Commissioner of Police v Flavell
[2023] NZHC 195
•15 February 2023
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2021-419-79
[2023] NZHC 195
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
THE COMMISSIONER OF POLICE
Applicant
AND
WILLIAM RAIN STRAUSS FLAVELL, ERIC AWANUI STRAUSS and JOHN
FLAVELL as executors of the Estate of Vanessa Anna Maria Strauss Respondents
Hearing: On the papers Counsel:
R Guthrie for the Applicant
P Cornegé for the Respondents
Judgment:
15 February 2023
Reissued:
23 February 2023
JUDGMENT OF GAULT J
This judgment was delivered by me on 15 February 2023 at 3:00 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
Solicitors / Counsel:
Ms R Guthrie and Mr K Whyte, Hamilton Legal, Office of the Crown Solicitor, Hamilton Mr P Cornegé, Barrister, Hamilton
THE COMMISSIONER OF POLICE v FLAVELL, STRAUSS and FLAVELL as executors of the Estate of Vanessa Anna Maria Strauss [2023] NZHC 195 [15 February 2023]
[1] The parties in this proceeding seek Court approval of a proposed settlement pursuant to s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).
Factual background
[2] Following a police investigation and charges against Ms Vanessa Anna Maria Strauss (Ms Strauss) and co-offenders, Ms Strauss pleaded guilty and was sentenced on 23 October 2019 to four years’ and nine months’ imprisonment on a representative charge of supplying methamphetamine during the period from 1 June 2017 to 9 May 2018. She was sentenced on the basis that she had supplied 197.55 grams of methamphetamine over that period. The sentencing judge observed that she had also conspired to supply a further 35 grams of methamphetamine during that period.
[3] Police analysis of her communications identified that she regularly purchased methamphetamine in quantities of a quarter of an ounce (7 grams) for approximately
$2,400 and sold in gram amounts for $600 to $650. She sold half grams for $350. It was clear as a result of the investigation that she also made quarter ounce sales and ounce sales. Based on the lower end of the sale price of $600 per gram, the 197.55 grams (7.055 ounces) of methamphetamine supplied by her over the relevant period had a value of some $118,530.
[4] Ms Strauss had only modest means to fund all lifestyle and living related expenses on the income declared by her. That suggests funds used to purchase the methamphetamine for further sales were likely to have been derived from previous methamphetamine sales.
[5] In addition to the financial benefit obtained by her from the sale of methamphetamine, the police investigation revealed that between 1 June 2013 and 6 May 2018 Ms Strauss was receiving the domestic purposes benefit and sole parent support benefit from the Ministry of Social Development (MSD). There is evidence that she provided false and misleading information to MSD for the purpose of obtaining the benefits and as a result obtained more than $79,000 to which she was not entitled. The provision of false information in that manner would support a charge of obtaining by deception.
The proceeding
[6] On 13 April 2021 the Commissioner of Police applied, without notice, for a restraining order against Ms Strauss under s 24 and/or s 25 of the Act and for further orders under s 33 of the Act.
[7]On 23 April 2021 Campbell J made orders as sought in the application.
[8]On 23 April 2021 the Commissioner applied on notice for a restraining order.
[9]On 23 June 2021 Lang J made orders as sought in the on-notice application.
[10]On 14 June 2022 Harland J extended the restraining order for one year.
[11] On 9 November 2022 the Commissioner applied for a profit forfeiture order that:
(a)the value of the benefit determined in accordance with s 53 of the Act is $197,849; and
(b)the maximum recoverable amount is $197,849.
[12] The application for profit forfeiture order seeks to realise the following property (the property):
(a)all that parcel of land known as 130b Goldfields Road, Manaia and 130 Goldfields Road (Unit B), Manaia, Waikato Region, being all that land comprised and described in the record of title unique identifier SA14A/827, South Auckland Land Registration District being 5.6985 hectares more or less, Waiwhau C1 Block excluding the interest of the mortgagee and any secured creditor; and
(b)all that parcel of land known as 130b Goldfields Rd, Manaia and 130 Goldfields Rd (Unit B), Manaia, Waikato Region, being all that land comprised and described in the record of title unique identifier
SA31D/315, South Auckland Land Registration District being 1.9172 hectares more or less, Waiwhau C2 Block excluding the interest of the mortgagee and any secured creditor; and
(c)all that parcel of land known as 130b Goldfields Rd, Manaia and 130 Goldfields Rd (Unit B), Manaia, Waikato Region, being all that land comprised and described in the record of title unique identifier SA11C/136, South Auckland Land Registration District being 3.8344 hectares more or less, Waiwhau C3 Block excluding the interest of the mortgagee and any secured creditor; and
(d)all that parcel of land known as 130b Goldfields Rd, Manaia and 130 Goldfields Rd (Unit B), Manaia, Waikato Region, being all that land comprised and described in the record of title unique identifier SA14A/848, South Auckland Land Registration District being 3.6649 hectares more or less, Waiwhau C4 B Block excluding the interest of the mortgagee and any secured creditor.
[13] Ms Strauss was the registered owner of the property and resided there prior to her arrest in May 2018. She had been the registered owner since 6 December 1996.
[14] Also on 9 November 2022, the Commissioner applied, without notice, for orders substituting the respondents in their capacity as executors of the estate of Ms Strauss following her death and carrying on the proceeding (the new parties order). On 10 November 2022 Campbell J made the new parties order.
[15] The parties have reached an agreement pending Court approval of the proposed settlement. In summary the parties agree that:
(a)the sum of $197,849 was unlawfully benefitted by the deceased;
(b)the restrained property is to be sold, ancillary to the restraining order, at a fair market value; and
(c)the respondents forfeit the sum of $197,849 unlawfully benefitted, to be paid from the restrained property’s sale proceeds.
Analysis
[16]Section 95 of the Act provides:
95High Court must approve settlement between Commissioner and other party
(1)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.
(2)A settlement does not bind the parties unless the High Court approves it.
(3)The High Court must approve the settlement if it is satisfied that it is consistent with—
(a)the purposes of this Act; and
(b)the overall interests of justice.
[17]In relation to profit forfeiture orders, s 55 of the Act relevantly provides:
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.
[18] I am satisfied that the respondents have unlawfully benefitted from “significant criminal activity” within the “relevant period of criminal activity” to the value of
$197,849. Supplying methamphetamine and obtaining by deception are both significant criminal activity as defined by the Act. The 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,1 that is 9 November 2022. By that date, the respondents had taken office as executors of Ms Strauss’ estate.2 I am also satisfied that the respondents have an interest in the property, namely effective control of the property as executors of Ms Strauss’ estate.
[19] The parties submit that the forfeiture of the cash will meet the purposes of the Act and consider the expense of a contested court hearing analysing the legitimate income made by Ms Strauss over the relevant period would not be justified by the potential increase in the amount recovered of $197,849, having regard to the extent of the forfeiture here. They submit that in terms of deterrent, the amount to be forfeited is significant and will no doubt act as a deterrent to others who may learn of the consequences of the application under the legislation. I accept those submissions. I am satisfied that the settlement is consistent with the purposes of the Act and the overall interests of justice.
[20] Accordingly, I approve the settlement of the Commissioner’s claim through the forfeiture to the Crown of the cash totalling $197,849.
Result
[21] I make orders in the terms sought in the draft profit forfeiture order submitted with the joint memorandum of counsel dated 31 January 2023.
Gault J
1 Criminal Proceeds (Recovery) Act 2009, s 5(1).
2 The evidence also indicates that two of the executors, Ms Strauss’ eldest and youngest sons, were co-offenders arrested at the termination of the police operation, but it is common ground that the respondents had no involvement with the relevant offending.
0
0
1