The Director of Public Prosecutions v Nguyen - [2025] WASC 3

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   THE DIRECTOR OF PUBLIC PROSECUTIONS -v- NGUYEN [2025] WASC 3
CORAM:   LEMONIS J
HEARD:   22 APRIL & 5 JUNE 2024, FURTHER WRITTEN SUBMISSIONS FILED 19, 25 JUNE & 3 JULY 2024
DELIVERED          :   20 JANUARY 2025
FILE NO/S:   CPCA 34 of 2018
(CPCA 9 of 2020)

BETWEEN: THE DIRECTOR OF PUBLIC PROSECUTIONS
Plaintiff
AND
HOANG NAM NGUYEN
First Defendant
PHUONG NAM NGUYEN
Second Defendant
HNLN CORPORATE PTY LTD as trustee for THE HNLN FAMILY TRUST
Third Defendant
JJ CORPORATE PTY LTD as trustee for THE JJ INVESTMENT TRUST
Fourth Defendant
CLOUD 9 MANDURAH CORPORATE PTY LTD as trustee for THE CLOUD 9 MANDURAH FAMILY TRUST
Fifth Defendant
CLOUD 9 PERTH CORPORATE PTY LTD as trustee for THE CLOUD 9 PERTH FAMILY TRUST
Sixth Defendant
CLOUD 9 PERTH CITY PTY LTD as trustee for THE CLOUD 9 PERTH CITY FAMILY TRUST
Seventh Defendant
CLOUD 9 CORPORATE PTY LTD as trustee for THE CLOUD 9 FAMILY TRUST
Eighth Defendant
N N CORPORATE PTY LTD as trustee for THE NAM NGUYEN FAMILY TRUST
Ninth Defendant
ANGEL FX PTY LTD as trustee for THE ANGEL FX FAMILY TRUST
Tenth Defendant
JJJ CORPORATE PTY LTD as trustee for THE JJJ FAMILY TRUST
Eleventh Defendant
NIGHTLIFE FX PTY LTD as trustee for THE NIGHTLIFE FX FAMILY TRUST
Twelfth Defendant
HN CORP PTY LTD as trustee for THE HN FAMILY TRUST
Thirteenth Defendant
WESTPAC BANKING CORPORATION
Fourteenth Defendant

Catchwords:

Freezing orders made on various grounds under the Criminal Property Confiscation Act 2000 (WA) in relation to three real properties - The properties were subject to registered mortgages at the time the freezing orders were made - Mortgagee did not have any involvement in or knowledge of the activities that led to the freezing orders being made - Whether orders for sale can be made permitting mortgagee to sell the properties so it can be paid out the monies due under the mortgage - Whether the court has the power to order that all or some of the proceeds of sale are subject to the existing freezing orders - Whether mortgagee is an owner as defined in the Criminal Property Confiscation Act 2000 (WA) of a joint tenant's interest in property, in contrast to the property itself

Legislation:

Criminal Property Confiscation Act 2000 (WA)
Interpretation Act 1984 (WA)
Transfer of Land Act 1983 (WA)

Result:

Rulings made
Parties to provide revised minute of orders

Category: B

Representation:

Counsel:

Plaintiff	:	I S Jones
First Defendant	:	M L Bennett
Second Defendant	:	B A Jackson
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance
Fifth Defendant	:	No appearance
Sixth Defendant	:	No appearance
Seventh Defendant	:	No appearance
Eighth Defendant	:	No appearance
Ninth Defendant	:	No appearance
Tenth Defendant	:	No appearance
Eleventh Defendant	:	No appearance
Twelfth Defendant	:	No appearance
Thirteenth Defendant	:	B A Jackson
Fourteenth Defendant	:	P R Edgar SC & N L Pham

Solicitors:

Plaintiff	:	Director of Public Prosecutions (WA)
First Defendant	:	Bennett
Second Defendant	:	Holborn Lenhoff Massey
Third Defendant	:	Bennett
Fourth Defendant	:	Bennett
Fifth Defendant	:	Bennett
Sixth Defendant	:	Bennett
Seventh Defendant	:	Bennett
Eighth Defendant	:	Bennett
Ninth Defendant	:	Bennett
Tenth Defendant	:	Bennett
Eleventh Defendant	:	Bennett
Twelfth Defendant	:	Bennett
Thirteenth Defendant	:	Holborn Lenhoff Massey
Fourteenth Defendant	:	Lavan

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

Ardrey v The State of Western Australia [No 2] [2017] WASCA 41
Bennett & Co (a firm) v Director of Public Prosecutions (WA) [2005] WASCA 141; (2005) 31 WAR 212
Bofinger v Kingsway Group Limited [2009] HCA 44
Cassegrain v Gerard Cassegrain & Co Pty Ltd [2015] HCA 2
Centurion Trust Company Ltd v Director of Public Prosecutions (WA) [2009] WASCA 97
Centurion Trust Company Ltd v Director of Public Prosecutions (WA) [2010] WASCA 133
Director of Public Prosecutions (WA) v Mansfield [2004] WASC 255; (2004) 150 A Crim R 348
Electric Light and Power Supply Corporation Ltd v Electricity Commission of NSW (1956) 94 CLR 554
Happy Cruising Pty Ltd v Magistrates Court of Western Australia [2024] WASC 183
Mansfield v The Director of Public Prosecutions for Western Australia [2006] HCA 38
Ng v Commissioner of the Australian Federal Police [2019] WASCA 195
NWC Finance Pty Ltd v The State of Western Australia [2019] WASC 485
Permanent Trustee Co Ltd v The State of Western Australia [2002] WASC 22
Prichard v M 6-8 Legal Pty Ltd [2024] WASCA 4
Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
R v Barlow [1997] HCA 19; (1997) 188 CLR 1
Singh v Kaur Bal [No 2] [2014] WASCA 88
Trustees of Cummins v Cummins [2006] HCA 6; (2006) 227 CLR 278
Westpac Banking Corporation & Ors [2001] WASC 365
Wright v Gibbons (1949) 78 CLR 313
Wyloo Metals Pty Ltd v Quarry Park Pty Ltd [2024] WASCA 38

LEMONIS J:

These proceedings concern orders made under the Criminal Property Confiscation Act 2000 (WA) (the Act).
It is a complex piece of legislation. Towards the end of Owen JA's more than 19 years as a judge of this court, his Honour said of the Act:[1]
In my time on the Bench I have seldom come across a piece of legislation as perplexing and difficult to construe as this one.
[1] Centurion Trust Company Ltd v Director of Public Prosecutions (WA) [2010] WASCA 133 (Centurion [No 2]) [75].
The applications now before me are indicative of that difficulty.
On the application of the plaintiff (the Director), this court made freezing orders under the Act that affect three residential properties. They are 100 Vincent Street, Mount Lawley, 65 Etwell Street, East Victoria Park and 49 Cowle Street, West Perth.
The fourteenth defendant (Westpac) has registered mortgages on the titles to those properties securing money it has advanced. Westpac wants to sell the properties so it can get paid the money due under the mortgages. The Director agrees that the properties should be sold to allow Westpac to get paid the money due to it. The Director accepts that Westpac is, by any stretch of the imagination, an innocent party and should not be disadvantaged by the activities that led to the freezing orders being made. The registered proprietors of the properties do not suggest the money claimed by Westpac is not due under the ordinary operation of the mortgages. One might have thought this would all suffice and I could readily make the orders sought. However, the operation of the Act is not so straightforward.
The Director and Westpac put forward a number of different paths by which the proposed orders for sale could be made. Ultimately, they settled on orders for sale being made under s 91 of the Act. If the properties are sold pursuant to such orders, then the proceeds of sale are not automatically frozen. Accordingly, the Director seeks an order freezing the remaining funds after Westpac has been paid the money due to it under the mortgages. The Director opposes the sale orders if that further freezing order is not made. The first defendant, Mr Nguyen, says I do not have the power to make the further freezing order.
The effect of the orders sought by Westpac as supported by the Director can be summarised as follows:
1.Westpac is appointed to sell the Vincent Street and Etwell Street properties.
2.Westpac is appointed to sell the ninth defendant's interest in the Cowle Street property.[2]
[2] The other registered proprietors in the Cowle Street property have also mortgaged their interests to Westpac. Accordingly, an order appointing Westpac to sell the ninth defendant's interest would enable Westpac to sell the property.
3.A process is put in place to facilitate the sale of the properties, including determining a minimum price.
4.The proceeds of sale are to be applied in the following order:
(a)payment of the reasonable costs of sale including the agent's commission and any settlement costs;
(b)payment of the outstanding rates and taxes for the relevant property;
(c)payment to Westpac of the monies due to it under the mortgage over the relevant property;
(d)the remainder of the sale proceeds:
(i)are to be paid into an interest bearing trust account in the name of the Director and the registered proprietors of the property; and
(ii)shall be taken to be the property sold and dealt with in accordance with the orders that imposed the freezing order in respect of that property.
5.Westpac's objection in respect of the relevant property is dismissed.
There are six key issues that I need to determine. The resolution of those issues will dictate the final form of orders sought by Westpac and whether or not the Director objects to such orders.
In the sequence in which I will address them, the issues are as follows:
1.Do the net proceeds from a sale of property pursuant to an order made under s 91 of the Act constitute property that is 'derived from' the property sold within the meaning of that phrase in s 45(a) of the Act?
This issue arises because s 45(a) provides the court with power to order that property derived from frozen property is to be treated as part of the frozen property while the freezing order is in place. Section 45(a) is the primary basis on which the Director and Westpac rely for the making of orders to the effect set out at [7(4)(d)(ii)] above.
2.Where a freezing order has been made in respect of real property, does the accrual of a registered mortgagee's rights after the making of the freezing order constitute a prohibited dealing under the Act?
The first defendant says the answer is yes, and that accordingly the accrual of a mortgagor's obligations under the mortgage is suspended once the freezing order is made.
3.When a party's legal or equitable interest in real property is frozen (in contrast to the real property itself), is a registered mortgagee an 'owner' of that frozen property under the Act?
This issue arises in respect of 49 Cowle Street. The freezing orders do not freeze the property itself, but only the ninth defendant's (NN Corporate) interest in the property. NN Corporate is one of three joint registered proprietors.
4.Does s 91 provide a source of power to make the sale orders that Westpac seeks?
This is fundamental to the applications before me. As I explain below, there is conflicting authority in this court on the issue.
5.If s 91 provides such a power, does the court also have the power to order that all or part of the net sale proceeds are taken to be frozen property that is the subject of the freezing order made in respect of the sold property?
If the answers to both issue 1 and issue 5 are no, the Director will oppose the orders sought. This is because it would then follow that the net sale proceeds would not be subject to the existing freezing order.
6.Does the court have power under s 91 to make an order in respect of the distribution of the 'unfrozen' part of the net proceeds?
The resolution of each issue requires the Act to be construed. Before undertaking that task, it is useful to describe the relevant properties, Westpac's mortgages over those properties, the relevant freezing orders and the procedural history of the matter.

The properties and the mortgages

Vincent Street

The Vincent Street property is constituted by the whole of the land comprised in Certificate of Title Volume 1168 Folio 114. The third defendant (HNLN Corporate) is the registered proprietor. It was registered as the sole proprietor on 17 October 2014. The mortgage to Westpac was also registered that day. There are no other registered mortgages, or any caveats, on the title. [3]
[3] Affidavit of Ms Williams affirmed 24 August 2023 in respect of the Vincent Street property, page 16, which annexes the Certificate of Title.
The Westpac mortgage secured the payment of a loan made by Westpac to HNLN Corporate. The loan was made for the predominant purpose of assisting with the purchase of the Vincent Street property.[4] The loan was to be repaid on or about 1 October 2015.[5] It was not. HNLN Corporate has not made any payments pursuant to the mortgage since 20 July 2020.[6] Westpac issued two notices of default to HNLN Corporate dated 7 July 2021 and 1 September 2022. The notices demanded payment of the entirety of the monies secured by the mortgage.[7] HNLN did not make any payment in response to the notices.

Etwell Street

[4] Affidavit of Ms Williams in respect of the Vincent Street property, pars 7 and 8.

[5] Affidavit of Ms Williams in respect of the Vincent Street property, par 11.

[6] Affidavit of Ms Williams in respect of the Vincent Street property, par 31.

[7] Affidavit of Ms Williams in respect of the Vincent Street property, pages 140 -143 and 151 - 154.

The Etwell Street property is constituted by the whole of the land comprised in Certificate of Title Volume 162 Folio 128A. The registered proprietors are the first and second defendants as joint tenants. They were registered as the proprietors on 24 December 2010. The mortgage to Westpac was registered on 22 October 2014. It is the only registered mortgage on the title. There is a prior caveat on the title, lodged on 23 February 2010.[8]
[8] Affidavit of Ms Williams affirmed 24 August 2023 in respect of the Etwell Street property, page 15, which annexes a copy of the Certificate of Title.
The Westpac mortgage secured the payment of a loan made by Westpac to the first and second defendants. That loan was constituted by a facility offer letter dated 25 September 2014. Ms Williams' affidavit in respect of the Etwell Street property says that the predominant purpose of the loan was to assist in the purchase of that property.[9] However, that cannot be right. The first and second defendants became the registered proprietors on 24 December 2010, years before the facility offer letter. Also, the facility offer letter describes the facility as a 'Bank Bill Business Loan with Redraw'.[10] Nothing turns on this misdescription of the loan's purpose.
[9] Affidavit of Ms Williams in respect of the Etwell Street property, par 10.
[10] Affidavit of Ms Williams in respect of the Etwell Street property, page 18.
The loan was to be repaid on or about 1 October 2017.[11] It was not. Westpac issued two notices of default to the first and second defendants dated 7 July 2021 and 1 September 2022.[12] The notices demanded payment of the entirety of the money secured by the mortgage. Some payment was made in response to the first notice, but not the entirety of the amount demanded. The first and second defendants have not made any payments since 10 January 2022.[13]

Cowle Street

[11] Affidavit of Ms Williams in respect of the Etwell Street property, par 12.

[12] Affidavit of Ms Williams in respect of the Etwell Street property, pages 117 ‑ 119 and 126 ‑ 128.

[13]Affidavit of Ms Williams in respect of the Etwell Street property, par 31.

The Cowle Street property is constituted by the whole of the land comprised in Certificate of Title Volume 933 Folio 134. The registered proprietors are the second defendant, the thirteenth defendant and NN Corporate as joint tenants. These parties were registered as joint tenants on 8 July 2014. The mortgage to Westpac was also registered that day. There are no other registered mortgages, or any caveats, on the title.[14]
[14] Affidavit of Amy Claire Williams affirmed 24 August 2023 in respect of the Cowle Street property, page 12, which annexes the Certificate of Title.
The Westpac mortgage secured the payment of a loan made by Westpac to the registered proprietors of the Cowle Street property. The loan was made for the predominant purpose of assisting with the purchase of the Cowle Street property.[15] The registered proprietors have not made any payments pursuant to the mortgage since 1 August 2017. Westpac issued a notice of default and demand to the registered proprietors dated 1 September 2022. The notice stated that if the default in payment continued for 31 days from service of the notice, Westpac demanded payment of the entirety of the money secured by the mortgage.[16] The registered proprietors did not make any payment in response to the notice.[17]

The charging clause in the mortgages

[15] Affidavit of Ms Williams in respect of the Cowle Street property, pars 7 and 8.

[16] Affidavit of Ms Williams in respect of the Cowle Street property, pages 92 ‑ 95, par 7.2 of the notice.

[17] Affidavit of Ms Williams in respect of the Cowle Street property, par 24.

By each mortgage, the registered proprietors mortgaged to Westpac all of their estate and interest in the subject land, as well as all rights attaching to the subject land.[18]
[18] Affidavit of Ms Williams in respect of the Cowle Street property, pages 64 and 68; Affidavit of Ms Williams in respect of the Vincent Street property, pages 60 and 64; Affidavit of Ms Williams in respect of the Etwell Street property, pages 56 and 60.

Freezing orders

It is not necessary at this stage to delve into the detail of the relevant statutory provisions. It is sufficient for now to set out the orders that have been made. The Director has lodged memorials on the relevant title in respect of the orders set out below, which the Registrar of Titles has registered.

Freezing order - Vincent Street

On 27 September 2018, Le Miere J made an order pursuant to s 43(1)(b) of the Act freezing the Vincent Street property on the ground that the Director intended to make an application for an examination order in relation to the property within 21 days of the making of the order.[19] Le Miere J also ordered pursuant to s 45(d) and s 91(2)(a) that HNLN Corporate was appointed to control and manage the Vincent Street property while the freezing orders affecting it were in force, or until further order.[20] This was subject to HNLN providing its written consent to that appointment.
[19] Order 1(c) of the orders made 27 September 2018 in CPCA 34/2018.
[20] Order 2 of the orders made 27 September 2018 in CPCA 34/2018.
On 26 July 2022, Curthoys J made an order pursuant to s 43(3)(b) freezing the interest of HNLN Corporate as registered proprietor of the Vincent Street property on the ground that interest was alleged to be owned, effectively controlled or had been given away by the first defendant and an application for a crime‑used property declaration had been made against him.[21] Curthoys J also ordered pursuant to s 91(2)(a) that HNLN Corporate was appointed to control and manage the Vincent Street Property while the freezing order made by his Honour remained in force.[22]

Freezing order - Etwell Street

[21] Order 2(c) of the orders made 26 July 2022 in CPCA 34/2018.

[22] Order 7(c) of the orders made 26 July 2022 in CPCA 34/2018.

On 27 September 2018, Le Miere J made an order pursuant to s 43(1)(b) of the Act freezing the Etwell Street property on the ground that the Director intended to make an application for an examination order in relation to the property within 21 days of the making of the order.[23] Le Miere J also ordered pursuant to s 45(d) and s 91(2)(a) that the first and second defendants were appointed to control and manage the Vincent Street property while the freezing orders affecting it remained in place, or until further order.[24] This was subject to the first and second defendants providing their written consent to that appointment.
[23] Order 1(b) of the orders made 27 September 2018 in CPCA 34/2018.
[24] Order 2 of the orders made 27 September 2018 in CPCA 34/2018.
Further, on 26 July 2022, Curthoys J made an order pursuant to s 43(8) freezing the Etwell Street property on the ground that there were reasonable grounds for suspecting that it was crime‑used.[25] His Honour made a further order that day pursuant to s 43(3)(b) freezing the interest of the first defendant as joint registered proprietor of the Etwell Street property on the ground that it was alleged the property was owned, effectively controlled or had been given away by the first defendant and an application for a crime‑used property substitution declaration had been made against him.[26]
[25] Order 4 of the orders made 26 July 2022 in CPCA 34/2018.
[26] Order 2(b) of the orders made 26 July 2022 in CPCA 34/2018.

Curthoys J also ordered pursuant to s 91(2)(a) that the first and second defendants were appointed to control and manage the Etwell Street property while the freezing orders made by his Honour set out at [23] above remained in place.[27]

Freezing order - Cowle Street

[27] Order 7(b) of the orders made 26 July 2022 in CPCA 34/2018.

On 20 April 2020, Allanson J made an order pursuant to s 43 of the Act freezing the interest of NN Corporate in the Cowle Street property.[28] There were two grounds for the freezing order:
1.pursuant to s 43(1)(a), on the ground that the Director had obtained an examination order in relation to the Cowle Street property; and
2.pursuant to s 43(3)(c), on the ground that the Director had advised the court that she was likely to make an application for a crime‑used property substitution declaration within 21 days after the freezing order was made.
[28] Order 1(d) of the orders made 20 April 2020 in CPCA 9/2020.
Further, pursuant to s 45(d), his Honour ordered that NN Corporate was appointed to control and manage its interest in the Cowle Street property subject to it providing written consent to doing so.[29]
[29] Order 2 of the orders made 20 April 2020 in CPCA 9/2020.

Proceedings in which the orders were made and Westpac's objections

The initial freezing orders made by Le Miere J on 27 September 2018 in respect of the Vincent Street property and the Etwell Street property were made in CPCA 34/2018. Westpac objected to those freezing orders by a notice of objection filed 12 November 2018 in CPCA 34/2018. The notice objected to any confiscation of property under that order.
The freezing order made by Allanson J on 20 April 2020 in respect of the Cowle Street property was made in CPCA 9/2020.
On 8 July 2020, an order was made consolidating CPCA 34/2018 and CPCA 9/2020.
The orders made by Curthoys J on 26 July 2022 were made in the consolidated proceedings. His Honour also ordered that Westpac's objection filed 12 November 2018 stand as its objection in the consolidated proceedings in relation to all freezing orders made in the actions the subject of the consolidated proceedings.[30]
[30] Order 6 of the orders made 26 July 2022 in CPCA 34/2018.

The Act

Principles of statutory construction

The principles of statutory construction were recently summarised in the joint reasons for decision of the Court of Appeal in Prichard v M 6:8 Legal Pty Ltd.[31] Their Honours explained:[32]
This court recently reiterated the importance of statutory text to the exercise of statutory construction in Chief Executive Officer, Department of Water and Environmental Regulation v Waroona Resources Pty Ltd. Consistently with that discussion, statutory construction is a process of determining the objective meaning of the legislation by the application of recognised rules of interpretation to the legislative text, understood as a whole and in its context. As the High Court observed in Zheng v Cai:
'It has been said that to attribute an intention to the legislature is to apply something of a fiction. However, what is involved here is not the attribution of a collective mental state to legislators. That would be a misleading use of metaphor. Rather, judicial findings as to legislative intention are an expression of the constitutional relationship between the arms of government with respect to the making, interpretation and application of laws … the preferred construction by the court of the statute in question is reached by the application of rules of interpretation accepted by all arms of government in the system of representative democracy. (citations omitted)'
(footnotes omitted)
[31] Prichard v M 6:8 Legal Pty Ltd[2024] WASCA 4.
[32] Prichard[41].
Their Honours also said:[33]
The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The statutory text is the surest guide to Parliament's intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of the provision, in particular the mischief it is seeking to remedy.
Legislative purpose is to be ascertained from what the legislation says, rather than any assumption about the desired or desirable reach or operation of the relevant provisions. Identifying the legislative purpose is itself an objective exercise of statutory construction, which does not involve a search for what those who promoted or passed the legislation may have had in mind when it was enacted … Nor is it for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose.
(footnotes omitted)
[33] Prichard[43] ‑ [44].
Further, in the joint judgment of the High Court in Project Blue Sky v Australian Broadcasting Authority,[34] their Honours observed:
A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court 'to determine which is the leading provision and which the subordinate provision, and which must give way to the other'. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
(footnotes omitted)
[34] Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [70].
Section 18 of the Interpretation Act 1984 (WA) provides that in the interpretation of a provision of a written law, a construction that would promote the purpose or object underlying the written law (whether or not that object is expressly stated) shall be preferred to a construction that would not do so.
Further, pursuant to s 19 of the Interpretation Act, I can have regard to extrinsic material relating to the Act to confirm that the meaning of a provision is the ordinary meaning conveyed by the text, taking into account context and the purpose or object of the legislation. I can also have regard to the extrinsic materials to determine the meaning of a provision when it is ambiguous or obscure. The extrinsic materials include the explanatory memorandum for the Bill which proposed the Act.
In this case, the object of achieving consistency across provisions of the Act is of importance. Furthermore, as I will explain, the explanatory memorandum has been of assistance in confirming the preferred construction of the Act.

Introductory observations on the Act

The scheme of the Act

The long title to the Act describes its primary purpose as 'to provide for the confiscation in certain circumstances of property acquired as a result of criminal activity and property used for criminal activity'.
The Act was considered by the High Court in Mansfield v The Director of Public Prosecutions for Western Australia.[35]In the majority judgment, their Honours observed that the term 'confiscable property' is of central importance to the scheme of the Act.[36]
[35] Mansfield v The Director of Public Prosecutions for Western Australia [2006] HCA 38.
[36] Mansfield [12].
Section 4 provides that property of the type described in s 4 is confiscable to the extent provided by the Act. The species of property described in s 4 are as follows:
…
(a)property equal in value to any amount by which the total value of a person's wealth exceeds the value of the person's lawfully acquired wealth (unexplained wealth - see section 144);
(b)certain property, services, advantages and benefits obtained by a person who has been involved in the commission of a confiscation offence (criminal benefits - see section 145);
(c)property used in or in connection with the commission of a confiscation offence, or property of equal value (crime-used property - see section 146);
(d)property derived directly or indirectly from the commission of a confiscation offence (crime-derived property - see section 148);
(e)property owned, effectively controlled or given away by a person who is declared to be a drug trafficker under section 32A(1) of the Misuse of Drugs Act 1981, or who absconds before a declaration can be made (declared drug trafficker - see section 159).
It is only crime‑used and crime‑derived property that require a connection between the property and the commission of a confiscation offence. As to the term 'confiscation offence', the majority judgment in Mansfield observed that:[37]
The critical term 'confiscation offence' is given a broad meaning by s 141. It includes an offence which is punishable by imprisonment for two years or more and which is 'against a law in force anywhere in Australia'.
[37] Mansfield [14].
The words 'property' and 'owner' are also defined broadly by the Act:
owner, in relation to property, means a person who has a legal or equitable interest in the property;
property means -
(a)real or personal property of any description, wherever situated, whether tangible or intangible; or
(b)a legal or equitable interest in any property referred to in paragraph (a).

Section 142 is allied to s 4. Section 142 provides that property is confiscable for the purpose of the Act if it is:
(a)owned or effectively controlled, or has at any time been given away, by a person who has unexplained wealth; or
(b)owned or effectively controlled, or has at any time been given away, by a person who has acquired a criminal benefit; or
(c)crime‑used property; or
(d)crime‑derived property; or
(e)owned or effectively controlled, or has at any time been given away, by a declared drug trafficker.
Section 142(a), (b) and (e) are directed to the attributes of a person, that is, a person who has unexplained wealth, a person who has acquired a criminal benefit or a person who is a declared drug trafficker. Section 142(c) and (d) are directed to the attributes of property, that is, the property is crime‑used or crime‑derived.
The Act provides for a number of investigative processes which facilitate inquiries being made in relation to specified properties and people. The types of processes include examination orders[38] and production orders.[39] An examination order requires a person to submit to examination by the District Court or the Corruption and Crime Commission (CCC) on a whole raft of matters relating to whether property might be confiscable. A production order is directed to the production of documents. These types of orders can be made irrespective of whether the person to whom they are directed is the person whose conduct is under investigation.
[38] The Act, pt 5 div 2.
[39] The Act, pt 5 div 3.
From this recitation of the key aspects of the Act, it is not overly difficult to envisage a scenario where an owner of property that is confiscable under the Act could include someone who had no involvement in, or no actual or constructive knowledge of, the activity that made the property liable to confiscation.

Freezing and confiscation - initial observations

The Act provides an extensive regime that permits property to be 'frozen'. Once frozen, the Act provides for how the frozen property is to be controlled and managed. The Act also places significant limits on any dealings involving the frozen property.
Broadly speaking, property can be frozen in two ways. First, by a Justice of the Peace issuing a freezing notice upon application by the Director or a police officer.[40] Second, by a court making a freezing order upon the application of the Director, or of the CCC.[41] An application for a freezing order may be made ex parte.[42] I address freezing notices and freezing orders in greater detail at [60] - [88] below.
[40] The Act, s 34.
[41] The Act, s 41 and s 43.
[42] The Act, s 41(2).
The Supreme Court is the only court that has jurisdiction to make a freezing order in respect of registrable real property, being property to which the Transfer of Land Act 1983 (WA) (TLA) applies.[43]
[43] The Act, s 101 and definition of 'registrable real property' in the Glossary of the Act.
The Act defines property that is the subject of a freezing notice or freezing order as 'frozen property'.[44]
[44] See the definition of 'frozen' in the Glossary of the Act.
The purpose of the power to freeze property is to preserve assets pending the determination of the substantive application brought (or to be brought) by the Director under the Act, or the criminal charge that might lead to a drug trafficker declaration being made.[45]
[45] Centurion Trust Company Ltd v Director of Public Prosecutions (WA) [2009] WASCA 97 (Centurion [No 1]) [14] (McLure P).
The freezing of property is also one of the steps that initiates the processes under the Act that might lead to the confiscation of that frozen property. These processes include a complex set of provisions (s 82 ‑ s 84) under which a party can object to confiscation.
Except where a freezing order was made on the CCC's application, the Director has responsibility for the control and management of frozen property unless the court otherwise orders.[46] Such orders can be made under s 45(c) or s 91(2). I address these provisions later.
[46] The Act, s 89(1).
Part 2 of the Act deals with the confiscation of property.
Section 6 applies where the court has made an unexplained wealth declaration, a criminal benefits declaration or a crime‑used property substitution declaration. There are two essential preconditions to confiscation under s 6. First, the making of the requisite declaration, including the specification in the declaration of the amount the respondent to it is liable to pay. Second, the respondent failing to pay that amount within the prescribed time period, whether by making payment, or by consenting to property being taken by way of payment.[47]
[47] Centurion [No 2] [220] (Buss JA, as his Honour then was). Owen JA at [74] agreed with the reasons of Buss JA.
Section 7 provides for the confiscation of frozen property.
Pursuant to s 7(1), frozen property is automatically confiscated if an objection to confiscation is not filed within the time stipulated after service of a copy of the order or freezing notice that effected the freezing of the subject property. Section 7(1) only applies to property that has been frozen upon crime‑derived or crime‑used grounds.[48]
[48] Centurion [No 2] [217] (Buss JA).
Section 7(2) addresses the scenario where an objection to confiscation is filed within the stipulated time. Section 7(2) provides that the frozen property is confiscated if the objection is finally determined and:
1.if the property is subject to a freezing notice, the notice is not set aside or cancelled; or
2.if the property is subject to a freezing order, the order is not set aside.
Section 8 provides for the confiscation of all property owned or effectively controlled by a person declared to be a drug trafficker at the time the declaration is made, as well as all property given away by that person before the declaration was made.
In respect of registrable real property, the Act distinguishes between when it is confiscated and when it vests in the State. Confiscated registrable property vests in the State when a court makes a declaration that the property has been confiscated and a memorial to that effect is registered by the Registrar of Titles on the title for the property.[49] Registrable real property vests in the State free from all interests, whether registered or not, including mortgages.[50]
[49] The Act, s 9 and s 113(1).
[50] The Act, s 9(2).

Freezing notices

Part 4 div 2 of the Act provides for the issue of freezing notices.
A Justice of the Peace may issue a freezing notice on application by the Director, or a police officer. There are two bases on which a freezing notice may be issued.
First, where there are reasonable grounds for suspecting that the property is crime‑used or crime‑derived.[51] Such grounds concern the property, not who owns or controls the property.
[51] The Act, s 34(2).
Second, where the person to whom the notice is directed has been charged with an offence of such a type that the person could be declared a drug trafficker if convicted,[52] or the applicant for the notice advises a Justice of Peace that the person is likely to be charged with such an offence within 21 days after the notice is issued. A freezing notice may be issued on this ground for all or any property that is owned or effectively controlled by the subject person, or for property that the person has given away.[53] Thus, third party interests in a piece of property will only be frozen on this ground if the accused, or prospective accused, effectively controls those interests, or has given them away to the third party.[54]
[52] The Act, s 34(3). The requisite drug trafficker declaration is a declaration made under s 32A(1) of the Misuse of Drugs Act 1981 (WA).
[53] The Act, s 34(4).
[54] See Centurion [No 2] [31] (McLure P) and [246] (Buss JA) in respect of the similarly worded s 43(5) concerning freezing orders.
For the purposes of the Act, a person has effective control of property if the person does not have the legal estate in the property, but the property is directly or indirectly subject to the control of the person, or is held for the ultimate benefit of the person.[55]
[55] The Act, s 156(1).
Section 34(5) provides that a freezing notice issued on the ground that a specified person might be declared a drug trafficker may include property acquired after the 'order is made'. However, s 34 does not provide for the making of any orders. It would seem that s 34(5) is meant to say 'after the freezing notice is issued'. What appears to have happened is that s 34(5) has mistakenly adopted the language from s 43(7) regarding freezing orders, without making the requisite change to reflect that s 34 deals with freezing notices.
Section 34(7) is of potential importance to the disposition of Issue 1. I will set it out in full:
Any income or other property derived from the property while the freezing notice is in force is taken to be part of the property.
The explanatory memorandum for the Criminal Property Confiscation Bill 2000 (WA) explained that this section:[56]
… is necessary otherwise income or property derived from frozen property could be dealt with, thereby defeating the Act. An example of property derived from frozen property is the progeny of livestock the subject of the freezing notice.
[56] Criminal Property Confiscation Bill 2000 Explanatory Notes, page 20. The reference is to subclause 4 which became s 34(7).
In respect of registrable real property, a freezing notice comes into force when a memorial of its issue is registered with the Registrar of Titles.[57]
[57] The Act, s 38(1).
A freezing notice for registrable real property stops being in force in a myriad of different ways. It is not necessary in these reasons to address in detail the possible scenarios that will bring a freezing notice to an end. It is sufficient to observe that the Act only expressly provides for one mechanism by which an 'innocent' party can bring about the end of the freezing notice in respect of property of which they are an owner. That mechanism is an objection proceeding brought under pt 6 of the Act. I have put the word innocent in quotation marks because, as I will come to explain, the characteristics of an innocent party are different depending on which provisions of the Act are being considered.

Freezing orders

Grounds

Part 4 div 3 provides for the making of freezing orders.
The provisions regarding the making of freezing orders are far more complex than those regarding the issue of a freezing notice.
Depending on the ground upon which the order is made, the order may be directed to property irrespective of who owns or controls it, or it may be directed to property that a specified person owns, effectively controls or has given away.
In respect of the matter before me it is sufficient to note the following.
Pursuant to s 43(1), very broadly speaking, the court may make a freezing order if a particular investigative order is in force, or shortly will be applied for, in relation to the property sought to be frozen. For example, the court may make a freezing order for property if an examination order obtained by the applicant for the freezing order is in place in relation to the property, or the applicant advises the court that they are likely to apply for such an order within 21 days after the freezing order is made.[58] The court may make an order on this ground irrespective of whether the person against whom the investigative order is made or is to be sought, owns or effectively controls the property.[59] The 'examination order' ground is the ground on which Le Miere J made the freezing orders on 27 September 2018 in respect of the Vincent Street and Etwell Street properties. It is also one of the grounds on which Allanson J made a freezing order on 20 April 2020 in respect of NN Corporate's interest in the Cowle Street property.
[58] The Act, s 43(1)(a) and s 43(1)(b).
[59] The Act, s 43(2).
Property that is frozen solely pursuant to a freezing order made under s 43(1) is not liable to be confiscated under s 6, s 7 or s 8.[60]
[60] Centurion [No 2] [215] (Buss JA).
Section 43(3) provides the court with power on a number of different grounds to freeze all or any property that is owned, effectively controlled, or has been given away, by a specified person.
Pursuant to s 43(3)(a), the court may make such a freezing order if a production order has been made against that person. Pursuant to s 43(3)(b) and (c), the court may make a freezing order if an application for such a production order has been made, or the court is advised that the application is likely to be made in 21 days after the freezing order is made.
Further, the court may make a freezing order if an application for a declaration that grounds confiscation under s 6 has been made in respect of the person (s 43(3)(b)), or the court is advised that the application is likely to be made within 21 days after the freezing order is made (s 43(3)(c)). An example of such an application is an application for a crime‑used property substitution declaration.[61] This is the ground on which Curthoys J made a freezing order on 26 July 2022 in respect of the first defendant's interest in the Etwell Street property, and HNLN Corporate's interest in the Vincent Street property. It is also one of the grounds on which Allanson J made a freezing order on 20 April 2020 in respect of NN Corporate's interest in the Cowle Street property.
[61] The Act, s 43(3)(b).

Section 43(5) provides a further ground on which the court may make a freezing order for all or any property that a specified person owns, effectively controls or has given away. This ground is that the person has been charged with an offence or the Director advises the court that it is likely the person will be charged within 21 days after the freezing order is made, and the person could be declared a drug trafficker if convicted of the charged offence.[62]
[62] The Act, s 43(5).
A freezing order made under s 43(3) or s 43(5) may include property acquired after the order is made.[63]
[63] The Act, s 43(7).
Section 43(8) provides that the court may make a freezing order for property if there are reasonable grounds for suspecting that the property is crime‑used or crime‑derived. Curthoys J made a freezing order on 26 July 2022 in respect of the Etwell Street property on the ground there were reasonable grounds for suspecting it was crime‑used.
A freezing order for registrable real property comes into force when a memorial of the making of the order is registered by the Registrar of Titles.[64] The requisite memorials have been lodged in this case. An instrument (such as a transfer of land) lodged for registration in respect of frozen registrable property has 'no effect, at law, in equity or otherwise, while the … freezing order is in force'.[65] However, if the freezing order later ceases to be in force and the property is not confiscated, the instrument takes effect as if the property had not been frozen at the time the instrument was lodged or registered.[66]
[64] The Act, s 48(1) and s 113(1).
[65] The Act, s 113(10)(a).
[66] The Act, s 113(10)(b).
Section 48 of the Act deals with the duration of freezing orders for registrable real property. Section 48 is structured as follows.
A freezing order for registrable real property stops being in force when a memorial to that effect is lodged with the Registrar of Titles.[67] Section 48 then sets out certain events that require the applicant for the order to lodge such a memorial. The relevant event pertains to the ground on which the order was made.[68] These events include that the order is set aside on all grounds at the request of the applicant for the freezing order or in objection proceedings.[69]

Freezing order - the court's powers

[67] The Act, s 48(2).

[68] See s 43(1), s 43(5), s 43(7) and s 43(8).

[69] The Act, s 48(4)(d), s 48(5)(e), s 48(6)(d) and s 48(7)(a).

Section 45 sets out the court's powers when making freezing orders:
45.Freezing orders, court's powers when making
In a freezing order, the court may do any or all of the following -
(a)direct that any income or other property derived from the property while the order is in force is to be treated as part of the property;
(b)if the property is moveable - direct that the property is not to be moved except in accordance with the order;
(c)appoint the DPP, the Public Trustee or the Commissioner of Police to manage the property while the order is in force;
(d)give any other directions necessary to provide for the security and management of the property while the order is in force;
(e)provide for meeting the reasonable living and business expenses of the owner of the property.
Section 45(a) provides the court with the power to make such an order in respect of the property the subject of the freezing order. This is to be contrasted with s 34(7), which is the corresponding provision in respect of freezing notices. Section 34(7) operates automatically in respect of the property the subject of the freezing notice. The explanatory memorandum explains the reason for the difference as follows: [70]
Clause 45 Scope of Freezing Orders
Because of the wider scope of property which may be frozen under a freezing order (rather than a freezing notice) it is appropriate for the Court to have the power to make directions in relation to income or other property derived from frozen property (subclause (a)) rather than it being an automatic consequence of the making of the freezing order, as in the case of a freezing notice (Clause 34(4)).
[70] Explanatory memorandum, pages 26 and 27.
In Mansfield, the majority held that the Supreme Court has the power to vary the scope of freezing orders. This power is derived by implication from s 45 of the Act and s 48 of the Interpretation Act, which provides for the exercise from time to time of powers conferred by statute.[71] The majority in Mansfield referred to the decision of Director of Public Prosecutions (WA) v Mansfield[72] as an example of the Supreme Court varying the scope of freezing orders. In that case, the Supreme Court varied the scope of the freezing order by removing property from it, namely two motor vehicles, on the application of the Director. The application was made on the basis that the vehicles were the subject of hire purchase agreements and the amount owing on them was greater than that likely to be realised on their sale.[73]
[71] Mansfield [7] (Gleeson CJ, Gummow, Kirby, Hayne and Crennan JJ).
[72] Director of Public Prosecutions (WA) v Mansfield [2004] WASC 255; (2004) 150 A Crim R 348.
[73] Director of Public Prosecutions (WA) v Mansfield [4].
There could be many good reasons the Director might seek to remove property from the scope of an order, for example, to avoid or minimise any potential liability on an undertaking as to damages given as a condition of obtaining the freezing order in the first place.[74]
[74] See Mansfield [46].

Objections to confiscation

Part 6 of the Act deals with objections to confiscation of frozen property.
Section 79(1) provides that a person may file an objection to the confiscation of frozen property. The balance of s 79 deals with the timeframe within which an objection must be brought.
As I explain below at [97] - [111], an objection to confiscation may result in the freezing notice or freezing order being set aside. Thus, confiscation does not occur. An objection may also result in the payment out of an innocent owner's interest in property once the property is sold after confiscation occurs. Thus, confiscation does occur, but an innocent owner may be paid out their interest in the property from the sale proceeds.
Section 81 to s 84 set out specific grounds on which the court may set aside a freezing notice or freezing order, or order payment out of an innocent owner's interest in the property.
In Centurion [No 2], Buss JA (as his Honour then was) said:[75]
By s 81(1), a court hearing an objection may only set aside a freezing notice or freezing order to the extent permitted under s 82, s 83 or s 84. If the property in question was frozen on two or more grounds, but the court does not set aside the freezing notice or freezing order in relation to both or all of the grounds, the freezing notice or freezing order continues in force as if it had been made on each remaining ground: see s 81(2).
[75] Centurion [No 2] [175].
His Honour also said:[76]
In Centurion Trust Company [2009] WASCA 97, I expressed, obiter dicta, views to the effect that, when s 79 is read and construed with the other provisions of pt 6 which are concerned with objections to confiscation (in particular, s 81, s 82, s 83 and s 84), it is apparent that, despite the general language of s 79, a notice of objection to the confiscation of frozen property may only be filed if the objector claims that the property in question has been frozen on a ground or grounds in respect of which the court may grant relief under s 82, s 83 or s 84. I adhere to those views.
Further, the right (if any) of a person who has filed an objection to obtain relief in relation to a freezing notice or freezing order is co‑extensive with the power of the court under s 82, s 83 or s 84 to grant relief in the particular circumstances. An objector may be the respondent to a freezing notice or freezing order. Alternatively, an objector may be a person who claims to be an 'innocent party' and seeks to establish the facts and matters which entitle an 'innocent party' to relief under s 82 or s 83.
[76] Centurion [No 2] [180] - [181].
Section 153 sets out a detailed exposition of what constitutes an 'innocent party' in relation to crime‑used property and crime‑derived property. The Act does not use this definition of 'innocent party' in respect of any of the other grounds on which property might be frozen. It is not necessary to expose in detail the considerations which result in a party being classified as innocent under s 153. It is sufficient to note that s 153 requires that the party, amongst other matters, does not have actual or constructive knowledge of the activity which led to property being classified as crime‑used or crime‑derived.
As I understand it, the Director accepts that Westpac is an innocent party within the meaning of s 153, and also within the ordinary meaning of the word 'innocent'.

Section 82 and s 83

Section 82 addresses crime‑used property and s 83 addresses crime‑derived property.
The sections provide the court with power to set aside a freezing notice or freezing order on various different grounds, which the objector must establish to the standard of 'more likely than not'.
Section 82(1) requires the objector to establish that the property is not crime‑used. Section 83(1) requires the objector to establish that the property is not crime‑derived.
Section 82(3) requires the objector to establish that they are the spouse, de facto partner or dependant of an owner of the property, are an innocent party or under 18 years of age, have a specified residential connection to the property and would suffer undue hardship from confiscation which cannot be ameliorated by other means. There is no similar provision in s 83.
Section 82(4) requires the objector to establish that they are an owner of, and an innocent party in relation to, the frozen property, that all other owners are innocent parties and that the property is not effectively controlled by a person who made criminal use of it. Section 83(2) is in similar terms, except it requires the objector to establish the property is not effectively controlled by a person who derived or realised all or part of the property, either directly or indirectly, from the commission of a confiscation offence.
Section 82(5) and s 83(3) apply where an objector does not establish that all other owners are innocent parties, but otherwise establishes all of the matters in s 82(4) or s 83(2). Section 82(5) and s 83(3) provide the court with the power to order that when the property is sold after confiscation, the objector is to be paid out their interest in the property from the sale proceeds. The explanatory memorandum explained that s 82(5) was necessary to ensure that co‑owners of crime‑used property who are innocent are not prejudiced by the property being confiscated to the State.[77] The explanatory memorandum also says that to achieve this, s 82(5):
… necessarily provides that the Court may order that an innocent co-owner will be paid out of the net proceeds of sale of confiscated property his share of the property.
[77] Explanatory memorandum, page 47.
At the time of the explanatory memorandum, the Bill did not include a provision to the effect of that now contained in s 83(3). The rationale given for this in the explanatory memorandum was that 'an owner may have little or no control over the use to which other owners put the property (crime‑used ground), whereas a person does have the ability to ensure that he does not obtain an interest in crime‑derived property'.[78] That position obviously changed given the introduction of s 83(3) into the Act.
[78] Explanatory memorandum, page 48.
On an application by the Director or an owner, s 82(7) provides the court with power to set aside a freezing notice or order if the court also orders the objector to pay the State an amount equal to the value of the property. Section 83(5) is in similar terms, except that it expressly provides for the court to assess the value of the property, which s 82(7) does not.

Section 84

Section 84(1) deals with property that was frozen under an order made pursuant to s 43(3). Section 84(2) deals with property that was frozen under a notice issued under s 34(3) or an order made pursuant to s 43(5). Both s 84(1) and s 84(2) provide the court with power to set aside the relevant order or notice if the court finds that the person the subject of the notice or order does not own or effectively control the subject property, and has not at any time given it away.

Observations regarding s 82 to s 84

Section 82 ‑ s 84 target specific scenarios.
Section 82 and s 83 are directed to property frozen on the ground that it is crime‑used or crime‑derived respectively. They bring into consideration the criterion of 'innocent party' as defined by s 153. That criterion is not utilised elsewhere in the Act.
Section 84(1) is directed to the circumstance where property is frozen under s 43(3) on the ground that an application for an unexplained wealth, criminal benefits or crime‑used substitution declaration has been made or is likely to be made within 21 days. For the court's power under s 84(1) to be enlivened, it is necessary to establish that the respondent to such an application does not own or effectively control the frozen property, and has not given it away. The interests of an innocent co‑owner (in the ordinary sense of the word 'innocent') are not expressed to be a relevant consideration.
Section 84(2) is directed to the circumstance where property is frozen on the prospective drug‑trafficker ground, which is s 34(3) in respect of a freezing notice and s 43(5) in respect of a freezing order. Similarly to s 84(1), it is necessary to establish that the person charged, or likely to be charged, does not own or effectively control the frozen property, and has not given it away. Again, the interests of an innocent co‑owner are not expressed to be a relevant consideration.
As the Director points out in written submissions:[79]
Where property is frozen on the basis of an investigation order under s 43(1) or s 43(3)(a), the Confiscation Act provides no explicit mechanism for a third party to seek amelioration of the effect of the freezing order or vindication of their interest in the property.
Where the interest of a respondent/potential drug trafficker in property is frozen under ss 43(3)(b) or 43(5), the Confiscation Act provides only limited relief to innocent co-owners from the operation of a freezing order.
That is the position notwithstanding that those interests are not frozen and are not liable to confiscation.
[79] Plaintiff's (Director's) written submissions dated 23 May 2024, pars 7.2 - 7.4. See also Centurion [No 1] [37], [45] (McLure P) and Centurion [No 2] [15] (McLure P).
The observations in the second paragraph in the extract above also apply to property frozen under s 43(3)(c), namely that an application referred to in s 43(3)(b) is likely to be brought.

Additional grounds to set aside freezing orders

In addition to the procedures provided for by pt 6, a person whose property is affected by an ex parte freezing order may apply to have the order set aside for such reasons as the absence of jurisdiction, material non‑disclosure and changed circumstances.[80]

Available objections post confiscation of property

[80] Bennett & Co (a firm) v Director of Public Prosecutions (WA) [2005] WASCA 141; (2005) 31 WAR 212 [64]; Mansfield [8]. See also Centurion [No 2] [171].

Section 85 - s 87 provide a process whereby a person can apply for the release of property that has been confiscated under s 6 or s 7.
Section 87 sets out the grounds that an applicant must establish to obtain the release of the property. One of the matters the applicant must establish is that:[81]
… the applicant did not become aware, and can not reasonably be expected to have become aware, until after the property was confiscated, that the property was liable to confiscation under section 6 or 7.
[81] The Act, s 87(1)(c).
It would be difficult, if not impossible, for a person who is aware of the existence of a freezing order over property to satisfy this ground. Ordinarily, the mere existence of a freezing order is a matter from which a person would reasonably be expected to be aware that the property was liable to confiscation.

Sale of frozen property

Part 7 of the Act deals with the control and management of seized, frozen and confiscated property.
Section 91, s 93 and s 94 are of particular importance to this matter. I will set them out in full:
91.Control etc. of frozen property by owner, court may order
(1)An owner of frozen property may apply to the court for an order under subsection (2) in relation to the property.
(2)On hearing an application, the court may, if it thinks fit, by order appoint the person -
(a)to control and manage the property while the freezing notice or freezing order is in force; or
(b)to sell or destroy the property.
…
93.Destruction of seized etc. property on grounds of public interest, court may order
(1)A person who has responsibility for the control or management of seized, frozen or confiscated property may apply to the court for an order under subsection (2).
(2)On hearing an application, the court may order that the property is to be destroyed if it would not be in the public interest to preserve the property.
94.Deteriorating frozen property, sale of
(1)A person who has responsibility for the control or management of frozen property may apply to the court for an order under subsection (2).
(2)The court may order that the property is to be sold if it is more likely than not that -
(a)the property is or will be subject to substantial waste or loss of value if it is retained until it is dealt with under another provision of this Act; or
(b)the cost of managing or protecting the property will exceed the value of the property if it is retained until it is dealt with under another provision of this Act.
(3)If the Public Trustee has the control or management of frozen property under this Act, the Public Trustee may sell the property in the circumstances referred to in subsection (2), without obtaining an order under that subsection, if -
(a)the Public Trustee gives adequate notice of the proposed sale to the owner of the property; and
(b)the owner does not file an objection to the sale in the court that made the freezing order.
(4)When frozen property is sold under an order under subsection (1), or under subsection (2), the net proceeds of the sale are taken to be frozen property that is subject to the freezing notice or freezing order made in respect of the sold property.

The explanatory memorandum is important in respect of both s 91 and s 94:[82]
[82] Explanatory memorandum, pages 51 - 52.
Clause 91Applications by Owner for Control and Management
Clause 91 is necessary to provide a procedure whereby [an] owner of frozen property, namely a person who has a legal or equitable interest in the property, may be appointed to control and manage, or sell or destroy the property. For example, a mortgagee may wish to exercise its powers under a mortgage in relation to frozen property and the Court may grant power to sell the property.
Clause 94Sale of Deteriorating Property
For the successful operation of the Act Clause 94 provides power for the Court to order the sale of frozen property in circumstances where the value of that property is being lost. For example, land may have been frozen on which there is an orchard with fruit ready to be harvested. Substantial loss and waste would occur if the Act did not provide power for the Court to order the sale of the crop in specified circumstances.
For the efficient operation of the Act subclause (3) provides power to the Public Trustee to sell property in specified cases without obtaining an order from the Court.
Subclause (4) is necessary to ensure that the proceeds from the sale of property are dealt with under the Act as if they were the frozen property.
It would appear that the reference in s 94(4) to subsection (2) should be a reference to subsection (3). If the Public Trustee decides to sell the property under subsection (3), there does not appear to be any plausible reason why the net proceeds of the sale would not be taken to be frozen property. In this respect, the explanatory memorandum states to the effect that s 94(4) applies to all sales effected under s 94.

Prohibition on dealing

Part 4 div 4 of the Act imposes prohibitions on dealing with frozen (and seized) property.
Section 50(1) is an offence provision. It provides that a person must not deal with seized or frozen property in any way. The penalty is $100,000 or the value of the property, whichever is greater, or imprisonment for 5 years, or both. A contravention of s 50(1) is therefore a serious offence.
Section 50(1) does not apply to an order made under s 91(2), among other provisions.[83] Interestingly, the exception does not include a sale under s 94. The Director's counsel suggests this must be a mistake and a sale under s 94 should be included in the exception provision. That appears to be correct, however, it is not necessary to resolve that issue for the purposes of this application.
[83] The Act, s 50(2).
Section 51 and s 52 are also important. They provide:
51.Effect of prohibited dealings in frozen property
Despite any other enactment, any dealing with property that contravenes section 50 has no effect, whether at law, in equity or otherwise, on the rights of the State under this Act.
52.Permitted dealings in mortgaged property
If mortgaged property is frozen, nothing in this Act -
(a)prevents the mortgagor from making payments to the mortgagee in accordance with the mortgage if the payments are made with money that has not been seized or frozen; or
(b)prevent the mortgagee from accepting payments from the mortgagor in accordance with the mortgage.
The effect of s 51 is that any prohibited dealing has no effect on the rights of the State under the Act. However, s 51 does not affect the rights between the parties. That is, the parties retain their rights in relation to each other with respect to dealings with frozen property.[84]
[84] This interpretation is confirmed by the Explanatory memorandum, page 31.
Section 52 enables a mortgagor to make payments to a mortgagee in accordance with the mortgage as long as the payments are not made with money that has been seized or frozen.
Section 151 provides a non‑exhaustive definition of dealing with property:
151.Term used: deal (in relation to property)
A reference in this Act to dealing with property includes a reference to doing or attempting to do any of the following -
(a)sell the property or give it away;
(b)dispose of the property in any other way;
(c)move or use the property;
(d)accept the property as a gift;
(e)take any profit, benefit or proceeds from the property;
(f)create, increase or alter any legal or equitable right or obligation in relation to the property;
(g)effect a change in the effective control of the property.
I turn now to the matters that I need to determine for the purposes of the application before me.

Issue 1 - the correct interpretation of the phrase 'derived from the property' in s 45(a)

An order pursuant to s 45(a) has not been made to date in respect of the frozen property. However, as the majority held in Mansfield, an order under s 45 can be made from time to time. The issue is whether the phrase 'derived from the property' in s 45(a) is sufficiently wide to capture the net proceeds from the sale of frozen property. If it is, then pursuant to s 45(a), the court has the express power to order that the net proceeds are 'to be treated as part of the property'.
Similar language is used in s 34(7) concerning freezing notices. Section 34(7) uses the phrase 'income or other property derived from the property … is taken to be part of the property'. Section 45(a) uses the phrase 'income or other property derived from the property … is to be treated as part of the property'. I do not see any discernible difference in effect between these two phrases. They both bring about the assumption of a substantially similar state of affairs. However, an important difference is that s 34(7) operates automatically, whereas s 45(a) provides the court with a power to make such an order.
Both the Director and Westpac contend that the phrase 'property derived from the property' is wide enough to capture the net proceeds from a sale of the property. The first defendant says otherwise. The first defendant contends that to convert real property into a sum of money is to alter the property, and does not fall within the meaning of the phrase 'derived from'.
The ordinary meaning of the word 'derived' is 'to receive or obtain from a source or origin'.[85] Property can be derived from a source when the source itself is retained. Plainly the reference in s 45(a) to 'income … derived from the property' is predicated on the source property being retained, for example rent received from a residential property. Property can also be derived from a source when the property is received in exchange for the disposition of the source property. The issue here is whether the phrase 'other property derived from the property' in s 45(a) is predicated on the property being derived from a source property that is retained, or whether it also captures property derived from the disposition of the source property. This issue turns on the proper construction of s 45(a).
[85] Macquarie Dictionary (9^th ed, 2023) 'derived' (def 1).
Section 45(a) has the effect that while the freezing order is in place, any derived property is to be treated as part of the property from which it is derived. This assumes therefore that the source property remains subject to the freezing order at the time of derivation. However, for a sale of property to be effected, it would be necessary for the freezing order to cease being in force upon sale. Accordingly, once the source property had been sold, then it would no longer be the subject of the freezing order and s 45(a) could not be engaged.
Accordingly, the language of s 45(a) does not lend itself to the interpretation put forward by the Director and Westpac.
Further, that interpretation gives rise to an inconsistency between s 34(7) and s 94(4) of the Act.
Section 94(4) provides that the net proceeds of a sale effected under particular subsections of s 94 are 'taken to be frozen property that is subject to the freezing notice or freezing order made in respect of the sold property'.
In respect of freezing notices, as I have explained earlier, s 34(7) provides that property derived from frozen property is automatically taken to be part of the frozen property. Accordingly, on the Director and Westpac's interpretation of the phrase 'property derived from the property', it would not be necessary for s 94(4) to provide that the net proceeds are taken to be frozen property the subject of the freezing notice. Rather, on their interpretation, the net proceeds would form part of the property sold and be frozen as a consequence.
Further, on their interpretation, s 34(7) and s 94(4) would deal with the same asset in different ways. Under s 34(7), the net proceeds would be taken to form part of the property that has been sold, whereas under s 94(4), the net proceeds themselves are taken to be frozen property. Westpac and the Director's interpretation does not therefore result in the coherent operation of s 34(7) and s 94(4).
Furthermore, s 50 of the Act imposes an absolute restriction on sale unless carried out in accordance with s 91, and as discussed at [122] above, s 94. It is the application of s 91 and s 94 that ought to dictate what happens to the net sale proceeds, not anticipatory orders under s 45(a), or the automatic application of s 34(7).
For these reasons, in my view the phrase 'property derived from the property' in s 45(a) does not extend to circumstances where the frozen property is sold and thus does not capture the net proceeds received from the sale of frozen property.
In my view, this interpretation is confirmed by the explanatory memorandum. The example given in the explanatory memorandum for property derived from frozen property is 'the progeny of livestock the subject of the freezing order'. That example accords with my view that the phrase 'property derived from the property' does not extend to net proceeds of sale in circumstances where the frozen property is sold.

Issue 2 - what constitutes a prohibited dealing?

The first defendant contends that any increase in the money due under the respective mortgages post the imposition of the relevant freezing order constitutes a prohibited dealing.
The first defendant relies in particular on s 151(f), which states that a reference in the Act to dealing with property includes a reference to doing or attempting to:
(f)create, increase or alter any legal or equitable right or obligation in relation to the property.
The first defendant submits that:[86]
Significantly, the words in section 151(f) are not limited to creating or altering any legal equitable right or obligation. The legal right of the mortgagee does not alter. The practical application of those legal rights, however, alters when additional moneys accrue under the mortgage so as to increase the rights of the mortgagee in a practical sense.
(emphasis in original)
[86] First defendant's written submissions dated 25 June 2024, par 4.
The Director submits that:[87]
The fact that the registered proprietor's debt arising from a loan agreement with the mortgagor may rise or fall in accordance with the terms of the agreement does not create, alter or increase either the registered proprietor's or mortgagee's rights in relation to the frozen real property.
[87] Plaintiff's (Director's) written submissions dated 19 June 2024, par 2.3.
Westpac raises three matters. First, s 151 requires 'doing or attempting' to do something. Westpac says that the operation of the mortgage does not constitute doing or attempting to do something. Second, while the accrual of interest and costs under the mortgage may increase the mortgagor's personal obligations, it does not alter or increase Westpac's rights as mortgagee. Third, s 52 implicitly accepts that the freezing of mortgaged property does not affect the parties' contractual rights and obligations under the mortgage including the amounts to be paid under the mortgage.[88]
[88] Fourteenth defendant's (Westpac's) written submissions dated 3 July 2024, pars 2 - 14.
The starting point for consideration of the first defendant's argument is that s 50(1) makes it a criminal offence for a person to deal with frozen property in any way. Ordinarily, a criminal offence requires an act or omission by a party that renders the person doing the act or omission liable to punishment.[89] In effect, the first defendant's contention is that the accrual of rights under a mortgage constitutes a prohibited dealing. I do not accept that submission. As Westpac submits, s 151 expressly requires that a person does something, or attempts to do something. The accrual of Westpac's rights under the mortgage does not meet that characterisation.
[89] Criminal Code (WA), s 2; R v Barlow [1997] HCA 19; (1997) 188 CLR 1, 9 (Brennan CJ, Dawson and Toohey JJ). See also Happy Cruising Pty Ltd v Magistrates Court of Western Australia [2024] WASC 183 [30] ‑ [32].
Furthermore, s 151(f) refers to a change in any legal or equitable right or obligation in relation to the property. The key words are 'right or obligation'. The rights or obligations under the mortgage do not change by reason of the intended operation of the mortgage. The amount owing may change, however that occurs by reason of the operation of the existing obligations under the mortgage, not because of any alteration in those obligations.
In addition, s 52 provides that nothing in the Act prevents a mortgagor from making payments to the mortgagee in accordance with the mortgage as long as the payments are made with money that has not been seized or frozen, nor does it prevent the mortgagee from accepting such payments. Section 52 therefore recognises the continuation of the mortgagor's obligations under the mortgage.
Accordingly, in my view, s 50 and s 151 do not result in the suspension of the mortgagor's obligations once the freezing order is made in respect of the mortgaged property. I consider this is confirmed by the explanatory memorandum.
The explanatory memorandum explains that without s 52, a mortgagee and a mortgagor would be in breach of a freezing order if monies were accepted or paid in accordance with a mortgage. The explanatory memorandum says that as long as the property being used to make mortgage payments is not frozen property, then it is appropriate that the Act enable mortgage payments to continue to be made.[90] The explanatory memorandum therefore recognises that the mortgagor's obligations to pay under a mortgage do not cease upon the freezing order having been made.

Issue 3 - is Westpac an owner within the meaning of the Act of the ninth defendant's interest in the Cowle Street property?

[90] Explanatory memorandum, pages 31 - 32.

As explained earlier, an 'owner' under the Act is defined as 'a person who has a legal or equitable interest in the property'.[91]
[91] The Act, s 3 (Glossary).
The property identified in the relevant freezing order is the interest of NN Corporate in the Cowle Street property.[92]
[92] Affidavit of Ms Williams in respect of the Cowle Street property, page 76, which annexes a copy of the orders of Allanson J made 20 April 2020.
A question arises as to whether Westpac, as mortgagee of the Cowle Street property, has an interest in the interest of NN Corporate, as opposed to an interest in the Cowle Street property itself, for the purposes of an application under s 91.
It is useful to first identify the nature of the interest frozen.
NN Corporate is one of three registered proprietors of the estate in fee simple in Cowle Street.[93] The registered proprietors hold the land as joint tenants.[94]
[93] Affidavit of Ms Williams in respect of the Cowle Street property, page 12, which annexes a copy of the Certificate of Title.
[94] Affidavit of Ms Williams in respect of the Cowle Street property, page 12, which annexes a copy of the Certificate of Title.
As a general proposition, each joint tenant, along with each other joint tenant, is fully seised of the whole estate or interest in land.[95]
[95] Singh v Kaur Bal [No 2] [2014] WASCA 88 [33] (Murphy JA, Pullin and Newnes JJA agreeing).
That being said, the majority judgment of the High Court in Cassegrain v Gerard Cassegrain & Co Pty Ltd, and Owen J in Wright v Gibbons, warn against relying on maxims and statements to the effect that joint tenants are 'considered by the law as one person for most purposes' in determining the effect of joint tenancies.[96]
[96] Cassegrain v Gerard Cassegrain & Co Pty Ltd [2015] HCA 2 (Cassegrain) [48] ‑ [50] (French CJ, Hayne, Bell and Gageler JJ); Wright v Gibbons (1949) 78 CLR 313, 330 (Dixon J).
A joint tenant's interest can be treated as a distinct interest in certain circumstances. For example, a joint tenant may dispose of their interest during their lifetime.[97] The majority judgment in Cassegrain, and Owen J's judgment in Wright, recognise that for the purposes of immediate alienation each joint tenant is conceived as entitled to dispose of an aliquot share in the property.[98] The joint tenant can deal unilaterally with this potential share during their lifetime.[99]
[97] Cassegrain [48].
[98] Wright v Gibbons (331) (Dixon J) cited with approval in Cassegrain [48] (French CJ, Hayne, Bell and Gageler JJ); see also [112] - [113] (Keane J).
[99] See Trustees of Cummins v Cummins[2006] HCA 6; (2006) 227 CLR 278 [56].

The nature of the right that a joint tenant seeks to exercise may therefore affect whether the interest being dealt with is the whole fee simple, or an aliquot share. In this respect, an order to control or manage under s 91(a), and an order to sell or destroy under s 91(b), may well be dealing with different interests. In any event, that distinction makes no difference for the purposes of assessing whether Westpac is an owner of NN Corporate's interests. On either scenario, for the reasons set out below, Westpac has a legal interest in NN Corporate's interest.
By the mortgage, the registered proprietors, including NN Corporate, mortgaged to Westpac all of their estate and interest in the Cowle Street property as well as all rights attaching to that property.[100] The mortgage does not operate as a transfer of the land mortgaged.[101] Instead, the mortgage operates as a statutory charge against the land. Westpac's 'interest' consists of a set of legal rights including a right to sell the land,[102] and take possession,[103] in cases of default in payment.
[100] Affidavit of Ms Williams in respect of the Cowle Street property, pages 64 and 68; Affidavit of Ms Williams in respect of the Vincent Street property, pages 60 and 64; Affidavit of Ms Williams in respect of the Etwell Street property, pages 56 and 60.
[101] TLA, s 106(1).
[102] TLA, s 108.
[103] TLA, s 111.
Further, by s 116 of the TLA, Westpac has the same rights and remedies at law and in equity as it would have had or been entitled to if the legal estate had actually been vested in it. This is subject to a right of quiet enjoyment of the mortgagors until default in payment of the principal and interest secured, or until a breach of an express covenant under the mortgage or one implied by the TLA. Section 116 does not purport to give Westpac the legal estate, nor does it deprive the registered proprietors of it. However, by s 116, Westpac is given the same rights as if it had the estate.[104]
[104] See Sykes and Walker, The Law of Securities, (5^th ed, Law Book Co Sydney, 1993), 248 and 253.
When these rights are taken as a whole, I am satisfied that Westpac has a legal right in respect of the whole fee simple as well as each aliquot share, that aliquot share being a subset of the whole fee simple. It follows that Westpac has a legal interest in NN Corporate's interest in Cowle Street and is therefore an 'owner' for the purposes of s 91.
Counsel for the Director and Westpac quite rightly brought to my attention the decision of NWC Finance Pty Ltd v The State of Western Australia.[105] Hill J stated that her Honour would not consider a registered mortgagee to be an owner of frozen property where the frozen property is constituted by an interest in the land, as opposed to the land itself. However, from what I can discern, submissions were not made to her Honour regarding the statutory rights of a mortgagee under the TLA and whether those statutory rights gave rise to a legal or equitable interest in property. Further, her Honour's observations were obiter dicta.[106] In NWC Finance, the real property itself was frozen. On that basis, her Honour found that the registered mortgagee had a legal interest in the frozen real property and was thus an owner for the purposes of s 91.[107]

Issue 4 - the availability of s 91 as a source of power for the orders sought

[105] NWC Finance Pty Ltd v The State of Western Australia [2019] WASC 485 [38].

[106] See Wyloo Metals Pty Ltd v Quarry Park Pty Ltd [2024] WASCA 38 [375].

[107] NWC Finance [36] ‑ [37].

It is important to bear in mind the distinction between whether an order for sale can be made under s 91 in the current circumstances and, if it can, whether the discretion to so order should be exercised. The first matter is directed to the source of power. The second is directed to the proper exercise of the power.
Section 91 empowers the court to make orders appointing the applicant for the order:
1.to control and manage the frozen property while the freezing notice or order is in force; or
2.to sell or destroy the property.
There are two preconditions to the making of an order:
1.the application is brought by an owner of the frozen property; and
2.the order sought is for that person to carry out the authorised activity.
These preconditions do not require any evaluative judgment to be made by a court. The first precondition requires an assessment of the applicant's legal status in relation to the property. The second precondition is directed to the terms of the order sought. There is nothing to suggest that s 91 was intended to have any additional preconditions.
If the preconditions are met, s 91 provides the court with a discretion to make the order sought 'if it thinks fit'. That discretion must be exercised having regard to the scheme of the Act itself.
The text of s 91 is different to s 94 in terms of the order to be made. Section 91(2) refers to an order appointing the applicant owner to sell the property. Section 94(2) refers to an order that the property is to be sold. The power in s 91(2) must, however, encapsulate an order that the property be sold. It would be inutile for an order to be made appointing a person to sell the property, without the order authorising the sale of the property.
Understood in that way, an order made under s 91 achieves two purposes. First, it removes the restriction on dealing with the property imposed by s 50.[108] Second, it authorises a sale, even where the applicant owner may not otherwise have a right of sale absent the provisions of the Act. Here, Westpac plainly has a right of sale under its mortgages, so it is (thankfully) not necessary to consider the potential limitations of s 91 where the applicant does not otherwise have the right to sell. For present purposes, it is sufficient to observe that the extent to which the applicant has an independent right of sale is relevant to the exercise of the discretion under s 91, as will be the existence of obstacles to effecting a sale. An example of a potential obstacle is the caveat lodged on the Etwell Street property prior to the registration of Westpac's mortgage.
[108] See the Act, s 50(2)(a).
The Director submits that s 91 is intended to ameliorate the impact of the Act upon innocent parties. In this respect, the Director points out that the objection processes afforded by s 82 ‑ s 84 do not deal with all of the grounds on which a freezing order may be made. As I have explained at [106] ‑ [111] above, in some circumstances those processes provide no, or limited, relief for an owner of property who was not involved in, and did not have actual or constructive knowledge of, the conduct that led to the property being frozen.
The Director also refers to the explanatory memorandum, which explains that s 91 is necessary to provide a procedure whereby an 'owner of frozen property, namely a person who has a legal or equitable interest in the property, may be appointed to control and manage, or sell or destroy the property'.[109]
[109] Plaintiff's (Director's) written submissions dated 23 May 2024, par 3.1.
It also should be kept in mind that property can be confiscable under the Act even when there is no direct connection between the property and any confiscable offence.
I accept the Director's submission that s 91 is intended to ameliorate the impact of the Act upon innocent parties, subject to two qualifications. First, the matters I have addressed at [170] above in relation to whether the applicant has an independent right of sale.
Second, s 82 - s 84 will not be irrelevant to the application of s 91. In particular, a factor that will inform the exercise of the discretion is whether s 91 is sought to be used to achieve a result that is contrary to the application of s 82 ‑ s 84 in the relevant circumstances. So, for example, if property was frozen on a crime‑derived ground and the applicant under s 91 was not an 'innocent party' within the meaning of s 153, then it would be most unlikely that a court would permit s 91 to be used to effect a sale so that an owner could be paid out their proportionate interest. This is, however, a matter that goes to the discretion to exercise the power, not to whether the power exists in the first place.

Prior authority on the operation of s 91

There are three prior decisions regarding the operation of s 91 which I need to address. I will do so in the order in which they were delivered.
In Westpac Banking Corporation & Ors[110] Hasluck J held that orders for sale of property upon the application of a registered mortgagee, as well as orders facilitating the sale process and distributing the sale proceeds, can be made as a matter allowed for by the Act and pursuant to the incidental powers conferred by the provisions of the Act.[111]
[110] Westpac Banking Corporation & Ors [2001] WASC 365.
[111] Westpac Banking Corporation [35], [65] - [66].
In Permanent Trustee Co Ltd v The State of Western Australia,[112] McKechnie J came to a different view. His Honour held:
1.When an objection is lodged, the objection provisions in the Act provide a complete mechanism for the release of crime‑used and crime‑derived property prior to trial. Further, the Act does not provide any mechanism for the early release of the property of a suspected drug trafficker, notwithstanding that the objector is an innocent party in relation to the property.[113]
2.Section 91(2) cannot be regarded as empowering a court to grant an unrestricted right of sale when such a sale would defeat the other provisions of the Act.[114]
3.The power to order destruction or sale under s 91(2) must be an adjunct to, and read in conjunction with, s 93 and s 94.[115]
4.Section 91(2)(b) must be read in light of s 94. The property may be sold if it is more likely than not that the property is, or will be, subject to substantial waste or loss of value if it is retained, or the cost of managing or protecting the property will exceed the property's value if it is retained under another provision of the Act.[116]
5.Section 91(2)(b) cannot be used as an artifice to overcome the specific provisions of the Act while allowing a sale on terms in a purported exercise of rights under a mortgage.[117]
[112] Permanent Trustee Co Ltd v The State of Western Australia [2002] WASC 22.
[113] Permanent Trustee Co Ltd [77].
[114] Permanent Trustee Co Ltd [82].
[115] Permanent Trustee Co Ltd [82].
[116] Permanent Trustee Co Ltd [82].
[117] Permanent Trustee Co Ltd [85].
His Honour was also of the view that there is potential for irremediable injustice if s 91 permitted a sale beyond the circumstances envisaged by s 94. The example his Honour gave was if a freezing notice triggered a default provision in a mortgage, and the State later failed to establish the grounds on which that freezing notice was obtained, the sale of the property would result in an innocent person losing their property through no fault or act of their own. His Honour therefore considered that the preferred construction is that s 91 be read in conjunction with s 93 and s 94, thus avoiding the risk of prejudice identified.[118]
[118] Permanent Trustee Co Ltd [92].
His Honour also held that there was no power to make the ancillary orders sought, which included orders facilitating the sale and disbursing the sale proceeds.[119]
[119] Permanent Trustee Co Ltd [89].
In NWC Finance, Hill J preferred the decision of Hasluck J in respect of the scope of the Court's powers under s 91 to order a sale.
Her Honour found:
1.It is not a necessary condition for an order for sale that the person be appointed to control and manage the property. Apart from the requirement that the order should only be made if the court thinks fit, there is no other condition or restriction on the court's exercise of discretion under the section.[120]
2.Section 94 expressly deals with the sale of the property where its value is deteriorating by reason of the factors set out in s 94(2). If the only circumstance where the court could order a sale under s 91 was that the value of the property was deteriorating, s 91(2)(b) would be unnecessary.[121]
3.The risk of prejudice referred to by McKechnie J as supporting his Honour's construction of s 91 is a matter to be taken into account by the court in determining whether to exercise its discretion, rather than a matter that is relevant to the scope of the power under s 91.[122]
4.It is a general principle of construction that the express conferral of power carries with it all that is reasonably necessary to ensure its effective exercise. The incidental power must be necessary, such that without it, the statutory function could not achieve its purpose. Orders that facilitate the sale process, for example, how the property will be sold, fall within this incidental power. Orders dealing with the distribution of sale proceeds do not.[123]
[120] NWC Finance [54].
[121] NWC Finance [55].
[122] NWC Finance [54] - [56].
[123] NWC Finance [57] - [58].
Putting to one side the court's power to make an order in respect of the distribution of sale proceeds, I respectfully agree with her Honour's observations. I approach the question as to whether the court has the power to make an order in respect of the distribution of sale proceeds from a different perspective. I explain this at [186] - [208] below.
Further to her Honour's observations, the explanatory memorandum confirms that s 91 is not allied to the powers provided by s 94. It states that 'a mortgagee may wish to exercise its powers under a mortgage in relation to frozen property and the Court may grant power to sell the property'.[124] The explanatory memorandum does not link the power under s 91 to the powers under s 94.
[124] Explanatory memorandum, page 51.
For these reasons, s 91 does provide a general source of power for the court to order the sale of frozen property.

Issues 5 and 6 - what happens to the net proceeds?

The Director accepts that the net proceeds from any sale ordered under s 91 do not form part of the frozen property the subject of the freezing orders. The Director's counsel told me that in his experience (which is significant) an order made under s 91 ordinarily includes an order that effects the freezing of the net proceeds, if the Director asks for that additional order. The parties have not located any authority which explains the basis for the court's power to so order. Nor have I.
The principal point made by the Director and Westpac is that s 45(a) provides the power to order that the net proceeds of sale are taken to be part of the property the subject of the relevant freezing order. I have found against the Director and Westpac on that point. It is therefore necessary to consider whether s 91 contains an implicit power to order that the net proceeds of sale are taken to be frozen property subject to the freezing order.
In considering this issue, it is helpful to start with s 94.

Section 94

Section 94(4) deems that the net proceeds of a sale under s 94 'are taken to be frozen property that is subject to the freezing notice or freezing order made in respect of the sold property'. There is of course no such provision in s 91. However, there are good reasons for that.
A sale under s 94 is ordered because the property or its value is deteriorating, or the costs of managing or protecting the property will exceed its value if the property is retained. The sale is therefore carried out to preserve value. In that scenario, the rationale for the sale warrants that the net proceeds automatically become frozen property.
On the other hand, under s 91, whether the net proceeds ought to become frozen property very much depends upon the reasons why an order for sale is made. Those reasons might dictate that all, some or none of the net proceeds should be frozen. Accordingly, the absence in s 91 of a deeming provision such as that found in s 94(4) is not fatal to the contention that there is an implicit power to order that the net proceeds from a sale pursuant to a s 91 order are taken to be frozen property.
I also consider that s 94(4) informs the scope of any implicit power under s 91, even though s 94(4) addresses different circumstances. Both s 91 and s 94 deal with the sale of frozen property outside the objection regime provided for by pt 6. To the extent there is an implicit power in s 91 to make a freezing order in respect of the net proceeds of sale, I consider the desire for statutory conformity dictates that such an implicit power is substantially similar in terms to the express power conferred by s 94(4).

Implicit powers

In Electric Light and Power Supply Corporation Ltd v Electricity Commission of NSW,[125] the joint reasons of the High Court explained that:
When the legislature finds that a specific question of a judicial nature arises but that there is at hand an established court to the determination of which the question may be appropriately submitted, it may be supposed that if the legislature does not mean to take the court as it finds it with all its incidents including the liability to appeal, it will say so. In the absence of express words to the contrary or of reasonably plain intendment the inference may safely be made that it takes it as it finds it with all its incidents and the inference will accord with reality.
[125] Electric Light and Power Supply Corporation Ltd v Electricity Commission of NSW (1956) 94 CLR 554, 560.
In the majority judgment in Mansfield, their Honours said the above reasoning is applicable to the operation of the Act.[126] This observation prefaced their Honours' acceptance that there is a power to vary the scope of freezing orders.[127]
[126] Mansfield [7].
[127] Mansfield [7].
Further, statutory powers conferred on a court ordinarily carry with them such powers as are incidental and necessary to the exercise of the powers conferred. This was explained by Mazza and Mitchell JJA in Ardrey v The State of Western Australia as follows:[128]
… the conferral of statutory jurisdiction or powers on a court carries with it such powers as are incidental and necessary to the exercise of the jurisdiction or powers so conferred. In this context 'necessary' is used in the sense of matters which are reasonably required or legally ancillary (as opposed to 'essential') to the exercise of the jurisdiction or powers.
(footnotes omitted)
[128] Ardrey v The State of Western Australia[No 2] [2017] WASCA 41 [161], cited with approval in Ng v Commissioner of the Australian Federal Police [2019] WASCA 195 [25] (Murphy and Mitchell JJA).
The starting point in the requisite analysis is to recognise that there may be many reasons an owner might seek to sell the subject property. For example, to take advantage of a rising market or circumvent a declining market, to extricate themselves from an association they consider to be undesirable, or to obtain payment of monies due under a mortgage. The Director may consent to such a sale to avoid or limit the impact of any undertaking as to damages that has been given.
The effect of a sale under a s 91 order is to substitute the net sale proceeds for the property sold. So, there is an exchange of one asset for another. There is nothing inherent in that exchange to suggest that, without more, the sale is intended to free up the benefit of the property for all owners or controllers of the property irrespective of their involvement in, or knowledge of, the alleged conduct that led to the property being frozen in the first place. Also, it cannot be assumed that the 'innocent' owners will have priority in respect of all of the net sale proceeds. The explanatory memorandum gives the example of a mortgagee exercising its powers under a mortgage. Whether or not an innocent mortgagee's priority extends to the entirety of the net sale proceeds very much depends on the circumstances. It is, at least, reasonably likely that there will be a surplus.
If there is not an implicit power to order that the net sale proceeds are frozen, the automatic result of a sale pursuant to a s 91 order is that frozen property (the property sold) is replaced with unfrozen property (the net sale proceeds). That is, the entirety of the net sale proceeds would be released for the benefit of all owners.
Further, the Director's ability to apply for a new freezing order in respect of the net sale proceeds would not necessarily alleviate the effect of the net sale proceeds being released for the benefit of all owners. An application for a new order would need to be assessed in a different environment to that which existed when the initial order was made. The relevant ground on which the sold property was frozen may no longer arise. For example, where real property was frozen on the crime‑used ground. In addition, pursuant to s 28(1)(a), the court can order that frozen property effectively controlled by a party when the freezing order was made, is available to meet that party's liability under a confiscable property declaration. Thus, the timing of the freezing order may well be significant in determining whether the property is available to meet the declared liability. A new freezing order would also create a whole new objection regime in respect of the net sale proceeds. There is no discernible legislative purpose that warrants such differences in approach between the property to be sold and the net sale proceeds, bearing in mind the net sale proceeds are received in substitution for the property.
Also, s 91 in its terms leaves a lot of work to the discretion of the court in formulating an order to facilitate the sale. Relevantly, s 91 only refers to the court, by order, appointing the applicant owner to sell the property. Section 91 says nothing as to the process or terms of sale, nor as to what happens to the net sale proceeds. In addition, to facilitate the sale, a s 91 order would need to vary the freezing order such that it ceases to be in force in respect of the sold property. Thus, the terms of s 91 are not in such detail that it could be said the legislature's intention was that s 91 'covered the field' in terms of what the court can order.
Section 34(5) and s 43(7) permit a freezing notice or order to include property acquired after the freezing notice or order is made. However, they do not automatically have that result. They also have a limited scope of operation. Section 34(5) only applies where the freezing notice is issued under s 34(3) and thus does not apply to a notice issued under s 34(2). Section 43(7) only applies to a freezing order made under s 43(3) or s 43(5) and thus does not apply to an order made under s 43(1) or s 43(8). Accordingly, s 34(5) and s 43(7) do not provide a remedy for the absence in s 91 of an express power to make an order in respect of the freezing of the net sale proceeds.[129]
[129] In making these observations, I have assumed, without deciding, that property acquired after an order is made would include the net proceeds from a sale of frozen property.
The first defendant submits:[130]
There is no clear identification of any legislative provision entitling the Court to 'deem' retrospectively a freezing order so as to defeat the rights of parties who have acquired interests at the specific time prior to any deeming. Clear statutory words would be needed in order to produce that effect.
(emphasis in original)
[130] First defendant's written submissions dated 25 June 2024, par 9.

It is difficult to see that there is prejudice in the absolute sense as suggested by this submission. An order that the net sale proceeds are taken to be frozen property subject to the existing freezing order in effect recognises that the benefit of the frozen property now resides in the net proceeds. The owners of the property sold will ordinarily have a beneficial interest in the surplus net proceeds.[131]
[131] Bofinger v Kingsway Group Limited [2009] HCA 44 [35].
It therefore does not automatically follow that the rights of parties who have acquired interests in the sold property are adversely affected by the making of such an order. Whether, or to what extent, their interests are adversely affected depends upon many matters. These would include the extent to which the party might successfully avail itself of s 82 ‑ s 84 and whether the party supports a sale of the property. These are all matters that can be taken into account in the exercise of the court's discretion under s 91. However, the prospect of prejudice does not mean that the rights of other parties will be defeated in the absolute sense reflected by the first defendant's submission.
Ultimately, the question I must determine is whether an implicit power to freeze all or part of the sale proceeds is reasonably required or legally ancillary to the exercise of the power under s 91 to appoint an owner to sell the frozen property.
In my view, having regard to the scheme of the Act, what happens to the proceeds of sale is legally ancillary to the exercise of the power to appoint an owner to sell the frozen property. That power is not exercised in the abstract. The court must think it is fit to so order. Part of the assessment of what the court thinks fit must include consideration as to what happens to the sale proceeds.
I am satisfied there is an implicit power in s 91 to order that the net proceeds of the sale are taken to be frozen property that is subject to the existing freezing order. An implicit power of that type accords with the deeming provision in s 94(4). Further, it is legally ancillary to the power to order a sale that the court is able to order that all or some of the net proceeds are frozen. The implicit power permits the court to direct the extent to which the benefit of the frozen property is released. Understood in that way, the implicit power gives necessary effect to the strict controls imposed by the Act on dealing with and releasing frozen property. It also facilitates the intended purpose of s 91, being to ameliorate the impact of the Act upon innocent parties.
In contrast, the absence of such an implicit power would result in the entirety of the benefit of the frozen property being released. I do not consider the operation of s 91 was intended to have such a result. It is inconsistent with the operation of the Act overall, and with the strict controls imposed by the Act on dealing with and releasing frozen property. Such a result would also significantly curtail the operation of s 91, as the court would be most reluctant to order a sale unless satisfied that only innocent parties would be entitled to the entirety of the net sale proceeds. The focus would then be on the attributes of all owners entitled to a share of the net sale proceeds, as opposed to the attributes of those owners seeking to utilise s 91 to extract their interest in the property to be sold. I do not consider that focus on the attributes of all owners is consistent with the intended purpose of s 91, being to ameliorate the impact of the Act upon innocent parties.
As a final observation on this issue, my current view is that the orders will need to recognise the beneficial interest that the registered proprietors will have in the surplus proceeds. The current form of orders seeks to achieve this by having the surplus funds placed in a trust account in the name of the Director and the registered proprietors. It may be necessary for the orders to make clear that those parties' interests in that fund reflect the interest they have in the surplus proceeds at law.

Extent of the sale proceeds to be frozen

The Director only seeks to freeze the remainder of the net sale proceeds after paying out the monies due to Westpac under its mortgages. It is a matter for the Director to decide the extent to which he seeks to have the net sale proceeds frozen.
There is no suggestion that Westpac would not be able to avail itself of s 82 and s 83 to seek to be paid out its interest if the properties were sold after confiscation. Accordingly, I do not see s 82 and s 83 as presenting an obstacle to the orders sought, nor does the Director suggest that they do so.
If an order is made that part of the net sale proceeds are taken to be subject to the freezing order that applies in respect of the property to be sold, I do not think the court has any remaining jurisdiction under the Act in respect of the proceeds that are not frozen.
Accordingly, if there is any dispute between Westpac and the other owners as to how the non‑frozen proceeds should be disbursed, that issue would need to be resolved in proceedings between them. It may be that issue could be resolved in these proceedings, although I have not formed any definitive view in that respect.

Conclusion

In conclusion, I have found that:
1.Section 45(a) of the Act does not provide the court with power to make an order in respect of the net proceeds from the sale of frozen property.
2.The accrual of Westpac's rights under its mortgages does not constitute a prohibited dealing under the Act.
3.Westpac is an owner within the meaning of the Act of the ninth defendant's interest in the Cowle Street property.
4.Section 91 provides for a general power of sale that is not limited to the circumstances specified in s 93 and s 94.
5.There is an implicit power in s 91 for the court to order that the net proceeds from a sale carried out pursuant to a s 91 order are taken to be frozen property that is subject to the freezing order made in respect of the sold property.
6.If there is a dispute between Westpac and the other owners of the properties as to how the non‑frozen proceeds should be disbursed, that issue will need to be resolved in proceedings between them. It may be possible for any such issue to be resolved in these proceedings.
The parties will need to consider the form of any orders that will now be sought in light of these reasons. The parties will also need to consider what, if any, implications arise by reason of the caveat lodged on the Etwell Street property.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
SP
Associate to the Hon Justice Lemonis
14 JANUARY 2025