Lange v The State of Western Australia

[2018] WASC 210

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   LANGE -v- THE STATE OF WESTERN AUSTRALIA [2018] WASC 210

CORAM:   ALLANSON J

HEARD:   28 JUNE 2018

DELIVERED          :   17 JULY 2018

FILE NO/S:   CPCA 7 of 2012

MATTER:   The Criminal Property Confiscation Act

Freezing Notice WAPFN120041 and WAPFN120042

BETWEEN:   MATTHEW ADRIAN WARWICK LANGE

First Plaintiff

MARTINE JOSIANE LANGE

Second Plaintiff

AND

THE STATE OF WESTERN AUSTRALIA

Defendant

FILE NO/S:   CPCA 8 of 2012

(Consolidated by orders of 7 May 2012)

BETWEEN:   MARTINE JOSIANE LANGE

Plaintiff

AND

THE STATE OF WESTERN AUSTRALIA

Defendant

Catchwords:

Criminal property confiscation - Criminal Property Confiscation Act 2000 (WA) - Declaration of confiscation - Where property subject to confiscation is interest in unencumbered estate - Turns on own facts

Legislation:

Administration Act 1903 (WA), s 8, s 10 (1), s 13, s 14, s 15
Criminal Property Confiscation Act 2000 (WA), s 8, s 30
Misuse of Drugs Act 1981 (WA), s 7(1)(a), s 32A(1)

Result:

Declaration granted

Category:    B

Representation:

CPCA 7 of 2012

Counsel:

First Plaintiff	:	No appearance
Second Plaintiff	:	No appearance
Defendant	:	Mr T A Staples

Solicitors:

First Plaintiff	:	No appearance
Second Plaintiff	:	No appearance
Defendant	:	Director of Public Prosecutions (WA)

CPCA 8 of 2012

(Consolidated by orders of 7 May 2012)

Counsel:

Plaintiff	:	No appearance
Defendant	:	Mr T A Staples

Solicitors:

Plaintiff	:	No appearance
Defendant	:	Director of Public Prosecutions (WA)

Case(s) referred to in decision(s):

Barnes v Barnes [2003] HCA 9; (2003) 214 CLR 169

Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; (1998) 192 CLR 226

Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366

Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306

ALLANSON J:

1. On 13 November 2014, Ms Lange was convicted of cultivating cannabis with intent to sell or supply, contrary to s 7(1)(a) of the Misuse of Drugs Act 1981 (WA). Pursuant to s 32A(1) of the Misuse of Drugs Act, the court declared Ms Lange to be a drug trafficker.

2. By s 8 of the Criminal Property Confiscation Act, all property that Ms Lange owned or effectively controlled at the time the declaration was made was confiscated. 

3. On 8 September 2017, the Director of Public Prosecutions (DPP) applied for orders including an order in these terms:

   The following property that Martine Lange owned or effectively controlled at the time she was declared to be a drug trafficker under s 32A(1) of the Misuse of Drugs Act 1981 on 13 November 2014 or gave away at any time before that date has been confiscated to the State of Western Australia namely Martine Lange's interest in the real and personal estate of the late Marjorie Mae Bevan and being:

   a.the interest of Marjorie Mae Bevan in all the land comprised in the land at Lot 2 on Strata Plan 23557 together with a share in any common property as set out on the Strata Plan in Certificate of Title Volume 1947 Folio 367, commonly known as 12A Kobelke Street, Dianella; and

   b.monies standing to the credit of Marjorie Mae Bevan in Commonwealth bank account no 601### as at 13 November 2014 together with any interest thereon.

4. By s 30 of the Criminal Property Confiscation Act, if the court finds that the property described in the application has been confiscated under s 8, it must make a declaration to that effect.

5. The matter proceeded before me ex parte.  All objections had earlier been dismissed by consent.

The facts

1. Ms Lange is the only child of Marjorie Mae Bevan.  Ms Bevan died sometime between 1 February 2011 and 10 May 2011, when her body was found.  Ms Bevan died intestate.

2. At the time of her death, Ms Bevan had an interest as a registered proprietor as tenant in common in equal shares in the property described in the application; the other tenant in common is the State Housing Commission.  Ms Bevan also held the described account with the Commonwealth Bank.

3. In July 2011, Ms Lange applied for letters of administration for her deceased mother's estate.  Letters of administration had not yet been granted when, on 23 February 2012, a freezing notice was made under the Criminal Property Confiscation Act prohibiting dealings with Ms Lange's property.  The freezing notice was based on an offence of cultivating cannabis at the Dianella property on 13 February 2012.

4. On 27 February 2012, letters of administration were granted to Ms Lange.

5. Upon the grant of administration, all the real and personal estate of Ms Bevan passed to and became vested in Ms Lange as administrator: Administration Act 1903 (WA) s 8. By s 13 of the Administration Act, Ms Lange held the real and personal estate which vested in her under s 8 on trust for the persons entitled under s 14 and s 15 of the Act.  On the evidence before me, there is no one else entitled under s 14.

6. The administration of Ms Bevan's estate is not complete, and was not complete on 13 November 2014, when the declaration was made under s 32A(1) of the Misuse of Drugs Act.  The question in this application is whether Ms Lange owned or effectively controlled the property described in the application at the time she was declared to be a drug trafficker.

Consideration

1. Property is defined in the glossary to the Criminal Property Confiscation Act in these terms:

   Property means ‑

   (a)Real or personal property of any description, wherever situated, whether tangible or intangible; or

   (b)a legal of equitable interest in any property referred to in paragraph (a).

2. The entitlement of a beneficiary in respect of the assets held by a trustee constitutes 'property' but is to be distinguished from the assets themselves.[1] 

   [1] Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; (1998) 192 CLR 226 [48].

3. In Barns v Barns, Gummow and Hayne JJ said of the interest of a residuary legatee:

   The whole of the property of the testator is held by [the executor], for the purpose of carrying out the functions and duties of administration; equity does not recognise or create for Mrs Barns, the residuary legatee, a beneficial interest in any particular asset in the hands of [the executor] during the course of the administration.  What Mrs Barns has is a right to due administration of the assets in accordance with the duties of the executor; it is in that sense that she may be said to have an interest in the entire estate, which is capable of transmission both by her under her will, and by operation of law, as in Official Receiver in Bankruptcy v Schultz.[2]

   [2] Barns v Barns [2003] HCA 9; (2003) 214 CLR 169 [50].

4. In Kennon v Spry, Heydon J described the nature of the property held by the residuary beneficiary of an unadministered estate in these terms:

   The right of a residuary beneficiary of an unadministered estate to have the estate duly administered can be assigned or devolve upon death.  The residuary beneficiary, while having no beneficial interest in any particular asset of the unadministered estate, is correctly described as being entitled to the appropriate share of the residuary estate and hence as having 'property' within the meaning of the broad legislative definition of that expression.[3]

   [3] Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366 [161]; see also French CJ at [75].

5. Ms Lange's interest in the estate of her mother is 'property' within the meaning of that term in the Criminal Property Confiscation Act.

6. In Official Receiver in Bankruptcy v Schultz, the testator, by will, gave her house and contents to Mrs Shultz.  At the time of the testator's death, Mrs Shultz was an undischarged bankrupt.  The testator's husband applied successfully for provision out of the testator's estate under the Succession Act 1981 (Q) and was awarded the house and contents. The provision in favour of the testator's husband was altered on appeal, so that the husband was given a life interest, with the remainder to Mrs Shultz. The administration of the estate was incomplete at all times.

7. The question in the High Court was whether the interest of Mrs Schultz in the remainder passed to the Official Receiver as part of her bankrupt estate.  The court held that it did, saying:

   … Mrs Schultz acquired upon the death of Mrs Pereira a right to have the deceased estate administered in accordance with the duties of the executors.  Though not the legal or equitable owner of the assets which were the subject of the devise and bequest in her favour, she had, by virtue of the chose in action created by that devise and bequest, an expectation that the assets would pass to her upon completion of the administration, subject to their being realized to meet any outstanding liabilities and to defray the costs of administration, and an interest in respect of those assets.  That interest was derived from and dependent upon the chose in action.  The interest is of such a kind that, when a beneficiary transmits a chose in action (or part thereof), or that chose in action passes by operation of law, such as under the Bankruptcy Act, that transmission naturally encompasses not only the chose in action but also the expected fruits of that chose in action.[4]

   [4] Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306, 314, (citation of authorities omitted).

8. The DPP relied upon what was said in Official Receiver inBankruptcy v Schultz to submit that that transmission to the State of Ms Lange's interest as beneficiary included the Dianella property and the funds in the bank account as the expected fruits of her chose in action.

9. The question is one of statutory construction.  The definition of property in the glossary to the Criminal Property Confiscation Act extends to a chose in action, such as that held by the beneficiary of an estate.  The expected fruits of the chose in action are not themselves legal or equitable interests in property that Ms Lange 'owned or effectively controlled at the time of the drug trafficker declaration.

10. In my opinion, the property that passed to the State on the making of the declaration under the Misuse of Drugs Act is properly described as Ms Lange's entitlement to the real and personal estate of the late Marjorie Mae Bevan.  The transmission of that property will entitle the State to the assets in the estate which remain after the payment of all duties and fees and the debts of the deceased in the ordinary course of administration.[5]  It may result in the State receiving the interest in the Dianella property and the funds in the bank account.  But at the time of confiscation, the property of Ms Lange was the chose in action.

    [5] Administration Act 1903 (WA) s 10(1).

11. I will make a declaration in terms of the preceding paragraph.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

ZW
ASSOCIATE TO THE HONOURABLE JUSTICE ALLANSON

17 JULY 2018