COMMISSIONER OF POLICE AND HAILONG YE THOMAS STEVEN GEORGE WEBB CARL GEOFFREY PRECIOUS
[2024] NZHC 3052
•18 October 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-2964
[2024] NZHC 3052
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
COMMISSIONER OF POLICE
Applicant
AND
HAILONG YE
First Respondent
THOMAS STEVEN GEORGE WEBB
Second RespondentCARL GEOFFREY PRECIOUS
Third Respondent
Hearing: On the papers Counsel:
E Rangamuwa and G Young for the Applicant D Stevens for the Third Respondent
Judgment:
18 October 2024
JUDGMENT OF GORDON J
This judgment was delivered by me
on 18 October 2024 at 12.30 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Solicitors:
Meredith Connell, Auckland D Stevens, Auckland
COMMISSIONER OF POLICE v YE [2024] NZHC 3052 [18 October 2024]
[1] In this proceeding the Commissioner of Police (Commissioner) has obtained restraining orders against the third respondent, Carl Precious, under the Criminal Proceeds (Recovery) Act 2009 (Act). The Commissioner has not yet filed an application for civil forfeiture orders.
[2] The Commissioner and Mr Precious now seek the Court’s approval under s 95 of the Act of a settlement agreement reached between them.
Background
[3] I draw the following summary of the alleged offending from the joint memorandum of counsel for the Commissioner and counsel for Mr Precious.
[4] In January 2023, Police commenced an investigation, Operation Chartreuse, focused on the actions of a syndicate involved in the importation of Class A and Class B controlled drugs and precursor substances, the supply of Class A and Class B drugs, and money laundering connected with these activities.
[5] Evidence was gathered through the interception of private communications, covert cameras and audio devices, surveillance and other means. The investigation identified a number of people involved in the syndicate, including Mr Precious.
[6] While others in the syndicate were responsible for importation of the controlled drugs, Mr Precious would receive methamphetamine from the second respondent, Thomas Webb, and then supply it to his associates. Mr Precious was just above the street level dealers in the syndicate and he would supply controlled drugs to street level dealers.
[7] His dealing activities were extensive. Intercepted communications establish that between 17 February 2023 and 21 June 2023, he supplied methamphetamine on 25 separate occasions. The quantity supplied was not usually specified.
[8] On 22 June 2023, the investigation terminated. Search warrants were carried out at 17 addresses across Auckland with seizures of controlled drugs, vehicles, cash and jewellery being made by Police.
[9] Police searched Hindmarsh Street, Mr Precious’s home address. In addition to the Property (as defined in [13] below), they located a thin sack containing four clear bags of pills and powder, two plastic containers with a crystal substance inside, drug paraphernalia and a shotgun. One sum of cash, an amount of $19,000, was found inside a toilet cistern. Jewellery and another sum of cash, comprising $1,270, were located in a safe in the wardrobe of the main bedroom. The total sum of that cash, being $22,070, is restrained as set out in [13] below.
[10] Mr Precious was arrested and charged with supplying the Class A controlled drug methamphetamine and participation in an organised criminal group.
[11] On 31 July 2024, Mr Precious pleaded guilty to a representative charge of supplying the Class A controlled drug methamphetamine. The total amount supplied, as specified in the charge, was no less than 23.5 grams.
Mr Precious is for sentence on 9 November 2024.
Proceedings under the Act
[13] Restraining and further orders were made on 13 December 2023, and restraining, effective control and further orders were also made on 1 March 2024. The following restrained property is attributed to Mr Precious:
(a)proceeds of sale, and any interest earned thereon, of a 2017 Ford Ranger, registration KRB592 (2017 Ford Ranger), former registered person [SEH];
(b)$22,070 cash located at 15 Hindmarsh Street, Henderson, Auckland (Hindmarsh Street) on 22 June 2023 (Hindmarsh Cash) and any interest earned thereon;
(c)proceeds of sale, and any interest earned thereon, the following items located at Hindmarsh Street on 22 June 2023 (Hindmarsh Jewellery):
9kt gold and diamond gent’s ring;
(ii)9kt gold curb link necklace 51g;
(d)proceeds of sale, and any interest earned thereon, of a Breitling Endurance-black dial, red strap men’s wristwatch located at Hindmarsh Street on 22 June 2023 (Breitling Watch);
(e)additional watches located at Hindmarsh Street on 22 June 2023 (Watches):
(i)faulty Tissot Touch Solar titanium men’s wristwatch;
(ii)counterfeit Breitling Endurance-black dial, white strap men’s
wristwatch;
(iii)counterfeit Breitling Endurance-black dial, orange strap men’s
wristwatch;
(iv)counterfeit Breitling Endurance-black dial, black strap men’s
wristwatch; and
(v)counterfeit Breitling Endurance-blue dial, pale blue strap men’s
wristwatch, (together, the Property).
[14] The total value of the Property, excluding the one faulty watch and four counterfeit watches, is approximately $41,745.60.
Unlawful benefit
[15] The Commissioner has identified a total of $411,657 of unexplained funds accumulated between 1 April 2019 and 31 March 2023 which cannot be attributed to any legitimate income declared by Mr Precious or SEH (Mr Precious’ former partner). The Commissioner considers it is likely that these unexplained funds were from the sale of methamphetamine and further, were used to meet the total expenditure of
Mr Precious and SEH between 1 April 2019 and 31 March 2023, being $1,259,534. That sum exceeded their declared income for the period in question by approximately
$830,782.
[16] Accordingly, the Commissioner considers the value of Mr Precious’ unlawful benefit is at the very least $411,657, but likely to be greater.
Tainted property
[17]The Commissioner also considers the Property is tainted property.
2017 Ford Ranger
[18] On the basis of the Commissioner’s evidence, it is likely that the 2017 Ford Ranger was funded, at least in part, using funds from outside the banking system, namely the proceeds of sale from Mr Precious’ methamphetamine offending. It is accordingly tainted.
[19] The registered person of the 2017 Ford Ranger is SEH. However, on the basis of the evidence available to the Commissioner, the Ford Ranger would appear to be Mr Precious’ property. The Court further notes that SEH has told the Police that she does not want to make a claim for the Ford Ranger.
Hindmarsh Cash
[20] The Hindmarsh Cash was located and seized during the search warrant at Hindmarsh Street, Mr Precious’ home address. The Commissioner’s position is that given the evidence of Mr Precious’ role in the supply of methamphetamine, the Hindmarsh Cash was likely derived from his methamphetamine offending and is accordingly tainted.
Hindmarsh Jewellery and Breitling Watch
[21] The net proceeds of sale of the Hindmarsh Jewellery is approximately $4,600 and the net sale proceeds of the Breitling Watch is $1,102.69 (excluding the watches referred to below). The Commissioner’s position is that given the significant
difference between Mr Precious’ declared income and his expenditure, it is likely the Hindmarsh Jewellery and Breitling Watch were funded at least in part using cash or other funds from the proceeds of Mr Precious’ methamphetamine offending and is accordingly tainted.
Watches
[22] As part of the proposed settlement the Commissioner, with the consent of Mr Precious, seeks destruction of the remaining watches given their low value. One is not working and the others are copies (described as counterfeit) and have an approximate value of $150 each.
Proposed settlement
[23]The proposed settlement is on the following terms:
(a)a type 1 assets forfeiture order is made, by consent, under s 50(1) of the Act over the Property;
(b)a direction is made, by consent, under s 59 of the Act for the destruction of the Watches.
(c)Mr Precious abandons all claims he may have, under the Act or otherwise, to any of the property to be forfeited under this settlement, or to any of the other restrained property in this proceeding;
(d)the Commissioner will not pursue an application for a profit forfeiture order against Mr Precious on the basis of the significant criminal activity evidenced in the affidavits filed in this proceeding to date;
(e)the agreement is in full and final settlement of the question of civil forfeiture of the Property as between the Commissioner and Mr Precious on the basis of the significant criminal activity evidence in the affidavits filed in this proceeding to date; and
(f)costs as between the Commissioner and Mr Precious in this proceeding will lie where they fall.
[24] The settlement would result in forfeiture of all of the restrained property attributed to Mr Precious, being the Property and any interest earned thereon. Mr Precious has no other known assets of any significance.
Statutory provision – Court approval
[25]Section 95 of the Act which governs settlements 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.
[26] First, as to the purposes of the Act: the primary purpose, in s 3(1) is to establish a regime for the forfeiture of property that has been derived directly or indirectly from significant criminal activity or that represents the value of a person’s unlawfully derived income. The ancillary purposes in s 3(2) include to eliminate the chance of persons to profit from undertaking or being associated with significant criminal activity and to deter significant criminal activity.
[27] The words “overall interests of justice” in s 95(3) require a broad inquiry.1 Relevant factors include the saving of time and cost and the litigation risk of a hearing to the Commissioner and a respondent.2 The Courts have recognised that a decision to settle proceedings under the Act will often reflect a “pragmatic” arrangement or
1 Commissioner of Police v Li [2018] NZHC 1566 at [32].
2 Commissioner of Police v Kree [2013] NZHC 2972 at [11]; Commissioner of Police v Zhang
[2016] NZHC 930 at [8].
solution, a “common sense compromise” or a “sensible resolution” that will meet the purposes of the Act and the overall interests of justice.3
The present case
[28] For the reasons advanced by the parties, I am satisfied that the settlement proposed is consistent with the purposes of the Act and the overall interests of justice. In particular:
(a)There will be a saving of time and cost for the parties if the matter can be resolved by consent without the need for the Commissioner to file a civil forfeiture application and a consequential hearing.
(b)It follows that settlement will also obviate the need for expenditure of the Court’s time and resources in determining an application for civil forfeiture orders.
(c)The agreed settlement recognises the risks inherent in such litigation to both parties and allows them to have certainty and control as to the outcome.
(d)Finally, and fundamentally, the proposed settlement results in forfeiture of all the property restrained against Mr Precious, with nothing to be released to him. The Commissioner acknowledges the practical difficulties of pursuing a civil debt under ss 55(4) and 83(4) of the Act. Mr Precious does not have any additional assets, bank accounts or income in New Zealand that could be realised to satisfy any residual debt he would owe to the Crown.
Result
[29] Given that I am satisfied as to the matters under s 95(3) of the Act, I must approve the settlement.
Commissioner of Police v Marsh [2022] NZHC 1032 at [5], Commissioner of Police v Douglas
[2015] NZHC 1293 at [6], and Commissioner of Police v Cherrington [2022] NZHC 1396 at [20].
[30]I make the following orders, so as to give effect to the settlement:
(a)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)proceeds of sale, and any interest earned thereon, of a 2017 Ford Ranger, registration KRB592, former registered person SEH;
(ii)$22,070 cash located at 15 Hindmarsh Street, Henderson, Auckland (Hindmarsh Street) on 22 June 2023 and any interest earned thereon;
(iii)proceeds of sale, and any interest earned thereon, the following items of jewellery located at Hindmarsh Street on 22 June 2023:
(A)9kt gold and diamond gent’s ring;
(B)9kt gold curb link necklace 51g;
(iv)proceeds of sale, and any interest earned thereon, of a Breitling Endurance-black dial, red strap men’s wristwatch, located at Hindmarsh Street on 22 June 2023;
(v)faulty Tissot Touch Solar titanium men’s wristwatch;
(vi)counterfeit Breitling Endurance-black dial, white strap men’s
wristwatch;
(vii)counterfeit Breitling Endurance-black dial, orange strap men’s
wristwatch;
(viii)counterfeit Breitling Endurance-black dial, black strap men’s
wristwatch; and
(ix)counterfeit Breitling Endurance-blue dial, pale blue strap men’s
wristwatch.
(b)Direction under s 59 of the Act:
The Official Assignee is to arrange for destruction of the following property:
(i)faulty Tissot Touch Solar titanium men’s wristwatch;
(ii)counterfeit Breitling Endurance-black dial, white strap men’s
wristwatch;
(iii)counterfeit Breitling Endurance-black dial, orange strap men’s
wristwatch;
(iv)counterfeit Breitling Endurance-black dial, black strap men’s
wristwatch; and
(v)counterfeit Breitling Endurance-blue dial, pale blue strap men’s
wristwatch.
(c)Costs: costs lie where they fall in relation to all matters between the Commissioner and Mr Precious.
[31]As requested by the parties, I note the further terms of the agreed settlement:
(a)Mr Precious abandons all claims he may have, under the Act or otherwise, to the property to be forfeited under this settlement.
(b)the Commissioner will not pursue an application for a profit forfeiture order against Mr Precious in respect of the significant criminal activity evidenced in the affidavits filed in the proceeding to date; and
(c)the settlement is full and final in respect of the question of civil forfeiture of the Property as between the Commissioner and Mr Precious on the basis of the significant criminal activity evidence in the affidavits filed in this proceeding to date.
Gordon J
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