Commissioner of Police v Creelman
[2022] NZHC 1393
•14 June 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-239
[2022] NZHC 1393
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
COMMISSIONER OF POLICE
Applicant
AND
DARREN ANDREW CREELMAN
First Defendant
CASEY RENEE SMETHURST
Second Respondent
MEGAN ELAINE PADDISON
Third Respondent
DANIEL MARC WILES
Fourth Respondent
MELODY JOSAPHINE BIDDLE
Fifth Respondent
On the papers: Counsel:
M R Harborow and L S N Lai for applicant D B Stevens for third respondent
Judgment:
14 June 2022
JUDGMENT OF TOOGOOD J
This judgment was delivered by me on 14 June 2022, at 3:00 pm Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar Date……………………………..
Solicitors/Counsel:
Meredith Connell, Crown Solicitor at Auckland D B Stevens, Auckland
COMMISSIONER OF POLICE v CREELMAN [2022] NZHC 1393 [14 June 2022]
[1] On 22 February 2022, the Commissioner of Police commenced a proceeding against the respondents under the Criminal Proceeds (Recovery) Act 2009 (the Act). Restraining and other orders were made under the Act on 25 March 2022 by Harvey J. Civil forfeiture orders under the Act were also sought.
[2] The Commissioner and the third respondent, Megan Elaine Paddison, 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. The proposed settlement involves the making of a consent assets forfeiture order regarding $124,875 in cash seized on 3 February 2021.
[3] I have taken my summary of the background to the proposed settlement from the joint memorandum of counsel filed on 18 May 2022. I am grateful to counsel for their assistance
Background
[4] In September 2020, Police commenced an enquiry into the distribution of the class A controlled drug, methamphetamine, and money laundering, targeting members of the Head Hunters motorcycle gang.
[5] The first respondent, Darren Andrew Creelman (Mr Creelman), and the second respondent, Casey Renee Smethurst (Ms Smethurst), were identified as manufacturers of methamphetamine.
[6] On 17 November 2020, Police searched a storage unit and an address linked to Mr Creelman and Ms Smethurst and located:
(a)three semi-automatic assault rifles;
(b)a semi-automatic shotgun;
(c)$2,055 in cash (Cames Cash); and
(d)12 grams of methamphetamine.
[7] On 5 February 2021, Police searched 2/213 Jervois Road, Herne Bay (Jervois Road) an AirBnB apartment used by Mr Creelman, Ms Paddison, the fourth respondent Daniel Marc Wiles (Mr Wiles) and the fifth respondent, Melody Josaphine Biddle (Ms Biddle).
[8]Police located:
(a)approximately 152 grams of methamphetamine;
(b)$124, 875 in cash (the Jervois Cash); and
(c)a Bruni pistol with ammunition.
[9] A silver Audi vehicle, registration FUA948, situated outside Jervois Road, was seized and towed. The key for the vehicle was found inside the Jervois Road apartment. Police executed a search warrant on the vehicle and located components of a clandestine methamphetamine laboratory and a further firearm.
Criminal proceedings
[10] As a result of the searches, Mr Creelman, Ms Smethurst, Ms Paddison, Mr Wiles and Ms Biddle face a variety of criminal charges in the Auckland District Court laid under the Misuse of Drugs Act 1975 and Arms Act 1983. Ms Paddison faces charges of:
(a)manufacturing methamphetamine;1
(b)possession of methamphetamine for supply (x5);2
(c)possession of a precursor substance/material/equipment (x4);3 and
(d)unlawful possession of firearm/explosives (x6).4
1 Sections 6(2)(a) and 6(1)(b) Misuse of Drugs Act 1975, maximum penalty life imprisonment.
2 Sections 6(2)(a) and 6(1)(f) Misuse of Drugs Act 1975, maximum penalty life imprisonment.
3 Section 12A(2)(a) Misuse of Drugs Act 1975, maximum penalty five years imprisonment.
4 Section 45(1) Arms Act 1983, maximum penalty four years imprisonment.
The evidence
[11] Financial investigations reveal Mr Creelman, Ms Smethurst, Ms Paddison, Mr Wiles and Ms Biddle declared minimal income between 2014 and 2021. There appear to be unexplained cash deposits made to their bank accounts.
[12]A review of Ms Paddison’s Inland Revenue records and bank account reveal:
(a)Ms Paddison’s declared income was, on average, $35,000 per annum in the last four years;
(b)there were no cash withdrawals that may account for the Jervois Cash; and
(c)between 2018 to 2021, approximately $6,660 of cash deposits and
$26,267.36 of unexplained third party deposits were made into Ms Paddison’s bank account.
The principles
[13] 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.
[14]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;5
(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;6 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.7
The proposed settlement
[15] The Commissioner and Ms Paddison have agreed to settle the issue of forfeiture in relation to Ms Paddison’s interests in the Jervois Cash on the terms set out in counsel’s joint memorandum dated 18 May 2022, subject to the Court’s approval under s 95 of the Act.
[16]The proposed settlement is in the following terms:
(a)Ms Paddison consents to assets forfeiture orders under s 50 of the Act over the Jervois Cash.
(b)In the event assets forfeiture orders are not made or do not encompass the entirety of the Jervois Cash, Ms Paddison consents to a profit
5 Commissioner of Police v Cotton [2017] NZHC 21 at [7].
6 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].
7 Commissioner of Police v Douglas [2015] NZHC 1293 at [6]; Commissioner of Police v Venn
[2014] NZHC 361.
forfeiture order against her under s 55 of the Act, subject to the following conditions:
(i)the maximum recoverable amount of the profit forfeiture order does not exceed the amount of Jervois Cash not made the subject of an assets forfeiture order;
(ii)the amount of the Jervois Cash not made the subject of the assets forfeiture order will be disposed of under s 83(1) of the Act to satisfy the profit forfeiture order; and
(iii)Ms Paddison will not owe any residual debt after the profit forfeiture is made.
(c)Ms Paddison agrees to abandon any and all claim she has to the Jervois Cash in this proceeding.
(d)The Commissioner consents to Ms Paddison and her counsel’s attendance being excused from all subsequent appearances in this proceeding.
(e)Costs in this proceeding in relation to Ms Paddison would lie where they fall.
[17] Pending the other respondents’ interests in the Jervois Cash being dealt with, the Commissioner and Ms Paddison do not seek formal orders at this stage, but instead ask the Court to formally record the position.
[18] In the present case, I accept the submissions of counsel that the settlement proposal is appropriate, and I agree that the proposed settlement is “consistent with the purposes of [the] Act and the overall interests of justice”, for the following reasons:
(a)there will be a saving of time and cost if the matter can be resolved by consent without the need for a hearing;
(b)an agreed settlement will allow the parties to have certainty and control as to the outcome;
(c)the Commissioner considers he has a good case to show that the restrained property is tainted property (so as to support an assets forfeiture order) and that Ms Paddison has unlawfully benefited from significant criminal activity (so as to support profit forfeiture order). However, the Commissioner acknowledges a contested hearing carries with it risk;
(d)Ms Paddison considers she does not have any legitimate (or illegitimate) interest in the Jervois Cash; and
(e)the form of the prepared settlement is such that it will ensure the Jervois Cash is forfeited. If assets forfeiture orders are not made in respect of it in its entirety, only then will a profit forfeiture order be made against Ms Paddison (and only then to an amount sufficient to ensure forfeiture of the Jervois Cash). Ms Paddison will not owe any residual debt to the Crown.
Order
[19]Accordingly, the Court:
(a)approves the proposed settlement under s 55(3) of the Act; and
(b)formally records Ms Paddison’s position for forfeiture orders to be made once the remaining respondents’ interests in the Jervois Cash are settled or the Commissioner’s civil forfeiture application is determined, so as to give effect to the settlement.
[20] Ms Paddison and her counsel’s attendance is excused for all subsequent appearances in this proceeding, except on any occasion on which the Commissioner seeks any order contrary to Ms Paddison’s interests to which she does not consent.
Costs
[21] Costs shall lie where they fall in relation to all matters as between the Commissioner and Ms Paddison.
Toogood J
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