COMMISSIONER OF POLICE AND PETER WILLIAM EVANS ROBERTS CONSOLIDATED LIMITED Interested Party MARTIN ALLAN PINHEY Interested Party ANZ BANK NEW ZEALAND LIMITED Interested Party CHAD WILLIAM EVANS Interested Party...

[2024] NZHC 2525

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2015-485-352

[2024] NZHC 2525

UNDER

the Criminal Proceeds (Recovery) Act 2009

IN THE MATTER OF

an application pursuant to ss 21, 24 and 25

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

PETER WILLIAM EVANS

Respondent

ROBERTS CONSOLIDATED LIMITED
First Interested Party

MARTIN ALLAN PINHEY

Second Interested Party

ANZ BANK NEW ZEALAND LIMITED
Third Interested Party

CHAD WILLIAM EVANS
Fourth Interested Party

CATHERINE MURA POIHIPI

Fifth Interested Party

On the papers:

Counsel:

E M Ferrier and S Deng for Applicant

S Hewson for Respondent and First, Second, Fourth and Fifth Interested Parties

Judgment:

4 September 2024

JUDGMENT OF GRAU J

[Application for sale orders]

COMMISSIONER OF POLICE v EVANS [2024] NZHC 2525 [4 September 2024]

Application for sale orders

[1]                  The Commissioner of Police (the Commissioner) applies for further sale orders of three vehicles pursuant to ss 33 to 35 of the Criminal Proceeds (Recovery) Act 2009 (the CPRA).1 The vehicles are associated with a restraining order dated 8 November 2019.

[2]                  On 3 May 2024, the Commissioner, the respondent, and the first, second, fourth, and fifth interested parties filed a joint memorandum of counsel consenting to the sale orders for the  three  vehicles.  The  third  interested  party,  ANZ  Bank  New Zealand Ltd, has not taken an active role in the proceedings to date.

[3]The Commissioner seeks sale orders for the following vehicles (the Vehicles):

(a)a red 2012 Harley Davidson CVO Breakout motorcycle, registration HFFH1, registered to the respondent Peter William Evans (Peter), and under the effective control of Peter;

(b)a gold 1970 Pontiac GTO motor vehicle, registration 7OGTO, registered to the fourth interested party Chad William Evans (Chad) and under the effective control of Peter; and

(c)a black 2002 Holden Monaro GTO motor vehicle, registration CSS945, registered to the fifth interested party (Catherine Poihipi), and under the effective control of Peter.

[4]The grounds on which the sale orders are sought are:

(a)the respondent and the first, second, fourth, and fifth interested parties consent to the application;

1      The application is dated 2 February 2024.

(b)the nature of the items of property and the cost of storage is such that the value and equity in the property will continue to depreciate pending the final determination of the proceedings; and

(c)it is in the interests of the parties that the value of the restrained property is preserved.

Background

[5]                  On 28 July 2014, the Commissioner applied for a restraining order over the respondent’s property including the Vehicles, a Silver 1994 BMW 730i motor vehicle registration ZR7030, and five various amounts of cash. Justice Collins made a restraint order on 29 September 2014.2

[6]                  On 13 May 2015, the Commissioner made a further on notice application for a restraining  order  in   relation   to   all   interests   in   a   property   located   at   14-16 Ropa Lane, Miramar, Wellington.  Justice Collins granted the application on  6 July 2015.3

[7]These restraining orders have been subsequently extended a number of times.

[8]                  On 8 November 2019, by consent, the two applications were consolidated.4 An order was also made that Peter’s effective control over [the restrained?] property be treated as an interest in property.

[9]                  The property continues to be subject to a restraining order. The most recent extension was granted on 8 November 2023 by McQueen J with the consent of the respondent and the first, second, fourth and fifth interested parties.5 The restraining order now expires on 8 November 2024.

2      This application related to CIV-2014-485-9652.

3      This application related to CIV-2015-485-352.

4      Bringing the restrained property under the proceeding numbered CIV-2015-485-352.

5      Commissioner of Police v Evans HC Wellington CIV-2015-485-382, 8 November  2023  (Minute of McQueen J).

Legal principles

[10]              The vehicles are currently restrained property under the Official Assignee’s (OA’s) custody and control.6 The effect of a restraining order is to preserve the property itself and not its value.7 The CPRA permits the OA to do anything reasonably necessary to preserve the vehicles’ value.8

[1]                  Section 33 of the CPRA allows the Commissioner to apply for sale orders in respect of property subject to a restraining order. Section 34 enables the Court to make further orders in respect of restrained property at any time before the expiry of the restraining order. The Court may make any such order if it considers it appropriate.

This requires the Court to be satisfied that such an order should be made.9

[2]                  Any further order may, but need not, be an order of one or more of types referred to in s 35. Under s 35(e)(v), the Court may make an order directing the OA to “sell restrained property (including, without limitation, a business) in order to preserve the value of the restrained property”.

[3]                  The Commissioner is not required to prove on a balance of probabilities that a sale is required,10 but must persuade the Court that a sale order is appropriate, and, where an order of the type set out in s 35(e)(v) is sought, that the order is necessary to preserve the value of the restrained property.11

[4]                  Justice Lang in Commissioner of Police v Drummond outlined a variety of factors relevant to the proposed sale of a restrained motor vehicle:12

… Factors that will need to be taken into account include the nature and value of the asset, the length of time before the substantive proceeding will be determined, the extent to which the asset may depreciate during that period and the wishes of the owner of the assets and/or those who may have an interest in it.

6      Subject to a restraining order made under ss 21, 24 and 25 of the Criminal Proceeds (Recovery) Act 2009 (CPRA).

7      Commissioner of Police v Skiffington [2017] NZHC 1687 at [38].

8      CPRA, s 80.

9      Commissioner of Police v Taaka-Te Kaute [2024] NZHC 280 at [10].

10     Commissioner of Police v Parker [2019] NZHC 1506 at [31].

11     McQuade v Commissioner of Police [2024] NZCA 46 at [24].

12     Commissioner of Police v Drummond [2018] NZHC 1730 at [15]; and see, Commissioner of Police v Milosevic [2019] NZHC 202 at [95(c)].

[5]                  Where restrained property is depreciating in value, a sale order may be necessary to preserve its value. Depreciation ultimately decreases the potential return to the Commissioner and/or the parties who claim an interest in the assets.

[6]                  Recently, the Court of Appeal in McQuade v Commissioner of Police noted that different Judges have taken different views in relation to the relevance of holding costs (associated with keeping the properties restrained, such as storage and insurance).13 Justice Wylie considered that a reduction in the eventual return caused by holding costs is a factor which can be considered in the exercise of the discretion, providing a sale order is otherwise appropriate in order to preserve the value of the restrained property.14

Discussion

[7]                  The critical issue is whether the value of the vehicles in this case are likely to be sufficiently eroded as a result of depreciation and/or holding costs such that their sale is appropriate to preserve value. The result of sale orders for the vehicles being made is that, once they are sold, the OA is able to hold the funds in an interest-bearing account.

[8]                  All parties agree the vehicles should be sold; therefore, this is not a case of a vehicle being held as an investment or having some special sentimental value such that the costs involved in continuing the restraint may not be enough of a reason to make a sale order.

[9]                  Given the nature of the property involved in this case, and the self-evident costs of storage and insurance of the vehicles over a very considerable time that will be eroding in value, I am satisfied that a sale order should be made.

13     McQuade v Commissioner of Police, above n 10, at [27].

14 At [27].

Result

[10]              I grant the Commissioner’s application for an order for sale of the three currently restrained vehicles described above at [3], in the terms set out in the draft order filed by the Commissioner on 3 September 2024.

Grau J

Solicitors:
Crown Solicitor, Wellington for Applicant