Commissioner of Police v Cherrington

[2022] NZHC 1396

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-2089

[2022] NZHC 1396

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

JARED KENNETH CHERRINGTON

First Respondent

PETER DAVID GLENN

Second Respondent

On the papers

Counsel:

E H K Rangamua and R M Gibbs for the applicant

K E Hogan for the first respondent and the interested parties

Judgment:

14 June 2022

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 14 June 2022, at 3:30 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar  Date……………………………..

Solicitors/Counsel:

Meredith Connell, Crown Solicitor at Auckland K E Hogan, Auckland

COMMISSIONER OF POLICE v CHERRINGTON [2022] NZHC 1396 [14 June 2022]

[1]    The Commissioner of Police commenced proceedings against the respondents under the Criminal Proceeds (Recovery) Act 2009 (the Act). Restraining and other orders were made under the Act on 8 February 2022 by Campbell J, and subsequently varied by Harvey J on 25 March 2022. An application for civil forfeiture orders under the Act was also made.

[2]    The property associated with Mr Cherrington and currently restrained pursuant to restraining orders made by Campbell J on 8 February 2022 is:

Real estate

(a)all interests in the property at 88C Selwyn Street, Onehunga, Auckland as  identified  in  the  record  of  title  NA139B/272,  registered  to   Mr Cherrington, excluding the interest of Avanti Finance Limited as mortgagee (Onehunga Property);

Cash

(b)$107,960 in cash seized by Police from 6C Swinton Close, Remuera, Auckland on 8 October 2020, and any interest accrued (Remuera Cash); and

(c)$24,900 in cash seized by Police from the Onehunga Property on      8 October 2020, and any interest accrued (Onehunga Cash).1

[3]    Mr Cherrington purchased the Onehunga Property in 2016, with a loan and a gift from his parents, Mataki Broughton Cherrington and Faye Dorothy Cherrington (the Cherringtons), and a mortgage facility (the mortgagee is presently Avanti Finance Limited).

[4]    The Commissioner of Police and Mr Cherrington have now reached agreement on the terms of a proposed settlement for which they seek approval of the Court under s 95 of the Act. In summary, the proposed settlement entails an assets forfeiture order

1      This sum is also attributed to the second respondent, Peter David Glenn.

under s 50(1) of the Act, by consent, in relation to the Onehunga Property and Remuera Cash, with a sum of $407,000 from the proceeds of sale of the Onehunga Property returned to The Cherringtons. The Onehunga Cash would remain restrained pending determination of the Commissioner’s application to forfeit that sum, and confirmation of the second respondent’s position.

[5]    I have taken my summary of the background to the proposed settlement from the joint memorandum of counsel filed on 30 May 2022. I am grateful to counsel for their assistance.

Background

[6]    Police commenced an investigation in 2020. Phone data for the period 1 November 2019 to 2 September 2020 was obtained by way of production orders in relation to Mr Cherrington’s phone, as well as a surveillance device warrant intercepting his private communications for a period of 60 days commencing on      4 September 2020.  The Commissioner relies, in part, on that data as evidence of   Mr Cherrington dealing in controlled drugs.

[7]    On 8 October 2020 a search warrant was executed at 6C Swinton Close, Remuera, the address of Mr Cherrington’s partner Ms Angela Wickins (Ms Wickins), where Mr Cherrington was located. A search warrant was also executed at the Onehunga Property registered in Mr Cherrington’s name, where the second respondent, Peter David Glenn (Mr Glenn), then resided. Mr Cherrington resided between the two properties. At both properties controlled drugs, paraphernalia and sums of cash, namely the Remuera Cash and Onehunga Cash, were located.

[8]    In addition, five customers to whom Mr Cherrington supplied controlled drugs were identified and interviewed by Police. They confirmed they had purchased methamphetamine, cocaine and/or MDMA from Mr Cherrington.

Criminal proceedings

[9]    When arrested, Mr Cherrington admitted possession of the controlled drugs and identified a container as housing a bag of lactose used as a cutting agent for cocaine. He admitted to ownership of the Remuera Cash as well.

[10]   As a result of the Police investigation, Mr Cherrington has been convicted and sentenced to imprisonment in relation to representative charges of supplying methamphetamine, cocaine and MDMA, and charges of possession of methamphetamine, cocaine, MDMA and LSD for supply.

[11]   Mr Glenn faces a charge of possession of methamphetamine for supply and is scheduled for trial on 27 July 2022.

Civil recovery proceedings

[12]   On 9 November 2021, the Commissioner filed an application for restraining and civil forfeiture orders seeking:

(a)restraint of the Onehunga Property, Remuera Cash and Onehunga Cash under ss 24 and/or 25 of the Act;

(b)profit forfeiture orders against Mr Cherrington and Mr Glenn under    s 55 of the Act in the sum of:

(i)in relation to Mr Cherrington: $406,362.75 plus the capital gain in the Onehunga Property since its purchase by Mr Cherrington on 24 June 2016;

(ii)in relation to Mr Glenn: $24,900; and

(c)in the alternative, assets forfeiture orders under s 50 of the Act over all of the restrained property.

[13]   Restraining orders over the property were made by consent on 8 February 2022 by Campbell J. Those orders were varied by Harvey J on 25 March 2022, allowing

for the sale of the Onehunga Property by the Official Assignee, with the proceeds of sale to remain restrained.

[14]   The Commissioner’s case is that Mr Cherrington has unlawfully benefited from significant criminal activity, namely drug offending and money laundering, and all of the restrained property is tainted. As well as the location of controlled drugs, paraphernalia and large sums of cash as referred to above, the Commissioner identified substantial deposits into accounts held by Mr Cherrington from June 2017 to March 2021 from unexplained sources, including cash deposits totalling $142,990. Meanwhile, Mr Cherrington’s declared income for the same period was modest, totalling approximately $98,500.40 and cannot account for the unexplained funds he received, the large sums of cash that are attributed to him, or his ability to maintain mortgage repayments for the Onehunga Property. The Commissioner’s case is that proceeds of Mr Cherrington’s drug offending was used to service the mortgage.

[15]   Mr Cherrington has indicated he intends to oppose the Commissioner’s application for civil forfeiture orders, but has not filed a notice of opposition and/or evidence to date, in light of the proposed settlement outlined in this memorandum.

[16]   The Cherringtons filed a notice of opposition and claim for relief, and an affidavit in support of their position, on 4 April 2022.

[17]   Mr Glenn filed a notice of opposition on 7 December 2021 indicating consent to the restraining orders but reserving his position on the civil forfeiture orders pending the outcome of his criminal trial. Matters relating to Mr Glenn are due for review in this Court at the mention scheduled for 3 August 2022.

[18]   The other interested parties, Ms Wickins and her daughter, have indicated that they will not take any steps in the proceeding.

The principles

[19]   Section 95 of the Act provides that 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, but that a settlement does not bind the parties unless it is approved by the

High Court. The High Court must approve the settlement if it is satisfied that it is consistent with:

(a)the purposes of the Act; and

(b)the overall interests of justice.

[20]I have taken into account the following considerations:

(a)civil litigation incurs substantial costs for the parties, a significant portion of which would not usually be recoverable under the rules of Court relating to payments of costs;

(b)it is in the public interest to avoid the burden on the Court of complex and lengthy civil litigation;

(c)there is also strong public interest in litigation of this nature being brought to a prompt conclusion, so long as the settlement reflects the likely costs and risks inherent in the determination of a contested application;2

(d)approval of any settlement by the Court acting in its supervisory jurisdiction requires consideration of the legislative intent and the overall interests of justice and is not a rubber-stamping exercise;3 and

(e)a broad inquiry is required, recognising that the decision to settle proceedings under the Act may be made on economic and pragmatic grounds and often reflects a “common sense compromise” between the parties.4

2      Commissioner of Police v Cotton [2017] NZHC 21 at [7].

3      Commissioner of Police v Bradley HC Rotorua CIV-2011-463-675, 5 July 2012 at [9];

Commissioner of Police v Veevers [2017] NZHC 80 at [10].

4      Commissioner of Police v Douglas [2015] NZHC 1293 at [6]; Commissioner of Police v Venn

[2014] NZHC 361.

[21]   Applying those principles, I accept the submissions of counsel that the proposal for the sale proceeds from the Onehunga Property and some cash to rest in the Crown (after returning approximately $407,000 to the Cherringtons) is appropriate.

[22]   Arguable disputes have been raised by the respondents regarding the Commissioner’s case and counsel have raised legal issues which, if resolved in the respondents’ favour, could lead to reductions in the recoverable amount.

[23]   Having regard to the nature of the offending; Mr Cherrington’s convictions; the admissions of the respondents; the cost and inconvenience of a lengthy civil proceeding, not only to the parties but also to the Court; the matters that are arguable in opposition to the Commissioner’s claims and usual litigation risks, I am satisfied that the proposed settlement meets the purposes of the Act and is consistent with the overall interests of justice.

Orders

[24]Accordingly, I make the following orders by consent:

Assets forfeiture orders under s 50(1) of the Act

(a)The following property vests in the Crown absolutely and is in the Official Assignee’s custody and control:

(i)all interests in the property at 88C Selwyn Street, Onehunga, Auckland as identified in the record of title NA139B/272, registered to Jared Kenneth Cherrington, excluding the interest of Avanti Finance Limited as mortgagee as at the date of these orders and $407,000 to be paid to The Cherringtons as described below (Onehunga Property); and

(ii)$107,960 in cash seized by Police from 6C Swinton Close, Remuera, Auckland on 8 October 2020, and any interest accrued.

Additional orders necessary and convenient for giving effect to the assets forfeiture order made in respect of the Onehunga Property under s 59 of the Act

(b)the Official Assignee shall, as soon as is reasonably practicable, sell the Onehunga Property at its fair market value, if that has not already occurred, and deal with the proceeds of sale in the following way:

(i)First, deduct the Official Assignee’s actual costs in effecting the sale (including, if applicable, any decontamination costs).

(ii)Second, repay the full indebtedness (including any accrued but unpaid interest, default interest and all other costs, legal fees, charges and expenses payable to, or incurred by, Avanti Finance Limited, under, or in relation to, its mortgage) secured by the registered mortgage over the Onehunga Property.

(iii)Third, pay the sum of $407,000, from the net proceeds of sale into a bank account nominated by The Cherringtons.

(iv)Fourth, the remaining net proceeds of the sale vest in the Crown absolutely and is in the Official Assignee’s custody and control pursuant to order (a)(i) above.

Costs

[25]   Costs shall lie where they fall in relation to all matters as between the Commissioner, Mr Cherrington and the Cherringtons.

Further terms noted

[26]I note the following:

(a)Mr Cherrington and The Cherringtons abandon all claims they may have, under the Act or otherwise, to any of the property to be forfeited or any of the other restrained property in this proceeding, namely the Onehunga Cash.

(b)The Commissioner will not pursue his application for a profit forfeiture order against Mr Cherrington in respect of the significant criminal activity alleged in this proceeding.

(c)The settlement is in full and final terms of the current proceeding under the Act, as between the Commissioner, Mr Cherrington and The Cherringtons.

Duty Judge List 3 August 2022

[27]   Counsel’s appearance on behalf of Mr Cherrington and the Cherringtons at the mention of the proceeding in the Duty Judge List on 3 August 2022, and all subsequent calls of this proceeding, is excused.

Toogood J