Commissioner of Police v Browne
[2021] NZHC 197
•17 February 2021
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2020-409-000212
[2021] NZHC 197
UNDER the Criminal Proceeds (Recovery) Act 2009 IN THE MATTER
of an application pursuant to ss 22, 24 and 25 of the Act
BETWEEN
COMMISSIONER OF POLICE
Applicant
AND
ALEXANDER LEIGH BROWNE
Respondent
Hearing: 15 February 2021 Appearances:
C White for Applicant
P N Allan for Respondent
Judgment:
17 February 2021
JUDGMENT OF DOOGUE J
This judgment was delivered by me on 17 February 2021 at 3.30 pm
Registrar/Deputy Registrar Date:
COMMISSIONER OF POLICE v BROWNE [2021] NZHC 197 [17 February 2021]
Introduction
[1] On 29 May 2020 the Commissioner of Police (the applicant) filed an on notice application for a restraining order in relation to Alexander Browne’s (the respondent) property.
[2] The applicant and the respondent have reached agreement in respect of the restraint or release of the majority of property which was outlined in the original application. The remaining property which the applicant seeks restraint over, but which has not been agreed, is as follows:
(a)a black-coloured 2013 Ford Ranger registration MRF341; and
(b)a 2004 Jayco Heritage caravan registration 44U91.
[3] Opposition to the restraint of those two items is on the basis that Rebecca Foster (the respondent’s former partner) asserts to be the purchaser and owner of those items.
[4] The respondent does not intend taking any further steps in opposition to the restraint of the items listed at paragraph 2.
[5] Ms Foster came to the hearing on 15 February 2021. She indicated that she had taken steps to obtain the services of a lawyer and that she would be in a position to provide instructions to him within a fortnight. She brought with her documents which she purported established her to be the owner of those two items. She sought an adjournment be granted.
[6] In the interests of access to justice I reviewed the documentation that was provided to me and returned to Ms Foster. Suffice to say it did not clearly, on its face, establish that she was the legitimate purchaser and owner of those items.
Application for adjournment
[7] Ms Rebecca Foster was served with these proceedings in October 2020, over four months ago. She claimed her inactivity was due to being unable to secure a lawyer to act for her. In my view she has had ample time to do just that.
[8] Despite affording her the unusual opportunity of providing me directly with the documentation on which she would ultimately rely, there was nothing on the face of the documentation provided which was proof of Ms Foster being legitimately and independently the person who acquired those assets from her own means. It may be Ms Foster can furnish evidence in the case that substantiates her claims.
[9] It is significant that this application is only a temporary holding measure and does not result in forfeiture. Granting the application would merely mean the assets are restrained in the interim.
[10] I have formed the view that an adjournment would only be delaying the inevitable, namely the making of a temporary restraining order and providing Ms Foster the opportunity to argue against forfeiture later in the proceeding.
[11] The interests of justice require that this matter is not delayed any longer at the “holding device” stage as opposed to the disposition phase.
The law
Temporary nature of the restraining order
[12] A restraining order is a “temporary order” and requires “reasonable grounds to believe” rather than “proof that the target has unlawfully benefited from significant criminal activity”.1
[13] The Court of Appeal’s remarks in Vincent v Commissioner of Police illustrate the interrelationship between urgency and the admissibility of evidence:2
1 Vincent v Commissioner of Police [2013] NZCA 412 at [47].
2 Vincent v Commissioner of Police, above n 1.
[47] By way of explanation, restraining orders will often need to be obtained in situations of urgency, as is illustrated by the provision for “without notice” applications. They are, as we have said, temporary orders, which give the police time to gather further evidence, and may lead to forfeiture but only on the completion of further processes. Restraining orders are issued on the basis of reasonable grounds to believe, rather than proof, that the target has unlawfully benefited from significant criminal activity. This means, in our view, that affidavits such as those filed by the two police officers are admissible, without the need for a formal application under s 19 of the Evidence Act. Rather, they fall within r 7.30 of the High Court Rules and s 20 of the Evidence Act. The alternative to allowing what are, technically at least, hearsay statements in affidavits such as those at issue would be to require a very elaborate evidentiary basis for the issue of restraining orders, which would be impractical and inconsistent with the approach taken in other contexts. We note that the same approach has been taken in other jurisdictions which have legislation similar to the Act.
[14] In Commissioner of Police v Vincent Priestley J called a restraining order a “holding device” of limited duration:3
[37] … A restraining order does not result in the forfeiture of property. Rather it is designed, as the name suggests, to ensure that the owner of the targeted property does not dispose of it until any outstanding forfeiture issues are finally determined. Effectively a restraining orders is a holding device. Its duration is limited …
[15] In Commissioner of Police v Li Katz J termed restraint a “preliminary stage at which it would be unrealistic to expect the Commissioner … [to provide] all or even most of the evidence likely to be adduced at trial”. Rather:
[33] … the Commissioner is required to put sufficient evidence before the Court to enable it to determine whether there are “reasonable grounds for belief” that Mr Li and Ms Yang have benefitted from significant criminal activity. If there are reasonable grounds for such belief, then a restraining order will be appropriate to protect the position pending trial.4
[16] An important dynamic of the “temporary” nature of a restraining order is that the Court, on restraint, is not making final determinations. For example, under s 25 the Court is not making a finding that the respondents have in fact unlawfully benefited from significant criminal activity – that is the function of s 55. Instead, it is determining matters, including whether it is satisfied it has reasonable grounds to
3 Commissioner of Police v Vincent [2012] NZHC 2581 was appealed, but the remarks of Priestley J were not overturned and the appeal was dismissed.
4 Commissioner of Police v Li [2014] NZHC 479 at [33].
believe that the respondents have unlawfully benefited from significant criminal activity.
[17]A greater amount of property may be restrained than is ultimately forfeited. In
Commissioner of Police v Singh, Priestley J observed:5
[46] … And finally, bearing in mind that some unknown proportion of the trading receipts of Scorpion must have been legitimate, the restraining orders I have made must inevitably restrain assets of a value well beyond the value of the property which might eventually be subject to forfeiture orders. I therefore invite the parties to explore and negotiate the possible release of some of Ms Devi’s assets.
[18] Unlike their forfeiture counterparts, restraining orders are discretionary where certain circumstances are met.
Section 24 restraining orders in relation to tainted property
[19] Section 24 concerns tainted property and does not require that the respondent have an interest in the property restrained or to have benefited from significant criminal activity.
[20] The section enables the Court to make a restraining order in relation to specific property if it is satisfied it has reasonable grounds to believe that any property is tainted property.
[21]If it is so satisfied, the Court may make an order that the restrained property:
(a) is not to be disposed or, or dealt with, other than is provided for in the restraining order; and
(b) is to be under the Official Assignee’s custody and control.6
[22]Section 24 of the Act states:
24 Making restraining order relating to specific property
5 Commissioner of Police v Singh [2012] NZHC 344.
6 Section 24(1).
(1) A court hearing an application for a restraining order relating to specific property may, if the court is satisfied it has reasonable grounds to believe that any property is tainted property, make an order that the property (“restrained property”)—
(a)is not to be disposed of, or dealt with, other than is provided for in the restraining order; and
(b)is to be under the Official Assignee’s custody and control.
(2) A restraining order may be made under subsection (1) whether or not there is a respondent in relation to whom the restraining order relates.
[23] “Tainted” property is defined as any property that has, wholly or in part, been acquired as a result of, or directly or indirectly derived from, significant criminal activity. Section 5 relevantly provides:
tainted property—
(a)means any property that has, wholly or in part, been—
(i)acquired as a result of significant criminal activity; or
(ii)directly or indirectly derived from significant criminal activity; and
(b)includes any property that has been acquired as a result of, or directly or indirectly derived from, more than 1 activity if at least 1 of those activities is a significant criminal activity
[24] In Commissioner of Police v Doorman Miller J noted that an entire house may be tainted, even though it was only partially acquired from significant criminal activity.7 The extent to which a property was derived from legitimate sources was relevant when considering any relief against forfeiture:
[36] However, I reject Mr Zindel’s submission that I must confine the property forfeited to an interest corresponding to the extent that the property is tainted. I accept that interests may be separately defined and severed, but the interests of justice do not require that here. Tainted property includes property that was derived in part from relevant criminal activity. The whole of the respondents’ interest in Clover Rd is accordingly tainted. To the extent that the property was also derived from legitimate sources, that may be taken into account when considering relief against forfeiture.
[25]“Significant criminal activity” is defined as follows in s 6 of the Act:
6 Meaning of significant criminal activity
7 Commissioner of Police v Doorman HC Nelson CIV-2010-442-169, 15 December 2011. Doorman was appealed but the assets forfeiture aspect of the decision was not overturned: Doorman v Commissioner, New Zealand Police [2013] NZCA 476, [2014] 2 NZLR 173.
(1) In this Act, unless the context otherwise requires, significant criminal activity means an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending—
(a)that consists of, or includes, 1 or more offences punishable by a maximum term of imprisonment of 5 years or more; or
(b)from which property, proceeds, or benefits of a value of $30,000 or more have, directly or indirectly, been acquired or derived.
(2) A person is undertaking an activity of the kind described in subsection
(1) whether or not—
(a)the person has been charged with or convicted of an offence in connection with the activity; or
(b)the person has been acquitted of an offence in connection with the activity; or
(c)the person’s conviction for an offence in connection with the activity has been quashed or set aside.
(3) Any expenses or outgoings used in connection with an activity of the kind described in subsection (1) must be disregarded for the purposes of calculating the value of any property, proceeds, or benefits under subsection (1)(b).
Section 25 restraining orders in relation to all or part of respondent’s property (in contemplation of profit forfeiture order)
[26] The Court’s discretion to make a restraining order under s 25 of the Act requires it to have reasonable grounds to believe that the respondent:
(a)has unlawfully benefited from significant criminal activity; and
(b)has an interest in, or effective control over, property identified in the application (in practice this is not an express condition of s 25 which refers to “all or part of a respondent’s property”).
[27] The section enables the Court to make a restraining order in relation to all or part of a respondent’s property if it is satisfied it has reasonable grounds to believe that the respondent has benefited from significant criminal activity. The property restrained (or forfeited) does not need to be tainted.
[28]If it is so satisfied, the Court may make an order that the restrained property:
(a)is not to be disposed of, or dealt with, other than is provided for in the restraining order; and
(b)is to be under the Official Assignee’s custody and control.8
[29]Section 25 of the Act provides:
25 Making restraining order relating to all or part of respondent’s property
(1) A court hearing an application for a restraining order relating to all or part of a respondent’s property may, if the court is satisfied it has reasonable grounds to believe that the respondent has unlawfully benefited from significant criminal activity, make an order that the property it specifies in the order (“restrained property”)—
(a)is not to be disposed of, or dealt with, other than is provided for in the restraining order; and
(b)is to be under the Official Assignee’s custody and control.
(2) A restraining order made under subsection (1) may relate to any of the following:
(a)all of a respondent’s property (including property acquired after the making of the order):
(b)specified parts of a respondent’s property:
(c)all of a respondent’s property (including property acquired after the making of the order) other than specifically excluded property.
[30] The meaning of “unlawfully benefited from significant criminal activity” for the purposes of s 25 is defined in s 7 of the Act as:
… unless the context otherwise requires, a person has unlawfully benefited from significant criminal activity if the person has knowingly, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person undertook or was involved in the significant criminal activity).
[31] In Doorman v Commissioner, New Zealand Police the Court of Appeal held that a profit forfeiture order cannot be made where the only identified property to be realised is already the subject of an assets forfeiture order.9
8 Section 25(2).
9 Doorman v Commissioner, New Zealand Police, above n 8.
Discussion
[32] The respondent concedes that he did conduct significant criminal activity. He has pleaded guilty to drugs-related offences in the District Court.
[33] He acknowledges having benefited from significant criminal activity. He has already consented to the making of orders restraining a significant amount of property.
[34] I need not make a finding that the property is tainted property on the balance of probabilities, the question for me is whether the Commissioner of Police has put forward sufficient evidence to enable the Court to determine that there are reasonable grounds to believe that the property is tainted property. This is a lower threshold, consistent with the role of restraining orders as a “holding” measure.10
[35] The respondent is a beneficiary. From 31 March 2015 to 31 March 2019 the respondent has not declared an annual income of $12,508.40. However, during that time he was able to purchase three unencumbered vehicles with an estimated value of
$60,000 over the space of a six-month period between 9 August 2019 and 22 February 2020.
[36] The respondent’s own evidence is that he purchased the black Ranger in June 2019, during the period for which there is evidence that he was obtaining significant income from his drug-dealing activities. Only after the termination date did he transfer the registration of the vehicle into Ms Foster’s name.
[37] Given the respondent’s very low legitimate source of income there are reasonable grounds to believe that he purchased the vehicle using proceeds from his cultivation of cannabis and therefore the vehicle is tainted property.
[38] In relation to the Jayco caravan, the respondent’s evidence is that he obtained the caravan, along with the Toyota Prado, by way of an exchange for his Nissan Patrol
10 Vincent v Commissioner of Police, above n 1 at [47]; Commissioner of Police v Li, above n 4 at [8] and [33]. See also Commissioner of Police v Evans [2014] NZHC 3109 at [9]; Commissioner of Police v McKinley [2014] NZHC 3131 at [14]; Commissioner of Police v Linton [2018] NZHC 1780 at [15] – [16].
vehicle. The respondent’s evidence is that he then swapped the caravan with Ms Foster for her BMW X5.
[39] The exchange of the vehicles does not mean that the caravan is not itself tainted, if the original vehicle was tainted. Given the respondent’s low legitimate income, I can also be satisfied that the caravan is tainted property. I am fortified in that view because the caravan was located at unit F 1010 Ferry Road, parked in the very storage shed where the cannabis was being cultivated. The respondent’s associate, Kyle Smith, had been residing in the caravan. This demonstrates that the respondent had effective control over the caravan, which qualifies as an interest in the property.11
Conclusion
[40] I am satisfied there are reasonable grounds to believe that the black Ranger and the caravan are either tainted property or that the respondent has an interest in them.
Orders
[41] The following property is not to be disposed of, or dealt with, other than is provided for in the restraining order and is to be in the Official Assignee’s custody and control:
(a)Black-coloured 2013 Ford Ranger registration MRF341;
(b)A 2004 Jayco Heritage caravan registration 44U91.
Doogue J
Solicitors:
Raymond Donnelly & Co, Christchurch Patient & Williams Christchurch
11 Commissioner of Police v Read [2015] NZHC 2055.
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