Director of Public Prosecutions v Twenty Fourth Trengganu Pty Ltd
[2011] VSCA 92
•12 April 2011
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2009 3893
| DIRECTOR OF PUBLIC PROSECUTIONS FOR VICTORIA | Appellant |
| v | |
| TWENTY FOURTH TRENGGANU PTY LTD | Respondent |
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| JUDGES | NETTLE, MANDIE JJA and HARGRAVE AJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 31 March 2011 |
| DATE OF JUDGMENT | 12 April 2011 |
| MEDIUM NEUTRAL CITATION | [2011] VSCA 92 |
| JUDGMENT APPEALED FROM | Rizzo & Anor v Director of Public Prosecutions for Victoria [2009] VSC 525 (Kaye J) |
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CONFISCATION – Motor vehicle registered in company name – Exclusion application by company – Offender held no office and had no interest in the company – Vehicle purchased with money lent by offender to the company – Primary possession of vehicle by the offender – Whether company ownership a sham to disguise offender’s interest in the vehicle – Whether offender had effective control of the vehicle – Confiscation Act 1997 s 22(b)(i).
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| Appearances: | Counsel | Solicitors |
| For the Appellant | Mr S G O’Bryan SC with Dr P T Vout | Solicitor for Public Prosecutions |
| For the Respondent | Mr A S Dickenson | Lobb and Kerr Solicitors |
NETTLE JA:
I have had the advantage of reading in draft the reasons for judgment of Hargrave AJA and gratefully adopt his Honour’s statement of the facts and issues.
In this case, the judge found that the respondent was the legal and beneficial owner of the motor car which was the subject of its application for exclusion under s 22(b)(i) of the Confiscation Act 1997 (‘the Act’). The appellant does not seek to disturb that finding.
In this case, the judge also found that, although the respondent was in the habit of making the vehicle available to the defendant, Bartholomew Rizzo, under a family arrangement whereby he was permitted to treat the vehicle for the most part as if it were his own, the respondent at all times retained the right to require immediate possession of the vehicle, to direct how and when it be deployed in the service of the respondent, and to sell or otherwise dispose of it as the respondent determined in the respondent’s own interests. The appellant does not seek to disturb that finding either.
The judge further found that, although it might be that the defendant had a moral claim to the use of the vehicle, inasmuch as he provided the loan funds with which, indirectly, the respondent financed its purchase, he did not have any right or ability, de facto or de jure, to control the respondent’s exercise of its rights to require possession or deployment or disposal of the vehicle. That finding, too, is not challenged.
Given those findings, the appeal was bound to fail.
In his reasons for judgment, Hargrave AJA has essayed the question of whether an ‘applicant’s interest’ in relevant property for the purposes of s 22(b)(i)(D) of the Act should be read as including a ‘primary incident’ of the applicant’s interest and, thus, whether it is enough to constitute effective control over an applicant’s interest in relevant property for the purposes of that provision that a defendant have
no more than effective control of that primary incident.
As at present advised, it appears to me that it is a question of fact and degree dependent, among other things, upon the nature of the relevant property, the nature of the applicant’s interest in the relevant property, the nature of the primary incident and the nature and extent of the defendants’ control over that primary incident.[1]
[1]Connell v Lavender (1991) 7 WAR 9, 22 (Malcolm CJ); Director of Public Prosecutions v Toro-Martinez (1993) 71 A Crim R 326, 345 (Handley JA); Director of Public Prosecutions v Tat Sang Loo [2002] VSC 231, [30] (Ashley J); Commonwealth Director of Public Prosecutions v Hart (No 2) [2005] 2 Qd R 246, 258, [21]–[22] (McPherson JA); Lee v Director of Public Prosecutions (C’th) (2009) 75 NSWLR 581, 588 [27].
I do not find it necessary, however, to reach a concluded view on the point for the purposes of this appeal. For the only ‘primary incident’ on which the appellant relied for the purposes of the appeal was ‘possession’ and, as has already been explained, the judge found that the defendant did not have de facto or de jure capacity to control the exercise of respondent’s right to immediate possession.[2]
[2]Cf. Commonwealth Director of Public Prosecutions v Hart (No 2) [2005] 2 Qd R 246, 260, [25]–[28].
I would dismiss the appeal.
MANDIE JA:
I agree with Hargrave AJA.
HARGRAVE AJA:
The respondent, Twenty Fourth Trengganu Pty Ltd (‘the company’), is the registered owner of a Holden Utility motor vehicle (‘the vehicle’). The company is owned and controlled by Vincent Rizzo and his wife, Maria Rizzo. They are its only directors and officers. Their son, Bartholomew Rizzo, was an employee of the company at relevant times, but has never owned an interest in or been an officer of the company.
The company owns a number of assets, including the Rizzo family business ‘Rizzo’s House of Linen’. At relevant times, that business operated at two locations. In the course of the business, the company had the need to transport stock between its two stores and to make deliveries as required. At all relevant times, the company owned a van for this purpose. In May 2006, it also acquired the vehicle. Vincent Rizzo said the vehicle was purchased to assist with the company’s transport requirements.
The vehicle was very occasionally used for the company’s business. At these times, it was usually driven by Bartholomew Rizzo, but others used it for company business on a few occasions. The vehicle was primarily garaged at Bartholomew Rizzo’s home and was used by him for personal purposes. He paid for its petrol, but received reimbursement for the occasions on which the vehicle was used for company business.
The vehicle was used by Bartholomew Rizzo in the course of him trafficking in a drug of dependence in not less than a commercial quantity applicable to that drug. In June 2007, he was arrested and charged. A restraining order was made in respect of his interest in various assets, including the vehicle. Subsequently, Bartholomew Rizzo pleaded guilty to the charges and was sentenced to a total term of 16 years’ imprisonment with a minimum non-parole period of 13 years.
It is common ground that the vehicle was ‘tainted property’ within the meaning of the Confiscation Act 1997 (‘the Act’).
Initially, Bartholomew Rizzo applied under s 20 of the Act for an exclusion order in respect of the assets covered by the restraining order. He subsequently withdrew that application and it was dismissed by consent.
The company then made an application for an exclusion in respect of the vehicle. The application was supported by an affidavit sworn by Vincent Rizzo. In that affidavit, Mr Rizzo swore that:
(1) the company purchased the vehicle in May 2006 for the sum of $30,000;
(2) the vehicle was duly registered in the company’s name with VicRoads;
(3) the vehicle was purchased to assist with the transport of stock between stores and company deliveries as required;
(4) the vehicle was primarily driven by his son, Bartholomew;
(5) his son had no interest whatsoever in the vehicle; and
(6) the vehicle was garaged at his son’s residence ‘merely as a convenience’.
The appellant, the Director of Public Prosecutions (‘DPP’), was the respondent to the company’s exclusion application. Following investigations by the DPP, significant facts surrounding the acquisition of the vehicle by the company emerged. In summary:
(1) The vehicle was purchased for the sum of $30,000 plus stamp duty, registration and insurance.
(2) At the time the vehicle was purchased, the company did not have sufficient funds to purchase it. At best, it had only $8,000 in its bank account.
(3) The purchase price of $30,000 was advanced to the company by Bartholomew Rizzo by a bank cheque payable to the company. Bartholomew Rizzo obtained the funds to purchase the bank cheque from one of his criminal associates.
(4) The company used this $30,000 to pay the purchase price of the vehicle, and paid the remaining amounts for stamp duty, registration and insurance from its own funds. Further, it would appear that the company paid the registration and insurance on at least one further occasion, as the vehicle was not seized by the police until more than one year later.
(5) The vehicle was purchased from the sister of a known criminal.
(6) The $30,000 was recorded in the books of the company as a loan from Vincent Rizzo and his wife, Maria, to the company.
Vincent Rizzo was cross-examined at the hearing of the exclusion application. He made a favourable impression on the trial judge, who perceived him to be ‘an honest and sincere witness’. The trial judge unreservedly accepted that, at the time the vehicle was purchased by the company, Mr Rizzo genuinely believed that his son, Bartholomew, was not then engaged in criminal activities, and that the funds which he lent to the company were derived from his savings.
In cross-examination of Vincent Rizzo, the following facts emerged:
(1) Vincent Rizzo and his son discussed purchasing another vehicle for the business for the purpose of transporting large mattresses which would not fit in the existing van. His son found the vehicle. Vincent Rizzo ‘wasn’t too happy about his choice’ but acceded to his son’s choice, as his son would be driving the vehicle and he wanted a ‘more younger looking’ vehicle than an ordinary delivery vehicle. Vincent Rizzo said that his son had always had issues in his life and that he ‘just wanted to make him happy’. So he relented and agreed to his son’s choice that the vehicle be acquired and said words to the effect ‘yeah look it will do the purpose, it’s not exactly what we’re looking for but if it makes you happy that’s fine’.
(2) At the time of the discussion, Vincent Rizzo told his son that the company did not have sufficient funds to purchase the vehicle. In response, Bartholomew Rizzo said that he would lend the money to the company.
(3) The $30,000 loan was recorded in the company’s books as a loan from Vincent and Maria Rizzo at the suggestion of the company’s accountant, who thought it easier to put it under their loan account and to treat the advance to the company as a loan, in the first instance, from Bartholomew Rizzo to his parents. The trial judge accepted this explanation.
(4) There was no fixed time for the loan to be repaid, nor was there any discussion as to the payment of interest on the loan. Vincent Rizzo said this was in accordance with other loans made within the Rizzo family from time to time.
(5) The $30,000 loan was used to pay the purchase price for the vehicle. The remaining charges for stamp duty, registration and insurance were paid by the company from its own funds.
(6) Although Bartholomew Rizzo was the predominant user of the vehicle, and it was regularly garaged at his home, the vehicle was used for the purposes of the business from time to time. A set of keys was kept at the company’s premises, so that others could drive it for the purposes of the company’s business but this happened on rare occasions.
(7) The loan has been repaid, because Vincent Rizzo has paid Bartholomew’s legal fees and Bartholomew now owes him money on a balance of account.
In re-examination, Vincent Rizzo said:
(1) The company has been depreciating the vehicle in its books of account since it was acquired.
(2) His son never had authority to sell the vehicle. It was registered in the company’s name and would require his signature on behalf of the company for any transfer. According to Vincent Rizzo, if the vehicle was to be sold it would be his decision (‘I’ve got to make the final decision, I had the final say’).
The trial judge’s decision
Given that the parties agreed that the vehicle was ‘tainted property’ within the meaning of the Act, the company’s exclusion application fell to be determined under s 22(b)(i) of the Act as it stood at the relevant time,[3] which provides:
[3]The restraining order was made on 20 December 2007.
(b)Where the application [for an exclusion order] is made by a person other than the defendant, the court may make an order excluding the applicant’s interest in the property from the operation of the restraining order –
(i)if the court is not satisfied that the property in which the person claims an interest is not tainted property or derived property but is satisfied that —
(A)the applicant was not, in any way, involved in the commission of the Schedule 2 offence; and
(B)where the applicant acquired the interest before the commission, or alleged commission, of the Schedule 2 offence, the applicant did not know that the defendant would use, or intended to use, the property in, or in connection with, the commission of the Schedule 2 offence; and
(C)where the applicant acquired the interest at the time of or after the commission, or alleged commission, of the Schedule 2 offence, the applicant acquired the interest without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the property was tainted property or derived property; and
(D)the applicant’s interest in the property was not subject to the effective control of the defendant on the earlier of the date that the defendant was charged with the Schedule 2 offence or the date that the restraining order was made in relation to the property; and
(E)where the applicant acquired the interest from the defendant, directly or indirectly, that it was acquired for sufficient consideration.
It was also common ground on the hearing of the exclusion application that the company satisfied paras (A) and (B) of s 22(b)(i) and that paras (C) and (E) were not relevant.
Further, it was common ground that the concept of ‘effective control’ was correctly summarised by Kaye J, who was also the trial judge on the company’s application, in DPP v Ferguson,[4] where his Honour stated:
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.[5]
[4][2006] VSC 484.
[5]Ibid, [54].
Before the trial judge, it was submitted on behalf of the DPP that the exclusion application should fail for two reasons. First, because Bartholomew Rizzo, and not the company, was the true owner of the vehicle. Secondly, because the company’s interest in the vehicle was subject to the effective control of Bartholomew Rizzo at relevant times. Each of these submissions was based upon two principal facts. First, the fact that Bartholomew Rizzo had possession and use of the vehicle for most of the time. Secondly, the fact that Bartholomew Rizzo paid the sum of $30,000 directly to the company, and thus enabled the company to purchase the vehicle. Based on these principal facts, it was submitted on behalf of the DPP that the registration of the vehicle in the name of the company was a sham, designed to disguise the fact that Bartholomew Rizzo was the true owner of the vehicle. In that regard, reliance was placed upon the fact that the company’s records wrongly record the $30,000 as a loan from Vincent and Maria Rizzo, and not from Bartholomew Rizzo who was the actual source of the funds. .
The trial judge rejected the DPP’s submissions. Accepting the evidence of Vincent Rizzo, the trial judge found that the company was the true owner of the vehicle and that Bartholomew Rizzo was not in effective control of the company’s interest in the vehicle. Accordingly, having regard to the concessions made concerning the other elements of s 22(b)(i) of the Act, he made an order excluding the vehicle from the operation of the relevant restraining order. On appeal, the DPP accepts the correctness of the trial judge’s determination on the first issue, that the company was the true owner of the vehicle at the relevant time. Notwithstanding this concession, the DPP persists on appeal with the contention that Bartholomew Rizzo was in effective control of the company’s interest in the vehicle at the relevant time. In considering this contention, it is first necessary to identify the extent of the company’s ownership in the vehicle, as the exclusion application under s 22(b)(i) of the Act relates to ‘the applicant’s interest’. Accordingly, it remains relevant to consider the trial judge’s reasons for concluding that the vehicle was owned by the company at the relevant time.
The trial judge’s reasons for concluding that the vehicle is owned by the company may be summarised as follows:
(1) Vincent Rizzo impressed the trial judge as an honest and sincere witness.[6]
[6][2009] VSC 525, [37].
(2) The trial judged accepted Vincent Rizzo’s evidence that the vehicle was purchased by the company with its own funds, albeit that the funds had been lent to the company by Bartholomew Rizzo.[7]
[7]Ibid, [36].
(3) The fact that the vehicle is registered in the name of the company.[8]
[8]Ibid.
(4) The fact that the company paid the initial registration, stamp duty and insurance and has paid the annual registration and insurance subsequently.[9]
[9]Ibid.
(5) The trial judge rejected the DPP’s submission that the company’s registered ownership of the vehicle was a sham to disguise Bartholomew’s ownership. In large part, this conclusion was based upon the trial judge’s unreserved acceptance of Vincent Rizzo’s evidence that he genuinely believed that his son was not then engaged in criminal activities and that the funds advanced by him to the company were derived from savings. Accordingly, by inference, there was no cause for Vincent Rizzo to involve himself in any sham to disguise Bartholomew’s ownership, as there was no perceived need for a sham in the absence of any knowledge that Bartholomew was engaged in criminal activity or that the funds advanced to the company were derived from criminal activity.[10]
[10]Ibid, [37].
(6) Bartholomew Rizzo was a mere employee of the company, which was by no means his alter ego.[11]
[11]Ibid.
(7) Although the vehicle was not that favoured by Vincent Rizzo for the company’s purposes, it was nevertheless a vehicle which had a genuine use in the company’s business and was in fact genuinely used in the business on a number of occasions.[12]
[12]Ibid, [38].
(8) Vincent Rizzo had a spare key to the vehicle, and was able to ensure its use from time to time for the company’s business.
(9) The trial judge accepted Vincent Rizzo’s explanation that it was the accountant who chose to record the loan to the company as one from Vincent Rizzo and his wife, and not from Bartholomew Rizzo.
Senior counsel for the DPP accepted that the effect of the trial judge’s finding as to ownership was that the company was the legal and beneficial owner of the vehicle. Further, counsel rightly acknowledged that the company did not grant Bartholomew Rizzo an exclusive right to possession of the vehicle. Rather, it granted him what counsel described as a general right to unsupervised possession for an indefinite period, subject only to the right of the company to require possession of the vehicle for use in its business when required.
The question remains: what was ‘the applicant’s interest’ in the vehicle for the purposes of s 22(b)(i) of the Act? It was submitted on behalf of the DPP that the concept of an interest in relation to property is widely defined in the Act. Reliance was placed on the definitions of ‘interest’ and ‘property’ in s 3 of the Act:
interest, in relation to property, means—
(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;
property means real or personal property of every description, whether situated within or outside Victoria and whether tangible or intangible, and includes any interest in any such real or personal property; [13]
[13]Emphasis added.
Further, reliance was placed upon s 9 of the Act, which recognises that a person may be in effective control of property whether or not the person has an interest in the property. Section 9 provides:
9 Effective control of property
(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 paragraph (b), and other persons.
Finally, on the issue of the extent of the company’s interest in the vehicle, reliance was placed on the underlying purpose of the Act, to deter serious criminal activity. Particular reference was made to s 1(d) of the Act, which provides that one of the purposes of the Act is to provide for the forfeiture of property used in connection with the commission of certain serious offences.
By reference to these definitions and provisions of the Act, it was submitted on behalf of the DPP that ‘the applicant’s interest’ in the relevant property for the purposes of s 22(b)(i)(D) should be construed to include any ‘primary incident’ of the applicant’s interest. Thus, it was contended that an applicant who (like the company in this case) is the legal and equitable owner of the property, and thus has an interest within para (a) of the definition of ‘interest’, may also have a subsidiary interest of the kind specified in para (b) of the definition. On this basis, it was submitted that s 22(b)(i)(D) of the Act operates to deprive the Court of the discretion to make an exclusion order if the defendant is in effective control of the subsidiary interest at the relevant time. When pressed with various examples of how such an interpretation could work hardship on an innocent owner of property, such as loss of unencumbered real estate, counsel for the DPP limited the submission to cases such as the present, where the property in question is a movable chattel of a depreciating kind and the primary purpose of the chattel (here, the vehicle) is to enable its use.
I do not accept these submissions. Such a result would require very clear language which is not to be found in the Act. The definition of ‘interest’ in relation to property directs attention to two alternative forms of interest, separated by the conjunction ‘or’ between paras (a) and (b). First, by para (a) of the definition, an interest in property may be a legal or equitable estate. In my view, if an applicant for an exclusion order has such an interest, then it is that interest which is ‘the applicant’s interest’ for the purposes of s 22(b)(i) of the Act. If the applicant does not have such an interest, then an exclusion application may still be made if the applicant has, in terms of para (b) of the definition, a lesser interest such as a right, power or privilege over, or in connection with, the relevant property.
I accept that the definitions of ‘interest’ and ‘property’, and a reading of the Act as a whole, demonstrates that Parliament has intended to cast its net widely, in defining the concept of interest in property. In my opinion, the width of the defined concept has two purposes. First, a wide definition promotes the ability of the DPP to restrain any form of interest which a defendant who engages in serious criminal activity may have. Secondly, the wide definition also gives persons who have some interest in the property, short of ownership, the right to apply for an exclusion order and thus avoid injustice from the harsh operation of the confiscation provisions of the Act. The width of the concept does not support the DPP’s construction of the words ‘the applicant’s interest’ in s 22(b)(i)(D) of the Act.
Was Bartholomew Rizzo in effective control of the company’s interest in the vehicle?
The trial judge based his finding that Bartholomew Rizzo was not in effective control of the company’s interest in the vehicle on the following grounds:
(1) His impression that Vincent Rizzo was an honest and sincere witness.[14]
[14][2009] VSC 525, [37].
(2) On the one hand, in favour of an inference of effective control, the judge accepted that the evidence demonstrated that Bartholomew Rizzo had the primary use of the vehicle and authorised associates of his to use it on a number of occasions. Further, the trial judge recognised that the fact Bartholomew Rizzo had provided the funds for the purchase of the vehicle gave him ‘at least a strong moral claim, in the family setting, to the predominant use of it’.[15]
[15]Ibid, [45].
(3) On the other hand, telling against the inference of effective control, the trial judge found that Bartholomew did not have the right to use the vehicle solely for his own personal purposes. The judge accepted that Bartholomew was required to and did use the vehicle for the purposes of the company’s business, and that the vehicle was also used for the company’s business by others, albeit on infrequent occasions.[16] Further, the trial judge considered that the facts giving rise to his finding that the company was the true owner of the vehicle told against the company’s interest as owner being subject to the effective control of Bartholomew Rizzo.[17]
[16]Ibid, [46].
[17]Ibid.
(4) Based on these factors, the trial judge concluded:
In those circumstances, while I accept that Bartholomew Rizzo had substantial control over the possession of the vehicle, I do not accept, on the evidence before me, that he had a right to exclude the company from use of it, if the company chose to exert its right to use the vehicle for its purposes. Further I am satisfied that Bartholomew Rizzo did not have the power, whether de jure or de facto, to dispose of the vehicle. Although he had some emotional influence over his father, because of his difficult background, nevertheless I accept Vincent Rizzo’s evidence that, in the upshot, any decision to sell or dispose of the vehicle would be made by Vincent Rizzo, not Bartholomew Rizzo. In those circumstances, I am satisfied, on the balance of probabilities, that Bartholomew Rizzo did not, at the time of his arrest, have effective control of [the vehicle].[18]
[18]Ibid.
It was submitted on behalf of the DPP that the trial judge’s conclusion on this issue was wrong because he treated the concept of ‘effective control’ as synonymous and interchangeable with ‘exclusive possession’, with the result that he found Bartholomew Rizzo’s ‘substantial possession’ to be insufficient to constitute effective control over the company’s interest in the vehicle. I do not accept that submission. Reading the reasons as a whole, the trial judge did no more than treat the factual issues concerning possession of the vehicle as relevant matters to be considered in determining whether, on the evidence as a whole, Bartholomew Rizzo had effective control of the company’s interest in the vehicle. In that regard, it is important to note that the company’s interest in the vehicle was not a mere possessory title.[19] It was full legal and beneficial ownership of the vehicle. Given that interest, it was relevant for the judge to consider whether Bartholomew Rizzo had effective control over the ownership of the vehicle, such as by having an effective right to dictate that it be sold and what would happen with its sale proceeds. The judge considered that issue and determined that Bartholomew Rizzo had no such effective control. To the contrary, the trial accepted Vincent Rizzo’s evidence that he was to be the sole decision-maker as to whether the vehicle should be sold.
[19]Nolan v Nolan (2003) 10 VR 626, [126].
It was further submitted on behalf of the DPP that the trial judge fell into error by failing to recognise that ‘effective control’ was a lesser concept than complete or absolute control. It was submitted that the primary incident of ownership of an ordinary motor vehicle, such as the vehicle in this case,[20] was the right to drive it on the road; and that it was thus a depreciating asset. In these circumstances, it was submitted that the company gave away so much of its primary possessory right as to pass effective control of the right to possession to Bartholomew Rizzo. I do not accept that submission either. The trial judge recognised that effective control was less than absolute control, describing it as encompassing a concept of control which is ‘practically effective’, in the sense that the person concerned has in fact the capacity to control the interest in question. In this case, the interest in question was the legal and equitable estate in the vehicle. The fact that Bartholomew Rizzo had the day-to-day capacity to substantially control the possession and use of the vehicle was not decisive. The company’s interest was not a mere possessory title, but a superior legal and equitable title. Accordingly, effective control of that interest required the DPP to establish that Bartholomew Rizzo had practical control over the disposition of the vehicle. The judge decided that he did not. That finding was clearly open to him on the evidence.
[20]The DPP’s submissions were limited to ‘an ordinary vehicle’, as it was acknowledged that different considerations may apply to a unique vehicle such as an antique car which may appreciate in value and would be infrequently driven on the road.
Counsel for the DPP endeavoured to support their submissions by reference to statements made by Malcolm CJ in Connell v Lavender,[21] where he stated that:
… control with respect to property is a question of fact. Does a person in fact have the power to regulate possession, use or disposition of the property in question? … Thus ‘control’ connotes something less than ownership.[22]
…
The question then is: what effect does the adjective ‘effective’ have on 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.[23]
[21](1991) 7 WAR 9.
[22]Ibid, 20. Emphasis added.
[23]Ibid, 22. Emphasis added.
It was submitted that these statements had been accepted by Ashley J (as he then was) in DPP v Tat Sang Loo,[24] and Kaye J in DPP v Ferguson,[25] and that this Court should also accept them and apply them to this case. Particular reliance was placed on the use of the conjunction ‘or’, as emphasised in the above quoted passages. On this basis, it was submitted that substantial control over either possession or use of property was sufficient to bring it within the concept of effective control; even where (as here) the interest in question is one of full legal and beneficial ownership. I do not accept that submission. Where the relevant interest is one of ownership, substantial control of the right to use or possess property, which remains subject to the owner’s right to demand possession and to sell or otherwise dispose of the property for its own benefit, is insufficient to constitute effective control of that property. Of course, substantial control of possession may be relevant in the mix of factors when determining whether effective control exists in a particular case. But this is not such a case.
[24][2002] VSC 231, [21]-[30].
[25][2006] VSC 484, [52]-[54].
Finally, it was submitted on behalf of the DPP that Bartholomew Rizzo had the primary right to possession of, and thus had ‘possessory title’ to, the vehicle.[26] On this basis, it was submitted that his title, although not superior to the company’s legal and beneficial title, gave him effective control because the company would have to enforce its ownership rights by either self-help or court proceedings if Bartholomew Rizzo refused to deliver-up the vehicle on demand. I reject that submission also. The trial judge’s acceptance of Vincent Rizzo’s evidence that the purchase price was lent by Bartholomew Rizzo to the company, and his rejection of the sham contentions, has the effect that Bartholomew’s possession of the vehicle was at all times subject to his father’s (the company’s) wishes. The mere possibility that Bartholomew may act contrary to those wishes is insufficient to found an inference that he had effective control of the vehicle.
[26]Nolan v Nolan (2003) 10 VR 626, [126].
Conclusion
The appeal should be dismissed.
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