Commissioner of Police v Farrell

[2022] NZHC 310

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV 2021-488-58

[2022] NZHC 310

UNDER

The Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

LEONIE MARIE FARRELL

Respondent

Hearing:	28 February 2022 (by VMR)
Appearances:	S Earl and J Barclay for the applicant M Taylor-Cyphers for the respondent
Judgment:	28 February 2022

JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 28 February 2022 at 4:00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

COMMISSIONER OF POLICE v FARRELL [2022] NZHC 310 [28 February 2022]

[1]    The Commissioner of Police applied, on notice, for restraining and further orders under the Criminal Proceeds (Recovery) Act 2009 (the Act) in relation to two items of real property and three vehicles (the application).

[2]    The respondent, Ms Farrell, initially opposed all the orders sought in the application. On 25 February 2022, the parties agreed to a resolution of the application, except for one order sought by the Commissioner.

[3]    In accordance with that agreed resolution, I have made restraining orders over all the property that is the subject of the application. Under the restraining orders the Official Assignee has, in accordance with ss 24 and 25 of the Act, custody and control of the restrained property. I have also made a further order under s 35 of the Act directing the Official Assignee to sell one of the restrained vehicles in order to preserve the value of the restrained property.

[4]    The only order sought by the Commissioner to which Ms Farrell did not agree was an order under s 35 directing the Official Assignee to sell another of the restrained vehicles, a 2012 BMW M5 Sedan 7A 4 Saloon, registration MQN791 (the BMW).1

[5]    The only matter that I have to determine on the application is whether I should make a sale order to preserve the value of the BMW. It is therefore unnecessary for me to outline the alleged offending that underlies the application.

[6]    Ms Earl, for the Commissioner, submitted that sale orders under s 35 are often made in respect of vehicles, because of the rate at which they depreciate and the ongoing costs of insurance, storage and maintenance. She referred me to a statement of Gordon J, in Commissioner of Police v Milosevic, that the “starting point is that motor vehicles have a clear tendency to depreciate in value and cost money to store, maintain and insure”.2 She submitted that the BMW has no special characteristics that would reduce the risk of depreciation.

1      There is a third vehicle (a 2016 Ford Ranger) over which the Commissioner sought, and has been granted, a restraining order. The Commissioner has not yet sought a sale order under s 35 in respect of the 2016 Ford Ranger but may do so in the future.

2      Commissioner of Police v Milosevic [2019] NZHC 202 at [96](a).

[7]    Ms Taylor-Cyphers, for Ms Farrell, made two submissions. The first was that the BMW was already ten years old and so the time for significant depreciation had passed. She submitted, by reference to recent online advertisements for the sale of BMWs, that this particular model and year of BMW had retained its value over time more than models manufactured since. The second submission was that Ms Farrell is a single mother with two school-aged children without a car. If the BMW were not restrained, it would be available to Ms Farrell for her use.

[8]    I put the second submission to one side. As Ms Earl said in response, that submission is irrelevant to the question whether property already the subject of a restraining order should be sold. The submission might be relevant to an application under s 28 of the Act, but Ms Farrell has not made any such application.

[9]    The issue is whether an order for the immediate sale of the BMW is necessary to preserve the value of that property.3 In that respect it is important to consider the time until any forfeiture application will be resolved. Ms Farrell is next appearing on her charges in the Whangārei District Court at callover on 31 March 2022. She has yet to enter pleas on some charges. It is unlikely the criminal trial will be held until 2023. The forfeiture application will follow the criminal trial. It is a reasonable assumption that at least 18 months will pass before the forfeiture application will be resolved.

[10]   In my view, it is probable that the BMW will depreciate over that time. I agree with Gordon J that motor vehicles have a clear tendency to depreciate. I acknowledge that some motor vehicles do not have that tendency. That usually occurs because they have some special or unique characteristics or they are of an older vintage. There is no evidence before me that the BMW is such a vehicle. The online advertisements that Ms Taylor-Cyphers provided with her submissions merely show asking prices for three different BMW vehicles. They do not show that the BMW in question has special characteristics or that it will hold its value over time.

3      Commissioner of Police v Milosevic [2019] NZHC 202 at [95].

[11]   In addition, if the BMW is not sold there will be ongoing storage, maintenance and insurance costs. In themselves they will not be insignificant given the time before any forfeiture application is resolved.

[12]   For these reasons I am satisfied I should make an order under s 35 for the sale of the BMW.

Result

[13]   I order that the Official Assignee shall sell the 2012 BMW M5 Sedan 7A 4 Saloon, registration MQN791, at its fair market value and hold the proceeds of that sale, after paying all associated costs, in accordance with the restraining orders already made on the Commissioner’s application.

Campbell J