Commissioner of Police v Antolik
[2017] NZHC 2436
•5 October 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2016-404-001075 [2017] NZHC 2436
UNDER the Criminal Proceeds (Recovery) Act
2009
BETWEEN
COMMISSIONER OF POLICE Applicant
AND
JAN ANTOLIK Respondent
Hearing: On the papers Appearances:
M R Harborow and A Park for Applicant
D P H Jones QC for RespondentJudgment:
5 October 2017
JUDGMENT OF LANG J
[on application for assets forfeiture orders]
This judgment was delivered by me on 5 October 2017 at 10.30 am, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
COMMISSIONER OF POLICE v ANTOLIK [2017] NZHC 2436 [5 October 2017]
[1] The respondent, Mr Antolik, is currently serving a sentence of imprisonment on a charge of importing class B controlled drug MDMA. After he was charged with that offending the Commissioner obtained restraining orders granted by this Court in respect of two separate sums of money that are currently held in bank accounts in the name of the Official Assignee.
[2] The Commissioner and Mr Antolik have now reached agreement regarding the manner in which these funds are to be disposed of. Also party to this agreement are Mr and Mrs Bozhenko, the parents of Mr Antolik’s wife. They claim an interest in one of the two sums currently subject to restraint.
The offending
[3] In November 2011 Mr Antolik was charged with manufacturing a controlled drug. The Crown alleged that between 6 October and 16 November 2011 he had arranged for pills containing either a Class B or Class C controlled drug to be manufactured. Mr Antolik was initially convicted on the charge but the Court of Appeal quashed his conviction after it allowed appeals by his co-offenders. The Crown subsequently amended the charge to one of being in possession of a Class C controlled drug for the purpose of supply. The Crown ultimately elected not to pursue that charge after Mr Antolik was charged with further drug-related offending in 2014.
[4] On 20 September 2014 Mr Antolik was arrested and charged with importing and being in possession of the class B controlled drug MDMA for the purpose of supply. The charges were laid after Customs examined a container addressed to a post office box associated with Mr Antolik. This contained 4.994 kilograms of MDMA having a street value of approximately $375,000.
[5] On 25 February 2016, Mr Antolik was convicted of importing the MDMA. The Crown elected not to offer evidence on the charge of being in possession of MDMA for supply. Mr Antolik was subsequently sentenced to five years nine months imprisonment on 3 June 2016.
Property
[6] Up until 1 April 2016, Mr Antolik owned a property situated in Eban Avenue, Hillcrest (the Eban Avenue property). He purchased the property in March 2009 for the sum of $490,000. He funded the purchase largely by means of cash deposits made into his bank accounts, together with a loan secured by a mortgage. He then funded the mortgage instalments by means of cash payments.
[7] On 1 April 2016, Mr Antolik sold the Eban Avenue property for the sum of
$800,000. The net proceeds of sale were used firstly to repay the mortgage. Of the balance remaining, the sum of $161,000 was paid into an ASB loan account held in the name of Mr and Mrs Bozhenko. This reduced a loan they had obtained in order to purchase a property situated in Abbotts Way, Remuera. The balance of
$237,389.90 was then transferred to an account with the Bank of New Zealand in the name of Karan Trustee Limited (KTL). Mr Antolik is the sole shareholder and director of that company. By the time the Commissioner obtained restraining orders in respect of these funds, the balance in the account had reduced to $129,183.33. Those funds are currently held by the Official Assignee.
[8] The Commissioner applied for restraining orders in respect of both the Abbotts Way property owned by Mr and Mrs Bozhenko and the funds held in the bank account in the name of KTL. Mr and Mrs Bozhenko ultimately reached agreement with the Commissioner that he would not take a restraining order over the Abbotts Way property provided Mr and Mrs Bozhenko paid the sum of $161,000 into the Official Assignee’s trust account. Mr and Mrs Bozhenko duly made that payment and the funds are still held under restraint by the Official Assignee.
[9] The Commissioner has not yet applied for civil forfeiture orders in respect of the two sums of money held by the Official Assignee. He considers, however, that he has a good case to obtain asset forfeiture orders in respect of both sets of funds. In addition, the Commissioner contends he has good grounds to obtain a profit forfeiture order against Mr Antolik that would exceed in value the sum of the two sets of funds held by the Official Assignee.
The proposed settlement
[10] The parties have agreed to settle the Commissioner’s claim in the following
way:
(a) The sum of $100,000 from the funds paid to the Official Assignee by
Mr and Mrs Bozhenko shall be returned to them.
(b)An assets forfeiture order is to be made by consent under s 50 of the Criminal Proceeds (Recovery) Act 2009 (the Act) over the remaining funds held by the Official Assignee so that it vests in the Crown absolutely. This means that the Commissioner will receive approximately $190,000, together with accrued interest.
[11] The overall effect of the settlement is that the Crown will obtain the sum of approximately $190,000 together with accrued interest whilst Mr and Mrs Bozhenko will receive a refund of $100,000. Thereafter, the Commissioner will not pursue profit forfeiture orders against Mr Antolik, and costs are to lie where they fall in relation to the present proceeding.
Threshold for approval
[12] Section 95 of 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.
[13] The forfeiture regime established by the Act has as its primary purpose 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.1 Ancillary purposes are to eliminate the chance for persons to profit from undertaking or being associated with significant criminal activity and to deter significant criminal activity.2
[14] The Court is empowered to approve settlements that are designed to achieve efficiencies in both time and cost and to minimise litigation risk to the parties.3
Provided the Court is satisfied of the two matters set out in s 95(3), the proposed settlement between parties to a proceeding brought under the Act must be approved.
Decision
[15] In the present case I have no doubt that the settlement is consistent with both the purposes of the Act and the overall interests of justice. First, there will be a significant saving of time and cost provided the matter can be resolved by consent at this stage and before the Commissioner is required to apply formally for forfeiture orders. Secondly, all but $100,000 of the restrained funds will be retained for the benefit of the Crown. Thirdly, I accept that the Commissioner has a good chance of showing that at least part of the restrained property is tainted property in terms of the Act, and that Mr Antolik has benefited from significant criminal activity. Those factors would support the Commissioner making an application for profit forfeiture orders.
[16] On the other hand, the Commissioner realistically acknowledges that the case against both Mr Antolik and Mr and Mrs Bozhenko is not without risk. In particular, the Commissioner’s preliminary financial analysis has demonstrated that Mr Antolik did not fund all of the purchase of the Eban Avenue property with cash deposits. In addition, the Commissioner accepts that the Court may well grant relief against forfeiture in the case of at least part of the funds paid to the Official Assignee by Mr and Mrs Bozhenko. This is because the Commissioner accepts that Mr and Mrs Bozhenko were not involved in Mr Antolik’s offending, and will inevitably be
recognised as innocent third parties. Furthermore, Mr Antolik asserts that the
1 Criminal Proceeds (Recovery) Act 2009, s 3(1).
2 Section 3(2)(a) and (b).
3 Commissioner of Police v Zhang and Xu [2016] NZHC 930 at [8].
payment into Mr and Mrs Bozhenko’s loan account was made in repayment of a loan that his parents-in-law had made to him.
[17] Other than the restrained funds, the Commissioner is not aware of other significant assets that could be applied towards a profit forfeiture order. Furthermore, the proposed settlement will permit Mr Antolik to be released from prison free of any residual debt to the Commissioner so that he can make a fresh start. For his part, Mr Antolik recognises that his previous proven involvement in importing class B controlled drugs is likely to weigh heavily against him in the present proceeding. Finally, the proposed settlement provides finality for the parties at this point and removes the inevitable risk and uncertainty that litigation produces.
[18] Given those circumstances, I have no hesitation in approving the proposed settlement. I now make the following orders by consent:
(a) The sum of $100,000 from the funds paid to the Official Assignee by Mr and Mrs Bozhenko is to be released from restraint and paid to a bank account nominated by Mr and Mrs Bozhenko.
(b)All of the remaining restrained property is to be subject to an assets forfeiture order under s 50 of the Act so that it vests in the Crown absolutely and is to be in the custody and control of the Official Assignee.
[19] I record the Commissioner’s undertaking that he will not apply for profit forfeiture orders against Mr Antolik, and the parties’ agreement that costs will lie
where they fall in relation to this proceeding.
Lang J
Solicitors:
Crown Solicitor, Auckland
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