Commissioner, New Zealand Police v Blance
[2020] NZHC 418
•6 March 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2017-485-197
[2020] NZHC 418
UNDER the Criminal Proceeds (Recovery) Act 2009 IN THE MATTER
of an application pursuant to ss 21, 25 and 58
BETWEEN
THE COMMISSIONER, THE NEW ZEALAND POLICE
Applicant
AND
STEVEN ALBERT BLANCE
Respondent
TRACEY MELANIE SNOOK
First Interested Party
THE CO-OPERATIVE BANK LIMITED
Second Interested PartyHAYLEY KINI-WAI KIRWIN
Third Interested PartyTANYA MICHELLE GRACE
Fifth Interested PartyROBERT SHANE BROMLEY
Sixth Interested PartyKARL WILLIAM GRUEBNER
Seventh Interested partyDAVID ALASTAIR MINKE
Eighth Interested PartyWIREMU HAMILTON WORKMAN
Ninth Interested Party
THE COMMISSIONER, THE NEW ZEALAND POLICE v STEVEN ALBERT BLANCE [2020] NZHC 418 [6
March 2020]
Hearing: 5 March 2020 Counsel:
S B McCusker for Applicant
P H Surridge for Respondent (on instructions from E A Hall) and Eighth Interested Party
S J Fraser for First Interested Party
Judgment:
6 March 2020
JUDGMENT OF THOMAS J
[1] The Commissioner of Police (the Commissioner) seeks profit forfeiture orders or alternatively asset forfeiture orders in respect of property currently restrained pursuant to the Criminal Proceeds (Recovery) Act 2009 (the Act).
[2]Two interested parties oppose the application, as follows:
(a)The first interested party, Tracey Snook, opposes the forfeiture applications in relation to the sale proceeds from the residential property located at 12 Roberts Street (the Property). She also seeks relief from forfeiture on the grounds of undue hardship.1
(b)The eighth interested party, David Minke, has signalled his opposition to the forfeiture of a 2000 Isuzu N series mobile home (the Mobile Home).
[3] The respondent, Mr Blance, does not oppose the application (as far as his own position is concerned) but supports the interested parties in their opposition to the application.
1 Criminal Proceeds (Recovery) Act 2009, ss 61 and 67.
[4] Following a police surveillance operation, Mr Blance was convicted and sentenced on 22 June 2018 to 14 years and six months’ imprisonment for possession and supply of a Class A drug, methamphetamine.
Ms Snook
[5]Ms Snook’s position requires a brief recap of the background.
[6] Ms Snook was an associate of Mr Blance. She was the registered owner of the Property, which she had lawfully acquired, and had lived there since 2003. She paid the mortgage.
[7] In early 2015, Ms Snook sought to sell the Property and obtained a real estate valuation of $280,000-$285,000. Mr Blance offered to purchase the Property for
$270,000 in cash with there being no estate agent fees.2 They agreed that Ms Snook
would remain in the Property, rent-free, and continue to pay mortgage repayments. Mr Blance paid regular cash instalments and the purchase price was fully paid on or around June 2015. The Property was never transferred into Mr Blance’s name.
[8]In June 2015, Police were alerted when Ms Snook attempted to deposit
$170,000 into her bank account but could not provide a sale and purchase agreement for the Property. She attempted to make further smaller deposits into her bank account and the bank accounts of her son and daughter-in-law. $44,500 of the money was used as a deposit for another property in Jillett Street (the Jillett Street Property).
[9] On 28 September 2015, the High Court granted without notice restraining orders over all three bank accounts and the Jillett Street Property (the Sale Proceeds).
[10] In April 2017, at the termination of the police surveillance operation, a without notice restraining order was placed over property held by Mr Blance, including the
2 There was a minor dispute over this figure in an earlier High Court decision which I refer to at
[11] of this judgment: Commissioner of Police v Snook [2018] NZHC 2537 (CIV-2015-485-736, CIV-2015-485-772) (“Commissioner of Police v Snook”) at [7]. In that case, Ms Snook said that Mr Blance paid $30,000 lump sum payments until he reached $250,000. Intercepted communications during the surveillance operation placed the figure at $270,000. However, no challenge to this figure was submitted in these proceedings nor would the analysis change if the payments totalled $250,000.
Property. On 31 August 2017 a sale order was made by consent over the Property. It was subsequently sold in May 2018 for $325,000. The residual sale proceeds,
$153.541.33, were paid to the Official Assignee Trust Account (the Property Proceeds).
The Snook proceedings
[11] This application for forfeiture is interrelated with the parallel proceedings in Commissioner of Police v Snook in which the Commissioner sought asset and profit forfeiture orders over the Sale Proceeds.3
[12]In a judgment dated 27 September 2018, the High Court found that:
(a)the $270,000 paid by Mr Blance to Ms Snook represented “the proceeds from the sale and supply of methamphetamine by Messrs Blance and Berkland”;4
(b)by taking and depositing money in accounts operated by her, her son and daughter-in-law, Ms Snook had engaged in a money laundering transaction for the purposes of s 243 of the Crimes Act 1961, making them party to the offending;5
(c)the cash deposited by Ms Snook and her family into the bank accounts, and used for the deposit of the Jillett Street Property were accordingly “tainted property” for the purposes of the Act;6 and
(d)an asset forfeiture order could accordingly be made in respect of the Sale Proceeds.7
3 Commissioner of Police v Snook, above n 2.
4 At [8].
5 At [45].
6 At [44].
7 At [49].
[13] The Court declined to make a profit forfeiture order, on the grounds that it did not consider that Ms Snook had “unlawfully benefitted from significant criminal activity” under s 55(1)(a) of the Act.8
[14] Ms Snook had also applied for relief from forfeiture on the grounds of undue hardship under s 51 of the Act. The Court considered that Ms Snook’s application for relief was more properly dealt with in the course of the current proceedings:9
[78] In my view, however, the question of undue hardship to Ms Snook is more appropriately addressed in the Blance proceedings rather than in these present. That is because it is the nature and extent of Ms Snook’s interest in the Roberts Street property that seems more naturally the proper focus of a s 51 inquiry in her case. While, on the basis of the information before me, I would be inclined to the view that undue hardship would be caused to Ms Snook in the event that the cash she received from Mr Blance and the proceeds from the sale of the Roberts Street property are all entirely forfeit, I am reluctant to come to a firm conclusion about that in the absence of a complete evidentiary picture.
Ms Snook’s opposition
[15] Ms Snook’s position on the applications for forfeiture of the Property Proceeds was that:
(a)Mr Blance had no legal or beneficial interest in the Property; and
(b)Ms Snook was the lawful registered proprietor and the legal, equitable and beneficial owner of the Property.
[16] Ms Snook therefore opposed the application for forfeiture orders and sought relief from forfeiture.
The Commissioner
[17]The Commissioner’s position was:
(a)the Property Proceeds should be forfeited on the grounds that either:
8 At [64].
9 Commissioner of Police v Snook, above n 2, at [78].
(i)they are “tainted property” for the purposes of an asset forfeiture order under s 50 of the Act; or
(ii)Mr Blance has an “interest” in them for the purposes of a profit forfeiture order by way of an equitable interest, or his effective control over the Property;
(b)Ms Snook, as a bare trustee of the Property, does not have an “interest” in the Property Proceeds capable of giving rise to a claim for relief under ss 66 or 67 of the Act; and
(c)even if Ms Snook did have an interest capable of giving rise to a claim for relief, the Commissioner’s position was that the Court should exercise its discretion under s 66 or s 67 to make no award of relief.
Forfeiture applications
[18] There is no doubt that the Property Proceeds are tainted property; that Mr Blance had an equitable interest in them10 following from his payment of the
$270,000 to Ms Snook; and that he clearly had control over the Property which could also be treated as an interest in the Property Proceeds.11
Application for relief from forfeiture
[19] Ms Snook alternatively applied for the Property Proceeds to be excluded from any forfeiture order on the grounds of undue hardship. As bare trustee of the Property, however, Ms Snook does not have an interest capable of giving rise to a claim for relief.12
[20] The Commissioner’s position was also that, in any event, no relief should be granted. This was on the basis of the need to be consistent with the purposes of the
10 Section 5 of the Act.
11 Section 58 of the Act.
12 Section 66 or s 67. See Commissioner of Police v Li HC Tauranga CIV-2010-470-48, 3 March 2011 at [51]-[54] and R v Matamua CA569/95, 10 July 1996 at 3.
Act, in particular deterrence.13 In the Commissioner’s view, forfeiture was a proportionate outcome for Ms Snook, having regard to her own significant criminal activity and the purposes of the Act.
[21] Given the circumstances, it is now apparent that Ms Snook’s claim for relief from forfeiture should have been in respect of the Sale Proceeds.
Settlement
[22] In light of the difficulties with the case, the parties responsibly undertook settlement discussions. They have now reached a settlement in the matter which they have asked the Court to approve.14 I have seen the terms of the settlement.
[23] I am satisfied that it is appropriate to approve the settlement. It is consistent with the purposes of the Act and the overall interests of justice.
[24] In particular, in this case, there are procedural difficulties with the way in which the matter has progressed. There is benefit to the system in the matter being settled without the need to expend further resources of the justice system, and indeed those of Ms Snook.
[25] The result is a proportionate outcome for Ms Snook, having regard to her own behaviour as already discussed in Commissioner of Police v Snook. It also reflects the fact that there is some money which the Commissioner has not recovered. Ms Snook acknowledges that she has no interest in the Property capable of giving rise to a claim for relief. However, the Commissioner responsibly recognises that it is appropriate that some monetary recognition be provided to Ms Snook in light of the hardship she may face following the forfeiture of the Property Proceeds and the Sale Proceeds.15
[26]For these reasons, the settlement is approved.
13 Section 3 of the Act.
14 Section 95 of the Act.
15 Commissioner of Police v Snook, above n 2, at [78].
Mr Minke’s Opposition
[27] Mr Minke has filed no formal notice of opposition nor an application for relief. However, the Commissioner takes no issue with that, being on notice of the opposition.
[28] The Commissioner’s position was that forfeiture of the Mobile Home can be established on one or all of the following grounds:
(a)the Mobile Home is “tainted property”;
(b)Mr Blance had effective control and therefore had an interest in it; and
(c)Mr Blance has a right “in connection with” the Mobile Home under contract to recover part payment of $20,020 given in consideration for the vehicle.
[29] On the morning of the hearing, the Commissioner and Mr Minke reached agreement on terms of the settlement. This is in full and final settlement of any claims Mr Minke may have against the Commissioner in the proceeding.
[30] I am satisfied that the agreed settlement is consistent with the purpose of the Act and the overall interests of justice, given that the Commissioner acknowledges that Mr Minke retains some measure of equity in the vehicle. The sum to be paid by Mr Minke reflects how much the Commissioner could reasonably expect to retain for the Mobile Home if an application for relief by Mr Minke were made and granted.
Result
[31] The settlements between the Commissioner and Ms Snook, and between the Commissioner and Mr Minke are approved. As agreed, costs are to lie where they fall.
Thomas J
Solicitors:
Crown Solicitor’s Office, Wellington for Applicant Jeffries Law, Wellington for Second Respondent
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