BETWEENCOMMISSIONER OF POLICEApplicantANDPASILIKA NAUFAHUFirst RespondentANDREW NEILL SIMPSONSecond RespondentTYSON TERAI DANIELSThird RespondentJEROME RAYMOND FONUAFourth RespondentVETEKINA NAUFAHUFifth RespondentN...
[2023] NZHC 3472
•1 December 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2019-404-627
[2023] NZHC 3472
UNDER The Criminal Proceeds (Recovery) Act 2009 BETWEEN
COMMISSIONER OF POLICE
Applicant
AND
PASILIKA NAUFAHU
First Respondent
ANDREW NEILL SIMPSON
Second RespondentTYSON TERAI DANIELS
Third RespondentJEROME RAYMOND FONUA
Fourth RespondentVETEKINA NAUFAHU
Fifth RespondentNATHAN NAUER
Sixth Respondent
On the papers Counsel:
M Harborow and C Hodgson for the applicant B Finn for the Official Assignee
Judgment:
1 December 2023
JUDGMENT OF CAMPBELL J
This judgment was delivered by me on 30 November 2023 at 4.30 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
COMMISSIONER OF POLICE v NAUFAHU and OTHERS [2023] NZHC 3472 [1 December 2023]
Introduction
[1] In March 2023, this Court approved a proposed settlement pursuant to s 95 of the Criminal Proceeds (Recovery) Act 2009 (Act) under which asset forfeiture orders (AFOs) were made over several motorcycles and registration plates that formerly belonged to members of the Comanchero Motorcycle Club.1 The Commissioner of Police and the Official Assignee apply for directions that the motorcycles and registration plates may be destroyed and any resulting scrap metal sold.
Background
[2]The AFOs were made over the following motorcycles and registration plates:
(a)2012 Harley Davidson V-Rod motorcycle, registration B3NNB;
(b)2015 Harley Davidson V-Rod motorcycle, registration COMO;
(c)2013 Harley Davidson V-Rod motorcycle, registration T0KO;
(d)2009 Harley Davidson V-Rod motorcycle, registration ELD0X;
(e)2008 Harley Davidson VRS motorcycle, registration TOK0;
(f)2013 Harley Davidson V-Rod, registration B2UKW;
(g)personalised registration plate “705”, and all rights to it;
(h)personalised registration plate “RRTOKO”, and all rights to it;
(i)personalised registration plate “COMO”, and all rights to it;
(j)personalised registration plate “1918”, and all rights to it;
(k)personalised registration plate “TOK0”, and all rights to it;
1 The Commissioner of Police v Naufahu HC Auckland CIV-2019-404-0627, 10 March 2023.
(l)personalised registration plate “T0KO”, and all rights to it; and
(m)personalised registration plate “ELD0X”, and all rights to it.
[3] The motorcycles and plates were obtained as a result of the criminal activity of members of the Comanchero Motorcycle Club, namely drug offending, money laundering and participation in an organised criminal group.2
[4] The AFOs vested the motorcycles and plates in the Crown absolutely. They also gave custody and control of the motorcycles and plates to the Official Assignee.
[5] The motorcycles and plates are distinctive. They have clear links to the Comancheros. For example, one motorcycle bears the word “Comancheros” on the side. The Commissioner considers the property is exclusively associated with the Comancheros. The motorcycles and other high-value luxury assets are utilised by the club to display wealth and power in an attempt to entice new members. Members of the Comancheros have engaged and continue to engage in significant criminal activity.
Application
[6] The Commissioner and the Official Assignee apply under s 59 of the Act and r 11.2 of the High Court Rules 2016 for directions that the motorcycles and plates be destroyed and any resulting scrap metal be sold.
[7] The Commissioner is concerned that if sold by the Official Assignee the motorcycles or plates could be purchased by the Comancheros or their associates and returned to members of the gang—undermining the purpose of the AFOs and the Act. The Commissioner, therefore, submits that there is value in disposing of the motorcycles and plates by destruction as it would ensure that the purpose of the AFOs is upheld.
2 R v Naufahu [2021] NZHC 217; R v Fonua [2020] NZHC 3107; and R v Daniels [2020] NZHC 275.
[8] An affidavit in support by Detective Inspector Lloyd Schmid states that the destruction of the motorcycles and plates would support the general functions of the Police and provide reassurance to the community that organised criminal groups are deprived of ill‑gotten gains. The Police consider that because of the distinctive nature of the motorcycles and their association with the Comancheros it may be difficult to sell them to the to the general public. Detective Inspector Schmid states that there is value in destroying the property as they would be removed from circulation in New Zealand in a manner that gives finality to the proceedings and ensures that the plates and motorcycles cannot return to the Comancheros.
[9] Under s 82 of the Act, the Official Assignee must dispose of property that has been made the subject of an AFO and apply the money resulting from the disposal in the manner set out in that section. An affidavit of Derek Webb, on behalf of the Official Assignee, says that the property that has been forfeited to the Crown in this proceeding (which encompasses more than just the motorcycles and plates) is more than sufficient to meet the payments required by s 82. Accordingly, destroying the motorcycles and plates will prejudice no public body or person except the Crown.
[10] The Commissioner and Official Assignee did not serve the application on any other parties. They took the view that because the property had vested in the Crown absolutely, no other parties were materially interested in the application.
Issues
[11]There are two issues:
(a)Should the other parties have been served with the application?
(b)Should I make directions that the property may be destroyed?
Should the other parties have been served with the application?
[12] Under s 50 of the Act, AFOs must specify that the property to which the orders apply vests in the Crown absolutely (and that the property is in the custody and control of the Official Assignee). That is what the AFOs did in this case. The previous owners
of the property therefore no longer have any interest in the property. I therefore agree that it was not necessary to serve the other parties with the application.
Should I make directions that the property may be destroyed?
[13] The directions are sought under s 59(1)(b) of the Act or r 11.22 of the High Court Rules. In full, s 59 provides:
59 Additional matters in respect of making civil forfeiture order
(1)In making a civil forfeiture order, the High Court may do either or both of the following:
(a)declare the nature, extent, and value of any person’s interest in property specified in the civil forfeiture order:
(b)give any directions that may be necessary and convenient for giving effect to the civil forfeiture order.
(2)Without limiting the generality of subsection (1)(b), if a Court makes a civil forfeiture order against any property the title to which is passed by registration on a register maintained under any New Zealand enactment, the Court may direct an officer of the Court to do anything reasonably necessary to obtain possession of any document required to effect the transfer of the property and for that purpose may, by warrant, authorise an officer to enter and search any place or thing and seize any document.
(3)Part 4 of the Search and Surveillance Act 2012 (except subpart 6), so far as applicable and with all necessary modifications, applies in relation to a warrant issued under subsection (2) as if it were a warrant issued under section 101 to a member of the police.
[14] Section 59(1)(b) is concerned with directions that are necessary and convenient to “give effect to” a civil forfeiture order, of which an AFO is a type. The effect of the AFOs in this case was, as described in s 50, to vest the property in the Crown absolutely and to give custody and control of the property to the Official Assignee. These effects are separate from the process of disposing of the property under s 82, which the Act characterises as “discharging” the AFO.
[15] The effects described in s 50 have already happened. There is nothing else to give effect to. In particular, directing that the property may be destroyed does not in any sense give effect to the vesting of the property in the Crown or the giving
of custody and control to the Official Assignee. I therefore conclude that s 59 does not give the Court jurisdiction to make the directions sought.
[16] Rule 11.22 provides that property to be sold “because of a direction in a judgment or order” must be sold in a way that ensures the best price is obtained for it, unless the court directs otherwise. This rule contemplates that a direction has been made to sell property. No such direction has been made here. Rule 11.22 is inapplicable.
[17] In a memorandum accompanying the application, counsel also relied on s 82 of the Act. It will suffice to refer to s 82(1), which provides:
82 Discharge of assets forfeiture order by Official Assignee
(1)If a court makes an assets forfeiture order, the Official Assignee must, as soon as practicable after the expiry of the specified period (as described in subsection (2)), dispose of the property specified in the order and apply the money resulting from the disposal as follows:
(a)first, by paying the costs recoverable by the Official Assignee under section 87:
(b)secondly, by paying to the Legal Services Commissioner the amount (if any) payable by way of legal aid granted to the former interest holder (less any contributions paid by the former interest holder):
(c)thirdly, by paying, in the order of priority set out in section 86E of the Summary Proceedings Act 1957, any of the following amounts imposed on the former interest holder:
(i)any amount of reparation (as defined in section 79 of the Summary Proceedings Act 1957):
(ii)any offender levy (as defined in section 79 of the Summary Proceedings Act 1957):
(iii)any other type of fine (as defined in section 79 of the Summary Proceedings Act 1957):
(d)fourthly, by paying any remaining money to the Crown.
[18] Section 82(1) requires the Official Assignee to “dispose” of the forfeited property. The Act does not define “dispose” or “disposal”. “Dispose” is a term with a wide meaning. However, when used in the context of property, I consider that “dispose” is referring to the many ways in which an interest in the property can be
transferred to or created in another party – for example, by sale, gift, assignment, mortgage or lease. It does not refer to actions upon or affecting the property that do not consist in the transfer or creation of an interest in the property. It therefore does not encompass the destruction that is proposed here.
[19] That is not the end of the matter. As noted, the AFOs vested the property in the Crown absolutely. The Crown therefore currently has full ownership of the property. Rights of ownership include not only the right to dispose of the property (contemplated and required by s 82) but other rights, including the right to destroy the property. Given that the Crown enjoys ownership of this property by virtue of AFOs made under the Act, the Crown must exercise its ownership rights for the purpose of, and subject to any limitations in, the Act.
[20]The purpose of the Act is:
3 Purpose
(1)The primary purpose of this Act is to establish a regime for the forfeiture of property—
(a)that has been derived directly or indirectly from significant criminal activity; or
(b)that represents the value of a person’s unlawfully derived income.
(2)The criminal proceeds and instruments forfeiture regime established under this Act proposes to—
(a)eliminate the chance for persons to profit from undertaking or being associated with significant criminal activity; and
(b)deter significant criminal activity; and
(c)reduce the ability of criminals and persons associated with crime or significant criminal activity to continue or expand criminal enterprise; and
(d)deal with matters associated with foreign restraining orders and foreign forfeiture orders that arise in New Zealand.
[21] I consider that the proposal to destroy the property achieves these purposes, for the reasons set out in the affidavits to which I have earlier referred. The only possibly relevant limitation in the Act is that which may be implicit in s 82 – that efforts should
be made to dispose of the property in a way that will produce as many proceeds as reasonably possible to pay for the items listed in s 82(1)(a)–(c). Here, it is clear that those items will be fully paid in any event.
[22] For these reasons, I am satisfied that the Crown, through the Commissioner and the Official Assignee, may destroy the motorcycles and the plates, and then sell any resulting scrap metal.
Result
[23] I direct that the motorcycles and plates identified in the application may be destroyed and any resulting scrap metal sold.
Campbell J
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