DPP v Gyurcsik [2007] VSC 424

Supreme Court of Victoria|2007-11-01|Before: KELLAM J

CONFISCATION ACT 1997 - Tainted Property - Forfeiture Application - Possession and Cultivation of Marijuana - Hardship to third parties - Applicable Principles.

1 The Director of Public Prosecutions seeks forfeiture of property of the defendant pursuant to s 32 of the ('the Act'). Amongst other things, the Director relies upon the following formal matters;

(a) that the jurisdiction to make a Confiscation Order arises by reason of the respondent having been convicted in the Magistrates' Court on 17 November 2006 of the offence of cultivating narcotic plants (cannabis) which is a Schedule 1 offence within the meaning of the Act,

(b) that the property, the subject of this application, is 'tainted property' within the meaning of the Act,

(e) that no previous application has been made under s 32(1) of the Act in relation to the conviction.

2 The respondent concedes all the formal matters referred to above but contends that s 33(1) of the Act confers a discretionary power upon the Court as to whether to make a forfeiture order in all the circumstances, and that the circumstances in this case are such that in the proper exercise of discretion the application should be refused.

3 The relevant facts are set out in an affidavit and the exhibits thereto sworn on 19 September 2005, by Benjamin Robert Wiseman, a Detective Senior Constable attached to the Proceeds Squad of Victoria Police. This affidavit was sworn in support of the preliminary application for a restraining order in the County Court. In summary, the relevant facts are as follows. On 23 July 2005, as a result of a police investigation into drug trafficking and cultivation in the Geelong region, police executed a search warrant at premises situated at 620 Ballan Road, Moorabool. That address is the address of the property, the subject of this proceeding.

4 As a result of the execution of the search warrant, police located 12 immature cannabis plants each of which was approximately half a metre in height, growing under lights in a shed on the property. Furthermore, 10.68 kilograms of cannabis heads in weatherproof plastic drums were located upon the property. The respondent was arrested that day and interviewed by police in relation to the matters. He made full admissions to the cultivation and possession of the cannabis plants and cannabis heads.

5 On 20 September 2005 an application made by the applicant under s 16 of the Act came on before His Honour Judge Robertson in the County Court. That day his Honour made a restraining order in respect of the property. The prosecution of the respondent came on before a Magistrate at the Magistrate's Court at Geelong on 17 November 2005. The respondent pleaded guilty to a charge of cultivation of cannabis but entered a "formal plea" of not guilty in relation to charges of possession of cannabis. He conceded that he was in possession of cannabis but contested the fact that he was in possession for any purpose related to trafficking. In the hearing before the Magistrate the prosecution estimated the total value of the cannabis to be $132,000. That estimate was on the basis that the dried cannabis was valued in the sum of $72,000 and the live cannabis plants (presumably based on their estimated value as mature plants) were valued in the sum of $60,000.

6 The Magistrate was not satisfied that the respondent had proved on the balance of probabilities that the cannabis was not possessed for purposes related to trafficking and accordingly the respondent was convicted of one charge of possession of cannabis contrary to s 73(1) of the Drugs, Poisons and Controlled Substances Act 1981, one charge of cultivation of cannabis contrary to s 72(b) of the Drugs, Poisons and Controlled Substances Act and one charge of using cannabis. On the charge of possession of cannabis he was sentenced to the term of imprisonment of nine months and fined the sum of $25,000. On the charge of cultivation of a narcotic plant he was sentenced to two months imprisonment and fined the sum of $1,500. Each of these offences is a Schedule 1 offence under the Act. On the charge of using cannabis he was fined $500. The imprisonment terms were ordered to be served concurrently and the sentence of nine months was wholly suspended under s 27 of the Sentencing Act 1991 for an operational period of two years. He was ordered to pay the fines by monthly instalments of $800.

7 The question of the value of the cannabis is somewhat vexed. As stated above, the Magistrate was informed that the total street value of the cannabis was $132,000. The affidavit of Detective Senior Constable Wiseman which was relied upon by the applicant to obtain a restraining order under s 16 of the Confiscation Act on 20 September 2005 stated that investigators estimated the 'approximate street value for the dried cannabis to be $72,000 and the cannabis plants to each have a potential street value of $5,000 each'. The total value of the cannabis seized was accordingly again estimated to be $132,000. However, included in the material before me in support of this application was an affidavit sworn by Detective Sergeant Sandra Dorman of the Major Drug Investigation Division of Victoria Police on 12 July 2006. She conducted calculations of the street value of cannabis sold as either pounds, ounces or grams of weight. The street value of the cannabis if sold per pound of weight ranged between $66,250 and $102,100. She deposed the value of the cannabis, if sold as ounces, to range between $102,000 and $190,350. If sold as grams, the street value was said to range between $241,400 and $362,100. No explanation was provided to me as to why it was that the estimates of value put before the Magistrate, and before his Honour Judge Robertson, varied so significantly from the estimates placed before me upon this application. I assume that the estimates placed before the Magistrate were based generally upon the street value of the cannabis if sold by the ounce. The higher values placed before me assume a street value based on sales by the gram. It is most unsatisfactory that the evidence put before the court on a trial or a plea should vary so significantly from that put before a later court on an application for forfeiture. Although the quantity of the drug in question is the most significant matter, evidence as to the value of drugs in question do relate to the issues of culpability and gravity of the offence. In the circumstances before me the range of values is so substantial that it appears to me to be generally appropriate to place such weight as is proper upon the value relied upon by the applicant in the prosecution of the respondent, and upon the application made before Judge Robertson for a restraining order under s 16 of the Act, that is $132,000.

8 On 26 June 2006 the respondent swore an affidavit which has been produced before me. He is 43 years of age. He is a boilermaker/pipe welder by trade, employed by an engineering company in Geelong and earns between $70,000 and $80,000 per annum. The property was purchased by his parents in 1983. In 1984 a two-bedroom, fibro-cement house was erected on the site. The family lived in those premises and resided there continuously until a second larger home was completed on the site in 1995. The respondent's father, with assistance from the family, conducted a market garden upon the property until his death in 1993. Shortly prior to his death, the respondent's father was diagnosed with a terminal cancer and he transferred his 50 per cent interest in the property to the respondent. From that point onwards the property has been held in equal shares between the respondent and his mother as tenants in common. The respondent has lived at the property continuously since 1983 except for short-term periods of employment interstate. The respondent resides at the property with his wife and two children who are aged three years and two years, respectively. In addition, his 17 year old stepson, his brother Peter and his mother reside at the property.

9 It should be observed that when the matter first came on for hearing on 17 April 2007 there was no evidence before the Court of any hardship which might be suffered by the mother of the respondent, the tenant in common of the respondent, if the Forfeiture Order were to be made. I permitted the proceeding to be adjourned so as to enable her, if she wished, to swear and file an affidavit in the proceeding. I shall return to that matter later.

10 The Director submits that the volume of cannabis, the subject of the offence, is a relevant matter. As stated above and at the prosecution of the respondent in the Magistrates' Court the police summary read to the court put a value of $72,000 on the dried cannabis and a potential total value of $60,000 on the live cannabis plants making an estimated total value of $132,000. It is argued that that figure was not disputed in the course of the hearing before the Magistrate. The Director contends that the fact that the plants had not reached maturity at the time of discovery by police is irrelevant. In this regard, the Director relies upon The Queen v Peter John Spaull and David John Rush[1] where the Court held that the criminality of the conduct of the accused could be gauged by what the accused set out to achieve and not by reference to what the accused had in fact achieved.

11 The Director does not seek the forfeiture of the entirety of the property notwithstanding that he submits the whole of the property is tainted property. The Director seeks an order with respect to the respondent's half interest in the property which, based upon the value of the equity in the property as stated by the respondent to exist, is approximately $165,000. It is contended by the Director relying, as I have said above, upon evidence other than that put before the Magistrate, that the potential street value of the cannabis exceeds the value of the property.

12 Furthermore, it is argued on behalf of the Director that there is little evidence of relevant hardship. It is submitted that an order of forfeiture would not be disproportionate to the offending of the respondent. It is argued that there is little evidence of great hardship and in particular it is submitted that there is no suggestion that the respondent would be rendered homeless by the forfeiture of the property. The respondent, it is submitted, has a relatively high income and could afford alternative accommodation for himself and his family should an order be made. Furthermore, it is contended that the respondent would be entitled to make application to reacquire his share of the property pursuant to ss 56 and 57 of the Act.

13 The respondent contends that in the circumstances of this case the forfeiture order would create hardship for him and his family. First, it is submitted that an order of forfeiture is grossly disproportionate to the nature of the offence. It is submitted that the respondent was convicted of cultivating 12 cannabis plants and of possessing a further 10.68 kilograms of cannabis which amount is well below that which would result in a commercial cultivation charge. It is submitted that the level of culpability is reflected by the fact that the prosecution chose to deal with the matter summarily in the Magistrates' Court and, furthermore, that the charge did not result in the imposition of a term of imprisonment to be served immediately. The respondent relies upon the fact that he made full admissions upon his apprehension by police, and in effect pleaded guilty at his earliest opportunity and has no relevant prior convictions and no subsequent convictions or matters pending. It is argued that he has not profited from his offences and the property is his only place of residence. Furthermore, it is submitted that the respondent's family will suffer considerable emotional and financial hardship should the order be made, they being entirely innocent third parties. In this regard he relies upon the evidence of his mother in particular.

14 On 19 April 2007 the mother of the respondent, Maria Gyurcsik, swore an affidavit which was filed subsequently. She deposed to the following matters: She is aged 64 years of age and suffers from diabetes. She confirmed that she and her late husband purchased the property in 1983 and that subsequently they built a two bedroom weatherboard house on the property, before building another house in 1989 and in which she continues to reside. After moving into the property her husband established a market garden on the property. He continued his occupation as a market gardener until he was diagnosed with cancer in 1993. She then ceased her employment as a nursing home employee in order to care for her husband. She confirmed that shortly prior to his death in 1994, her husband transferred his interest in the property to the respondent. Mrs Gyurcsik did not resume employment after the death of her husband. Her only source of income is the age pension. A mortgage of $27,000 remains on the property. This mortgage is repaid fortnightly in the sum of $280. The most recent council rate notice values the property in the sum of $360,000. She has no investments or superannuation, her major asset being her share of the property. She owns a Mitsubishi motor car valued at approximately $3,000 and has little more than $50 in two bank accounts. She states that she is 'deeply concerned' and upset at the prospect of the property being sold. She expresses the hope that she will continue to live in the property for the rest of her life. She expresses the concern that if the property is to be sold, her share of the proceeds would be insufficient to purchase a property to 'replicate' her present circumstances.

15 As stated above, the Director seeks an order pursuant to s 33(1) of the Act that the 50 per cent interest of the respondent in the property be forfeited to the Minister. Relevantly s 33(5) of the Act provides that in considering whether to exercise its discretion under s 33(1) the court may have regard to the use that is ordinarily made, or is intended to be made of the property, and to any hardship that may reasonably be likely to be caused to any person by the order.

16 There is no dispute that the ordinary use of the property is as a residence for the respondent, his wife and two children, a stepson and his brother and his mother. The question of whether or not hardship exists, relates therefore to the respondent and others of his family and in particular to his mother.

17 The authorities establish that 'more than ordinary hardship' is required to be demonstrated in order for relief under s 33(1) of the Act. In R v Lake Kirby P said:[2]

In considering hardship, it is necessary to bear in mind that, of necessity, in achieving its objects, the Act will cause a measure of hardship in the deprivation of property. Indeed that is its intention. It is not that kind of hardship, therefore, that can give rise to the relief under s.5(1)(b)(ii). The provision for relief on that ground must not be so interpreted as to frustrate the achieving of the purpose of Parliament in enacting the exceptional provisions of the Act. Something more than ordinary hardship in the operation of the Act is therefore meant.

18 As Debelle J said in Taylor v Attorney-General:[3]

The fact that hardship will occur is not a factor which, standing alone, will militate against an order of forfeiture. It is necessary to bear in mind that it is the intention of the Act that the forfeiture of property will cause a measure of hardship.

19 In R v Winand[4] the Court of Criminal Appeal gave consideration to the test to be applied in resolving the question as to whether a forfeiture order should or should not be made. The Court said that the matters which are to be regarded as relevant to a judicial determination of an application for forfeiture include the following:

[t]he value of the subject property, the nature and gravity of the offence, the use made of the property, the degree of the offender's involvement, the offender's antecedents, the value of any other property confiscated and the penalty imposed, the nature of the offender's interest in the property, the value of the drugs involved or the size of the crop, whether the property was acquired with the proceeds of the sale of drugs, the utility of the property to the offender, the length of ownership of the property, the extent to which the property was connected with the commission of the offence, the fact that forfeiture is intended as a deterrent, the interest of innocent parties in the property and the extent (if any) to which the retention of the property might bear on the offender's rehabilitation.

It is clear that what must also be borne in mind is the question of proportionality, that it to say, would forfeiture of the property be sufficiently proportionate to the nature and gravity of the offence having regard also to the sentence imposed on the offender. These latter considerations are, we think, critical in the present case. The final question which the judge must ask is, having regard to the foregoing matters which are relevant on the particular facts of the case, would it be fair or cause unacceptable hardship to order forfeiture?

20 Applying the principles as set out in Winand, I conclude as follows. Accepting that the valuation of the property by the rating authority is correct, the value of the equity of the respondent is approximately $165,000. Whilst it is true that estimates of value of drugs can be approximate only, the value of the respondent's interest in the property exceeds the total estimated value of the cannabis plants put before the Magistrate at $132,000 although not by a great deal. The property was not acquired with the proceeds of the sale of drugs but is a family asset, having been owned by the respondent's parents for many years prior to the death of the respondent's father and the transfer of half of the ownership to him. True it is that the property is intimately connected with the commission of the offence, it having been used by the respondent as the place of propagation of the narcotic plants. However, there is no reason to believe that the respondent's mother in particular, had any knowledge whatsoever of the criminal activities conducted by him at the property. Although the offence committed by the respondent is serious, and no doubt forfeiture would serve its purpose as both a specific and general deterrent, the offence under consideration is not in any way the most grave such offence. This is demonstrated by the fact that the respondent was dealt with in the Magistrates' Court and received a sentence which did not require his immediate incarceration. It should be observed that in handing down sentence, the Magistrate stated that the respondent had no prior convictions of any relevance to the matter then before him. The offence before the Court was that of possession of cannabis, under s 73(1) of the Drugs Poisons and Controlled Substances Act 2004. The monetary penalty imposed upon the respondent of a $21,600 fine is not without consequence in the consideration of proportionality.

21 I am satisfied that notwithstanding the fact that the Director seeks the forfeiture of the share in the property owned by the respondent, hardship will nevertheless be caused to the respondent's widowed mother who is a pensioner and whose only asset of any significant value is her share in the property. She will have the very real uncertainty of half of the property being held in the name of the Minister. She will have no guarantee as to what will take place over the long term. There is no reason to think that the property is necessarily protected from sale. S 41 of the Act provides that every interest in land the subject of a forfeiture order is to be vested in the Minister. S 44 provides that the Minister must as soon as practicable after the property vests in him, sell or otherwise dispose of the property. The sale or disposal of the property to a third party by the Minister may well result in an application being made for the sale and division under Part IV of the Property law Act 1958. Furthermore, there is the question of the continued payment of the mortgage in the event that half of the property is forfeited. It must be presumed that the respondent is making payment of most, if not all, of the mortgage payments at this time. It may be that he will not do so in the event that he has no interest in the property. The Director submits that these difficulties would be resolved if the respondent exercised his right to make application to the Minister to buy back his interest in the property pursuant to s 56 of the Act. However the decision of the Minister under that section is entirely discretionary and not liable to be challenged, appealed against, reviewed, quashed or called into question in any court or tribunal. The ability of the respondent to make such an offer to the Minister and to finance such repurchase of his interest without recourse to the value of the asset owned by his mother is entirely speculative.

22 In all the circumstances I am satisfied that if the respondent's property is forfeited to the Minister the fact of such forfeiture will cause hardship to his mother in particular, and as likely as not to his wife and children and other occupants of the property. The question is whether or not, having regard to the particular circumstances of the case, it would be fair, or would cause unacceptable hardship if forfeiture was ordered. The question in my view is in fine balance. The quantity and the potential street value of the cannabis was substantial. The property was used to cultivate cannabis. The respondent earns an income which is sufficiently substantial to enable him to provide alternative accommodation for his wife and children even if such accommodation was to be rented. The possession of the cannabis was held to be for purposes of trafficking. Taking into account the need for deterrence, were it the case that the respondent was the sole occupant and proprietor of the property there would be much to be said in favour of the case advanced by the applicant. However, the matters in the balance in particular are, that an innocent victim, his widowed pensioner mother, would in my view suffer hardship, even if that hardship consisted of the uncertainty of whether or not the Minister would permit the purchase back of the respondent's entitlement by him. Of course the risk of hardship being higher than that is obvious. It may be that the property would require to be sold. It is a property which was purchased by her and her husband nearly a quarter of a century ago. It has been her intention to reside in the property for the rest of her life. Her living circumstances are such that her two sons live with her and provide practical and emotional support. She is diabetic and I accept that having her family live with her in the property in question at this stage of her life is a matter of great significance to her. The risk of the property having to be sold as a result of a forfeiture order is of considerable significance in her case.

23 My conclusion that serious though the offence is, it is not so serious as to warrant the gravity of the consequences of the forfeiture sought, I conclude that in the proper exercise of my discretion an order for forfeiture should not be made. The application is dismissed. As I understand the position, both parties accept that s 133A of the Act precludes any order for costs. This appears to me to be correct. However, in the course of the hearing I stated that I would reserve liberty to apply in the event that either party wished to make submissions to me on the matter.

Poisons and Controlled Substances Act 1981

Drugs Poisons and Controlled Substances Act 2004

At a glance

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Judgment (37 paragraphs)

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Legislation Cited (2)