COMMISSIONER OF POLICE AND KATHY EMILY CRIBBETT

[2024] NZHC 2954

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-249

[2024] NZHC 2954

UNDER

The Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

KATHY EMILY CRIBBETT

Respondent

AND

MORTGAGE HOLDING TRUST COMPANY LIMITED

First Interested Party

AND

DARRIN STEPHEN BAYLIS

Third Interested Party

AND

DARRIN STEPHEN BAYLIS and CAMBRIDGE TRUSTEES NO 2 LIMITED

as trustees of the BAYLIS FAMILY TRUST Fourth Interested Party

On the Papers

Appearances:

K South for Applicant

C M Ruane for the Respondent

Judgment:

10 October 2024

JUDGMENT OF CHURCHMAN J

[1]    On 12 December 2022, the Commissioner of Police made an application for a Profit Forfeiture Order (PFO) against the respondent, Ms Cribbett, who the Commissioner alleged had unlawfully benefitted from significant criminal activity, in particular, by aiding and inciting tax evasion on the part of a company she operated

COMMISSIONER OF POLICE v KATHY EMILY CRIBBETT [2024] NZHC 2954 [10 October 2024]

and controlled at the relevant time, Baylis Motor Company Christchurch Limited (BMCC).

[2]    BMCC subsequently went into liquidation owing tax arrears. That litigation has now been concluded.

[3]    The property that the Commissioner asserts should be forfeited to meet the PFO is whatever remaining share Ms Cribbett receives from her claim to relationship property against Darrin Stephen Baylis.

[4]    The Commissioner has also instituted proceedings under the Criminal Proceeds (Recovery) Act 2009 (the Act) against Mr Baylis.

[5]    The Commissioner contends that, while engaging in otherwise lawful activities, Ms Cribbett caused and incited BMCC to commit tax evasion and that she directly, personally, unlawfully benefitted from that alleged offending.

[6]    Counsel for the Commissioner and Ms Cribbett have filed a joint memorandum. That memorandum records that Ms Cribbett accepts that she derived

$49,663.38 from BMCC, of which she was the sole director and shareholder at the relevant time, ahead of making payments of GST and PAYE to Inland Revenue that were then due, and accepts the making of a PFO in the sum of $49,663.38 should certain criteria for the making of a PFO be triggered.

Criteria for making a PFO

[7]    Ms Cribbett claims relief from forfeiture on account of undue hardship, in relation to the following property proposed for forfeiture in relation to the proceedings involving Mr Baylis (CIV-2017-409-000393); (the reals estate proposed for forfeiture):

(a)77 Ensign Street;

(b)76 Frankleigh Street;

(c)76A Frankleigh Street.

[8]    Ms Cribbett claims no interest in the balance of the property that is the subject of the Baylis forfeiture proceedings.

[9]    The Commissioner accepts that Ms Cribbett has a relationship property interest in the real estate proposed for forfeiture, however, contends that the property is all tainted.

[10]   If  Ms  Cribbett  is  unsuccessful  in  her  claim  for  relief  from  hardship,  Ms Cribbett will have no assets that are subject to an application for forfeiture, and there would be no property to which a profit forfeiture order could attach. In that case, no profit forfeiture order should be made by the Court and these proceedings should be dismissed.

[11]   If however Ms Cribbett is successful in her claim for relief from hardship there would be assets (namely the property she is granted relief in relation to) to which a profit for forfeiture order could attach. If that criteria is first met, the parties consent to the making of a profit forfeiture order in the sum of $49,663.38, such that the first

$49,663.38 of any amount of property ordered to be paid or transferred to Ms Cribbett is forfeited to satisfy the profit forfeiture order in respect to Ms Cribbett with any balance thereafter being her property.

The proposed order

[12]   The Commissioner acknowledges that the Respondent has an attachment to 76A Frankleigh Street. In the event that the property at 76A Frankleigh Street is to be forfeited, and sale is directed, the Commissioner will not oppose Ms Cribbett having the first opportunity to purchase the property at fair market value from the Official Assignee before it is offered for sale to the open market generally, such option to be exercised within eight weeks of the Court making its determination in relation to the Baylis proceedings.

The law

[13]   Section 95 of the Act provides that the High Court must approve any settlement agreed between the parties. Section 95(3) states:

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.

[14]   The joint memorandum of counsel records the Commissioner’s view as being that the proposed agreed settlement would deprive Ms Cribbett of property (in the event relief is to be granted to her) that reflects the sum to which she directly benefited from the alleged significant criminal activity of aiding and abetting tax evasion on the part of BMCC.

[15]   The joint memorandum also records the view that both counsel consider the proposed settlement is practicable and pragmatic, reflecting the perceived litigation risks of the respective parties and noting there will be a significant saving of time and cost to all parties and the judicial system if the matter is resolved as proposed.

[16]   In the event Ms Cribbett is not granted relief from hardship in the Baylis proceedings, the parties agree that no profit forfeiture order can be made by the Court.

Analysis

[17]   Having reviewed the material available on the Court file together with the contents of the joint memorandum of counsel I am satisfied that the proposed draft settlement is consistent with he purposes of the Act and the overall interests of justice, and I approve it in term of the draft order filed with the application.

Churchman J

Solicitors:
Raymond Donnelly & Co, Christchurch for Commissioner