COMMISSIONER OF POLICE AND DAVID ALLAN HOWARD

[2024] NZHC 3004

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2023-488-18

[2024] NZHC 3004

UNDER

Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

DAVID ALLAN HOWARD

Defendant

Judgment:

(On the papers)

15 October 2024

JUDGMENT OF BREWER J

This judgment was delivered by me on 15 October 2024 at 3.30 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Meredith Connell (Auckland) for Applicant

COMMISSIONER OF POLICE v HOWARD [2024] NZHC 3004 [15 October 2024]

Introduction

[1]                 The Commissioner of Police and the estate of the late Mr David Allan Howard have agreed to settle a  proposed  claim  by  the  Commissioner  for  forfeiture  of  Mr Howard’s assets.

[2]                 The agreement between the Commissioner and Mr Joseph Allan Howard, as personal representative of the estate of the late Mr Howard, is dated 9 October 2024. It has been referred to me for approval since s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act) 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.

Background1

[3]                 The late Mr Howard owned two properties in Kaeo. One was at 29 School Gully Road and the other was at 11 School Gully Road.

[4]                 On 27 September 2022, police executed a search warrant at 29 School Gully Road, which was where the late Mr Howard lived. The police found a large cannabis growing operation. There were 267 cannabis plants (in various states of maturity),

4.8 kilograms of dried and packaged cannabis head and 91 grams of cannabis oil. The late Mr Howard was charged with various cannabis related offences as well as for unlawful possession of a pistol and airgun.

1      I take my view of the facts from the affidavits of Jason Lee Hill (sworn 3 March 2023), Kevan Andrew Verry (affirmed 3 March 2023) and Nicholas Gordon Pirihi (affirmed 9 October 2024).

[5]                 The late Mr Howard pleaded not guilty to the charges, but he died on or about 9 May 2023 before any resolution of the charges.

[6]                 The police investigation showed that the late Mr Howard lived a cash-based lifestyle. He would deposit cash into his bank accounts as required for specific transactions, or when his account was low on funds.

[7]                 The police case was that the late Mr Howard had completed at least one previous grow cycle of cannabis at 29 School Gully Road with an estimated yield of at least $106,500 per cycle.

[8]Between 2016 and 2022, the late Mr Howard declared income totalling

$73,606.57   to  Inland  Revenue.     However, between 15  December  2015  and  13 December 2022 the late Mr Howard’s bank records show that he received:

(a)over $100,000 in cash deposits;

(b)approximately $4,000 in unexplained deposits; and

(c)approximately $35,000 of deposits from family members or known associates for reasons unknown.

[9]                 The late Mr Howard purchased 29 School Gully Road in 1990. In February 2021, he paid off the mortgage and it was discharged.

[10]The late Mr Howard bought 11 School Gully Road on 29 April 2021 for

$72,000.    In the 12 months prior to the purchase, the late Mr Howard deposited

$70,280 cash into his bank account and was able to fund the purchase without taking out a mortgage.

[11]              This Court made without notice restraining orders as sought by the Commissioner, against 29 School Gully Road and 11 School Gully Road on 9 March 2023. The Commissioner then applied for on notice restraining orders which were made on 12 April 2024.

[12]              Mr Joseph Howard was appointed as the personal representative of the late Mr Howard’s estate on 27 June 2024. He had previously approached police to discuss settlement of the proceedings.

[13]              Mr Joseph Howard, on 3 October 2024, received a letter setting out the Commissioner’s settlement offer and on the same day accepted the offer. On 8 October 2024, Detective Sergeant Pirihi emailed Mr Joseph Howard a copy of the settlement agreement for him to consider. Mr Joseph Howard was repeatedly advised to seek legal advice before accepting or rejecting the offer. Indeed, the settlement agreement repeats that advice.

[14]              On 8 October 2024, after he had provided Mr Joseph Howard with a copy of the settlement agreement, Detective Sergeant Pirihi met with Mr Joseph Howard who stated that he was happy to sign the agreement.

[15]              Mr Joseph Howard was with his brothers, Mr Daniel Howard and Mr Adam Howard. Before signing the agreement, Mr Joseph Howard telephoned  his  sister, Ms Amy Howard, and discussed the agreement with her. Mr Joseph Howard then signed the agreement.

The settlement agreement

[16]              The essence of the settlement agreement is that the estate of the late Mr Howard will lose its interests in 11 School Gully Road but there will be no challenge to its interests in 29 School Gully Road.

[17]              As set out in s 95, I must approve the settlement if I am satisfied that it is consistent with the purposes of the Act and the overall interests of justice. The purpose of the Act is set out in s 3:

(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.

[18]              There is  no suggestion that any of the potential beneficiaries of the late     Mr Howard’s estate have had anything to do with his criminal activities.

[19]              I agree with the submission of counsel for the Commissioner that there is a good case to show that 11 School Gully Road is “tainted property”, so as to support a type 1 assets forfeiture order.

[20]              I also accept that there are grounds to apply for a profit forfeiture order (and, probably, a forfeiture order on the basis of it being “tainted property”) in respect of 29 School Gully Road. But that would be an uncertain application and beneficiaries of the late Mr Howard’s estate would be entitled to claim relief against forfeiture.

[21]              I am influenced by the advice from the Commissioner that if he were to seek a profit forfeiture order, he would likely nominate an unlawful benefit figure in the region of $106,500. That is not so far distant from the assessed value of 11 School Gully Road of $88,000.

[22]              I have considered whether I should order service of the current application on potential beneficiaries of the late Mr Howard’s estate. I have decided not to because:

(a)three sons and a daughter of the late Mr Howard agree with the proposed settlement, from which I take it that there is broad family agreement; and

(b)the proposed settlement is pragmatic and objectively favourable to the late Mr Howard’s estate; and

(c)it is in the interests of all parties for this proceeding to be concluded.

Decision

[23]              I approve the settlement agreement pursuant to s 95 of the Act. I make the following orders, so as to give effect to the settlement:

(a)Further orders under s 34 of the Act: the restraining order over the following property is rescinded and the Official Assignee is directed to remove the order from the record of title:

(i)all interests in the property at 29 School Gully Road, Kaeo, deposited plan LOT 1 and LOT 4 DP 115344, record of title unique identifier NA65C/672, registered owner David Allan Howard.

(b)Type 1 assets forfeiture order under s 50(1) of the Act: the following property vests in the Crown absolutely and is in the Official Assignee’s custody and control:

(i)all interests in the property at 11 School Gully Road, Kaeo, deposited plan Part Old Land Claim 69, record of title unique identifier NA765/280, registered owner David Allan Howard.

(c)Costs: costs lie where they fall in relation to all matters between the Commissioner and the estate of the late David Howard.

[24]              In addition, at the request of the parties, I note the further terms of the settlement:

(a)Mr J Howard, as personal representative for Mr Howard’s estate, abandons all claims he may have under the Criminal Proceeds (Recovery) Act 2009 or otherwise to 11 School Gully Road;

(b)the Commissioner will not proceed with an application for a profit forfeiture order against Mr Howard’s estate on the basis of the significant criminal activity evidenced in the affidavits filed in the proceedings to date;

(c)subject to the Court’s approval, the settlement is in full and final settlement of the question of civil forfeiture of the property as between the Commissioner and the estate of Mr Howard on the basis of the significant criminal activity evidenced in the affidavits filed in the proceedings to date.

[25]This proceeding is at an end.

Brewer J