Harrison v The Commissioner of Police
& The Northern Territory of Australia  NTSC 45
PARTIES: HARRISON, Samantha Mary
THE COMMISSIONER OF POLICE
THE NORTHERN TERRITORY OF AUSTRALIA
TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION: SUPREME COURT OF THE TERRITORY EXERCISING APPELLATE JURISDICTION
FILE NO: LA 2 of 2012 (21133935)
DELIVERED: 25 June 2012
HEARING DATES: 22 May 2012
JUDGMENT OF: MILDREN J
APPEAL FROM: LOCAL COURT
(DR J LOWNDES SM)
CRIMINAL LAW – Forfeiture – ownership – effective control – Criminal Property Forfeiture Act ss 7, 63
PERSONAL PROPERTY – Ownership and Possession – Criminal Property Forfeiture Act – what is effective control – ss 7, 63
APPEAL – Local Court – Jurisdiction and procedure generally – error of law – failure to consider all the facts
Criminal Property Forfeiture Act
Misuse of Drugs Act
Road Traffic Act 1974 (WA)
Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389; Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47, applied
Connell v Lavender (1991) 7 WAR 9; Director of Public Prosecutions for Victoria v Twenty Fourth Trengganu Pty Ltd  VSCA 92; J Walsh Nominees Pty Ltd (1989) 43 A Crim R 266; Logan Park Investments Pty Ltd v Director of Public Prosecutions (1994) 122 FLR 1; followed
Director of Public Prosecutions (Victoria) v Tat Sang Loo & Anor (2002) 130 A Crim R 452; Public Prosecutions v Ferguson  VSC 484; Solicitor-General v Bartlett  1 NZLR 87; Wilson v Lowery (1993) 4 NTLR 79; referred to
Appellant: G Phelps
Respondents: R Murphy
Appellant: Ward Keller Lawyers
Respondents: Solicitor for the Northern Territory
Judgment category classification: A
Number of pages: 19
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
Harrison v The Commissioner of Police
& The Northern Territory of Australia  NTSC 45
SAMANTHA MARY HARRISON
THE COMMISSIONER OF POLICE
THE NORTHERN TERRITORY OF AUSTRALIA
CORAM: MILDREN J
REASONS FOR JUDGMENT
(Delivered 25 June 2012)
 This is an appeal from the Local Court. Pursuant to s 19 of the Local Court Act, an appeal lies to this Court on a question of law only.
 On 11 October 2011, the Commissioner of Police applied to the Local Court for a restraining order against a Mitsubishi Triton Utility registered in Western Australia in the name of Chiz Chizwell, on the ground that there were reasonable grounds for suspecting that the vehicle is crime-used property within the meaning of s 11 of the Criminal Property Forfeiture Act (NT) (the Act).
 The application was apparently made under s 41(1) of the Act. The form of the application does not indicate whether it was intended to be served or not. On 13 October 2011, the matter came before Mr Cavanagh SM. The appellant appeared, but there was no appearance by the other party against whom the order was sought, Mr Chizwell. No affidavit of service was filed. Mr Chizwell at that time was serving a sentence of imprisonment of three years, partially suspended after 18 months, imposed by Southwood J on 19 August 2011. The sentence was imposed in respect of the unlawful supply of a commercial quantity of cannabis. The amount of the cannabis was 7919.16 grams. The cannabis had been concealed in cryovac bags secreted within the rear lining of the vehicle and had been discovered by police at a road block at the intersection of the Stuart Highway and the Tanami Highway on 3 July 2011. The learned Magistrate proceeded to hear the application ex parte on 13 October 2011, and made a restraining order for a period of six months. The order, however, did not comply with section 45(1)(b) of the Act which requires the order to set out the ground or grounds on which the order may be made. No point is taken about this.
 The notice required to be served in accordance with s 47(5), as well as the other documents requiring service under s 47, were served on the appellant and Mr Chizwell as required. Mr Chizwell, who was in prison, did his best to comply with the requirements of s 48 of the Act by writing a letter in which he asserted that the vehicle was owned by the appellant. The appellant lodged an objection pursuant to s 59 of the Act on the grounds that she is the owner of the vehicle, that it was not effectively controlled by Mr Chizwell, and that she is an “innocent party in relation to the property”: see s 63(1)(b) of the Act. Alternatively, an order under s 63(2) of the Act was sought, ie an order that the appellant receive 50 per cent of the proceeds of sale of the vehicle. Subsequently, the objection was amended to plead that the power to restrain and to forfeit crime-used property was beyond the legislative power of the Northern Territory.
 The objection proceedings were heard by Dr Lowndes SM who delivered oral reasons for judgment on 9 March 2012. His Honour dismissed the objection and awarded costs at the rate of 80 per cent of the Supreme Court Scale against the appellant. No order was made under s 63(2), and the reasons do not discuss that topic at all. The matter proceeded solely on affidavit evidence on the single issue of whether or not Mr Chizwell had effective control of the vehicle. Counsel for the respondents conceded that the appellant was an owner of the vehicle and reserved the right to call evidence on the s 63(2) question. It was common ground that if the objector failed to establish on the balance of probabilities that Mr Chizwell did not have effective control of the vehicle, the restraining order could not be set aside.
Grounds of Appeal
 The appellant has appealed against His Honour’s decision on the following grounds:
That the learned Magistrate erred in law:
1. In finding that a vehicle being registered in the name of [Mr Chizwell] was a “trump card” and a “paramount interest” in determining “effective control” under section 63(1)(b)(ii) of the Act;
2. In finding that Western Australian legislation was applicable in determining “effective control” under the Act;
3. In failing to take into account that the Appellant actually held the legal and practical right to dispose of the proceeds, to deal with the ‘sale proceeds’ and/or to use the vehicle as security in determining “effective control” under the Act.
4. In failing to find in the face of unrefuted evidence that the Appellant, by paying the full purchase price of the vehicle, was its one and only legal owner.
5. In awarding costs against the Appellant at 80 percent of the Supreme Court Scale.
A preliminary question
 Counsel for the respondents has submitted that the conclusion that Mr Chizwell was in effective control is a finding of fact and is, therefore, not reviewable on appeal because the inference which the learned Magistrate drew was a secondary fact from the primary facts and is, therefore, itself a finding of fact, citing Wilson v Lowery. However, in Collector of Customs v Agfa-Gevaert Ltd, the High Court said (per Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ):
In this Court, the Collector again submitted that the relevant findings of the Tribunal did not raise any questions of law that could found an appeal under s 44 of the Tribunal Act. Hence, the first issue in the appeal is whether the Full Court was correct in finding that the decision of the Tribunal was vitiated by an error of law.
The distinction between questions of fact and questions of law is a vital distinction in many fields of law. Notwithstanding attempts by many distinguished judges and jurists to formulate tests for finding the line between the two questions, no satisfactory test of universal application has yet been formulated. In Hayes v Federal Commissioner of Taxation, Fullagar J emphasised the distinction between the factum probandum (the ultimate fact in issue) and the facta probantia (the facts adduced to prove or disprove that ultimate fact). His Honour said:
“Where the factum probandum involves a term used in a statute, the question whether the accepted facta probantia establish that factum probandum will generally – so far as I can see, always – be a question of law.”
 As noted above, it was not disputed that the appellant was an owner of the vehicle. The evidence established that from around 1990 to 2002, the appellant was in a relationship with Andrew Donnon. They jointly owned a residential property in Karratha, Western Australia. In 2002, they separated. Mr Donnon paid the appellant $75,000.00 in return for the appellant transferring to him her interest in the house property.
 After the separation, the appellant moved in and lived with a Mr and Mrs Lodge in Karratha, WA. At that time, the appellant and Mrs Lodge were both employed at the Karratha Entertainment Centre for the Shire of Roebourne. At some time in about July 2003, the appellant negotiated the purchase of the vehicle with a Mr Baggetta, who was then employed by Bunbury Mitsubishi, WA. When the vehicle was ready to be collected, the appellant and Mr Chizwell came to the office of Bunbury Mitsubishi on 25 September 2003 and paid for the vehicle by a cheque for $44,800.00. These funds were part of the $75,000.00 paid to the appellant by Mr Donnon. Mr Chizwell contributed nothing to the purchase of the vehicle.
 As from 1 September 2003, Mr Chizwell and the appellant had formed what is described as a ‘family partnership’ under the style of “C. Chizwell & S. M. Harrison”.
 The vehicle was registered in Western Australia in the name of Mr Chizwell only. According to Mr Chizwell, this was because of “advice from our tax advisor”, and he agreed to this “as we sometimes work together in our fitness business and other times I work in other jobs in construction”. Mr Baggetta claimed that it was intended that the vehicle would be used in a business. Because the business did not have an ACN number, he explained that “they had to chose(sic) who’s(sic) name the vehicle was to be registered in” and on being told this, they “chose to register the vehicle in Mr Chizwell’s name”. The appellant has also asserted that, on advice from her accountant, who is not named, the vehicle was registered solely in Mr Chizwell’s name “for tax reasons”. However, it appears that the accountant was a Mr Toovey of Busselton, Western Australia.
 The appellant claimed that, at the time of the purchase of the vehicle, she was working as a personal trainer and Mr Chizwell was working on a gas plant project and had his own 4-wheel drive Ford Utility.
 In 2006, the appellant moved to the Northern Territory and drove the vehicle to Darwin ahead of Mr Chizwell. According to Mr Baggetta, the only modification to the vehicle when it was delivered was a bull bar and a tow bar, but the appellant has asserted that the vehicle was modified specially to suit her work as a personal trainer. Some photographs of the vehicle were produced indicating that the vehicle had roof mountings to fit a kayak on top of it in 2006, and was also used to load bicycles over the rear tailgate. The appellant’s work as a personal trainer includes outdoor activities requiring significant sporting equipment. These activities include camping, kayaking, hiking, swimming, diving, running and mountain biking. The appellant uses the vehicle to access beaches and other outdoor areas to take her clients and equipments to these sites. She says that this is the only vehicle she uses in her business, that she was the predominant user of the vehicle and that, since 2003, she has always determined who uses the vehicle. Both she and Mr Chizwell state that he had always a separate vehicle which he owned and used.
 The evidence is that, on 17 October 2006, the appellant and Mr Chizwell purchased a block of land in joint names at 25 Samuel Road, Howard Springs, comprising three hectares and 8,700 square metres.
 There was also evidence in the form of a statutory declaration from a friend, Ms Carter, who had known the appellant for three years, and had seen her use the vehicle in her business and also to provide food to various animals on the property at Howard Springs, but also only rarely saw Mr Chizwell drive the vehicle. A statutory declaration from a Ms Barlee was also relied upon, in which she stated that she has seen the appellant drive the vehicle to her home and elsewhere for various activities connected with her personal training business. Ms Barlee is one of her regular clients.
 The following documents were not tendered in evidence:
· the partnership agreement of C. Chizwell and S. M. Harrison;
· the accounts of the said partnership; and
· the taxation returns of the partnership or of the appellant, apart from the returns for the year ended 30 June 2004.
 Mr Wall, the respondent’s forensic accountant’s evidence was that “assets can be introduced for use in the business and can be in either partner’s names. The use of such assets introduced into the partnership would usually be determined by a partnership agreement or some other arrangement.”
 The partnership tax return for the year ended 30 June 2004 shows that the vehicle was depreciated as an asset of the partnership. Consistently, the appellant’s personal income tax return does not show that she claimed the vehicle as a deduction. Mr Chizwell’s personal return shows that he claimed a deduction for use of a Toyota Landcruiser in his employment. This return indicates that he was employed by Brambles Industrial Services WA for part of the year and by Transfield Worley Joint Venture for the rest of the year. The partnership tax return does not include a balance sheet and there is nothing to indicate whether or not there were partners’ loan accounts. The total assets and proprietor’s funds are listed as totalling $85,127.00 in each case.
 Also tendered were a number of invoices for servicing and repairs to the vehicle covering a period from 7 April 2004 to 10 June 2011. All of these accounts are in the name of the appellant. The 2004 partnership return indicates that motor vehicle expenses totalling $4,724.00 were claimed as a business expense. The plant and equipment also lists a bus purchased on 1 January 2004 for $53, 641.00 by the partnership. It is not possible to determine from the taxation returns if the appellant paid for the servicing and repairs to the Triton Utility or whether she paid for these herself. There are no tax returns or business records tendered, covering the years after the year ended 30 June 2004.
 At the time of the offence on 3 July 2011, the vehicle was still “registered” in the name of Mr Chizwell in Western Australia. The appellant asserts that she had “no idea” that her Utility was being used by Chizwell for transporting illegal drugs. According to Mr Chizwell, he borrowed the vehicle from the appellant because his own vehicle was unreliable and expensive to run, and he had promised to return it to her by 5 July 2011 as she needed it for her work. The appellant stated in her affidavit sworn 15 November 2011 that “I lent him my Utility because it is more reliable and my work commitments at the time meant that it was not altogether inconvenient. By lending Chiz the Utility to drive to Adelaide, in no way did I intend to cease effectively controlling the Utility. It was simply a loan for a short period.”
 In his record of interview with the police following his arrest, Mr Chizwell told the police that the vehicle was owned by him and his de facto partner, the appellant. For that reason, the Crown did not press for a forfeiture order pursuant to s 43(3) of the Misuse of Drugs Act at the time of sentencing Mr Chizwell.
The reasoning of the learned Magistrate
 As noted earlier, the only issue at that stage of the proceedings was whether or not the appellant could prove on the balance of probabilities that the vehicle was not effectively controlled by Chizwell who made criminal use of the vehicle. The learned Magistrate held that the question had to be decided as at the “time of seizure”. No issue is taken about that part of his Honour’s decision, but in my opinion the correct point of time to consider this question is the time when the property was being crime-used. Nothing turns on this in this case because the vehicle was seized by the police at the time of Chizwell’s arrest.
 After referring to a number of authorities, his Honour appears to have focused on who had the power to dispose of the vehicle, or otherwise deal with it for the purposes of raising a loan, using the vehicle as security. His Honour held that “despite her [the appellant’s] enormous control over the vehicle, her extensive capacity in relation to the vehicle, Mr Chizwell held the trump card at the end of the day because the registration was in his name.” His Honour held that this gave Mr Chizwell “the paramount interest”. Later, in his judgment, his Honour said that ”the most favourable position so far as the objector is concerned is this; that the evidence gives rise to competing hypotheses of equal probability” and, therefore, the appellant had not discharged the burden of proof. The only other finding his Honour made was that he was satisfied that the appellant was an owner of the vehicle but he was not satisfied that the appellant was the sole owner, despite her assertion and the assertion of Mr Chizwell to the contrary, and notwithstanding the fact that none of the deponents who swore affidavits or made statutory declarations were subjected to cross-examination.
 For the purposes of the argument in the Local Court, it was not in contention that the vehicle was ‘crime-used property’ within the meaning of s 11 of the Act. No issue was taken about the validity of the restraining order relating to the vehicle. It is now common ground that the only relevant matter which had to be determined is whether or not the objector could establish that Chizwell did not have effective control of the vehicle. The constitutional point was not argued, and the Court was not asked to make any order under s 63(2) of the Act, that being left to be decided at a later time if the objector was able to establish that Chizwell did not have effective control of the vehicle.
 Section 7 of the Act provides guidance for determining the question of “effective control”, and was in the following terms as at the date of the offence:
Effective control of property
(1) For the purposes of this Act, a person has effective control of property if, although the person does not have the legal estate in the property, the property is directly or indirectly subject to the control of the person or is held for the ultimate benefit of the person.
(2) Without limiting subsection (1), when determining whether a person has effective control of any property, the following matters may be taken into account:
(a) any shareholdings in, debentures over or directorships of any corporation that has a direct or indirect interest in the property;
(b) any trust that has a relationship to the property;
(c) family, domestic and business relationships between persons having an interest –
(i) in the property;
(ii) in a corporation that has a direct or indirect interest in the property; or
(iii) in a trust that has a relationship to the property;
(d) any other relevant matters.
 However, s 7 must be read in the context of the Act read as a whole and, in this respect, s 63(1)(b) and (2) are illuminating:-
Section 63(1)(b) and (2) relevantly provide:
(1) The court that is hearing an objection to the restraint of property on the ground that the property is crime-used may set aside the restraining order if –
(a) [not relevant]
(b) the objector establishes that –
(i) the objector is the owner of the property or is one of two or more owners of the property;
(ii) the property is not effectively controlled by a person who made criminal use of the property;
(iii) the objector is an innocent party in relation to the property; and
(iv) each other owner (if there is more than one) is an innocent party in relation to the property; or
(c) the objector establishes that it is more likely than not that the property is not crime-used.
(2) If the objector fails to establish for the purposes of subsection (1)(b) that each other owner is an innocent party, the court hearing the objection may –
(a) order that, when the property is sold after forfeiture, the objector is to be paid an amount from the proceeds of the sale that is in proportion to the objector’s share of the property; or
(b) set aside the restraining order in relation to the property if it also orders the objector to pay to the Territory the value of the share of the property that the court finds is attributable to the owner or owners who are not established to be innocent parties.
 It is clear that s 63 specifically contemplates the possibility of there may be joint owners, where one of the joint owners is an innocent party, and the joint owner who committed the forfeiture offence and used the property for that purpose did not have “effective control” of the crime-used property, otherwise s 63(2) would have no work to do. It follows from this, that a legal or other interest in the property by a joint owner who used the property for a forfeiture offence is not in itself sufficient to amount to effective control of the property. Logically, it follows that in a situation such as this, the legislature has contemplated that the question of who had effective control of the property focuses on the fact of control, and that the question is whether the joint owner who committed the forfeiture offence had sole effective control of the property to the exclusion of the other joint owner. This is consistent with the reasoning of Seaman J in J Walsh Nominees Pty Ltd, and the Court of Appeal of New South Wales in Logan Park Investments Pty Ltd v Director of Public Prosecutions, (when dealing with the company’s Alexandria properties).
 In Connell v Lavender, Malcolm CJ, with whom Pidgeon and Rowland JJ agreed, discussed what is meant by “effective control” in its ordinary meaning. His Honour said:
In my opinion, the ordinary meaning of “control” is de facto control or control in fact. The question then is: what effect does the adjective “effective” have upon the meaning? Mr Hughes submitted that it necessarily connoted legal control, that is to say control which is exercised by virtue of some legal right or power. This would be de jure control. In my opinion, “effective control” in the context of the statute means de facto control. The expression contemplates control that is practically effective, in the sense that the person concerned has in fact the capacity to control the possession, use, or disposition of the property. This is, in my opinion, the meaning of “effective control” unadorned or unencumbered by the definition in s 3(1) in terms of s 52A of the Act.
 Nevertheless, who had the full legal and beneficial ownership of an asset may be a relevant, but not necessarily a determinative, consideration. In J Walsh Nominees Pty Ltd, the assets were not owned legally or beneficially by the person whom the Court found had effective control over them. Contrast that with Director of Public Prosecutions for Victoria v Twenty Fourth Trengganu Pty Ltd where the vehicle in question was owned by a company. The person who used the vehicle to commit the crime worked for the company but his parents were the sole directors and shareholders. The trial Judge found that, notwithstanding that the son provided the money to pay for the vehicle, his father had the sole right to decide who would use, sell or dispose of the vehicle, and that the son did not have de jure or de facto control over the vehicle. This decision was upheld on appeal to the Court of Appeal.
 Other authorities to which I have been referred adopt similar principles of construction: see Director of Public Prosecutions v Ferguson; Director of Public Prosecutions (Victoria) v Tat Sang Loo & Anor; Solicitor-General v Bartlett.
 The Road Traffic Act 1974 (WA), ss 17(3)(4) and (5) provide:
(3) A vehicle cannot be licensed in the name of more than one person at a particular time.
(4) Any one of two or more owners may apply for the grant or transfer of a licence and the application is to be signed by each of them.
(5) An application under subsection (4) is to be regarded as notice of the nomination of the applicant for the purposes of section 5(4).
 Subsection 5(4) of the Western Australia Act provides:
When a vehicle is owned by more than one person and one of those persons is nominated by all such persons, by notice in writing given to the Director-General, the nominated person shall for the purposes of this Act be deemed to be the owner of the vehicle.
 Counsel for the appellant submitted that, the licensing of the vehicle in the name of Mr Chizwell did not determine who was the true owner of the vehicle. All that it did was to deem Chizwell to be the owner for the purposes of the WA Act. I accept the submission that for the purposes of deciding who in fact was the true owner of the vehicle under Northern Territory law, the fact that the vehicle was licensed under the WA Act is not determinative. The learned Magistrate did not so treat it because his Honour accepted, and the respondent accepted, that the appellant was ‘an owner’ of the vehicle. The relevance of the WA Act, according to his Honour’s reasoning, was that it demonstrated that Chizwell had effective control of the vehicle, because only he could effectively grant a transfer of the licence over the vehicle to a potential buyer, for example. However that may be, I accept the submission of counsel for the appellant that the learned Magistrate was wrong to treat the fact that the vehicle was still licensed in Western Australia as a ‘trump card’. His Honour failed to take into consideration the following facts:
· the vehicle was physically present in the Northern Territory, and could not have been as easily sold with WA licensing as it might have been in Western Australia.
· it was accepted that the appellant was an owner of the vehicle.
· both the appellant and Chizwell accepted that the vehicle was mostly used by the appellant and only occasionally used by Chizwell who owned his own vehicle.
· either the vehicle was wholly owned by the appellant or it was at the very least partnership property, and was used in the partnership business. (The learned Magistrate found that the appellant was not the sole owner of the vehicle. On the evidence, this finding was reasonably open and no error of law has been established in relation thereto. Ground 4 must be dismissed.)
· the appellant had a strong moral, and possibly equitable claim, to the vehicle as she had provided the funds for its purchase, and she used the vehicle except when it was more convenient for Chizwell to use it (as was the case here).
· in the circumstances, it is unlikely that Chizwell would alone decide what to do with the vehicle; whether to sell it, mortgage it, lend it, or use it, without the permission or authority of the appellant, who was not only at least a part owner of the vehicle but also his business partner and his de facto spouse.
· on the evidence, Chizwell did not alone have either de facto or de jure control or ownership of the vehicle.
· there was no evidence that the vehicle had been placed in Chizwell’s name with the intention of disguising who really owned the vehicle.
· the appellant needed the vehicle in her occupation as a personal trainer, and it had been to some extent adapted for their purpose.
 In my opinion, the learned Magistrate should have considered the question of control in the light of all of the evidence, and there was no evidence, other than the fact that the vehicle was licensed solely in his name that Chizwell had sole de facto control over the vehicle.
 The failure of the learned Magistrate to properly consider all of the facts before drawing the ultimate conclusion that it had not been proved that Chizwell did not have effective control of the vehicle is itself an error of law. His Honour’s judgment does not deal with all of the facts, and in fact mentions very few of them. Alternatively, error of law has been established because the ultimate finding was one which could not be reasonably drawn: Wilson v Lowery.
 I would uphold Ground 1 of the appeal. The appeal must be allowed and the order dismissing the objection is set aside. The order that the appellant pay the respondent’s costs in the Local Court is also set aside. I further order that the action be remitted to the Local Court to consider whether or not orders should be made in accordance with s 65(2) and (3) of the Criminal Property Forfeiture Act and to reconsider the question of costs in the light of these reasons. I will hear the parties as to the costs of the appeal to this Court.
 (1993) 4 NTLR 79 at 85.
 (1996) 186 CLR 389 at 394-395.
 Under the Road Traffic Act 1974 (WA) vehicles are “licensed” rather than registered.
 (1989) 43 A Crim R 266 at 279 – 280.
 (1994) 122 FLR 1 at 4.
 (1991) 7 WAR 9 at 22.
  VSCA 92.
  VSC 484 at  to  per Kaye J.
 (2002) 130 A Crim R 452 at 457; par .
  1 NZLR 87 at 95 – 96; par  – .
 (1993) 4 NTLR 79 at 85.