Commissioner of Police v Avery

[2023] NZHC 1513

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-184

[2023] NZHC 1513

UNDER

Criminal Proceeds (Recovery) Act 2009

IN THE MATTER OF

An application pursuant to ss 21, 24 and 25 of the Act

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

ISAAC WIREMU AVERY

First Respondent

KELSEY ROSE MEHRTENS
Second Respondent

GABRIELLE RIVERS

Interested Party

Hearing:

12 June 2023

Appearances:

C C White for Applicant

E Huda (on agency instructions) for Second Respondent

Judgment:

16 June 2023

JUDGMENT OF ANDREW

This judgment was delivered by Justice Andrew on 16 June 2023 at 3.00 pm

pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar

Date …………………………….

COMMISSIONER OF POLICE v AVERY & OR [2023] NZHC 1513 [16 June 2023]

Introduction

[1]        The Commissioner of Police1  applies on notice for restraining orders under  ss 21, 24 and 25 of the Criminal Proceeds (Recovery) Act 2009,2 over the following items of property:

(a)$391,177.20 cash located  at  3  Primrose  Street,  Christchurch,  on  22 September 2021;

(b)Items of jewellery located at 3 Primrose Street including a full sovereign gold ring, a half sovereign gold ring and a gold chain necklace;

(c)Two black Louis Vuitton handbags located at 3 Primrose Street;

(d)$19,180 cash located at 45A Reginald Street, Burwood, Christchurch, on 22 September 2021; and

(e)10-carat gold and diamond earrings located at 45A Reginald Street and valued at approximately $1,400.

[2]        The Commissioner says that the property is tainted property as defined in the Act and the respondents have unlawfully benefited from significant criminal activity. The application is supported by an affidavit of Detective Glenn Forrest, sworn 2 May 2023.

[3]        The second respondent, Ms Mehrtens, does not oppose the application. In respect of the $19,180 cash and earrings, both located at 45A Reginald Street, she consents to the restraining order sought by the Commissioner and in respect of the other property she takes a neutral position.3

1      The Commissioner.

2      The Act.

3 Ms Mehrtens says she has no interest in the property identified at [1] above, but for those items identified at [1(d)] and [1(e)] ($19,180 cash and the 10-carat gold and diamond earrings).

[4]        Mr Huda represents the first respondent, Mr Avery, in respect of the related criminal proceedings. Mr Avery (aka Izic Placid) has pleaded guilty and is to be sentenced in the District Court on on 15 August 2023. Mr Huda has no instructions in respect of the current application; Mr Huda advises that he has no expertise in proceedings under the Act and will assist Mr Avery to obtain legal advice on the current application.

Relevant legal principles

[5]        In a recent comprehensive judgment, Commissioner of Police v Vinnik,4 Gordon J summarised the principles to be applied under the Act. I gratefully adopt the principles set out at [35]–[48] of that judgment.

[6]        Gordon J refers to the leading Court of Appeal decision Vincent v Commissioner of Police, and the importance of a court needing to be satisfied that there are “reasonable grounds to believe” that the property is tainted property or that the relevant person unlawfully benefited from significant criminal activity.5

Summary of the Commissioner’s case

[7]        What follows is a summary of the salient points of Detective Forrest’s evidence.

[8]        In August 2021, Police initiated a covert operation into the alleged methamphetamine supply activities of both respondents.

[9]        On 22 September 2021, $391,177.20 cash was seized from 3 Primrose Street, Christchurch, pursuant to the execution of a search warrant. At the time of the search warrant, Mr Avery was residing at 3 Primrose Street along with his father, Mr Placid Senior. Most of the cash was found in shoeboxes and then concealed in a wardrobe purposely modified for the purpose of hiding items.

4      Commissioner of Police v Vinnik [2023] NZHC 370.

5      Vincent v Commissioner of Police [2013] NZCA 412 at [45(b)].

[10]      At the same time Police seized a “full sovereign” gold ring, a “half sovereign” gold ring, a gold chain necklace valued at $22,935, and two black Louis Vuitton handbags. One bag contained $11,530 cash and the other contained $4,450 cash.

[11]      Also on 22 September 2021, $19,180 cash was seized from 45A Reginald Street, Burwood, Christchurch, pursuant to a search warrant. 45A Reginald Street was the rental property in which Ms Mehrtens was residing at the time of her arrest.

$19,000 of the cash seized was located in bundles hidden under Ms Mehrtens’ bed mattress and between the slats of the frame. The remaining $180 was in Ms Mehrtens’ handbag.

[12]Mr Avery was charged inter alia with the following offending:

(a)supplying a class A controlled drug (methamphetamine) x 3;

(b)possession of class A controlled drug (cocaine);

(c)possession of class A controlled drug (LSD); and

(d)possession of class B controlled drug (MDMA).

[13]Ms Mehrtens was charged inter alia with the following:

(a)offering to supply class A controlled drug (methamphetamine) x 22;

(b)supplying a class A controlled drug x 2;

(c)possession of class A controlled drug for supply (methamphetamine);

(d)supplying a class A controlled drug (LSD); and

(e)possession of class B controlled drug (MDMA).

[14]      Detective Forrest says that the intercepted communications between Mr Avery and Ms Mehrtens demonstrates behaviours consistent with drug-dealing, namely:

(a)The use of coded conversations and language consistent with drug- dealing language, as identified in the investigation of other unrelated drug-dealers.

(b)The presence and use of paid, subscription-only encrypted communications software allowing communication between various parties.

(c)The conscious awareness by both respondents that certain methods of communication were less secure and able to be intercepted. For example, when Mr Avery stressed to Ms Mehrtens that her Facebook drug orders could be intercepted by Police, she responded that it would be easier for Police to obtain text messaging data rather than information from Facebook.

(d)The timing of communications between Ms Mehrtens and her customers indicates that Mr Avery was her primary drug supplier.

[15]      Items  seized  from  Ms  Mehrtens’  handbag  when  she  was  arrested  on   22 September 2021 and property seized from 45A Reginald Street were sent to the Institute of Environmental Science & Research6 for testing. The results demonstrated possession of commercial amounts of methamphetamine and MDMA.

[16]      Items seized from 3 Primrose Street were also subject to ESR analysis. Those results also demonstrated possession of commercial amounts of MDMA, cocaine and LSD.

[17]      In October 2021, Police made enquiries with the Ministry of Social Development7 as to any benefits paid to the respondents. Ms Mehrtens received continuous financial assistance between 2015 and 2021 however Mr Avery did not receive any financial assistance during the previous seven-year analysis period. Further enquiries established that both respondents received a significant amount of

6      ESR.

7      MSD.

cash into their respective bank accounts.   The proportion of cash deposited into     Mr Avery’s account is significant when compared to his explained income as reported to IRD. Ms Mehrtens’ account contains a large number of transactions from unexplained sources.

[18]      The Commissioner contends that Mr Avery has unlawfully benefited from significant criminal activity, namely the supply of the class A controlled drug methamphetamine and/or other drugs to a sum of no less than $545.435.20 and that all cash, bags and jewellery seized are tainted property. Similarly, the Commissioner asserts that Ms Mehrtens has unlawfully benefited from significant criminal activity to a sum of no less than $77,254 and that any cash located in her possession is tainted property.

[19]      The Commissioner further contends that both respondents had high cash reserves and relatively low volumes of controlled drugs, indicating that they were apprehended towards the end of a supply cycle. The Commissioner says that the combined unlawful benefit of the enterprise between the respondents was not less than

$622,689.20.

Analysis and decision

[20]      This application is a civil proceeding. It is not a criminal proceeding. The onus of proof is to the civil standard on the balance of probabilities, not beyond reasonable doubt.8 As Katz J held in Commissioner of Police v Li, it would be unrealistic to expect the Commissioner to provide at this preliminary restraining order stage all or even most of the evidence likely to be adduced if the matter proceeds to a full trial.9 Rather, the Commissioner is required to put sufficient evidence before the Court to enable it to determine whether there are reasonable grounds for believing that the respondents have benefited from significant criminal activity or that the property at issue is tainted property.

8      Commissioner of Police v Linton [2018] NZHC 1780 at [15].

9      Commissioner of Police v Li [2014] NZHC 479 at [33].

[21]      I am satisfied, based on the comprehensive affidavit of Detective Forrest, that the grounds for the orders sought have been made out. There are reasonable grounds to believe that the property at issue is tainted property and that both respondents have unlawfully benefited from significant criminal activity.

[22]      It is not necessary for the property itself to be derived from criminal offending. What is relevant is the knowing derivation (including wilful blindness) and financial reward from crime.10

[23]      Unlawful benefit may be established on the basis of circumstantial evidence and inferences can be drawn from several strands of evidence.11 Possession of large sums of unidentified income which cannot be adequately explained will tend to support an inference that the relevant cash has been sourced from illegitimate or criminal activity.12

[24] There is clear circumstantial evidence in this case supporting the inference that both respondents have unlawfully benefited from criminal activity. I am also satisfied that the property described at [1] above is tainted property. In reaching those conclusions, I have considered the available evidence in its entirety.

[25]I accordingly find that the application for restraining orders should be granted.

Result

[26]I grant the Commissioner’s application and order that the property specified in

[2] of the Commissioner’s application dated 2 May 2023 is not to be disposed of or dealt with pending further order of the Court or expiry of this order. The property is to be under the Official Assignee’s custody and control.

[27]   Leave is granted to the first respondent, Mr Avery, to apply to rescind or amend my orders, upon receipt of legal advice.

10     Commissioner of Police v Vinnik, above n 4, at [43]; referring to Commissioner of Police v Vincent

[2012] NZHC 2581 at [48]–[53].

11     Commissioner of Police v de Wys [2016] NZCA 634 at [9].

12     Commissioner of Police v de Wys, above n 11, at [71].

[28]Costs are reserved.

Andrew J