MATTER : Section 7 and s 30 of the Criminal Property Confiscation Act 2000

Criminal law - Confiscation of property - Real property - Freezing notice - Notice of objection - Notice of discontinuance - Whether objection finally determined - Application for declaration that property confiscated

Criminal Property Confiscation Act 2000 (WA), s 7, s 30, s 79, s 82

Misuse of Drugs Act 1981 (WA), s 7(1)(a)

1 ROBERTS-SMITH J: This is an application by the Director of Public Prosecutions for Western Australia by notice of originating motion dated 1 March 2002 for a declaration that certain property has been confiscated under the Criminal Property Confiscation Act 2000 ("the Act"). The notice of originating motion was in the course of these proceedings amended by leave so that the application now is for a declaration that the estate in fee simple in portion of Cockburn Sound Location 16 and being Lot 99 on Plan 11968, delineated and coloured green on the map, being 6 McCann Mews, Rockingham, Certificate of Title Volume 1466 Folio 973 ("the property"), has been automatically confiscated under s 7(2) of the Act.

2 Ms Prentice appears on behalf of the Director who is the applicant on this application. There is no appearance for any other party. The circumstances are these. On 4 May 2001 police obtained a freezing notice number AISFN010014, to which I shall refer as the freezing notice, from a Justice of the Peace pursuant to s 34(2) of the Act in respect of the real estate which I have described, registered in a named individual to whom I shall refer in these reasons, for convenience, as the respondent.

3 The freezing notice was issued on the basis that there were reasonable grounds to suspect that the property was crime-used property. The circumstances of that, according to the affidavit of Jonathan Alfred Grey sworn 6 March 2002 in support of the application, were that as a result of a search by police on the property at Rockingham police located 209 cannabis plants of various sizes in different rooms of the house. The respondent was arrested and charged with cultivating cannabis with intent to sell or supply contrary to s 7(1)(a) of the Misuse of Drugs Act 1981.

4 Police found an extensive hydroponic set-up in all three bedrooms of the house and that was being used to cultivate the cannabis plants. In addition to the plants which were seized, there was also seized a large amount of associated hydroponic equipment. The cannabis plants themselves ranged from 10 to 80 centimetres in height. On 4 May 2001 an officer of the Western Australian Police Service applied to a Justice of the Peace for the freezing notice and that was issued.

"Property is crime used if it was used or intended for use directly or indirectly in or in connection with the commission of a confiscation offence."

Section 141 defines confiscation offence as meaning:

"An offence against a law in force anywhere in Australia that is punishable by imprisonment for 2 years or more, or any other offence prescribed for the purposes of this definition."

6 An offence contrary to s 7(1)(a) of the Misuse of Drugs Act is punishable by imprisonment for up to 25 years and so is therefore a confiscation offence for the purposes of the Act. Freezing notices are issued under s 34 of the Act. By s 36, as soon as practical after a freezing notice is issued, the person who has applied for it must arrange for a copy of it to be served personally on the person from whom the property was taken or any person of whom the applicant is aware has or may have a claim to or in the property.

7 If the property is registrable real property, as it is here, the applicant is required by s 36(2) to lodge a memorial of the issue of the notice with the Registrar of Titles. By s 37 of the Act, once a person is served with a copy of a freezing notice under s 36 that person is required to give a statutory declaration to the police officer in charge of the police station specified in the notice within 7 days. In that statutory declaration the declarant to required to state the name and, if known, the address of any other person of whom the declarant is aware is or may be or claims to be an interested party or, if the declarant is not aware of any such other person, to make a statement to that effect.

8 The respondent made such a statutory declaration in this case to the effect that he was the sole registered proprietor of the property and was unaware of anyone else with an interest in it.

9 Section 79 of the Act provides for the filing of an objection to the confiscation of frozen property. That must be done with 28 days after service of the copy of the freezing notice upon the objector.

10 The procedure to be followed then on the hearing of a notice of objection is that set out in s 82 of the Act which provides for the setting aside of a freezing notice or freezing order upon the demonstration of certain matters set out in the section. The respondent in this case did file a notice of objection, together with a notice or origination motion, on 31 July 2001.

11 No doubt because the notice of objection was filed with the notice of originating motion the proceedings were given a different number, that being CIV 2075 of 2001. The motion sought an order that the freezing notice be deferred pending the hearing of the substantive criminal charge currently pending against the respondent as at that date. The freezing notice was simply in the form that it indicated the applicant objected pursuant to s 79 of the Act to the freezing notice.

12 Procedural orders were made in relation to the notice of objection. The notice of objection and notice of motion were both supported by an affidavit of the respondent sworn 29 January 2002. In that affidavit the respondent deposed that he was 48 years of age and that on 19 November 2001 he appeared in the District Court before Chief Judge Hammond on a indictment charging that on 7 April 2001 at Rockingham he cultivated a quantity of prohibitive plants, namely cannabis, with intent to sell or supply to another. To that offence he had pleaded guilty and subsequently, after submissions were heard, was sentenced to a fine of $10,000.

13 He deposed that the fine was paid, the money being provided through his mother who lives in Queensland. She had also provided the sum of $20,000 out of her own funds as a cash deposit to allow him to be released on bail. The respondent went on in his affidavit to depose that the property is registered in his name and is owned outright by him. There are no encumbrances or other charges upon it. He purchased the property in early 1999 from funds which were the proceeds of the sale of a previous dwelling he owned in Swanview. He had owned that property for 4 or 5 years.

14 He deposed that the property at Rockingham was the sole significant asset he had, apart from a motor vehicle, furniture and a bank account with a balance of less than $100. At the time of swearing his affidavit he was registered with Rockingham Centrelink and was in receipt of Newstart benefit. He deposed that he did at that stage live on his own at the Rockingham house and had a girlfriend with young children who stayed on weekends and on other occasions. He deposed that he did not have any other funds in any other bank account, building society or credit union, nor own any other real estate and that he had no other property of any particular financial value.

15 He has worked mainly as a commercial diver for 15 years, up to approximately 1992 but had to retire from that occupation in that year as a result of a serious shoulder condition caused by diving for prolonged periods at depth, leading to the deterioration of part of the bone in his shoulder. He is unable to obtain a medical clearance to do further commercial diving.

16 He has undertaken linguistics and anthropology studies at the University of Western Australia between 1993 and 1995. The only other job he had done was a massage business operating from home commencing in 1995. He operated as a sole trader but because of his shoulder injury was having difficulty carrying out the work and ceased that in April 2001.

17 He claimed that he would suffer undue hardship if the property were confiscated. He deposed that he has no prospects of obtaining future significant remunerative work in his working life and has no other significant assets. His intention, he deposed, was to use the equity he has in the house to obtain a small business loan to purchase or start a business. He referred to a possible second-hand book business. If he were to lose the house he would be forced into rental accommodation and reduced, he deposed, to a life of poverty.

18 On 18 February 2002 the respondent filed a notice of discontinuance in CIV 2075 of 2001 which stated simply in the usual form that he wholly discontinued the action in that matter.

19 The applicant has also filed an affidavit of Barrie Seldon, a police officer, sworn 9 April 2002 in which the officer deposes to having served the respondent with the relevant documents in this matter on 27 March 2002. He further deposes in paragraph 3 of his affidavit that at the time of service the respondent advised him that he did not wish to appear on the then listed hearing on 28 March 2002 in relation to the matter, that he wanted a reasonable time to vacate the property, approximately 2 weeks, and that he was resiled - I assume the deponent means resigned - to the fact that the land would be confiscated.

20 In the meantime, on 1 March 2002, the applicant had filed the notice of originating motion to which I have referred. On 14 March 2002 that had been adjourned by another Judge of this Court to allow submissions to be made as to whether or not the respondent needed to be served with the s 30 application and whether or not the notice of discontinuance filed by him operated to finally determine his objection. As I have mentioned, the respondent was served with these documents on 27 March.

21 Section 7 of the Act is headed "Automatic Confiscation of Certain Property". It reads as follows:

(1) Frozen property is confiscated if an objection to the confiscation of the property is not filed on or before the 28th day after the service cut-off date for the property.

(2) If an objection to the confiscation of frozen property is filed on or before the 28th day after the service cut-off date for the property, the property is confiscated if

(a) the objection or each objection, if there are more than one, is finally determined;

(b) where the property is subject to a freezing notice, the freezing notice is not cancelled or set aside and (c) where the property is subject to a freezing order, the freezing order is not set aside.

22 There is no definition in the act of the term "finally determined". As counsel for the applicant points out, proceedings on an application under the Act are taken to be civil proceedings for all purposes by virtue of s 102(1). The applicant's submission before me is in substance that the notice of discontinuance filed by the respondent must be taken to have finally determined the objection.

23 As Ms Vernon points out, the general principle in relation to a notice of discontinuance is that it does not preclude the institution of new proceedings. A party who has commenced the litigation may subsequently institute new proceedings to further pursue the claim which was the subject of the discontinued proceedings. She acknowledges that in that sense a notice of discontinuance cannot be said to finally determine a claim. The cause of action which formed the basis of the discontinued proceedings continues to exist and can therefore found new proceedings. As she points out, this is to be contrasted with an action which proceeds to judgment.

24 Not surprisingly the authorities which deal with the effects of a notice of discontinuance do so in the context of proceedings upon a cause of action. In that context the practical effect of a notice of discontinuance is to bring an action to an end and the steps that were taken while it was extant are thereby in effect obliterated, see Fowler v Renmark and Paringa District Hospital Inc (1988) 51 SASR 506 at 508.

25 The applicant does not suggest that as a general proposition leave of the court is required to file a notice of discontinuance, although Ms Prentice has I think suggested, without a great deal of enthusiasm, that in the context of this legislation perhaps there is or should be seen to be a requirement for leave of the court before a notice of discontinuance can be filed. She has also raised the proposition that a notice of discontinuance might be permitted to be withdrawn, which could effectively mean that a court would be making an order that has the effect of reviving a dead action and that would be inappropriate in the context of this legislation.

26 Certainly, again speaking as a general proposition, a court has a discretion whether or not to give leave to allow the withdrawal of a notice of discontinuance and such leave ordinarily would only be given when it would be more likely to allow justice to be done and that the administration of law and justice may well be served by a power to reinstate proceedings: see Fowler v Renmark and Paringa District Hospital (supra)and FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268 at 288 per Gaudron J.

27 However, the applicant submits that proceedings upon an objection under the Act are not in respect of cause of action. Ms Prentice says that in objection proceedings there is no right that the objector is seeking to enforce against the State. It is simply an allegation by the objector that the statutory criteria for the setting aside of a freezing notice or freezing order have been met.

28 As she puts it, for s 7(1) of the Act the relevant question is whether an objection has been filed. If the answer is no, then the frozen property is confiscated. The relevant question for s 7(2), assuming an objection has been filed, is whether the objection has been finally determined and, if so, whether the freezing notice has been set aside or cancelled.

29 I am able to accept the applicant's submissions broadly to this point. From this point, however, the applicant develops the following argument: first it is submitted that the term "finally determined" means that the objection proceedings must be finally concluded or finished. The argument then runs that a notice of discontinuance does terminate the proceedings and so s 7(2) then operates to confiscate the property the subject of the freezing notice.

30 It is submitted that the fact that a court could allow the withdrawal of a notice of discontinuance is of no relevance. Such a withdrawal, it is said, would have the effect of reviving the objection proceedings but by then the property would have been confiscated. To take a contrary view, it is submitted, would lead to an untenable situation.

31 If the view were taken that a notice of discontinuance does not finally determine an objection, it is submitted the effect would be that there would be no confiscation of property, although the freezing notice would continue in force, the confiscation proceedings could never be resolved and the property would remain frozen indefinitely. In short it is put that an objector could defeat the operation of the Act simply by filing an objection and then immediately discontinuing his or her objection, thereby keeping the property in limbo.

32 I am mindful of the fact that I have not had the benefit of submissions contrary to those advanced on behalf of the applicant. Even so, I am of the view that there is an element of unnecessary confusion concerning the effect of a notice of discontinuance in the context of the relevant provisions of the act. It is necessary I think to revert to s 7, the terms of which I have already set out. It can immediately be seen that under subs (2)(a), where an objection notice has been filed within the 28 days, as it was here, the property is confiscated if the objection is finally determined.

33 It must be acknowledged I think that the act is not felicitously drafted. As I have observed, the term "finally determined" is not defined in the glossary to the Act. In ordinary parlance one would think it meant finally decided one way or the other, that is, either finally upheld or finally dismissed. However, read in context, it cannot have those two possible meanings because it could not possibly have been Parliament's intention that the frozen property would be confiscated once an objection to the freezing notice or freezing order was finally determined by a finding that the objection was upheld. The term therefore could here mean only finally determined by dismissal of the objection. Clearly that presently is not what has happened here.

34 For the reasons articulated by the applicant, a notice of dismissal is not a final dismissal of an action or application. Further, given that the objection has been discontinued by the notice, nor is there still extant any objection which this Court could still determine one way or the other, and that at least that would ordinarily be the case in ordinary civil proceedings. It is this apparently which the applicant sees as giving rise to the problem.

35 No assistance is to be found in s 7(1) of the Act. The situation in this case must be that there was no automatic confiscation of the property by virtue of that subsection because an objection was in fact filed within the 28 days. That subsection therefore has no further operation.

36 By s 102 of the Act, as I have mentioned, proceedings under it are civil proceedings. Plainly though that does not necessarily import all aspects of procedure involved in civil proceedings. The content of what is thereby imported must I think be determined by the requirements and necessary implications of the legislative scheme set out in the Act. There is a real question whether a notice of discontinuance is an appropriate procedure here in any event. It is arguably contrary to the legislative intent.

37 I am of the view that the effect of s 7(2) is that where a notice of discontinuance is filed beyond the time prescribed in s 79 for the filing of a notice of objection so that no further such notice could be filed, the Court should order that the objection be dismissed. That would be a final determination of the objection within the meaning of s 7(2)(a). I am prepared to make such an order of dismissal in the circumstances of this case.

38 Notwithstanding that conclusion, I go on to consider more pertinently the effect of a notice of discontinuance in the absence of an order dismissing the objection. The effect of the notice of discontinuance filed here by the respondent is that the proceedings on the objection are discontinued. The effect simply is that the objection must be taken not to have been made.

39 The Director has now made an application under s 30(1) for a declaration that the property has been confiscated. That application is made just short of 12 months after the issue of the freezing notice. The respondent cannot now file any further objection to the confiscation. I see no reason in principle why, following a notice of discontinuance in respect of an objection to confiscate and in the absence of an order of dismissal as I have indicated above, an interested person may not file another effective objection, so long as that was filed within the time limit prescribed by s 7(1) of the Act, but that manifestly cannot be the case here.

40 No effective objection, whether by the respondent nor anyone else, could now be filed against the freezing notice in respect of this property. The 28-day time limit has patently long expired. The position therefore is that the applicant now comes to this court in circumstances in which the property is subject to a freezing notice which has not been cancelled nor set aside. The property is therefore confiscated by the operation of s 7(2) itself. That finding having been made, s 30 affords a court no discretion. It stipulates that a declaration to that effect must be made and I will accordingly make it.