Commissioner of Police v Franklin
[2023] NZHC 1610
•27 June 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-420
[2023] NZHC 1610
BETWEEN COMMISSIONER OF POLICE
Applicant
AND
WAYNE BRENDON FRANKLIN
Respondent
Hearing: On the papers Appearances:
S M Earl for Applicant
P F Wicks KC for Respondent
Judgment:
27 June 2023
JUDGMENT OF JOHNSTONE J
This judgment was delivered by me on 27 June 2023 at 3pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors: MC, Auckland
COMMISSIONER OF POLICE v FRANKLIN [2023] NZHC 1610 [27 June 2023]
[1]In this proceeding, the Commissioner of Police applied for:
(a)a profit forfeiture order against Wayne Franklin, in effect requiring payment of $694,755.90 from interests in a property at 28B Portage Road, New Lynn, Auckland (excluding those of a caveator), and $12,050 cash seized by police at 447 Otira Highway, Kumara, West Coast on 16 May 2020; or
(b)in the event a profit forfeiture order is not made, asset forfeiture orders vesting the above property in the Crown.
[2] The Commissioner and Mr Franklin have agreed a settlement. They jointly invite the Court to approve the settlement under s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).
Background
[3] Police attended at 447 Otira Highway, Kumara on 15 and 16 May 2020. Mr Franklin was present. Police found, amongst other things, 670 grams of methamphetamine and the cash mentioned above (Search Evidence).
[4] Mr Franklin was charged with offending against the Misuse of Drugs Act 1975. In March 2021, Judge Farish at the Greymouth District Court ruled that the search evidence was obtained unlawfully, and would be inadmissible at trial. The Crown offered no evidence at Mr Franklin’s criminal trial and his charges were dismissed.
[5] The Commissioner’s forfeiture application, outlined in essence above, was filed on 7 October 2022. It relied in part on the Search Evidence ruled inadmissible in the criminal proceeding, and further upon statements Mr Franklin made on compulsory examination under s 107 of the Act. On 27 April 2023, Woolford J ruled both the Search Evidence and Mr Franklin’s statements admissible.1
1 Commissioner of Police v Franklin [2023] NZHC 727.
Settlement for approval
[6] The settlement, which will bind the parties in the event this Court approves it,2 is that:
(a)an assets forfeiture order will be made under s 50(1) of the Act, by consent, over:
(i)12,050 cash seized by Police at 447 Otira Highway on 16 May 2020, and any interest accrued;
(b)a profit forfeiture order will be made, limited to the sum of
$392,705.90 (Settlement Sum);
(c)payment of the Settlement Sum referred to in paragraph (b) will be met by way of borrowing from a legitimate lender to the satisfaction of the Commissioner, within three months of the proposed settlement being approved (with the payment to be made directly by the lender to the Official Assignee);
(d)upon the Official Assignee providing written confirmation that theSettlement Sum has been paid, the restraining order over 28B Portage Road will be lifted and removed from the record of title of 28B Portage Road;
(e)in the event the Settlement Sum is not paid in accordance with paragraph (c), the Official Assignee will sell 28B Portage Road at fair market value to obtain the Settlement Sum from the sale proceeds, with any remaining proceeds to be paid to a bank account nominated by Mr Franklin);
(f)Mr Franklin is to abandon all claims he may have, under the Act or otherwise, to any of the property to be forfeited;
(g)the settlement is in full and final settlement of the current proceedings brought by the Commissioner against Mr Franklin under the Act;
(h)the settlement does not entail any admission of liability or wrongdoing by Mr Franklin; and
(i)costs will lie where they fall.
2 Criminal Proceeds (Recovery) Act, s 95(2).
Approval of settlements under the Act
Section 95 of the Act provides as follows:
High 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.
[8] As can be seen, Parliament has expressly empowered the Commissioner to enter into settlements as to the forfeiture of property under the Act, and it has entrusted the High Court with a supervisory jurisdiction to approve settlements when satisfied they are consistent with the purposes of the Act and the overall interests of justice.3
[9] The primary purpose of the Act as set out in s 3 is to establish a regime for the forfeiture of property that has been derived directly or indirectly from significant criminal activity or which represents the value of a person’s unlawfully derived income.4 Further purposes include those of eliminating opportunities to profit from undertaking or being associated with significant criminal activity, and deterring significant criminal activity.5
[10] The requirement expressed in s 95 that the Court have regard to the overall interests of justice reflects the strong public interest in litigation under the Act being brought to a prompt conclusion, reflecting the likely costs and risks inherent in the determination of a contested application,6 and the desirability of proceedings under
3 Commissioner of Police v Know-All Group Ltd HC Auckland CIV-2010-404-403, 7 November 2011 at [11].
4 Criminal Proceeds (Recovery) Act, s 3(1).
5 Section 3(2).
6 Commissioner of Police v Cotton [2017] NZHC 21 at [7].
the Act being made on economic and pragmatic grounds reflective of common sense compromise.7
Decision
[11] Here, the Commissioner considers he has a good case to show that Mr Franklin has unlawfully benefited from significant criminal activity (so as to support a profit forfeiture order) and that the cash found at Otira Highway, Kumara is tainted (so as to support an assets forfeiture order), particularly as the Search Evidence and Mr Franklin’s statements on compulsory examination have been found by this Court to be admissible. However, Mr Franklin disputes the strength of the Commissioner’s case. In particular, he disputes that the methamphetamine found at Otira Highway belonged to him, and that he unlawfully benefited from the distribution of methamphetamine. He recognises nevertheless that the civil standard of proof applies.
[12] Approval of the settlement so that it becomes binding is, in my view, consistent with the purposes of the Act and the overall interests of justice. While Mr Franklin has provided an explanation for unexplained funds being paid into bank accounts owned and controlled by him, and the Commissioner both disputes that explanation and suggests it may, in any event, reflect tax evasion on his part, there exists a degree of litigation risk as to whether each party’s preferred outcome would be achieved following a contested hearing. If such a hearing can be avoided, there will be a saving of considerable time and cost. Further, an agreed settlement will allow the parties to have certainty and control in the meantime.
[13]The settlement is approved accordingly.
Result
[14]I make the following orders, so as to give effect to the settlement:
(a)Assets forfeiture order under s 50(1) of the Act: the following property vests in the Crown absolutely and is in the Official Assignee’s custody and control:
7 Commissioner of Police v Douglas [2015] NZHC 1293 at [6].
(i)$12,050 cash seized by Police at 447 Otira Highway on 16 May 2020, and any interest accrued; and
(b)Profit forfeiture order under s 55(1) of the Act: a settlement sum of
$392,705.90 (Settlement Sum) being met in either of the following ways:
(i)a payment met by way of borrowing from a legitimate lender to the satisfaction of the Commissioner by 5pm on the date falling three months from the approval of this settlement (Due Date), with the Settlement Sum being paid directly by the lender to the Official Assignee; or
(ii)the amount held by the Official Assignee in accordance with paragraph (c)(iv)(C) below if Mr Franklin fails to pay the Settlement Sum by the Due Date.
(c)Additional orders necessary and convenient for giving effect to the profit forfeiture order made in respect of the Settlement Sum under s 59 of the Act:
(i)the restraining order over 28B Portage Road is varied to allow Mr Franklin to borrow against the property from a legitimate lender to the satisfaction of the Commissioner for the exclusive purpose of enabling Mr Franklin to raise the Settlement Sum;
(ii)upon the Official Assignee providing written confirmation that the Settlement Sum has been paid by 5pm on the Due Date, the restraining order over 28B Portage Road is lifted and the Official Assignee must then immediately arrange for the restraining order to be removed from the record of title of 28B Portage Road;
(iii)in the event that the Settlement Sum is not paid by 5pm on the Due Date, Mr Franklin must take steps to remove the caveat registered against the title of 28B Portage Road;
(iv)the Official Assignee shall then, as soon as is reasonably practicable, sell 28B Portage Road at its fair market value and deal with the proceeds of sale in the following way:
(A)first, deduct the Official Assignee’s actual costs in effecting the sale;
(B)second, repay any borrowings secured against the property;
(C)third, hold an amount equal to the Settlement Sum and effect forfeiture of that amount in accordance with paragraph 6.1(b)(ii) above;
(D)finally, return the balance to a bank account nominated by Mr Franklin.
(d)Costs: costs lie where they fall in relation to all matters between the Commissioner and Mr Franklin.
[15]I note the further terms of the settlement as follows:
(a)Mr Franklin abandons all claims he may have, under the Act or otherwise, to any of the property being forfeited;
(b)the settlement is in full and final settlement of this proceeding brought by the Commissioner against Mr Franklin under the Act;
(c)the settlement does not entail any admission of liability or wrongdoing by Mr Franklin;
(d)the settlement is not binding on any other party, including the Commissioner of Inland Revenue.
Johnstone J
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