Commissioner of Police v Dunn
[2024] NZHC 720
•4 April 2024
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2018-419-000173
[2024] NZHC 720
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
THE COMMISSIONER OF POLICE
Applicant
AND
BROOKE MAURICE DUNN
Respondent
KIMIORA MOANA DUNN
First Interested Party
BROOKE DUNN COATINGS LIMITED
Second Interested Party
Hearing: 8 December 2023 Appearances:
J N Hamilton for Applicant J S Gurnick for Respondent
Judgment:
4 April 2024
JUDGMENT OF VAN BOHEMEN J
This judgment was delivered by me on 4 April 2024 at 12 pm Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
……………………………..
Counsel/Solicitors:
Crown Solicitor, Hamilton J S Gurnick, Hamilton
P A Depledge, Hamilton
THE COMMISSIONER OF POLICE v DUNN [2024] NZHC 720 [4 April 2024]
BROOKE MAURICE DUNN and KIMIORA MOANA DUNN as TRUSTEES OF THE DUNN FAMILY TRUST
Third Interested Party
BANK OF NEW ZEALAND LIMITED
Fourth Interested Party
[1] The Commissioner of Police (the Commissioner) has applied for orders under s 35(e)(v) of the Criminal Proceeds (Recovery) Act 2009 (the Act) directing the Official Assignee to sell a 2015 Ford Ranger, registration BDC1 (the Ford Ranger) to preserve its value and to restrain the sale proceeds. The Ford Ranger has been subject to restraint since June 2018 and is currently being held in storage by the Official Assignee.
[2] The application is opposed by Brooke Dunn, the sole director and shareholder of Brooke Dunn Coatings Ltd (BDC Ltd), the registered owner of the Ford Ranger. Mr Dunn says that he will suffer extreme hardship if the Ford Ranger is sold. Mr Dunn asks that the Ford Ranger either be released from restraint or released into his possession for his use, pending determination of the Commissioner’s application for profit forfeiture. Mr Dunn also seeks an order directing that funds retained from the sale of another vehicle that had been subject to restraint, a 2013 Mitsubishi Pajero, be used to pay down a loan from the Bank of New Zealand (BNZ) on the Ford Ranger.
[3] Progress with the application has been very slow. The application was filed on 23 September 2022. It was initially set down for hearing on 30 November 2022.1 Following an application for an adjournment by Mr Dunn to allow time to instruct new counsel, it was set down for hearing on the first available date in 2023. In ordering the adjournment, Tahana J recorded that Mr Dunn was expected to instruct counsel without delay.2 In the event, Mr Dunn did not instruct new counsel until July 2023. Mr Dunn’s newly appointed counsel then sought time to review the file, to which the Commissioner agreed.
[4] On 1 November 2023, Johnstone J set the application down for hearing on 8 December 2023.3 I heard the application on that date. I regret that this judgment has been delayed by the need to deal with a backlog of other judgments. Although the application is itself of limited scope, the need to review the considerable documentary history related to the application also contributed to the delay.
1 Commissioner of Police v Dunn HC Hamilton CIV-2018-419-173, 2 November 2022 (Minute of Campbell J).
2 Commissioner of Police v Dunn HC Hamilton CIV-2018-419-173, 29 November 2022 (Minute of Tahana J).
3 Commissioner of Police v Dunn HC Hamilton CIV-2018-419-173, 1 November 2023 (Minute of Johnstone J).
Relevant background
[5]On 22 May 2018, the police executed search warrants at Raddington Way,
Hamilton, the residential address of Mr Dunn and Mr Dunn’s wife, Kimiora Dunn; 14 Manchester Place, Hamilton, the business premises of BDC Ltd; and a storage unit rented by Mr Dunn. As a result of the searches, the police found large quantities of hypophosphorous acid, a precursor chemical used in the manufacture of methamphetamine.
Without-Notice Order
[6] On 14 June 2018, various assets and bank accounts, owned or controlled by Mr Dunn, Mrs Dunn, BDC Ltd and the Dunn Family Trust, including the Ford Ranger, were restrained following a without notice order made under s 22 of the Act (the Without-Notice Order).4 In making the Without-Notice Order, Lang J recorded that it was made on the express basis that the police would enter into an arrangement with Mr and Mrs Dunn that enabled the Dunn family and BDC Ltd to continue to have access to funds to meet daily living and operating expenses.5
First On-Notice Order
[7] On 10 October 2018, following an on-notice application made under s 21 of the Act, Brewer J made, by consent, an on-notice order restraining assets that had been subject to the Without-Notice Order (the First On-Notice Order).6 The restrained assets included Raddington Way, a property at Clem Newby Road, Hamilton, the Ford Ranger, the Mitsubishi Pajero, a 2016 Holden Commodore, and a 2016 Harley Davidson motorcycle. All the motor vehicles, except for the Mitsubishi Pajero, were subsequently seized. The Mitsubishi Pajero was left with Mrs Dunn to assist with family administration.
4 Commissioner of Police v Dunn HC Hamilton CIV-2018-419-173, 14 June 2018 (Minute of Lang J).
5 At [2].
6 Commissioner of Police v Dunn HC Hamilton CIV-2018-419-173, 10 October 2018 (Minute of Brewer J). On 10 October 2019, this order was extended by consent to 30 June 2020; see Commissioner of Police v Dunn [2019] NZHC 2587.
October 2019 Orders; Ford Ranger released to Mr Dunn
[8] In April 2019, the Commissioner applied for orders to sell some of the restrained assets including Clem Newby Road, the Ford Ranger, the Holden Commodore and the Harley Davidson motorcycle. The orders sought included provision of $10,000 from the sale proceeds to be released to Mr and Mrs Dunn to purchase a vehicle to assist with family administration. At that time, the Dunns had three school aged children and a finance company had repossessed the Mitsubishi Pajero.
[9] Mr and Mrs Dunn initially opposed the Commissioner’s application and sought the release of the Ford Ranger to assist with the management of BDC Ltd. Following discussions between police and the Dunns and the filing of an amended application, on 15 October 2019, Jagose J made, by consent, orders for the sale of some of the restrained land and assets, including Clem Newby Road, the Holden Commodore and the Harley Davidson motorcycle (October 2019 Orders).7
[10]Under the October 2019 Orders:
(a)the proceeds of the sale of the assets ordered to be sold were restrained, subject to payment of the costs of sale and the costs required to be paid to BNZ to discharge the security held over Clem Newby Road and the Ford Ranger;
(b)the Mitsubishi Pajero, which had been repossessed by a finance company, was formally released from restraint; and
(c)the Ford Ranger remained subject to restraint but was returned to Mr Dunn, subject to conditions requested by the Commissioner. These were that:
(i)it was not to be sold, damaged or modified in any way and it was to be maintained in good condition;
7 Commissioner of Police v Dunn HC Hamilton CIV-2018-419-173, 15 October 2019 (Minute of Jagose J).
(ii)it was not to be dealt with or further encumbered in any way;
(iii)it was to be made available to the Official Assignee to inspect, on 48 hours’ notice, at a place agreed between the Official Assignee and Mr Dunn;
(iv)Mr Dunn was to ensure that it was warranted, registered, serviced according to manufacturer recommendations and insured (for appropriate market value) while the restraining order was in force; and
(v)if any of the conditions were not met, the Ford Ranger was to be recovered by the Official Assignee and placed in storage pending further orders.
[11] According to an affidavit sworn by Detective Stuart McIntyre on 17 November 2023, the finance company sold the Mitsubishi Pajero, which resulted in residual funds of $8,514.09 that were captured by the First On-Notice Order, after payment of related debt and sale costs.
[12] Despite the terms of the October 2019 Orders, it appears that neither the residual funds realised from the sale of the Mitsubishi Pajero nor the funds realised from the sale of the other assets ordered to be sold were used to satisfy the debt over the Ford Ranger.
[13] Based on an affidavit sworn by Detective McIntyre on 19 September 2019, it appears that it had been BNZ’s wish and the Commissioner’s intention that all debt owed or guaranteed by Mr Dunn, BDC Ltd and the Dunn Family Trust, including the debt related to the Ford Ranger, would be repaid from funds realised from the sales ordered under the October 2019 Orders. However, as recorded in Detective McIntyre’s affidavit, Mr Dunn had specifically asked that the Ford Ranger be returned to him but that the debt owed in respect of the Ford Ranger not be repaid. Detective McIntyre noted that the repayment of the debt relating to the Ford Ranger would be a business decision to be determined by BNZ and that the Commissioner agreed to the
return of the Ford Ranger whether or not BNZ required the debt in respect of the Ford Ranger to be repaid.
Second On-Notice Order; Ford Ranger remains with Mr Dunn
[14] On 19 August 2020, following a further application by the Commissioner, Gordon J made a further restraining order over the assets and bank accounts of Mr and Mrs Dunn, BDC Ltd and the Dunn Family Trust (Second On-Notice Order).8 The Second On-Notice Order has been extended periodically, most recently on 13 February 2024, pending determination of the Commissioner’s application for forfeiture of the restrained assets.9 The restrained assets included Raddington Way, the Ford Ranger and the residual proceeds from the assets already sold. The Second On-Notice Order provided that, to allow it to be used by Mr Dunn for business purposes, the Ford Ranger was subject to restraint but was to be returned to Mr Dunn subject to conditions identical to those in the October 2019 Orders.
Mr Dunn convicted and sentenced
[15] On 4 June 2021, Mr Dunn was convicted of four counts of possession of material intended to be used in the manufacture of a class A controlled drug and three counts of the supply of material intended to be used in the manufacture of a class A controlled drug.
[16] On 15 December 2021, Mr Dunn was sentenced to four years and three months’ imprisonment.10 No minimum period of imprisonment was imposed. When sentencing Mr Dunn, Judge J C Down noted that, in finding him guilty, the jury must have rejected Mr Dunn’s claim that he had used the large amount of hypophosphorous acid that he had imported in the course of his paint business. At the same time, the Judge noted that the proposition that all of the material had been supplied and used in the manufacture of methamphetamine was not realistic.11 Nonetheless, the Judge was satisfied that a significant amount of hypophosphorous acid had been supplied to the
8 Commissioner of Police v Dunn HC Hamilton CIV-2018-419-173, 19 August 2020 (Minute of Gordon J).
9 Commissioner of Police v Dunn HC Hamilton CIV-2018-419-173, 13 February 2024 (Minute of Moore J).
10 R v Dunn [2021] NZDC 24848.
11 At [8].
methamphetamine trade and that a substantial amount of Mr Dunn’s unexplained cash income of $1,829,105 was attributable to his sales of hypophosphorous acid for the purposes of the manufacture of methamphetamine.12
Ford Ranger returned to custody
[17] In 22 March 2022, the Ford Ranger was uplifted and returned to the custody of the Official Assignee, where it has remained.
[18] Mr Dunn has appealed his conviction and sentence. His appeal has yet to be heard. It appears that the delay has been the consequence of Mr Dunn’s need to instruct, and a delay in instructing, new counsel.
Current application filed
[19] On 23 September 2022, the Commissioner filed the current application, which was served on Mr Dunn on 27 September 2022.
[20]On 28 October 2022, Mr Dunn filed a notice of opposition to the application.
Mr Dunn released from prison
[21]On 24 May 2023, Mr Dunn was released from prison.13
Commissioner applies for profit forfeiture order
[22] On 19 July 2023, the Commissioner applied for a profit forfeiture order to a maximum amount of $1,829,105.00. The profits to be realised are those resulting from the sale of Raddington Way and the Ford Ranger and the proceeds realised from the sales of assets already ordered. The application was to have been heard at a hearing commencing on 4 June 2024.14 However, following separate applications for adjournment by Mr Dunn and Mrs Dunn, to which the Commissioner consented, the
12 At [11].
13 From the information before the Court, it is not clear whether Mr Dunn was released on parole because he had served one-third or more of his sentence or whether he was released on bail pending determination of his appeal.
14 Commissioner of Police v Dunn HC Hamilton CIV-2018-419-173, 1 November 2023 (Minute of Johnstone J).
profit forfeiture application is now set down for a four-day hearing commencing on 21 October 2024.15
Relevant provisions of Criminal Proceeds (Recovery) Act
[23] Under s 33(1) of the Act, an application for a further order in relation to a restraining order may be made by the applicant or by any person with an interest in the restrained property.
[24] Section 34(1) provides that, on an application under s 33(1), a court may, if it considers it appropriate, make further orders in relation to the restrained property which may, but need not, be an order of any one or more of the types referred to in s 35.
[25] Under s 35, a court may, on an application under s 33(1), make one or more of the following orders:
(b) an order varying any condition to which a restraining order is subject:
…
(e) an order relating to the Official Assignee that—
…
(ii) determines any question relating to the restrained property (including any question relating to the liabilities of any person holding an interest in the restrained property), or the exercise of the powers, or the performance of the duties, of the Official Assignee:
…
(v)directs the Official Assignee to sell restrained property … in order to preserve the value of the restrained property:
(vi)directs the Official Assignee to make mortgage payments or payments in respect of any other encumbrance from the restrained property.
15 Commissioner of Police v Dunn HC Hamilton CIV-2018-419-173, 21 February 2024 (Minute of Campbell J).
The Commissioner’s application
[26] As already noted, the Commissioner’s application was filed and served in September 2022. It seeks an order for the sale of the Ford Ranger with the proceeds of sale to be restrained, after payment of the costs of auction and costs to be paid to BNZ to discharge the security over the vehicle.
[27] The grounds for the application are that an order for sale is required to preserve the value of the Ford Ranger and there are ongoing costs associated with the vehicle’s storage, insurance and management which will reduce the return to the community.
[28] Mr Dunn opposes the application and seeks alternative orders; namely the release of the Ford Ranger from restraint or its release to his possession for use pending determination of the Commissioner’s forfeiture application, and an order that the debt in relation to the Ford Ranger be paid down from funds realised from the sale of the Mitsubishi Pajero.
[29] The orders sought by the Commissioner and Mr Dunn are mutually exclusive but the merits of each bear on whether any further orders should be made.
Evidence for the Commissioner
[30] In an affidavit sworn on 23 September 2022, Detective McIntyre stated that, based on the daily cost to the Official Assignee of storing cars and four-wheel drive vehicles, the projected yearly cost to store the Ford Ranger was $5,219.50. He also said the Ford Ranger had a market valuation of $25,000.
[31] In an affidavit sworn on 14 November 2022, Detective McIntyre provided evidence indicating that BDC Ltd was no longer operating. The Detective also stated that Mrs Dunn had told him that her relationship with Mr Dunn had ended and that she was talking steps to dispose of BDC Ltd’s assets.
[32] The Detective also provided evidence to indicate that Mrs Dunn had a vehicle available for her use and that the two older Dunn children each had vehicles registered in their names. The Detective also stated that he had told Mrs Dunn in December 2021
that the Ford Ranger would be returned to the custody of the Official Assignee because the purpose for which it had been released to Mr Dunn was no longer valid (given Mr Dunn’s sentence of imprisonment). The Detective said that Mrs Dunn did not advise him that the Ford Ranger was needed for everyday use but had expressed a desire to purchase it for their son to use.
[33] In an affidavit sworn on 17 November 2023, Detective McIntyre stated that the assets available to satisfy the Commissioner’s profit forfeiture application seeking
$1,829,105 were:
(a)Raddington Way, which had a net equity of around $1,605,000;
(b)funds of $225,953.55 realised from previously sold assets; and
(c)the Ford Ranger, valued at $22,000.
[34] The Detective provided evidence to show that the balance owing under the finance agreement relating to the Ford Ranger was $9,493.38, which included
$1,109.23 for additional interest on payments in arrears. The Detective said no payments had been “successfully” made under the agreement since 18 March 2022.
[35] The Detective also provided evidence to show that Mr Dunn’s disclosed income for the six-month period from his release from prison on 24 May 2023 to 15 November 2023 was $33,328.75. The Detective also produced a valuation from Turners Auctions which valued the Ford Ranger at $22,000 as at 17 November 2023.
[36] The Detective stated that, while the terms of the restraining order precluded restrained assets from being used as security, it was open to Mr Dunn to use any newly purchased vehicle as security.
[37] In an affidavit sworn on 15 November 2022, Derek Webb, the Case Co- ordinator at the Criminal Proceeds Management Unit of the Official Assignee, stated that, when he went to Raddington Way in March 2022 to uplift the Ford Ranger, he noted that its condition was significantly worse than when it had been released to Mr Dunn in October 2019 and that it did not appear to have been serviced and
maintained while in Mr Dunn’s custody. In particular, Mr Webb noted damage to the rear bumper, the tonneau cover had been ripped, the front heavy duty car seats had been removed, the plastic cover on the lower driver’s seat had been broken and the rear seat was stained.
Submissions for the Commissioner
[38] In a memorandum dated 21 November 2022, counsel for the Commissioner submitted that the sale of the Ford Ranger was necessary to preserve its value, given the usual rate at which vehicles depreciate but also in terms of eliminating the costs of storage and finance. Counsel also observed that the Dunn family, absent Mr Dunn, had managed without the vehicle for eight months (at that stage) and the family appeared to have alternative vehicles available to them.
[39] In a memorandum dated 28 November 2023 and at the hearing on 8 December 2023, Ms Hamilton, the Crown Solicitor, submitted that the Ford Ranger continued to depreciate, the arrears in respect of the finance agreement continued to grow and storage fees continued to accumulate.
Evidence of Mr Dunn
[40] In an affidavit sworn on 8 November 2022, Mr Dunn said he opposed the sale of the Ford Ranger because it was the only roadworthy vehicle currently owned by the Dunn family and it was essential for everyday family use. He also said the Dunns were unable to purchase a vehicle because of an inability to obtain credit with the restraining orders in place and that the uplifting of the vehicle had caused undue difficulties for the family, himself and BDC Ltd.
[41] Mr Dunn also said his release from prison was imminent and that, upon his release, the Ford Ranger would be essential for getting to and from work to support his family financially.
[42] In an affidavit sworn on 10 November 2023, Mr Dunn said he was then living at and working from a rural property near Morrinsville but that his current employment would end in December, and he would need to seek new employment to sustain
himself. Mr Dunn said the sale of the Ford Ranger would cause him extreme hardship. He would not be able to purchase another vehicle because he was unable to obtain finance while the restraining orders were in place, and he would not be able to purchase a vehicle with cash because of his term of imprisonment and his high living costs.
[43] Mr Dunn said he was not then able to visit his family in Hamilton because of not having a motor vehicle and that not being able to reconnect with his family since his release from prison had been incredibly stressful. He said he would also need a vehicle to seek out new employment when his then current employment ended because it was likely he would need to travel to attend job interviews and for any work he obtained. Mr Dunn said the Ford Ranger was essential to him and its sale would cause him significant financial hardship and restrict him for supporting his younger daughter financially.
[44] Mr Dunn also took issue with the Commissioner’s assessment that the value of the Ford Ranger, which he had purchased new in 2016 for $55,000, had depreciated to $25,000 (based on the valuation in Detective McIntyre’s affidavit of 23 September 2022). Mr Dunn said that Ford Rangers, as a general rule, hold impressive resale value in the New Zealand second-hand market. He provided a copy of a TradeMe listing of what Mr Dunn described as a comparable 2015 Ford Ranger, which was listed for sale at $31,990 as at 10 November 2023. He also said that the significance of the vehicle to him personally and professionally vastly outweighed any deterioration in value.
[45] Mr Dunn also took issue with Mr Webb’s description of damage to the Ford Ranger. He said it was a work vehicle that had incurred minor cosmetic damage that had no material impact on the value of the vehicle.
Submissions for Mr Dunn
[46] Mr Gurnick, counsel for Mr Dunn, submitted that, based on a purchase price of $55,000 in 2016 and the most recent valuation produced by Detective McIntyre of
$22,000, the Ford Ranger had depreciated at around 12.5 per cent per annum. This was considerably better that the 21 per cent per annum depreciation assumed by the Inland Revenue Department and tended to confirm Mr Dunn’s view that Ford Rangers
hold their value. Mr Gurnick said this and the TradeMe listing provided by Mr Dunn indicated that the Ford Ranger was bottoming out and submitted that any further depreciation before the hearing of the Commissioner’s profit forfeiture application would be minimal.16
[47] With regard to the costs of storage, Mr Gurnick submitted that it has been held that holding costs in isolation are not sufficient to warrant early sale, especially where the value of a vehicle is bottoming out. Mr Gurnick also submitted that the debt to BNZ was significantly less than the estimated current value of the Ford Ranger and was likely to remain significantly less than the value of the vehicle when the Commissioner’s profit forfeiture application is heard.17
[48] Referring also to Mr Dunn’s evidence about the impact on himself and his family of the loss of the use of the Ford Ranger, Mr Gurnick submitted that Mr Dunn’s need for a vehicle was dire and his personal circumstances outweighed the need to crystallise the value of the Ford Ranger by way of sale.
Analysis
[49] As Courtney J observed in Commissioner of Police v Keen (aka Chen), the underlying purpose of a restraining order is to preserve the subject property because it represents a monetary value to the parties concerned.18 As her Honour went on to note, s 35(e)(v) specifically recognises the need to preserve the value of the restrained property through the sale of it.19
[50]As Venning J observed in Commissioner of Police v Cavanagh:20
[7] A sale order may be made at any time. Typically sale orders are pursued by the Commissioner where the restrained assets in relation to which the sale orders are sought have high depreciation rates combined with additional costs of storage and insurance which ultimately decrease the potential return to the Commissioner and/or be parties who claim an interest
16 Mr Gurnick’s submission was made when the Commissioner’s profit forfeiture application was set down for 4 June 2024.
17 Again, Mr Gurnick’s submission was made when the Commissioner’s profit forfeiture application was set down for 4 June 2024.
18 Commissioner of Police v Keen (aka Chen) [2013] NZHC 2259 at [30].
19 At [31].
20 Commissioner of Police v Cavanagh [2014] NZHC 2978.
in the assets. There is a further additional benefit in the sale in that, once the assets are sold, the Official Assignee is able to hold the funds in an interest bearing account.
[51] In Commissioner of Police v Evans and Commissioner of Police v Blance, Brown J and Dobson J respectively were not prepared to order the sales of vehicles that had been restrained just because of the risk of depreciation and costs associated with storage.21 In Evans, Brown J questioned whether it was appropriate to take storage costs into consideration in an application under s 35(e)(v).22 In Blance, Dobson J was not prepared to go that far, but said that, in the case of vehicles that were appropriately treated as investments, or at least where the rate of depreciation had bottomed out, the reduction in the eventual return caused by holding costs was not of itself sufficient to warrant an order for sale.23
[52] In Commissioner of Police v Drummond, Lang J, after discussing the above decisions, observed:24
[15] The point to be taken from these cases is that the Commissioner should not assume that sale orders will automatically be made in relation to restrained assets such as motor vehicles. Factors that will need to be taken into account include the nature and value of the asset, the length of time before the substantive proceeding will be determined, the extent to which the asset may depreciate during that period and the wishes of the owner of the assets and/or those who may have an interest in it.
[53] Lang J noted that the vehicle in question in that case had only recently been restrained and the associated criminal proceedings would take well over a year to resolve, which meant the asset forfeiture proceedings would not be resolved for some considerable time. There was also no reason to believe that the then 11-year-old vehicle would hold its value over that period.25 Accordingly, Lang J granted the order for sale, despite the owner’s sentimental attachment to the vehicle.
[54]The circumstances in the present case are very different from those in
Drummond. The Ford Ranger has been restrained since June 2018. Subject to
21 Commissioner of Police v Evans [2015] NZHC 1240; Commissioner of Police v Blance [2018] NZHC 108.
22 Commissioner of Police v Evans, above n 21, at [33].
23 Commissioner of Police v Blance, above n 21, at [52].
24 Commissioner of Police v Drummond [2018] NZHC 1730.
25 At [16].
Mr Dunn’s appeal, the associated criminal proceedings were determined in 2021 with Mr Dunn’s conviction and sentence. The profit forfeiture application is to be heard in October 2024 — in approximately seven months.
[55] While it is apparent that both the current application and the profit forfeiture application could have been held and determined much sooner if Mr Dunn had been more diligent in appointing new counsel following the withdrawal of his previous counsel while he was still in prison, the Commissioner has consented to the various adjournments that were granted. Accordingly, I put that delay to one side.
[56] It is much more relevant that, although the Ford Ranger was restrained in June 2018, it was returned to Mr Dunn, with the agreement of the Commissioner, following the October 2019 Orders. While those orders did not specify the purpose of the return, the Second On-Notice Order made by Gordon J in August 2020 said the return was to allow it to be used by Mr Dunn for business purposes. It is not contended that Mr Dunn did not use it for those purposes. Nor was it repossessed for breach of the conditions imposed under the October 2019 Orders and the Second On-Notice Order, despite the damage now alleged by Mr Webb.
[57] The Ford Ranger was taken back into the custody of the Official Assignee as a consequence of Mr Dunn’s imprisonment, although it was only repossessed some three months after Mr Dunn was sentenced. The application for an order for sale was made in September 2022 and might well have been made if determined while Mr Dunn was still in prison. However, Mr Dunn is not still in prison. I accept that he has a need for a motor vehicle to earn a living, just as he had before he was imprisoned — as was recognised by the Commissioner when consenting to the October 2019 Orders and the Second On-Notice Order. The fact that BDC Ltd is no longer operating does not change that need. Arguably, it makes the need stronger, as does the fact Mr Dunn has separated from Mrs Dunn and is no longer living with her.
[58] With regard to the debt to BNZ, although Detective McIntyre said that no payments against the finance agreement had been “successfully” made since March 2022, the transaction record exhibited to the affidavit shows that, up until March 2022, when the Ford Ranger was repossessed by the Official Assignee,
Mr Dunn had been making regular monthly payments of $699.37, even after his sentence of imprisonment. The payments stopped after the vehicle was repossessed, apparently because Mr Dunn had exceeded the overdraft limit for the account from which funds were automatically debited. Whether or not Mr Dunn was aware of that fact is not in evidence.
[59] According to Detective McIntyre’s affidavit of 17 November 2023, as at that date, the balance of the finance agreement with BNZ in relation to the Ford Ranger stood at $8,384.15. However, an additional sum of $1,109.23 was owed by way of accumulated interest on arrears, leaving a total debt to clear of $9,493.38. It is apparent from the bank records exhibited to the affidavit that the amount in arrears was incurred over the period of approximately seventeen months from 20 April 2022 to 13 November 2023. It can be assumed, therefore, that the amount in arrears over the past four months will have increased by at least $250, meaning that the amount in arrears will now be of the order of $1,350 and the total debt in relation to the Ford Ranger of the order of $9,750.
[60] As far as the market value of the Ford Ranger is concerned, Mr Gurnick did not seriously challenge the valuation of $22,000 obtained by the Commissioner, despite the TradeMe listing produced by Mr Dunn.
[61] On the basis of the figures provided by Detective McIntyre, therefore, the Ford Ranger would appear to have a net current value to the Commissioner and the Dunn interests of approximately $1,800 — based on the valuation of $22,000, and after deductions of two years’ storage costs (April 2022 to March 2024) of $10,439 and repayment of the BNZ loan and outstanding interest of approximately $9,750 (assuming no further repayments have been made and interest has continued to accrue).
[62] In other words, even if an order for sale were made and given immediate effect, the contribution of the Ford Ranger to any profit forfeiture order made against Mr Dunn would be very minor — just over 0.5 per cent assuming the Commissioner obtained the maximum order sought of $1,829,105. Moreover, assuming that Raddington Way still has a net equity of around $1,605,000, the need for any
contribution from the Ford Ranger is doubtful, given that the Commissioner has already realised $225,953.55 from previously sold assets and interest will have been earned on those funds in the interim.
[63] For these reasons, the value of the Ford Ranger to the Commissioner is at best marginal, even assuming no further depreciation and no further storage costs.
[64] By contrast, the value of the Ford Ranger to Mr Dunn is considerable, despite his debt to BNZ and whatever its current condition. It provides him a means of transport, will facilitate his earning a living and will increase the opportunity of maintaining contact with his family, even if some family members have their own vehicles. Moreover, if released to Mr Dunn, the Ford Ranger would incur no further storage costs — which, to date, constitute over half of the total to be offset against the value of the Ford Ranger
[65] In these circumstances, I do not consider it appropriate to grant the Commissioner’s application, which appears to have been continued without consideration of the monetary values at issue and without sufficient regard to the time and costs of proceeding with the application.
[66] I am satisfied that the most appropriate and just result is that the Ford Ranger should remain subject to restraint but should be released to Mr Dunn on the same conditions as it was released under the October 2019 Orders and the Second On-Notice Order, subject to one modification. That modification is that Mr Dunn is to have 20 working days to bring the Ford Ranger into compliance with the conditions following any notice of non-compliance by the Commissioner. Given the reported condition of the Ford Ranger and Mr Dunn’s straitened circumstances, it is unrealistic to expect Mr Dunn to be able to comply with the conditions from the outset.
[67] I see no case, however, for ordering the Commissioner to use the funds realised from assets already sold, including the Mitsubishi Pajero, to pay down or pay off the debt to BNZ. For whatever reason, a decision was made not to pay off that debt, despite provision being made for that to happen in the October 2019 Orders. To order that payment now would risk reducing the sum available for satisfying any profit
forfeiture order that might be made, with no assurance that that value would be offset by whatever value that might be realised from the Ford Ranger if it were required to be sold to satisfy the order. Given the reported condition of the vehicle, I am not prepared to accept that the value of the Ford Ranger has bottomed out as asserted by Mr Gurnick.
[68] It would clearly be in Mr Dunn’s interest to reach an arrangement with BNZ over his repayment of the loan and outstanding interest and to forestall any move by the Bank to repossess the Ford Ranger. However, those are matters for BNZ and Mr Dunn to arrange and are not the business of this Court.
Result
[69] I dismiss the Commissioner’s application for orders under s 35(e)(v) of the Criminal Proceeds (Recovery) Act 2009 directing the Official Assignee to sell the Ford Ranger, registration BDC1 to preserve its value and to restrain the sale proceeds.
[70] In accordance with s 35(b) of that Act, I order that the Ford Ranger remain under restraint but be released to Mr Dunn on the following conditions:
(a)it is not to be sold, damaged or modified in any way and that it is to be maintained in good condition;
(b)it is not to be dealt with or further encumbered in any way;
(c)it is to be made available to the Official Assignee to inspect, on 48 hours’ notice, at a place agreed between the Official Assignee and Mr Dunn;
(d)Mr Dunn is to ensure that it is warranted, registered, serviced according to manufacturer recommendations and insured (for appropriate market value) while the restraining order is in force; and
(e)if any of the conditions are not met within 20 working days of any notice of non-compliance from the Official Assignee, the Ford Ranger
is to be recovered by the Official Assignee and placed in storage pending further orders.
G J van Bohemen J
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