We don’t get very many appellate decisions on the Confiscation Act 1997, and even fewer from the Court of Appeal.

DPP v Twenty Fourth Trengganu Pty Ltd [2011] VSCA 92 was delivered by the Court of Appeal earlier this week. The company Twenty Fourth Trengganu Pty Ltd applied to exclude a car from being restrained for automatic forfeiture. The application is made under s 22 of the Act.

The company was owned by Vincent and Maria Rizzo, who were its directors and officers.

Their son Bartholomew was employed by the company, but wasn’t an officer of the company.

In May 2006 the company bought a Holden ute to help deliver stock. It didn’t have the money for it, so Bartholomew Rizzo loaned $30 000 to the company. At [18], the Court noted the trial judge’s findings that Bartholomew obtained the money from a criminal associate, and that the car was bought from the sister of a known criminal.

The car was mainly used by Bartholomew Rizzo, and garaged at his home. Very occasionally, it was used by the company for business purposes.

Rizzo used the car when trafficking a drug of dependence in not less than a commercial quantity. He was arrested and charged in 2007; ultimately pleaded guilty, and received a total effective sentence of 16 years jail.

The company claimed in its application it wasn’t involved in the offence, and, when it acquired the car, it didn’t know Bartholomew Rizzo would use the car for drug trafficking.

A large part of the appeal turned on what interest the company had in the car: [29] – [41].

The trial judge concluded that although Bartholomew had control and possession of the car, he didn’t have the power to exclude the company from it (i.e. actual possession). Nor did he have the right in law or in fact to dispose of it: that required the signature of the company’s officers on the notice of transfer: [21] and [35]. And, bartholomew did not have effective control of the car, which would have defeated the company’s exclusion application, under s 22(1)(b)(i) or (ii).

The Court approved Kaye J’s previous explanation of effective control:

The whole scheme of the Act is to treat as the owner of property those who, in reality, exercise a fundamental incident of ownership, namely, the practical control of property. Accordingly, the question whether the defendant has the effective control of property involves an examination of the actual practical exercise, or capacity to exercise, by the defendant of rights over the property in question, such as the right to possess, use, sell, mortgage, make fundamental improvements to, and exclude others from possession of, the items of property in question: DPP v Ferguson [2006] VSC 484 at [54].

Nettle JA succinctly summarised all these considerations at the start of the case:

[2] In this case, the judge found that the respondent was the legal and beneficial owner of the motor car which was the subject of its application for exclusion under s 22(b)(i) of the Confiscation Act 1997 (‘the Act’). The appellant does not seek to disturb that finding.

[3] In this case, the judge also found that, although the respondent was in the habit of making the vehicle available to the defendant, Bartholomew Rizzo, under a family arrangement whereby he was permitted to treat the vehicle for the most part as if it were his own, the respondent at all times retained the right to require immediate possession of the vehicle, to direct how and when it be deployed in the service of the respondent, and to sell or otherwise dispose of it as the respondent determined in the respondent’s own interests. The appellant does not seek to disturb that finding either.

[4] The judge further found that, although it might be that the defendant had a moral claim to the use of the vehicle, inasmuch as he provided the loan funds with which, indirectly, the respondent financed its purchase, he did not have any right or ability, de facto or de jure, to control the respondent’s exercise of its rights to require possession or deployment or disposal of the vehicle. That finding, too, is not challenged.

[5] Given those findings, the appeal was bound to fail.

And, in a unanimous judgment, the appeal did fail.

This provides useful guidance to notions of control and ownership often involved in forfeiture applications.

With the increasing number of car impoundment and forfeiture applications in summary courts, this case might provide some help for determining impoundment and disposal applications under the ‘hoon’ provisions in the Road Safety Act 1986. (Though the legislative scheme is not the same, so this case has to be treated cautiously in its application.)