Commissioner of Police v Bunning

[2013] NZHC 3161

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2013-419-748 [2013] NZHC 3161

IN THE MATTER             of an application pursuant to sections 43,

44, 49 and 58 of the Criminal Proceeds
(Recovery) Act 2009

BETWEEN  COMMISSIONER OF POLICE Applicant

ANDSHANNON PETER BUNNING Respondent

Hearing:                   28 November 2013

Counsel:                  P V Cornege for Applicant

No appearance for Respondent

Judgment:                28 November 2013

ORAL JUDGMENT OF KATZ J

Solicitors:               R G Douch, Crown Solicitor, Hamilton

Jackson Reeves, Tauranga

Counsel:                 P Mabey QC, Tauranga

COMMISSIONER OF POLICE  v BUNNING [2013] NZHC 3161 [28 November 2013]

Introduction

[1]      The Commissioner has filed an application seeking effective control and asset forfeiture orders under the Criminal Proceeds (Recovery) Act 2009 (“Act”).   The property in issue is a 2003 Harley Davidson FXSTD Deuce motorcycle, registration

40ZKB.   The Commissioner says that the motorcycle is the property of the respondent, Shannon Bunning, and that it was acquired as a result of, or directly or indirectly derived from, significant criminal activity.

[2]      Mr Bunning denies effective control of the motorcycle, but has otherwise indicated that he is unable to contest the Commissioner’s application.  He says his father is the beneficial owner of the motorcycle.  Mr Bunning’s father has indicated that he does not wish to take any steps in these proceedings, although he has not disputed his son’s claim that he has an interest in the motorcycle.

[3]      Accordingly,  although  a  pro-forma  notice  of  opposition  has  been  filed, neither Mr Bunning nor his father have filed any evidence in opposition to the Commissioner’s application.  The application accordingly proceeds today by way of formal proof.

The law

[4]      Pursuant to s 50(1) of the Act, if the Court is satisfied on the balance of probabilities that specific property is tainted property, the Court must make an assets forfeiture order in respect of that specific property.  Tainted property is defined in s 5 of the Act as:

“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.”

[5]      Significant criminal activity is defined in s 6 of the Act.  It includes activity that, if proceeded against as a criminal offence, would amount to offending that consists of, or includes, one or more offences punishable by a maximum term of imprisonment of 5 years or more.

[6]      Notwithstanding  the  mandatory  requirement  to  make  an  assets  forfeiture order if the Court is satisfied that the property is tainted, s 50(4) of the Act provides:

“(4)      Despite subsection (1) the Court may not make an assets forfeiture order in relation to property that no person has claimed an interest in, unless the Court is satisfied, on the balance of probabilities, of the following additional matters:

(a)  That a restraining order was earlier made in relation to the same property; and

(b) That the restraining order has been in place for a period of at least 1 year; and

(c)  That the Commissioner has contacted or made all reasonable efforts to contact any person the Commissioner believes may have an interest in the property.”

[7]       Pursuant to s 58 of the Act, where the court is satisfied that a respondent has effective control over property, the court may, on an application made by the Commissioner, order that the property is to be treated as though the respondent had an interest in the property specified by the Court.

The Commissioner’s application

[8]      The Commissioner’s application is supported by an affidavit of Bruce Ronald Russell, sworn 19 July 2013.   Mr Russell is an investigator attached to the Asset Recovery Unit of the Hamilton Police.   His evidence establishes, amongst other things, that:

(a)      On 1 November, police conducted a search of a vehicle driven by Mr Bunning.     A substantial quantity of ammunition and precursor substances used in the production of methamphetamine were located in the vehicle.  Mr Bunning was taken to the police station, where he attempted to dispose of 5 grams of methamphetamine.

(b)On 2  July 2013,  a search  warrant  was  executed  at  an  address  in Ohaupo, at which Mr Bunning was residing on electronically monitored bail.  Located at the address was a significant quantity of equipment and chemicals used in the manufacture of methamphetamine, together with a stun gun.

(c)       Mr Bunning faces charges in respect of both searches.

(d)Mr Bunning has a lengthy criminal history, including a number of convictions for commercial drug offending.

(e)      During the course of the search warrant executed on 2 July 2013, police located the Harley Davidson motorcycle which is the subject of this application.

(f)      The motorcycle is registered in the name of Julia Jane Graham, who resides in Ngaruawahia.

(g)      A copy of the application to licence the vehicle in Ms Graham’s name

was located in the bedroom occupied by Mr Bunning.

(h)When  spoken  to  by  police,  Ms  Graham  confirmed  that  she  was Mr Bunning’s aunt.   She said she had been asked by Mr Bunning’s father to register a motorcycle belonging to Mr Bunning in her name, but she otherwise had no interest in the vehicle.

(i)In recent times, Mr Bunning has had little legitimate income.   He would have been unable to afford to purchase a motorcycle worth approximately $10,000 from legitimate income sources.

[9]      The Commissioner submitted that, given Mr Bunning’s lack of legitimate income in recent years, and clear evidence of his involvement in commercial drug offending, the only funds available to him with which to purchase the motorcycle would have come from methamphetamine related offending.   Such offending falls within the statutory definition  of significant  criminal  activity (having  maximum

terms of imprisonment of five  years or more).   Accordingly, the Commissioner submits that the motorcycle is tainted property and that Mr Bunning is the effective owner of it.

Discussion

[10]     Based on Mr Russell’s evidence, the Commissioner has established, on the balance of probabilities, that Mr Bunning has benefitted unlawfully from dealing in methamphetamine within the relevant statutory period.  This constitutes significant criminal activity, being offending punishable by a maximum term of imprisonment of five years or more.

[11]     I am further satisfied that Mr Bunning had effective control of the motorcycle based on the evidence before the Court.   I refer in particular to the discussions between  Mr Russell  and  Ms  Graham,  the presence of the registration  papers in Mr Bunning’s  bedroom,  and  the  presence  of  the  motorcycle  at  Mr  Bunning’s address.   Pursuant to s 58 it is therefore appropriate to treat the property as if Mr Bunning had legal ownership of it.

[12]     This is not a case where s 50(4) of the Act applies.   Mr Bunning’s father claims an interest in the motorcycle, but has chosen not to seek relief in respect of that   interest   or   take   any   steps   to   oppose   the   Commissioner’s   application. Mr Bunning himself has attempted to disclaim ownership of the motorcycle.  That disclaimer lacks credibility, however, for the reasons outlined above.

[13]     Based on the evidence set out in Mr Russell’s affidavit (and in the absence of any opposing evidence) the Commissioner has established, on the balance of probabilities, that the motorcycle is tainted property.  The clear inference from the evidence before the Court is that the motorcycle must have been acquired or derived in whole or in part from the proceeds of methamphetamine dealing.

[14]     The statutory criteria for the making of effective control and asset forfeiture orders are met.

Result

[15]     I   order   that   the   2003   Harley   Davidson   FXSTD   Deuce   motorcycle, registration 40ZKB, registered in the name of Julia Jane Graham, is to be treated as being in the ownership of the respondent.  I further order that that motorcycle is to vest in the Crown absolutely and is to be in the custody and control of the Official

Assignee.

Katz J