Rizzo & Anor v DPP (Vic) [2009] VSC 525 (18 November 2009)

24th TRENGGANU PTY LTD and VITINA RIZZO	Applicants

And

THE DIRECTOR OF PUBLIC PROSECUTIONS FOR VICTORIA	Respondent

JUDGE:	KAYE J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 November 2009
DATE OF JUDGMENT:	18 November 2009
CASE MAY BE CITED AS:	Rizzo & Anor v Director of Public Prosecutions for Victoria
MEDIUM NEUTRAL CITATION:	[2009] VSC 525

CRIMINAL LAW – Confiscation of property – Application for exclusion orders – Whether applicants had interest in property – Whether defendant in effective control of property – Confiscation Act 1997 (Vic) s 22.

APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr A S Dickenson	Lobb and Kerr Lawyers

For the Respondent	Mr P T Vout	Solicitor for Public Prosecutions

1 These proceedings involve two applications for exclusion orders under the Confiscation Act 1997 (“the Act”). The first application is by 24th Trengganu Pty Ltd (“the company”). That application concerns a Holden utility, registered to the company, which was seized by police from premises, at 49 Linda Avenue, Box Hill North (“the Box Hill North property”), in which the offender, Bartholomew Rizzo, had an interest. The second application is brought by Vitina Rizzo, in which she claims an interest in the Box Hill North property.

2 On 6 June 2007, Bartholomew Rizzo was charged with trafficking a drug of dependence, namely, methylamphetamine, in a quantity that is not less than a commercial quantity applicable to that drug. On 7 June 2007, Osborn J made a restraining order in respect of various properties in which Bartholomew Rizzo has an interest, including the Box Hill North property, and the Holden utility.

3 Subsequently, on 1 August 2008, at a directions hearing, Bartholomew Rizzo pleaded guilty, before King J, to four counts, namely, one count of trafficking a large commercial quantity of methylamphetamine, one count of trafficking a commercial quantity of cocaine, one count of trafficking a commercial quantity of MDMA, and one count of dealing with approximately 4.2 million dollars, knowing it was the proceeds of crime. Those offences were alleged to have occurred between 1 January 2006 and 5 June 2007. Each of the charges related to Schedule 2 offences under the Act.

4 On 3 November 2008, Bartholomew Rizzo was again arraigned before King J, and he again pleaded guilty to each of the four counts on the presentment. The allocotus was administered, and a plea in mitigation of sentence was presented on his behalf. On 9 February 2009, Bartholomew Rizzo was sentenced by King J to a total term of 16 years’ imprisonment, with a minimum non-parole period of 13 years.

5 On 21 October 2008, Bartholomew Rizzo gave notice of an application, under s 20 of the Act, for an exclusion order in respect of each item of property affected by the restraining order. That application was dismissed by me by consent. On 31 October 2008, the company gave notice of intention to apply, under s 20 of the Act, for an order excluding, from the restraining order, the Holden utility. Subsequently, on 9 December 2008, Vitina Rizzo also gave notice that she intended to apply, under ss 20, 49 and 50 of the Act, for an order excluding, from the restraining order, her interest in the Box Hill North property.

6 Initially, the respondent to the applications, the Director of Public Prosecutions, took issue with the time at which each application had been commenced. A question also arose as to whether the applications were made under s 20, or s 51, of the Act. However, in the hearing before me, it was common ground that each application was made in time pursuant to ss 20 and 22 of the Act.

7 It is also common ground that the Box Hill North property and the Holden utility were both “tainted property” under the Act. Accordingly, each application is made under s 22(b)(i) of the Act, which provides as follows:

(A) the applicant was not, in any way, involved in the commission of the Schedule 2 offence; and

(B) where the applicant acquired the interest before the commission, or alleged commission, of the Schedule 2 offence, the applicant did not know that the defendant would use, or intended to use, the property in, or in connection with, the commission of the Schedule 2 offence; and

(C) where the applicant acquired the interest at the time of or after the commission, or alleged commission, of the Schedule 2 offence, the applicant acquired the interest without knowing, and in circumstances such as not to arouse a reasonable suspicion, that the property was tainted property or derived property; and

(D) the applicant’s interest in the property was not subject to the effective control of the defendant on the earlier of the date that the defendant was charged with the Schedule 2 offence or the date that the restraining order was made in relation to the property; and

(E) where the applicant acquired the interest from the defendant, directly or indirectly, that it was acquired for sufficient consideration.”

8 It is convenient to deal, first, with the application by Vitina Rizzo in respect of the Box Hill North property. In support of that application, Ms Rizzo swore an affidavit, and was cross-examined before me.

9 The relevant facts pertaining to the application may be shortly stated. Vitina Rizzo is the grandmother of Bartholomew Rizzo. In 1966, Vitina Rizzo and her husband, Tolo Rizzo, were registered as the proprietors of the Box Hill North property. After her husband’s death, Ms Rizzo became registered as the sole surviving proprietor of the property in 1988. She continued to live at that property, and remarried. After her second husband passed away in mid 2006, Ms Rizzo decided to move into an apartment in a retirement village in Doncaster. In early 2006, Vitina Rizzo had a number of discussions with Bartholomew Rizzo, initially, about renting the property to him. However, Bartholomew wished to purchase the property. Ultimately, Vitina Rizzo agreed to sell the property to him. She obtained a market valuation of the property, and negotiated a “sale” price of $430,000. In her affidavit, Ms Rizzo states that she then “gifted” $180,000, of the purchase price, to Bartholomew Rizzo, and loaned him the balance of the sale price of $250,000.

10 On 27 September 2006, Vitina Rizzo signed a transfer of the property to Bartholomew Rizzo. The consideration stated in the transfer is the sum of $430,000. On the same day, Vitina Rizzo and Bartholomew Rizzo entered into an agreement, prepared by a solicitor, entitled “loan agreement” (“the agreement”). The agreement recited that Bartholomew Rizzo (“the borrower”) was purchasing the property, and that Vitina Rizzo (“the lender”) was agreeable to assist the borrower “in financing the purchase of the said property by lending the borrower monies”. The agreement then provided (by clause 1) that Vitina Rizzo agreed to lend to Bartholomew Rizzo the sum of $250,000, free of interest, to enable him to purchase the property. By clause 2, Bartholomew Rizzo acknowledged receipt of the $250,000 on 1 November 2006. Clause 3 of the agreement specified that the whole of the loan monies would be repaid by the borrower to the lender on or before 30 December 2016. Clause 4 is of particular importance, and provides:

11 As a result, on 25 October 2006, Bartholomew Rizzo became registered as the proprietor of the Box Hill property. A caveat was lodged over the property on behalf of Vitina Rizzo. By that caveat, she claimed “an equitable interest as chargee” in the property.

12 Subsequently, Bartholomew Rizzo made a number of partial repayments of the loan monies to Vitina Rizzo. Those monies were paid by him into a nominated Westpac Bank account, of which Vitina Rizzo had the sole control. The first payment, of $50,000, was made by Bartholomew Rizzo on 6 October 2006. Subsequently, between 23 October 2006 and 14 May 2007, he made eight further payments, totalling $16,856. No further repayments have been made by Bartholomew Rizzo since that date. Accordingly, $185,144 is still outstanding under the loan agreement.

13 Mr Vout, who appeared on behalf of the respondent, submitted that the evidence of the applicant did not entitle her to an exclusion order, on two grounds. First, he submitted that the applicant does not have a relevant interest in the property. Secondly, he submitted that any interest held by the applicant in the property was, at the material time, subject to the effective control of Bartholomew Rizzo.

14 The first question is whether Vitina Rizzo had an equitable interest in the property under the agreement, after she had transferred the property to Bartholomew Rizzo. The applicant relies on clause 4 of the loan agreement, which entitled her to lodge a caveat over the title of the property. As I have stated, pursuant to that clause, Vitina Rizzo lodged a caveat over the property. Although the agreement did not, in terms, provide for any security for repayment of the loan, there is authority for the proposition that a clause, such as clause 4, constitutes an implied grant of an equitable interest in a property, which may be protected by a caveat.[1] Mr Vout did not contend that those authorities do not apply to the agreement in this case. Rather, he submitted that, when properly analysed, the transaction involved was not that recorded in the loan agreement.

15 In particular, Mr Vout relied on the evidence given by Ms Rizzo in cross-examination, namely, that she did not pay the monies, described in the agreement as loan monies, of $250,000, to Bartholomew Rizzo by cash, cheque or otherwise. Mr Vout submitted that therefore there was no advance, which could be the subject of the security interest relied on by Ms Rizzo. Mr Vout submitted that, properly characterised, the transaction was one by which Ms Rizzo had gifted the entire property to Bartholomew Rizzo. He disclaimed submitting that the loan agreement was a “sham agreement”. However, he submitted that the true transaction between Ms Rizzo and Bartholomew Rizzo was not that recorded in the agreement, and that the “real transaction” between the parties did not involve an equitable charge over the property in favour of Vitina Rizzo.

16 In response, Mr A Dickenson, who appeared for each applicant, submitted that it was not necessary for funds, by way of cheque, cash or otherwise, to change hands, in order for the loan, specified in the agreement, to be effective. He acknowledged that it is unusual for a vendor of a property to lend to the purchaser part of the purchase price. However, he submitted that the unusual nature of the arrangement derived from the close relationship between Vitina Rizzo and her grandson, Bartholomew Rizzo. Vitina Rizzo trusted her grandson, and thus was prepared to characterise the outstanding component of the purchase price as a loan by her to Bartholomew.

17 In my view, the submissions made by Mr Dickenson are correct. It is of course trite that a loan may take place, notwithstanding that there is not an actual, physical, exchange of funds. In ordinary commerce, such a transaction may occur by way of book entry. Properly analysed, the transaction in this case comprised an obligation by Bartholomew, as purchaser, to pay Vitina, as vendor, $250,000. By their agreement, the parties agreed to treat the outstanding obligation of Bartholomew to Vitina as a loan. Strictly, the consequence of the structure of the agreement is that simultaneously Vitina Rizzo “advanced” $250,000 to Bartholomew, who thereby discharged his outstanding obligation (as purchaser) to pay the balance of the purchase price to Vitina. As a result, he became constituted as the debtor of Vitina Rizzo under the loan agreement.

18 As I stated, Mr Vout did not submit that the loan agreement itself was a sham transaction. Nor was any such proposition put to Vitina Rizzo in cross-examination. In my view, the above analysis of the transaction constituted Vitina Rizzo the lender of $250,000 to Bartholomew Rizzo. The effect of the authorities, to which I have referred, is that clause 4 of the agreement was effective to constitute an equitable charge, in favour of Vitina Rizzo, over the property, as security for the outstanding debt owed to her by Bartholomew Rizzo.

19 The more substantive submission made by Mr Vout concentrated on subparagraph (D) of s 22(b)(i) of the Act. Mr Vout referred to the evidence, which demonstrates that, after Bartholomew Rizzo took possession of the property in late July 2006, he had effective control of the property, to the exclusion of Vitina Rizzo. He became registered proprietor of the property in October 2006. He apparently resided at the property, and indeed, on the evidence, used it for his illegal purposes. (I interpolate that Vitina Rizzo did not know, nor suspect, that the property was being used for those purposes). It was not in contention that, to all intents and purposes, Bartholomew Rizzo was in sole and exclusive control of the property from the date of the transfer to him by Vitina Rizzo.

20 Mr Vout submitted that s 22(b)(i)(D) should be construed, so that the effective control of a defendant over the property constitutes the effective control by him of any equitable interest in it. Mr Vout submitted that, unless that construction of subparagraph (D) were adopted, it would have no work to do in any case of an applicant asserting rights under an unregistered equitable interest over real estate. In particular, he contended that, as distinct with corporeal property, it is not possible, conceptually, for a defendant to have control over an intangible interest such as an equitable interest. Thus, he submitted, in order to give effect to the requirement in subparagraph (D), it should be construed so that the effective control by a defendant over a property constituted, without more, the effective control by the defendant over any equitable interest in it.

21 Plainly, the construction contended for by Mr Vout is not supported by the plain language of s 22(b)(i)(D), but, rather, would involve a substantial redrafting of it. Such a construction of the subsection would only be justified, should a literal application of the section either render it meaningless, or without any substantive effect. It is, in my view, possible to conceive of a number of different instances, in which a defendant may exercise effective control over an equitable interest in a property, without necessarily controlling the property itself. For example, the holder of the equitable interest may be a legal entity, such as a company, which is controlled, either directly or indirectly, by the defendant. Alternatively, the personal relationship between a defendant, and the person who holds the equitable interest, may be such that, as a matter of practical reality, it is the defendant who has effective control of the equitable interest. As Mr Dickenson correctly pointed out, an example of such a relationship is illustrated in my previous decision in Director of Public Prosecutions v Ferguson[2], where the husband defendant so dominated the financial affairs of his wife as to control her interest in two properties.

22 Furthermore, if the construction, contended for by Mr Vout, were accepted, it would give rise to harsh consequences, which would be unlikely to have been intended by Parliament. For example, if a financial institution were to make a loan to a defendant, in consideration of an unregistered mortgage or charge over the property, according to Mr Vout’s construction, the defendant would have effective control over the interest of the mortgagee, by having effective control over the property himself. Yet, it seems clear that the intent of the provisions relating to exclusion orders, in the Act, were designed to protect the rights and interests of “innocent” parties, such as the hypothetical equitable mortgagee, to whom I have just referred.

23 Thus, in my view, there is no warrant to construe s 22(b)(i)(D) other than according to its ordinary meaning. There is no evidence to support the proposition that Vitina Rizzo’s equitable interest in the property, under the loan agreement, was subject to control, let alone effective control, by Bartholomew Rizzo. In cross-examination, she candidly conceded that, if at the end of the loan period, her grandson did not repay her, she would be loathe to evict him from the house. However, that concession was borne out of a grandmother’s affection for her grandson. Her answer did not reveal, in my view, that Bartholomew Rizzo exercised, or had the capacity to exercise, any effective control over the applicant’s interest in the property under the loan agreement. While, as registered proprietor of the property, he exercised full rights of ownership of it, those rights, and their exercise, did not affect, or impinge on, the control by Vitina Rizzo of her equitable interest in the property as noted in the caveat.

24 Accordingly I am satisfied that the interest of Vitina Rizzo, in the Box Hill North property, was not subject to the effective control of the defendant Bartholomew Rizzo. The respondent has conceded that the requirements of subparagraph (A) and subparagraph (C) of s 22(b)(i) have been established, and that subparagraph (B) and subparagraph (E) are not applicable. It follows that the application by Vitina Rizzo for an exclusion order should succeed. Subject to hearing from counsel as to the precise terminology of the order, I propose to make an order, excluding from the operation of the restraining order made by Osborn J on 7 June 2007, the equitable interest of the applicant in the property at 49 Linda Avenue, Box Hill North to the extent of the debt owed to her by Bartholomew Rizzo in the sum of $185,144.

25 I turn to the application for an exclusion order made by the company in respect of the Holden utility motor vehicle.

26 The affidavit in support of the application by the company was sworn by Vincent Rizzo, who is a director of the company. Vincent Rizzo is the father of Bartholomew Rizzo.

27 The company owns a number of assets, including the family business, which trades under the name “Rizzo’s House of Linen”. At the time of the arrest of Bartholomew Rizzo in June 2007, the business operated at two locations, in East Doncaster and Forest Hill. Bartholomew Rizzo was not a director or officer of the company, but, at the time of his arrest, he had been employed by the business for a substantial period. Some time before his arrest, he had sustained a number of serious injuries from motor vehicle accidents, and was only working part time in the business.

28 In his affidavit, Vincent Rizzo stated that the Holden utility was purchased by the company in May 2006 for the sum of $30,000. The vehicle was duly registered, with VicRoads, in the name of the company. Mr Rizzo states that the vehicle was purchased to assist with the transport of stock between stores and company deliveries as required. Although the company owned another vehicle, which was the principal vehicle used for deliveries and transfer of stock, the Holden utility provided additional capacity for those activities. The vehicle was primarily garaged at the residence of Bartholomew Rizzo in Box Hill. In his affidavit, Mr Vincent Rizzo stated that because Bartholomew was responsible for a number of deliveries and stock transfers, it was more convenient for the vehicle to remain at his residence. However, Mr Rizzo maintained that Bartholomew did not have the power to make and implement decisions about the vehicle, as it was not his vehicle, but was a company asset.

29 In response, the respondent filed affidavits, which established that on 11 May 2006 Bartholomew Rizzo withdrew a bank cheque for $30,000 from his Westpac bank account, and deposited it into the bank account of the company. Those funds were used by the company, four days later, in payment of the purchase price of the Holden utility vehicle. Further investigations undertaken by the respondent demonstrate that the company in fact purchased the vehicle from the sister of a criminal associate of Bartholomew Rizzo. The respondent’s investigations also revealed that the original source of the $30,000, paid by Bartholomew Rizzo to the company, was another criminal associate of Bartholomew Rizzo.

30 Mr Vincent Rizzo was cross-examined in the proceeding before me. In the course of cross-examination, he stated that although Bartholomew was the source of the funds used to purchase the utility, the accountant recorded those funds as a loan by Vincent Rizzo, and his wife Maria, to the company. Mr Rizzo accepted that it was Bartholomew who had identified the vehicle to be purchased. Mr Rizzo stated that the vehicle would be useful in the business for transporting mattresses, which did not fit well into the other vehicle used by the company. Initially, Mr Rizzo was not happy with Bartholomew’s choice of vehicle, but Bartholomew wanted to have the Holden utility, because it was “more younger looking”. Mr Rizzo stated that Bartholomew had had a number of “issues”, and, to indulge his son, he allowed Bartholomew’s choice of vehicle to prevail.

31 Mr Rizzo also stated that he himself did not use the vehicle very often. In addition to Bartholomew, an associate of Bartholomew, John Courtney, also drove the vehicle quite often. Courtney was not an employee of the company. On one occasion, Courtney drove the vehicle to deliver stock on behalf of the company, because Bartholomew was injured.

32 Mr Rizzo also stated that he was not aware, in May 2006, that one of Bartholomew’s criminal associates had deposited the funds, used to purchase the vehicle, into Bartholomew’s account. Mr Rizzo understood that his son was always a keen saver, and he was not surprised that his son had $30,000 available to advance to the company. Mr Rizzo denied that the transaction, involving the loan of the funds to the company, was a sham, to disguise the fact that Bartholomew Rizzo actually owned the vehicle. Mr Rizzo stated that at the time, he did not know that his son was then involved in drug dealing. In re-examination, he explained that Bartholomew had, some time previously, had a previous conviction for drug offences, and that after that conviction, Mr Rizzo and his wife had, for some time, kept Bartholomew under tight control, to ensure that he did not re-offend. However, in hindsight, it appears that Bartholomew deceived his parents, and returned to drug trafficking. In re-examination, Mr Rizzo also stated Bartholomew did not have the authority to sell the vehicle, which was registered in the name of the company, and which could only have been sold if Mr Rizzo agreed. He also stated that the company paid the insurance and annual registration for the vehicle.

33 In opposition to the exclusion order, Mr Vout relied on two principal grounds. First, he submitted that, on a proper analysis of the transaction, Bartholomew Rizzo, and not the company, was the owner of the vehicle. Secondly, he submitted that the vehicle was subject to the effective control of Bartholomew Rizzo.

34 In support of each of those bases, Mr Vout relied on two principal facts. First, he relied on the evidence that, for most of the time, Bartholomew had possession and use of the vehicle. He submitted that possession of the vehicle was a key indication of ownership of it. In support of that proposition, he referred to the principle that possession is prima facie evidence of ownership, and that possession of property confers a “possessory title”, which is good against all persons except the absolute owner.[3] Secondly, Mr Vout relied on the fact that Bartholomew Rizzo had supplied all of the funds required for the purchase price of the utility. Indeed, Mr Vout submitted that the registration of the vehicle in the name of the company was a sham, designed to disguise the fact that Bartholomew Rizzo was the true owner of the vehicle. He contended that that proposition was supported by the fact that the company’s book of accounts recorded Vincent and Maria Rizzo, and not Bartholomew Rizzo, as the sources of the funds used in the purchase of the vehicle.

35 In response, Mr Dickenson, while conceding that there are a number of factors present in this case which indicate either ownership, or effective control, of the vehicle by Bartholomew, submitted that those factors were more than counterbalanced by other factors, which inclined in the opposite direction. First, he relied on the fact that the company is not the alter ego of Bartholomew Rizzo. Secondly, he submitted that the respondent had not challenged the evidence of Vincent Rizzo that Bartholomew did not have the power to sell the vehicle. Further, Bartholomew’s possession and use of the vehicle was subject to the requirements, from time to time, of the company to use the vehicle for business purposes. In this context, he submitted that it is relevant that the vehicle was of a type which was appropriate for use in the business. In addition, the company has paid a number of outgoings in respect of the vehicle, including its upkeep, insurance and registration.

36 The first issue, is whether the company has established, on the balance of probabilities, that it is and was the owner of the Holden utility. In his affidavit in support of the application, Vincent Rizzo deposed that the vehicle was purchased by the company. The vehicle registration transfer states that the purchaser was the company. The purchase price was paid by the company, albeit with funds provided to the company by Bartholomew Rizzo. The company registered the vehicle with VicRoads, insured it, and paid for the annual insurance and registration in respect of it.

37 All of those matters, standing alone, strongly favour the conclusion that the company is and was the owner of the vehicle. Mr Vout’s primary submission, on this issue, was that the purchase of the vehicle by the company was a sham, the purpose of which was to disguise the ownership of the vehicle by Bartholomew Rizzo. Certainly, Bartholomew Rizzo may well have perceived that it would be preferable for the company, and not himself, to own the vehicle, thus disguising the fact that the vehicle was purchased with funds sourced from criminal activity. However, the evidence does not establish that the company, or Vincent Rizzo, was at all a party to any arrangement with Bartholomew Rizzo, whereby the company would be used as a “stooge” to own the vehicle for and on behalf of Bartholomew Rizzo. Vincent Rizzo was cross-examined concerning his knowledge as to the source of the funds, and as to his son’s then activities. To my perception, Vincent Rizzo was an honest and sincere witness. I accept, without reservation, that at the time at which the vehicle was purchased, Vincent Rizzo genuinely believed that his son Bartholomew was not then engaged in criminal activities, and that the funds, provided by Bartholomew for the purchase of the vehicle, were derived from savings by Bartholomew of wages earned by him. Although the company was, in a real sense, a “family” company, nonetheless it was by no means the alter ego of Bartholomew Rizzo. On the contrary, Bartholomew was not a director or officer of it. The company conducted a long standing family business at two retail locations. Bartholomew’s role in that business was no more than as an employee.

38 Certainly, the model of the vehicle, which was purchased by the company, was not the favoured choice of Vincent Rizzo. Nevertheless, the Holden utility was a type of vehicle which had genuine use in the business. Although Bartholomew had the primary use of the vehicle, nevertheless I accept that it was genuinely used for the company business on a number of occasions.

39 The fact that Bartholomew Rizzo had the primary possession and use of the vehicle does weigh against the ownership by the company of the vehicle. However, Bartholomew did not have the exclusive possession of the vehicle. From time to time, albeit infrequently, Vincent Rizzo used it. Vincent Rizzo had a spare key to the vehicle. In addition, at Vincent Rizzo’s request, the vehicle was used, from time to time, for the purposes of the company’s business.

40 The manner in which the accountant recorded the funds, provided by Bartholomew, did raise a doubt in my mind as to whether the formal arrangements, in respect of the ownership of the vehicle, were genuine. However, I agree with Mr Dickenson that a ready explanation for the method by which those funds were accounted, is that the accountant chose to treat the transaction as a loan by Vincent and Maria Rizzo to the company of funds lent to them by Bartholomew.

41 Thus, I am not persuaded that the transaction, by which the vehicle was purchased by the company, was a sham, designed to conceal that Bartholomew was the true owner of the vehicle. Rather, I am satisfied, on the balance of probabilities, that the company has established that it is and was the owner of the Holden utility.

42 That conclusion leads to the second issue, which I must resolve, namely, whether the applicant company has established that the vehicle was not subject to the effective control of the defendant, Bartholomew Rizzo, on the date on which he was charged. As Mr Dickenson realistically acknowledged, that issue is not as clear cut as the issue of ownership.

43 In DDP v Ferguson[4], I gave some consideration to the meaning of “effective control” in the Act. As I there noted, the authorities have cautioned against redefining, or paraphrasing, those words. Nevertheless, as I concluded in that case, the authorities, to which I had reference[5], describe the concept of “effective control” in terms of control which is “practically effective”, in the sense that the person concerned has in fact (while not necessarily de jure) the capacity to control the possession, use or disposition of the property. Thus, in DPP v Ferguson I concluded:

44 In submissions before me, both counsel accepted that the test, so stated by me in Ferguson, is applicable to the question whether Bartholomew Rizzo did have effective control of the Holden utility vehicle at the time of his arrest.

45 The answer to the question, raised by this issue, is by no means straightforward. On the one hand, it is clear on the evidence that Bartholomew Rizzo had the primary use of the vehicle. It was kept at his premises, and was available for his use. The vehicle was used not only by Bartholomew Rizzo, but also by an associate of his on a number of occasions. As I observed in the course of argument, a depreciating chattel, such as a motor vehicle, is somewhat different to real estate, when considering the question of effective control. The primary purpose of a motor vehicle is to act as a means of conveyance. Bartholomew Rizzo had a substantial amount of control over the primary use of the vehicle. No doubt, the fact that he provided the funds for the purchase of the vehicle gave him at least a strong moral claim, in the family setting, to the predominant use of it.

46 On the other hand, the fact remains that Bartholomew did not have the right to use the vehicle solely for his own personal purposes. The evidence, which I accept, establishes that Bartholomew was required to, and did, use it for the purposes of the company. It was also used by others, including Vincent Rizzo, for the purposes of the company, albeit on infrequent occasions. Further, as I have noted, Vincent Rizzo had access to the vehicle, as he had a spare key to it. The vehicle was registered in the name of the company, and thus it could not be disposed of, unless the company agreed to sign a transfer of it. In addition, the company’s right to the vehicle was supported by the fact that it bore some of the obligations relating to the vehicle, such as the payment of the insurance and registration in relation to it. In those circumstances, while I accept that Bartholomew Rizzo had substantial control over the possession of the vehicle, I do not accept, on the evidence before me, that he had a right to exclude the company from use of it, if the company chose to exert its right to use the vehicle for its purposes. Further I am satisfied that Bartholomew Rizzo did not have the power, whether de jure or de facto, to dispose of the vehicle. Although he had some emotional influence over his father, because of his difficult background, nevertheless I accept Vincent Rizzo’s evidence that, in the upshot, any decision to sell or dispose of the vehicle would be made by Vincent Rizzo, not Bartholomew Rizzo. In those circumstances, I am satisfied, on the balance of probabilities, that Bartholomew Rizzo did not, at the time of his arrest, have effective control of the Holden utility.

47 Mr Vout accepted that the company had established the matters prescribed in subparagraph (A) and subparagraph (C) of s 22(b)(i) of the Act, and that subparagraph (C) and subparagraph (E) are not applicable to the case. The concession made by Mr Vout is well supported by the evidence. In those circumstances, I am satisfied that the company has established its rights to an exclusion order in relation to the Holden utility vehicle. Accordingly, and subject to hearing from counsel on the precise wording of the appropriate order, I am prepared to order that the interest of the company, as the owner of the 2003 Holden Maloo utility motor vehicle, registration number UEA 537, be excluded from the restraining order made by Osborn J on 7 June 2007.

48 For the reasons I have stated above, I therefore conclude that each application before me for an exclusion order should succeed.

49 Accordingly, in the application by 24th Trengganu Pty Ltd, I propose to make an order that the interest of 24th Trengganu Pty Ltd, as the owner of the 2003 Holden Maloo utility motor vehicle, registration number UEA 537, be excluded from the restraining order made by Osborn J on 7 June 2007. In the application by Vitina Rizzo, I propose to order that the equitable interest of Vitina Rizzo in the property at 49 Linda Avenue, Box Hill North be excluded from the operation of the restraining order made by Osborn J on 7 June 2007, to the extent of the debt owed to Vitina Rizzo by Bartholomew Rizzo in the sum of $185,144.

[1] See Troncone & Ors v Aliperti & Ors (Unreported, New South Wales Court of Appeal, 20 April 1994) BC9402483 at 2 (Mahoney JA); Crampton& Anor v French (Unreported, Supreme Court of Victoria, Harper J, 14 August 1995) BC9503947, especially at 4 to 7; Esanda Finance Corp Ltd v Barber [2004] NSWSC 1139 [17]-[19] (Campbell J); Raptis v Wija Investments Development Pty Ltd [2007] NSWSC 924 [88]-[89] (Gzell J).