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Supreme Court of Western Australia |
Last Updated: 12 September 2014
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION : KITIS -v- THE STATE OF WESTERN AUSTRALIA [2014] WASC 318
CORAM : JENKINS J
HEARD : 26 AUGUST 2014
DELIVERED : 26 AUGUST 2014
PUBLISHED : 12 SEPTEMBER 2014
FILE NO/S : CPCA 42 of 2010
BETWEEN : CRAIG STEPHEN KITIS
First Plaintiff
GEORGE KITIS
Second Plaintiff
HELEN KITIS
Third Plaintiff
MARK VICK KITIS
Fourth Plaintiff
AND
THE STATE OF WESTERN AUSTRALIA
Defendant
Catchwords:
Criminal law - Criminal property confiscation - Declaration of confiscation of part of the property of a declared drug trafficker - All of declared drug trafficker's property statutorily confiscated - State's conduct of application falling short of standard expected from a model litigant - Need to ensure that application and submissions are consistent with the facts and orders sought - Cancellation of freezing notices if declaration of confiscation not sought
Legislation:
Criminal
Property Confiscation Act 2000 (WA),
s 7, s 8, s 9, s 30, s 34, s 36,
s 79
Misuse
of Drugs Act 1981 
(WA), s 32A(1)
Result:
Orders in terms of amended application
Category: B
Representation:
Counsel:
First Plaintiff : Mr C E Chenu
Second Plaintiff : Mr C E Chenu
Third Plaintiff : Mr C E Chenu
Fourth Plaintiff : Mr C E Chenu
Defendant : Mr I S Jones
Solicitors:
First Plaintiff : Bennett + Co
Second Plaintiff : Bennett + Co
Third Plaintiff : Bennett + Co
Fourth Plaintiff : Bennett + Co
Defendant : Director of Public Prosecutions (WA)
Case(s) referred to in judgment(s):
(This judgment was delivered extemporaneously on 26 August 2014 and has been edited from the transcript).
1 This is my decision in respect of the defendant's, the State of Western Australia's, summons dated 14 September 2012 for various orders and declarations. Paragraph 1 has been amended and paragraphs 2 to 4 have been deleted and substituted. The State now seeks orders and declarations that:
(1) the fourth plaintiff's objection to the confiscation of frozen property made by originating summons, and notice of objection dated 30 March 2010, be dismissed;
(2) the following property owned, or effectively controlled,
by Mark Vick Kitis (Kitis) at the time he was declared to be a drug
trafficker
under s 32A(1) of the Misuse
of Drugs Act 1981 (WA) (the MDA) on 21 December 2011, has been
confiscated to the State of Western Australia, namely:
(a) a 2007 Harley Davidson motorcycle registered number ASIS VIN/chassis number 5HD1JL5138YO13964, engine number JL58013964 (the vehicle); and
(b) cash in the sum of $8,000, together with interest thereon;
(3) within seven days of being requested by the DPP, or his agent, to do so, Kitis deliver up, or cause to be delivered up, the vehicle to such place as is nominated by the DPP, or his agent; and
(4) such other orders as the court thinks fit (the amended application).
2 In respect of par 1 of the summons, on 21 May 2014 I signed orders that the first to third plaintiffs' objections to the confiscation of frozen property by a notice of originating summons, and notice of objection dated 30 March 2010, be dismissed. That is why the objection of Kitis is the only remaining objection.
3 Mr Chenu, who appears today for the plaintiffs, neither consents to, nor objects to, the orders sought by the State.
4 This matter has a long history for a matter of this type. It is unnecessary for me to detail everything that has occurred in it. That is, because some of the issues which have previously arisen are no longer relevant because of the amendments which the State has made to its original application.
5 However, in order to understand the delay in determining the matter, and so that parties in the future will understand the necessity of scrutinising orders sought, and considering their effect having regard to the terms of the Criminal Property Confiscation Act 2000 (WA) (the CPCA), I will refer to some of the issues which have arisen in the course of the application.
6 The amended application is made on the basis that Kitis's items of property in (2), being, the vehicle and the $8,000 cash, were confiscated under the CPCA s 8, upon Kitis being declared a drug trafficker pursuant to the MDA s 32A(1), on 21 December 2011, as a result of being convicted of confiscation offences committed after the commencement of the CPCA.
7 Initially the State's application sought orders that all Kitis's property which he owned or controlled at the time he was declared a drug trafficker, and all property he had given away at any time before the drug trafficker declaration was made, had been confiscated (the general declaration of confiscation). In addition to the property named in the amended application, the summons, as originally filed, identified other specific items of property as being included in the declaration. These were:
(a) Kitis's quarter interest as a tenant in common in the land at lot 164 on plan 9130 in certificate of title volume 166, folio 56A, commonly known as 25 Glenwood Way, Balcatta (the Balcatta land);
(b) Kitis's one third interest as tenant in common in the land at lot 99 on plan 12372 in certificate of title volume 1504, folio 307, commonly known as 16 Hargrave Street, Stirling (the Stirling land);
(c) cash in the sum of $8,000, together with interest thereon;
(d) cash in the sum of $10,000, together with interest thereon; and
(e) moneys standing to the credit of Kitis in Bank of Western Australia account xxxxxxxxxx3473 (account no 3473).
8 The application, as originally filed, only sought to exclude Kitis's two home loan accounts from the general declaration of confiscation. It is not in dispute that these accounts are loan accounts, and so there is not, and never has been, any money standing to Kitis's credit in those accounts.
9 The application was, and still is, supported by the affidavit of Marie Claire Normoyle, sworn 5 September 2012. That affidavit proves that on 26 February 2010, pursuant to the CPCA s 34(3), freezing notice WAPFN100030 (FN30) was issued on the basis that Kitis was a potential drug trafficker and had been charged with an offence. FN30 froze all Kitis's property, including all of the Balcatta and Stirling land, the vehicle and any moneys standing to Kitis's credit in the two home loan accounts.
10 On 3 March 2010 WAPFN100036 (FN36), pursuant to the CPCA s 34(2) and (3), was issued, both on the drug trafficker basis, and also on the basis that there were reasonable grounds for suspecting that the property in the schedule to FN36 was crime used or crime derived.
11 The property named in FN36 was the two sums of cash, being $8,000 and $10,000 respectively, and the moneys in account no 3473, being estimated at $6,623.89.
12 On 4 March 2010 WAPFN100040 (FN40), pursuant to the CPCA s 34(3), was issued on the drug trafficker basis. The property named in FN40 was all the property identified in the previous two freezing notices.
13 The freezing notices were filed in this court, as required by the CPCA. FN30 was filed on 3 March 2010 against Kitis, 5 March 2010 against the Bank of Western Australia, and 12 March 2010 against the other plaintiffs.
14 FN36 was filed on 5 March 2010 against each of Kitis and the bank, and 12 March 2010 against each of the other plaintiffs. FN40 was filed on 5 March 2010 against Kitis, and 12 March 2010 against each of the bank and the other plaintiffs. By the time of the filing of the freezing notices they had been served on all of those parties, including Kitis, the Bank of Western Australia, and the first to third plaintiffs.
15 The plaintiffs filed statutory declarations naming each other as persons who may be interested parties in the frozen property. The bank filed a statutory declaration naming Kitis as an interested party in the bank accounts. Kitis's statutory declaration named no other person as having an interest in the $8,000 or the vehicle.
16 I am satisfied that the freezing notices were served on the persons from whom the frozen property was taken, the persons who had custody of the frozen property, and all persons whom the State was aware are, or may be, or claim to be, an interested party.
17 On 12 March 2010 Kitis filed an originating summons and notice of objection pursuant to the CPCA s 79. On 26 May 2010 this objection was dismissed. On 30 March 2010 all the plaintiffs filed an originating summons pursuant to the CPCA s 79. This was an objection to confiscation.
18 The CPCA s 7(1) provides that frozen property is confiscated to the State if an objection to confiscation is not filed on or before the 28th day after the service cutoff date for the property. Section 7(3) says that the property frozen under a freezing notice is not confiscated under subsections (1) or (2) until the freezing notice is filed in accordance with s 36(6)(a). However, the State does not rely on s 7, rather it relies on the CPCA s 8, which states:
When a person is declared to be a drug trafficker under
(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.
19 On 21 December
2011 Scott DCJ sentenced Kitis, after his pleas of guilty to two charges or
two offences, being, first, attempting
to possess a prohibited drug, namely,
methylamphetamine, with intent to sell or supply it to another, and, secondly,
possession of
a prohibited drug, namely, methylamphetamine, with intent to sell
or supply it to another. He was sentenced to a total of 12 years'
imprisonment. Kitis was also declared a drug trafficker pursuant to the MDA
s 32A(1).
20 The affidavit of Ms Normoyle attaches a copy of a certificate issued by the Department of Transport in respect of the vehicle. It records Kitis as being the registered owner of that vehicle. Ms Normoyle's affidavit also asserts that cash in the sum of $8,000 was seized from Kitis on 25 February 2010.
21 The plaintiffs filed some affidavits in support of their objections. That was where the matter stood for some time. It was intended, it seems, by the parties, that a hearing would take place in respect of the plaintiffs' objections.
22 However, on 4 February 2013 the plaintiffs and the State consented to orders that they attend mediation. At mediation the parties agreed to resolve the matter without trial. The exact details of the agreed resolution are not before me. After mediation the State filed a memorandum of consent orders whereby the State and the first to third plaintiffs consented to their objections to the confiscation of the frozen property being dismissed. The State also filed a minute of orders dated 30 July 2013 containing proposed orders that:
(1) Kitis's objection made by originating summons be dismissed;
(2) A general declaration of confiscation of Kitis's property including:
(a) the vehicle;
(b) cash in the sum of $8,000, together with interest thereon; and
(c) money standing to the credit of Kitis in account no 3473;
(3) The following property be excluded from the declaration of confiscation:
(a) Kitis's quarter interest in the Balcatta land;
(b) Kitis's one third interest in the Stirling land;
(c) cash in the sum of $10,000, together with interest thereon; and
(d) Kitis's two home loan accounts.
23 The State also filed written submissions which supported the making of the orders contained in the minute on the basis that Kitis's property had been confiscated when he was declared a drug trafficker. In respect of ownership of the Balcatta and Stirling land, the submissions stated that the first to third plaintiffs had 'purchased Kitis's interest' in the two pieces of land 'from the State and confiscation' of them was no longer sought. No evidence was adduced of this purchase. The submissions also stated that the State accepted that the $10,000 seized from Kitis was the property of the third plaintiff.
24 The matter came on before me for hearing on 25 September 2013. I raised two issues with counsel for the State. The first was that none of the freezing notices appeared to have been cancelled. This was an issue because not all the property specified in the freezing notices had been confiscated. The second was that I found it difficult to understand how the State could have sold Kitis's interest in the Balcatta and Stirling land without Kitis's consent if the land was not, as it was not, registered in the State's name.
25 As to the first issue, counsel for the State conceded that the freezing notices ought to be cancelled in respect of property which was not going to be the subject of a declaration of confiscation. He undertook to file cancellation notices if I proceeded to make the orders that day. I declined to do that as my understanding was that if I made the general declaration of confiscation of Kitis's property it would then be too late for the State to cancel the freezing notices or property in them. After further discussion it was agreed that the State would consider its position and, after it had done so, the matter may be able to be resolved by consent orders. I adjourned the application sine die.
26 Apparently, the State did nothing until it applied to relist the matter this year. Unfortunately for the State, the matter was relisted before me on 20 May 2014. On that date the State handed up a new minute of proposed orders which was identical to the minute of 30 July 2013. I had not had time, prior to the hearing, to refresh my memory of the earlier hearing. The State made no attempt to update me on what it had done since the last hearing. In fact, it does not seem that it had addressed either of the issues which I had raised at the earlier hearing. It simply referred me to the application, affidavit of Ms Normoyle, and its submissions of July 2013. I declined to make orders at that time and reserved my decision.
27 There was a failure on behalf of the State, which is supposed to be a model litigant, to address the concerns which I had raised at the hearing of 25 September 2013 and which counsel for the State had undertaken to examine. Further, it was deplorable that the State relisted the matter and simply asked me to make the same orders on the basis of the same material which I had expressed concerns about. I cannot help but think that the State hoped that the matter would be listed before a different judge who would not be cognisant of the outstanding issues and would make the orders as sought without question.
28 On reviewing the file in chambers it became apparent to me that my concerns remained and had not been answered. On 2 July 2014, I had my associate send an email to the parties in the following terms:
Her Honour has now had an opportunity to consider her decision in this matter and has asked me to advise you that she is not able to make her decision until:
(a) On 25 September 2013, Mr Seaman advised her Honour from the bar table that certain real estate transactions had occurred pursuant to an agreement entered into between the defendant and the firstthird plaintiffs. Those transactions are also referred to in paragraphs 16 and 17 of the defendant's amended submissions dated 31 July 2013. However, there does not appear to be any evidence of those transactions. Further, it was clear from Mr Seaman's oral submissions that the nature of the transactions may not have been as they are described in paragraphs 16 and 17 of the amended submission. Her Honour wishes these matters to be clarified by evidence.
(b) There is also no evidence to support the defendant's submission that the moveable property specified in [par 3 above] was not owned by [Kitis].
Misuse of Drugs Act 1981 (WA)
s 32A (1). If they have already been confiscated, on the face of it they
could not be excluded from the declaration of confiscation.
Related to this are
her Honour's queries at the hearing on 25 September 2013 as to the
basis on which the State could purport to
'sell' [Kitis's] interests to the
other plaintiffs, without [Kitis's] consent, unless [Kitis's] interest had
already been confiscated
to the State. Again if this was the case, it is
apparently inconsistent to declare that [Kitis's] interest has not been
confiscated.(a) The defendant's amended submissions [20] state that it now accepts that the $10,000 seized from [Kitis] on 25 February 2010 was not owned by [Kitis]. The order sought tends to suggest that the cash was [Kitis's] but that there is no declaration of confiscation made in respect of it.
(a) On 25 September 2013, her Honour raised with Mr Seaman the status of freezing notices which had been issued in respect to the property which is the subject of [par 3 above]. In respect of the real property, the court was told that memorials of the cancellation of freezing notices had been filed with Landgate. Her Honour requires proof of this and also submissions on which subparagraph of the CPCA
(b) In respect of the moveable property referred to in [par 3 above], her Honour requires proof that the freezing notices are no longer in force and also proof that they stopped being in force for some reason other than that the property was confiscated under the CPCA s 8. This is because it seems rather inconsistent for the State to ask for a declaration that property is not confiscated if it was statutorily confiscated.
29 On 29 July 2014 the State filed an affidavit of Michael Seaman sworn 28 July 2014 in which he deposed that at mediation it was agreed by deed that in return for the first to third plaintiffs paying a sum of money to the State, the State would remove the memorials it had placed over the two parcels of land and return the $10,000 in cash to the third plaintiff. Further, it was a term of the deed that the State would not take any further action under the CPCA and that the first to third plaintiffs could plead the deed as a bar in the event of further proceedings. Pursuant to the deed, the police had withdrawn the memorials on the two parcels of land and had arranged for the $10,000 to be returned to the third plaintiff. The police had perused their file but could find no record of cancellation of the freezing notices with respect to the real property or the $10,000.
30 The further written submissions conceded that the State did not sell Kitis's interest in the Balcatta and Stirling land to the other plaintiffs. Rather, the State then submitted that it took payment from them in return for a promise from the State not to take further action to confiscate the land. In respect of the $10,000 the State had decided that it was appropriate that the $10,000 not be referred to in the application as it was not Kitis's property.
31 In respect to other matters which I raised, the State responded in the following terms:
s 38(2)] can only be those described in s 38(5)(f) , that is where the
property is confiscated pursuant to s 8 of the CPCA. As a memorial has
been filed the freezing notice is no longer in force over the real estate. s 8 CPCA and the
making of a declaration of confiscation pursuant to s 30. The State is not
compelled by the CPCA to seek a declaration of confiscation upon that property
becoming confiscated. This is not
the case upon the Court making a declaration
of confiscation where the State is compelled by s 31(1) of the CPCA to
lodge a memorial of confiscation by which, pursuant to s 113(2)(a) CPCA the
Registrar of Titles is to register the
State as proprietor of the property.32 I considered those submissions and had my associate send a response to the parties dated 4 August 2014 which said, in part:
s 8 but that it does not seek a declaration to that
effect. The application currently being heard by the court is that contained in
the State's summons filed 14 September 2012. That summons seeks a
declaration that all of [Kitis's]
property has been confiscated,
including his interest in the real
property.The CPCA s 30(2) states that if the court
finds that the property 'described in the application has been confiscated under
section ... 8, the court
must make a declaration to that effect'. Therefore, it
seems that after hearing the application, as currently worded, her Honour
must make a declaration that [Kitis's] interest in the real property has been
confiscated;
s 8 , the CPCA will continue to affect dealings with the
confiscated property. Pursuant to the CPCA s 9(3) the property remains
subject to the CPCA ss 50 and 51 and Part 7. These provisions appear
to prohibit any dealings with confiscated property and they may invalidate any
such dealings. Unless the
parties can persuade her Honour that this
interpretation is incorrect, this point will need to be made in her reasons for
decision
so that third parties are not misled about the effect of the exclusion
of the confiscated real property from any declaration. As
Mr Chenu pointed
out at the hearing of 20 May 2014, it is important for third parties to
understand what property is or is not affected
by the
CPCA.33 I also raised concerns about the State's response to the issues I had raised with them. That letter provoked a written apology from Mr Seaman which I accept unreservedly.
34 In addition, the
parties filed further material. The State acknowledged the issues concerning
the obligation in the CPCA s 30(2) by seeking leave to amend its
application to its current form. That amendment relieves me of the obligation
to make a general declaration
of confiscation in circumstances where the State
was also seeking orders that items of Kitis's property were specifically
excluded
from the general declaration of confiscation.
35 In respect to the effect of the CPCA on Kitis's interest in the Balcatta and Stirling land, which now is not the subject of the amended application, the State has altered its position yet again. It says that the effect of the agreement between the State and the first to third plaintiffs can be more properly characterised as a sale or disposal by the State of its contingent interest in the land arising from Kitis's declaration as a drug trafficker. The State makes the following submissions:
[The CPCA
Unlike for crimederived property the Act does not make specific provision about when confiscated property ceases to be confiscated property for the purposes of the Act. However, at the least, confiscated property must cease to be confiscated property when it is disposed of by the State.
A declaration of confiscation under
Nevertheless, in relation to registrable real estate, the declaration also has a prospective effect in that it is a necessary precondition for ownership of the land to vest in the State through the operation of
There is nothing in the Act which would suggest that the State cannot dispose of its contingent interest in confiscated registrable real property before that property vests in the State. In my submission, if it does dispose of its contingent interest the registrable real property ceases to be confiscated property from the date of disposal of the State's interest. To hold otherwise would be to raise the possibility of double recovery by the State of the confiscated property.
As has been noted in the plaintiffs' solicitors' submissions the DPP has a discretion as to whether or not to seek a declaration of confiscation under
However, if the Director of Public Prosecutions ('the DPP') brings an application for a declaration of confiscation under
It is submitted that if the State has disposed of its contingent interest in confiscated registrable real property before the land vests in the State then an application under
Arguably s 30 of the Act, insofar as it applies to registrable real property, is to be interpreted as making an application only competent if the subject property remains 'confiscated' ie undisposed of, at the time of the making of the declaration.
However, it is submitted that a better view is that, in such circumstances, the DPP could be prevented from filing a
For present purposes the precise reason that would preclude a
...
Where an application by the DPP for a
Rather it is submitted that by referring back to s 9(1) and thereby to the making of a declaration under
36 The email to the parties dated 4 August 2014 said that I thought I would need to say something about the effect of any orders I made on Kitis's property which was not the subject of a specific declaration of confiscation. That was because the State was then seeking a general declaration of confiscation of all of Kitis's property and an order excluding the Balcatta and Stirling land from the general declaration of confiscation. Now that the State does not seek such an order and the amended application only seeks a declaration of confiscation in respect of specific items of Kitis's property, I am of the opinion that I should not express a final view about the legal status under the CPCA of other items of Kitis's property. That is because their status is simply not an issue in this application. It is sufficient for me to say that I think that there are alternative constructions of the agreement between the parties and of the terms of the CPCA which would have to be considered if the issue of the legal status of Kitis's interest in the Balcatta and Stirling land was squarely before the court.
37 The State has acknowledged that it should cancel the freezing notices in respect of property which is not the subject of the amended application. I, of course, raised this issue with the State last year. At that time it was even more significant because of the general declaration of confiscation then sought by the State. As I said to State's counsel in September 2013, it may be too late to cancel the freezing notices or have them set aside once a general declaration of confiscation had been made.
38 After this regrettably
long history, the State's amended application can now proceed in a
noncontentious manner. However, before
I finalise it, I digress to note that at
earlier hearings Mr Chenu submitted to me that the State's application did
not quell any
controversy between the parties or any third party because it did
not determine what had been confiscated and therefore, as a matter
of principle,
the court should not be asked to make a declaration which served no useful
purpose. Of course, the CPCA s 30 requires the court to make a declaration
of confiscation if the State applies for it and the preconditions are met.
Until or unless
the relevant provisions of the CPCA are held to be invalid, the
court is required to comply with them. However, this case shows
that the making
of a declaration of confiscation in respect of specific items of property can
provide certainty as to the legal status
of those items. What it does not do is
say anything about the status of any other items of property not identified in
the order.
If uncertainty exists in respect of a particular item of property,
it may be necessary for an interested party to bring separate
proceedings to
have the issue resolved. What this case also shows is that the court will not
permit the State to obtain a general
declaration of confiscation which does not
reflect accurately the status of particular items of property which are,
arguably, included
in it. In colloquial terms, the court will not permit the
State to have its cake and eat it too.
39 Turning to the merits of the amended application, the State submits that the property identified in the amended application was owned or effectively controlled by Kitis at the time the drug trafficker declaration was made. In support of that submission is the evidence in Ms Normoyle's affidavit. The State has also pointed out that in the affidavit of Helen Kitis, the third plaintiff, sworn 1 February 2013, she asserts that $3,000 of the $8,000 was saved by herself and the second plaintiff. However, she states that she knew that Kitis had taken it with their consent to use it for his own purposes, although he was going to repay it.
40 Taking the evidence as
a whole, I am satisfied that the vehicle and the cash in the sum of $8,000 were
owned or effectively controlled
by Kitis at the time the drug trafficker
declaration was made against him. Pursuant to the CPCA s 8 they were
confiscated when Kitis was declared a drug trafficker. The CPCA s 30
provides that the Director of Public Prosecutions may apply to the court for a
declaration that property has been confiscated and
if, on considering such an
application the court finds that the property described in the application has
been confiscated under
the Act, s 8 the court must make a declaration to
that effect.
41 Having found that the
property now described in the amended application has been confiscated under the
Act s 8 , I make a declaration to that effect. I also order that Kitis's
objection by originating summons dated 31 March 2010 be dismissed
and that
within seven days of being requested by the DPP or his agent to do so, Kitis
deliver up, or cause to be delivered up, the
vehicle to such place as is
nominated by the DPP or his agent.
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