Commissioner of Police v Cadby

[2019] NZHC 1319

THE NAME AND OCCUPATION OF THE SECOND RESPONDENT ARE SUPPRESSED. HER RELATIONSHIP WITH THE FIRST RESPONDENT, STEPHEN WILLIAM CADBY, IS NOT SUPPRESSED.

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2015-425-93

[2019] NZHC 1319

UNDER

Sections 24, 25, 28 and 37 Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

STEPHEN WILLIAM CADBY

First Respondent

AND

[Q]

Second Respondent

Hearing:

(On the Papers)

Counsel:

R W Donnelly for the Applicant

R Cunliffe for the First and Second Respondents

Judgment:

12 June 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

[1]                 The applicant, the Commissioner of Police (“the Commissioner”), applies for costs against the first respondent and the second respondent. The second respondent applies for costs against the Commissioner.

COMMISSIONER OF POLICE v CADBY & ANOR [2019] NZHC 1319 [12 June 2019].

[2]                 The application for costs has its origins in the judgment of Nicholas Davidson J dated 14 December 2018.1

[3]                 His Honour in a comprehensive judgment made an assets forfeiture order in respect of all the property, the subject of the application, but granted relief to the second respondent under s 67 of the Criminal Proceeds (Recovery) Act 2009 (“the CPRA”) as a result of having found her to be entirely innocent of any wrongdoing including finding that she was not being wilfully blind to the conduct of the first respondent. Indeed, in a subsequent judgment relating to suppression, His Honour described the second respondent as having been exonerated in all respects. There could not have been a stronger finding in her favour in respect of her involvement.

[4]                 Despite this, the Commissioner seeks a costs award against the second respondent.

Costs application against the first respondent

[5]                 Counsel for the first respondent accepts the Commissioner was successful against the first respondent and prima facie is entitled to costs. The first respondent suggests costs on a 2B basis.

[6]                 Davidson J’s comments about the culpability of the first respondent stand in stark distinction to the comments about the second respondent.

[7]                 There is nothing in the first respondent’s position to stand against the proposition that costs should follow the event. Accordingly, there is a costs award against the first respondent on a 2B basis.

Costs application against the second respondent

[8]                 The Commissioner asserts that the Commissioner achieved a great measure of success in relation to the second respondent. I do not accept this.

1      Commissioner of Police v Cadby & Anor [2018] NZHC 3334.

[9]                 The reality is, and this is reflected in Davidson J’s decision, that the CPRA works strictly so that property is “tainted” even if a small amount of money derived from significant criminal activity is applied to the property. That is the case irrespective of the culpability of the second respondent. As recorded by His Honour in his judgment at [18], “a taint is a taint”. Because of the first respondent’s conduct, the property became tainted in its entirety notwithstanding that the second respondent was innocent of any wrongdoing whatsoever.

[10]              I do not consider this outcome in substance represents the Commissioner succeeding against the second respondent, rather it is a consequence of the operation of the CPRA, meaning that the property the second respondent sought to protect was automatically tainted as a result of conduct in which she had no involvement.

[11]              The Commissioner argues that the first and second respondents were represented throughout the proceedings by the same counsel and there was a combined defence. That is true, but that is an issue for quantification rather than denial of costs. The structure of the 14 December 2018 judgment shows His Honour treated the two respondents as two distinct parties.

[12]              The Commissioner also refers to the outcome of the judgment being better than settlement offers put by the first and second respondents.

[13]              The Commissioner’s memorandum says that none of the offers put forward by the first and second respondents reached an acceptable level, meaning the Commissioner was justified in pursuing the matter to hearing. However, I do not accept the submission that because the Commissioner may have achieved a greater success at hearing than the offers made by the first and second respondents, the Commissioner should receive an award of costs against the second respondent, or that she should be denied costs.

[14]              The position may have been different if the Commissioner had made offers that were unreasonably declined, but that is not the case. In fact, it seems the Commissioner did not make any counter offers, only called for the first and second respondents to increase their offers.

[15]              I do not consider the fact that the first and second respondents made offers which they may not have bettered at hearing to help me with the costs assessment.

Outcome

[16]              I consider the second respondent was a successful party in the context of an application under the CPRA. The second respondent was caught by a strict liability regime which meant that the substance of her case was orientated around seeking relief. She was successful in obtaining relief against the objection of the Commissioner.

Factors relevant to costs assessment

[17]              There is something in what Mr Cunliffe, counsel for the first and second respondents, says in his memorandum that the Commissioner’s initial position was that the second respondent was jointly involved in the first respondent’s criminal enterprise.

[18]              There was the late addition to the claim that further misconduct by the second respondent involved steps to avoid the requirement to register as a licenced motor vehicle dealer and tax evasion. Implicit in the approach recorded in the substantive judgment is that the Commissioner maintained that the second respondent was involved in the unlawful activity or was wilfully blind to the criminal activity of the first respondent. Those submissions were wholly rejected.

[19]              Mr Cunliffe in his submission said that in relation to the asset forfeiture and profit forfeiture proceedings, much of the attendances were directed at defending the second respondent’s position. That is understandable given the first respondent was practically in an indefensible position.

[20]              I consider the second respondent was successful in the application and that costs should follow the event.

[21]              I consider that the scale costs sought by Mr Cunliffe on the second respondent’s behalf are reasonable.

Decision

[22]              Had the second respondent been separately represented, an uplift may have been justified, but both respondents were represented by the same counsel. Apportioning attendances is a difficult exercise. I consider a broadly just approach is to decline the application for an uplift and to make a costs award on a 2B basis in terms of annexure “A” to the second respondent’s memorandum of 26 February 2019. The claimed disbursements are approved.

Associate Judge Lester

Solicitors:

Preston Russell Law, Invercargill Macalister Todd Phillips, Queenstown