Commissioner of Police v Cole
[2023] NZHC 1369
•2 June 2023
JUDGMENT FOR PUBLICATION: SEE ADDENDUM IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV2022-404-1411
[2023] NZHC 1369
BETWEEN COMMISSIONER OF POLICE
Applicant
AND
BRANDON ST JOHN COLE
First Respondent
MICHAEL McGREGGOR COLE
Second RespondentADELE COLE
Interested Party
Hearing: 1 February 2023 Counsel:
S Earl and C Purdon for Applicant
J D Munro and J Wall for First Respondent
K Hogan for Second Respondent and Interested PartyJudgment:
2 June 2023
JUDGMENT OF HINTON J
[Redacted]
This judgment was delivered by me on 2 June 2023 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date: ………………………….
Solicitors: Meredith Connell, Auckland
Tucker & Co, Auckland
COMMISSIONER OF POLICE v COLE [2023] NZHC 1369 [2 June 2023]
[1] The first respondent, Brandon Cole, faces criminal charges in the Auckland District Court for importation and supply of methamphetamine1 and for money laundering.2 He is on bail. At the time of the hearing no charges had been laid against the second respondent or interested party, Michael and Adele Cole, who are Brandon Cole’s parents. However, I was informed by updating memorandum dated 1 June 2023 that the same charges faced by Brandon Cole have now been laid against Michael Cole. In the absence of contrary advice, I assume Michael Cole is also on bail.
[2] On 23 August 2022 the Commissioner obtained restraining orders under the Criminal Proceeds (Recovery) Act 2009 (the Act) over assets in the names of all three parties on the basis there were reasonable grounds to believe the assets were acquired in connection with significant criminal activity and/or that they were tainted property in terms of the Act.3
[3] This proceeding relates to applications for release of reasonable living costs under s 28 of the Act.
[4] Brandon Cole filed an application and affidavit in support dated 9 November 2022. His application sought $650 per week for expenses plus an additional sum of approximately $18,400 to meet debts. His affidavit said he had no income.
[5] Michael and Adele Cole (together referred to as the Cole Seniors), filed an application jointly on 3 November 2022. In support, Adele Cole affirmed an affidavit dated 3 November 2022 and an updating affidavit dated 28 January 2023. Michael Cole did not provide evidence. Their application was for $1,150 per week being the shortfall between claimed expenses of $2,035 per week and income of $885 per week. They also sought approximately $2,000 for a one-off expense. In counsel’s updating memorandum of 1 June 2023, the expenses are reduced to about $1,900 per week and income is declared at $883 per week, the shortfall being $1,017. I work from those most recent figures.
1 Misuse of Drugs Act 1975, s 6.
2 Crimes Act 1961, s 243.
3 Cmr of Police v Cole [2022] NZHC 2095.
[6] The Commissioner provided three affidavits in support of his opposition, from Detective Constable Jason Lee Hill, sworn 28 November 2022; Authorised Officer Marius Domiticus Germishuyzen, sworn 29 November 2022; and forensic accountant Andrew Minkyu Yoon, sworn 29 November 2022.
[7] Brandon Cole and Adele Cole were called for cross-examination at the hearing. In the course of questioning, there were significant shifts in the substance of both applications, particularly that of Brandon Cole.
Restrained and unrestrained property
[8] The restraining orders were made over the following property, including approximately $3m in cash:
(a)the residential property (and current home of the respondents) at [redacted], registered owners the Cole Seniors, Mr Botha and Ms Pridmore and subject to a mortgage in favour of ASB;
(b)all funds (and interest earned thereon) in seven bank accounts held by the respondents jointly and separately, as set out in the Appendix to this judgment, totalling $458,442.62;4
(c)18 vehicles;5
(d)$12,000 transferred to a Kiwibank account on 20 August 2022, being the proceeds of the sale of a Toyota Hiace, registration JBH699, and all interest earned thereon;
(e)$2,398,600 cash seized from a storage unit at 7/43 Wookey Lane Kumeu, Auckland, and all interest earned thereon;
(f)$49,950 cash seized from Brandon Cole’s accommodation at 120 Boord Crescent, and all interest earned thereon;
4 See appendix at Table 1.
5 See appendix at Table 3.
(g)$33,745 cash seized from the Cole Seniors’ accommodation at 120 Boord Crescent, and all interest earned thereon;
(h)the personalised licence plate 81HA, registered and affixed to a 2020 Harley Softail; and
(i)12 Harley Davidson motorcycles.6
[9] Further orders were made to sell eight of the vehicles and all 12 motorcycles, with the proceeds of those sales to be restrained. One of the vehicles was released for use by the Cole Seniors.
[10] There are unrestrained assets belonging to the parties, in particular the shares of Zoo Performance Limited. Brandon and Michael Cole are the director-shareholders of that company. Its business is in supply of specialist car parts. The company is in wind-down mode. Michael Cole seems to have been engaged full-time in that process. The affidavit evidence of Officer Germishuyzen addressed two intercepted communications in which Brandon Cole talked to friends about the value of inventory held by Zoo Performance as just over $1m (17 February 2022) and $1.6m (22 June 2022). The officer’s affidavit includes photos of hundreds of tyres, boxes labelled ‘stock’ and specialist car parts in a warehouse at the offices of Zoo Performance. The affidavit of Detective Hill records his sighting Michael Cole loading tyres in a storage facility and that Mr Cole told him he had about 600 tyres to move. In evidence Brandon Cole accepted that the total value of parts (including tyres) could well be
$1.6m.
[11] A number of other corporate entities were also referred to, the shares in which are also not subject to restraint. In particular, Michael Cole was a 50 per cent shareholder and co-director of a company called Rogue Customs New Zealand Limited, incorporated in July 2021, whose registered office was at 12 Olive Road, Penrose. Rogue seems to have been involved in importing motorbikes, mostly Harley Davidsons. There are still six motorbikes in South Africa which have been paid for but not yet shipped. Michael Cole ceased to be a director of Rogue in June 2022 and
6 See appendix at Table 2.
he transferred his shareholding to a Mr Fritz in January 2023. There is no evidence as to consideration for the sale.
Section 28 of the Act
[12] Section 28 of the Act provides the Court with a discretion to allow specified expenses or debts to be met out of a respondent’s restrained property. It provides:
28 Conditions on restraining order
(1)A court may make a restraining order subject to any conditions the court thinks fit including, without limitation, conditions that provide for the following to be met out of a respondent’s restrained property:
(a)the reasonable living costs of the respondent and any of his or her dependants:
(b)the reasonable business expenses of the respondent:
(c)the payment of any specified debt incurred by the respondent in good faith:
(d)any other expenses allowed by the court.
(2)Despite subsection (1)(d), a court may not allow any legal expenses to be met out of a respondent’s restrained property.
(3)In determining whether or not to make a restraining order subject to a condition, the court must have regard to the ability of a respondent to meet the reasonable living costs, expenses, or debt concerned out of property that is not restrained property.
(4)In this section a dependant is a person who is dependent on the respondent and who is either or both—
(a)a child of the respondent:
(b)a member of the household of the respondent.
Relevant principles
[13] An application under s 28 requires that I consider two issues. I must determine what ‘reasonable living costs’ are in the circumstances of the applicant, and then consider whether the applicant has any unrestrained property (meaning income or unrestrained assets able to be liquidated) that may meet those reasonable costs.
[14] The maximum amount I can order to be paid out of the restrained property is the amount assessed to be an applicant’s ‘reasonable’ living costs.
[15] Courtney J in Cmr of Police v Dotcom7 noted that while a family’s financial and other commitments must be taken into account, a person whose property is restrained cannot, in general, reasonably expect to maintain their previous lifestyle.
What is ‘reasonable’ will often not be the actual costs claimed.8
[16] There is an evidential burden on an applicant to show on the balance of probabilities that the amounts sought are justified. In the absence of such evidence, the Court may draw an adverse inference.9
[17] Similarly, where there are unrestrained and unencumbered assets sufficient to meet expenses, the Court will usually expect evidence that the applicant has explored all avenues to liquidate those assets before making provision to meet expenses out of property included in the restraining order. To the extent that the applicant has access to assets or funds that are not restrained, they must be utilised first, with recourse made to restrained funds only as necessary to meet any remaining shortfall.10
Brandon Cole’s application
Reasonable living costs and expenses
[18] The restrained property at 120 Boord Crescent, Kumeu is a 5-acre farmlet. The Cole Seniors live in the main house, together with their daughter and her partner. Brandon Cole lived in a separate cottage with his partner until his arrest when he and his partner had to live elsewhere as part of his bail conditions.
[19] As noted above, Brandon Cole’s application was for a weekly sum of $650.00. This included a weekly charge of $150 for rent. At the hearing the rental charge was substituted by a $500 weekly mortgage contribution, as he and his partner had moved
7 Cmr of Police v Dotcom [2015] NZHC 820 at [12].
8 Cmr of New Zealand Police v Rae [2021] NZHC 2766 at [44].
9 As noted in Cmr of New Zealand Police v Rae, above n 8.
10 Adams on Criminal Law, CP28.01.
back to the [redacted] residence following a variation in bail terms. His weekly expenses as claimed at the outset of the hearing were therefore as follows:
$ 150.00 Medical expenses $ 100.00 Petrol $ 250.00 Food and essentials $ 500.00 Mortgage contribution $ 1000.00 Total weekly expenses claimed
[20] However, he then said in cross-examination that his partner, Ms Morris, had been paying the $500 weekly mortgage payment while they were renting and that she was still paying $250 of that amount. That materially changed his application again by reducing it to $750 per week. I note it is then unclear to what extent Ms Morris is in fact contributing to the other costs he claims. As I understand it, she is working full-time.
[21] Mr Cole’s medical expenses of $150 per week are for Cannabidiol and associated doctors’ appointments. While I accept medical expenses are essential, he has not provided any evidence as to cost, annexing only a prescription from his doctor at the Cannabis Clinic. This is clearly inadequate. In the absence of evidence, I nevertheless allow a sum of $100 per week.
[22] Mr Cole also does not provide evidence as to his spending on food and petrol. However, I consider those amounts clearly reasonable on their face, particularly given he has included very few items of expenditure. I do not consider an applicant has to prove basic costs where the amounts claimed are patently reasonable.
[23] In respect of Mr Cole’s costs, I accept that, as he is back residing at [redacted], there is an expectation that he will contribute to the mortgage cost. I consider that
$250 per week is reasonable, allowing for Ms Morris’ contribution.
[24]Overall, I consider Brandon Cole’s reasonable living costs to be approximately
$700 per week after reducing his medical expenses to $100 and halving the mortgage contribution as discussed.
[25] Brandon Cole also claimed $16,611.65 to meet outstanding tax liabilities to the Inland Revenue Department (IRD), and $1,752.92 for a debt owed to the Accident
Compensation Corporation (ACC). Under cross-examination, it was determined that the IRD debt had been settled by a payment on or before 11 October 2022 from Zoo Performance Limited. Brandon Cole said that was the first he knew of this payment and that his father was in charge of finances. In addition, Brandon Cole indicated that he had been paying $70 per week on a payment plan in respect of the IRD and ACC debt. Given his evidence is patently incorrect with regard to the IRD debt, I also discount it in respect of the ACC debt.
[26]The net effect is no lump sum is allowed.
Available unrestrained assets and income
[27] Brandon Cole claimed by affidavit and in written submissions that he currently had no income or other sources of funds, and no prospect of employment due to his bail conditions not to access the internet. However, under cross-examination he accepted that for quite some time he has been receiving $500.00 weekly payments from “Western Terra”, which he says were repayments for a business loan. While he claimed those payments would stop soon, given his failure to declare them in the first place and the vagueness of his evidence, I am sceptical about that and sceptical as to what other funds he and/or his partner are receiving. Brandon Cole also acknowledged that he is receiving $96 by way of a weekly job-seeker support benefit, and is working at a casual labouring job for a friend for which he will be paid an indeterminate lump sum. Overall, his financial position was materially different to his sworn evidence.
[28] The Commissioner points out that Brandon Cole and the Cole Seniors also have unrestrained assets including in Zoo Performance, its considerable trading stock and a number of small bank account credit balances. The Commissioner notes that any payments made into Brandon Cole’s bank account since the restraining orders, have been immediately transferred to his partner. I note again that Zoo Performance funds had been used to meet his IRD debt of over $16,000, yet he was claiming real disadvantage in being unable to pay it. In the absence of evidence to the contrary, I have to proceed on the basis that Zoo Performance will be generating some funds.
[29] The Commissioner also draws attention to the six unrestrained Harley Davidson motorcycles in South Africa. However, given that a previous shipment of
motorcycles was restrained on arrival in New Zealand and that sale and exportation of sale proceeds to New Zealand would presumably be problematic, I do not consider that these additional vehicles should be treated as available unrestrained property for present purposes.
[30] Brandon Cole submits that he is unable to gain employment as he is restricted from using the internet by his bail conditions. While I acknowledge that it may be difficult to enter traditional employment, both because of online recruitment and because of the charges he is facing, my impression of Brandon Cole was that he is capable and resourceful. He has connections in the community, from which he has been able to source casual work.
[31] Viewed overall, I consider that there is unrestrained property or income from which Brandon Cole’s weekly costs can be met, including from employment, Zoo Performance, Western Terra, his WINZ benefit and/or otherwise.
The Cole Seniors’ application
[32] In light of Ms Hogan’s updating memorandum of 1 June 2023, which advised of slightly changed income and outgoings, I set out those revised figures:
$ 500.00 Food (household and animals) $ 200.00 Petrol $ 625.00 Mortgage contribution $ 57.50 Storage unit $ 70.00 Power $ 56.00 Car and contents insurance $ 191.74 Medical insurance $ 37.50 Internet and phone charges $ 25.00 Medical expenses (including animals) $ 133.59 Life insurance $1,896.33 Total weekly expenses claimed
[33] The claimed expenses have reduced by about $135 per week from those claimed at the hearing. The Cole Seniors’ declared income is $883 per week, $618 approximately being Ms Cole’s salary and $265 per week from WINZ.
[34] The Cole Seniors also seek the release of funds for upgrades to the water filtration system on their property, estimated to cost $2,100.
Reasonable living costs and expenses
[35] I note that evidence from forensic accountant Andrew Yoon for the Commissioner suggests that the actual costs of the Cole Seniors are considerably lower than indicated. A seven-day rolling average shows weekly expenditure of around
$108.12 on petrol, and only $96.80 on food. However, I accept Adele Cole’s evidence that their actual food costs have not been reflected accurately in their banking records because friends and family have supported them with gifts of Prezzy cards. I expect also that they have been living off meat from their own animals.
[36] I agree with the Commissioner that the estimated cost for food is too high for two people, let alone people who are in a position to produce some of their own food. The food cost included food for animals, but the cattle have been killed and the cat put down after it attacked Ms Cole. Bearing in mind these factors and the Commissioner’s evidence as to the Coles’ actual costs, I allow for weekly food costs (including miscellaneous items) of $350.
[37] Previously the amount claimed for petrol was $300 per week. I accept the reduced claim of $200.
[38] Under cross- examination, Adele Cole indicated that the storage unit would not be an ongoing cost as she was in the process of moving its contents into the residence. That item is still listed. I do not consider it a reasonable cost.
[39] I note the Commissioner’s submission that the cost claimed for mortgage payments is inflated. The mortgage account is shared with Brandon Cole, his sister, and their partners, who also contribute to payments. The Cole Seniors have been contributing more than the children to the account, creating a surplus. Under cross- examination, Adele Cole confirmed that the actual monthly mortgage payment is
$5,226. Each child and their partner pays $2,000 per month into the account and the Cole Seniors pay about $2,500 per month. Thus, the mortgage account is run at a surplus and the Commissioner confirmed this with reference to $9,000 in withdrawals from the account between August and December 2022, made by the Cole Seniors only, and a balance still sitting there at the date of hearing of some $15,000. However, I note there would be other payments relating to outgoings on the property that are not
included in the list of expenses, including rates and maintenance. Given the asset is restrained it is in both the applicants’ and the Commissioner’s interest that it be properly upkept and that there be a small fund to fall back on.
[40] As to costs generally, in Solicitor General v Darwish,11 Heath J used population statistics to determine reasonable living costs alongside an assessment of the applicant’s stated expenses. The most recent Statistics New Zealand data on household expenditure shows an average weekly spend of $1,249 for a two-person household.12 This information was gathered in 2019 and does not therefore account for recent changes in inflation.
[41] With reference to that figure, a rough allowance for inflation and the adjustments already made above, I set reasonable living costs for the Cole Seniors at
$1,700 per week. I consider this generous.
Available assets and income
[42]As noted above, the Cole Seniors’ declared income is $883 per week.
[43] Michael Cole had back surgery in May 2022 and it was claimed he had limited ability to work, hence his only declared income being the WINZ benefit. However, Ms Cole confirmed under cross-examination that Michael Cole had in fact been fit for work since October 2022. That was consistent with, although not clear from, his medical records, which were annexed. Ms Cole said that Michael Cole was not looking for work because he was in the process of winding up Zoo Performance. She said that hopefully within the next month or two he would be back to work.
[44] Michael Cole’s previous “income”, which came from Zoo Performance, was by way of drawings of $3,000 per month. There is no evidence from him as to his earning capacity, which there should be. I proceed on the basis that he could earn at least $750 net per week, which is a little more than his wife earns and is not a large
11 Solicitor-General v Darwish HC Auckland CIV-2004-404-1603, 24 November 2004
12 Statistics New Zealand “Household expenditure statistics: Year ended June 2019” (3 March 2020) Further, I consider he could have been working since before this application was filed on 3 November 2022. There is no evidence that winding up Zoo Performance is a full-time job or what it entails at all, including what income is being generated from sales. I see no reason why for example Michael and Brandon Cole could not have been attending to that exercise jointly in the evenings or over weekends.
[45] In any event, I also repeat, as the Commissioner submits, it is likely that there have been and will be ongoing sales of merchandise of Zoo Performance. I cannot say how much actual income might be generated from those sales but it can reasonably be assumed it might be substantial, given the limited amount known about the company, and given the known payments made already out of Zoo Performance funds. Presumably the Coles expect to generate funds from the wind-up or Michael Cole would not have been dedicating so much time to it. If it were otherwise, evidence should have been provided by Michael Cole. Instead, both Adele and Brandon Cole claimed lack of any knowledge of finances.
[46] I consider that Michael Cole’s earning potential, and/or proceeds from the sale of stock of Zoo Performance can readily be treated as generating the equivalent of a weekly net income of at least $750 which, added to Adele Cole’s salary, means weekly funds available of approximately $1,367.
[47] This reduces the difference between the Cole Seniors’ reasonable costs and their income to $333 per week. I am satisfied that this amount may be drawn from restrained funds.
[48] As to the fixed cost of $2,100, I am not satisfied that sufficient evidence has been provided to show the servicing of the water filtration system cost is presently required or as to the actual cost. In any event, I consider that this cost and similar costs can be covered by the surplus funds in the mortgage account or generated out of the Zoo Performance wind-up.
Result and Orders
[49] For these reasons, I vary the restraining orders to allow for the second respondent and interested party to receive $333 per week. I leave it to the
Commissioner to determine from which asset the payment is to be made. The order is to be backdated to the date of hearing.
[50]The application of the first respondent is dismissed.
Costs
[51] The Commissioner would be entitled to costs on the application by Brandon Cole but as I understand it, he is in receipt of legal aid. If the Commissioner wishes nonetheless to pursue costs, he is to file and serve a brief memorandum within ten working days from the date of this judgment, and the first respondent is to file and serve a brief reply within a further ten working days.
[52] I make no order for costs in respect of the Cole Seniors’ application. Their success was very modest compared to their claim and I consider the stance I have taken towards the application to be generous.
Addendum
[53] This judgment has been redacted pursuant to the inherent jurisdiction of this Court to remove sensitive information such as bank account numbers and home addresses.13
Hinton J
13 Peters v Birnie HC Auckland CIV-2009-404-8119, 19 March 2010 at [23] citing Taylor v Attorney- General [1975] 2 NZLR 675 (CA). Although these judgments refer to the inherent jurisdiction to suppress information, the same principles have been applied in the context of redactions. See for example Kidd v van Heeren [2016] NZHC 576.
Appendix
Table 1: Restrained bank account assets
Amount Account number Account holder $81,085.75 [redacted] Mr B Cole $355.09 [redacted] Mr B Cole $140,024.25 [redacted] Mr B Cole $152,164.99 [redacted] Mr M Cole and Mrs A Cole $80,000.00 [redacted] Mr M Cole and Mrs A Cole $2,272.71 [redacted] Mr M Cole $2,539.83 [redacted] Mr M Cole Total $458,442.62
Table 2: Restrained motorcycles
Motorcycle VIN number 2014 Harley Davidson V-Rod 5HD1HHHC4EC803045 2017 Harley Davidson V-Rod 5HD1HHHC7HC802623 2016 Harley Davidson V-Rod 5HD1HPHCAGC800422 2014 Harley Davidson Night Rod 5HD1HHHC1EC805612 2013 Harley Davidson V-Rod Muscle 5HD1HPHC8DC800027 2017 Harley Davidson V-Rod 5HD1HPHC6HC801120 2017 Harley Davidson V-Rod 5HD1HPHC1HC802286 2016 Harley Davidson V-Rod 5HD1HPHC2FC802388 2015 Harley Davidson V-Rod 5HD1HPHCOFC801000 2016 Harley Davidson V-Rod 5HD1HPHC2GC801436 2018 Harley Davidson V-Rod 5HD1HHHC4HC802210 2017 Harley Davidson V-Rod Touring 5HD1HPHCXHC801430
Table 3: Restrained vehicles
Vehicle Registration/identification number Registered owner 1977 Austin Mini Clubman POORKY Mr M Cole 1979 Leyland Mini MYMlNE Mr M Cole 1992 Mazda RX7 OOHAY Mr B Cole 2006 Harley Davidson Night Rod COFFN Mr B Cole 2006 Mitsubishi Lancer Evolution ON RACK Zoo Performance 2008 Can-Am Spyder NRU519 Mr M Cole 2016 Ford Ranger XLT Double Cab JZR479 Ms A Cole
2017 Isuzu D-Max KQM731 Mr M Cole 2018 Ford Ranger XLT Double Cab OGBOSS Mr Botha 2020 Harley Davidson Softail 81HA Mr B Cole 2006 Mitsubishi Fuso Canter FE150 E2 MFL152 Zoo Performance 2003 Nissan 350Z JN1GAAZ33A0001818 NANTE 10 Mini Digger NT10212282 2018 Harley Davidson Breakout 1HD1YHK10JC013976 2021 Road trailer 87D72 Mr B Cole 2022 Husqvarna FC350 VBKUXN430NM219859 1998 Nissan Skyline R34 GTT 7A8DH120702000549 2006 Yamaha Raptor 700 JY407Y06C01558
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