Pham v Director of Public Prosecutions
[2017] VSC 261
•19 May 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2010 04338
S CI 2010 04351
| SON THANH PHAM | Applicant |
| v | |
| DIRECTOR OF PUBLIC PROSECUTIONS FOR VICTORIA | Respondent |
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JUDGE: | T FORREST J |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 20, 21 October, 11 November 2016 |
DATE OF RULING: | 19 May 2017 |
CASE MAY BE CITED AS: | Pham v DPP |
MEDIUM NEUTRAL CITATION: | [2017] VSC 261 |
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CRIMINAL LAW – Confiscation of property – Tainted property – Whether ‘carve out’ available to applicant under Confiscation Act 1997 (Vic) – Equitable interest – Whether the applicant was ‘in any way involved in the commission of the Schedule 2 offence’.
CRIMINAL LAW – Confiscation of criminal proceeds – Whether applicant’s bank account was tainted – Derived from parents criminal offending.
TRUSTS – Presumption of advancement – Whether presumption arises in father-son relationship – Gift – Parties purchasing property in joint names – Unequal contributions – Whether Calverley v Green mortgage liability principle should be applied mechanically in cases of criminal offending – Constructive trust for applicant in cases of innocent parties only.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr T Best | SDR Law |
| For the Respondent | Ms D Mandie | Office of Public Prosecutions |
HIS HONOUR:
Introduction
The Applications
Son Pham claims an interest in 1 Jetty Lane, Maribyrnong, Victoria, and in an ANZ bank account[1] held in his name. Both Jetty Lane and the ANZ account are the subject of restraining orders – Jetty Lane is the subject of a ‘charge-based’ restraining order (R.O. 4338); the ANZ account the subject of a civil forfeiture restraining order (CFRO 4351). Son Pham seeks orders excluding his claimed interests in these properties.[2]
[1]I shall refer to this as the ANZ account. It is to be distinguished from an ANZ “access” account. I will refer to this as the Access Account.
[2]Jetty Lane is also subject to a civil forfeiture restraining order S CI 2010 4352. In the hearing of this matter the DPP agreed that the applicant succeeded in excluding his interest in Jetty Lane on the charge-based restraining order, he would necessarily succeed in excluding the same interest from the civil forfeiture order as it applied to Jetty Lane (see Transcript of Proceedings, Pham v DPP (Supreme Court of Victoria, 2010/04338 and 2010/04351, Justice T Forrest, 20–21 October and 11 November 2016) (‘T’), T172 – T173).
In the shortest possible compass the issues to be determined are:
1.What is the size and nature of the Son Pham’s interest in Jetty Lane.
2.Ought Son Pham’s interest in Jetty Lane be excluded from the effect of the change-based restraining order.
3.Ought Son Pham’s interest in the ANZ account be excluded from the effect of the civil restraining order.
There are numerous sub-issues to these three broad questions which I shall identify as they arise.
In February 2014, Son Pham’s mother Chi Ba and his father Than Hai Pham pleaded guilty to trafficking a drug of dependence (heroin) in not less than a large commercial quantity between 1 December 2009 and 12 August 2010. Both pleaded guilty on the basis that they were involved in a joint criminal enterprise with each other and others.
Because Son Pham’s applications for exclusion must be determined according to the Confiscation Act 1997 (Cth) as it applied in 2010[3] it is necessary to set out the relevant statutory scheme in its 2010 form, whilst taking into account the retroactive operation of certain transitional provisions.[4]
[3]The Confiscation Act 1997 (Cth), Version No.054, incorporating amendments as at January 2010.
[4]For example, s 190 of the Act, inserted in 2016 by an amending act, relevantly retroactively amends the definition of ‘tainted property’ to be construed with reference to the definition of ‘partly discharged’ as inserted by the 2016 amending act.
Statutory Scheme
The provisions in the Act that apply to the determination of exclusion applications are dependent upon the stated purpose of the relevant restraining order. Automatic forfeiture of restrained property will follow conviction for certain offences set out in Schedule 2 of the Act. RO4388 includes as a stated purpose the ‘automatic forfeiture of property that may occur under Division 2 of Part 3’ in respect of Thanh Hai Pham. In this circumstance Son Pham’s application for exclusion from this restraining order is to be determined according to s 22 of the Act. The application for exclusion from CFRO 4351, made for the stated purpose of satisfying any civil forfeiture order that may be made under Part 4 of the Act, is to be determined under s 24 of the Act. In simple terms, the Jetty Lane exclusion application will be determined according to s 22 of the Act; the ANZ account exclusion under s 24.[5]
[5]Jetty Lane is also the subject of a civil forfeiture restraining order. During the hearing the DPP conceded that if Son Pham was successful in his s 22 exclusion application, it would not persist with this particular civil forfeiture restraining order.
Section 22 of the Act relevantly provides that, on application for exclusion from a restraining order made in relation to a Schedule 2 offence for the purposes of automatic forfeiture, that –
…
(a) The court may make an order excluding the applicant’s interest in the property from the operation of the restraining order if the court is satisfied that –
(i) The property in which the applicant claims an interest was lawfully acquired by the applicant; and
(ii) The property is not tainted property; and
(iia) the property is not derived property; and
(iii) The property will not be required to satisfy any pecuniary penalty order or an order for restitution or compensation under the Sentencing Act 1991; or
(b) Where the application is made by a person other than the accused, 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 accused 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 the circumstances such as not to arouse a reasonable suspicion, that the property was tainted or derived property; and
(D) the applicant’s interest in the property was not subject to the effective control of the accused on the earlier of the date that the accused 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 accused, directly or indirectly, that it was acquired for sufficient consideration; or
(ii) if the court is satisfied that the property is not tainted or derived property and that –
(A) the applicant’s interest in the property was not subject to the effective control of the accused on the earlier of the date that the accused was charged with the Schedule 2 offence or the date that the restraining order was made in relation to the property; and
(B) where the applicant acquired the interest from the accused, directly or indirectly, that it was acquired for sufficient consideration;
…
Insofar as Jetty Lane was concerned Son Pham accepted that the property was tainted property[6] but argued that his interest ought be excluded from the restraining order because:
[6]See [62] below.
(i) He was not, in any way, involved in his parents’ drug trafficking activities; and
(ii) The property was not used in connection with these criminal activities; and
(iii) His interest in the property was not subject to the effective control of his parents at any relevant time; and
(iv)He did not acquire his interest from one or other of his parents, either directly or indirectly.
Section 24 of the Act provides that on application for exemption from a restraining order made in relation to a Schedule 2 offence for the purposes of civil forfeiture:
…
(a) The court may make an order excluding the property from the operation of the restraining order if the court is satisfied that –
(v) The property is not derived property; and
(vi) The property is not tainted property; or
(b) The court may make an order excluding the applicant’s interest in the property from the operation of the restraining order if the court is not satisfied that the property in which the applicant claims an interest is not tainted property or derived property but is satisfied that –
(i) the applicant was not, in any way, involved in the commission of the Schedule 2 offence; and
(ii) where the applicant acquired the interest before commission, or alleged commission, of the Schedule 2 offence, the applicant did not know that the accused would use, or intended to use the property in, or in connection with, the commission of the Schedule 2 offence; and
(iii) 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 the circumstances such as not to arouse a reasonable suspicion, that the property was tainted or derived property; and
(iv) the applicant’s interest in the property was not subject to the effective control of the accused on the earlier of the date that the accused was charged with the Schedule 2 offence or the date that the restraining order was made in relation to the property; and
(v) where the applicant acquired the interest from the accused, directly or indirectly, that it was acquired for sufficient consideration.
Insofar as the ANZ bank account is concerned, the applicant contended that he had satisfied the court that the property was neither derived nor tainted. If he has not satisfied the court of this the applicant nevertheless contended that he was not, in any way, involved in the commission of his parents’ relevant offending, his interest in the property was not subject to the control of his parents or one of them and that otherwise the components of s 24(b) either were satisfied on the evidence or did not apply to his particular factual situation.
The Evidence
Two witnesses were called by the applicant in this matter: the applicant himself, and his sister, Megan Pham. The respondent relied upon affidavits of Chris Pavlidis and Jennifer Papic, along with their accompanying exhibits, and a statement of Jessie Uren. The applicant did not seek to cross examine any of the respondent’s witnesses.
I do not propose to set out the evidence of this case in full. I will provide a summary of Son Pham’s evidence in chief and cross-examination. I shall refer to other relevant evidence in my analysis of the s 22 and s 24 factors as required.
The Applicant’s Evidence
1. Purchase of Jetty Lane
The following background provided by Son Pham in relation to the purchase of Jetty Lane is not disputed by the respondent:
(a) On 19 August 2006, the applicant and his father Thanh Hai Pham jointly entered into a contract with a vendor company for the purchase of Jetty Lane;
(b) The purchase price for Jetty Lane was $730,000;
(c) Thanh Hai Pham paid the deposit of $73,000;
(d) The applicant and Thanh Hai Pham were advised by St George Bank to jointly apply for finance;
(e) The finance application was approved;
(f) An amount of $250,000 was borrowed from St George Bank under a loan facility (‘St George loan’);
(g) The St George loan was secured by a mortgage over Jetty Lane under which the applicant and Thanh Hai Pham were jointly and severally liable to pay the $250,000 home loan, together with interest;
(h) The funds borrowed by the applicant and Thanh Hai Pham from St George Bank were applied by them ($125,000 each) in proportion to their joint and several liability in part payment of the purchase price.
(i) The balance of the settlement money was paid by Thanh Hai Pham at or close to settlement.
(j) The applicant did not pay stamp duty on Jetty Lane at settlement, and it is likely that Thanh Hai Pham paid the stamp duty.
(k) From the date of settlement, the applicant and Thanh Hai Pham were registered as tenants in common of Jetty Lane. The applicant was registered as sole proprietor of 19 of 20 equal undivided shares in the property. Thanh Hai Pham was registered as sole proprietor of 1 of 20 equal undivided shares.
On 10 August 2010, the loan balance was approximately $38,500.[7] As at October 2016, the loan balance was approximately $31,000.[8]
[7]T 16.
[8]T 10.
The applicant gave evidence that service of the St George loan and interest up to the date of the hearing before me came from various sources. Prior to 10 August 2010, these were:
(a) Rental payments made on that property during the 12 months following the purchase, in which the property was leased back to the original vendor as a display home;
(b) Monthly cash payments ranging from $800 to $2,000 from Thanh Hai Pham that were deposited by the applicant;
(c) Cash payments totalling $5,000[9] which were made by the applicant from his own resources between 5 November 2009 and 6 February 2010 while his father was abroad.
[9]$1,500 on 9 November 2009, $1,500 on 1 December 2009, and $2,000 on 11 January 2010.
Following 10 August 2010 the applicant has made minimal monthly payments of about $130 per month on the loan from his own resources.
2. Applicant’s evidence for the purpose of ss 22 and 24 analyses
In his 2015 affidavit, the applicant described Jetty Lane as his home, having lived there with his sister Megan from January 2008 to August 2010. He moved back to his parents’ property in Willys Avenue, Keilor Downs, after a search warrant was executed on Jetty Lane on 12 August 2010.
He said that he was not involved in the commission of the Schedule 2 offence for which his father was convicted, and that the ANZ account was not used in connection with the commission of the Schedule 2 offence. He said that to the best of his knowledge, Jetty Lane was not used in the commission of the Schedule 2 offence, and that he did not acquire his interest in Jetty Lane or in the ANZ account either directly or indirectly from his father.
He stated that he had little contact with his father during the ‘charge period’ to which his father’s conviction relates (1 December 2009 – 12 August 2010). Thanh Hai Pham was in Vietnam from 5 November 2009 to 31 January 2010. The applicant then left for Vietnam on 6 February 2010 and returned on 12 June 2010. From 12 June 2010 to 12 August 2010, the applicant lived at Jetty Lane and saw his father about three times per week when he would have dinner with his father, mother, sister (Tyla), and nephew at Willys Avenue. He says that nothing ever happened at these family dinners that aroused his suspicion that his father was involved in drug trafficking.
Regarding his personal income and expenditures from 2007 – 2010, the applicant said that he graduated from Victoria University with a Bachelor of Business degree in 2004. He was unable to find permanent employment until about May 2007. From May – August 2007 he worked part-time at a petrol station in St Albans. In financial years 2007 and 2008 he also derived income from the rent of Jetty Lane. He worked for a Vietnamese grocer from some time in the 2009 financial year until December 2009. He was paid in cash in 2009, which he did not directly deposit into any bank account. From May – December 2009, he made deposits to an ANZ Access Account in his name that were sourced from his gambling winnings. From time to time he would withdraw money from the Access Account to use for gambling.
On 10 December 2009 he withdrew $30,000 from the Access Account and deposited it to the ANZ account. He made further deposits from 4 January 2010 to 5 February 2010 to the ANZ account, which were sourced by gambling winnings.
He said that, from about 2001, his father had operated a clothing wholesale business. In the context of discussions with a St George representative regarding the application for the St George loan, the applicant recalled his father saying that his earnings from the business were about $30,000 per year. The applicant said he had never been very interested in the clothing business and had not discussed it with his father.
He said that his father had told him that some of the money used to purchase Jetty Lane was sourced from the clothing business, and some was sourced from gambling winnings. He said that in 2006 his father told him that he had two big casino wins of about $160,000 and $70,000 respectively, and he recalled his father showing him a cheque for $69,000 at some time during that year.
He confirmed that he had made monthly deposits on the St George loan, from about 2007 until his father’s incarceration, of amounts ranging from $800-$2,000, but mostly about $1,500. His father provided him this money in cash. He never questioned the source of this money.
In cross-examination, the applicant said that the clothing wholesale business was a ‘family business’ that was run from Willys Avenue. He said it began as a manufacturing business, with his parents making the clothes on two sewing machines. The clothes were made and stored in the garage. Book work was performed inside the house and there was no formal office. He saw his father make deliveries of clothes from time to time. He said he did not know whether this was a ‘cash business’ and understood that $30,000 was a low business income per annum. He said he also understood that his father gambled, and that ‘gambling winnings’ were a financial resource for his father. His father would sometimes say things like ‘I was lucky at the casino the other night, I won $4,000’.
He described collecting monthly loan repayments of about $1,500 from his father at Willys Avenue in cash, in denominations of $50 or $100. He would take that money straight to a bank to deposit it against the loan. He said he never questioned his father about the source of this money and never thought to do so.
He said that this loan repayment method remained until his father was incarcerated in 2010. He said that while his father was in Vietnam from 5 November 2009–6 February 2010, loan repayments on the St George loan would have come from his own resources, which during that time might have been his own gambling winnings. He said he did not bank all of his gambling winnings to the Access Account, and some of the outstanding cash would have been used to pay off the St George loan during this time. The applicant said that during the time he was in Vietnam he believes his father performed the monthly banking himself.
Regarding his father’s gambling winnings, he repeated seeing a Crown Casino cheque for about $69,000 in 2006. He said he had seen many Crown cheques. He said he believed that a $100,000 payment made in service of the St George loan in April 2007 was sourced from his father’s gambling winnings. He said he never wondered where his father’s gambling funds came from. He said that his father paid about $40,000 for a car for him in 2006, and that as at 2006 his father and mother were fully supporting him and his two sisters in terms of their living expenses. The applicant reiterated that his father would consistently come home from the casino and say that he had won money, and he believed him.
The applicant agreed that he had visited Willys Avenue about three times weekly between 12 June and 12 August 2010 for family dinners. The family would eat in the dining room, in the back half of the house. When he was around for dinner he would sometimes go into the kitchen. The house had four bedrooms: the master bedroom, his sister Tyla’s bedroom, his nephew’s bedroom and a bedroom that was not in use.
When it was put to him that upon raid of the property on 12 August 2010, $381,145 in cash was located, along with $54,500 worth of Crown Casino chips and expensive jewellery, the applicant said it surprised him that that amount of money had been found on the premises. He denied seeing large bundles of cash or stacks of casino chips like to those depicted in police photography of the raid. He also denied ever seeing ‘packages’ like those discovered in the kitchen in the raid upon Willys Avenue, or anyone preparing packages like that at Willys Avenue. He denied ever seeing bags of white powder, and denied knowing that two additional coffee grinders were used for the preparation of drugs. He could not recall seeing glucodin in the kitchen, and denied knowing that glucodin powder found in Willys Avenue was used in the preparation of heroin. He could not recall seeing two large containers of MSM in the kitchen, and denied knowledge of its use as a cutting agent. When it was put to the applicant that much of the money recovered upon raid of Willys Avenue was located ‘in the open’ – in open boxes or bags his sister’s room or the spare bedroom, the applicant said that he did not enter those rooms or look into any bags in those rooms.
The applicant said that his trip to Vietnam in 2010 was financed by his parents. He had been diagnosed with diabetes some time earlier, and his mother had hoped that he could deal with this health issue by way of herbal remedies available in Vietnam. He agreed that while he was in Vietnam he looked at two or three properties for his parents with a person called Dao. He understood his parents were considering purchasing these properties as investments, and believed that Dao was a property developer.
The applicant said that in about April 2010, while staying in Saigon, he received a call from his mother asking his availability to collect a package. About an hour or so later someone knocked on his door and delivered a bag of money. On the deliverer’s instructions, he counted the money and confirmed there was $100,000 in Australian currency. He spoke to his mother on the phone again, and she told him to hand the package to her cousin, Ty, ‘for storage’ when he arrived. Chi Ba also told the applicant to lock the doors and not to open them for anybody. Ty arrived about an hour later and took the package from him. Ty asked the applicant whether the money was to go to ‘Aunty Ut’; the applicant called his mother and asked whether this was correct and she confirmed that it was. The applicant said that he did not ask his mother what the package was for, nor did he ask Ty. He said that nothing about the delivery made him suspicious, and he considered it must be related to a ‘family matter’. He said that generally in Vietnamese culture, if your mother asked you to do something you would do it if you were capable.
The respondent relied upon other transcripts to establish context and content for this cross-examination.[10]
[10] Exhibits PN-5; PN-6; SOK-10; TN-1; TN-2; TN-3; TN-4; TN-5; TN-6; TN-7; TN-8; PN-7; TN-10.
The applicant also accepted that he was party to a conversation which occurred on 15 June 2010 between himself, his mother and his father, in which the purchase of a business was discussed. He said this conversation occurred after he had spoken to a person called Cau My at his mother’s request. The applicant accepted that his mother had said to him ‘Like ah give him 100 first, like he is selling it for 265, but on paper he will have it as 90 only, the balance of 75 will be cash’ and that he had responded ‘but ah he said to pay him 100 first as a down payment and for the cash balance of 75 plus ah 90 in cheque’. The applicant said that at this time he was merely repeating to his mother what Cau My had told him. He said that his mother had told him she was interested in taking over a restaurant and understood this information to have something to do with that proposed transaction. He said that at the time of the discussion he was confused by the discussion and was just relaying information from Cau My. He did not know what deposits or monies might have been paid prior to this conversation while he was away in Vietnam, and said that in any case the transaction ultimately did not proceed.
Regarding his bank accounts, the applicant accepted that he opened the ANZ account with a balance of $30,000, which was transferred from the Access Account on 10 December 2009. He said the amount of $30,000 was ‘saved up’ in the six months preceding this transfer, during which he made eleven cash deposits to the Access Account, nine of which were in sums over $2,000. He agreed that his total taxable income for 2009 was $29,020, which he earned in cash from work at a Vietnamese grocery. He said that he would regularly take his cash payments (about $500 per week) to the casino, where he consistently won playing baccarat. He described his baccarat strategy as ‘doubling up’: starting from $100 bets, then increasing to $200 once he reached a threshold in winnings such as $1,000. He would sometimes lose, but won on a fairly consistent basis. He said that during this period he lived with his sister at Jetty Lane, and his sister paid the utility bills. He spent minimal amounts on food, and covered his living expenses with his gambling winnings.
The applicant further agreed that five cash deposits were made into the ANZ account between 4 January 2010 and 9 July 2010, totalling $21,700 (mostly made in January and February, prior to his trip to Vietnam). He accepted that he was unemployed during this period. He said that this money also came from gambling winnings. He said that he did not deposit all of his gambling winnings to the ANZ account, but rather retained a cash float of about $2,000-$2,500 to gamble with, and only deposited money intended as savings into that account. He said that during the time between 4 January 2010 and 9 July 2010 when he was in Australia he continued to consistently win at the casino. He said the largest single win he can recall was $7,000.
In re-examination the applicant said that his Access Account bank records demonstrated withdrawals of $202.50 at ATM’s in Crown Casino Southbank on four occasions in November and December 2009, as well as $600 withdrawn at a Melbourne Aquarium ATM on 30 December 2009. He said these withdrawals would have been for the purpose of gambling at Crown. He said that withdrawals of $1,000 on each of 27 January 2010 and 1 February 2010 at the Melbourne Aquarium ATM would also have been for gambling purposes.
The exclusion applications
Though there is some overlap in the analyses I shall perform, for clarity I propose to deal with the applicant’s exclusion applications in relation to each property separately.
Jetty Lane
What is the size and nature of Son Pham’s interest in Jetty Lane?
This is a threshold issue to the exclusion application. If, as the respondent contends, the applicant has no propriety interest in Jetty Lane, or if whatever interest he holds is a gift from his father, then Son Pham has no interest capable of exclusion.
Legal principles and provisions of the Act
It will be recalled that both ss 22(a) and 22(b) of the Act provide for exclusion of ‘the applicant’s interest in the property’ in certain circumstances.
‘Property’ is defined in s 3(1) of the Act as ‘real or personal property of every description, whether situated within or outside of Victoria and whether tangible or intangible, and includes any interest in any such real or personal property’; and ‘interest in relation to property’ is defined as (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.[11]
[11]Section 3(1) of the Act.
Dealing with the issue of real property in which multiple people may have interests, in the matter of DPP v Le [2007] HCA 52 (‘Le’), Kirby and Crennan JJ (with whom Gleeson CJ agreed) clarified (with respect to an application for exclusion from automatic forfeiture) that:
Read in the light of the definitions of both "property" and "interest" in s 3(1), and having regard to the Act as whole, s 52(1) empowers a court to make orders in respect of any "real or personal property" and in respect of any interest in such real or personal property in which the applicant claims an interest. Sometimes the two will coincide ... Where they do not coincide, the court's powers are to exclude the applicant's "interest" in the object of the restraining order with the result that any interest, other than the applicant's interest, can remain subject to the restraining order. Such a construction is unremarkable given that real property is frequently owned jointly.[12]
[12]Le, [84] (Kirby and Crennan JJ).
Relying on the equitable presumption of advancement the applicant’s primary position is that his equitable interest in Jetty Lane is 19 of 20 shares of the property consistent with the certificate of title. The following principles on this presumption are extracted from Calverley v Green (1984) 155 CLR 242 (‘Calverley v Green’):
(a) Where two or more persons advance the purchase price of property in different shares, it is presumed that the person or persons to whom the legal title is transferred holds or hold the property upon a resulting trust in favour of those who provided the purchase price in shares in which they provided it.[13]
[13]Calverley v Green, 246 (Gibbs CJ).
(b) The presumption of a resulting trust is displaced when recognized categories of relationships occur in which equity infers that any benefit provided for one party at the cost of the other has been provided by way of advancement.[14]
[14]Calverley v Green, 247 (Gibbs CJ).
(c) The extent of the beneficial interest of the parties must be determined at the date of purchase, and the fact the mortgage debt was repaid by one is not relevant. It is erroneous to regard the payment of a mortgage debt as payment of the purchase price. ...[15]
(d) A transfer from a father to a son (including an adult son) is a recognised category to which the presumption of advancement applies in Australia.[16]
(e) The presumption of advancement may be displaced by evidence of a contrary intention on the part of the purchaser at the time of the purchase.[17]
[15]Calverley v Green, 252 (Gibbs CJ), see also Vedeks v Public Trustee [1985] VR 569; Austin v Keele (1987) 61 ALJR 605; Arthur v Public Trustee (1988) 90 FLR 203.
[16]Calverley v Green, 247 (Gibbs CJ).
[17]Calverley v Green, 251 (Mason and Brennan JJ).
Section 10 of the Act stipulates that ‘for the purposes of an application under this Act in relation to an offence, property in which the accused has an interest includes…any property that was the subject of a gift from the accused to another person (i) within the period of 6 years before the first application made under this Act in respect of that offence; and (ii) at any time if the application is made for the purposes of automatic forfeiture or civil forfeiture’.
‘Gift’ is defined non-exhaustively in s 3 of the Act to include ‘a transfer for consideration significantly less than the greater of (a) the prevailing market value of the property; or (b) the consideration paid by the accused’.
A. Does an interest resulting from the presumption of advancement constitute a gift?
As I have said, the applicant’s primary position is that his equitable interest in Jetty Lane is 19 of 20 shares of the property, consistent with the certificate of title. Purchase by a father of property in the name of his son is an established category of presumed advancement, and there is no evidence of any contrary intention expressed by Thanh Hai Pham at the time of purchase, or indeed at any stage up until now.
Ms Mandie, for the respondent, submitted that if the presumption of advancement is accepted by the Court in relation to this transfer, then the effect of the conferral of beneficial interest in Jetty Lane to the applicant (by his father) constitutes a ‘gift’ within the meaning of the Act. Pursuant to s 10 of the Act, Thanh Hai Pham thus retains an interest in that proportion of the property that was ‘gifted’ to the applicant, and therefore no exclusion order can be made in respect of that proportion of the property.
Mr Best, for the applicant, responds that from the moment of settlement the presumption of advancement confirmed the applicant’s beneficial interest in Jetty Lane to be at home with his legal title (19/20 shares). At no stage did Thanh Hai Pham transfer or give an interest in Jetty Lane to the applicant, as he never had an interest in that real property beyond his 1/20 share. Rather, Mr Best contends, the applicant acquired his interest directly from the vendor at settlement. Because no transfer of this interest from Thanh Hai Pham to the applicant occurred, the applicant’s interest in the property cannot properly be described as a ‘gift’ as defined in the Act.
I am satisfied that, insofar as the applicant’s interest in Jetty Lane was financed by his father, that the presumption of advancement operates to confirm that the applicant’s equitable interest is at one with his legal title. I am also satisfied that part of the interest confirmed by advancement constitutes a gift within the meaning of the Act. ‘Gift’ is defined non-exhaustively, and I consider that the financing of a property by a father for his son falls comfortably within the ordinary meaning of this term. Indeed, the case law addressing the question of advancement routinely describes purchase arrangements of this nature with this terminology.
Considering the basis of the presumption of advancement in Bennet v Bennet,[18] Jessel MR postulated that, “the presumption of a gift arises from the moral obligation to give” (emphasis added).
[18](1897) 10 Ch D 474, 477 (‘Bennet v Bennet’), cited in Calverley v Green, 247 (Gibbs CJ).
Addressing the instances in which advancement is presumed, Gibbs CJ in Calverley v Green described, “[t]he question is whether the relationship which exists between two persons living in a de facto relationship makes it more probable than not that a gift was intended when property was purchased by one in the name of the other”[19] (emphasis added). I see no issue in extending the de facto relationship example to that of a relationship between father and son. Mason and Brennan JJ in Calverley v Green also used the expression ‘presumption of gift’[20] to describe the circumstance in which advancement ought be presumed.
[19]At 488.
[20]Calverley v Green, 247 (Gibbs CJ).
While I accept there is some force in Mr Best’s submission regarding the strict interpretation of a property ‘transfer’, for the reasons I have set out I consider it to be clear that that description has been included in the definition on an inclusive rather than an exhaustive basis.
It follows that I am of the view that s 10 of the Act operates to provide that Thanh Hai Pham retains his interest in that proportion of Jetty Lane that was ‘gifted’ to Son Pham and that no exclusion order can be made in respect of that proportion of the property.
Absent the gifted interest, the applicant submits that he nonetheless retains an interest in Jetty Lane proportionate to his contribution to the purchase price. Applying the reasoning of Kirby and Crennan JJ in Le, whatever interest the applicant can prove he has in the property as a result of his own contribution to the purchase (i.e. not the result of a gift) can be ‘carved out’ for the purpose of exclusion from RO 4338. The size of this contribution is in dispute.
B. The size of the applicant’s ‘carve out’ interest
Leaving the presumption of advancement to one side, where two or more persons contribute to the purchase of a property, the usual equitable presumption is that they hold the legal estate in trust for themselves as tenants in common in shares proportionate to their contributions.[21]
[21]See Calverley v Green, 258 (Mason & Brennan JJ).
The applicant submits that his contribution to the purchase price equates to 125,000/730,000 (17.123%), being the application to the purchase price of 50% of the $250,000 borrowed pursuant to the St George loan, for which the applicant and his father were jointly liable. Thus, in accordance with Le, the applicant claims an excludable interest equating to a 17.123% interest in the current market value of Jetty Lane.
Mr Best contended that the legal principle upon which this claimed interest is based is plainly set out in Calverley v Green, that being that the beneficial interest of the parties must be determined at the date of purchase. Where two persons jointly borrow moneys applied towards the purchase price, one-half of the moneys jointly borrowed is said to have been applied by each person.
Ms Mandie for the respondent accepted that the assumption of a mortgage liability ordinarily gives rise to a ‘mortgagor interest’ proportionate to the loan monies contributed to the purchase of the property at the time of purchase, but submitted that ‘at equity, and certainly under the Act, to regard this as direct contribution toward the purchase price, particularly in circumstances (where a) gift was intended and almost all repayments are made by another, is entirely artificial.’[22] She argued that the rule should not be mechanically applied, and that at equity the legal or statutory context of a purchase transaction can alter the application of the general rule on mortgage liabilities. For the purposes of the Act, a court must look behind the mere formal transaction. Where loan monies would not have been obtained at all but for the unlawful funds contributed by the accused and the use of this unlawfully acquired property as collateral, it cannot be that the loan money can be considered a direct contribution. Ms Mandie contended that in this circumstance, the equitable rule must be of limited application. She submitted that in reality, at its largest, the applicant’s ‘carve out’ interest could equate to half of the mortgage repayments made pursuant to the rental of the house as a display home over the first year, the very minimal deposits made by the applicant from his own resources in the period while his father was abroad, and perhaps to some extent the interest payments the applicant has been forced to make following his father’s incarceration.
[22]Closing written submissions for the Respondent at [12].
Wheeler J in Bertei v Feher[23] when considering the ‘mortgage liability’ principle set out in Calverley v Green, said this:
[23][2000] WASCA 165 (‘Bertei v Feher’).
...although the proposition is undoubtedly correct, it does not dictate a formula which must be mechanically applied.
For example, where finance is raised which is plainly intended to be “bridging finance” it seems to me that it may be undesirably artificial to say that it is the money raised under the mortgage for which, temporarily, both parties may be liable, rather than what is intended to be the ultimate source of funding (for example, money from the sale of one party’s home) which constitutes the payment of the purchase price.[24] (emphasis added)
And concluding:
It is not necessary finally to determine this question in this case, but it may be that evidence of the purpose of the mortgage and the expectation which the parties may have had about its early discharge from the means of one of them may affect the position which is referred to in Calverley v Green.[25]
[24]Bertei v Feher, [34] – [44].
[25]Bertei v Feher, [44].
Similarly, in Bloch v Bloch,[26] the High Court found that where parties, jointly liable to a mortgage, had an intention to in fact acquire land free of mortgage rather than subject to mortgage, the initial contributions to purchase price as well as subsequent mortgage repayments determined the beneficial interests.[27] In the later case of Calverley v Green, Mason and Brennan JJ accepted the Bloch position in respect of cases in which title freed of mortgage was sought, but distinguished the principle and stated that so far as a mortgage was retained over the property following purchase, repayments upon that mortgage could not be considered contributions to purchase price for the purpose of a resulting trust.
[26](1981) 180 CLR 390.
[27]See discussion in Dal Pont ‘Equity and Trusts in Australia’, 6th edition, Thomson Reuters, 2015, at [26.80] (‘Dal Pont’).
I agree with Wheeler J that the ‘mortgage liability’ Calverley v Green principle ought not be mechanically applied whatever the circumstance. For reasons set out in paragraphs [77] to [85], it is unnecessary to determine whether the principle ought apply in this case. However, there is force in the contrary argument advanced by the respondent.
In my view it would be highly undesirable for the Calverley v Green principle to be strictly and mechanically applied to all confiscation cases where there is an innocent party to a mortgage. It is not inconceivable that a convicted person might have structured affairs so as to introduce an innocent party (say a spouse or a child) into the mortgage in order to protect his or her proprietary interest from confiscation. I have been unable to locate any judicial consideration on this precise issue, however (as mentioned in Le) this Court is able to ‘make orders in respect of any “real or personal property” and in respect of any interest in such … property in which the applicant claims an interest’. In cases where the innocent party has made some tangible contribution to otherwise tainted property, it would be reasonable to reimburse that party to the extent of that contribution on the basis of a constructive trust. Thus an innocent party would be entitled to recover outlays for improvements, mortgage repayments and other legitimate expenditure.
Returning to the facts of this case, it will be recalled that the applicant made only minimal contributions to the mortgage repayments and there was no evidence that he spent anything on improvements. Adopting the ‘constructive trust’ approach set out in paragraph 59, he would be entitled to a ‘carve out’ of the sum of these contributions.[28] Adopting the strict Calverley v Green principle the applicant would be entitled to a ‘carve out’ of 17.123% of the current market value of Jetty Lane.[29] The difference is stark.
[28]Perhaps with some allowance for interest.
[29]125/730 x market value; where $125 000 is half of the $250 000 mortgage on the $730 000 property as at purchase.
However stark it may be, as I have said, it is unnecessary for me to determine the correct approach to this question as my findings on the s 22 factors (set out below) mean that there is no interest held by Son Pham that is capable of exclusion.
Exclusion of interest in Jetty Lane
The applicant initially proposed to argue that his interest in Jetty Lane was excludable pursuant to s 22(a), being lawfully acquired and neither tainted nor derived as defined by the Act as it operated at the relevant time. However, upon reflection of the retroactive operation of the 2016 Amendment Act,[30] the applicant conceded that for the present application, tainted property includes:[31]
(b)…, property that, in relation to an offence—
…
(iv) is, or has been, subject to a mortgage, lien, charge, security or other encumbrance wholly or partly discharged using property referred to in subparagraph (i), (ii) or (iii);
…
[30]Section 190 of the Act, as inserted by the 2016 Amendment Act, requires that ‘an amended provision relating to property obtained with a loan applies with respect to any proceeding under this Act before, on or after the date on which the relevant section of the 2016 Act comes into operation.’ I note that as the definitions of tainted property and derived property had already been amended between August 2010 and the 2016 Amendment Act, the only way to logically retroactively apply the 2016 amendments is to interpret the post-2016 Amendment Act definitions (taking into account 2010 – 2016 amendments as well as the 2016 Amendment Act amendments) as being the now operative definitions.
[31]Confiscation Act 1997, s 3. I note also that the 2016 Amendment Act amended the definition of derived property in substantially the same terms as those broadening the definition of tainted property in this regard.
Given this definition, the applicant abandoned his s 22(a) exclusion application in respect of the Jetty Lane interest, and proceeded on the basis of an application for exclusion pursuant to s 22(b)(i) alone.
Objection to evidence concerning the offending of Chi Ba
Before I set out my analysis of the evidence against the s 22(b)(i) factors, it is necessary to resolve an objection to certain evidence upon which I reserved at trial. Specifically, Mr Best objected to the cross-examination of the applicant by the respondent using a series of translated transcripts of telephone intercepts (‘TI’s’) of conversations variously between Chi Ba, the applicant, and the applicant’s aunt, Chi Tu. The purpose of this cross-examination, Ms Mandie indicated, was to counter the applicant’s assertions that he was in not in any way involved in the commission of the offence (s 22(b)(i)(A)).
Mr Best argued that, because the basis of RO 4338 was in respect of ‘alleged offender Thanh Hai Pham’ (i.e. in personam in nature), evidence connecting the applicant to the offending of Chi Ba or his aunt was not relevant and therefore ought be excluded pursuant to s 55 of the Evidence Act 2008. He contended that there is no nexus between Chi Ba or Chi Tu to the purchase of Jetty Lane, or to the specific restraining order in place. Where an act interferes with personal property rights and interests, interpretation of restraint of forfeiture provisions must be strict. The restraining order upon Jetty Lane is responsive to the offending of Thanh Hai Pham. He argued that it is entirely inappropriate for the respondent to seek to extend to reach of RO 4338 to the offending of Chi Ba for the purpose of exclusion application analysis of the conviction-based restraining order, and to alternatively consider the applicant’s role, knowledge, or suspicion of any offending other than the Schedule 2 offending of his father would be to take into account an irrelevant consideration.
Ms Mandie submitted that this was not a case of considering the applicant’s knowledge or involvement in a separate set of offending. Section 22(b)(i)(A) refers to ‘the Schedule 2 offence’, not a specific offender. Thanh Tai Pham, Chi Ba and Chi Tu were co-accused in the criminal matter, and were ultimately convicted on a joint criminal enterprise basis. The offending of Chi Ba and Chi Tu, Ms Mandie contends, is therefore the same offending as that of Thanh Tai Pham. Insofar as the telephone transcripts rebut the applicant’s contention that he was not involved in this offending, they are plainly relevant to determination of s 22(b)(i)(A).
At trial, I permitted Ms Mandie to cross-examine using these transcripts on a contingency basis on the understanding that the applicant made a ‘blanket relevance objection’ to the use of this material.
Having considered the content of the TI’s and the wording of s 22(b)(i)(A), I am satisfied that where the TI’s have the capacity to demonstrate a connection between the applicant and the Schedule 2 offending of Chi Ba and Chi Tu, they are relevant to the determination of the RO 4338 exclusion application. It follows that I will take into consideration the evidence of the applicant that was provided in those relevant answers in his cross-examination. In my view, evidence that connects the applicant to his mother’s and aunt’s pursuit of a joint criminal enterprise also connects him to the same criminal enterprise pursued by his father.
Section 22(b)(i)
The respondent did not pursue ss 22(b)(i)(B), (C) or (D) as a ground of opposition to the applicant’s application in respect of Jetty Lane.[32] The remaining areas of contention were reduced to ss 22(b)(i)(A) and (E).
[32]T201.
Section 22(b)(i)(A) – ‘involved in the commission of the offence’
To satisfy this section, the applicant must satisfy the Court, on balance,[33] that he was not, in any way, involved in the commission of the Schedule 2 offence.[34] It was agreed by the parties that for the purpose of this section, for a person to be involved in an offence that person must have knowledge of at least the essential facts that constitute the relevant offending.[35] That is, whatever his involvement, the applicant must have been aware that each element of the offence was met by the offender. The Drugs Poisons and Controlled Substances Act 1981 defines ‘traffick’ in relation to a drug of dependence to include:
[33]Section 132 of the Act.
[34]Section 22(b)(i)(A) of the Act.
[35]T189.
(a) Prepare a drug of dependence for trafficking;
(b) Manufacture a drug of dependence for trafficking; or
(c) Sell, exchange, agree to sell, offer for sale or have in possession for sale, a drug of dependence.[36]
A ‘large commercial quantity’ in respect of heroin is 750 grams pure, or 1 kg mixed.[37]
[36]Section 70.
[37]Drugs Poisons and Controlled Substances Act 1981, Schedule 11.
The parties were not in agreement however, on what acts or omissions could constitute ‘in any way involved’, and as to what level of ‘knowledge’ could dislodge the requirement for knowledge of the elements of the offence. Referring to the Victorian Court of Appeal Case of Le v DPP [2007] VSCA 71 (‘Le v DPP’)[38], Ms Mandie submitted that what was required was that “the person in question must know of the offence and must at the very least condone or permit the commission of the offence”.[39] Knowledge, she submitted, at criminal law includes ‘wilful blindness’ and wilful blindness, as set out by Nettle JA[40] in Le v DPP “includes the actions of a person who deliberately refrains from making enquiries because he or she prefers not to have the result, or who otherwise wilfully shuts his or her eyes for fear they may learn the truth”.[41] In Le v DPP his Honour cited the proposition originally made in Giorgianni v the Queen,[42] that:
“…a combination of suspicious circumstances and failure to make inquiry may sustain an inference of knowledge of the actual or likely existence of the relevant matter”.
[38]Unrelated to Le in the High Court of Australia referred to above.
[39]Le v DPP, [19], citing Lyall v Solicitor General [1997] 2 NZLR 641, 648.
[40]As he then was.
[41]Le v DPP, [23].
[42](1958) 156 CLR 473482 – 3, reiterated in Bahri Kural v The Queen (1987) 162 CLR 502, 505; 511 – 512; Pereira v Director of Public Prosecutions (1988) 63 ALJR 1, 3.
Ms Mandie submitted that the evidence establishes a prima facie case as to the knowledge or belief or wilful blindness of the applicant in relation to his parents’ offending, and of the applicant’s condoning and/or assisting that offending.[43]
[43]Closing Submissions of the Respondent, [86].
Mr Best contended, in effect, that in taking this approach the respondent had conflated the two distinct elements of s 22(b)(i)(A); that is, that there must be (i) knowledge of the elements of the offence, and (ii) knowledge of the involvement in the commission of the offence. Reliance upon Le v DPP was misconceived, as the appellant in Le v DPP had brought her appeal on the issue of knowledge alone – the physical aspects of her ‘involvement’ in the relevant trafficking were not in issue before the Court of Appeal – the dispute was in fact reduced to whether or not she knew or was wilfully blind to the elements of the Schedule 2 offence (i.e. whether or not she knew that the amount of cannabis was ‘not less than a commercial quantity’ and whether or not she knew that the cannabis was being grown ‘for the purpose of trafficking’).
Mr Best contended that the involvement contemplated by the section is strictly limited to the Schedule 2 offending itself. Inferences of involvement in other offending (for example, and relevantly in this case, involvement in money laundering) could not be used to muddy the applicant’s demonstration he was not involved in the commission of the Schedule 2 offence itself.
I do not accept Mr Best’s contention that the respondent’s interpretation of Le v DPP conflates the two arms of s 22(b)(i)(A). In Le v DPP, Nettle JA described the New Zealand case of Lyall v Solicitor General[44] (‘Lyall’) as ‘persuasive authority’ for the proposition that what is contemplated by s 22(b)(i)(A) is ‘knowing involvement’. His Honour then continued to set out the Lyall definition of ‘knowing involvement’ – ‘the person must know of the offence and must at the very least condone or permit the commission of the offence’. I do not understand Ms Mandie’s submissions to have gone beyond restating this authority. That is, provided a Court is satisfied that an applicant knew of (or was wilfully blind to) the essential elements of an offence, passively condoning or permitting the continuation of the offence is sufficient to constitute knowing involvement by that applicant.
[44][1997] 2 NZLR 641.
The second issue, being what might constitute ‘in any way involved’, is more complicated. Ultimately, I consider it is a question of fact and degree. While I accept that this is penal legislation and so is to be strictly construed,[45] use of the language ‘in any way involved…’ plainly indicates the intent of the drafters to set a broad and low threshold for this factor. If ‘knowing involvement’ can be met by ‘condoning or permitting’ an offence to continue, in my view it necessarily follows that a person who knows of the essential elements of the offence and commits an act that would assist the commission of the offence, or assist in masking the commission of the offence (such as laundering of the proceeds of crime), is knowingly involved in the commission of that crime provided the crime is ongoing at the time of the commission of the relevant act. That person will satisfy the ‘in any way involved test’ if that secondary act is capable of constituting knowing involvement, and thus being in any way involved.
[45]Le v DPP citing Murphy v Farmer (1988) 165 CLR 19, 28.
Analysis
It is important to bear steadily in mind that the onus is on the applicant to demonstrate, on balance, that he was not in any way involved in the commission of the Schedule 2 offence. For the following reasons, I conclude that he has failed to do so.
The applicant’s evidence, when considered as a whole, is implausible. The applicant claimed that as at August 2010 he understood the sources of his father’s income to be the family clothing business and ‘gambling winnings’ won from the proceeds of the clothing business. To his knowledge, the family business was a two machine sewing shop, operated out of his parents’ garage, with no employees other than his two parents, and which generated an annual income of approximately $30,000. Despite this, he claims to have had no suspicion whatsoever about his father’s/parents’ ability to fully support three children in 2006 (and variously at other times), pay an amount totalling around $480,000 upfront on the purchase of Jetty Lane in 2006 (being the deposit and balance of the settlement price after application of the St George loan), purchase a new car valued at about $40,000 for him in 2006, pay an additional $100,000 off the balance of the St George loan in 2007, pay monthly instalments of around $1,500 in cash on that loan, finance the applicant’s lengthy trip to Vietnam in 2010, consider purchasing three investment properties in Vietnam in 2010, dealing with A$100,000 cash whilst in Vietnam and consider purchasing another business in Australia in 2010. In my view, any reasonable adult (particularly one with a business degree) would necessarily have had very grave reservations about Than Hai Pham’s spectacular ability to consistently win such large amounts at Crown Casino. I reject the applicant’s adamant protestations that he did not. I also consider the applicant’s account of his own highly consistent wins at Crown casino by ‘doubling up’ to be inherently far-fetched, particularly in the absence of any cogent supporting evidence, other than the occasional withdrawals from ATMs at and near Crown Casino.
I consider that the applicant has failed to demonstrate that he was not, in any way involved in the Schedule 2 offending as I have explained it. I accept that a finding of knowing involvement requires knowledge (or wilful blindness) of all of the essential elements of the offence, however it is fundamental to bear in mind that the respondent is not required to prove knowing involvement by the applicant, rather the onus is on the applicant to prove otherwise.
Son Pham has given sworn evidence that he was not only ignorant but unsuspicious of his parent’s offending. I do not accept this evidence as credible. His father had no plausible explanation for his consistent access to large amounts of money. Bundles of cash and the tools and materials for the preparation of heroin for sale were located in the open in his parents’ home. Son Pham visited there about thrice weekly in the months preceding his parents’ arrest.
I am not persuaded by the applicant that he did not know of, or was at least wilfully blind to, his parents’ offending. If the applicant did know of the offending, then the contention that he condoned or permitted this offending logically follows.
Further, I am not satisfied that the applicant was not involved in either attempted or actual money laundering in respect to the proceeds of his parents’ offending. Put positively, I consider it more likely than not that his 2010 activities in Vietnam were undertaken knowingly and with the purpose of assisting or attempting to assist his parents to deal with the proceeds of their ongoing criminal enterprise.
I note that a Jones v Dunkel[46] inference was sought by the respondent in respect of the applicant’s failure to call his father, mother, or aunt, each of whom may have been able to provide evidence supporting the applicant’s asserted ignorance. Given my finding above, there is no need to consider this submission.
Section 22(b)(i)(E) – ‘where the applicant acquired the interest from the accused, directly or indirectly, that it was acquired for sufficient consideration’
[46](1959) 101 CLR 298.
Given my finding in s 22(b)(i)(A), there is no need to consider s 22(b)(i)(E).
The applicant has failed to demonstrate that he has any interest capable of exclusion in Jetty Lane. The application in respect of Jetty Lane is refused.
The ANZ Bank Account
I have set out the relevant test concerning s 24 of the Act at paragraph [7] above.
Section 24(b)(i) is identical to s 22(b)(ii)(A). I have found already that the applicant fails this criterion in respect of his interest in Jetty Lane and I conclude that he also fails this test for the same reasons in respect of the ANZ account. If the applicant’s exclusion application in respect of this account is to succeed, it must therefore do so pursuant to s 24(a), which requires that the applicant satisfy the Court that the property is neither tainted nor derived.
Taking into account the 2016 Amendment Act, ‘tainted property’ is relevantly defined as:
(a)in the case of civil forfeiture, a civil forfeiture restraining order, a civil forfeiture order or a civil forfeiture exclusion order, property that—
(i)was used, or was intended to be used in, or in connection with, the commission of one or more Schedule 2 offences; or
(ii)was derived or realised, or substantially derived or realised, directly or indirectly, from property referred to in subparagraph (i); or
(iii)was derived or realised, or substantially derived or realised, directly or indirectly, from the commission of one or more Schedule 2 offences; or
(iiia)is, or has been, subject to a mortgage, lien, charge, security or other encumbrance wholly or partly discharged using property referred to in subparagraph (i), (ii) or (iii); or
(iv)is likely to be used, or intended to be used in, or in connection with, the future commission of one or more Schedule 2 offences;[47]
...
[47]Confiscation Act 1997, s 3.
‘Derived property’ is relevantly defined as:
(1)In relation to civil forfeiture, a civil forfeiture restraining order, a civil forfeiture order or a civil forfeiture exclusion order, derived property means—
(a)property used in, or in connection with, any unlawful activity; or
(b)property derived or realised, or substantially derived or realised, directly or indirectly, from any unlawful activity; or
(c)property derived or realised, or substantially derived or realised, directly or indirectly, from property of a kind referred to in paragraph (a) or (b).
(2)Without limiting subsection (1), property is derived from property of a kind referred to in subsection (1)(a) or (b) if it is, or has been, subject to a mortgage, lien, charge, security or other encumbrance wholly or partly discharged using property of a kind referred to in subsection (1)(a), (b) or (c).[48]
[48]Confiscation Act 1997, s 7A.
The applicant relies on the evidence he has given of the provenance of the money in the account to discharge his burden to prove the money in that was neither tainted nor derived.
The applicant submitted that his evidence that the money in the ANZ account was entirely the result of his gambling winnings ought be believed. He had given evidence regarding his ‘doubling up’ strategy for baccarat at Crown Casino, and had demonstrated withdrawals of cash from his Access Account at or nearby Crown at relevant times. His income in the 2009 financial year had been devoted almost entirely to gambling, and a ‘float’ or ‘seed money’ in cash was maintained into 2010.
The respondent submitted that the applicant’s explanations were implausible, and that they failed to prove that the funds came from a legitimate source in the face of a strong inference that the true source of the funds was either Thanh Hai Pham, Chi Ba, or both. In addition to managing to save $30,000 over a six-month period in which his taxable income was only $29,020 for the entire year, the applicant also managed to deposit approximately a further $22,000 in a period in which he was entirely without income, as well as pay $5,000 in instalments on the St George Loan while his father was abroad.
Analysis
I am not persuaded by the applicant’s sworn evidence that his deposits to the ANZ account were sourced entirely from his own gambling winnings. Not only is his unsupported oral evidence of consistent gambling success inherently improbable, the applicant’s evidence as a whole, as I have set out at [78] above, lacked any real cogency. In the absence of any plausible source there is, in my view, a strong inference available that the deposits to the ANZ account (all of which occurred during the relevant offending period of his parents) were the proceeds of his parents’ offending. I am satisfied that it is more likely that the deposits made into the impugned account were the product of the Schedule 2 offending than from any consistent winnings at the casino using the doubling up strategy. It follows that I am not satisfied that the ANZ account is neither tainted nor derived.
I therefore also refuse the applicant’s application in respect of the ANZ account.
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