Commissioner of Police v Armstrong

[2023] NZHC 3501

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2021-419-000096

[2023] NZHC 3501

IN THE MATTER OF

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

QUENTIN JAMES ALEX ARMSTRONG

Respondent

TENOHOTU TAHU
Interested Party

ANZ BANK OF NEW ZEALAND

Interested Party

Hearing:	28 November 2023
Appearances:	R Guthrie for the Applicant T Tran for the Respondent
Judgment:	4 December 2023

JUDGMENT OF WALKER J

[Approving settlement]

This judgment was delivered by me on 04 December 2023 at 4.30 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

COMMISSIONER OF POLICE v ARMSTRONG [2023] NZHC 3501 [4 December 2023]

Introduction

[1]                 Before the Court is a joint memorandum of counsel for the Commissioner of Police and counsel for Quentin Armstrong. The memorandum invites the Court to approve a proposed settlement reached between the Commissioner and Mr Armstrong.

[2]                 Any settlement made in relation to proceedings brought under the provisions of the Criminal Proceeds (Recovery) Act 2009 (the Act) is required to be approved by this Court.1

Background

[3]                 These proceedings arose following the  execution  of  a  search  warrant  at Mr Armstrong’s home address on 26 September 2019. Located within the address was a sophisticated indoor cannabis growing operation conducted within the garage. Police located 92 growing cannabis plants at varying stages of maturity together with nine packaged resealable plastic ounce bags of cannabis head. Electronic scales, tinfoil and unused resealable plastic bags were also found as was a diary recording cultivation cycles and cannabis yield.

[4]                 On 30 July 2020, Mr Armstrong was sentenced in the Hamilton District Court to eight months’ home detention in respect of charges of possession of cultivation of cannabis, possession of cannabis for supply and unlawful possession of a pistol.

[5]                 The subsequent investigation conducted by the Waikato Asset Recovery Unit (ARU) included analysis of power consumption; Mr Armstrong’s power consumption was five times above the national average for a family of a similar size and much was late at night which is consistent with indoor cannabis cultivation.

[6]                 Cannabis yields were also analysed from detailed diary notes prepared  by  Mr Armstrong for 2018 and 2019. Analysis of text messages was also conducted. Police concluded between January 2018 and September 2019 the respondent had

1      Criminal Proceeds (Recovery) Act 2009, s 95(2).

cultivated cannabis with an approximate financial benefit to him of between

$224,926.50 and $358,281.60.

Second set of offending

[7]                 On 26 May 2021 while serving civil restraining orders on Mr Armstrong, Police located a second similar commercial cannabis cultivation operation at [REDACTED]. A total of 40 cannabis plants of various stages of maturity were found within a tent in the garage and in a sleepout.

[8]                 On 1 April 2022, Mr Armstrong pleaded guilty to a further charge of cultivating cannabis and was sentenced to a further eight month term of home detention.

[9]                 Further investigation was undertaken by the ARU. Genesis Energy records showed the power consumption from [REDACTED] was between two and three times the national average for a comparable family. The consumption patterns were similar to those reviewed in 2018 and 2019.

[10]              Police undertook an analysis of yield and financial benefit and identified the respondent had cultivated cannabis with an approximate financial benefit to him of between $213,150 and $340,264.

This proceeding

[11]              The Commissioner of Police applied for a profit forfeiture order by way of application dated 15 September 2022 against Mr Armstrong to the value of

$437,076.50 pursuant to ss 43, 44 and 52 of the Act.

[12]              The Commissioner’s case is that Mr Armstrong has in the relevant period of criminal activity unlawfully benefitted to that value from significant criminal activity.

[13]              Mr Armstrong filed a notice of opposition and affidavit in support. He asserts that if he has unlawfully benefitted from significant criminal activity the amount would be between $83,300 and $116,550 from both sets of offending.

Settlement for approval

[14]              The proposed settlement, which will bind the parties in the event this Court approves it is that:

(a)The respondent accepts that he has unlawfully benefitted from significant criminal activity, namely the cultivation and supply of cannabis.

(b)Within the relevant period of criminal activity the value of that unlawful benefit was $275,000.

(c)The parties agree that the maximum recoverable amount is $275,000.

(d)The respondent will pay to the Commissioner $275,000 (settlement sum) in full and final settlement within six months of the date the profit forfeiture order is sealed.

(e)Upon the Official Assignee providing written confirmation that the settlement sum has been paid in full, the property at [REDACTED] is to be released from restraint.

(f)Each party will bear their own costs.

Approval of settlements under the Act

[15]Section 95 of the Act provides:

95       High     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.

[16]              Parliament has expressly empowered the Commissioner to enter into settlements as to the forfeiture of property under the Act. It has entrusted the High Court with a supervisory jurisdiction to approve settlements when satisfied they are consistent with the purposes of the Act in the overall interests of justice.2

[17]              The s 95 requirement is that the Court have regard to the overall interests of justice. This reflects the strong public interest in proceedings under the Act being brought to a prompt conclusion, reflecting the likely costs and risks inherent in the determination of a contested application and the desirability of proceedings under the Act being made on economic and pragmatic grounds reflective of common sense compromise.3

Decision

[18]              Approval of the settlement so that it becomes binding is, in my view, consistent with the purposes of the Act and the overall interests of justice. The amount to be paid in settlement represents a significant portion of the value of Mr Armstrong’s unlawfully derived income as identified by the agreed maximum recoverable amount. There will be a saving of time and expense if the proceeding is resolved by consent without the need for a substantive hearing. The estimated amount to be forfeited is significant. It will be a deterrent to Mr Armstrong and others who may learn of the consequences of the application of the legislation.

[19]The settlement is approved accordingly.

Result

[20]I make the following orders, so as to give effect to the settlement:

2      Commissioner of Police v No-All Group Limited HC Auckland CIV-2010-404-404, 7 November 2011 at [11].

3      Commissioner of Police v Douglas [2015] NZHC 1293 at [6].

(a)The respondent will pay to the Commissioner $275,000 (settlement sum) in full and final settlement within six months of the date the profit forfeiture order is sealed.

(b)Upon the Official Assignee providing written confirmation that the settlement sum has been paid in full the property at [REDACTED] is to be released from restraint.

(c)Each party will bear their own costs.

(d)In the event the settlement sum is not paid within the timeframe identified above, the Commissioner will sell the property and pay the proceeds of sale in the following order to satisfy the settlement sum:

(i)First, deduct the Official Assignee’s actual cost in effecting a sale;

(ii)Second, repay any secured loan(s) to ANZ Bank of New Zealand;

(iii)Third, effect forfeiture of $275,000 (or less if partial payment of the settlement sum has been made) in accordance with paragraph [14](d) above;

(iv)Finally, return the balance of the sale proceeds to a bank account nominated by the respondent.

(e)For the purposes of effecting the sale of any property, the Official Assignee has the power to execute any deed or instrument in the name of Mr Armstrong, and do anything necessary to give validity and operation to the deed and instrument.

............................................................

Walker J