Commissioner, New Zealand Police v Kite

[2024] NZHC 3329

IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WAIHARAKEKE ROHE

CIV-2024-406-026

[2024] NZHC 3329

IN THE MATTER

of a without notice application for a

restraining order pursuant to ss 22(1), 24, 25, 33 and 34 of the Criminal Proceeds (Recovery) Act 2009

BETWEEN

THE COMMISSIONER, THE NEW ZEALAND POLICE

Applicant

AND

JOEL LAWRENCE KITE

First Respondent

TONY JAMES KITE

Second Respondent

KEENEN AWARANGI TE HORE
First Interested Party

MATIU WILLIAM RHIND
Second Interested Party

POLYETHYLENE PIPELINE FABRICATIONS LIMITED

Third Interested Party

On the Papers
Counsel:	J M Webber for Applicant
Judgment:	8 November 2024

JUDGMENT OF McQUEEN J

NZ POLICE v KITE [2024] NZHC 3329 [8 November 2024]

[1]    The Commissioner of Police (Commissioner) applies without notice for a restraining order pursuant to s 22 of the Criminal Proceeds (Recovery) Act 2009 (the Act). The application is supported by an affidavit from Kelvin Scoble (Specialist Investigator for the Southern Asset Recovery Unit of the New Zealand Police) and a memorandum of counsel in which counsel for the Commissioner certifies that the application complies with the High Court Rules 2016.

[2]The application is made under both ss 24 and 25 of the Act on the basis that:

(a)the respondents’ property that is sought to be restrained is tainted property; and

(b)the respondents unlawfully benefited from significant criminal activity.

[3]The property sought to be restrained is:

(a)A Black 2013 Harley Davidson V-Rod Night Special motorcycle, registration A9WFJ, registered in the name Keenen Awarangi Te Hore, and all associated keys and immobilisation devices.

(b)A Teal 2013 Harley Davidson V-Rod motorcycle, registration C6EKG, registered in the name Matiu William Rhind, and all associated keys and immobilisation devices.

(c)A 2005 Toyota Hilux Utility vehicle, registration CUR118, registered in the name Polyethylene Pipeline Fabrications Ltd, and all associated keys and immobilisation devices.

(the Property)

[4]The Commissioner also seeks orders that:

(a)the Property is in the effective control of Joel Kite and/or Tony Kite;

(b)pursuant to s 47(1) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, the disclosure of the suspicious transaction report (described  at  [8.14]-[8.17]  of  the  affidavit  of  Mr Scoble) is necessary in the interests of justice; and

(c)pursuant to ss 33, 34 and 35 of the Act, members of the New Zealand Police are permitted to enter onto property to enable them to take custody and control of the Property on behalf of the Official Assignee, if there are reasonable grounds to believe that a restrained vehicle is on the property.

Leave to disclose information in suspicious transaction reports

[5]    The Commissioner seeks leave under s 47(1) of the Anti-Money Laundering and Countering Financing of Terrorism Act for the Commissioner and the Commissioner’s witnesses to disclose information relating to suspicious transaction reports, as set out in s 46(1) of that Act, in this proceeding. That information is contained at [8.14]-[8.17] of the affidavit of Mr Scoble filed in support of the application.

[6]    I am satisfied that disclosure of the information is necessary in the interests of justice and accordingly I grant leave as sought by the Commissioner.

Respondents and interested parties

[7]    The respondents Joel Kite and Tony Kite are members of the Killer Beez gang. They are alleged to have been directly involved in significant criminal activity.

[8]    The first and second interested parties, and the sole director and shareholder of the third interested party Polyethylene Pipeline Fabrications Ltd, are the registered owners of vehicles which the Commissioner contends are in the effective control of Joel Kite and/or Tony Kite.

Significant criminal activity

[9]    The alleged significant criminal activity is dealing in methamphetamine. Details of the alleged significant criminal activity are set out in the affidavit of      Mr Scoble.

[10]   In summary, it is alleged that Joel Kite and Tony Kite were involved in the commercial supply of methamphetamine in Blenheim, which was detected as part of a criminal investigation, code-named Operation Bear, conducted by Tasman Organised Crime Unit. This Court has already made restraining orders in relation to other property owned or controlled by persons charged in Nelson  as  a  result  of Operation Bear.1 This application is described as representing the Marlborough phase of the same operation.

[11]   The evidence includes a number of sales of methamphetamine to an undercover police officer, culminating in the sale of an ounce of methamphetamine to the officer by Joel Kite. Joel Kite was arrested immediately after that sale and was found to be in possession of a further ounce of methamphetamine. There were numerous discussions between the officer and both Joel Kite and Tony Kite about the supply of methamphetamine, which included admissions by both the respondents about the scale of their methamphetamine operation, as well a number of offers and agreements to supply methamphetamine to the officer.

[12]As a result of the investigation, the respondents have been charged as follows:

(a)Joel Kite faces charges of supplying methamphetamine (four counts), offering to supply methamphetamine (three counts), possession of methamphetamine for supply, conspiracy to supply methamphetamine, participating in an organised criminal group and failing to carry out obligations in relation to a computer search.

(b)Tony Kite faces charges of supplying methamphetamine (two counts), offering to supply methamphetamine (seven counts), possession of

1      Commissioner of Police v Cooley [2024] NZHC 3554.

methamphetamine for supply, conspiracy to supply methamphetamine, participating in an organised criminal group and failing to carry out obligations in relation to a computer search.

[13]   Joel Kite has pleaded not guilty to the charges arising from Operation Bear and has elected trial by jury. He received a sentence indication on 18 October 2024. The indication was for a starting point of six years’ imprisonment. He is to appear on    15 November 2024 to accept or decline the indication.

[14]   Tony Kite has entered not guilty pleas and sought a sentence indication, which is to be given on 15 November 2024.

Financial information

[15]   Mr Scoble’s affidavit sets out relevant financial information in respect of each of the respondents.

[16]   Joel Kite is unemployed and receives a benefit. His only declared income in the seven years from 2018 to 2024 has been from his benefit. Joel Kite’s partner Dallas Materoa is unemployed and receives a benefit. Her only declared income in the seven years from 2018 to 2024 has been from her benefit. Joel Kite and Ms Materoa have lived together since 2021. Since that time their average weekly income after tax has been $465.55. Counsel for the Commissioner submits that their household would likely have faced significant pressures in meeting typical weekly living costs from verifiable income alone.

[17]   Joel Kite is alleged to have been in possession of, or had registered to himself or close associates:

(a)A Black 2013 Harley Davidson V-Rod motorcycle valued at approximately $30,000.

(b)A   Teal    2013   Harley    Davidson   V-Rod   motorcycle    valued   at approximately $15,000.

(c)A 2005 Toyota Hilux utility valued at approximately $30,000.

(d)      Cash of $2,508.70.

[18]   Tony Kite is unemployed and receives a benefit. His only declared income in the seven years from 2018 to 2024 has been from his benefit. Tony Kite’s partner Jazaria Thompson has received income between 2018 to 2024 from employment and benefits. Tony Kite and Ms Thompson have lived together since 2021. Since that time their average weekly income after tax has been $549.51. Counsel for the Commissioner submits that their household would likely have faced significant pressures in meeting typical weekly living costs from verifiable income alone.

[19]   In the period from January 2022 to December 2023, Tony Kite has received unexplained cash deposits and third-party transfers into his bank account totalling

$91,697.22.

[20]   During the same two-year period Ms Thompson has received unexplained cash deposits and third-party transfers into her bank account totalling $39,227.50.

[21]   During the same two-year period Ms Thompson made  104  transfers  to  Tony Kite’s primary bank account. The total value of these transfers was $39,782. By comparison, transfers from Mr Kite to Ms Thompson during this period totalled only

$8,132.

[22]   Tony Kite is alleged to have been in possession of cash totalling $6,505 when Operation Bear was terminated.

Effective control

[23]   Mr Scoble’s affidavit sets out the evidence relied on by the Commissioner to illustrate the respondents have effective control of the Property, despite the vehicles not being registered in their names.

[24]   In relation to the Black V-Rod motorcycle, the Commissioner says that the motorcycle was transferred into Mr Hartley’s name as a means to hide the true

ownership of it, while true ownership remained with Joel Kite. It was then transferred directly from Mr Hartley to Mr Te Hore in circumstances where Mr Hartley likely never owned it and was not in a position to transfer it, calling into question the legitimacy of that transfer.

[25]   In relation to the Teal V-Rod motorcycle, the Commissioner says that there were also transfers from Joel Kite to Mr Hartley and then back to Joel Kite within the same year, and then the registration was changed again to Mr Hartley less than a month later. Joel Kite also made comments to the undercover police officer about his intentions to alter or decorate the motorcycle. A few days later, the Teal V-Rod was transferred to Matiu Rhind. However, a week later after that registration change,  Joel Kite was seen riding the motorcycle while meeting the undercover police officer. In addition, Mr Rhind does not have a motorcycle license.

[26]   In relation to the Hilux vehicle, the Commissioner says that the vehicle was transferred from Tony Kite’s partner Ms Thompson to Joel Kite. When other Killer Beez members were initially served with on-notice restraining orders relating to the other property, the motorcycle was transferred back to Ms Thompson. Once further Killer Beez members were served with on-notice restraining orders, the Hilux vehicle was subsequently changed into the name of Tyler Alridge, who is an associate of  Joel Kite and Tony Kite. Then, 11 days later, it was transferred to Polyethylene Pipeline Fabrications Ltd. That company is controlled by Gregory Couch, a convicted drug dealer with an extensive criminal record and who has a connection to the Kite brothers.

Application without notice

[27]   The application is made without notice, pursuant to s 22 of the Act, as the Commissioner believes that there is a risk of the proposed restrained property being destroyed, disposed of, altered or concealed if notice of the application were given.

[28]The location of each of the proposed restrained vehicles is unknown.

[29]   An on-notice application has been filed simultaneously with the without notice application. That on-notice application includes further property being two amounts

of cash that were seized from the respondents and is currently held in a Police trust account. That application will be dealt with separately but has a first call date in the Criminal Proceeds List in this Court on 19 November 2024.

Relevant statutory provisions

[30]Section 22 of the Act provides:

22       Application for restraining order without notice

(1)A court that receives an application for a restraining order may, on the request of the applicant, consider the application without notice being given to any or all of the persons mentioned in section 21(1)(a) if the court is satisfied that there is a risk of the proposed restrained property being destroyed, disposed of, altered, or concealed if notice were given to the person or those persons.

(2)If an application is made for a restraining order without notice, the court must, so far as it is practicable and consistent with the interests of justice, ensure that the application is dealt with speedily.

(3)Any provisions of this subpart that relate to restraining orders applied for on notice apply, with any necessary modifications, to restraining orders applied for without notice.

[31]   The Court may make a restraining order if it is satisfied that there are reasonable grounds to believe that the property is tainted property. Section 24 provides:

24Making restraining order relating to specific property that is potentially tainted

(1)A court hearing an application for a restraining order relating to specific property may, if the court is satisfied it has reasonable grounds to believe that any property is tainted property, make an order that the property (restrained property)—

(a)is not to be disposed of, or dealt with, other than is provided for in the restraining order; and

(b)is to be under the Official Assignee’s custody and control.

(2)A restraining order may be made under subsection (1) whether or not there is a respondent in relation to whom the restraining order relates.

[32]Tainted property is defined in s 5 of the Act:

tainted property—

(a)means any property that has, wholly or in part, been—

(i)acquired as a result of significant criminal activity; or

(ii)directly or indirectly derived from significant criminal activity; and

(b)includes any property that has been acquired as a result of, or directly or indirectly derived from, more than 1 activity if at least 1 of those activities is a significant criminal activity

[33]   The Court may also make a restraining order if it is satisfied that there are reasonable grounds to believe that the respondent has unlawfully benefited from significant criminal activity:

25Making restraining order relating to all or part of respondent’s property

(1)A court hearing an application for a restraining order relating to all or part of a respondent’s property may, if the court is satisfied it has reasonable grounds to believe that the respondent has unlawfully benefited from significant criminal activity, make an order that the property it specifies in the order (restrained property)—

(a)is not to be disposed of, or dealt with, other than is provided for in the restraining order; and

(b)is to be under the Official Assignee’s custody and control.

(2)A restraining order made under subsection (1) may relate to any of the following:

(a)all of a respondent’s property (including property acquired after the making of the order):

(b)specified parts of a respondent’s property:

(c)all of a respondent’s property (including property acquired after the making of the order) other than specifically excluded property.

[34]   “Significant criminal activity” and “unlawfully benefited from significant criminal activity” are defined in ss 6 and 7 of the Act, respectively:

6Meaning of significant criminal activity

(1)In this Act, unless the context otherwise requires, significant criminal activity means an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending—

(a)that consists of, or includes, 1 or more offences punishable by a maximum term of imprisonment of 5 years or more; or

(b)from which property, proceeds, or benefits of a value of the threshold amount or more have, directly or indirectly, been acquired or derived.

(2)A person is undertaking an activity of the kind described in subsection

(1) whether or not—

(a)the person has been charged with or convicted of an offence in connection with the activity; or

(b)the person has been acquitted of an offence in connection with the activity; or

(c)the person’s conviction for an offence in connection with the activity has been quashed or set aside.

(3)Any expenses or outgoings used in connection with an activity of the kind described in subsection (1) must be disregarded for the purposes of calculating the value of any property, proceeds, or benefits under subsection (1)(b).

7Meaning of unlawfully benefited from significant criminal activity

In this Act, unless the context otherwise requires, a person has unlawfully benefited from significant criminal activity if the person has knowingly, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person undertook or was involved in the significant criminal activity).

[35]   The Court may make an order that property is to be treated as though the respondent had an interest in the property under s 17A of the Act:

17ACourt may treat effective control over property as interest in property

(1)If the High Court is satisfied that a respondent has effective control over property, the Court may, on an application made by the Commissioner, order that the property is to be treated as though the respondent had an interest in the property specified by the Court.

(2)An order under subsection (1) may—

(a)be made even if the respondent has no interest in the property; and

(b)specify an interest that differs from the interest that the respondent has in the property.

(3)Without limiting the generality of subsections (1) and (2), the Court may have regard to—

…

(c) family, domestic, and business relationships between persons having an interest in the property or in companies of the kind referred to in paragraph (a) or in trusts of the kind referred to in paragraph (b), and any other persons.

(4)Property that is subject to an order under subsection (1) may be included in any restraining order, any type 2 assets forfeiture order, or any profit forfeiture order that is made against the respondent.

(5)If the Commissioner applies for an order under subsection (1),—

(a)the Commissioner must, so far as it is practicable to do so, serve notice of the application on the respondent and on any person who, to the knowledge of the Commissioner, has an interest in the property; and

(b)the respondent and any other person who claims an interest in the property are entitled to appear and to adduce evidence at the hearing of the application.

[36]   The Commissioner must prove that the respondents have effective control on the balance of probabilities because of the potential implications of making such an order for third parties with a legal or equitable interest in the property.2

[37]   The Court may also make further orders in relation to restrained property under ss 33, 34 and 35 of the Act:

33Applying for further orders

(1)An application for a further order may be made by—

(a)the applicant for the restraining order with which the further order is associated; or

(b)a person with an interest in the restrained property or proposed restrained property with which the further order is associated; or

(c)the Official Assignee; or

(d)with the leave of the court, any other person.

2      Commissioner of Police v McGoldrick-Savaii [2018] NZHC 936 at [42].

(2)The applicant for the further order must serve a copy of the application on—

(a)every person, or every other person (if the applicant is a party), who is a party to the proceeding in which—

(i)the making of the associated restraining order is to be considered; or

(ii)the associated restraining order was made; and

(iii)the Official Assignee.

(3)The following persons are entitled to appear and to adduce evidence at the hearing of an application for a further order:

(a)the applicant:

(b)a person with an interest in the restrained property or proposed restrained property with which the further order is associated:

(c)the Official Assignee:

(d)with the leave of the court, any other person

34Making further orders

(1)On an application under section 33(1), a court may, if it considers it appropriate, make further orders in relation to the restrained property (which may, but need not, be an order of any 1 or more of the types referred to in section 35).

(2)A further order may be made—

(a)at the time the associated restraining order is made; or

(b)at any later time before the expiry of the associated restraining order.

[38]   Without limiting the generality of s 34(1), the Court may make further orders as set out in s 35 of the Act.

Discussion

Without notice application

[39]   I am satisfied it is appropriate to consider the application on a without notice basis, to prevent any dissipation of assets.

Restraining order

[40]   Having considered the evidence set out in the affidavit of Mr Scoble, I am satisfied on the balance of probabilities that the respondents have effective control of the Property despite not having the vehicles registered in their names. It appears that changing the ownership of those vehicles was an attempt to disguise the true and effective control of the Property as held by Joel Kite and Tony Kite.3 The evidence shows continued use of the Property and the likely connections with the registered owners, revealing the practical reality of the respondents’ capacity to treat the Property as their own.

[41]   I am also satisfied that there are reasonable grounds to believe that the Property is tainted property. As set out above, I consider that the respondents have effective control of the Property, and this means the Property can be treated as though they have an interest it. I consider that the respondents derived the interest in the Property from unexplained sources and more likely than not derived it from unlawful activity such as dealing in methamphetamine.

[42]   I am further satisfied that there are reasonable grounds to believe that the respondents have unlawfully benefited from significant criminal activity. This is evidenced in the respondents’ connections to the Killer Beez gang as investigated in Operation Bear and in the numerous discussions they had with the undercover police officer about the supply of methamphetamine, which included admissions by both Joel and Tony Kite about the scale of their methamphetamine operation, as well as several offers and agreements to supply methamphetamine to the officer. In addition, on arrest, Tony Kite was found in possession of cash totalling $6,505 and Joel Kite in possession of cash totalling $2,508.70.

Ancillary order permitting entry onto property

[43]   The Commissioner seeks an ancillary order pursuant to s 34(1) of the Act permitting members of the New Zealand Police to enter onto property to take the vehicles into custody on behalf of the Official Assignee, provided there are reasonable

3      Commissioner of Police v Read [2015] NZHC 2055 at [60].

grounds to believe that a restrained vehicle is on the property. Counsel for the Commissioner submits that this is likely to be that the vehicle is visible on the property.

[44]   Where a third party has possession of the restrained vehicles and therefore an order is required to give effect to the restraining order, a further order can be made to give a limited search and seizure power to uplift the vehicle and to deliver it to the Official Assignee.4

[45]   The Commissioner indicates that the location of each of the proposed restrained vehicles is presently unknown, and that they may be held by the persons in whose names they are registered. In these circumstances I consider it is appropriate to grant the further order to give effect to the restraining order.

Orders

[46]   I grant the Commissioner’s without notice application for a restraining order in relation to  the  Property,  in  the  terms  set  out  in  [1]  of  the  application dated 7 November 2024.

[47]   As the Commissioner has filed an application for an on-notice restraining order within seven days, the order granted without notice will continue in effect until the on-notice application is determined, pursuant to s 39 of the Act.

McQueen J

Solicitors:

O’Donoghue Webber, Nelson for Applicant

4      Commissioner of Police v Standen [2022] NZHC 76.