Commissioner of Police v Eddy
[2018] NZHC 736
•19 April 2018
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE
CIV-2016-412-000047 [2018] NZHC 736
BETWEEN THE COMMISSIONER OF THE NEW ZEALAND POLICE
ApplicantAND
TE AHU KEVIN EDDY
First Respondent
AND
LETATIA ALICE CARR
Second Respondent
AND
THERESA WIKI MCGREGOR
Interested Party
Hearing: 12 April 2018 Appearances:
M J Grills for the Applicant
N M Laws for First and Second Respondent A Stevens for the Interested Party
Judgment:
19 April 2018
JUDGMENT OF NATION J
[1] The first respondent (Mr Eddy) holds title to a residential property at 26 Burns Street, Milton. The property’s current value for rating purposes is $94,000. The Commissioner accepts Mr Eddy’s mother (Ms McGregor) has a beneficial interest in the property to the extent of $68,500.
[2] On 1 March 2017, the Commissioner obtained a restraining order under the Criminal Proceeds (Recovery) Act 2009 preventing any dealing with the Burns Street property.
POLICE v EDDY [2018] NZHC 736 [19 April 2018]
[3] On 14 July 2016, Mr Eddy pleaded guilty to five charges of cannabis dealing under the Misuse of Drugs Act 1975. Those charges arose out of transactions between Mr Eddy and an undercover Police officer between 17 July 2015 and April 2016. He was sentenced to two years and two months’ imprisonment for that offending on 17 March 2017.1
[4] The restraining order was due to expire on 28 February 2018. The order has been extended since then on an interim basis. On 5 April 2018, the Commissioner filed an application for asset forfeiture and profit forfeiture orders.
[5]The issue I deal with now is whether the restraining order should be extended.
Submissions for the Commissioner
[6] In written submissions, Mrs Grills, for the Commissioner, noted the Act is silent as to the grounds upon which an extension of a restraining order may be granted but the legislation allows for repeated extensions of a restraining order. Mrs Grills noted the temporary nature of a restraining order. She highlighted that the evidential threshold for the making of a restraining order was whether there were “reasonable grounds to believe, rather than proof, that the target has unlawfully benefited from significant criminal activity”.2
[7] Mrs Grills referred to efforts that had been made on behalf of the Commissioner to reach a resolution that included a possible sale of the property, but no resolution had been achieved. She therefore asked for the extension so the application for forfeiture orders can be determined by the High Court.
[8] In response to submissions for the respondents, Mrs Grills accepted there had been a delay in the Commissioner filing the forfeiture application. Mrs Grills said that Mr Eddy was not sentenced on the charges brought against him until March 2017. Prior to that, it appeared there was some prospect of matters being resolved without there having to be an application for forfeiture.
1 R v Eddy [2017] NZDC 5792.
2 Vincent v Commissioner of Police [2013] NZCA 412 at [47].
[9] Mrs Grills submitted there would be no prejudice as a result of the extension of the restraining order because the second respondent and the party’s child would continue to occupy the home in the interim, as all parties wanted. Mrs Grills submitted that the evidence currently before the Court from Ms McGregor indicated that she had lent her son funds for the purchase on a basis where she did not contemplate repayment within a particular time and where she had been willing to allow the loan to be outstanding without the originally contemplated payments in reduction of the loan.
[10] Mrs Grills said that any extension of the restraining orders would not have to be for a full 12 months but could be on terms that would mean it was in place until the forfeiture application had been dealt with. She said that, from the Commissioner’s perspective, those proceedings were ready for hearing.
Submissions for respondents
[11] For the first and second respondents, Mr Laws accepted that, in the context of the Court’s 28 February 2017 judgment, there were and are reasonable grounds to believe that the respondents unlawfully benefited from significant criminal activity. He submitted the issue for the Court was whether, in the exercise of its discretion, it should extend the order.
[12] He argued that the extension should be refused because of the delay that had occurred in seeking the extension and the delay that had occurred in the filing of the forfeiture application. He argued that the grounds for the making of a forfeiture order do not require the target to have been convicted of a criminal offence. Therefore, the forfeiture application could have been filed by the end of 2016, given all the evidence which the Commissioner was relying on wherein the Police affidavits of 15 April 20163, 8 December 20164 and 9 December 20165. He said there was no evidence before the Court as to negotiations that might have occurred before Mr Eddy was sentenced or as to any other reasons to account for the delay. Mr Eddy’s position, as to the evidence on which the charges against him had been brought, became clear when he pleaded guilty to those charges on 14 July 2016. He submitted that the Court should
3 Affidavit of Duncan Robert Bell.
4 Affidavit of Melanie Jessie van der Pol.
5 Affidavit of Regan David Boucher.
not effectively condone the delay in the Commissioner filing an application for forfeiture through an extension of the restraining order.
[13] Mr Laws submitted the extent of the recovery which the Commissioner was seeking to make was relevant in considering whether a restraining order should be made and would be relevant in considering whether an initial restraining order should be extended. He addressed the evidence already available for the Commissioner and suggested it did not support the Commissioner’s contention that the respondents had benefited to the extent of $46,800 from dealing in cannabis over the review period.
[14] Mr Laws suggested there was no evidence that the property was acquired with the proceeds of criminal activity. He submitted that the value of 26 Burns Street to the Commissioner if a forfeiture order were to be made was limited, given its rating valuation of just $94,000. He submitted the benefits which the Commissioner alleged Mr Eddy had obtained were in marked contrast to other cases where the Commissioner had sought and obtained an extension of a restraining order.6
[15] Mr Laws submitted there would be unfair prejudice to Mr Eddy if the restraining order were to be renewed. He points to Mr Eddy’s evidence that the Parole Board were not willing to consider granting him parole on the basis that he reside at 26 Burns Street, Milton because they were aware that the Commissioner had obtained a restraining order in relation to that property.
[16] Although this had not been mentioned as a ground for opposition in their notice of opposition, the respondents also opposed the application on the basis that the application had been formally made on the basis that the Commissioner would be filing an application for a profit forfeiture order but the application actually filed was for both profit and asset forfeiture orders.
[17] For Ms McGregor, Mrs Stevens said the way Ms McGregor had funded the purchase of the property was not challenged by the Commissioner. With Mr Eddy in
6 Commissioner of Police v Reed [2013] NZHC 802, total unexplained income from significant criminal offending, as alleged by the Commissioner, of $1.46 million; Commissioner of Police v Burgess [2015] NZHC 1008, alleged benefits of $2 million; Vincent v Commissioner of Police, above n 2, claimed benefits of $11 million.
prison, no payments had been made in reducing her loan so Ms McGregor had neither the use of her capital nor any reduction in that loan for the period of the restraining order since it was first made on 20 April 2016. She argued that there had been no obstacle from Ms McGregor to the Commissioner applying for a forfeiture order in the 12-month period since the restraining order was made on an on notice basis on 1 March 2017. She argued the Commissioner had been negligent in not filing a forfeiture application without delay and, with that background, the Court should decline to extend the existing order.
The relevant law
[18]The Criminal Proceeds (Recovery) Act 2009 relevantly begins:
3 Purpose
(1)The primary purpose of this Act is to establish a regime for the forfeiture of property—
(a) that has been derived directly or indirectly from significant criminal activity; or
(b) that represents the value of a person’s unlawfully derived income.
(2)The criminal proceeds and instruments forfeiture regime established under this Act proposes to—
(a) eliminate the chance for persons to profit from undertaking or being associated with significant criminal activity; and
(b) deter significant criminal activity; and
(c) reduce the ability of criminals and persons associated with crime or significant criminal activity to continue or expand criminal enterprise; and
...
[19]As part of the overview referred to in s 4, it is stated that:
In general terms, this Act—
(1) provides for the restraint and forfeiture of property derived as a result of significant criminal activity without the need for a conviction.
[20] Subject to certain exceptions that do not apply here, a restraining order expires on the date that is one year after the restraining order is made or the earlier date of the making or declining of a forfeiture order associated with the same property.7 If the duration of a restraining order is extended by a Court, the restraining order expires on the date to which the order has been extended.8
[21]Section 41 states:
41 Extending duration of restraining order
(1)If a court has made a restraining order, the applicant for that order may, before the restraining order expires, apply to that court to extend its duration.
(2)If an application is made under subsection (1), the court may order that the operation of the restraining order be extended for a period not exceeding 1 year.
(3)The duration of a restraining order may be extended more than once under this section.
(4)If, before a restraining order would otherwise expire under section 37(1), an application is made to a court under this section and the application is granted, the restraining order ceases to be in force on the date specified in the court’s order.
[22]Section 42 states:
42 Additional matters relating to extending duration of restraining order
(1)On making any order under section 41(2), the court may vary the restraining order in any way it considers fit, including, without limitation, by specifying whether all or part of the restrained property is to remain subject to the restraining order during the extended period of operation.
(2)An applicant for an order under section 41(1) must serve a copy of the application on any person who, to the knowledge of the applicant, has an interest in the property that is the subject of the application.
[23] Consistent with the approach taken by Woolford J in Commissioner of Police v Reed, I have regard to ss 41 and 42 of the Act which give the Court a wide discretion to extend restraining orders. As Woolford J stated, “the discretion must be exercised
7 Criminal Proceeds (Recovery) Act 2009, s 37(1).
8 Criminal Proceeds (Recovery) Act 2009, s 37(2)(d).
in a reasonable manner having regard to the purpose of the Act and the nature and purpose of the restraining orders”.9
[24] The benefit of a restraining order and of any extension of such an order under the Act is that the property sought to be restrained should be available to meet any profit or asset forfeiture order that might be made on an application for such orders. An application for an extension should be considered taking that purpose into account.
[25] The extent of the alleged benefit obtained from significant criminal activity does not need to be particularised at the restraint stage but the extent of the benefit can:10
… be a matter for the Court to take into account in deciding whether to order restraint or new restraining orders and in the exercise of its discretion to impose conditions on a restraining order.
[26] It is relevant that, given the Commissioner has nominated the value of the unlawful benefit received, the onus is now on the respondents to prove that the figure is correct.
[27]Nevertheless:11
… absent gross disproportion which the Court is in a position to identify at a preliminary stage, issues regarding the value of the unlawful benefit and the property available to meet any profit forfeiture should be left to the time of substantive forfeiture.
[28] Relevant to the exercise of the Court’s discretion over an extension will be an assessment of any prejudice which a respondent claims they will suffer as a result of an extension of the restraining order and the evidence that has been presented in relation to that.
[29] The making or extension of a restraining order can be highly prejudicial to those affected by it so it restricts the way property might be dealt with. A restraining order is meant to be an interim order of limited duration. The extension of a restraining
9 Commissioner of Police v Reed, above n 6, at [34].
10 Commissioner of Police v Reed, above n 6, at [35].
11 Commissioner of Police v Reed, above n 6, at [35].
order is subject to judicial oversight. The Courts should be careful not to allow restraining orders to be extended repeatedly in a way inconsistent with the statutory scheme, which provides for them to be a temporary restraint until substantive forfeiture applications have been determined.12
[30] Where the Commissioner is seeking to extend a restraining order because there have been delays in determining a forfeiture application, the reasons for the delay and the particular prejudice that a respondent might suffer with an extension must be considered carefully, having regard to the circumstances of the case.
Analysis
Prejudice
[31] I would not decline the application for extension on the basis that any extension of the restraining order would cause unfair prejudice to either the first and second respondents or Ms McGregor.
[32] In an affidavit sworn on 25 May 2016, Ms McGregor details how she and her partner, as the parents of Mr Eddy, paid $79,375.65 to their son’s solicitors. This enabled him to buy 26 Burns Street and pay legal costs on the purchase. She said they did this because the respondents were about to have a baby and they wanted to help him step up and be a responsible family man. She said they were agreeable to the property being in his name but with a verbal agreement that he would pay them back
$150 per week, and with the idea that he would repay the balance of any loan when it was sold but would keep “the profit” so he could use it to buy another larger home if necessary. She says that Mr Eddy kept up the repayments for the first 12 months (which would have been until about April 2015) but then stopped, telling her that he was in financial strife. She said, at that stage, she was not concerned. Between December 2015 and April 2016 they agreed that, because he was so far behind in his weekly payments, he would return to Milton and sell the property. She says the house was not put on the market because it was soon after this that Mr Eddy was arrested.
12 Commissioner of Police v Burgess, above n 6, at [34]-[38].
[33] In his affidavit of 14 July 2016, Mr Eddy said he had spoken to his mother about repayments when he stayed with her around Christmas 2015. He said that, when he came back to Milton in March 2015, there was no work and it was hard to make the repayments. He made no mention of any agreement that they would then sell the property.
[34] In an affidavit of 5 July 2016, Mr Eddy’s partner, the second respondent (Ms Carr) said there had been discussions with Ms McGregor at the end of 2015 to deal with the fact no repayments were being made. She says they were given three options. Two of those options involved restarting repayments. One involved selling the house. She says they went with a repayment option but were not able to make repayments because of Mr Eddy not having work.
[35] In Ms Carr’s most recent affidavit of 23 March 2018, she makes no reference to Ms McGregor wanting to see the house sold but referred to 26 Burns Street having been put forward to the Parole Board as a parole address for Mr Eddy if he was to be granted parole at that time. She wanted the restraining order to end on the basis 26 Burns Street could still be an appropriate residential address for Mr Eddy if he were to be granted parole at his next appearance before the Board on 7 May 2018. It is apparent from the evidence that she considers that, without a restraining order, the family, including Mr Eddy, would be able to continue living at 26 Burns Street either at the end of his sentence or if he is released on parole.
[36] There is no updating evidence from Ms McGregor which would indicate that she is currently anxious to see the house sold so that she can recover the balance of her loan. There is also no evidence that the property is deteriorating or, in any way, losing its value in a way that might make it more difficult for her to recover from her son what is outstanding on her loan. Ms McGregor said she helped her son buy the home for the benefit of his family. I note, from the sentencing remarks of Judge Phillips of 17 March 2017, Mr Eddy was said to have three children from a relationship which was “clearly very tight”.
[37] As to prejudice relating to Mr Eddy’s attempts to obtain bail, the respondents rely on the evidence of Ms Carr in her affidavit of 23 March 2018. She says she attended a Parole hearing on 9 February 2018. She said:
The Parole Board decided that our house at 26 Burns Street, Milton was an unsuitable parole address because it had a restraining order on it. I believe that if the house did not have the restraining order on in, Te Ahu would have got parole.
[38] She said that his next Parole Board hearing is to be on 7 May 2018. She was concerned that the Board would continue to deny Mr Eddy parole because they would not consider the home suitable because of the restraining order.
[39]No party has put before me the actual decision of the Parole Board.
[40] In her affidavit, Ms Carr said that, during the Parole Board, the Board indicated they had tried to obtain information about the restraining order but she refers to this in a way which indicates they had not obtained the information they wanted.
[41] I cannot see how the existence of a restraining order alone would be likely to prejudice Mr Eddy in seeking parole. However, the Parole Board may well have inferred, from the fact there was a restraining order in place, that the Commissioner would also be seeking a forfeiture order that could result in a sale of the property. This would mean that it would not be available as a residential address for Mr Eddy if granted parole.
[42] Mr Eddy’s release date on his current sentence is 20 June 2018. If the restraining order is extended and with forfeiture proceedings unlikely to go to a hearing before the latter part of this year, it should be possible for Mr Eddy and his advisors to put before the Parole Board information which will satisfy them that 26 Burns Street, Milton will be available as a suitable parole address until his release date.
The potential for recovery
[43] I accept that the potential recovery from 26 Burns Street on resolution of the forfeiture proceedings is modest. On Ms McGregor’s evidence, the funds which the parents made available for the purchase of the property were made available as a loan.
Despite this, I was told by Mrs Grills that the Commissioner accepts that Ms McGregor has an interest in the property to the extent that loan is outstanding. The Commissioner is proceeding on the basis the purchase price was $78,000 and $9,500 of the purchase price loan has now been repaid. The Commissioner thus accepts that Ms McGregor has an interest in the property to the extent of $68,500.
[44] When the Commissioner first sought an application for a restraining order on 19 April 2016, it was claimed the property had a value of $80,000. Its current rateable value is now $94,000. Although there is no evidence as to what the cost of sale would be, I take judicial notice of the fact that it would likely be no less than $4,500. The potential value of the property to the Commissioner could thus be around $21,000.
[45] On the basis of the evidence that will be before the Court, the Commissioner is claiming that Mr Eddy’s equity in the property is tainted as having been obtained with the gross monies received from criminal offending to the extent of $9,500. That is based on evidence already before the Court as to the record of legitimate income received by Mr Eddy and Ms Carr, and evidence as to how that income had been spent. The analysis suggests that the couple’s legitimate income was never sufficient to cover all their ordinary living expenses, let alone the repayments they had to make on the loan from Ms McGregor. That evidence, and the inferences to be drawn from it, is in dispute but, at this stage, it cannot be said there are no reasonable grounds to believe that the equity in the home is tainted property to that extent.
[46] Based on evidence that is currently before the Court, the Commissioner is also contending that the gross proceeds that Mr Eddy received from dealing in cannabis over the relevant period was $46,800. Mr Laws argued that conclusion is speculative and ought not to be accepted when the evidence is analysed against other evidence about dealings the undercover Police officer had with Mr Eddy, which led to the charges he faced.
[47] In his affidavit of 23 March 2018, Constable Bull refers to the evidence provided by Mr Eddy as to the extent of his own cannabis use and the cost of cannabis. Based on that evidence and his knowledge of the price of cannabis, Constable Bull
concludes that Mr Eddy would have purchased in excess of $46,800 of cannabis over the review period of 28 March 2014 to 22 April 2016.
[48] It cannot be said, with the evidence as it now is, that there are no reasonable grounds to believe that Mr Eddy benefited to the extent of $46,800 from dealing in cannabis. The amount to be brought into account on an application under the Act is the gross amount received, not the net amount after deduction of expenses.13
[49] I accept however that the extent of the alleged benefit at $46,800 is modest in relation to many such applications under the Act. The potential recovery is also modest in relation to the cases which Mr Laws referred to and also one of the alternative thresholds for the Commissioner to seek a restraining order. One of the thresholds that applies here is that a person has been involved in activity that, if proceeded against as a criminal offence, would be punishable by a maximum term of imprisonment of five years or more.14 The alternative threshold is that a person had been involved in an activity from which property proceeds or benefits of a value of
$30,000 or more have directly or indirectly been acquired.15
[50] I have taken the extent of the benefit which the Commissioner is seeking to recover into account in my decision.
The arguably changed nature of the forfeiture application
[51] The Commissioner filed a without notice application for restraining orders on 19 April 2016. The grounds for the order included that there were reasonable grounds to believe the property at 26 Burns Street was tainted property (that is, it had been acquired directly or indirectly with the proceeds from significant criminal activity) and that there were reasonable grounds to believe the respondents had unlawfully benefited from significant criminal activity.16
13 Commissioner of Police v Eddy [2017] NZHC 299; Commissioner of Police v Tang [2013] NZHC 1750.
14 Criminal Proceeds (Recovery) Act 2009, s 6(1)(a).
15 Criminal Proceeds (Recovery) Act 2009, s 6(1)(b).
16 The without notice application for a restraining order particularised the significant criminal activity as dealing in class C controlled drugs. There appears to have been a mistake with the later on notice application in that it described the significant criminal activity as being “obtaining by deception and/or using a document for pecuniary advantage”. That would appear to be a mistake
[52] These remained the grounds referred to in the on notice application for a restraining order which was filed on 22 April 2016 and then amended on 29 April 2016. On their face, those applications were described as an Application for Restraining Order (prior to civil forfeiture orders).
[53] There was a hearing before Dunningham J on 28 February 2017 when there was argument as to the legal meaning of “benefited” in the context of the legislation. Dunningham J decided that issue, consistent with the judgment of Katz J in Commissioner of Police v Tang.17 Following that judgment, the respondents withdrew their objection to the making of a restraining order. An order was then sealed on 1 March 2017. It was an order restraining any dealing with the Burns Street property.
[54] Although the order itself did not refer to this, the restraining order was obviously made in contemplation of the Commissioner filing an application for a forfeiture order.
[55] The order made on 1 March 2018, consistent with s 37, was due to expire on 28 February 2018. On 20 February 2018, the Commissioner applied to extend the duration of the restraining order, pursuant to s 41 of the Act.
[56]The application to extend was made on the grounds:
(1)there is currently a restraining order in force;
(2)a settlement proposal by the Commissioner to resolve the proceedings to which the restraining relates has not been accepted; and
(3)the proceedings in respect of the subject matter are yet to be resolved.
[57] On 23 February 2018, counsel for the respondents and Ms McGregor advised the Court that the application would be opposed. The application to extend was then set down for hearing on 12 April 2018 with timetabling directions. In the interim, the restraining orders were extended to 12 April 2018.
because the significant criminal activity referred to in the evidence and particularised in the without notice application was the dealing in class C controlled drugs.
17 Commissioner of Police v Tang, above n 13.
[58] At the hearing on 12 April 2018, I reserved my judgment and extended the restraining order until I had issued my judgment determining the application for extension.
[59] On 5 April 2018, the Commissioner filed an application for assets forfeiture and profits forfeiture orders. The application for an assets forfeiture order sought an order that title to 26 Burns Street vest in the Crown absolutely on the grounds that it was tainted property, the respondents having received benefits totalling $46,800 from significant cannabis dealing and through using that money were able to repay monies owing to Ms McGregor. The Commissioner also sought a profit forfeiture order fixing the maximum amount by which the Commissioner could obtain through an assets forfeiture order at $46,800, as the value of unlawful benefits obtained from significant criminal activity, namely selling cannabis.
[60] Against that background, I do not consider there is any unfair prejudice to the respondents in now being faced with an application for both asset and profit forfeiture orders. Since being served with the proceedings, the respondents and Ms McGregor have been on notice that the Commissioner has been seeking to recover, as against Mr Eddy’s interest in 26 Burns Street, the profits which the Commissioner asserts the first and second respondents obtained from dealing in cannabis. With the application for a restraining order, as originally framed, the respondents were on notice that an application was being made in respect of 26 Burns Street, both as tainted property and through a profits forfeiture order.
Delay
[61] I do not consider, in the context of all that has occurred in this case, that the delay in the Commissioner filing the forfeiture application is so unreasonable that this requires the refusal of an extension to the restraining order.
[62] It was not necessary for the Commissioner to establish that Mr Eddy was guilty of the cannabis dealing offences with which he was charged to obtain assets or profit forfeiture orders. However, the Police were referring to the circumstances of that offending as part of their case that the respondents had benefited from dealing in cannabis. In affidavits filed in opposition to the Commissioner’s application for
restraining orders, the respondents denied that money obtained from selling drugs went towards the purchase of the property. Mr Eddy said, in an affirmation of 14 July 2016, that the money he obtained from selling drugs went to repay people from the past who he had brought drugs off and to supply his habit. In an affidavit of 19 January 2017, before the restraining order was made on an on notice basis, Mr Eddy said that he was not a commercial dealer and that he had only ever bought cannabis for him and his friends to smoke.
[63] In her affidavit of 5 July 2016, the second respondent, Ms Carr, referred to the way she and Mr Eddy had lived after 2013. She asserted that it was because money was “so tight” that they never profited from any crime.
[64] No evidence was filed for the Commissioner to explain why there had been a delay in the filing of the forfeiture application. Despite this, it appears from documents on the Court file that, until the Commissioner applied for an extension to the restraining order, there was no concern expressed by the respondents or their advisors as to the delay.
[65] On 1 September 2016, through memoranda filed with the Court, counsel for the Commissioner and the respondents sought a four week adjournment of the application for an on notice restraining order. They referred to Mr Eddy having pleaded guilty to the various charges on 13 July 2016 and that his sentencing was scheduled to proceed on 12 September 2016. However, counsel for the Crown and for Mr Eddy had requested that sentencing be adjourned to a new date. The Commissioner noted that objection had been made to the without notice application for restraint and said that discussions were about to take place between its counsel and counsel for the respondents. Counsel agreed an affidavit had been filed on behalf of Ms McGregor. The Commissioner had accepted that the material provided indicates that she had a substantial interest in the property and discussions with respect to a possible settlement had been initiated.
[66] Counsel for the Commissioner, Mrs Stevens for Ms McGregor, and Mr Laws, for the respondents, also referred to unexpected delays with settlement discussions in
requesting an adjournment of a case management conference for the proceedings on 21 September 2016.
[67] I am thus satisfied that part of the reason for the Commissioner not filing a forfeiture application after Mr Eddy pleaded guilty was that there was then considered to be some prospect of resolving matters between the various parties without having to incur the expense of either pursuing or opposing a forfeiture application.
[68] On 17 October 2016, counsel for the Commissioner sought timetabling directions for the hearing of the on notice application for a restraining order. It was apparent from the respondents’ notices of objection that they were opposing the application on substantive grounds. Were they to succeed with their opposition on that basis, there would have probably been little point to the Commissioner pursuing a forfeiture application.
[69] It also seems likely that, at the time, there was still potentially some prospect of matters being resolved without the need for a forfeiture application to be filed. Mr Eddy’s sentencing was delayed from September 2016 until 17 March 2017. It appears from counsel’s memorandum that the delay was, at least in part, because of settlement discussions which were taking place and because Mr Eddy wanted at sentencing to be able to claim some sort of credit or discount because he had lost his home. Judge Phillips discussed this issue, as recorded in his sentencing notes of 17 March 2017.
[70] It does seem that the Commissioner could and should have filed the forfeiture application within a reasonable time after Mr Eddy was sentenced on 17 March 2017. In making the forfeiture application, the Commissioner relies primarily on evidence in the affidavit of Detective Sergeant Boucher, sworn on 9 December 2016, and the affidavit of the Police financial analyst, Melanie van der Pol, sworn on 8 December 2016. Both affidavits were described as affidavits “in support of forfeiture application”. The Commissioner has filed a further affidavit from Detective Robert Bull, sworn on 23 March 2018. That affidavit responds to assertions made by Mr Eddy in his affidavit of 19 January 2017 and has annexed to it the summary of facts for the offending to which he pleaded guilty and the sentencing notes for his sentencing
of 17 March 2017. The evidence Detective Bull provides was thus available soon after Mr Eddy was sentenced.
[71] I accept that, at least until the end of 2017, part of the reason for a delay may have been the reasonable expectation or hope on the part of the Commissioner that it might still be possible to reach some agreement. Mrs Grills, for the Commissioner, told me that certain settlement discussions had taken place at the end of 2017. Mrs Stevens confirmed this in her submissions to me.
[72] All parties acknowledge that the Commissioner will be able to pursue the application for forfeiture orders, even if the restraining order is not extended. On the evidence before me, it seems likely that, with Mr Eddy, Ms Carr and their children needing 26 Burns Street to be available as a home after Mr Eddy’s release from prison, it is unlikely to be sold prior to the hearing of the forfeiture application.
[73] In considering this application for an extension, I must have regard to the purpose of the Act. On the evidence currently before the Court, the Commissioner can reasonably assert that Mr Eddy did benefit to the extent of $46,800 from dealing in cannabis even if the amount he received from selling cannabis was used primarily to support the family’s living expenses and his drug habit. With the Commissioner having nominated that amount as the benefit he received, the onus is on the respondents to prove otherwise. Although, on the evidence, it is likely that 26 Burns Street will remain in the ownership of Mr Eddy without a restraining order, the denial of an extension would carry with it a risk that the property would be sold so that none of its value would be available to meet any forfeiture order that the Commissioner could obtain.
Conclusion
[74] In all these circumstances, an extension of the restraining order is not going to cause either the respondents or Ms McGregor such unfair prejudice as would justify a refusal of an extension. The delay that has already occurred in the filing of the application is not so blameworthy that, for that reason, an extension should be refused.
[75] I accordingly allow the application. An order is made extending the restraining order for 12 months or until such earlier time as the Court determines the Commissioner’s application for forfeiture orders.
[76] That order is made on the basis that all parties will now do all that is required to have the forfeiture application brought on for hearing without undue delay. Notices of opposition to the application do not have to be filed until 18 April 2018. Ms McGregor has also filed an application for relief against forfeiture. I was told the respondents will be opposing the making of a forfeiture order on the grounds that such an order would cause the respondents undue hardship. The respondents wish to file affidavits in relation to that contention.
[77] There will be a telephone conference with counsel for all parties on Thursday 26 April 2018 at 9.30 am. Counsel are to file a memorandum, on or before 24 April 2018, setting out a timetable for all the steps which have to be taken for the forfeiture application to be brought on for hearing.
Solicitors:
RPB Law, Dunedin
Ross Dowling Marquet Griffin, Dunedin
Davidson Armstrong & Campbell, Lawyers, Waipukurau Anne Stevens, Barrister, Dunedin.
4
0