Szabo v The State of Western Australia - [2006] WASC 5

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: SZABO -v- THE STATE OF WESTERN AUSTRALIA [2006] WASC 5

CORAM: JENKINS J

HEARD: 20 JULY 2005

DELIVERED : 20 JULY 2005

PUBLISHED : 20 JANUARY 2006

FILE NO/S: CIV 2307 of 2004

BETWEEN: ROBERT GEZA SZABO
Plaintiff
AND
THE STATE OF WESTERN AUSTRALIA
Respondent

FILE NO/S :CIV 2308 of 2004

BETWEEN :PERPETUAL TRUSTEES CO LTD (ACN 000 001 007)
Plaintiff
AND
THE STATE OF WESTERN AUSTRALIA
Defendant

Catchwords:

Criminal law - Confiscation of property - Objections to confiscation - Declaration that property has been confiscated

Legislation:

Criminal Property Confiscation Act 2000 (WA), s 8, s 30

Misuse of Drugs Act 1981 (WA), s 32A(1), s 32A(a), s 34

Result:

The objections are dismissed
Declaration made pursuant to the Criminal Property Confiscation Act 2000 (WA), s 30

Category: B

Representation:

CIV 2307 of 2004

Counsel:

Plaintiff: Mr D M Lewis
Respondent: Mr B S W Wyatt

Solicitors:

Plaintiff: Lewis Blyth & Hooper
Respondent: State Director of Public Prosecutions

CIV 2308 of 2004

Counsel:

Plaintiff: Mr D M Lewis
Defendant: Mr B S W Wyatt

Solicitors:

Plaintiff: Lewis Blyth & Hooper
Defendant: State Director of Public Prosecutions

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

Nil

Case(s) also cited:

Hendricks v The State of Western Australia [2002] WASC 68
Re Smith; Ex Parte Director of Public Prosecutions for Western Australia (No 3) [2004] WASC 157

JENKINS J: This is the hearing of a summons filed by the State on 28 June 2005 for orders that:
(a)the objections to the confiscation of certain property seized pursuant to a freezing notice No AISFM040068 issued under the Criminal Property Confiscation Act 2000 (WA) ("the Act") be dismissed;
(b)a declaration pursuant to the Act, s 30 that the seized property, being all the property owned or effectively controlled by Miklos Ferenc Szabo as at 1 December 2004 and all that property given away at any time prior to 1 December 2004 by Miklos Ferenc Szabo, has been confiscated under the Act, s 8 be made; and
(c)Miklos Ferenc Szabo deliver up the confiscated property to the Director of Public Prosecutions ("the DPP").
In respect to the application for dismissal of the objections there have been two objections filed. The first was filed by Robert Geza Szabo by summons dated 7 October 2004. The second objection was filed by Perpetual Trustee Co Ltd, also by summons.
The situation in respect to the objection by Perpetual Trustee Co Ltd is that it has sent a letter to the DPP advising it that, on the basis of the undertaking contained in the facsimile received from the DPP, it agrees to the orders that its originating summons dated and filed 8 October 2004 in CIV 2308 of 2004 be dismissed and that there be no order as to costs.
Consequently in respect to that objection I am prepared to make the order that the objection of Perpetual Trustee Co Ltd be dismissed upon the defendant filing the written undertaking given to Perpetual Trustee Co Ltd. I understand that that undertaking is that upon the sale of the properties which Perpetual Trustee Co Ltd has an interest in, the interest of that company will be acknowledged and will be paid out upon sale.
In respect to the other objection made by Robert Geza Szabo, it is based on the fact that he is a joint tenant with Miklos Szabo in the properties known as 14 Kinbrace Way, Lynwood and 27 Queensville Avenue, Lynwood ("the Lynwood properties"). His counsel who appears before me today says that Robert Szabo does not consent to the orders sought by the State but agrees that Robert Szabo's interest in the Lynwood properties is protected by the orders sought by the State.
As I understand the situation, the interests of Robert Szabo are protected insofar as the State seeks only a declaration that Miklos Szabo's half shares in the Lynwood properties have been confiscated to the State. Consequently Robert Szabo's half shares in the Lynwood properties remain his and are unaffected by any orders that I make today. I am therefore prepared to dismiss Robert Szabo's objection made by originating summons dated 7 October 2004.
I now move on to the State's application for a declaration pursuant to the Act, s 30 that the seized property owned or controlled by Miklos Szabo or given away by him has been confiscated under the Act, s 8. The application by the State is made on the basis that the property the subject of the freezing notice has been confiscated in any event under the Act, s 8 because Miklos Szabo was declared to be a drug trafficker on 1 December 2004 as a result of being convicted of confiscation offences committed after the commencement of the Act.
The affidavit of John Charles Hancock sworn 21 June 2005 establishes that on 10 September 2004, Miklos Szabo was arrested and charged with various drug‑related offences. On 11 September 2004 pursuant to the Act, s 34 a freezing notice was issued on the basis that there were reasonable grounds for suspecting that Miklos Szabo had been charged with an offence and could be declared to be a drug trafficker under the Misuse of Drugs Act 1981 (WA) ("the Misuse of Drugs Act"), s 32A(a) if he was convicted of one or more of those offences. There was a further ground being that the property known as 14 Kinbrace Way, Lynwood was a crime‑used property. On 26 April 2005 the freezing notice was varied so as to delete this latter allegation.
On 1 December 2004 in the District Court at Perth, Miklos Szabo was convicted on his own confession of one count of possessing a prohibited drug, namely cocaine, with intent to sell or supply it to another and one count of cultivating a prohibited plant, namely cannabis. On the same date Miklos Szabo was declared to be a drug trafficker pursuant to the Misuse of Drugs Act, s 32A(1). Section 8 of the Act provides:
"(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."
As I have indicated, the orders sought by the State recognise the interests of Robert Szabo insofar as they do not seek a declaration that his interest in the Lynwood properties be confiscated.
The State has also given an undertaking to the Perpetual Trustee Co Ltd that it will recognise that company's interests under the mortgages over those properties.
There is only one other issue for me to deal with and that is the alleged interest of Marta Szabo, Miklos Szabo's mother. The situation is that in respect of 14 Kinbrace Way, Lynwood, Miklos and Robert Szabo are joint tenants of that property. The State seeks a declaration that a one‑half share of that property has been confiscated pursuant to s 8 because it is owned by Miklos Szabo. The evidence before me establishes that to my satisfaction.
However, Marta Szabo, Miklos Szabo's mother, has filed an affidavit alleging that she has an interest in that property to the extent of $9,500.00 which she said she lent to Miklos and Robert Szabo, her sons, to reduce the mortgage over the property.
The affidavit of Marta Szabo is dated 19 July 2005. I accept that it has only been filed recently because Mrs Szabo did not appreciate the significance of the issues. Mrs Szabo deposes that she lent her sons the money to reduce their debt. She says it was agreed that the loan would be repaid when the mortgage was repaid or if she needed the money sooner.
However, the agreement was not placed in writing and no security was taken out over the property by Mrs Szabo. I readily acknowledge that in a family arrangement of this type, it is not to be expected that the parties would evidence their agreement in a formal way.
The difficulty for Mrs Szabo is that given that they have not reduced their agreement to writing and have not formalised it by the creation of any security, it does not seem to me that the loan of $9,500.00 by Mrs Szabo to her sons gives rise to any kind of equitable or legal interest in the property known as 14 Kinbrace Way, Lynwood or any interest that I can recognise in these proceedings.
Mrs Szabo has given her sons an unsecured loan. That loan may well be recoverable by her in other proceedings. However, as I have said, I do not accept that it gives rise to any interest recognised by law or equity in the property at 14 Kinbrace Way, Lynwood.
Consequently, upon being satisfied from the evidence of John Charles Hancock in an affidavit sworn 21 June 2005, that the property referred to in pars 2(a) to (h) of the defendant's summons is property that was owned or under the control of Miklos Szabo as of 1 December 2004 and being satisfied that on that date he was declared to be a drug trafficker upon his conviction for confiscation offences, I am prepared to make the orders sought in pars 2(a) to (h) of the summons. I am also prepared to make the orders sought in par 3 of the summons with respect to the delivering up of the property to the Director of Public Prosecutions or his agent.
Each of the orders that I make today will be subject to the defendant filing an affidavit of service proving that Miklos Szabo was served with the summons, including the date of today's hearing, on a date prior to today; that is, that service took place on a date prior to today. I give liberty to the parties to re‑list the matter before me if there is any difficulty with the provision of that affidavit. My final order will be that there be no order as to costs.