Mussarri v The State of Western Australia
[2019] WASC 211
•19 JUNE 2019
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: MUSSARRI -v- THE STATE OF WESTERN AUSTRALIA [2019] WASC 211
CORAM: ACTING JUSTICE STRK
HEARD: ON THE PAPERS
PUBLISHED : 20 JUNE 2019
FILE NO/S: CPCA 10 of 2014
BETWEEN: PAOLO MUSSARRI
Plaintiff
AND
THE STATE OF WESTERN AUSTRALIA
Defendant
DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA
Applicant
Catchwords:
Criminal property confiscation - Turns on own facts
Legislation:
Criminal Property Confiscation Act 2000 (WA)
Misuse of Drugs Act 1981 (WA)
Result:
Declaration made
Category: B
Representation:
Counsel:
| Plaintiff | : | No appearance |
| Defendant | : | No appearance |
| Applicant | : | No appearance |
Solicitors:
| Plaintiff | : | Holborn Lenhoff Massey |
| Defendant | : | Director of Public Prosecutions (WA) |
| Applicant | : | Director of Public Prosecutions (WA) |
Case(s) referred to in decision(s):
Bennett & Co (a firm) v Director of Public Prosecutions (WA) [2005] WASCA 141; (2005) 31 WAR 212
Brennan v The State of Western Australia [2018] WASC 31
Hendricks v The State of Western Australia [2002] WASC 86
McLeod v The State of Western Australia [2015] WASC 48; (2015) 248 A Crim R 473
Ranford v The State of Western Australia [2015] WASC 45
Re Smith; Ex parte Director of Public Prosecutions for Western Australia [No 3] [2004] WASC 157
ACTING JUSTICE STRK:
This is a matter arising under the CriminalPropertyConfiscationAct2000 (WA) (CPCA).
By an application made by summons filed 20 March 2019, the Director of Public Prosecutions for Western Australia applies for an order dismissing the plaintiff's objection to freezing notice WAPFN130196 issued on 20 December 2013. Mr Mussarri's objection was made pursuant to the CPCA s 79 and was filed on 15 January 2014. No grounds of objection were specified.
The Director of Public Prosecutions also applies for a declaration under the CPCA s 30 that the property specified in par 2 of the summons has been confiscated to the State of Western Australia under the CPCA s 8(1), upon Mr Mussarri being declared to be a drug trafficker pursuant to the Misuse of Drugs Act 1981 (WA) s 32A(1). Such declaration was made on 14 February 2018, as a result of Mr Mussarri being convicted of confiscation offences committed after the commencement of the CPCA.
Seven affidavits were filed in support of the summons: the affidavit of Alison Margaret Gibson, a paralegal employed by the Office of the Director of Public Prosecutions (ODPP) filed 20 March 2019; the affidavit of service deposed by Bruce Robert Maxwell Wimbridge, a paralegal also employed by the ODPP, filed 25 March 2019; the affidavit of service deposed by Gavin Abbott, Senior Constable, filed 23 April 2019; the affidavit of service deposed by Matthew James Bradshaw, Police Officer, filed 23 April 2019; the affidavit of service deposed by Scott Robertson, Police Officer, filed 23 April 2019; and the further affidavit of Bruce Wimbridge, attaching a company search in respect of Malaga Holdings Pty Ltd ACN 077 497 931, filed 24 May 2019. The applicant also relies upon the outline of written submissions filed on 20 March 2019.
No affidavits were filed on behalf of Mr Mussarri in response to the summons, and no outline of written submissions was filed.
By a memorandum of consent orders, the parties agreed to the hearing of the application being adjourned to 30 May 2019. The court was informed that the reason for the adjournment was to allow the solicitors for Mr Mussarri to take instructions as to whether the application would be opposed. On 30 May 2019, a further adjournment was pressed on behalf of Mr Mussarri, which was not opposed. The hearing of the application was adjourned to 20 June 2019.
On 19 June 2019, the following orders were made by consent, at the request of the parties.
1. No further affidavits may be relied on by any party, except with leave of the Court.
2. The affidavit of Alison Margaret Gibson sworn 1 March 2019 stand as that deponent's evidence-in-chief.
3. The affidavit of Bruce Robert Maxwell Wimbridge sworn 24 May 2019 stand as that deponent's evidence-in-chief.
4. No oral evidence-in-chief may be adduced by any party or deponent, except with leave of the Court.
5. The hearing of the application listed at 9.30am on Thursday, 20 June 2019 be vacated.
6. The applicant's (defendant's) summons filed on 20 March 2019 be dealt with on the papers.
7. There is no order as to costs.
The applicant presses for orders in the terms set out in Schedule A to these reasons. As requested by the parties, I now deal with the application on the basis of the papers filed to date.
For the reasons set out below, I am prepared to make orders in the terms pressed on behalf of the applicant and set out in Schedule A to these reasons.
Background – the freezing of property
The following findings are all based on the uncontradicted evidence contained in the affidavit of Ms Gibson, and from a review of the orders made in the proceeding.
On 20 December 2013, 12 March 2014 and 28 October 2014, freezing notices WAPFN130196, WAPFN140029 and WAPFN140138, respectively, were issued pursuant to the CPCA s 34. The freezing notices were issued on the ground that Mr Mussarri had been charged with an offence against the Misuse of Drugs Act committed after the commencement of the CPCA, and if convicted of that offence, he could be declared a drug trafficker.[1] In terms of the formal requirements,[2] there is no reason to doubt the validity of the freezing notices.
Freezing notice WAPFN130196
[1] Affidavit of AM Gibson pars 3, 6 and 9; applicant's outline of written submissions par 4. Freezing notice WAPFN130196 was also issued on the basis that there were reasonable grounds for suspecting that the property in Schedule 2 to the notice and marked as 'CU' was crime used and / or that the property in Schedule 2 marked as 'CD' was crime derived: see affidavit of AM Gibson 'AMG1'.
[2] CPCA s 35.
Freezing notice WAPFN130196 was served on Mr Mussarri; Ms Jennifer Kelly; Australia and New Zealand Banking Group (ANZ); Ms Malgorzata (Margaret) Kot; and Mr Scott Justin Kelly.[3] Statutory declarations were subsequently received by Police from Mr Mussari and Ms Kot.[4]
[3] Affidavit of AM Gibson par 4.
[4] Affidavit of AM Gibson par 5, 'AMG2' – 'AMG3'.
In response to freezing notice WAPFN130196, Mr Mussarri deposed that no other person he was aware of had any interest in the property sought to be frozen by the notice.[5]
[5] Affidavit of AM Gibson par 5, 'AMG2'.
Ms Kot, a licenced real estate agent, deposed that:[6]
(a)she did not have any interest in the property sought to be frozen by the notice, with the exception of her drawing monthly fees associated with the management of the property known as Unit 3, 20 Escot Road, Innaloo (Innaloo Property);
(b)she did not know of any person or persons who may have any interest in the property sought to be frozen by the notice, with the exception of the tenants residing at the Innaloo Property.
[6] Affidavit of AM Gibson par 5, 'AMG3'.
In her statutory declaration, Ms Kot also referred to utility providers and the City of Stirling, noting that they were also entitled to payments in relation to the Innaloo Property.
Freezing notice WAPFN140029
Freezing notice WAPFN140029 was served on Mr Mussarri and ANZ.[7] No statutory declarations were received by Police in relation to the freezing notice.[8]
Freezing notice WAPFN140138
[7] Affidavit of AM Gibson par 7.
[8] Affidavit of AM Gibson par 8.
Freezing notice WAPFN140138 was served on Mr Mussarri; Ms Kelly; and ANZ.[9] A statutory declaration was subsequently received from Ms Kelly.[10]
[9] Affidavit of AM Gibson par 10.
[10] Affidavit of AM Gibson par 11, 'AMG 6'.
In response to freezing notice WAPFN140138, Ms Kelly deposed that she had an interest in, among other things, the following property (which property is the subject of the application for a declaration now pressed pursuant to the CPCA s 30):
(a)cash in the sum of $9,700 taken from Mr Mussarri on 18 December 2013 at 17A Dundee Close, Warnbro;
(b)moneys standing to the credit of Mr Mussarri in ANZ account number 016141 2995 91270 in the amount of $112,138.76; and
(c)moneys standing to the credit of Mr Mussarri in ANZ account number 016363 9701 56006 in the amount of $41,265.12.
On 8 April 2015, by the consent of the State of Western Australian and Mr Mussarri, a freezing order and ancillary orders were made by the Principal Registrar pursuant to the CPCA s 43(5).[11] The freezing order froze the same property as had been frozen by the freezing notices, and it was ordered that the objection made by Mr Mussarri in CPCA 10 of 2014 to freezing notice WAPFN130196 stand as an objection to the freezing order. On 25 May 2018, the freezing notices were cancelled.[12]
[11] $121,100 was also frozen on the basis that there were reasonable grounds for suspecting that the moneys were crime used property pursuant to the CPCA s 43(8): see affidavit of AM Gibson 'AMG10'.
[12] Affidavit of AM Gibson pars 12 and 13, 'AMG7' – 'AMG10'.
By consent, the freezing order was varied on 9 September 2015, 8 September 2016, 11 October 2016, 21 March 2017, 16 June 2017 and 30 June 2017.[13]
[13] Affidavit of AM Gibson par 15, 'AMG16' - 'AMG 21'.
Legal framework
Section 30 of the CPCA provides:
30.Declarations of confiscation, applying for and making
(1)The DPP or the CCC may apply to the court for a declaration that property has been confiscated.
(2)On considering an application, if the court finds that the property described in the application has been confiscated under section 6, 7 or 8, the court must make a declaration to that effect.
Section 8(1) of the CPCA provides:
8.Declared drug trafficker, certain property of confiscated
(1)When a person is declared to be a drug trafficker under section 32A(1) of the Misuse of Drugs Act 1981 as a result of being convicted of a confiscation offence that was committed after the commencement of this Act, the following property is confiscated ‑
(a)all the property that the person owns or effectively controls at the time the declaration is made;
(b)all property that the person gave away at any time before the declaration was made, whether the gift was made before or after the commencement of this Act.
Section 10(1) of the CPCA provides:
10.Other property, time and effect of confiscation of under s 6, 7 or 8
(1)Property (except registrable real property) that is confiscated under section 6, 7 or 8 vests absolutely in the State when the section takes effect in relation to the property.
Under the CPCA s 9, registrable real property does not vest absolutely in the State unless and until the court makes a declaration under s 30 that the property has been confiscated.
In this proceeding, the applicant has to prove the following under the CPCA s 8(1):
1.Mr Mussarri had been declared to be a drug trafficker pursuant to the Misuse of Drugs Act s 32A(1).
2.The declaration was as a result of 'confiscation offence'. The term 'confiscation offence' is defined in the CPCA s 141(1). It includes an offence against a law in force anywhere in Australia that is punishable by imprisonment for two years or more.
3.The offence was committed after the commencement of the CPCA, that is, after 1 January 2001.
4.The subject property was owned or effectively controlled by Mr Mussarri. (The term 'owner' is defined in the CPCA to mean, in relation to property, a person who has a legal or equitable interest in the property.)
5.The subject property was so owned or effectively controlled at the time the drug trafficker declaration was made.
If the above are proved, then by operation of the CPCA s 8(1), the subject property was confiscated at the time the drug trafficker declaration was made, and, by the CPCA s 10(1), the property (except registrable real property) vested absolutely in the State at that time. Further, given the mandatory terms of the CPCA s 30, the court will be compelled to make a confiscation declaration confirming that the property had been so confiscated under s 8(1).[14]
[14] Ranford v The State of Western Australia [2015] WASC 45 [9]; Hendricks v The State of Western Australia [2002] WASC 86 [19]; Re Smith; Ex parte Director of Public Prosecutions for Western Australia [No 3] [2004] WASC 157 [15]; Bennett & Co (a firm) v Director of Public Prosecutions (WA) [2005] WASCA 141; (2005) 31 WAR 212 [49].
Service of the freezing order
The CPCA s 46(1) provides that as soon as practicable after a freezing order is made, the applicant for the order must arrange for a copy of the order and a notice that complies with s 46(6) to be served personally on the following persons:
(a)if the frozen property was taken from a person, or is in the custody of a person – that person;
(b)if, at the time that the freezing order is made, the applicant is aware of any other person who is, or may be, or claims to be, an interested party – that person.
The term 'interested party' is defined to mean 'a person who has an interest in the property that would enable the person to succeed on an objection to the confiscation of the property'.[15]
[15] CPCA s 3.
The CPCA s 47 provides that a person served with a copy of a freezing order under s 46 must give a statutory declaration to the applicant for the order. Among other things, the declarant must state whether the declarant is aware if there is any other person who is or may be, or claims to be, an interested person, and if so, provide certain details.
No statutory declarations were provided to the applicant in relation to the freezing order.[16]
[16] Affidavit of AM Gibson par 16.
The applicant says that a copy of the freezing order has been served on any person from whom property was taken, any person who had custody of frozen property, and all persons, the applicant for the freezing order, is aware are, or may be, or claim to be, an interested party.[17]
[17] Affidavit of AM Gibson pars 14 and 17.
The applicant has served a copy of the freezing order on Mr Mussarri; ANZ; Ms Kelly; Mr Kelly; and Ms Kot.[18]
[18] Affidavit of AM Gibson par 14, 'AMG11' – 'AMG15'.
Save for the objection of Mr Mussarri, no other objection has been filed in relation to the freezing notices or the freezing order.[19]
[19] Affidavit of AM Gibson par 18.
With the exception of Ms Kot, the applicant has also served on ANZ and on each of the individuals identified at [32] a copy of:
(a)the application made by summons;
(b)the affidavit of Ms Gibson; and
(c)the applicant’s outline of written submissions,
all filed on 20 March 2019. The applicant also gave notice to the Australian Securities and Investment Commission (ASIC). None have sought to be heard.
Determination
This is a civil proceeding.[20] I am required to make findings of fact on the balance of probabilities.[21] In all of the circumstances revealed by the papers filed, I am satisfied that the applicant has established, on the balance of probabilities, the five matters identified at [25] above.
[20] CPCA s 102(1).
[21] CPCA s 102(2)(d).
On 9 June 2016, Mr Mussarri was convicted on Indictment 1261 of 2014 under the Misuse of Drugs Act s 6(1)(a) of one count of possessing a prohibited drug, namely heroin, with the intent to sell or supply it to another, committed on 18 December 2013.
On 23 May 2016, Mr Mussarri was also convicted on Indictment 461 of 2015 under the Misuse of Drugs Act s 6(1)(c) of four counts of having sold or supplied a prohibited drug, namely methylamphetamine, committed on 7 October 2014, 8 October 2014, 15 October 2014 and 23 October 2014.
Mr Mussarri was declared to be a drug trafficker under the Misuse of Drugs Act s 32A(1) on 14 February 2018 in relation to those convictions.[22]
[22] Affidavit of AM Gibson par 22, 'AMG24'.
The offences are punishable by a term of imprisonment of more than two years,[23] and is therefore a 'confiscation offence'.
[23] Misuse of Drugs Act s 34(2).
The offences were committed after the commencement of the CPCA, that is, after 1 January 2001.
As to the last two conditions, I find as follows.
Cash in the sum of $9,700
In relation to the cash in the sum of $9,700 taken from Mr Mussarri on 18 December 2013, and any interest thereon, on the balance of probabilities, I am satisfied that the moneys were owned or effectively controlled by Mr Mussarri at the time the drug trafficking declaration was made.
The moneys were seized by police during the execution of a search warrant issued pursuant to the Misuse of Drugs Act at 17A Dundee Close, Warnbro (Ms Kelly's residence) on 18 December 2013.
On 3 December 2014, the State presented an indictment against each of Mr Mussarri and Ms Kelly, alleging that on 18 December 2013 in Warnboro, they attempted to possess a quantity of heroin with intent to sell or supply it to another.[24]
[24] ts 326 (31 October 2016), being 'AMG22' to the affidavit of AM Gibson.
As noted above, on 9 June 2016, Mr Mussarri was convicted on Indictment 1261 of 2014 of one count of possessing a prohibited drug, namely, heroin, with intent to sell or supply committed on 18 December 2013.
On 14 June 2016, Ms Kelly was sentenced in respect of one count of attempting to possess a prohibited drug, namely heroin, on Indictment 1261 of 2014.
As noted by Sleight CJDC in sentencing Ms Kelly, the charges against Mr Mussarri and Ms Kelly arose from an investigation conducted by the Western Australian Police into an interstate drug trafficking syndicate. On 13 and 16 December 2013, Ms Kelly contacted by telephone Ms Lee, who was involved in some way with the drug trafficking syndicate. The purpose of the telephone calls was as part of an arrangement whereby the syndicate would supply Mr Mussarri with a quantity of heroin.[25]
[25] Affidavit of AM Gibson 'AMG23', being ts 162 (14 June 2016).
Sleight CJDC noted that Mr Musarri had $130,000 in a safe at Ms Kelly's residence to purchase the heroin. It would appear that his Honour's reference to $130,000 is a reference to the sums of $9,700 and $121,000 located at Ms Kelly's premises.
The statutory declaration made by Ms Kelly in response to freezing notice WAPFN140138, in which she asserted an interest in the $9,700 seized on 18 December 2013 predated Ms Kelly pleading guilty to the charge and being sentenced by Sleight CJDC.
Despite having been served with the freezing notice, the freezing order and the summons, Ms Kelly has taken no steps to be heard in relation to the confiscation of the property.
Moneys – ANZ account number 016141 2995 91270
In relation to the moneys standing to the credit of ANZ account number 016141 2995 91270 (being the sum of $112,138.76), and any and all interest payable on such moneys, on the balance of probabilities, I am satisfied that the moneys were owned or effectively controlled by Mr Mussarri as at the time the drug trafficking declaration was made.
An ANZ statement of account for the period 7 June 2012 to 31 March 2014 discloses that account number 016141 2995 91270 was held in the name of Mr Mussarri.[26]
[26] Affidavit of AM Gibson 'AMG27'.
By his statutory declaration made in response to freezing notice WAPFN130196, Mr Mussarri confirmed that no other person of which he was aware had an interest in the money in the account.[27]
[27] Affidavit of AM Gibson 'AMG2'.
I have weighed in the balance the statutory declaration made by Ms Kelly in response to freezing notice WAPFN140138, in which she asserted an interest in the moneys standing to the credit of ANZ account number 016141 2995 91270. I note that despite having been served with the freezing notice, the freezing order and the summons, Ms Kelly has taken no steps to be heard in relation to the confiscation of moneys standing to the credit of the account.
From the time of the freezing notice to the drug trafficker declaration, the property was subject to the effect of a freezing notice or freezing order. Accordingly, I am satisfied that the chose in action as represented by the bank account continued to be property owned by or effectively controlled by Mr Mussarri at the time the drug trafficker declaration was made.
Cash in the sum of $121,000
In relation to the cash in the sum of $121,000 taken from Mr Mussarri and Ms Kelly on 18 December 2013, together with interest thereon, on the balance of probabilities, I am satisfied that the moneys were owned or effectively controlled by Mr Mussarri as at the time the drug trafficking declaration was made.
The moneys were also seized by police during the execution of the search warrant referred to above and I have had regard to the material facts as summarised by Sleight CJDC, as set out at [47] – [48] above.
By the statutory declaration made by Ms Kelly in response to freezing notice WAPFN140138, Ms Kelly asserted no interest in the $121,000 seized on 18 December 2013. Further, despite having been served with the freezing notice, the freezing order and the summons, Ms Kelly has taken no steps to be heard in relation to the confiscation of sum of $121,000.
Innaloo Property
I now turn to the Innaloo Property, being the land at Lot 3 on Strata Plan 34101, together with a share of any common property as set out on the strata plan in Certificate of Title Volume 2128 Folio 980, commonly known as Unit 3, 20 Escot Road, Innaloo, presently registered to Malaga Holdings Pty Ltd ACN 077 497 931.
Malaga Holdings was deregistered on 17 July 2005. Immediately prior to deregistration, Mr Mussarri was the sole shareholder and director of Malaga Holdings.[28]
[28] Affidavit of AM Gibson par 28, 'AGM29'; further affidavit of BRM Wimbridge 'BRMW1'.
Malaga Holdings became the registered proprietor of the Innaloo Property on 14 April 1998, and remains noted on the title as the registered proprietor.
Notwithstanding that Malaga Holdings was deregistered, Mr Mussarri exercised control over the Innaloo Property. This was reflected in the orders made by the Principal Registrar on 8 April 2015, including Order 7, which provided that pursuant to the CPCA s 91, while the freezing order was in force and effect or until further order, Mr Mussarri be appointed to control and manage the Innaloo Property.
As a director of Malaga Holdings, Mr Mussarri may apply to ASIC for reinstatement of Malaga Holdings. ASIC do not oppose forfeiture of the Innaloo Property to the State of Western Australia.[29]
[29] Affidavit of AM Gibson par 29, 'AMG30'.
On the balance of probabilities, I am satisfied that the Innaloo Property was effectively controlled by Mr Mussarri at the date that he was declared a drug trafficker on the basis that he did not hold the legal title to the Innaloo Property, but it was subject to his control and held for his ultimate benefit within the meaning of CPCA s 156.[30]
Moneys – ANZ account number 016363 9701 56006
[30] McLeod v The State of Western Australia [2015] WASC 48; (2015) 248 A Crim R 473 19] - [26].
In relation to the moneys standing to the credit of the ANZ account number 016363 9701 56006 (being the sum of $41,265.12), and any and all interest payable on such moneys, on the balance of probabilities, I am satisfied that the moneys were owned or effectively controlled by Mr Mussarri.
An ANZ reconstruction of term deposit account for the period 20 July 2012 to 20 January 2014 discloses that ANZ account number 016363 9701 56006 was held in the name of Mr Mussarri.[31]
[31] Affidavit of AM Gibson par 30, 'AGM31'.
I have weighed in the balance the statutory declaration made by Ms Kelly in response to freezing notice WAPFN140138, in which she asserted an interest in the moneys standing to the credit of ANZ account number 016363 9701 56006. I note that despite having been served with the freezing notice, the freezing order and the summons, Ms Kelly has taken no steps to be heard in relation to the confiscation of moneys standing to the credit of the account.
From the time of the freezing notice WAPFN140029 to the drug trafficker declaration, the property was subject to the effect of a freezing notice or freezing order. Accordingly, I am satisfied that the chose in action as represented by the bank account continued to be property owned by or effectively controlled by Mr Mussarri at the time the drug trafficker declaration was made.
Conclusion and orders
For the reasons set out above, I find that all five conditions have been established.
It follows that the subject property was confiscated by operation of the CPCA s 8(1), with effect from 14 February 2018, and the property (except the Innaloo Property) vested absolutely in the State of Western Australia at that time.
Given the mandatory terms of the CPCA s 30, I am required to and will now declare that the property had been confiscated. In making the declaration, the Innaloo Property will now vest absolutely in the State.[32]
[32] CPCA s 9.
As the freezing order has ceased to have force, the objection is without utility.[33]
[33] Brennan v The State of Western Australia [2018] WASC 31 [28].
I will make orders 1 and 2 pressed on behalf of the applicant, as set out in Schedule A to these reasons.
SCHEDULE A
1.The plaintiff's objection to the confiscation of frozen property made by originating summons dated 14 January 2014 is dismissed.
2.The following property that Paolo Mussarri (Mussarri) owned or effectively controlled at the time he was declared to be a drug trafficker under s 32A(1) of the Misuse of Drugs Act 1981 on 14 February 2018 or gave away at any time before that date has been confiscated to the State of Western Australia, namely:
(a)Cash in the sum of AUD$9,700.00 taken from Mussarri on 18 December 2013 together with any interest thereon;
(b)Money standing to the credit of Mussarri in Australia and New Zealand Bank account number 016141 2995 91270 and any and all interest payable on such money;
(c)Cash in the sum of AUD$121,100.00 taken from Mussarri and Jennifer Lee Kelly on 18 December 2013 together with any interest thereon;
(d)The Land at Lot 3 on Strata Plan 34101 together with a share in any common property as set out on the strata plan in Certificate of Title Volume 2128, Folio 980 commonly known as Unit 3, 20 Escot Road, Innaloo presently registered to Malaga Holdings Pty Ltd ACN 077 497 931 (Deregistered); and
(e)Money standing to the credit of Mussarri in Australia and New Zealand Bank account number 016363 9701 56006 and any and all interest payable on such money.
3.Such other orders as the court thinks fit.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
NW
Secretary
18 APRIL 2023
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