Commissioner of Police v Bayley

[2023] NZHC 1571

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2023-470-67

[2023] NZHC 1571

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

THE COMMISSIONER OF POLICE

Applicant

AND

JAMES SPENCER BAYLEY

Respondent

Hearing:	On the papers
Counsel:	R W Jenson for the Applicant B Nabney for the Respondent
Judgment:	23 June 2023

JUDGMENT OF HARVEY J

This judgment is delivered by me on 23 June 2023 at 12pm pursuant to r 11.5 of the High Court Rules.

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

Registrar / Deputy Registrar

Solicitors:           Crown Solicitor, Tauranga

Counsel:            William Nabney, Barrister, Tauranga

Copy to:            S Best, Manager

Ministry of Social Development Client Service Integrity Waikato

THE COMMISSIONER OF POLICE v BAYLEY [2023] NZHC 1571 [23 June 2023]

Introduction

[1]                  By a joint memorandum filed 16 June 2023, the Commissioner of Police and James Bayley seek an order per s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act) approving the proposed settlement of the Commissioner’s claim against  Mr Bayley.

Background

[2]                  On 3 May 2020, after a search without a warrant of Mr Bayley’s address, 18 The Mall, Mount Maunganui, the Police found drugs, a firearm and $31,690 in cash. Mr Bayley accepted that this cash is tainted property acquired from drug and fraud related offending.

[3]                  Mr Bayley also accepted that he owes the Ministry of Social Development (MSD) $21,314 in wrongfully received COVID-19 wage subsidies. It is agreed between the Commissioner and Mr Bayley that his debt to the Ministry can be repaid from the funds seized, with the balance being forfeited under an asset forfeiture order.

The proposed settlement

[4]                  The Commissioner and Mr Bayley propose the following settlement terms, which MSD has also agreed to:

(a)$21,314.00 is to be repaid to the Ministry of Social Development for wage subsidy payments wrongfully received.

(b)The balance of the $31,690.00 seized by Police on 2 May 2020 vests in the Crown absolutely under the custody and control of the Official Assignee.

[5]                  The purpose of this arrangement is that if the funds were forfeited, they would not be payable to MSD under s 82 of the Act as part of the distribution of forfeited funds. The Commissioner has accordingly agreed to forego forfeiture of an amount equivalent to that owed by Mr Bayley to MSD on the basis that sum is paid out of the funds.

[6]                  Both counsel confirm that the proposed settlement is consistent with the purposes of the Act, taking account of the particular facts of this case, in that:

(a)property derived from significant criminal activity will be forfeited;

(b)the profit gained by Mr Bayley from criminal activity is diminished; and

(c)such forfeiture potentially deters future significant criminal activity.

[7]                  Overall, counsel submitted that the approval of the proposed settlement is in the interests of justice since it provides for the prompt forfeiture of relevant property and repays MSD without the need for further recovery proceedings.

Legal principles

[8]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.

[9]                  Pursuant to s 3, the purpose of the Act is to establish a regime for the forfeiture of property derived directly or indirectly from significant criminal activity or which represents the value of a person’s unlawfully derived income.1 A further purpose of the regime is to eliminate the opportunity for persons to profit from undertaking or being associated with significant criminal activity and to deter significant criminal activity.2

1      Criminal Proceeds (Recovery) Act 2009, s 3(1).

2      Section 3(2)(a)–(b).

[10]              It is well settled that the Court’s approval is not a “rubber stamping” exercise.3 The Court’s supervisory jurisdiction and function under s 95 requires a broad inquiry.4 An assessment of s 95(3)(a) and (b) compliance will require the Court to consider the strength of both the Commissioner’s case and of the respondent’s defence.5 In addition, the value of assets to be forfeited and the relativity of such sum to the total value of assets restrained as tainted property are relevant considerations.6 Further, there is also the litigation risk of a hearing to the Commissioner and the respondent.7 Finally, the Court may consider such other matters, including economic and pragmatic grounds, as inform a sensible compromise to litigation that serves the Act’s purposes.8 There is a strong public interest in such litigation being resolved promptly, especially where a settlement reflects the likely costs and risks inherent in adjudicating a contested application.9

Discussion

[11]              Mr Bayley has consented to an assets forfeiture order per s 50 of the Act in respect of the cash. He also agrees to abandon all claims he may have, under the Act or otherwise, to any of the property to be forfeited. As foreshadowed, the search of his premises was undertaken without a warrant and subsequently that search was found to be unlawful. However, Mr Bayley has conceded the cash is related to criminal offending. The Commissioner and Mr Bayley accordingly accept that this agreement settles all matters in the proceeding arising out of the Police search of his address on 3 May 2020.

[12]              I am satisfied that the proposed terms of settlement are consistent with the objectives and principles of the Act and are in the interests of justice. The finality of a settlement on these terms and the certainty it brings for the parties will avoid further costs, delay and litigation risk. I also accept that this proposal is a sensible and pragmatic basis on which to settle the proceedings.

3      The Commissioner of Police v Know-All Group Ltd HC Auckland CIV-2010-404-403, 7 November 2011 at [11].

4      Commissioner of Police v Zhang [2016] NZHC 930 at [8].

5      The Commissioner of Police v Kree [2013] NZHC 2972 at [11].

6      Commissioner of Police v Venn [2014] NZHC 361 at [5]–[6].

7      Kree, above n 5, at [11].

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

9      Commissioner of Police v Cotton [2017] NZHC 0021 at [7].

Decision

[13]              The proposed settlement is approved, per s 95 of the Criminal Proceeds (Recovery) Act 2009.

[14]The property to which this order applies:

(a)vests in the Crown absolutely; and

(b)is to be in the Official Assignee's custody and control.

[15]This order applies to the following property, namely sums remaining from the

$31,690.00 in cash seized by Police on 3 May 2020 after the debt owing by the respondent to the Ministry of Social Development for wage subsidy payments, being

$21,314.00 is re-paid.

[16]There is no order as to costs.

Harvey J