Downie & Anor v Commissioner of Police [2011] QMC 51

MAGISTRATES COURT OF QUEENSLAND CITATION: Downie & Anor v Commissioner of Police [2011] QMC 51 PARTIES: MARTIN JOHN DOWNIE (first applicant) BEN OGDEN (second applicant) v COMMISSIONER OF POLICE (respondent) FILE NO/S: M503/11, M3330/11 DIVISION: Magistrates Court PROCEEDING: Application for return of property seized by police ORIGINATING COURT: Magistrates Court at Southport and Brisbane DELIVERED ON: 14 December 2011 DELIVERED AT: Southport HEARING DATE: 8 November 2011 MAGISTRATE: Magee KT ORDER: In relation to the application of Martin John Downie I Order that $3,000 of the $43,000 seized by the police from Jason Mundy’s vehicle on 6 January 2010, be returned to Martin John Downie. In relation to the application of Ben Ogden I Order that $40,000 of the $43,000 seized by police from Jason Mundy’s vehicle on 6 January 2010 be returned to Ben Ogden. CATCHWORDS: PERSONAL PROPERTY – determination of ownership – property seized by police - competing claims for return of property in the possession of the police Police Powers and Responsibilities Act 2000, s 693 Powers of Attorney Act 1998, s 87 Barclays Bank v Quistclose Investments Ltd [1968] A11 ER 651 COUNSEL: B Reilly for first applicant M de Waard for second applicant T Jobberns for the Respondent SOLICITORS: DK Law for first applicant Mallesons Stephen Jaques for second applicant -- 1 of 8 -- 2 [1] The applicant in each of the two applications before me, Martin John DOWNIE and Ben OGDEN, each claim the return of money seized by the Police on 6 January 2010; in Mr Downie’s case $43,000 and in Mr Ogden’s case $40,000, pursuant to s 693 of the Police Powers and Responsibilities Act 2000 [PPRA]. [2] On 6 January 2010 the Police seized $43,000 cash contained in a plastic bag wrapped in a T-shirt and located in a motor vehicle owned by Jason Mundy and driven by the Applicant Downie. Charges brought against both Jason Mundy and Martin Downie of being in possession of tainted property (namely the $43,000 cash) were subsequently dismissed. [3] In his affidavit filed on 20 July 2011 the applicant Downie states that he received the money on New Years day 2010 from a friend, Raewyn Wood, to invest in a proposed boat building business. At paragraph 3 he states ―Raewyn said that she used some of the money and then replaced it, and that there was $40,000.‖ In cross examination and in response to questions asked by me, Mr Downie was unable to elaborate as to what he meant by that. Downie states that he added $3,000 of his own money to the money provided by Ms Wood and it was a combination of his $3000.00 and the $40,000 provided by Ms Wood that was located by the police on 6 January 2010. [4] Raewyn Margaret WOOD has provided an affidavit. Exhibited to her affidavit is a statutory declaration made by her on 9 February 2010 stating: ―Received $40,000 in cash from Mr Ben Ogden, who resides with myself for the investment into shares of Mr Martin Downie’s boat building business.‖ [5] Exhibited to Ms Wood’s affidavit is a further statutory declaration dated 28 May 2010 stating: ―I withdrew money for Martin Downie and held it until January 1 2010, whereby I gave Martin Downie the cash to invest into a houseboat renovation building business.” [6] The withdrawal referred to was from the applicant Ogden’s Commonwealth Bank account and comprised three withdrawals on 4, 5 & 6 November 2009 of $15,000, $5,000 and $20,000 respectively. Ms Wood has also exhibited to her affidavit a statement which was provided by her to the police and which is dated 2 August 2010. In that statement she says: (a) She has known the applicant Downie for approximately 25 years1; (b) He is like a brother to her2; (c) She has known the applicant Ogden since May 20093; (d) Ogden commenced living with her in July or August 20094; (e) On 27 July 2009 she was made Ogden’s attorney, pursuant to a power of attorney5; 1 At paragraph 2 2 At paragraph 2 3 At paragraph 4 4 At paragraph 4 5 At paragraph 5 -- 2 of 8 -- 3 (f) Prior to 4 November 2009 it was the applicant Ogden’s idea to give her $40,000 for her to look after him for the year. She drove him to the Commonwealth Bank at Ashmore, whereupon the applicant Ogden withdrew $15,000 in cash and handed it to her. On 5 November 2009 she drove the applicant Ogden to the Commonwealth Bank at Ashmore, whereupon the applicant Ogden withdrew $5,000 in cash and handed it to her. On 6 November 2009 she drove the applicant Ogden to the Commonwealth Bank at Ashmore, whereupon the applicant Ogden withdrew $20,000 in cash and handed it to her6. (g) Prior to this she had been having discussions with the applicant Downie about a houseboat building business, particularly in relation to purchasing an existing houseboat, renovating it and selling it7. (h) She advised the applicant Downie that she had $40,000 to invest8. (i) Upon receipt of the funds from the applicant Ogden, she placed them in an A4 envelope, she would use small amounts of money and replace it when needed and on 1 January 2010 gave the $40,000 in cash, which had been in the envelope at that time, to the applicant Downie9. [7] At paragraph 32 of her police statement Ms Wood said; “I have never had conversations with Ben in relation to him investing into the houseboat building business. And as far as I know Marty has never discussed this with Ben‖. Ben is reference to the applicant Ogden; Marty is a reference to the applicant Downie. [8] In her affidavit sworn in these proceedings Ms Wood, at paragraph 5 states; ―The statement that I provided to police remains a true account of my recollection of the events surrounding the money. The only point that I will add is that I believe Ben Ogden was aware of the boat building discussions and was aware that I was going to invest the money with Martin‖. [9] The applicant Ogden provided an affidavit confirming that at the time the $40,000 was withdrawn from his account Ms Wood was his attorney pursuant to a power of attorney10. He states ―Wood told me that the money taken from my account was to be used to invest in building a houseboat. She never told me Martin Downie was involved in the houseboat building project”11. “Wood later told me that the houseboat project had fallen through and that she would give me back my money”12. “Wood said she would put the money in her account but I told her she had to put it back in my account”.13 The applicant Ogden was not required for cross examination by either the respondent or the legal representative for the applicant Downie. [10] Accordingly it is the un-contradicted evidence of the applicant Ogden that the $40,000 provided by him to Wood was to be used to invest in building a houseboat. 6 At paragraphs 9, 12, 13 and 14 7 At paragraphs 7, 16 and 17 8 At paragraph 17 9 At paragraphs 15 and 18 10 At paragraph 3 11 At paragraph 3 12 At paragraph 4 13 At paragraph 5 -- 3 of 8 -- 4 That is also the evidence of Ms Wood and the applicant Downie. That purpose was frustrated upon the seizure of the $40,000 together with the $3,000 contributed by the applicant Downie, by the police. [11] On the evidence I am satisfied on the balance of probabilities that the $40,000 that was withdrawn from the applicant Ogden’s account was placed by Ms Wood with Mr Downie for the express purpose of investment in a houseboat building business and that that purpose was frustrated by the police seizure of the funds. [12] Where money or property is settled pursuant to an express trust for a specific purpose which cannot be effected because of the terms of the settlement, the beneficial interest in the trust money or property can be construed as being held by the intended trustee on a resulting trust for the settlor.14 [13] Accordingly, the purpose for which the funds were provided to Downie having been frustrated, the monies were held by Downie on a resulting trust in favour of the settlor. For reasons indicated above I am satisfied that the applicant Downie held the funds prior to their seizure for a specific purpose which was frustrated by the seizure such that a resulting trust arose in relation to the funds. [14] Mr Reilly, counsel for the applicant Downie submits that on the evidence I should be satisfied that the applicant Downie repaid the $40,000 to Ms Woods, thereby fulfilling his obligations under any resulting trust and entitling him to the return of the full amount of the funds seized by the police. [15] In his affidavit sworn on 20 July 2011 the applicant Downie says at paragraph 8: ―Since this has happened I have been paying Raewyn back in bits and pieces. I have paid her back the entire amount of $40,000. I am the lawful owner of the $43,000 in the possession of the police. I did not obtain the money from any unlawful action. Whilst the money was invested by Raewyn Wood, I have paid her back and therefore am entitled to the return of the total amount of $43,000 in the possession of the police.‖ No documentary evidence was exhibited to the affidavit in support of the assertion that the $40,000 had been repaid in full to Ms Wood. [16] By letter dated 25 August 2011 from Mallesons Stephen Jacques, solicitors to the applicant Ogden, to DC law, the solicitors for the applicant Downie, it was noted that the applicant Downie’s affidavit did not exhibit any documentary evidence to support the assertion that the money had been repaid and requested any documentary evidence. In response, by email dated 26 August 2011, the applicant Downie’s solicitor asserted that as the applicant Ogden was not a party to the proceedings it would be inappropriate to disclose the requested information. [17] It is to be noted that the claim of the applicant Ogden was not brought until 10 October 2011, was brought in a separate application and was heard with the application of the applicant Downie pursuant to an order made in the Brisbane Magistrates Court on 31 October 2011. [18] After the applicant Ogden’s claim was filed the solicitors for the applicant Downie persisted in their resistance to production of any documentation to the solicitors for 14 Halsbury’s Law of Australia at paragraph 430-520; Barclays Bank v Quistclose Investments Ltd [1968] 3 A11 ER 651 -- 4 of 8 -- 5 the applicant Ogden on the basis that the two applications were separate and distinct. [19] In cross examination the applicant Downie stated that the payments were made by two separate payments of $20,000. The first was made in October of 2010 and the last between November and December 2010. He stated that he had been unemployed since January 2010 and that he financed the repayment by selling two motor vehicles that he had held for a long period of time. He identified the motor vehicles as being Holden Monaros and asserted that prior to their sale they were unregistered. He also asserted that he was paid in cash by two instalments, the first for $20,000 and the second for $25,000. He was unable to identify the name of the purchaser but recalls he was from Portland Victoria. In re-examination, two receipts (Exhibit 2) were tendered. Both are handwritten apparently under the same hand and with the same type of pen. Both refer to monies received from C. Ward and purport to be signed ―C. Ward‖. The first is dated 1 October 2010, for the sum of $20,000 being deposit for two Monaros. The second is dated 8 October 2010 for the amount of $25,000 for two Holden Monaros, total $45,000. The 2 receipts tendered appear to be originals, not duplicates. [20] In re-examination the applicant Downie also provided 2 receipts (Exhibit 1) from Ms Wood for 2 payments each of $20,000 dated 4 October 2010 and 13 October 2010 respectively. The receipts purport to be loan repayments. [21] In her affidavit sworn on 20 July 2011 Ms Wood states at paragraph 6; ―Since these events Martin has paid me back the entire amount of $40,000. His final payment to me was in about March of this year.‖ [22] In cross examination Ms Woods stated that the last repayment was for $20,000. She said that she knew that the applicant Downie was unemployed at the time the repayments were made. She then said that she knew that he had some vehicles which he sold in two transactions. When asked by me what she did with the funds repaid to her by the applicant Downie, she said that she put the whole of the funds into her house renovation. [23] I was particularly unimpressed with Ms Woods as a witness. Her evidence was confusing and contradictory. There were myriad inconsistencies between her statutory declarations, her statement to the police, her affidavit and her sworn evidence in Court. [24] In the statutory declaration dated 28 May 2010, she says that she withdrew the money from the applicant Ogden’s account. In her statutory declaration dated 9 February 2010 she says she received $40,000 in cash from the applicant Ogden. [25] In her statutory declaration dated 9 February she says this money was received for investment into shares of Mr Martyn Downie’s boatbuilding business. [26] In paragraph 9 of her statement to the Police she said the monies was given to her by the applicant Ogden ―for me to look after him for the year‖, and that she had never had any conversations with the applicant Ogden about him investing in the houseboat building business. [27] In her affidavit (at paragraph 5) she states that she believed that the applicant Ogden was aware of the boat building discussions and that she was going to invest the money with Martin. -- 5 of 8 -- 6 [28] Under cross examination Ms Woods asserted that the $40,000 was a gift to her whilst at the same time conceding that there was a discussion that the $40,000 was to look after the applicant Ogden for a year. In cross examination she denied that she had ever been given any other monies by the applicant Ogden although she did admit to him having paid board. She was then shown an email that she forwarded to the applicant Ogden’s then solicitor Andrew at Robins Watson on 6 June 2010 which states in part; ―With that in mind he offered to pay for my verandah to be built so that it would be safer for everyone to walk on. My house is over 30 years old and the verandah to the main access was in disrepair. An accident waiting to happen in fact. I told Ben I would take his offer after him becoming somewhat annoyed to me constantly telling him I would wait until my court case was settled and do it myself. He would not hear of it, and would become angry if you didn’t except (sic) his offer. I told Ben infront (sic) of witnesses that I would take the money for the verandah with the condition that once my court case was settled I would pay him back. I wanted a written agreement made by your office but Ben insisted I get my solicitor to do it then just file it with your office. I then engaged a builder and had the verandah replaced. He also bought an air conditioner for the house for his comfort, which is situated outside of his room, I am happy to re- imberse (sic) him for that also. The estimated valve (sic) that Ben has contributed to this house for renovation is approximately $47,000 (thousand) with the air conditioner costing approximately $2,500 on top of that.15‖ Whilst acknowledging that she had sent that email she denied that Ogden had contributed $47,000 to her house renovations. [29] Her answers to questions about any agreement to repay the monies provided by Ogden were inconsistent, contradictory and difficult to comprehend though she was insistent that on those occasions she told Ogden she would repay the monies she was told by the applicant Ogden that he did not want the money back. It is not disputed that she has not paid any of the monies back to the applicant Ogden. [30] Mr Reilly submits that Ms Wood’s evidence that the $40,000 was repaid is a statement against her interests and is therefore quite persuasive. However it is less persuasive when considered in the context of her long established relationship with Downie, who is the person who seeks to benefit from the admission. [31] Having considered the evidence in relation to the alleged repayment by the applicant Downie of the $40,000 to Ms Woods, I do not accept that evidence. The applicant Downie has given three different versions of when the monies were repaid. In his affidavit he said it was paid back ―in bits and pieces‖, in cross examination he said it was repaid by a payment of $20,000 in October 2010 and a second payment in November to December 2010 and in re-examination he confirmed payment by production of receipts dated 4 October 2010 and 13 October 2010. He has not provided any independent verifiable documentation as to the receipt or transmission of the funds. On the one hand he asserts that he had owned the Monaro motor vehicles for years and regarded them as assets he would fall back on. On the other hand they were not registered and he has not produced any independent documentary evidence as to the acquisition, ownership or disposal of the vehicles. [32] Ms Woods asserted that the final repayment of $40,000 was made in March 2011. In re-examination she confirmed the receipts contained in exhibit 1 which refer to 15 Exhibit 3 -- 6 of 8 -- 7 two payments, each of $20,000 made on 4 and 13 October 2010 respectively. She has not produced any independent documentary evidence of the receipt of the funds. I consider it extremely unlikely that she received $40,000 in cash on 6 and 13 October and has no independent evidence of the receipt of the funds. Her explanation that the monies were expended on a house renovation is noted to be the same explanation she appears to have given for expenditure of other funds received from the applicant Ogden in the email in evidence as exhibit 3. I am unconvinced that $40,000 was repaid by the applicant Downie to Ms Wood. [33] As a result of the failure of the purpose for the provision of the funds to Downie, the funds were subject to a resulting trust in favour of the settlor. I find that upon the police seizing the $40,000 provided by Wood to Downie there was a resulting trust in favour of Wood, as the settlor. [34] Mr Reilly, counsel for the applicant Downie, submits that assuming that there is a resulting trust, the money reverts to Ms Wood, not to the applicant Ogden. However it is to be noted that Ms Wood obtained the money from Mr Ogden, whilst Ms Wood was his attorney. By virtue of section 87 of the Powers of Attorney Act 1998 there is a presumption that the applicant Ogden was induced to provide the monies or enter into the transaction with Ms Wood by the undue influence of Ms Wood. Mr Reilly asserts that section 87 of the Powers of Attorney Act 1998 might give rights and entitlements vis a vie the applicant Ogden and Ms Wood but does not impact upon Mr Downie’s entitlement to the funds as he was without notice of the interest of the applicant Ogden. It is true that there is nothing in the material to indicate that the applicant Downie was ever advised as to the source of the funds provided by Ms Wood. However, Ms Woods was given the money by Ogden to invest in a boat building business, a purpose frustrated by the police seizure of the funds, and in circumstances which raise a presumption, not rebutted by any evidence before me, of undue influence by Ms Wood over the applicant Ogden. I find therefore that Ms Wood’s interest in the funds was subject to an equitable entitlement on the part of Ogden to have the funds returned to him either under a resulting trust (Ogden having given the funds to Wood for the specific purpose of investing in the boat building business) and / or on the basis that the funds were obtained by Wood from Ogden as a result of undue influence. [35] Section 693 of the PPRA provides as follows: (1) This section applies to a relevant thing— (a) that has been in the possession of the police service for 30 days and is not returned under section 692; or (b) that is described in a notice given under section 719(4). …. (3) A person who claims to have a legal or equitable interest in the relevant thing may apply to a magistrate for an order that the thing be returned to the person or to someone else named in the application as the person to whom the thing may be delivered (the nominee). (4) The person must give each of the following a copy of the application and notice of the day, time and place fixed for hearing the application— -- 7 of 8 -- 8 (a) the commissioner; (b) anyone else the person reasonably believes has a legal or equitable interest in the thing. (5) The magistrate may order that the relevant thing be returned to a person on the conditions, if any, the magistrate considers appropriate if satisfied— (a) the person may lawfully possess the thing; and (b) it is appropriate that the thing be returned to the person. … [36] I am satisfied on the balance of probabilities that the applicant Ogden has an equitable interest in $40,000 of the funds seized by the police and that he is lawfully entitled to the possession of the funds. I am also satisfied that it is appropriate that the funds be returned to him. [37] It is uncontested that the balance of the funds were provided from the funds of the applicant Downie and that he is the legal and the beneficial owner of those funds and it is appropriate that they be returned to him. [38] In relation to the application of Martin John Downie I Order that $3,000 of the $43,000 seized by the police from Jason Mundy’s vehicle on 6 January 2010, be returned to Martin John Downie. [39] In relation to the application of Ben Ogden I Order that $40,000 of the $43,000 seized by the police from Jason Mundy’s vehicle on 6 January 2010, be returned to Ben Ogden. -- 8 of 8 --