Commissioner of Police v Balle

[2018] NZHC 418

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002372

[2018] NZHC 418

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

JACOB MARSDEN BALLE

First Respondent

NATALIA VLADIMIROVNA BALLE

Second Respondent

Hearing:	On the papers
Judgment:	14 March 2018

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 14 March 2018 at 2.30 pm

pursuant to R 11.5 of the High Court Rules Registrar / Deputy Registrar Date……………………….

COMMISSIONER OF POLICE v BALLE [2018] NZHC 418 [14 March 2018]

[1]    The respondents, Jacob and Natalia Balle, are the registered proprietors of a property at 217 Taylor Road, Waimauku. In March 2017 the police found a substantial cannabis growing set-up at the property. The Commissioner of Police obtained a without notice restraining order and, subsequently, an on notice restraining order, the latter by consent. The parties have now reached agreement as to the basis on which forfeiture orders may be made, subject to the Court’s approval under s 95 of the Criminal Proceeds (Recovery) Act 2009 (CPRA).

[2]    Under s 95 the Court has the power to approve settlement arrangements in relation to the forfeiture of property or money. In giving its approval the Court must be satisfied that the proposed settlement is consistent with the purposes of CPRA and the overall interests of justice. In this regard, s 3 of CPRA provides that:

(1)The primary purpose of this Act is to establish a regime for the forfeiture of property –

(a)that has been derived directly or indirectly from significant criminal activity; or

(b)that represents the value of a person’s unlawfully derived income.

(2)The criminal proceeds and instruments forfeiture regime established under this Act proposes to –

(a)eliminate the chance of a person to profit from undertaking or being associated with significant criminal activity; and

(b)deter significant criminal activity; and

(c)reduce the ability of criminals and persons associated with crime or significant criminal activity to continue or expand criminal enterprise; and

(d)deal with matters associated with foreign restraining orders and foreign forfeiture orders that arise in New Zealand.

[3]    It is recognised that there is a strong public interest in the resolution of proceedings brought under CPRA provided, of course, that the proposed settlement reflects the purposes of the Act and in the overall interests of justice.

[4]    The circumstances giving rise to the current proposal are as follows. Mr and Mrs Balle purchased the property at 217 Taylor Road on 15 April 2011. In the 2011 and 2012 tax years Mr Balle earned legitimate income of $112,276 and $77,058

respectively. The deposit on the house came from his income, his Kiwisaver account, a loan from his mother and some cash deposits. Over the next five years Mr and Mrs Balle serviced a substantial mortgage over the property. Mortgage repayments ranged from $1,100 per week to $4,137.52 per month between October 2011 and February 2015.

[5]    However, for the period 2013 to 2017 Mr Balle declared no income and in the 2018 tax year only a modest income from a benefit paid by the Ministry of Social Development. Likewise, Mrs Balle’s only income declared during the period 2011 to 2018 was limited to MSD payments of $6,725.70.

[6]During the period 2010 to 2017 Mr and Mrs Balle received approximately

$958,000 in cash into their various bank accounts.   In addition, the Police found

$41,000 in cash in the house at 217 Taylor Road when they searched it in March 2017.

[7]    When the Police searched the property in March 2017 they found a substantial cannabis growing set-up involving heat lamps, fans, a generator and an industrial filtration system. There were 159 cannabis plants at different stages of growth. There was a large amount of cannabis in the drying process. Mr Balle subsequently pleaded guilty to one charge of cultivating cannabis and was sentenced to $150 hours community work and one year’s supervision. Mrs Balle was not charged.

[8]    The proposed settlement would see the property at 217 Taylor Road sold and its proceeds used to repay the current charges held by the BNZ Bank and the Legal Services Agency and a sum of $50,000 paid to Mrs Balle with the balance forfeited to the Crown. That process would conclude all matters between the parties. The Commissioner will not pursue an application for profit forfeiture orders against either Mr or Mrs Balle. Presently it is estimated that the proposed settlement would see approximately $620,000 forfeited to the Crown, though on my calculation the figure would be a little less than that. A current valuation puts the value of the property at

$1.375 m and there is total borrowing secured against the property of $705,704.

[9]    I approach the issue on the basis that the evidence, coupled with Mr Balle’s plea to the charge of cultivation, supports the Commissioner’s assertion that Mr and

Mrs Balle derived substantial benefit from significant criminal activity, namely the cultivation and sale of cannabis. As a result, the property is tainted property and liable to forfeiture. However, I also accept the Commissioner’s acknowledgement that without some funds Mrs Balle will face significant hardship. There are currently domestic violence charges pending against Mr Balle in relation to his former wife. Mrs Balle has the care of three children aged 18, 16 and four-and-a-half, the two younger still being financially dependent on her. Her only income is from a benefit and she has not worked since 2010. She has been diagnosed with depression and is undergoing treatment to address that.

[10]   Finally, there appear to be no other assets of any significance that could be the subject of a profit forfeiture order.

[11]   In these circumstances I am satisfied that the overall purpose of the Act will be achieved by the settlement and that the settlement is also in the overall interests of justice. I accordingly approve the settlement reached between the parties and make the orders sought by consent at paragraph 6.1 of counsels’ joint memorandum dated 8 March 2018.

P Courtney J