Commissioner of Police v Bracken
[2021] NZHC 2597
•30 September 2021
IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY
I TE KŌTI MATUA O AOTEAROA TŪRANGANUI-A-KIWA ROHE
CIV-2018-416-44
[2021] NZHC 2597
UNDER the Criminal Proceeds (Recovery) Act 2009 IN THE MATTER
of an application under s 33
BETWEEN
THE COMMISSIONER OF POLICE
Applicant
AND
JOHN RICHARD BRACKEN
First Respondent
MARGARET ALEXANDRIA BRACKEN
Second Respondent
BRACKEN ENTERPRISES LIMITED
Third Respondent
THE BRACKEN FAMILY TRUST
Fourth Respondent
AND
ANZ BANK NEW ZEALAND LIMITED
First Interested Party
RICHARD THOMAS BRACKEN
Second Interested Party
SHIRLEY LESLEY BRACKEN
Third Interested Party
ROBERT RICHARD BRACKEN
Fourth Interested Party
Hearing: 28 September 2021 Appearances:
C R Walker for the Applicant
J R Bracken and M A Bracken Respondents in person
Judgment:
30 September 2021
THE COMMISSIONER OF POLICE v BRACKEN [2021] NZHC 2597 [30 September 2021]
JUDGMENT OF COOKE J
(Immediate sale order)
[1] By application dated 21 May 2020 the Commissioner seeks orders under ss 33– 35 of the Criminal Proceeds (Recovery) Act 2009 (the Act) that a black Cam-Am Outlander 1000 quad motorcycle (the quad bike) be sold with the proceeds of sale to be held in the Official Assignee’s custody and control as part of the property currently restrained by on notice restraining orders. The application is opposed by the respondents.
Background
[2] The background is set out in the affidavits that have been filed by the Commissioner.
[3] The quad bike is worth approximately $5,000. It is currently restrained under orders made by the Court on 27 October 2020. That order exists through to 30 October 2021. The Commissioner has advised that an application for a further extension of the restraining orders is currently being prepared.
[4] On 26 March 2021 the first respondent was found guilty on 39 charges of dishonestly using GST returns in an attempt to obtain a pecuniary advantage. The Court found that the first respondent unlawfully obtained tax refunds of approximately
$17.3 million.1 On 11 May 2021 he was sentenced to eight years six months’ imprisonment.2
[5] The Commissioner has advised that he will be seeking forfeiture of a large number of assets in relation to the unlawful benefit of $17.3 million. The quad bike is among the assets currently restrained. It was initially restrained as a consequence of a without notice restraining order made by the Court on 14 December 2018. It was then taken into the custody and control of the Official Assignee but it was left in the possession of the respondents along with other farm equipment and vehicles to allow
1 R v Bracken [2021] NZHC 609.
2 R v Bracken [2021] NZHC 1032.
them to continue with their farming operation. It was one of five quad bikes left with the respondents.
[6] In March 2021 it was established that the quad bike was in the process of being sold. The vehicle needed repairs prior to sale and it then came to the attention of police. It was uplifted by police on 26 March 2021, and is now subject to the application.
Evidence
[7] The Commissioner relies on the evidence that has been filed in these proceedings in support of its application, including most recently the affidavit of Detective Paul Camplin dated 21 April 2021. The Commissioner’s written submissions filed in advance of the hearing advised that its deponents would be available for cross-examination by the respondents at the hearing.
[8] Proceedings under the Act proceed under Part 19 of the High Court Rules 2016. Rule 19.14 contemplates that deponents may be cross-examined in accordance with r 9.74. Under r 9.74 a party may require that a deponent be available for cross- examination by giving written notice to the opposite party three working days before the day fixed for the hearing. No such notice was given by the respondents here. Even if such notice had been given, cross-examination is not permitted on matters that are not relevant.3 It is important that the right to cross-examination under Part 19 is not understood to extend beyond cross-examination on matters that are relevant. Part 19 proceedings are designed to provide a relatively speedy and inexpensive mechanism for applications which need to be made to the Court under specific statutory provisions.4 Unrestrained cross-examination is accordingly not contemplated by Part 19, and the Court is able to control the existence and extent of cross-examination under rr 19.14 and 9.74 to ensure it remains relevant.
[9] I asked the respondents to identify which of the Commissioner’s deponents they wished to cross-examine and why. I also gave them a brief adjournment so that
3 See Andrew Beck and Others McGechan on Procedure (loose-leaf ed, Brookers) at [HR 9.74.03].
4 Manchester Securities Ltd v Body Corporate 172108 [2015] NZCA 29 at [15].
they could discuss the matter, including with their McKenzie friend Mr Peter Helmbright. After that adjournment they raised two main matters — the question whether the quad bike was validly subject to a restraining order, and wider matters set out in a formal statement that Mr Bracken then read to me, and which was subsequently received on the Court file. This document states, inter-alia:
The accused and political asylum holder John Bracken is claiming this is a threat upon his independence and claims this is an international matter on Civil and Political Rights and not a matter for the judicial system of the NZ Courts to decide, therefore he denies all charges and must be dismissed.
[10] As to the first issue, the existence of without notice and on notice restraining orders, and the property that they cover, is a matter identified from the Court’s judgments. It would not be relevant to cross-examine the Commissioner’s witnesses on that matter — they are not able to give admissible evidence as to the meaning and effect of the Court’s orders. As to the second issue I am satisfied that such broader matters are not relevant to the more confined questions that are relevant to this application.
[11] For those reasons I declined the respondents’ application to cross-examination the Commissioner’s witnesses on the basis that the proposed cross-examination was not a relevant to the application to be determined by the Court.
Substantive application
[12] The Commissioner sought an immediate sale order either under s 34 or s 35 of the Act. Under s 34 the Court is empowered to make further orders in relation to restrained property, including the orders of the kind mentioned in s 35. Section 35 relevantly provides:
35 Types of further order
Without limiting the generality of section 34(1), a court may, on an application under section 33(1), make 1 or more of the following further orders in relation to restrained property:
…
(e) an order relating to the Official Assignee that—
…
(v) directs the Official Assignee to sell restrained property (including, without limitation, a business) in order to preserve the value of the restrained property:
…
[13] Such powers have been considered in a number of decisions, including those that have focused on whether an order should be made under s 35(e)(v) when an asset is depreciating in value.5 In the present case, however, the Commissioner’s main reason for seeking immediate sale is not because of the diminishing value of the asset, although this is relevant. The main reason for the sale is that the quad bike was in the process of being sold in a manner that would defeat, or potentially defeat, the restraining order, and it is also apparent from the intended sale that the quad bike is no longer needed for farming purposes.
[14]In Commissioner of Police v Parker Hinton J said:6
[51] In any event, I agree with the Commissioner that a sale order is not limited to a sale under s 35(e)(v) of the Act. Section 35 only sets out examples of orders that the Court can make. It expressly does not limit the orders that can be made. That is equally clear from s 34.
[52] I consider a Court can order a sale under s 34 where it is necessary to preserve the potential net realisation value (as opposed to the value per se) of the restrained asset, providing a sale is otherwise considered appropriate. A sale may also be appropriate in other circumstances, for example, where it is impracticable for the Commissioner to manage the goods in the interim. Both of these may be circumstances where there is no likely depreciation. Examples are where the Commissioner restrains a herd of cattle, or a large boat of low value. Cattle may be unlikely to “depreciate” in value over the period of a year or two, but may be expensive and/or logistically difficult for the Official Assignee to continue to farm. A large boat of low value may not be subject to much at all in the way of depreciation, but may take up a lot of space and therefore entail high storage costs.
[53] Providing the assets are also not of non-monetary value to the respondent, or there are no other special circumstances, they, or another claimant, will likely in fact be better off in the event no forfeiture order is made, with the sale proceeds having been held on an interest-bearing basis in the meantime.
[54] In my view, this approach gives effect to the purpose of a restraining order which is, as Priestley J said in Commissioner of Police v Singh, a preliminary mechanism designed to ensure “that property which may be subject to forfeiture is not put beyond the reach of the Crown or dissipated”.7
5 See Commissioner of Police v Blance [2018] NZHC 108 at [51]-[52].
6 Commissioner of Police v Parker [2019] NZHC 1506 at [50] and [55].
7 Commissioner of Police v Singh [2012] NZHC 344 at [17].
[55] I therefore conclude that as a matter of law, the Court is not limited to ordering a sale only under s 35(e)(v) and is therefore not precluded from making an order under s 34 where there is no or little proven depreciation of the asset.
[15] I agree with that analysis. There are no express limits on the power of the Court to make an order under s 34. What is relevant is the overall scheme of the legislation, and the reason for the proposed sale. The scheme of the Act generally involves property being restrained until forfeiture applications are made. But the legislation contemplates more detailed conditions of restraint, and other orders. Provided that the particular application is consistent with the overall scheme and purpose of the provisions, an order under s 34 can be made. The applicant would need to show that there is a reason for the immediate sale which is consistent with the scheme and purposes of the provisions, but the Court should not adopt an overly technical approach to such applications.
[16] In the present case I am satisfied there is good reason to make the order. This is for two related reasons. First, it is apparent from the Commissioner’s evidence that the quad bike was in the process of being sold in a manner that would have, or could have defeated the restraining orders made by the Court. Leaving the quad bike in the possession of the second respondent and the wider family may not be appropriate in these circumstances. Secondly it is apparent that the quad bike is no longer needed as part of the farming operation. The respondents themselves were seeking to sell it. In those circumstances there is little point in requiring the Commissioner to take possession of the quad bike requiring him to keep it in storage in some way pending the forfeiture application, particularly given its relatively low value compared with the amounts that are in issue in these proceedings. I also bear in mind that a vehicle of this kind is likely to be depreciating in value. That is an observation that Dobson J made in relation to a related application in these proceedings that other vehicles be disposed of.8 On that basis there are good reasons to order that the vehicle be sold.
[17] Mr Bracken argued that the vehicle had been improperly taken in the first place, that it was not the Commissioner’s property, that it had been written off as an asset and it was being appropriately sold in those circumstances. I do not accept that
8 Commissioner of Police v Bracken [2020] NZHC 3246 at [42].
those points mean the order is not appropriate. His arguments about ownership are not relevant to this application. The only relevant question is whether the property is subject to a restraining order. Similar arguments were advanced by Mrs Bracken in the previous application, and I reject those arguments for the same reasons.9
[18] Mrs Bracken also argued that the property was not properly subject to a restraining order, and both Mr and Mrs Bracken argued that a sealed restraining order dated 11 July 2020 covering the property had only turned up later, and had effectively backdated restraint in an inappropriate way. I do not accept that argument. The chronology of events is apparent. A without notice restraining order was first made on 14 December 2018 covering the quad bike. An on notice restraining order was then made by Simon France J on 30 October 2019. It was confirmed by him by judgment dated 9 July 2020, and then extended by Mallon J on 27 October 2020. Contrary to Mrs Bracken’s submission, it is not the sealing of the order that determines when it has effect. Such orders have effect on the date that they were actually made by a Judge. It is also clear from the terms of the order now in existence that the quad bike is covered by a restraining order. I am also satisfied on the evidence of the Commissioner that the quad bike in question is one of the quad bikes referred to in the restraining order.
[19] The final main argument for the respondents is that related to the matters set out in the document handed up at the hearing I refer to above. It is also outlined in the notice of opposition dated 28 May 2021. These submission raise arguments of a political kind about the appropriateness of the Court making orders covering property owned by others. I do not accept these arguments are relevant. The Court’s function is to apply the law as enacted by Parliament. This involves application of the statutory provisions, here ss 33–35 of the Act. I am satisfied the Commissioner’s application is in accordance with those statutory provisions. The broader arguments raised by the respondents are of a political kind and they are not appropriately addressed in this forum.
9 At [19].
Conclusion
[20] For the above reasons the Commissioner’s application is granted in the terms sought.
[21]If there is any issue as to costs memoranda may be filed.
Cooke J
Solicitors:
Elvidge & Partners, Napier for the Applicant
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