COMMISSIONER OF POLICE AND MARTIN JOHN PIPER TROY KAKAU SHANNON HONETUHI RAYNER Cont:…/2

[2024] NZHC 3212

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1777

[2024] NZHC 3212

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

MARTIN JOHN PIPER

First Respondent

TROY KAKAU
Second Respondent

SHANNON HONETUHI RAYNER
Third Respondent

Cont:…/2

Hearing:

On the papers

Counsel:

R W Jenson for Applicant

W T Nabney for Second Respondent

Judgment:

31 October 2024

JUDGMENT OF WILKINSON-SMITH J

This judgment was delivered by me on 31/10/2024 at pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:

Pollett Legal, Tauranga W T Nabney, Tauranga

COMMISSIONER OF POLICE v PIPER [2024] NZHC 3212 [31 October 2024]

Continued…

AND

LISA MAY O’SULLIVAN

First Interested Party

TRADIN POST LIMITED
Second Interested Party

ANZ BANK NEW ZEALAND LIMITED

Third Interested Party

Introduction

[1]                  The Commissioner of Police and the second respondent Troy Kakau seek approval of a proposed settlement pursuant to s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).

[2]                  The Commissioner of Police has filed an application for an assets forfeiture order against Mr Kakau in respect of the following property:

(a)cash in the sum of $60,000;

(b)cash on the sum of $19,000;

(c)$14,855.38 proceeds from the sale of a 2007 green Holden Ute SSV Auto Utility, registration EGB533; and

(d)$20,829 proceeds from the sale of a 2013 black Harley Davidson VRSCDX, registration number C8DQN.

[3]                  The Commissioner has also applied for a profit forfeiture order to the value of the benefit of $647,644.64 with the only property available to be realised being the property which is the subject of the assets forfeiture order.

[4]  Under the terms of the proposed settlement, Mr Kakau consents to the assets forfeiture order being made in respect of the restrained property on the basis that the Commissioner will discontinue the application for a profit forfeiture order. An amended application reflecting the proposed settlement has been filed.

Legal Principles

[5]                  Section 95 of the Act provides that the Commissioner may enter into a settlement with any person as to the property or any sum of money to be forfeit to the Crown, but that settlement does not  bind  the  parties  unless  approved  by  the  High Court.

[6]The High Court must approve the settlement if satisfied it is consistent with:1

(a)the purposes of the Act; and

(b)the overall interests of justice.

[7]                  In Commissioner of Police v Cherrington Toogood J set out the principles to be applied as follows:2

(a)civil litigation incurs substantial costs for the parties, a significant portion of which would not usually be recoverable under the rules of Court relating to payments of costs;

(b)it is in the public interest to avoid the burden on the Court of complex and lengthy civil litigation;

(c)there is also strong public interest in litigation of this nature being brought to a prompt conclusion, so long as the settlement reflects the likely costs and risks inherent in the determination of a contested application;

(d)approval of any settlement by the Court acting in its supervisory jurisdiction requires consideration of the legislative intent and the overall interests of justice and is not a rubber-stamping exercise; and

(e)a broad inquiry is required, recognising that the decision to settle proceedings under the Act may be made on economic and pragmatic grounds and often reflects a “common sense compromise” between the parties.

(footnotes omitted)

Discussion

[8]                  Mr Kakau came to the attention of police during a covert operation targeting the manufacture and supply of the Class A controlled drug, methamphetamine. He was located at an address, together with two of the other respondents, midway through the process of manufacturing methamphetamine. He has now been convicted of:

(a)seven counts of produce/manufacture methamphetamine;

(b)two counts of supply methamphetamine;

1      Criminal Proceeds (Recovery) Act 2009, s 95(3).

2      Commissioner of Police v Cherrington [2022] NZHC 1396 at [20].

(c)three counts of possess for supply the Class A controlled drug methamphetamine;

(d)possess for supply the Class B controlled drug MDMA;

(e)three counts of possess precursor material;

(f)possess precursor equipment;

(g)possess precursor substance;

(h)unlawful possession of firearm; and

(i)unlawful possession of a pistol.

[9]                  The Commissioner accepts that the value of the restrained assets which are the subject of his application for an assets forfeiture order is significantly less than the profit forfeiture order amount claimed. The Commissioner also acknowledges that the evidence filed in support of the application does not support that the Holden Ute, registration EGB533, is a  “tainted asset”, however for the  purpose of  settlement  Mr Kakau concedes that the asset was acquired through significant criminal activity and is therefore tainted.

[10]              The Commissioner maintains that the second respondent has had the benefit of the value of the amount sought in the profit forfeiture application, but the Commissioner is satisfied that Mr Kakau does not have an asset base at his disposal to satisfy the profit forfeiture order sought.

[11]              The Commissioner accepts it is unlikely that the value of any profit forfeiture order can be realised and seeks to settle the proceeding on the basis that an assets forfeiture order of Mr Kakau’s available assets be granted as full and final settlement in the proceedings.

[12]              The parties’ position is that settlement may assist in the second respondent’s overall rehabilitation in that upon his release from his sentence of imprisonment he

will not be disincentivised from pursuing legitimate avenues of employment and enrichment due to fear that the fruits of those efforts could be used to satisfy the balance of a profit forfeiture order. Rehabilitation is not one of the purposes of the Act but I agree that a pragmatic approach taking into account economic realities may well be appropriate in some cases.

[13]              The parties agree that the resolution is in keeping with the purposes of the Act in that it provides for the forfeiture of property, diminishes the profit obtained by the respondent from criminal activity and has the ability to deter significant criminal activity in the future.

[14]              The parties also submit that the resolution is in the interests of justice and provides for the prompt forfeiture of the relevant property without the need for further proceedings in relation to Mr Kakau.

[15]              The resolution is proposed in full and final settlement and there is no issue as to costs between the Commissioner and the second respondent.

[16]              I accept the Commissioner’s position that there is a good case to show that the property which is subject to the proposed assets forfeiture order is tainted property. The proposed settlement diminishes the profit obtained by Mr Kakau from the criminal activity, although it is not reflective of the entire benefit that Mr Kakau obtained from the criminal activity. The reality however is that Mr Kakau has no other assets that can be realised and is unlikely to be in any position to meet a profit forfeiture order.

[17]              Having regard to the matters upon which Mr Kakau has now been convicted and the fact he is serving a sentence of imprisonment, I am satisfied that the proposed settlement arrangement is consistent with the purpose of the Act and the overall interests of justice.

Orders

[18]I make the following orders by consent:

(a)The settlement arrangement is approved by the Court pursuant to s 95 of the Act.

(b)The following property vests in the Crown absolutely; and is to be in the Official Assignee’s custody and control:

(i)Cash in the sum of $60,000, attributed to Troy Kakau.

(ii)Cash in the sum of $19,300, attributed to Troy Kakau.

(iii)$14,855.38 proceeds from the sale of a 2007 Green Holden Ute SSV auto Utility, registration number EGB533, attributed to Troy Kakau.

(iv)$20,829.99 proceeds from the sale of a 2013 Black Harley Davidson VRSCDX registration number C8DQN, attributed to Troy Kakau.

[19]              Costs lie where they fall in relation to all matters between the Commissioner and Mr Kakau.

Wilkinson-Smith J