Commissioner of New Zealand Police v He

[2023] NZHC 1326

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-2685

[2023] NZHC 1326

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF NEW ZEALAND POLICE

Applicant

AND

WEI DA HE

First Respondent

YUMEI LI

Second Respondent

Hearing:

On the papers

Appearances:

S M Earl and LSN Lai for Applicant

E Ho and L James for First Respondent A Speed for Second Respondent

Judgment:

30 May 2023

JUDGMENT OF MANDER J

[1]    The Commissioner of Police (the Commissioner) and Ms Yumei Li seek orders of the Court, pursuant to s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act), approving a settlement reached between them.

[2]    Ms Li and her partner, Mr He, were arrested on 4 December 2019 following the execution of search warrants at two properties, including a Housing New Zealand property tenanted by Ms Li at 22 Simmonds Avenue where $51,995 in cash and 2.4 kg of methamphetamine were located.  While the police were searching this address,  Ms Li arrived driving a Honda Touring motor vehicle (the Honda vehicle).

COMMISSIONER OF NEW ZEALAND POLICE v HE [2023] NZHC 1326 [30 May 2023]

[3]    Ms Li was found guilty following a jury trial on 13 August 2021 on a charge of permitting premises to be used for the commission of an offence against the Misuse of Drugs Act 1975.1 She was sentenced to 10 months’ home detention.

[4]    On 6 March 2020, Katz J made a restraining order in respect of the Honda motor vehicle registered to Ms Li. A sale order was also made at that time in respect of the vehicle.2

[5]    On 28 May 2020, Muir J approved a settlement agreement between the Commissioner and Mr He. As part of the settlement, Mr He agreed to abandon any and all claims he had to the Honda vehicle and consented to its forfeiture.3

[6]    Subsequently, on 13 December 2022, the Commissioner filed an application for civil forfeiture orders. The Commissioner and Ms Li have now agreed to settle the matter of civil forfeiture of assets between them which, subject to the Court’s approval, will bring the Commissioner’s application to an end.

Relevant principles

[7]Section 95 of the Act governs settlement, and provides:

95High Court must approve settlement between Commissioner and other party

(1)The Commissioner may 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—

(a)the purposes of this Act; and

(b)the overall interests of justice.

1      Misuse of Drugs Act 1975, s 12(1) and (2)(a) — maximum penalty 10 years’ imprisonment.

2      Criminal Proceeds (Recovery) Act 2009, ss 33-35.

3      Commissioner of Police v He [2020] NZHC 1145 at [17](c).

[8]    Section 95 requires this Court to be satisfied that the overall interests of justice are consistent with such a settlement. This indicates a broad enquiry is required that includes regard being had to the savings of time and costs, and the litigation risk to the parties.4 The Court has recognised that decisions to settle proceedings can be made for economic and pragmatic reasons that often reflect a common sense compromise between the parties.5

[9]    As noted in counsel’s joint memorandum, Parliament is likely, when empowering the Commissioner to enter into settlement agreements, to have had this in mind, and in particular the significant costs associated with civil litigation and the benefits to all parties from being able to resolve claims by consent. I accept there is a strong public interest in litigation of this kind being brought to a prompt conclusion provided the settlement reflects the likely costs and risks inherent in the determination of a contested application of this type.

The proposed settlement

[10]The terms of the proposed settlement are:

(a)an assets forfeiture order be made under s 50(1) of the Act, by consent, over the sale proceeds of the Honda vehicle, and any interest accrued;

(b)Ms Li agrees to abandon any and all claims she has (under the Act or otherwise) to the Honda vehicle;

(c)the Commissioner will not pursue an application for a profit forfeiture order against Ms Li in respect of the significant criminal activity alleged in this proceeding to date;

(d)the settlement is in full and final settlement of the civil forfeiture application (dated 13 December 2022) brought by the Commissioner against Ms Li under the Act; and

4      Commissioner of Police v Zhang [2016] NZHC 930 at [8].

5      Commissioner of Police v Douglas [2015] NZHC 1293 at [6].

(e)the costs in relation to the matter between the Commissioner and Ms Li are to lie where they fall.

[11]The approximate value of the property being forfeited is $25,742.70.

Discussion

[12]   I am satisfied the proposed settlement is consistent with the purpose of the Act and the overall interests of justice. In reaching that conclusion, I have taken into account the following considerations:

(a)There will be significant savings of time and cost from the matter being resolved by consent which will obviate the need for the Commissioner to expend time and resources in pursuing his application in respect of property of relatively low value.

(b)I accept there is a good case to show the Honda vehicle is tainted property because there is evidence that it has wholly (or in part) been acquired as a result of significant criminal activity, namely the supply (including sale) of methamphetamine, and permitting premises to be used for the commission of an offence against the Misuse of Drugs Act 1975. It follows that the proceeds of its sale would be liable to be forfeited. Alternatively, as contended by the Commissioner, Ms Li has unlawfully benefited from significant criminal activity to the value of at least as much as approximately $66,500, and the property is therefore liable to be forfeited to meet a profit forfeiture order.

(c)Ms Li, by her own admission and at trial, admitted that Mr He funded the purchase of the Honda vehicle and that she was well aware of his dealing activities but deliberately turned a blind eye in order to enjoy the benefits of her relationship with him. Mr He pleaded guilty to and was convicted of a representative charge of supplying methamphetamine and two charges of possessing that drug for supply. He received a total of $1,393,071.50 in unexplained cash deposits and international money transfers. In the same period Ms Li’s only form of

legitimate income was from a benefit. Having regard to Ms Li’s admissions and her minimal income, there is a firm basis for the Commissioner’s position that the purchase of the Honda vehicle was likely funded by Mr He’s methamphetamine offending, and that Ms Li unlawfully benefited from facilitating that offending.

(d)The form of the proposed settlement is such that it will ensure the sale proceeds of the Honda vehicle will be forfeited.

(e)There are no other substantial assets belonging to Ms Li of which the Commissioner is aware that could be realised to satisfy a profit forfeiture order.

(f)While Ms Li disputes aspects of the Commissioner’s case against her, she acknowledges a contested hearing carries risks for her. An agreed settlement will allow the parties to have certainty and control as to the outcome of the proceeding.

[13]I therefore approve the settlement, pursuant to s 95(2) of the Act.

Result

[14]I make (by consent) the following orders:

(a)An assets forfeiture order under s 50(1) of the Act on the terms that the following property vests in the Crown absolutely and is to pass into the Official Assignee’s custody and control:

(i)the sale proceeds of the Honda vehicle, approximately $25,110, and any interest accrued.

(b)Costs are to lie where they fall in relation to all matters between the Commissioner and Ms Li.

[15]In addition, I record the following terms of the agreed settlement:

(a)Ms Li agrees to abandon any and all claims she has under the Act or otherwise to the Honda vehicle or any of the other property that has been restrained in this proceeding;

(b)the Commissioner will not pursue an application for a profit forfeiture order against Ms Li in relation to the significant criminal activity alleged to underlie this proceeding;

(c)the settlement is in full and final settlement of the civil forfeiture application (dated 13 December 2022) brought by the Commissioner against Ms Li under the Act.

Solicitors:

Crown Solicitor, Auckland Focus Law, Auckland Andrew Speed, Auckland