Director of Public Prosecutions v Ferguson
[2006] VSC 484
•15 December 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
CRIMINAL DIVISION
No. 1453 of 2003
| DIRECTOR OF PUBLIC PROSECUTIONS | Applicant |
| v | |
| IAN NORMAN FERGUSON | Respondent |
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JUDGE: | KAYE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 12 and 13 December 2006 | |
DATE OF JUDGMENT: | 15 December 2006 | |
CASE MAY BE CITED AS: | DPP v Ferguson | |
MEDIUM NEUTRAL CITATION: | [2006] VSC 484 | |
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CRIMINAL LAW – Confiscation Act 1997 (Vic) - Defendant convicted of conspiracy to traffick heroin in commercial quantity – Pecuniary penalty order – Increase in market value of asset purchased with proceedings of conspiracy – Whether part of benefit derived from offence – Declaration as to property available to satisfy pecuniary penalty order – Discretion - Confiscation Act s.70 - Whether defendant in “effective control” of property on date of restraining order.
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APPEARANCES: | Counsel | Solicitors |
| For the Crown | Mr M. Tovey QC with Mr D. Brown | Office of Public Prosecutions |
| For the Respondent Ian Ferguson | Mr C. Thomson | C. Marshall & Associates |
| For the Respondents Joanne Ferguson, Sheila Boon and Norman Ferguson | Mr S. Tyrell | Theo Magazis & Associates |
| The Respondent Mr P. Ogden | Appeared in person |
TABLE OF CONTENTS
Background
The Claim by the Director of Public Prosecutions
Pecuniary Penalty Order claim: Money derived from conspiracy
Pecuniary Penalty Order claim: Increase in value of Bambra property
Declaration
“Effective control”
Background relationship of Ian Ferguson and Joanne Ferguson
The Lara property
The Bambra property
Discretion: Lara and Bambra properties
Declaration: Personal Property
Item (c): The 2000 Toyota Landcruiser wagon
Item (d): Blue 2001 Landini 7860 tractor
Items (e) and (f): Black 1997 BMW coupe motor car and personalised vehicle registration plates “BMW 388”
Item (i): 1980 Mitsubishi Cantor tray truck, registration “29459F”
Item (k): MTD 14.5 HP ride-on mower
Items (l), (m) and (n): Savage 525 Osprey SP boat; Honda 4 stroke outboard motor; Dunbier boat trailer
Item (o): Commonwealth Bank of Australia Streamline account in the names of Joanne Maree Ferguson and Ian Norman Ferguson
Item (p): Property listed in Schedule 1 to the Restraining Order
Conclusion
HIS HONOUR:
On 4 January 2006, the respondent, Ian Norman Ferguson, was convicted, by the jury empanelled on his trial in this Court, on one count of conspiracy to traffick heroin in a quantity not less than the commercial amount, and on one count of money laundering contrary to s.122 of the Confiscation Act 1997 (Vic). On 28 April, Ferguson was sentenced to 12 years’ imprisonment with a minimum non‑parole period of eight years. The Director of Public Prosecutions (“DPP”), by Notice of Application dated 20 February 2006, has made application against Ferguson for a pecuniary penalty order under ss.58 and 68 of the Confiscation Act, and for a declaration under s.70 of that Act.
Background
The first count on which Ferguson was convicted alleged that between 1 April 1999 and 6 December 2002 Ferguson conspired with Stephen Cox and Glenn Sadler and others to traffick heroin in a quantity not less than the commercial quantity applicable to that drug of dependence. On the second count of the presentment Ferguson was jointly presented with his wife, Joanne Ferguson, that between 1 April 1999 and 6 December 2002 they engaged directly or indirectly in transactions which involved money and other property that were the proceeds of crime, which Ian Ferguson and Joanne Ferguson knew or ought reasonably to have known was derived or realised directly or indirectly from illegal activity. Joanne Ferguson was acquitted by a majority verdict of the jury on that count. Subsequently, at a separate trial, Cox and Sadler were convicted on the same charge of conspiracy as that on which Ferguson was convicted.
The relevant facts relating to the two charges on which Ferguson was convicted are set out in the reasons which I gave for sentencing Ferguson in April.[1] It is only necessary to give a short summary of those facts.
[1]R v Ian Norman Ferguson [2006] VSC 163.
At the time of the offences Ferguson was a member of the Victorian Police Force. In January 1997 he had joined the Drug Squad, and he remained with that squad until 6 November 2000. He was then seconded to the National Crime Authority until 13 February 2001, when he transferred to the Crime Department until October 2001. Ferguson then worked with the Organised Crime Squad. Throughout the period of offending Sadler was a member of the Drug Squad. Cox was also a member of the Drug Squad. He was the sergeant in charge of the crew of which Ferguson and Sadler were members, until his retirement from the Victoria Police in January 2000.
The Crown case was that Ferguson, Cox and Sadler conspired to traffick substantial quantities of heroin to a drug trafficker, Duy Le, during the relevant period. In April 1999, Duy Le had been arrested by the Drug Squad on trafficking charges. After his arrest he was recruited as an informer to the Drug Squad. In that role he set up two successful drug arrests. In August 1999 Cox commenced to traffick heroin to Duy Le. At a time shortly thereafter Sadler and Ferguson also commenced to traffick heroin to him. The Crown case was that Cox, Sadler and Ferguson were working together in a conspiracy. During the conspiracy considerable quantities of heroin were trafficked to Duy Le, particularly in the second half of 2000 and early 2001. For the purposes of sentencing Ferguson, I was satisfied beyond reasonable doubt that as a result of his participation in the conspiracy he profited by at least $630,000. That sum equated to the price of approximately 4.5 kilograms of heroin. At Ferguson’s trial there was no evidence admitted as to the financial betterment of Cox and Sadler. Adopting a conservative approach, for the purposes of sentencing Ferguson, I acted on the basis that pursuant to the conspiracy at least 5 kilograms of heroin was trafficked to Duy Le during the lifetime of the conspiracy.
Ferguson was arrested for his role in the conspiracy in May 2003. On 27 May 2003 the Director of Public Prosecutions obtained a restraining order against Ferguson under s.16 of the Confiscation Act. The order applied to a number of items of property set out in paragraph 1 of the order, and in Schedule 1 which was appended to the order. The property affected by the order included:
(a)Real estate at 130 Branch Road, Lara and at 55 School Road, Bambra;
(b)5 vehicles consisting of: a 2000 Toyota Landcruiser; a 1997 BMW coupe motor car; a 1971 International tray truck; a 1985 Toyota Landcruiser station wagon; and a 1980 Mitsubishi Cantor tray truck;
(c)a Savage 525 Osprey Boat, a Honda four‑stroke outboard motor, and a Dunbier motor trailer;
(d)a 2001 Landini 7860 tractor.
The Claim by the Director of Public Prosecutions
In the Notice of Application, the DPP made a claim for a pecuniary penalty order under s.58 and/or s.68 of the Confiscation Act. However at an early stage the DPP made it clear that he only sought to rely on s.58. That section provides that if a defendant is convicted of an “automatic forfeiture offence”, the DPP may apply for a pecuniary penalty order under the Act. The charge of conspiracy to traffick heroin in an amount not less than a commercial quantity, and the charge of money laundering, are both prescribed as “automatic forfeiture offences” under the Act. Section 59(1) provides that on an application under s.58(1) the Court may assess the value of the benefits derived by the defendant, and order the defendant to pay to the State a pecuniary penalty equal to the value so assessed. Section 59(4)(b) provides that on an application under s.58(1) the Court may take into account any material it thinks fit, including evidence given in any proceeding relating to the offence in reliance on the conviction of which the application is made. For that purpose the whole or any part of the transcript of those proceedings is admissible in evidence as if it were a record of evidence given on the hearing of the application. Section 67(1) provides that the value of the benefits derived by the defendant may include: any money actually received as a result of the commission of the offence; any property that was derived or realised directly or indirectly as a result of the commission of the offence; and any increase in the total value of property, in which the defendant has an interest in the period beginning immediately before the commission of the offence and ending some time after the commission of the offence, that the Court is not satisfied was due to causes unrelated to the commission of the offence; and any other thing that the Court thinks fit to treat as benefits.
Section 70 of the Act provides:
“(1)On application by the DPP … a court may, if in its opinion particular property in respect of which a restraining order has been made –
(a)was, on the date when the order was made, subject to the effective control of the defendant; or
(b)was the subject of a gift from the defendant to another person –
make an order declaring that the whole, or a specified part, of that property is available to satisfy a pecuniary penalty order.
(2)If a court declares that property is available to satisfy a pecuniary penalty order, the order may be enforced as if the property were property of the defendant.”
Section 72(1) of the Act provides that if a court makes a restraining order in respect of property of a person, and the Court makes a pecuniary penalty order against that person, then there is created on the making of the pecuniary penalty order or the restraining order, whichever is the later, a charge on all the property of that person to which the restraining order applies to secure the payment to the State of the pecuniary penalty. Section 72(2) provides that if a court makes a declaration under s.70(1), then there is created on the making of that declaration a charge on all the property to which the declaration applies to secure the payment to the State of the pecuniary penalty.
Section 70(3) provides that an applicant under s.70(1) must give written notice of the application to any person to whom the Court directs that notice be given. Section 70(4) provides that any person notified under sub‑section (3) and any other person who claims an interest in the property are entitled to appear and give evidence at the hearing of the application. In accordance with sub-section (3) the Crown gave notice to a number of persons who might be affected by orders sought by the DPP. As a result Mrs Joanne Ferguson, Mrs Sheila Boon, Mr Norman Ferguson, and Mr Paul Ogden, were joined as respondents to the application. Mrs Ferguson, Mrs Boon and Mr Norman Ferguson were each represented by Mr Tyrell of counsel. Mr Ogden appeared in person.
Pecuniary Penalty Order claim: Money derived from conspiracy
The claim by the DPP for a pecuniary penalty order consists of two components. The first component is the sum of $710,365, being the cash which the DPP alleges Ferguson derived from the commission of the offence of conspiracy to traffick heroin in not less than the commercial quantity applicable to that drug of dependence. That figure is calculated by reference to the evidence of Mr Gerard Curtin at the trial of Ferguson.
At about the time of Ferguson’s arrest the Ethical Standards Department of the Victorian Police Force seized a significant amount of financial documentation from the home of Mr and Mrs Ferguson at Branch Road, Lara. Mr Curtin conducted two principal analyses of those documents. First, he did an estimate of the financial position of Mr and Mrs Ferguson during the period charged on the presentment. That analysis was conducted to assess the growth of the assets of Mr and Mrs Ferguson in each of the three financial years up to 30 June 2002. Mr Curtin eliminated increases in the market value of assets by holding the value of real and personal assets at the value attributed to them, either at the beginning of the period, or at the time of their acquisition during the period in question. Mr Curtin’s original analysis of the financial position of Mr and Mrs Ferguson (Exhibit P 108) estimated a growth of their assets over the three year period in the sum of $674,993 (including a growth of $589,706 in the 12 months to 30 June 2001). As a result of matters put in cross-examination, and matters elicited in the evidence, Mr Curtin later produced a revised estimate (Exhibit P 359) which showed a growth of the assets of Mr and Mrs Ferguson in the sum of $697,257 during the three year period (including a growth of $605,457 in the 12 months to 30 June 2001).
Mr Curtin, as a comparison, performed an analysis of the declared taxable income of Mr and Mrs Ferguson for the three financial years in the period 1 July 1998 to 30 June 2001 (Exhibit P 104). That analysis was produced from tax returns which had been seized. No tax returns were available for the 12 month period ending 30 June 2002. That analysis showed that Mr and Mrs Ferguson had a combined income, after taxation but before deductions, ranging from $75,000 to $80,000 per annum. During that period they had three young children and a number of motor vehicles. It is clear on any view that little if any of the growth in the equity position of Mr and Mrs Ferguson during the period ended 30 June 2002 could have been funded from their known sources of income.
Mr Curtin also conducted a second analysis, consisting of a cash flow analysis. Mr Curtin identified and collated a large number of cash transactions by Mr and Mrs Ferguson during the period 1 January 1999 to 30 June 2002. Those transactions are set out in monthly transaction sheets (Exhibit P 295). Those sheets identify deposits of cash by the Fergusons into their accounts, purchases by cash by the Fergusons during that period, and cash withdrawals by Mr and Mrs Ferguson from their various bank accounts. Using accounting criteria which Mr Curtin developed for the purpose of the exercise, he eliminated from his analysis some deposits and purchases by attributing the cash, which had been used for those transactions, to withdrawals of cash from the accounts of Mr and Mrs Ferguson in the period shortly preceding the relevant deposit or payment. That process left a substantial amount of cash deposits and cash payments, during the period, which Mr Curtin could not attribute to previous cash withdrawals from the accounts of Mr and Mrs Ferguson. Mr Curtin called those transactions “cash deposits” and “cash payments” respectively. In other words, Mr Curtin identified cash deposits and cash payments which, using his criteria, could not be said to be sourced from bank accounts or other legitimate sources of funds available to Mr and Mrs Ferguson. For the period covered by Mr Curtin’s analysis, those cash transactions totalled the sum of $710,365 (including the sum of $637,836 for the 12 month period to 30 June 2001).
The Crown case at Ferguson’s trial was that the cash transactions of $710,000, and the growth of assets of Mr and Mrs Ferguson of almost $700,000, were funded by the proceeds of drug trafficking carried out by Ferguson pursuant to the conspiracy for which he was convicted. Thus, in this application, the Crown submits that that sum is the quantum of the money each received by Ferguson as a result of the commission of the offence, pursuant to s.67(aa) of the Confiscation Act.
On the present application, the Crown relied on the evidence adduced at trial. Ferguson gave evidence at trial, and witnesses were called on his behalf. He did not give any further evidence in the present application. Part of Ferguson’s evidence at the trial was directed to the financial evidence called against him by the Crown, and in particular the evidence of Mr Curtin. In substance Ferguson claimed that the financial betterment identified by Curtin substantially consisted of funds provided to him by his father Norman. He also gave evidence that he had worked part‑time in a number of capacities including as a builder, and as a truck driver. In addition he maintained that he earned income from his farm property at Lara, and from the property at Bambra which he purchased in early 2001. In my reasons for sentence[2] I rejected Ferguson’s evidence that he received funds from his father. I was satisfied beyond reasonable doubt that Ferguson did not. That finding was, I consider, consistent with the jury’s verdict. The evidence given by Ferguson at trial concerning that matter was entirely unsatisfactory, and strained credulity. In these proceedings, the civil onus of proof applies.[3] I am comfortably satisfied on that onus that Ferguson did not receive the funds from Norman Ferguson about which he gave evidence at trial. Indeed, I remain of the same view which I expressed in my reasons for sentence, namely, I am satisfied beyond reasonable doubt that he did not.
[2]At [23].
[3]Confiscation Act, s.132.
In the reasons for sentence I accepted that Ferguson had been an industrious and enterprising person, and that he was a capable mechanic and handyman. I therefore accepted that he earned some money during the relevant period from part‑time work as a builder, handyman and the like. However I was satisfied that those amounts would have been relatively modest in the context of the amount of betterment alleged. I was satisfied that Ferguson had not made any profit from his farming enterprises. Indeed the tax returns tendered in evidence showed that the farms ran at a loss. The scale of the enterprises would not have been sufficient to realise any or any significant profit in any event. I also rejected Ferguson’s evidence that a substantial part of the cost of the swimming pool, installed at the Lara home, was accounted for by an off‑set arrangement which Ferguson claimed he had with the supplier. I was satisfied that it was not. In his evidence Ferguson did not give any details of the type of earnings which he claimed to have derived from the part‑time work which he described. As I have stated, I was satisfied that it was no more than a modest amount in the context of the amount of betterment found by Curtin.
One of the items of betterment attributed to Ferguson at his trial was a boat which he purchased from “The Boat Shop” in Kororoit Creek Road, Williamstown on 5 December 2000. The purchase price of the boat, less a trade‑in, was $26,600. Mr Andrew Oakes, the owner of that boat shop, gave evidence at trial. He stated that Ferguson handled the negotiations for the boat, and paid him the purchase price for the boat in cash. The contract for the purchase of the boat was in the name of his father, Norman Ferguson. On 16 December, Ian Ferguson came with his father Norman and took delivery of the boat. At trial, Ferguson gave evidence that his father, Norman, had provided the money to purchase the boat. Ferguson accepted that it was he who negotiated the purchase of the boat. In my reasons for sentence[4] I did not accept Ferguson’s evidence that Norman Ferguson paid for the boat. I was satisfied beyond reasonable doubt that he did not do so. I remain of that view. In these proceedings Norman Ferguson has sworn two affidavits. The Crown served notice on him to attend for cross‑examination. Mr Ferguson declined to do so. As a result his counsel did not seek to rely on his affidavits.
[4]At [24].
In September 2001 Ferguson purchased a hay baler for the sum of $17,017. The baler was paid for by bank cheques drawn on Ferguson’s accounts. Therefore it did not impact on the cash transactions calculated by Curtin. However Mr Curtin included the baler as an additional asset acquired by Ferguson for the purposes of the estimate of Ferguson’s financial position. In his evidence at trial Ferguson stated that he purchased the hay baler for a friend, Paul Ogden. Ferguson stated that he paid for the baler himself, claimed the GST on a return, and also insured the equipment in his own name. Subsequently Ogden repaid Ferguson the purchase price minus the GST, and picked up the baler from the vendor, Godings.
Mr Ogden also gave evidence at the trial. He had known Ferguson since 1988 and the two were friends. Ogden’s family had a large property at Moama which Ferguson visited from time to time. Ogden stated that he needed a hay baler, and that Ferguson had said that he had seen one near him. Ogden stated that he gave Ferguson the money with which to purchase the hay baler. He said that he gave Ferguson cash for the hay baler. In my reasons for sentence[5] I stated that I very much doubted that Ferguson was repaid for the hay baler. I said:
“I very much doubt that you were repaid for the hay baler which you purchased in late 2000. (sic). The evidence of you and your witness Ogden was unsatisfactory. However I accept that it is possible that you were repaid for that equipment and, giving you the benefit of a small doubt, I am prepared to act on the basis that he did repay you for it.”
[5]At [24].
Mr Ogden appeared as an interested party in this proceeding, in order to oppose the making of a s.70 declaration in respect of the hay baler. I remain of the same view which I expressed in my reasons for sentence. There was an inconsistency between the evidence of Ferguson and Ogden. Ferguson[6] stated that he was later repaid the cost of the hay baler which he had paid for out of his own pocket. By contrast, Ogden[7] said that he gave Ferguson the money with which to purchase the baler. Further, Ogden stated that he gave cash to Ferguson. In cross‑examination he had no record of the cash coming out of his account. He claimed that he kept the money hidden on the farm and that he had accumulated it over a period of time. In itself such an explanation is quite extraordinary. Furthermore, Ferguson claimed the Goods and Services Tax paid for the baler as an input credit, and insured the baler on his own farm insurance. On the balance of probabilities, I am well satisfied that Ferguson paid for the baler, that he was not repaid by Ogden, and that he did not purchase it for Ogden. Ogden stated that the baler has remained on his property. That may be so, but nonetheless on the evidence I am satisfied on the balance of probabilities that the baler was purchased by Ferguson and belongs to Ferguson.
[6]Trial transcript p.3075.
[7]Trial transcript p.3429.
As I stated, the calculation of the money received by Ferguson as a consequence of the conspiracy was based on the evidence of Mr Curtin. There were some inherent limitations in Mr Curtin’s methodology. Mr Curtin identified the cash purchases and cash deposits made by Mr and Mrs Ferguson from documents seized from their property. Those transactions are set out in the monthly transaction sheet. To that extent they are accurate, but certainly they are not complete. Self-evidently, Mr Curtin was only able to identify the cash payments and cash deposits which were evidenced by documentation seized under the search warrant.
Mr Curtin then set about determining which of those cash transactions might have been sourced from earlier cash withdrawals by Mr and Mrs Ferguson from their bank accounts. There was nothing contained in the documentation, which had been seized, which enabled him to link a particular cash withdrawal from the accounts of the Fergusons with a subsequent cash purchase or cash deposit. Thus, Mr Curtin had to make assumptions as to the relationship between cash withdrawals and subsequent cash payments or cash deposits, otherwise his analysis would overstate the amount of betterment derived by Ferguson from the conspiracy. In order to make those assumptions, Mr Curtin developed certain criteria, drawing on his experience from conducting very cash‑flow analyses as a forensic accountant. He set out those criteria in his evidence at the trial.[8] First Mr Curtin eliminated cash transfers between bank accounts. He then applied the criteria he had established by which he might off-set cash withdrawals against subsequent cash deposits and cash payments identified by him. In general, he determined to off-set such transactions if the cash withdrawal occurred within a period of three of five days before the subsequent cash payment or cash deposit, and if the cash withdrawal was equal to or greater than the amount of the cash deposit or cash payment. In applying those criteria, Mr Curtin was able to off-set cash payments and cash deposits amounting to $68,194 against earlier cash withdrawals identified by him.[9] When applying that methodology Mr Curtin concluded that for the period from 1 January 1999 to 30 July 2002 there were cash payments and cash deposits identified by him in the sum of $710,365.
[8]Trial transcript pp.1653 et al.
[9]Exhibit P109.
Obviously there were limitations in the methodology employed by Mr Curtin, which I have just described. In particular, there may have been cash withdrawals by the Fergusons, more than three to five days before a subsequent cash payment or cash deposit, which would not fall within the criteria set by Mr Curtin, but which may in fact have funded a later cash deposit or cash payment. However, while in theory that might be so, in the course of argument I have not been referred to any transactions which Mr Curtin might have off-set, but did not do so, had Mr Curtin adopted criteria permitting the off-setting of cash withdrawals more than three to five days prior to the subsequent cash payment or cash deposit. An examination of the monthly transaction sheets prepared by Mr Curtin[10] reveals very few, if any, such transactions. In his evidence at trial, Ferguson did not point to any. In his final address at trial, counsel for Ferguson did not press any argument as to this aspect of Curtin’s methodology.
[10]Exhibit P295.
On the other hand there are a number of limitations in Mr Curtin’s analysis which worked in favour of Ferguson. In particular Mr Curtin was only able to identify cash payments and cash deposits for which evidence was found on the seizure of documents. In doing so he was nonetheless able to identify almost $780,000 of cash transactions during the three and a half year period analysed by him. Less than ten percent of those were, on Mr Curtin’s analysis, sourced to earlier cash withdrawals from the Fergusons’ accounts. Given such a large amount of cash transactions identified from the documentation, it is quite possible, if not probable, that the Fergusons made significantly more cash payments than were able to be identified by Mr Curtin. The DPP, quite responsibly, did not invite me to infer, on the balance of probabilities, that the amount of cash transactions undertaken by Ferguson over the period was greater than the amount identified by Curtin from the documentation. Nonetheless the potential existence of a significant amount of unidentified cash transactions by the Fergusons is relevant, because it shows that the limitations in Curtin’s methodology might well have weighed in favour of Ferguson, rather than against him.
In my reasons for sentence, I concluded, and based my sentence on the finding, that Ferguson profited by at least $630,000 as a result of his participation in the conspiracy. However it must be noted that that finding was made on the criminal onus, namely, beyond reasonable doubt. I stated:
“ … I adopt a conservative approach and err in your favour. Adopting such an approach, I would readily accept that, as a result of your participation in the conspiracy, you profited by at least $630,000 as a result of your participation in the conspiracy.”[11]
[11]Reasons for Sentence [25].
These proceedings are civil in nature. The civil onus, the balance of probabilities, applies. As my reasons for sentence make clear, in applying the criminal onus on the sentencing of Ferguson, I adopted a conservative approach and erred in his favour. In doing so I “readily” accepted that Ferguson profited “by at least” $630,000. My task now is to make a finding on the civil balance of probabilities on the evidence adduced at trial and in these proceedings.
It is clearly not possible to make an exact calculation of the betterment derived by Ferguson as a result of the conspiracy. However, that does not prevent me from making a proper assessment of the betterment, based on the evidence which is before me. In R v Motherwell,[12] Winneke P (with whom Charles JA and Chernov JA agreed) recognised that the type of evidence, upon which the judge is normally asked to act in a proceeding such as this, will not be particularly precise because it is unlikely to include any input from the drug trafficker himself.[13] His Honour stated:
“As I said earlier, the assessment has to be based on evidence. That evidence will not necessarily be precise, but will have to be of such a kind as to provide a sufficient basis for the assessment which is made. In this sense it seems to me to be similar to assessments frequently made by trial judges for past and future economic loss in personal injury claims. The basic premises upon which the assessment is to be founded must be supported by fact finding on the balance of probabilities; and the processes of drawing inferences from those basic premises should be seen to be sound.”[14]
[12][2004] VSCA 241.
[13]At [7].
[14]At [10].
Applying those principles, I consider that the basic methodology adopted by Mr Curtin was sound. In essence Mr Curtin identified a considerable amount of cash transactions undertaken by Ferguson, for which there was no other identifiable source of income or cash withdrawal. As I have stated, I accept, as I accepted for the purposes of the sentence, that, during the period, Ferguson derived a modest amount of income in cash which might have been used to fund some of the cash transactions identified by Curtin. Ferguson’s evidence on this aspect at trial was quite unsatisfactory. It lacked any detail, and in a number of respects lacked credibility. For the purposes of these proceedings, I would accept that, during the relevant period, he earned approximately $3,000 cash per year from carrying out such part-time work. Ferguson was involved in the conspiracy for about three years. Therefore I would reduce Mr Curtin’s total by $10,000 on that basis. Secondly, Mr Curtin calculated cash payments and cash deposits from 1 January 1999. However Ferguson’s involvement in the conspiracy did not commence until later. Therefore it is necessary to reduce Mr Curtin’s calculations by a further sum of $7,000. Thirdly, although I have not been pointed to any cash payments or cash deposits which might have been, but were not, off-set against previous cash withdrawals had Mr Curtin adopted more “lenient” criteria, nonetheless I would allow a further $10,000 as a reduction from Mr Curtin’s analysis in order to allow for any possible overstatement caused by the application of Mr Curtin’s criteria. Adding those three amounts together, and rounding them off, I am therefore satisfied on the balance of probabilities that Ferguson received at least $680,000 as a result of the offence for which he has been convicted.
Pecuniary Penalty Order claim: Increase in value of Bambra property
The second component of the claim by the DPP is a claim for the increase in the value of a 40 hectare property in School Road, Bambra purchased by Ferguson, in his wife’s maiden name, in early 2001. The property was purchased pursuant to a contract of sale dated 1 February 2001 for the sum of $335,000. Settlement took place on 31 March 2001. The Crown has tendered, in these proceedings, a valuation of the property by Mr Chris Peart and Mr Judd Blincoe, Certified Practising Valuers, of Ridge Property Practice Pty Ltd, and dated 14 March 2006. They assessed the value of the property on 10 March 2006 at $650,000. The DPP claims the sum of $315,000, being the increase in value of the property, pursuant to s.67(1)(c) of the Confiscation Act. That section provides:
“(1)For the purposes of this Part, the value of the benefits derived by a defendant in relation to an offence may include –
…
(c)any increase in the total value of property in which the defendant has an interest in the period beginning immediately before the commission of the offence and ending at some time after the commission of the offence that the Court is not satisfied was due to causes unrelated to the commission of the offence.”
I am satisfied that Ferguson was able to purchase Bambra as a result of the moneys which I have found to have been derived from the conspiracy of which he has been found guilty. Throughout the relevant period Ferguson and his wife were living at 130 Branch Road, Lara, which they had purchased in December 1993. Until February 2001 that property was the subject of a mortgage to the Bank of Melbourne. At that time the debt, secured by the mortgage, amounted to $200,000. In late January 2001 Ferguson inspected the property at Bambra, and negotiated the purchase of it for the sum of $335,000. A contract was signed by Joanne Ferguson, in her maiden name Joanne Barrett, for the acquisition of the property on 1 February 2001. In February 2001 Ferguson applied to the Commonwealth Bank for a loan of $353,000 to fund the purchase (including the costs of purchase) of the Bambra property. The application for the loan was successful, and a mortgage was executed by the Fergusons to secure it over both the Bambra and Lara properties. In order to obtain that loan, Ferguson, on 8 February 2001, paid off the Bank of Melbourne mortgage debt over the Lara property, which then amounted to $199,218.[15]
[15]Trial transcript 3080.
It is clear that Ferguson was able to pay off the Lara mortgage by accessing and using proceeds of the conspiracy. Between October 2000 and February 2001 cash deposits were made into the various bank accounts of the Fergusons totalling $350,000. At that time the trafficking of heroin to Duy Le reached its peak. That sum included $56,100 cash deposited in January 2001, and $221,393 cash deposited in February 2001. Between February 2001 and April 2001 Ferguson carried out a complicated series of transfers of funds, which had been deposited by him into those accounts, between the various bank accounts. Those transfers are depicted in a chart prepared by Mr Curtin.[16] The effect of the transfers was to effect the discharge of the Bank of Melbourne mortgage over Lara. The purchase of Bambra settled on 31 March 2001. For that purpose Ferguson had obtained a loan, secured by mortgages over Bambra and Lara, in the sum of $353,000, from the Commonwealth Bank. The loan consisted of two components, a fixed loan for $200,000, and a home loan of $153,000. In April 2001 Ferguson transferred $140,000 from the Commonwealth Bank Streamline account, in the name of his wife and himself to the home loan account, thereby reducing the debt to some $13,000.
[16]Exhibit P307.
In the above circumstances it is clear that Ferguson was able to purchase Bambra by using the funds derived by him from the conspiracy. The question is whether the increase in the value of the property, from the time of its purchase in March 2001, until the assessment of its value in March 2006, may be included in the value of benefits derived by Ferguson in relation to the conspiracy pursuant to s.67(1)(c) of the Confiscation Act.
The first question under s.67(1)(c) is whether Ferguson had an interest in Bambra in the period beginning immediately before the commission of the offence and ending at some time after the commission of the offence. Section 3 of the Act defines “interest” in relation to property to mean:
“(a)A legal or equitable estate or interest in the property; or
(b)a right power or privilege over, or in connection with, the property.”
It is clear that Ferguson had, and still has, such an interest in Bambra. No argument was addressed to me to the contrary. Joanne Ferguson is the registered legal proprietor of the property. The evidence of Ferguson was that he controlled and managed the property. It was Ferguson who made the decision to purchase it. He made all of the relevant decisions in relation to the farming of it. From time to time Ferguson lived at the property while his wife remained at Lara. At the very least he had a “right power or privilege” over Lara so as to deem him to have an “interest” in the property for the purposes of s.67(1)(c).
Section 67(1)(c) operates to include, in the benefits derived by a defendant from an offence, any increase in the total value of property in which the defendant has an interest “ … that the Court was not satisfied was due to causes unrelated to the commission of the offence.” In effect, the section casts an onus on the defendant to show that the increase in the property was not due to causes related to the commission of the offence.
The valuation of Mr Peart and Mr Blincoe shows that its value has increased, since the date of its purchase, until the date of valuation on 10 March 2006, by an amount of $315,000 in excess of the price paid by Ferguson for the property. There is no evidence that Mr Ferguson, either by his own work, or by the use of funds not derived from the conspiracy, contributed to that increase in value. Indeed at the trial, Mr Stewart, the agent who sold the property to Ferguson, said that at the time of the sale there were seven or eight dams on the property, it was well‑equipped and had good shedding. He said there was a renovated cottage on the property which had been restored very well.[17] Ferguson, in his evidence, did not describe any significant improvements effected by him after he purchased the property.
[17]Trial transcript pp.1193-4.
Accordingly the increase in value of Bambra was clearly attributed to the increase in the market value of the real estate. On behalf of Ferguson it was submitted that I should be satisfied that that increase was due to causes unrelated to the commission of the offence. I am not so satisfied. On the contrary, I am satisfied that such an increase could be properly characterised as having been due to causes related to the commission of the offence. Ferguson’s participation in the conspiracy enabled him to have access to significant quantities of cash. As I have found, his access to those moneys enabled him to purchase Bambra. Clearly that property was a valuable investment, as is evidenced by the increase in its value between the date of its acquisition in 2001 and the date of the valuation in 2006. That “profit” was derived from a purchase of property funded by the proceeds of crime. In those circumstances, it would be contrary to any common sense concept of causation were I to be satisfied that such an increase was due to causes unrelated to the commission of the offence.[18] Accordingly, the increase in the value of Bambra, namely $315,000, is to be included in the value of the benefits derived by Ferguson in relation to the conspiracy for which he has been convicted.
[18]Compare March v E. & H. Stramare Pty Ltd (1991) 171 CLR 506 at 515 (Mason CJ), 522-3 (Deane J).
Mr Thomson further submitted that, on its proper construction, s.67(1)(c) only applies, to treat as part of the benefits derived by a defendant in relation to an offence, the increase in value of the property therein described, which increase occurs during the period beginning immediately before the commission of the offence and ending some time after the commission of the offence. That period, in this case, was from August 1999 until November 2002. The valuation of Mr Peart and Mr Blincoe has only assessed the value of the Bambra property as at 10 March 2006. Therefore, it was submitted, the DPP has failed to adduce any proof of the increase in value of Bambra in the time period specified in s.67(1)(c).
Mr Thomson’s submission focused on the phrase in sub-s.(c) “ … in the period beginning immediately before the commission of the offence and ending at some after the commission of the offence.” Mr Thomson’s submission was that that phrase attached to the first words in the section (“any increase in the total value”), rather than to the words which immediately precede it (“property in which the defendant has an interest”). In other words, Mr Thomson’s submission is that the time period referred to in sub‑s.(c) is the period in which the increase in the value of the property is to be calculated, rather than the period of time in which the defendant is to have an interest in the property concerned.
Self-evidently, the construction contended for by Mr Thomson involves a restructuring of the sub-section (c), so as to transplant the temporal phrase, which I have quoted above, from its present position in the sub-section to a position immediately after the words “any increase”. There is no warrant for such a re‑writing of s.67(1)(c). Further, such a restructuring of the sub-section would offend the clear purpose of s.67(1)(c). Section 67(1) is, on its face, designed to treat, as benefits derived by a defendant from an offence, not only direct funds received by the defendant, but also other consequential profits and benefits derived by the defendant. That is the clear purpose of sub-paragraph (a) (which treats as benefits any property derived or realised directly or indirectly as a result of the commission of the offence) and sub-s.(b) (which treats as benefits any benefits, service or financial advantage provided for the defendant or any other person as a result of the commission of the offence). In that context s.67(1)(c) is designed to treat as benefits any increase in the value of property in which the defendant has an interest in the period described in the sub‑section, unless the defendant is able to establish that the increase in value was due to causes unrelated to the commission of the offence. In other words sub‑s.(c) creates, as it were, a presumption that the increase in the value of any property held by the defendant during the relevant period has resulted from the offending for which the defendant has been convicted. In that light it would make no sense for s.67(1)(c) to limit the increase in value, treated as benefits, to any increase sustained during the period of offending.
Indeed, the construction contended for by Mr Thomson would render s.67(1)(c) nugatory in relation to any offending consisting of a single act occurring on one particular date, such as one large drug trafficking transaction. If Mr Thomson’s construction were accepted, then s.67(1)(c) would have no effect in such a case, since any increase in the value of the property of the defendant, in which the defendant then had an interest, could only occur after the completion of the offence. Accordingly I consider that, on its proper construction, s.67(1)(c) operates to treat as benefits the increase in the property in Bambra, as assessed by Mr Peart and Mr Blincoe, since Bambra was a property in which the defendant had an interest in the period beginning immediately before the commission of the offence and ending at some time after the commission of the offence.
Thus, I assess the value of the benefits derived by Ferguson in relation to the conspiracy to be $995,000. I shall therefore make an order that Ferguson pay that sum to the State pursuant to s.59(1)(b) of the Act.
Declaration
The DPP also seeks a declaration under s.70(1) of the Confiscation Act. That section, which I have set out earlier in these reasons,[19] provides that on the application by the DPP a Court may, if in its opinion particular property in respect of which a restraining order has been made, was, on the date when the order was made, subject to the effective control of the defendant, or was the subject of a gift from the defendant to another person, make an order declaring that the whole or a specified part of that property is available to satisfy a pecuniary penalty order. Section 70(2) provides that if a court declares that property is available to satisfy a pecuniary penalty order, the order may be enforced as if the property were property of the defendant. Section 72(2) states that if a court makes a declaration under s.70(1), then there is created, on the making of that declaration, a charge on all the property to which the declaration applies to secure the payment to the State of the pecuniary penalty made by the County Court on 27 May 2003.
[19]At [8].
Paragraph 1 of the restraining order restrained the named respondents from disposing of or dealing with specific property specified in sub-paragraphs (a) to (o), and (by sub-paragraph (p)) all of the property listed in Schedule 1 appended to the order. Schedule 1 listed 19 items of personal property. The DPP seeks a declaration, under s.70, in relation to all the property covered by paragraph 1 the restraining order, except for the property referred to in sub-paragraphs (g), (h) and (j).
In his notice of response to the DPP’s claim, Ferguson has contended that not all the property was subject to his effective control of the date of the restraining order. Further he contended that if any declarations are made in relation to the property described in paragraphs 1(a) to (k), and (o), then the declaration should be limited to the respondent’s 50 percent interest in the marital property. He has further submitted that the property described in paragraph 1(l) to (n), namely the Savage 525 Osprey Boat, the Honda engine, and the boat trailer, belonged to Norman Ferguson and were under his effective control, and that the property detailed in Schedule 1 item 2 (the hay baler) is the property of Paul Ogden and as such was not in the effective control of the respondent at the date of the restraining order.
In her notice of response, Joanne Ferguson opposes the making of a declaration in relation to the properties at Lara and Bambra, the Landini tractor, the 1985 Toyota Landcruiser, and the ride on mower.
“Effective control”
The first question, then, is whether the property, the subject of the restraining order, was at the time of the making of the restraining order subject to “the effective control” of the defendant. Section 9 of the Act provides:
“(1)For the purposes of this Act, property may be subject to the effective control of a person whether or not the person has an interest in it.
(2)In determining whether or not property is subject to the effective control of a person or whether or not there are reasonable grounds to believe that it is, 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, business or other 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 (b), and other persons.”
It is clear both from s.9, and from other provisions in the Act, that a defendant may have the effective control of property notwithstanding that that defendant has no legal, equitable or other interest in the property. Thus, s.9(2) enables a Court to be guided by the reality, rather than the legal structure, of the relationship of the defendant to the property in question. What is relevant is the de facto, rather than the de jure, relationship between the defendant and the property. In ordinary usage, “control” means the power of directing or commanding. Ordinarily, a person may be in effective control of real property if that person has the power to make and implement basic decisions which affect the ownership, possession, use and enjoyment of property. In terms of real property, effective control would therefore encompass the de facto power to make and implement decisions such as to sell, lease, use, exclude others from possession of, and make significant improvements to, the property. Similarly a person might be considered to have the effective control of items of personal property where the person has the power to make and implement decisions such as to sell, lease, use and possess, the item of property in question.
That meaning of effective control is, I consider, consistent with the clear purposes served by the Confiscation Act.. The concept of “effective control” is employed in a number of sections of the Act.[20] The intention of the legislation is to focus on the reality of the relationship between the defendant and the particular item of property. The purpose is to capture, and have available for the purposes of enforcement of a pecuniary penalty order (s.72(2)) or (in other provisions) forfeiture, property which, whilst not subject to any proprietary or other interest of the defendant, nonetheless is in the de facto power of the defendant. Consistent with that purpose, the concept of effective control is used to deprive the defendant of property and wealth to which he or she might have access, regardless of whether the defendant has any legal or equitable interest in it.
[20]For example, ss.10, 21, 22, 24, 52, 54.
The Confiscation Act is an important weapon in the armoury of the law for dealing with offences of the type for which Ferguson has been convicted. Thus, in R v Motherwell, Winneke P referred to the purposes of the statute and stated:
“Those purposes clearly include (at least in this case) the suppression of the drug trade and the removal of ill gotten gains from those engaged in it; in other words, the statutory expression of the maxim that ‘crime does not pay’.”[21]
The Attorney‑General, in her Second Reading Speech introducing the Confiscation Bill on 13 November 1997, described the purposes of the legislation in similar terms.
[21]Paragraph 7; see also DPP (Cth) v Toro Martinez (1993) 33 NSWLR 82 at 102-3.
The authorities which have considered the concept of “effective control” have focussed on the practical reality of the power of the defendant over the particular item of property. In DPP (Vic) v Tat Sang Loo & Anor[22] Ashley J reviewed those authorities and concluded:
“All in all, the Victorian legislation suggests, and the authorities dealing with like legislation show, that effective control means control which is practically effective, although it is not supported by any proprietary interest or legally enforceable power; control de facto, not necessarily – though it might also be – control de jure. Such control is not denied by the existence of trust arrangements which in ordinary circumstances would yield the trustee a bare legal interest in property.”[23]
[22](2002) 130 A Crim R 452 at 457.
[23]The Court of Appeal, in Tat Sang Loo, allowed the defendant’s appeal, on unrelated grounds; Tat Sang Loo v DPP (Vic) [2005] VSCA 161.
In Connell v Lavender[24] the Full Court of Western Australia was concerned with the question of what documents may be under the “effective control” of a person for the purposes of s.41(2) of the Crimes (Confiscation of Profits) Act 1988 (Western Australia). Malcolm CJ (with whom Pidgeon and Rowland JJ agreed) stated:
“In my opinion the ordinary meaning of ‘control’ is de facto control or control in fact. The question then is: what effect does the adjective ‘effective’ have upon the meaning? … In my opinion, ‘effective control’ in the context of the statute means de facto control. The expression contemplates control that is practically effective, in the sense that the person concerned has in fact the capacity to control the possession, use, or disposition of the property.”[25]
[24](1992) 7 WAR 9.
[25]At 22.
Other authorities[26] have cautioned against paraphrasing or redefining the concept of “effective control”. Notwithstanding those admonitions, I respectfully consider that, at least in the context of the Victorian Act, the views expressed by Ashley J in Tat Song Loo v DPP are apposite and useful. As I have stated, the concept of “effective control” is used by the Act to capture property for the purposes of the enforcement of a pecuniary penalty order, notwithstanding the lack of any legal or other interest of the defendant in the property, and for those purposes to treat the property as if it were the defendant’s property. The whole scheme of the Act is to treat as the owner of property those who, in reality, exercise a fundamental incident of ownership, namely, the practical control of property. Accordingly, the question whether the defendant has the effective control of property involves an examination of the actual practical exercise, or capacity to exercise, by the defendant of rights over the property in question, such as the right to possess, use, sell, mortgage, make fundamental improvements to, and exclude others from possession of, the items of property in question.
[26]See for example Gray v Official Trustee and Bankruptcy (1991) 29 FCR 166 at 173 (Heerey J) and DPP (Commonwealth) v Hart [2005] QCA 51 at [21] (McPherson JA).
Background relationship of Ian Ferguson and Joanne Ferguson
The main basis on which the application by the DPP for a declaration is opposed arises from the claims made on behalf of Mrs Joanne Ferguson. Those claims have focussed on her marital relationship with Ferguson, on her role in that relationship, and on her rights which are said to arise from it.
Before examining the evidence in relation to each of the items of property in detail, it is relevant first to outline the evidence relating to the nature of the relationship between Ferguson and Joanne Ferguson.
Ferguson and Joanne Ferguson met in 1993 while they were both serving in the Victoria Police Force. They married in March 1996. In December 1993 they purchased, in their joint names, the property at 130 Branch Road, Lara. That property consisted of 78 acres of bare paddocks. Initially they lived in a caravan on the property while Ferguson built a garage which contained a flat. They then lived in the flat, while a house on the property was constructed. Ferguson’s evidence was that he carried out nearly all of the construction work in relation to the house with the exception of some electrical works. Ferguson and Joanne lived at the property until Ferguson’s conviction in January 2006. Joanne Ferguson has remained at the property with their three children.
Apart from when she was having children, Joanne Ferguson worked as a part time policewoman. At trial two key features emerged in the evidence relating to the relationship between Ian and Joanne Ferguson. First, the marriage was particularly volatile, and their relationship was fraught. There were many separations. On those occasions, Ferguson would remain at the home at Lara, and Joanne would take the three children with her to stay at her mother’s house. Secondly, Ferguson totally and exclusively controlled all financial matters relating to the family. In evidence in chief he stated[27] that he controlled and operated the finances of the family. He organised the opening of accounts for the children. Nearly all the transactions of any significance, including loans and refinancings, were carried out by him and not by Joanne. He acquired a number of assets without any input from his wife. It was he who, without referring to Joanne, purchased the 1997 BMW. It was he who purchased the hay baler, the farm equipment, and the property at Bambra. It was he who organised the installation of a swimming pool at the Lara property. In cross-examination by counsel for Joanne Ferguson, Ian Ferguson expressly accepted the proposition that the financial affairs of the family were “exclusively” his domain[28]. He described the family finances as his portfolio, while Joanne Ferguson’s portfolio was looking after the children. He stated that, for example, he never asked Joanne’s permission or advice about opening a bank account. He would simply ask Joanne to sign the relevant documentation to obtain an increase on a mortgage. Ferguson agreed that it was he who completely controlled the filing of all documents.[29] When mail was delivered to the household it was left on Ferguson’s table for him to open. He filed all the documents. He said “I didn’t need nor ask for assistance in relation to it”. Ferguson, and his mother in law, Mrs Sheila Boon, both described how Ferguson was a perfectionist about everything which needed to be done around the house. He agreed that he could be volatile if things were not done the way he wanted them to be done. He stated that any purchase other than items such as groceries were carried out by him. He agreed therefore with the proposition, put in cross-examination by counsel for Joanne Ferguson, that he “… had the pulse on the finance of the home”.[30] He said that he never felt the need to discuss with Joanne Ferguson the purchase by him of larger agricultural equipment. He would inform her, but not discuss it with her.[31] Ferguson also stated that when they first married Joanne already had a unit. Ferguson took over the administration of the unit. When it was sold Ferguson dealt with the proceeds of the sale himself. He attended at the solicitor’s office and was paid the money and dealt with it.[32] The money ended up in investment accounts. Ferguson stated that he did not believe that Joanne knew about the investment accounts.
[27]Trial transcript 3064.
[28]Trial transcript 3100 to 3101.
[29]T.3102.
[30]T.3106.
[31]T.3107.
[32]T.3115-3116.
Mrs Sheila Boon, Joanne Ferguson’s mother, was called to give evidence on behalf of Ian Ferguson. She confirmed that the marriage was very unstable. When things fell apart, Joanne would come to live with her with the children, leaving Ferguson alone at Lara. In cross-examination by counsel for Mrs Ferguson, Mrs Boon also confirmed that Ferguson was exclusively in control of the finances of the house, to the extent that he went through the mail, and that no-one else dared to go through it. She said that Ian Ferguson was the dominant figure in the household. Joanne Ferguson coped by not asking questions and keeping the peace. Ferguson liked things done his own way.
With that background evidence in mind, I now turn to consider the claims by the DPP for a declaration in relation to specific items of property. I shall first consider the claims in respect of the Lara and Bambra properties.
The Lara property
The first question in relation to the Lara property is whether Ian Ferguson had the effective control of that property at the time of the making of the restraining order, notwithstanding Joanne Ferguson’s legal interest as joint proprietor of that property.
The evidence of the relationship between Ferguson and Joanne Ferguson, which I have summarised above, demonstrates that Ferguson totally dominated all financial matters, including matters pertaining to the Lara property. Thus, for example, in February 2001 he paid off the mortgage which was then secured over Lara, without informing Joanne Ferguson.[33]
[33]Trial transcript 3101.
Similarly Ferguson unilaterally made decisions about substantial improvements to the property. It was Ferguson who alone who dealt with Mr Sutcliffe of the Kirwan Group, and organised for that company to install a swimming pool at Lara.[34] In cross-examination by counsel for Mrs Ferguson, Sutcliffe[35] said that he did not believe that Joanne Ferguson played any role in the planning of the pool or in the payment for it. He agreed with the suggestion put to him, in cross-examination by counsel for Mrs Ferguson, that “… her involvement was to bring out some coffee and Anzacs to you and the tradesmen”.[36] Similarly, Ferguson’s evidence was that it was he and not his wife who chose the colour of the sails which were purchased to put over the pool.[37]
[34]Trial transcript 3082.
[35]Trial transcript 2066.
[36]Trial transcript 2067.
[37]Trial transcript 3115.
Ferguson conducted a farming operation at Lara in the names of himself and his wife. As I have already stated, Ferguson’s evidence was that he alone decided on the purchase of larger agricultural equipment for use on the farm. Ferguson stated “a tractor is a tractor to Joanne”.[38] Joanne Ferguson assisted with some of the animal husbandry, but Ferguson agreed with the proposition put in cross-examination by counsel for Mrs Ferguson that in some respects she was not particularly enamoured by the lifestyle on the farm. Apart from her role in some care for sick cattle, Ferguson’s evidence relating to other activities on the farm, such as the growing and harvesting of crops and the like, did not make any mention of any contribution by his wife.
[38]Trial transcript 3107.
As I have already stated, Ferguson and Joanne Ferguson separated on a number of occasions during their marriage. On each of those occasions Joanne Ferguson went with her children to live with her mother. The home at Lara had bedrooms for each of the children. When Joanne took the children to live at Mrs Boon’s house, the accommodation was cramped. No explanation was given at trial why, during those periods of marital difficulty, it was Joanne Ferguson and the children, rather than Ian Ferguson, who left the home at Lara. While it is possible that Ferguson stayed at Lara in order to look after the farm, no such explanation was proffered at his trial for that conduct. Indeed, I note that there was a separate flat at the property, which Ferguson and his wife had lived in when building the house, and in which Mrs Boon had, at one time, also resided.
Ferguson stated that in February 2001 he paid funds into Joanne Ferguson’s account because he was in the process of paying her out. He stated that if they were going to stay separated, he would keep Lara, develop, it and build spec homes on it, and that Joanne was going to have the finances to purchase her own home.[39] I do not accept Ferguson’s explanation why he paid the moneys into the account of Joanne Ferguson, and I confidently expect that the jury would also have rejected that explanation. However, in the course of a telephone conversation of 1 August 2002 with Cox, which is the subject of an intercept, Ferguson discussed with Cox plans which he had to subdivide the property at Lara. The recording of that telephone conversation was tendered in evidence at the trial.[40] When Ferguson was cross-examined by counsel for Mrs Ferguson, Ferguson said that Joanne Ferguson accepted the proposition in relation to Bambra, in other words that if the separation became permanent, she would live at Bambra and Ferguson would keep Lara.[41]
[39]3089.
[40]Exhibit P 348 (a transcript of intercepts was also before the jury – Exhibit P 347 (for identification)).
[41]T.3109.
The evidence to which I have referred demonstrates that Ferguson comprehensively controlled each relevant aspect relating to the property at Lara. It was Ferguson who exclusively controlled all matters financial pertaining to Lara. He exclusively controlled all issues relating to the improvement of the property. He controlled the farming side of the property. He was the dominant party when issues of occupation and possession arose. When there was a separation, he remained in the large home at Lara, while Mrs Ferguson decamped with the three children to the cramped accommodation at her mother’s place. He discharged the Bank of Melbourne mortgage over Lara without informing his wife. He organised the Commonwealth Bank mortgage over the Lara property to finance the purchase of Bambra. It was Ferguson who had plans to subdivide Lara. Those factors, combined with the evidence relating to the relationship between Ferguson and Joanne Ferguson, satisfy me that that Ian Ferguson had the effective control of the whole of the Lara property.
No evidence was given by Joanne Ferguson at her trial. No inference can be drawn against her for not doing so. However Joanne Ferguson did not give evidence in these proceedings. When the matter came before me on 20 November, it was adjourned until 12 December. On that date I was told that Mrs Ferguson might not be available on 12 December, because she planned to have a holiday in Queensland. That holiday was said to be necessary because of Joanne Ferguson’s health. However on 20 November I was told that it was not intended that Joanne Ferguson would give evidence. I had previously directed that evidence in chief would be given on affidavit. No affidavit was filed on her behalf. No application was made for her to give evidence via audio visual link. In those circumstances, and these being civil proceedings, I am entitled to infer, and do infer, from the failure of Joanne Ferguson to give evidence without any explanation for not doing so, that any evidence which might have been given by her would not have been of any assistance to her case in respect of the issues which I must determine.[42] The failure of Joanne Ferguson to give evidence in this case reinforces the conclusion which I have reached, namely, that Ian Ferguson had the effective control of the property at Lara to the exclusion of Joanne Ferguson, notwithstanding Joanne Ferguson’s legal interest as a joint proprietor of that property.
[42]Jones v Dunkel (1959) 101 CLR 298 at 308, 312, 321; O’Donnell v Reichard [1975] VR 916 at 929; Brandi v Mingot (1976) 12 ALR 551 at 559; Ronchi v Portland Smelter Services Ltd [2005] VSCA 93 at [32] to [52].
The failure of Joanne Ferguson to give evidence in these proceedings is hardly surprising. At her trial, the principal defence of Joanne Ferguson to the charge of money laundering was that, because of her unusual marital circumstances, she did not know, nor ought she to have been aware, that there were large amounts of cash deposited into bank accounts of herself and her husband, and large amounts of cash used for purchases by herself and her husband, which had been derived from drug trafficking carried out by her husband as a member of the Drug Squad. That defence was put by way of positive assertion by Joanne Ferguson’s counsel in cross‑examination of various witnesses so as to demonstrate the lack of control of Joanne Ferguson over matters relating to the finances and properties owned by herself and her husband. If it were necessary to do so I would consider that the positive assertions, so made at the trial by Joanne Ferguson’s counsel, are capable of constituting implicit admissions by Joanne Ferguson as to a near total lack of involvement in, and control over, anything which related to the properties or finances of the household.[43] In any event it would have been difficult for Joanne Ferguson to give evidence in this proceeding contrary to the propositions made on her behalf by her counsel at her trial.
[43]See Spiteri v Visyboard Pty Ltd [2005] VSCA 132 at [41] to [44]; R v Ali (No. 2) (2005) 13 VR 257 at [21].
Thus, I have concluded that, at the time of the restraining order, the Lara property was subject to the effective control of Ian Ferguson. The parties have made submissions as to what order I should make in respect of that in the exercise of my discretion, should I reach such a conclusion. I shall defer dealing with those submissions until I have considered whether the Bambra property was also subject to the effective control of Ferguson.
The Bambra property
The property at Bambra was purchased in the name of Joanne Barrett, which was the maiden name of Joanne Ferguson. In her Notice of Response to the claim by the DPP for a declaration in relation to that property, Mrs Ferguson claimed a financial interest in the property alleging that she contributed directly to its purchase in 2001 and then provided significant payments of the mortgage over the property directly and indirectly. It is also alleged in the notice that Mrs Ferguson contributed labour in the development of the land improvements. It is alleged that Mrs Ferguson is the sole registered proprietor of the property and “as such it is not under the control of the first named respondent (Ferguson)”.
The factual allegations made in that response are not based on the evidence. Further, even if they were established by the evidence, the question nonetheless remains whether the Bambra property was subject to the effective control of Ferguson. Contrary to the allegations contained in Mrs Ferguson’s notice of response, she did not contribute to the purchase of the property in 2001. As I have already set out, the purchase price of the property was funded, totally, by a mortgage to the Commonwealth Bank. That mortgage was secured over the properties at Bambra and Lara. In order to be able to provide a first mortgage over Lara, Ferguson paid out the Bank of Melbourne mortgage by a payment of almost $200,000. Those funds were not supplied by Mrs Ferguson. Rather, they were, as I have found, the proceeds of the drug trafficking by Ian Ferguson pursuant to the conspiracy for which he has been convicted.
There is no evidence that Mrs Ferguson contributed payments to the mortgage over the Bambra property. Her mother, Mrs Boon, has made some payments to the Commonwealth Bank. There is no suggestion that those payments were made with funds of Mrs Ferguson. There was no evidence that Joanne Ferguson provided any labour, or made any other contribution, in respect of the improvement of the Bambra property. Indeed little evidence was adduced at trial in relation to any improvements effected at Bambra after its purchase in early 2001.
In any event, the question which I must determine is whether I am satisfied that, when the restraining order was made, the Bambra property was subject to the effective control of Ferguson. In my view the evidence establishes that it was. First, it was Ferguson alone who negotiated the purchase of the property. I have no doubt that it was purchased in the maiden name of Mrs Ferguson with the intention of providing some cover for the fact that Ferguson, then a member of the Drug Squad, was purchasing a valuable farm. The agent, Mr Stewart, did not meet Joanne Ferguson until he took the contracts to the Lara property in order that she might sign them. In cross‑examination by counsel for Mrs Ferguson, Mr Stewart stated that when he arrived at the residence in Lara Joanne Ferguson seemed a bit distant and disinterested. Ian Ferguson was present. Joanne Ferguson did not say much at all.[44] It was Ian Ferguson who alone carried out the complicated series of transactions between various bank accounts, which resulted in the discharge of the Lara mortgage to the Bank of Melbourne. It was Ian Ferguson who organised and negotiated the mortgage to the Commonwealth Bank which secured the loan for the purchase price of Bambra. It was Ferguson who, in April 2001, transferred $140,000 from the Streamline account to reduce the mortgage. The evidence showed that, after the purchase of the property, from time to time Ferguson went to the property alone and worked there. That evidence, combined with the fact that, as I set out above, it was Ferguson who had total control of all financial matters in the marriage, satisfy me that Ian Ferguson had the effective control of Bambra at the date on which the restraining order was made.
[44]Trial transcript 1194-1196.
Discretion: Lara and Bambra properties
The principal submissions made in respect of both the Lara and Bambra properties focussed, not so much on whether those properties were subject to the effective control of Ferguson, but, rather, on what orders I should make in the exercise of the discretion under s.70. Mr Thomson accepted that Ferguson had the effective control of Lara, at least as to his legal interest. He also accepted that Bambra should be the subject of a declaration under s.70. However he submitted that in the exercise of my discretion I should not make a declaration relating to the Lara property. Mr Thomson submitted that that property was already subject to a mortgage to the Commonwealth Bank, and also to a charge executed in favour of Victoria Legal Aid securing payment to it of outstanding legal fees of $314,000 incurred in defence of the criminal charges against Ferguson. Accordingly Mr Thomson submitted that any further charge over the Lara property would be otiose.
Mr Tyrell’s main submissions were also directed to the exercise of my discretion. Essentially Mr Tyrell emphasised that the role of Ferguson, in controlling and directing the financial and property matters of himself and his wife, took place in relation to and as part of his marital relationship with Joanne Ferguson. In that relationship Joanne Ferguson contributed to the properties, and in particular to Lara, by discharging her role as a homemaker, prime carer for the children, and part‑time employee. Mr Tyrell submitted that the marriage of Joanne and Ian Ferguson in effect creates one person in respect of property owned by one or other of them. He submitted that it would be inappropriate to regard the two parties to the marriage as playing discrete roles separately from the other. Rather, in exercising control over the financial and property matters, Ian Ferguson was acting in the marriage as agent for Joanne Ferguson.
At one stage Mr Tyrell’s arguments appeared to be directed to the question of whether Ferguson had the effective control of the Lara and Bambra properties. However as I understood them his arguments were principally if not wholly directed to the question of discretion. In so far as they may relate to the issue of control, I do not consider that the matters raised by Mr Tyrell alter or qualify my conclusion that Ferguson did have the effective control over both the Lara and Bambra properties. Indeed, the degree of control exercised by Ferguson, his dominance over all financial and property matters, and his unfettered autocracy in relation to those matters, went well beyond the division of labour or division of roles commonly occurring in a marriage. His control of financial matters was, on the evidence, well nigh exclusive of any role of his wife. In those circumstances, as I have already found, it is clear that Ferguson had the effective control of both Lara and Bambra.
I therefore turn to the question of my discretion. Both parties submitted that I do have a discretion as to what order I should make under s.70, if I come to the conclusion that Ferguson had the effective control of the particular property. Mr Tovey submitted that if I come to the conclusion that Ferguson had effective control of a property, then I am empowered to make a declaration under s.70. The discretion, as to whether I make such a declaration as to the whole or a specified part of the property, is to be exercised irrespective of any legal or other interests in the property. He submitted that in the exercise of my discretion it is appropriate for me to take into account Joanne Ferguson’s role in the marriage, the position of the children of the marriage, and the fact that at least some of the equity of Joanne Ferguson in the property was earned before the commencement of the period of offending by Ian Ferguson. He submitted that I should make a declaration in relation to the whole of Ferguson’s legal interests, and in relation to the majority of Joanne Ferguson’s legal interests. In particular he submitted that I should only exclude either ten or twenty per cent of Joanne Ferguson’s interest from the declaration.
On the other hand, Mr Tyrell submitted that I should not make any declaration in relation to Lara. Alternatively he submitted that I should not make a declaration in respect of Joanne Ferguson’s one half share as joint proprietor in the property. In fact he submitted that the percentage which should not be the subject of a declaration should be greater than Joanne Ferguson’s interest as joint proprietor of the Lara property. Mr Tyrell accepted that the Bambra property should be the subject of a declaration, but that I should “exempt” from that declaration fifty per cent of the capital gain made on the property since its original acquisition.
The submissions of both parties were based on the propositions, first, that I do have a discretion under s.70 and, secondly, that in the exercise of my discretion, I may make a declaration as to a percentage of the rights of a party in relation to a particular property.
Section 70(1)(a) provides that if the Court is satisfied that particular property was at the time of the making of a restraining order in respect of it subject to the effective control of the defendant, the Court “may” make an order declaring whole or part of the property to be available to satisfy pecuniary penalty order. As a matter of statutory construction, the use of the verb “may”, and not “shall”, denotes that the power conferred under s.70(1) may be exercised, or not exercised, as a matter of judicial discretion.[45]
[45]Interpretation of Legislation Act 1984 (Vic) s.45(1).
The more difficult question concerns the proper meaning of that part of s.70(1) which entitles the Court to make a declaration “ … that the whole, or a specified part“[46] of the property which is the subject of the restraining order is available to satisfy a pecuniary penalty order. As I have already noted, s.3 defines “property” to “mean” real or personal property and to “include” any interest in any such real or personal property. There is an inherent ambiguity in the part of s.70(1) which I have just quoted. It may mean that a declaration may be made as to a specified part (rather than the whole) of the physical item of real or personal property. Alternatively it might mean that the declaration may be made as to the whole, or a specified part, of the rights constituting the relevant interest in the property over which the defendant has effective control. In the context of a section dealing with both personal and real property, the latter construction is more likely to be the correct one. If the phrase “specified part” were held to refer to the physical item of property, then that phrase would have little work to do in relation to real estate (other than real estate already the subject of sub-division) and most items of tangible personal property. In reaching that view, I should note that I have not had the benefit of argument whether the phrase “specified part of that property” refers to the physical item or to the bundle of rights comprising the property.
[46]Emphasis added.
Ian and Joanne Ferguson are and were at all relevant times registered as the joint proprietors of the Lara property. Accordingly, each has an undivided moiety in the whole of Lara.[47] The arguments before me proceeded on the assumption that a declaration may be made as to the whole, or a specified part, of the moiety of a joint tenant. In particular it was assumed that s.70 enables me to limit any declaration made in respect of the moiety of Joanne Ferguson to a proportionate part of that interest. The point is somewhat novel and has not been the subject of argument before me. Accepting, as I do, that s.70 permits me to make a declaration as to a whole or part of a person’s interest in a property, there is no reason apparent to me why s.70 would not thus permit me to make a declaration as to a whole, or a specified part, of the interest of a joint tenant in property.
[47]Wright v Gibbons (1948) 78 CLR 313 at 329 (Dixon J).
I therefore turn to the competing contentions of the parties as to what declarations I should make in relation to the Lara and Bambra properties, both of which I have found to be subject to the effective control of Ferguson. The first submission by both Mr Thomson and Mr Tyrell was that I should make no declaration in relation to the Lara property, because it is already the subject of a mortgage to the Commonwealth Bank and also a charge to Victoria Legal Aid. Although there is no evidence as to the amount of debt secured by the Commonwealth Bank mortgage, I was told from the Bar table that that is now approximately $250,000. That estimate would be in accordance with the evidence at trial, which disclosed that the debt secured over both Lara and Bambra was reduced to approximately $220,000 by the payment made by Ferguson of $140,000 in April 2001.
I do not consider that the existence of those two secured debts are a proper basis upon which I should decline, in the exercise of my discretion, to make a declaration in respect of the Lara property. As I have stated, the Commonwealth Bank debt is secured over both Lara and Bambra. It is a matter of speculation whether the bank would seek to discharge the debt by taking possession of, and exercising its rights in relation to, Lara rather than Bambra. Indeed, as a matter of common sense it is more likely that the bank would seek to recover its debt by exercising its rights as mortgagee of Bambra. If the bank discharges its debt by realising its rights against Bambra, then Ian and Joanne Ferguson would have a significant equity in the Lara property, even allowing for the debt secured over it to the Victorian Legal Aid Authority. In those circumstances I do not consider that it is appropriate to decline to make an order under s.70(1) in respect of the whole of the Lara property.
The principal argument by Mr Tyrell on behalf of Joanne Ferguson, in relation to Lara, related to her role in her marriage to Ian Ferguson. That factor is, I consider, relevant to the exercise by me of my discretion under s.70. The interest of Joanne Ferguson in the Lara property as a joint proprietor was not a contrivance or a device. It was, as Mr Tyrell correctly points out, a legitimate interest of the kind ordinarily held by a wife in a matrimonial home. Her interest was born from her marital relationship with Ian Ferguson, in which Joanne Ferguson contributed as a wife, mother, homemaker and part-time policewoman.
The effective control which I have found Ian Ferguson exercised, not only over his own interests but also over his wife’s interest, was quite extraordinary. The nature and extent of that control was far beyond what one would ordinarily expect in a marriage. That control was very much a product of Ferguson’s volatile and domineering personality. In the battleground which their marriage appears to have been, Ferguson seized and maintained a tight grip on all financial matters including his wife’s legal interest in the matrimonial home. While I have found that Ferguson had effective control of the Lara property, including Joanne Ferguson’s joint interest, nonetheless I do not consider that her interest in the matrimonial home is the type of interest to which s.70(1)(a) is primarily directed. Furthermore Joanne Ferguson acquired her interest in Lara in late 1993. It would appear, from Mr Curtin’s estimate of financial position, that, shortly before Ferguson’s criminality commenced, as at 30 June 1999 the mortgage debt secured over the property amounted to $222,000. Mr Curtin’s estimate refers to a valuation conducted of the property in 1996 estimating its value at $320,000. It would therefore seem that Joanne Ferguson acquired at least some equity in the property before the commencement of her husband’s criminality for which he has been convicted.
In those circumstances, it would, in my view, be appropriate to exercise my discretion so as not to make a declaration in respect of the whole of Joanne Ferguson’s joint interest in the Lara property. On the other hand, it is clear that some of the equity currently held by Joanne Ferguson in the Lara property, as a joint tenant, is the result of her husband’s offending. In particular, improvements such as the swimming pool and sails were funded by the proceeds of his drug trafficking. In addition the Bank of Melbourne mortgage debt, amounting to almost $200,000, secured over the property, was discharged with the proceeds of Ferguson’s drug trafficking. In April 2001 the Commonwealth Bank mortgage over Lara and Bambra, which secured the loan in respect of the purchase price of Bambra, was reduced by a payment by Ferguson of $140,000, at least some of which derived from the proceeds of his drug trafficking. Thus a not insignificant part of the value of Joanne Ferguson’s equity in the Lara property was not the product of her input during the marriage, but rather was the product of her husband’s criminal conduct. In those circumstances, in the exercise of my discretion, it is appropriate to make a declaration under s.70(1) in respect of a part of Joanne Ferguson’s joint interest in the Lara property. Bearing in mind the matters to which I have already referred, I consider that it is appropriate that the declaration should relate to fifty per cent of Joanne Ferguson’s joint interest in the property.
Mr Tyrell did not submit that Ferguson did not have effective control of the Bambra property. Rather he submitted that, pursuant to my discretion, any declaration made by me in respect of Bambra should not cover fifty per cent of the capital gain in Bambra since its acquisition. In other words Mr Tyrell submitted that the declaration which I make in respect of Bambra should exclude from it fifty per cent of the increase in the value of Bambra since its acquisition, being fifty per cent of $315,000. Mr Tyrell submitted that Joanne Ferguson had contributed financially to the acquisition of the mortgage, by contributing the proceeds of the sale of her unit which she had owned when she first married Ian Ferguson. Secondly, it was submitted that Sheila Boon had made mortgage payments in respect of the Bambra property on behalf of Joanne Ferguson. At the trial Mrs Boon stated that she had been making mortgage payments. Mr Curtin’s evidence was that the periodic payments in relation to the mortgage amounted to $650 per fortnight.
I do not consider that the matters advanced by Mr Tyrell should persuade me in the exercise of my discretion not to make a declaration in respect of the whole of the Bambra property. There is no evidence that the proceeds of the sale of Joanne Ferguson’s unit played any role in the acquisition of the Bambra property. Indeed I have found to the contrary. The contributions by Mrs Boon to the mortgage do not constitute a factor which persuade me not to make a declaration under s.70. As I found, the capital gain on the property is a direct product of its acquisition by Ferguson. In turn that acquisition was the result of the use by him of the proceeds of his crime to discharge the Bank of Melbourne mortgage, and thus to raise a fresh loan from the Commonwealth Bank. In those circumstances I intend to make a declaration in respect of the whole of the Bambra property.
Declaration: Personal Property
I now turn to consider the items of personal property, covered by the restraining order, in respect of which the DPP claims a declaration.
Item (c): The 2000 Toyota Landcruiser wagon
On 1 July 2000, Ferguson negotiated the purchase of a Toyota Landcruiser wagon from Blood Toyota, Geelong. The total contract price was $64,700. Ferguson signed the contract as purchaser and paid a $10,000 deposit in cash. He took the cash from his own pocket in $50 bills, bundled into $1,000 lots. On 15 September Ferguson returned and collected the vehicle. On that day he paid the balance of the purchase price by a bank cheque of $25,700 and cash of $29,000. In response to the DPP’s claim for a declaration in respect of that vehicle, Ferguson, in his written response, has contended that the declaration should be limited to his 50% interest “in marital property”. However no submission was addressed to me to that effect.
I am satisfied that the purchase price for the Landcruiser was paid from the proceeds of drug trafficking by Ferguson under the conspiracy. Thus, if it were relevant, Mrs Ferguson would not, in any event, have any claim to an equitable interest in the vehicle. It was Ferguson who, on his own, negotiated the purchase of the vehicle. There is no evidence that Joanne Ferguson had anything to do with the purchase of it. It is clear on all the evidence that Ferguson not only owned the vehicle, but had the effective control of it. Accordingly I shall make a declaration in respect of that item of property.
Item (d): Blue 2001 Landini 7860 tractor
In September 2001 Ferguson purchased a blue Landini tractor for $46,500. In her written response to the claim for a declaration in respect of the tractor Mrs Ferguson stated:
“The tractor is registered in the name of the second respondent and is not under the control of the first respondent. The second respondent uses the tractor to maintain the Lara property.”
In fact, the tractor, when first purchased in September 2001, was registered in the name of Ferguson. In September 2002 it was registered in the name of Joanne Ferguson, most probably with a view to protecting it from possible seizure.
There is no evidence that Mrs Ferguson has used the tractor on the Lara property or elsewhere. Ferguson’s evidence at trial was that it was he alone who made the decisions for the purchase of larger items of agricultural equipment such as the tractor. He said that he would inform Mrs Ferguson but did not feel the need to discuss the financial side of the purchase of some items with her. He said, “A tractor is a tractor to Joanne. It is the same as a plough. I don’t know whether she would have an understanding of what they cost or what they could cost.”[48]
[48]Trial transcript 3107.
As I have already stated the evidence was that it was Ian Ferguson who ran the farm. It was he who made all significant decisions. He controlled the finances and items of property of the family. All that evidence leads to the conclusion that Ferguson, at the time of the making of the restraining order, had the effective control of the tractor. Accordingly I shall make a declaration in respect of it.
Items (e) and (f): Black 1997 BMW coupe motor car and personalised vehicle registration plates “BMW 388”
In November 2000 Ferguson purchased a secondhand black 1997 BMW couple motor car from Duy Le. Five months earlier Duy Le had failed to appear in two courts and had absconded. Warrants had been issued for his arrest. Ferguson paid Duy Le cash and heroin for the BMW. Shortly thereafter Duy Le gave Ferguson personalised number plates “BMW 388” which he had purchased for the vehicle. In his written response to the claim by the DPP for a declaration in respect of those two items, Ferguson claimed that any declaration should be limited to his 50% “interest in marital property”. However no argument to that effect was addressed to me. Joanne Ferguson has not opposed the making of any declaration in relation to the vehicle.
At trial Ferguson gave evidence that he purchased the vehicle from Ky Quoc Pham, the uncle of Duy Le. Ky Quoc Pham was a high level drug trafficker. Ferguson’s evidence on this aspect lacked any credibility. It was clear that he purchased the vehicle from Duy Le. I am satisfied that it was purchased with the proceeds of the conspiracy. Thus it would not be subject to any equitable interest of Joanne Ferguson. In any event, consistently with the evidence that I have summarised above, it is clear that Ferguson had the effective control of the vehicle. I therefore intend to make a declaration in respect of it.
Item (i): 1980 Mitsubishi Cantor tray truck, registration “29459F”
In early 2000 Ferguson purchased a Mitsubishi tray truck from Philip Browning for $1,800. Ferguson paid cash. There was evidence that he used the tray truck from time to time, and indeed at one stage, sought Duy Le’s assistance in order to obtain a roadworthy certificate for it. I am satisfied that Ferguson had effective control of the tray truck. No argument was addressed to me to the contrary. I shall make a declaration in relation to it.
Item (k): MTD 14.5 HP ride-on mower
In June 1999 Ferguson purchased a ride-on mower from “Mowers Galore” in North Geelong. He paid $2,750 cash for it. I am satisfied that at the time of the making of the restraining order the mower was subject to the effective control of Ferguson. Although there is little other evidence in relation to the mower, the evidence was that Ferguson controlled the finances and properties. It was he who used the agricultural equipment. I am therefore satisfied that the mower was subject to the effective control of Ferguson at the time of the making of the restraining order.
Items (l), (m) and (n): Savage 525 Osprey SP boat; Honda 4 stroke outboard motor; Dunbier boat trailer
I have already concluded that it was Ferguson, and not his father Norman Ferguson, who paid the cash purchase price of $26,600 for the Savage boat. After the boat had been collected from “The Boat Shop”, Ferguson towed it from Williamstown to his own home address in Lara. The contract was in the name of Norman Ferguson. However, Ferguson paid the purchase price, and at least initially took possession of the boat. In those circumstances I conclude that he was the owner of the boat, and also had the effective control of the boat. Norman Ferguson declined to attend for cross‑examination and therefore gave no evidence. His failure to give evidence in this case strengthens my conclusion that Ferguson had the effective control of the boat at the time of the making of the restraining order.
The purchase agreement in relation to the boat records that there was a trade‑in valued at $3,800, off-set against the total price of $30,400. Ian Ferguson stated that the boat traded in was his father’s. I found Ferguson’s evidence concerning the transaction to be lacking credibility. Again Norman Ferguson did not give any evidence. Accordingly I make no finding as to who owned the boat which was traded in. Even if the boat which was traded in had belonged to Norman Ferguson that would not alter my conclusion that Ian Ferguson had effective control of the Savage boat purchased from The Boat Shop, together with the outboard motor and boat trailer. If the boat traded in had belonged to Norman Ferguson, that would not create any interest of Norman Ferguson in the Savage Osprey. In any event it would not disturb the conclusion that Ian Ferguson had the effective control of the Savage boat. Nor would it provide any discretionary basis for me to decline to make a declaration in respect of the whole of the boat. Accordingly I shall make a declaration in respect of the Savage Osprey boat, the Honda 4 stroke outboard motor and the Dunbier boat trailer.
Item (o): Commonwealth Bank of Australia Streamline account in the names of Joanne Maree Ferguson and Ian Norman Ferguson
On 18 January 2001 Joanne Ferguson opened a Commonwealth Bank Streamline account, in her maiden name, Joanne Marie Barrett, at the Geelong East branch of the Commonwealth Bank. Amanda Trott, an officer of that Commonwealth Bank, gave evidence as to the opening of the account. She confirmed that Mrs Ferguson opened it, and produced identification. She gave her address as 38 Anderson Street, Geelong East. At trial Ferguson’s evidence was that he had control of the card for the Streamline account and that he deposited money into that account. It is clear on the evidence that Ferguson had the effective control of the account and accordingly I shall make a declaration in relation to it.
Item (p): Property listed in Schedule 1 to the Restraining Order
The items of property listed as items numbered 1, 3, 5, 8, 9 and 18 were all the subject of evidence at the trial. No argument was addressed to me in this proceeding that those items, purchased by Ferguson, were not subject to the effective control of Ferguson. In my view, based on the evidence of the acquisition of them by Ferguson, they were in the effective control of Ferguson. Accordingly I intend to make a declaration in relation to each of those items of property.
The items of property listed as items numbered 4, 6, 7, 10 to 17 (inclusive), and 19, in Schedule 1, were not the subject of any evidence put before me or at trial. Accordingly I am unable to make any finding as to whether or not those items were subject to the effective control of Ferguson. I shall therefore not make any declaration in relation to them. They are, of course, still subject to the restraining order.
The remaining item, No. 2, is the New Holland Twine baler purchased by Ferguson in September 2001, to which I have referred earlier in these reasons.[49] I have already found, on the balance of probabilities, that Ferguson paid for the baler, and that he was not repaid by Mr Ogden. I accept that the baler has remained on the property of Ogden since shortly after its purchase. However, Ferguson claimed the Goods and Services Tax paid for the baler, and has had it insured on his own farm insurance policy. Ogden has not insured the baler. Nor has he claimed it as a depreciable item on his Tax Return. The evidence satisfies me on the balance of probabilities that Ian Ferguson has remained the legal owner of the baler. Although he has permitted Ogden to have the continued use of it, I do not consider that that disturbs Ferguson’s right to have effective control of the baler. Indeed, if Ferguson is no longer the owner of the baler, then it would have been the subject of a gift by him to Ogden, which would have brought it within s.70(1)(b) of the Confiscation Act. Accordingly I intend to make a declaration in respect of the baler.
[49]Paragraphs 19 et seq.
Conclusion
Accordingly, for the reasons set out above, I intend to make the following orders in this proceeding:
1.I order that the respondent, Ian Ferguson, pay to the State of Victoria a pecuniary penalty which I assess in the sum of $995,000.
2.Pursuant to s.70(1) of the Confiscation Act 1997 I declare that the following property is available to satisfy the said pecuniary penalty order:
(a)The whole of the joint interest of the respondent Ian Ferguson in the property at 130 Branch Road, Lara being the property contained in Certificate of Title Volume 07973 Folio 085.
(b)Fifty per centum of the joint interest of the respondent Joanne Ferguson in the said property at 130 Branch Road, Lara.
(c)The whole of the property at 55 School Road, Bambra being the property contained in Certificate of Title Volume 8943 Folio 221.
(d)The blue 2000 Toyota Landcruiser wagon, previously issued with registration number QKT 449, engine 1FZ0444951, chassis/vehicle identification number JT711UJA509019399.
(e)The blue 2001 Landini 7860 tractor, previously issued with registration number QTP 389, engine number U919211H, chassis/vehicle identification number TESLJ14146.
(f)The black 1997 BMW coupe motor car, previously issued with registration number BMW 388, engine number 34431446256S3, chassis/vehicle identification number 6T9REPV97X1LNT001.
(g)Personalised Victoria vehicle registration plates BMW 388.
(h)1980 Mitsubishi Canter tray truck registration number 29459F.
(i)MTD 14.5hp 38” ride-on mower model number 13AM678F670, serial number IK048h30172.
(j)Savage 525 Osprey SP boat registration number FT 994 equipped with Hummingbird Fish Finder and GME marine radio and aerial, registered in the name of Norman Ferguson of 309 Grimshaw Street, Watsonia 3087.
(k)Honda 4 stroke 90hp outboard motor, model number BF90A1LRTD, VIN BBBL4400239, engine number 2100257.
(l)Dunbier boat trailer registration number N83509 registered in the name of Norman Ferguson of 309 Grimshaw Street, Watsonia.
(m)Commonwealth Bank of Australia Streamline account number 386610067119 in the names of Joanne Marie Ferguson and Ian Norman Ferguson.
(n)The following items listed in Schedule 1 to the restraining order made by His Honour Judge Holt in the County Court dated 27 May 2003, namely items 1, 2, 3, 5, 8, 9 and 18, being respectively: a Silvan 8 metre boom spray, model number K06-60; a New Holland twine baler model number 650; a John Shearer 13R link seed drill serial number 167318; a Berends 14 disc off-set plough; a 12’ roller; a flail mower; a Panasonic widescreen television model number TX-51P5H.
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