Commissioner of Police v Fennell

[2018] NZHC 2249

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2015-409-000783 [2018] NZHC 2249

BETWEEN

THE COMMISSIONER OF THE NEW

ZEALAND POLICE Applicant

AND

FRANCIS GARY FENNELL Respondent

Hearing:	27 August 2018
Appearances:	H McKenzie for the Applicant No appearance for the Respondent
Judgment:	29 August 2018

JUDGMENT OF NATION J

[1]      On 18 February 2016, I made an order under ss 22 and 24 Criminal Proceeds (Recovery) Act 2009 (the Act) that funds attributed to ANZ Bank New Zealand Limited, account number 06-0909-0418548-00 in the name of the respondent F G Fennell:

(a)  are not to be disposed of or dealt with other than is provided for in the restraining order; and

(b)  are to be in the Official Assignee’s custody and control.

[2]      The restraining order has subsequently been extended on two occasions to 5

March 2019.

POLICE v FENNELL [2018] NZHC 2249 [29 August 2018]

[3]      On 16 February 2018, the Commissioner filed an application under the Act for a profit forfeiture order and, in particular, for orders that the funds attributed to the above ANZ account in the name of F G Fennell vest in the Crown absolutely, an order that the value of the benefit determined in accordance with s 53 of the Act be $233,525 and that the maximum recoverable amount under the Act is $233,525. The application was made on the grounds the respondent had in the relevant period of criminal activity (as defined in s 5(1) of the Act), namely 22 May 2014 until 31 August 2016, unlawfully benefitted to the value of at least $233,525 from significant criminal activity, namely importing and selling controlled drugs and the associated laundering of the funds from the sale of those drugs.

[4]      An affidavit of Ronan McMorrow, Police Officer of Dublin, sworn on 10

February 2016, confirmed that on 20 January 2016 he served Mr Francis Gary Fennell with documents relating to the original application for a restraining order.

[5]      In a further affidavit of 25 June 2018, Ronan McMorrow confirmed that he had received from New Zealand various documents, including the application for profit forfeiture order, notice of hearing from the Christchurch High Court for a hearing on Monday 27 August 2018 at 10.00 am, an affidavit of Detective Duncan Robert Bull in support of the application for forfeiture order, and an order extending the duration of the restraining order.

[6]      On 23 April 2018, Ronan McMorrow attempted to serve the documents on the respondent.  Mr Fennell refused to accept them from the Police Officer.

[7]      On 25 June 2018, Ronan McMorrow travelled to the office of Wayne Kenny Solicitors in Dublin.  Wayne Kenny accepted service of the documents on behalf of his client Francis Fennell.

[8]      On 3 August 2018, I made an order deeming delivery of the documents to the office of Wayne Kenny Solicitors in Dublin on 25 June 2018 to have been service of the documents on Francis Gary Fennell.  I directed the Commissioner’s application was to proceed to hearing on 27 August 2018. The respondent was to be given notice

of these orders and direction through delivery by email to the offices of French Kenny

Solicitors of Dublin.

[9]      On  27 August  2018,  when  the  proceedings  were  called  in  Christchurch, Detective Duncan Robert Bull confirmed that, on 6 August 2018, he emailed to French Kenny the directions I had made as to service on 3 August 2018 and confirmation that the proceedings were to be called in the Christchurch High Court on 27 August 2018 for a forfeiture hearing.

[10]     I am satisfied the respondent, Francis Gary Fennell, was served with these proceedings and has taken no steps.

[11]     Section 43 of the Act provides standing for the Commissioner of Police to apply for a profit forfeiture order.

[12]     A profit forfeiture order is mandatory where certain requirements are met. The Court must make a profit forfeiture order under s 55 if it is satisfied, on the balance of probabilities, that the respondent has unlawfully benefitted from significant criminal activity within the relevant period of criminal activity and has interests in property.1

Importantly, property subject to a profit forfeiture order does not need to be tainted by the significant criminal activity (or any other criminal activity) as is required for an assets forfeiture order.

[13]     Section 55 mandates the Court to make a profit forfeiture order if certain pre- requisites are met:

55   Making profit forfeiture order

(1)   The High Court must make a profit forfeiture order if it is satisfied on the balance of probabilities that—

(a)the respondent has unlawfully benefited from significant criminal activity within the relevant period of criminal activity; and

(b)   the respondent has interests in property.

(2)   The order must specify—

(a)   the value of the benefit determined in accordance with section

53; and

(b)the maximum recoverable amount determined in accordance with section 54; and

(c)   the property that is to be disposed of in accordance with section

83(1), being property in which the respondent has, or is treated as having, interests.

(3)   Subsections (1) and (2) are subject to section 56.

(4)A profit forfeiture order is enforceable as an order made as a result of civil proceedings instituted by the Crown against the person to recover a debt due to it, and the maximum recoverable amount is recoverable from the respondent by the Official Assignee on behalf of the Crown as a debt due to the Crown.

[14]     Section 53 provides that the value of that benefit is presumed to be the value stated in the application (here, $233,525) if the Commissioner proves, on the balance of probabilities, that the respondent has, in the relevant period of criminal activity, unlawfully benefitted from significant criminal activity. The respondent can rebut the presumption on the balance of probabilities.2

[15]     Section 54 states that the maximum recoverable amount is the value of the benefit under s 53 less the value of any property forfeited to the Crown as a result of an assets forfeiture order made in relation to the same significant criminal activity to which the profit forfeiture order relates.

[16]     The relevant period of criminal activity is defined in s 5 as follows:

Relevant period of criminal activity, in relation to an application for a profit forfeiture order, means the period that ends on the date the application is made and starts 7 years before—

(a)   the date of  the application for the relevant restraining order, if  the application for the profit forfeiture order relates, wholly or in part, to restrained property; or

(b)   the date of the application for the profit forfeiture order, if the application for the profit forfeiture order does not relate to restrained property.

[17]     In the current case, the relevant period of criminal activity is 1 May 2014 until

31 August 2016.

[18]     The quantum of a profit forfeiture order may exceed the property to be realised. The remaining balance can be recovered by the Official Assignee on behalf of the Crown as a civil debt due to the Crown under s 55(4) of the Act. The section relevantly provides:

55 Making profit forfeiture order

…

(4)A profit forfeiture order is enforceable as an order made as a result of civil proceedings instituted by the Crown against the person to recover a debt due to it, and the maximum recoverable amount is recoverable from the respondent by the Official Assignee on behalf of the Crown as a debt due to the Crown.

[19]     I consider the application in terms of the four separate steps that have to be satisfied, as noted by Lang J in Pulman v Commissioner of Police.3

[20]     I am satisfied, from the evidence of Detective Bull, that the respondent has unlawfully benefitted from significant criminal activity during the relevant period. The Commissioner has proved, on the balance of probabilities, that the respondent imported or facilitated the importation of controlled drugs into New Zealand and Australia and facilitated the transfer of funds from the sales of the drugs to himself using banks, Western Union and couriers.  The controlled drugs were MDMA and cocaine.  The drug importation offences at issue have a maximum penalty of more than five years’ imprisonment and hence qualify as “significant criminal activity”. Money laundering under s 243(2) of the Crimes Act 1961 has a maximum penalty of seven years’ imprisonment which also qualifies as “significant criminal activity”.

[21]     The application was made on the basis the maximum recoverable amount was the value of the benefit assessed as being the total cash deposited into the respondent’s ANZ bank account from the date of the first deposit, 22 May 2014, until the funds were restrained and transferred to the Official Assignee on 7 December 2015, together

with $21,095 which was transferred to the Western Union. In fact, the total deposited was $6,000 more than this but the Commissioner asks the Court to determine the maximum  recoverable  amount  as  assessed  was  as  originally  claimed,  namely

$233,525.

[22]     No assets forfeiture order has previously been made. I thus determine the value of the benefit, in accordance with s 53, as being $233,525.

[23]     I thus determine the maximum recoverable amount, in accordance with s 54, to be $233,525.

[24]    It has not been claimed that any property should be excluded from the application of the profit forfeiture order because undue hardship is likely to be caused to the respondent if such profit were to be realised.

[25]     The Court must make a profit forfeiture order under s 55(1) if it is satisfied, on the balance of probabilities, that the respondent has interests in the property.  The amount which was subject to a restraining order in an ANZ account is now held by the Official Assignee.  With interest that has accumulated to 27 August 2018, the amount on deposit was $72,739.02.

[26]I accordingly make a profit forfeiture order as sought by the Commissioner: (a)  the value of the benefit is $233,525;

(b)  the maximum recoverable amount is $233,525; and

(c)  the following property is to be realised:

(i)funds currently held by the Official Assignee and formerly in the ANZ Bank New Zealand Limited, account number 06 0909 0418548 00 in the name of F G Fennell in the sum of $72,739.02, together with such further interest as may have accumulated on that sum.

Solicitors:

Raymond Donnelly & Co., Christchurch.