Commissioner, New Zealand Police v Smith

[2023] NZHC 1317

NOTE: BANK ACCOUNT DETAILS IN PARA [4(k)] ARE REDACTED

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2017-485-199

[2023] NZHC 1317

UNDER

the Criminal Proceeds (Recovery) Act 2009

IN THE MATTER

of applications pursuant to sections 21, 25, 33, 35 and 58

BETWEEN

THE COMMISSIONER, THE NEW ZEALAND POLICE

Applicant

AND

GEOFFREY WAYNE SMITH

Respondent

AND

DIANNE MARIE OLIVE SMITH

First Interested Party

STEPHEN EDWARD SMITH
Second Interested Party

JAMES GAVIN DONOVAN
Third Interested Party

RODNEY MARTIN FOSTER
Fifth Interested Party

ASB BANK LIMITED

Sixth Interested Party

On the papers

Counsel:

S B McCusker for Applicant

M Taylor-Cyphers for Respondent

Judgment:

30 May 2023

JUDGMENT OF RADICH J

COMMISSIONER OF POLICE v SMITH [2023] NZHC 1317 [30 May 2023]

[1]                 The applicant and the respondent have asked the Court to approve, under s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act), a settlement between them that would bring these profit forfeiture proceedings under the Act to an end.

The underlying proceeding

[2]                 The respondent (Mr Smith) faced two charges of supplying methamphetamine, one representative charge of supplying methamphetamine, one charge of possession of methamphetamine, one charge of unlawfully possessing a firearm and one charge of unlawfully possessing ammunition. He pleaded guilty to the charges and was sentenced by Collins J on 17 August 2018 to 13 years and six months’ imprisonment.1 The quantity of methamphetamine involved was valued conservatively at $5,250,000.2

This proceeding

[3]                 This proceeding was initiated by a without notice restraining order, granted by Mallon J on 6 April 2017. An application for on notice restraining orders was filed on 12 April 2017.

[4]                 In a judgment of Clark J of 23 January 2018,3 restraining orders were made by consent over all of the assets sought for restraint, which were as follows:

(a)All interests in the property at 6 Broadview Place, Howick, Manukau, registered in the names of Dianne Marie Olive Smith, Stephen Edward Smith and James Gavin Donovan, and described in certificate of title NA13B/109, legal description Lot 32, DP 58632, which is unencumbered;

(b)Proceeds from the sale of the 2008 Mercedes-Benz C63A AMG saloon motor, registration JHW926, namely funds in the amount of

$33,512.40, along with any interest accrued;

1      R v Smith [2018] NZHC 2118.

2 At [15].

3      The Commissioner of New Zealand Police v Smith [2017] NZHC 10 (Restraining and Sale Orders Judgment).

(c)A 1991 Chevrolet Corvette motor vehicle including ignition keys and personalised registration plate IMEANI, registered in the  name  of  Mr Smith (the Corvette);

(d)A Holden Commodore utility motor vehicle including ignition keys, registration GJN195, currently registered to Christopher William Leigh;

(e)A 2009 Nissan Navara utility motor vehicle including ignition keys, and personalised registration plate PRIMO;

(f)Proceeds from the sale of a bobcat Digger, namely funds in the amount of $22,587, along with any interest accrued;

(g)All interests in the property at 32 Kowhai Avenue, Kaiaua, RD3, Pokeno 2473, registered in the name of Dianne Smith and described in the certificate of title NA26B/817, legal description Lot 3 DP 41462, shown as being mortgaged with ASB Bank Limited;

(h)A Lidgard 34 Launch including ignition keys;

(i)A 2003 boat trailer, registration: U330Y, registered  in  the name of Mr Smith with a Seadoo Jetski (the Boat Trailer and Jetski).

(j)Proceeds from the sale of a 1994 Ford Trader 4.0T EXLWB tow truck, registration HUC990, namely funds in the amount of $4,402.62, along with any interest accrued; and

(k)A Westpac bank account [ ] personalised in the name of Geoffrey Smith and containing a balance of funds in the amount of $4,894.33.

[5]                 Mr Smith consented to all of the restraining orders. He consented to the related sale orders for all of the items of property in which he had an interest with the

exception of the Corvette and the Boat Trailer and Jetski. Clark J declined, in those circumstances, to make sale orders over those two assets.4

[6]                 On 28 February 2019, an application was made for profit forfeiture orders under s 52 of the Act. The application was made over the same property as that which was subject to the restraining order (the forfeiture application). The forfeiture application has been adjourned pending settlement discussions between the applicant, the respondent and the first and second interested parties – the mother and brother of the respondent. Aspects of those negotiations resulted in the making of asset forfeiture orders by the Court on 14 October 20195 and on 13 December 2021.6

Interested parties

[7]                 The Court has approved a settlement with the first interested party relating to the Kaiaua property.7 A settlement was approved also with the second and third interested parties, relating to the Manukau property.8 A notice of discontinuance was filed in relation to the involvement of the fourth interested party.9 The fifth interested party is the registered owner of the Nissan Navara motor vehicle. I am satisfied from a job sheet from Detective Brown attached to the 24 May 2023 memorandum of counsel seeking approval of this settlement that these proceedings have been brought to the attention of Mr Brown on several occasions and that he has said that he wishes nothing further to do with the proceedings or with the vehicle – and that “they can do what they like with it”.

[8]                 The Court approved a settlement with the former seventh interested party on 22 January 2020.10 As a result of the settlements, the interests of each of the interested parties have been accommodated.

4      At [43] and [50].

5      Commissioner of Police v Smith [2019] NZHC 2606.

6      The Commissioner, the New Zealand Police v Smith [2021] NZHC 3402.

7      Commissioner of Police v Smith, above n 5.

8      The Commissioner, the New Zealand Police v Smith, above n 6.

9      Memorandum in regard to discontinuance between the applicant and the fourth interested party dated 18 March 2019.

10     The  Commissioner,  the  New  Zealand  Police  v  Smith  HC  Wellington  CIV-2017-485-199,  7 February 2020 (Order of Clark J approving settlement).

Settlement

[9]                 The terms of settlement are as recorded in the orders made in this judgment. By way of summary, Mr Smith, or Mr Darryl Slater on his behalf, are to pay $30,000 plus transport costs of $320 plus GST (the payment) into the New Zealand Insolvency & Trustee Service Proceeds of Crime Account by 30 June 2023. The Corvette and the Boat Trailer and Jetski will then be released from the ambit of the restraining order. The payment and the assets that remain subject to the restraining order will then be forfeit pursuant to a profit forfeiture order. These arrangements will bring the proceedings against the respondent to an end.

Legal principles

[10]             I am satisfied that the profit forfeiture order is able to be made. Under s 52(c) of the Act, the application for the order is to state the value of the benefit the respondent is alleged to have obtained in the relevant period of criminal activity. In terms of s 53(1) of the Act, Mr Smith’s unlawful benefit is $7 million.11 Under s 54, before the High Court makes a profit forfeiture order, it is to determine the maximum recoverable amount by taking the value of the benefit determined under s 53 and deducting the value of any property forfeited to the Crown as a result of assets forfeiture orders. As a result of the settlements referred to in paragraphs [7] and [8] above – which became subject to assets forfeiture orders – the maximum recoverable amount is $6,912,000.

[11]             I am satisfied, in terms of s 55 of the Act, that Mr Smith has unlawfully benefited from significant criminal activity within the relevant period of criminal activity and (as recorded in the joint memorandum of counsel of 24 May 2023) in terms of s 55(1)(b) of the Act that Mr Smith accepts that he has an interest in (or effective control over) all of the property to be realised for the purposes of the profit forfeiture order.

[12]             The joint memorandum of counsel records also that, if Mr Smith does not make the payment of $30,000 referred to above by 30 June 2023, then Mr Smith agrees that

11     Affidavit of Paul Brown dated 26 February 2019 at [9.1]–[9.4].

the Corvette and the Boat Trailer and Jetski will be realised pursuant to the profit forfeiture orders and that the proceeds of their sale will be forfeit in accordance with s 83(1) of the Act.

[13]             I am content that the settlement is in order to be approved under s 95 of the Act. That section provides:

High Court must approve settlement between Commissioner and other party

(1)The Commissioner must enter into a settlement with any person as to the property or any sum of money to be forfeited to the Crown.

(2)A settlement does not bind the parties unless the High Court approves it.

(3)The High Court must approve the settlement if it is satisfied that it is consistent with—

(i)the purpose of this Act; and

(ii)the overall interests of justice.

[14]             I am satisfied that the settlement is consistent with the purposes of the Act, as described in s 3, and with the overall interests of justice, which involves a broad inquiry taking into account the savings of time and costs and litigation risk to the parties – often reflecting a common sense compromise between the parties.12 The parties have agreed in this case, and I concur with their assessments that:

(a)The Corvette, the Jetski and the boat trailer can be dealt with separately as proposed on the basis  of  the  sentimental  value  they  hold  for  Mr Smith;

(b)A valuation of the Corvette by Turners in late 2020 for the Official Assignee valued it at between $33,500 and $38,000 and the Jetski is valued at less than $5,000 if sold at auction;

(c)In the circumstances, the forfeiture of $30,000 in exchange for the Corvette, the Boat Trailer and Jetski, while below what might be

12     Commissioner of Police v Wellington [2018] NZHC 2502 at [14]–[15].

realised if the assets were sold at auction, will be offset by cost savings to the Commissioner in not having to continue to litigate the case and not having to incur further costs through putting the assets put up for sale. The outcome here is pragmatic.

(d)The total value of the assets to be forfeited under the proposed profit forfeiture order, as well as those already forfeit under asset forfeiture orders, is approximately $240,000. The forfeiture of this property is consistent with the statutory purpose of the Act.

(e)There is considerable benefit to the parties and to the Court in bringing this longstanding proceeding to a close.

[15]             For these reasons, I make the orders in the terms set out in the draft orders submitted with the joint memorandum of counsel seeking approval of settlement under s 95 of the Act, dated 24 May 2023.

Radich J

Solicitors/Counsel:

Crown Solicitor, Wellington for Applicant M Taylor-Cyphers, Dunedin for Respondent