Trajkoski v The State of Western Australia

[2017] WASC 273

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   TRAJKOSKI -v- THE STATE OF WESTERN AUSTRALIA [2017] WASC 273

CORAM:   LE MIERE J

HEARD:   ON THE PAPERS

DELIVERED          :   4 DECEMBER 2017

FILE NO/S:   CIV 1268 of 2003

MATTER                :The Criminal Property Confiscation Act 2000

A freezing notice numbered AISFN030005 issued pursuant to section 34 of the Criminal Property Confiscation Act 2000

BETWEEN:   SOTIR TRAJKOSKI

First Plaintiff

DONNA YVETTE JANCZAK
Second Plaintiff

AND

THE STATE OF WESTERN AUSTRALIA
Defendant

Catchwords:

Criminal property confiscation - Criminal Property Confiscation Act 2000 (WA) - Objections to confiscation of real property - Whether property interest owned or effectively controlled by first plaintiff - Whether second plaintiff has equitable interest in the first plaintiff's property interest

Trusts - Constructive trust - Common intention constructive trust - Whether common intention that second plaintiff have a beneficial interest in the first plaintiff's property interest

Trusts - Constructive trust - Muschinski v Dodds - Baumgartner v Baumgartner - Where there was a joint endeavour - Contributions made by second plaintiff during period of first plaintiff's imprisonment - Where unconscionability not established

Equity - Equitable accounting principles - Improvements to real property

Equity - Obligation to pay occupation rent

Legislation:

Criminal Property Confiscation Act 2000 (WA), s 7(2), s 8, s 9(1), s 30, s 34(3), s 47(1), s 79(1), s 81(2), s 84(2), s 113(1), s 91(2)(a)
Misuse of Drugs Act 1981 (WA), s 7(1)(a), s 32A(1)

Result:

The first and second plaintiff's objections to confiscation dismissed
Declaration of confiscation made

Category:    B

Representation:

Counsel:

First Plaintiff                  :     No appearance

Second Plaintiff             :     No appearance

Defendant:     No appearance

Solicitors:

First Plaintiff                  :     No appearance

Second Plaintiff             :     MacLean Legal

Defendant:     Director of Public Prosecutions (WA)

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

Allen v Snyder [1977] 2 NSWLR 685

Bamess v The State of Western Australia [2015] WASC 259

Baumgartner v Baumgartner (1987) 164 CLR 137

Bruson v Bryant (1992) 29 NSWLR 188

Callow v Rupchev [2009] NSWCA 148

Calverley v Green (1984) 155 CLR 242

Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353

Draper v Official Trustee in Bankruptcy (2006) 156 FCAFC 553

Foregeard v Shanahan (1994) 35 NSWLR 206

Green v Green (1989) 17 NSWLR 343

Hendricks v The State of Western Australia [2002] WASC 86

Kais v Turvey (1994) 11 WAR 357

Lamonaca v The State of Western Australia [2014] WASC 251

Lloyd v Tedesco (2002) 25 WAR 360

McKay v McKay [2008] NSWSC 177

Muschinski v Dodds (1985) 160 CLR 583

Parsons v McBain (2001) 109 FCR 120

Ranford v The State of Western Australia [2015] WASC 45

Re Smith; Ex parte Director of Public Prosecutions for Western Australia (No 3) [2004] WASC 157

Ryan v Dries [2002] NSWCA 3

Silvester v Sands [2004] WASC 266

Stavrianakos v The State of Western Australia [2016] WASC 64

Stowe and Devereaux Holdings Pty Ltd v Stowe (1995) 15 WAR 363

West v Mead [2003] NSWSC 161

LE MIERE J: 

Summary

1. By summons filed 22 November 2016 the defendant, the State of Western Australia (the State) seeks an order that the objection of the first plaintiff (Sotir Trajkoski) to the confiscation of frozen property be dismissed and a declaration that the first plaintiff's interest as joint tenant in the land at Lot 352 on Plan 16690 in Certificate of Title Volume 1829, Folio 336, commonly known as 6 Castillo Rise Mirabooka (Property Interest) has been confiscated to the State of Western Australia.

2. The second plaintiff, the first plaintiff's former wife formerly known as Donna Trajkoski and now known as Donna Janczak was joined to this action on 12 April 2017 and objects to the State's application on the basis that the majority of the interest that the State claims that the first plaintiff holds in the property at 6 Castillo Rise, Mirrabooka (Mirrabooka Property) is actually held on constructive trust for her.

3. For the reasons given below I find:

   1.The first plaintiff's objection to the confiscation of frozen property made by notice of originating motion and notice of objection dated 12 March 2003 must be set aside.

   2.The second plaintiff's objection to the confiscation of frozen property made by her joinder, on 12 April 2017, to the first plaintiff's objection, must be set aside.

   Further, there shall be a declaration pursuant to s 8(1) and s 30 of the Criminal Property Confiscation Act 2000 (WA) (CPCA) that:

   The following property that Sotir Trajkoski owned or effectively controlled at the time he was declared to be a drug trafficker under section 32A(1) of the Misuse of Drugs Act 1981 (WA) on 19 March 2014 or given away at any time before that date has been confiscated to the State of Western Australia, namely Sotir Trajkoski's interest as joint tenant in the land at Lot 352 on Plan 16690 in Certificate of Title Volume 1829, Folio 336, commonly known as 6 Castillo Rise, Mirrabooka.

Procedural history

1. It is appropriate to recount the procedural history of this matter.

2. On 15 January 2003, pursuant to s 34(3) CPCA, Freezing Notice number AISFN0300005 (Freezing Notice) was issued by a Stipendiary Magistrate, on the ground that the first plaintiff had been charged with an offence under the Misuse of Drugs Act 1981 (WA) (MDA) and if convicted could be declared a drug trafficker. The only property frozen under this notice was the Property Interest.

3. On 16 January 2003, the Freezing Notice was filed in this court. On the same day, both the first and second plaintiffs were personally served with a copy of the Freezing Notice. On 23 January 2003, the first plaintiff made a declaration under compulsion, pursuant to s 47(1) CPCA that the second plaintiff holds an interest in the Mirrabooka Property. On 21 January 2003 a copy of the Freezing Notice was served personally on a representative of the Commonwealth Bank of Australia. The Commonwealth Bank of Australia holds a mortgage over the Mirrabooka Property, registered 10 October 2001.

4. This action was commenced on 12 March 2003 when the first plaintiff filed a notice of originating motion and a notice of objection pursuant to s 79(1) CPCA. In the notice of originating motion, the first plaintiff sought orders that the Freezing Notice be set aside, and that the 28 day period within which an objection may be filed to the confiscation of property the subject of the Freezing Notice be extended to 12 March 2003. On 9 September 2003 Registrar Powell made a consent order that the 28 day period be extended to 12 March 2003 and that the first plaintiff be appointed to control and manage the Property pursuant to s 91(2)(a) CPCA.

5. On 14 October 2008, the Commonwealth Bank of Australia filed an originating summons pursuant to s 79 CPCA in action number CPCA 126 of 2008.  This summons was dismissed by Registrar Powell on 21 April 2009.

6. The State's summons dated 22 November 2016 was listed for hearing on 19 January 2017 before Justice Tottle.  It was served, together with an affidavit of Ms Sherri Lee Stacey sworn 1 November 2016, on the second plaintiff on 22 November 2016 and the Commonwealth Bank of Australia on 21 December 2016.  The hearing on 19 January 2017 and a further hearing on 22 February 2017 before Chaney J were adjourned because the first plaintiff had not been served.

7. The second plaintiff has not filed any original notice of objection.  On 12 April 2017, she attended a directions hearing before Chaney J.  She stated to the court that she objects to the acquisition and agreed to be joined as a party.  The State consented to this order.  Chaney J made orders that the second plaintiff be joined as a party and that she file any affidavit by 11 May 2017.  The matter was adjourned to 26 May 2017.

8. The matter came before me on 26 May 2017.  I made orders as to the filing of submissions, that the second plaintiff's 11 May 2017 affidavit stand as her evidence‑in‑chief, and that the matter would be dealt with on the papers.  I subsequently made a consent order varying the deadline for the second plaintiff to file submissions in order to facilitate her obtaining legal representation, which she did on 19 July 2017.

9. There is no evidence before the court that the first plaintiff has been personally served with the 22 November 2016 summons.  There is evidence, in the affidavit of Ms Alison Margaret Gibson sworn 6 April 2017, of the efforts made to serve the first plaintiff personally.  Ultimately, the summons and accompanying affidavit were left in the letterbox at the first plaintiff's last known address. I am satisfied that the appropriate efforts have been made to serve the first plaintiff.  The first plaintiff has taken no part in the proceedings since the State filed its summons on 22 November 2016.

The first plaintiff is a declared drug trafficker

1. On 3 August 2007, before Judge Wager in indictment number 1605 of 2003, the first plaintiff was convicted under s 7(1)(a) MDA of one count of cultivation of a prohibited drug, namely cannabis, with the intent to sell or supply it to another, committed between 1 July and 27 December 2002. On 29 August 2007 he was sentenced by Judge Wager to 2 years and 8 months imprisonment, with eligibility for parole, and declared to be a drug trafficker. According to the Total Offender Management Solution system, he was released on parole on 27 December 2008, a period of custody of approximately 16 months.

2. Following a successful appeal to the Court of Appeal in CACV 75 of 2009, Owen JA, Buss JA and Jenkins J set aside Judge Wager's 29 August 2007 declaration that the first plaintiff is a drug trafficker and remitted the matter to the trial judge. Upon a rehearing before Judge Wager on 19 March 2014, the first plaintiff was declared to be a drug trafficker pursuant to s 32A(1) of the MDA as a result of being convicted of a confiscation offence committed after the commencement of the CPCA. The first plaintiff filed an appeal against this decision on 9 April 2014, but this was discontinued on 22 September 2014.

Have the statutory requirements been met?

1. This application for a declaration under s 30 CPCA is made by the Director of Public Prosecutions for Western Australia on the basis that the Property has been confiscated under s 8(1) CPCA upon the first plaintiff being declared a drug trafficker on 19 March 2014.

2. Section 30 CPCA provides that:

   (1)The DPP may apply to the court for a declaration that property has been confiscated.

   (2)On considering an application, if the court finds that the property described in the application has been confiscated under section 6, 7 or 8, the court must make a declaration to that effect.

3. Section 8(1) CPCA provides that:

   When a person is declared to be a drug trafficker under section 32A(1) of the Misuse of Drugs Act 1981 as a result of being convicted of a confiscation offence that was committed after the commencement of this Act, the following property is confiscated ‑

   (a)all the property that the person owns or effectively controls at the time the declaration is made;

   (b)all property that the person gave away at any time before the declaration was made, whether the gift was made before or after the commencement of this Act.

4. The only requirement before a declaration is made is that the court is satisfied that the statutory requirements have been met:  Re Smith; Ex parte Director of Public Prosecutions for Western Australia (No 3) [2004] WASC 157 [15] (Roberts-Smith J); Ranford v The State of Western Australia [2015] WASC 45 [19] (Edelman J). Once it is established that property has been confiscated under s 8 CPCA, the court is obliged by s 30(2) CPCA to make a declaration to that effect: Lamonaca v The State of Western Australia [2014] WASC 251 [10] (EM Heenan J); Hendricks v The State of Western Australia [2002] WASC 86 [19] (Roberts‑Smith J); Re Smith; Ex parte Director of Public Prosecutions for Western Australia (No 3) [15] (Roberts-Smith J).

5. I am required to decide whether the first plaintiff owns or effectively controlled the Property Interest, or whether it was, in whole or in part, given away by him before 19 March 2014.

Who held the Property Interest on 19 March 2014?

1. Sotir Trajkoski and Donna Yvette Trajkoski are recorded on the Certificate of Title pertaining to the Mirrabooka Property as being the registered proprietors, as joint tenants, having been registered on 14 September 1998.  The plaintiffs were married at that time.  According to the second plaintiff, she and the first plaintiff were married on 10 April 1998, separated in late 2007 and were divorced on 29 August 2011.  The second plaintiff states that there was no financial property settlement between the parties.  The second plaintiff now uses the name Janczak.  She states in her affidavit that she lived at the Mirrabooka Property between 1998 and 'the middle of 2008', before leaving the state to New South Wales because she 'fear[ed] for [her] safety and … mental health'.  After returning to Western Australia in 2014, the second plaintiff says that she lived with family, and that her son from a previous marriage lived at the Mirrabooka Property alone until she moved back to also live there from December 2015 to present day.

2. The second plaintiff argues that she holds an equitable interest in the Property in excess of her 50% legal interest.  Her argument is that a constructive trust has been created on the basis of her financial and marital contributions, such that as a matter of equity she is entitled to an 80% interest in the Property.  That is, an argument that the first plaintiff holds 60% of the Property Interest on trust for the second plaintiff.

3. The second plaintiff supports her argument with a number of assertions about financial and marital contributions that she has made.

4. At [7], [25], [28], [30], [34] and [37] of her submissions, the second plaintiff puts her case on the basis that during the period of the first plaintiff's incarceration, she was the sole contributor to the mortgage and maintenance payments in respect of the property.  However, at [35] the second plaintiff states that she is 'unable to particularise that she was the sole financial contributor to the mortgage payments on the [Mirrabooka] Property from 1998 due to that evidence no longer being available'.  I do not take it that the second plaintiff is arguing that she was the sole financial contributor of all mortgage payments in respect of the Mirrabooka Property since it was acquired.  This is for two reasons.  First, this assertion is unsupported by the second' plaintiffs affidavit where at [9] she states only that '[w]hile [the first plaintiff] was in prison I had to maintain and pay for the [Mirrabooka Property] by myself'.  Second, the focus of the second plaintiff on the significance of her contributions during the period of the first plaintiff's incarceration is inconsistent with an argument that she was the sole contributor during the entire period since the Mirrabooka Property was acquired in 1998.  Therefore, as to her financial contributions, I take the second plaintiff's case to be that she is entitled to a greater interest in the Mirrabooka Property in equity than she has in law, on the basis of a constructive trust that arose due to financial contributions made during the period of the first plaintiff's imprisonment.

5. Second, as to her 'marital contributions', the second plaintiff argues that she made 'marital contributions' during the time after the Mirrabooka Property was acquired, by way of caring for the children, and that these contributions 'should be considered as a basis for increasing her beneficial interest in the Mirrabooka Property'.  These contributions are argued to be particularly significant during the period of the first plaintiff's incarceration, where it is said that she had sole responsibility for the plaintiffs' children.

The second plaintiff's argument

1. As I have said, the plaintiffs purchased the Mirrabooka Property as joint tenants in equal shares in September 1998.  This acquisition date is the appropriate time to determine the beneficial interests of the parties:  Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, 365 (Dixon CJ, McTiernan, Williams, Fullagar & Taylor JJ); Calverley v Green (1984) 155 CLR 242, (Calverley) 252 (Gibbs CJ), 262 (Mason & Brennan JJ), 269 (Deane J).  Unless the second plaintiff succeeds in establishing a recognised equitable ground to alter the parties' initial equal equitable interests in the Mirrabooka Property, I will conclude that the plaintiff's interests remain fixed in the proportions established when the Mirrabooka Property was acquired.  The second plaintiff argues that these interests are altered on the basis of a constructive trust.

2. The second plaintiff does not distinguish between two discrete species of constructive trust; those of a common intention constructive trust and a Baumgartner constructive trust.  These are two types of constructive trust that have been recognised, particularly in the context of addressing imbalances in the legal title at the conclusion of a domestic relationship.  I will briefly discuss the principles relating to each.

Principles relating to the common intention constructive trust

1. The principles relating to common intention constructive trust are summarised by the Court in Stowe and Devereaux Holdings Pty Ltd v Stowe (1995) 15 WAR 363 (Stowe) at 367 ‑ 368. Two matters must be established; first, the existence of a common intention that the relevant parties should have a beneficial interest; and second, that the claimant acted to his or her detriment on the basis of that common intention: Green v Green (1989) 17 NSWLR 343, 355 (Gleeson CJ) cited in Stowe (367 - 368); Stavrianakos v The State of Western Australia [2016] WASC 64 (Stavrianakos) [289] (Tottle J). Must the common intention be actual, or may it be imputed as a matter of law? The position in Australia, according to authorities such as Muschinski v Dodds (1985) 160 CLR 583 (Muschinski), 595 (Gibbs CJ) and Allen v Snyder [1977] 2 NSWLR 685, 694 (Glass JA), 701 (Samuels JA), is that such an intention cannot be imputed by operation of law.

2. If the second plaintiff's argument is correct, her equitable interest would have been created before the Freezing Notice was served, because a common intention constructive trust creates substantive rights and is not merely an equitable remedy that comes into existence when a court makes a declaration to that effect:  Parsons v McBain (2001) 109 FCR 120 [9] ‑ [16] (Black CJ, Kiefel & Finkelstein JJ); Muschinski (614) (Deane J); Stavrianakos [295] (Tottle J).

Principles relating to the Baumgartner principle

1. Another basis for the imposition of a constructive trust arises from the principle enunciated by Deane J in Muschinski at (620):

   the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it.  The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do …

   This principle has been cited with approval and applied in Baumgartner v Baumgartner (1987) 164 CLR 137 (Baumgartner), 148 (Mason CJ, Wilson and Deane JJ) and will be referred to as the Baumgartner principle.  See also the summary by Buss JA in Willis at [51] to [66] and comments approving of the principle in Kais v Turvey (1994) 11 WAR 357, 362, (Malcolm CJ), 363 - 364 (Ipp J) and Lloyd v Tedesco (2002) 25 WAR 360, 363 - 364 (Murray J, Hasluck J agreeing), 373 - 374 (Pullin J).

1. A number of principles are clear from the authorities:

   (1)The intervention of equity is justified to prevent unconscionable reliance:  Muschinski (620) (Deane J) approved by Mason CJ, Wilson and Deane JJ in Baumgartner at (148); West v Mead [2003] NSWSC 161 [62] (Campbell J).

   (2)The claimant must identify with some precision 'the nature, purpose and scope of [their] alleged joint endeavour' with their partner; mere cohabitation, without more, will not be enough:  Willis [72] (Buss JA).

   (3)A constructive trust is not imposed in accordance with idiosyncratic notions of what is just and fair, only on the basis of applicable principles of equity:  Stavrianakos [300] (Tottle J) citing Muschinski (615 ‑ 616) (Deane J), Baumgartner (148) (Mason CJ, Wilson & Deane JJ); however, notions of fairness and justice are relevant to whether there has been unconscionable conduct:  Muschinski (616) (Deane J), cited with approval in Baumgartner (148) (Mason CJ, Wilson & Deane JJ).

   (4)The declaration of a constructive trust to preclude the unconscionable assertion of legal title may be made regardless of actual or presumed agreement or intention (Willis [64] (Buss JA)), but the actual intention of the parties may be relevant, for example in determining:  whether they knew they were contributing to a common pool to be used for their ongoing common benefit, whether they had formed an express intention about what was to happen in the circumstances which has in fact arisen, and in determining whether a relationship has ended prematurely (West v Mead [62] ‑ [64]).

The second plaintiff's argument fails

1. There are a number of insurmountable obstacles which mean that the second plaintiff's argument must fail.

2. The first is the lack of any supporting documentary evidence.  The second plaintiff has not produced any supporting documentary evidence, and her evidence, given by affidavit, amounts to no more than assertion at a very high level of generality.  Her failure to adduce any evidence to support her argument that a constructive trust exists is a defect that cannot be overcome.

3. The second is that the second plaintiff has not established the existence of a common intention constructive trust.  On the basis of the principles summarised above, the second plaintiff is required to prove on the balance of probabilities:  first, a common intention that she hold an 80% beneficial interest in the Mirrabooka Property; and second, that she has acted to her detriment in the belief that she would gain such an interest.  I find that the second plaintiff has failed to demonstrate such an intention.  First, because of the lack of evidence.  Secondly, because such an intention is inconsistent with the plaintiffs purchasing the property as joint tenants in equal shares.  Thirdly, because this case is distinguishable from others where the principles of a common intention constructive trust have been applied.  This specie of trust has commonly been applied with the end of establishing the existence of a beneficial interest on the behalf of a spouse or partner who holds no legal interest.  This is not such a case.  The second plaintiff here already holds a 50% legal interest and is seeking to establish a common intention that she hold 80% of the beneficial interest in the Mirrabooka Property.  In addition to a failure to establish a common intention, I also find that the second plaintiff has failed to demonstrate that she has acted to her detriment in the belief that she would gain an 80% interest.  I find that even if the second plaintiff had established that she made the financial contributions which she asserts, during the period of the first plaintiff's imprisonment, and the marital contributions that she asserts, she has failed to demonstrate that there would be unconscionability if she has a beneficial interest in 50% of the Mirrabooka Property only.  At this point I note that, whether in relation to an argument for a common intention constructive trust, or a Baumgartner constructive trust, any contributions made after 19 March 2014 are not relevant:  Willis [67] (Buss JA, McLure P & Owen JA agreeing).

4. The third is that the second plaintiff has not established the existence of a constructive trust on the basis of the Baumgartner principle.  Whilst I find, with the plaintiffs having married and started a family, that there is a joint endeavour, and that any contributions were, until the parties' separation (when the substratum of the relationship was removed), made to the advancement of their mutual security and benefit, there are numerous difficulties with the second plaintiff's argument.

5. First, the nature and extent of the second plaintiff's contributions are not clear.  It is clear that any contribution of the second plaintiff towards family welfare (for example, by acting as a homemaker and parent) are legally recognised contributions:  Baumgartner (156) (Gaudron J); Bruson v Bryant (1992) 29 NSWLR 188, 203 ‑ 204 (Kirby P). It is also clear that the second plaintiff's assumption of liability under the home loan used to purchase the Mirrabooka Property constitutes a direct contribution to the purchase price: Calverley (251) (Gibbs CJ), 257 - 258 (Mason & Brennan JJ), (267 ‑ 268) (Deane J).  However, as I have discussed, the second plaintiff has not particularised her contributions or supported her assertions by reference to evidence.  For example, one might infer, based on the second plaintiff's emphasis on the importance of her sole financial contributions during the period of the first plaintiff's incarceration, that the second plaintiff did not otherwise make financial contributions towards the Mirrabooka Property during the plaintiffs' relationship.

6. Second, and significantly, the second plaintiff has failed to establish that it would be unconscionable for the first plaintiff to retain his 50% Property Interest.  Even if the second plaintiff had adduced conclusive evidence in support of her claim that she was the sole financial contributor to the Mirrabooka Property, in paying mortgage payments and other expenses, this would not have affected the result of this case. I am required to strive to give effect to the notion of practical equality, rather than pursuing complicated actual inquiries which will result in relatively insignificant differences in contributions and consequential beneficial interest:  Baumgartner (150) (Mason CJ, Wilson & Deane JJ).  The first plaintiff was imprisoned for 16 months.  The parties' relationship continued for almost ten years.  I am not convinced that equity requires that the second plaintiff receive a constructive trust over 60% of the first plaintiff's Property Interest because of her contributions during the first plaintiff's comparatively brief period of imprisonment.

7. Fourth, there is a well-established principle of equitable accounting that expenditure on repairs, maintenance or improvements on a property will not increase an equitable co-owner's share in the property unless there is proof of a corresponding increase in the value of the property:  Silvester v Sands [2004] WASC 266 [117], [140] (EM Heenan J); Willis [70], [74].  To the extent that the second plaintiff has argued that her expenditure, during the period of the first plaintiff's imprisonment, was applied to repairs, maintenance or property improvements, she has not adduced any evidence of maintenance or of a corresponding increase in value.

8. Finally, if I am mistaken, and the second plaintiff's alleged contributions did in fact create a constructive trust in her favour, giving her a beneficial interest in the Mirrabooka Property in excess of 50%, that interest would be set‑off in equity against what she owes to the first plaintiff in occupation rent.  There are two possible bases for the conclusion that the second plaintiff owes the first plaintiff occupation rent.  The first is the breakdown of the plaintiffs' relationship.  The breakdown of a domestic relationship has been recognised as a reason of the same nature as an ouster, and one that operates 'as an independent ground for charging the co-owner who remains with an occupation rent':  Callow v Rupchev [2009] NSWCA 148 [46] (per curiam); see also McKay v McKay [2008] NSWSC 177 [51] (Brereton J). The parties separated in 'late 2007' and the second plaintiff remained at the Mirrabooka property living rent free until 'the middle of 2008'. The second plaintiff would be liable to pay occupation rent during this period. The second basis for finding that the second plaintiff owes the first plaintiff occupation rent is as follows: where a co-owner makes a claim in relation to mortgage or improvement expenses, they will be liable to their co-owner for occupation rent: Draper v Official Trustee in Bankruptcy (2006) 156 FCAFC 553 [163] (Besanko J; see also [102], [104], [114] (Rares J)).  In this instance, occupation rent would be owed from August 2007, when the first plaintiff was incarcerated, and 'the middle of 2008', when the second plaintiff left the Mirrabooka Property.  This is an application of the principle that a party 'who seeks equity must do equity':  Ryan v Dries [2002] NSWCA 3 [71], [75] (Hodgson JA); Foregeard v Shanahan (1994) 35 NSWLR 206, 223 (Meagher JA). Therefore either because of the plaintiff's separation, or because of the second plaintiff's claim for mortgage expenses during the period of the first plaintiff's imprisonment, any mortgage repayments, rates, taxes, proven property improvements and like expenditure would be set off in equity against occupation rent in respect of the period that the second plaintiff had exclusive possession of the Mirrabooka Property: see eg Draper v Official Trustee in Bankruptcy [114] (Rares J); [163] (Besanko J); Callow v Rupchev [30], [59] ‑ [60], [74] (per curiam); Calverley (253) (Gibbs CJ).

Conclusion on the existence of a constructive trust

1. I reject the second plaintiff's argument that the first plaintiff holds any proportion of his interest in the Mirrabooka Property on constructive trust for her.  I find that each party holds a beneficial interest equal to their 50% legal interest.

2. The State raises the point of hardship, and correctly argues that it is not a relevant ground to set aside a freezing notice issued under s 34(3) CPCA.  Hardship is not a relevant consideration where the basis for confiscation is the making of a drug trafficker declaration in relation to the person who owned or effectively controlled the property:  Bamess v The State of Western Australia [2015] WASC 259 [79] (Beech J). That is, hardship is not a ground to set aside a freezing notice under s 84 CPCA, whereas it is when confiscation is sought on the basis that property was crime-used: cf s 82(3)(f) CPCA in relation to crime‑used property.

Objections to be dismissed

1. As I have explained, the first plaintiff has been declared to be a drug trafficker.  There is uncontradicted affidavit evidence, in the Certificate of Title of the Mirrabooka Property, that the first plaintiff holds a 50% interest in the Mirrabooka Property.  The second plaintiff has failed to establish that she is entitled to part of the first plaintiff's Property Interest.  I am satisfied that the first plaintiff is the owner of the Property Interest described in the State's summons, and was the owner of that same interest on 19 March 2014 when he was declared to be a drug trafficker.  The plaintiffs' objections must be dismissed.

Service

1. I am satisfied that the Freezing Notice is valid and was served on the first plaintiff, the second plaintiff, and the Commonwealth Bank of Australia, and that it was filed with the court.  The State has satisfied its service obligations under s 36 CPCA.

Declaration

1. Pursuant to s 8 of the CPCA, the following property that Sotir Trajkoski owned or effectively controlled at the time he was declared to be a drug trafficker under s 32A(1) of the MDA on 19 March 2014 or given away at any time before that date has been confiscated to the State of Western Australia, namely Sotir Trajkoski's interest as joint tenant in the land at Lot 352 on Plan 16690 in Certificate of Title Volume 1829, Folio 336, commonly known as 6 Castillo Rise, Mirrabooka.