Commissioner of Police v Kiwi
[2021] NZHC 2457
•17 September 2021
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CIV-2017-470-000083
[2021] NZHC 2457
UNDER The Criminal Proceeds (Recovery) Act 2009 BETWEEN
COMMISSIONER OF POLICE
Applicant
AND
JAY TARAHINI KIWI
Respondent
PIRIHIMA WHANAU TRUST
Interested PartyJOHN AITKEN
Interested Party
Hearing dates: 13 July 2020 and 12 April 2021 (final submission due date
10 May 2021)
Counsel:
R Jenson and J Sutton for applicant
P Kaye for first respondent and for interested party, John Aitken J Koning for interested party, Pirihima Whanau Trust
Judgment:
17 September 2021
JUDGMENT OF KATZ J
This judgment was delivered by me on 17 September 2021 at 4:00 pm pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors:Pollett Legal, Office of the Crown Solicitor, Tauranga J Connell, Jennifer Connell & Associates, Auckland Pawson Law, Te Puke
Counsel: P Kaye, Barrister, Auckland
J Koning, Commerce Lane Chambers, Te Puke
COMMISSIONER OF POLICE v KIWI [2021] NZHC 2457 [17 September 2021]
Table of Contents
Introduction.......................................................................................................... [1]
The Criminal Proceeds (Recovery) Act 2009.................................................... [6]
Has Mr Kiwi been involved in significant criminal activity?......................... [10]
Should an assets forfeiture order be made in respect of 135 Kairua Road? [16] The acquisition of the 135 Kairua Road property by Mr Kiwi [16] Did Alex Aitken fund Mr Kiwi’s purchase of 135 Kairua Road? [35]
Were the proceeds of crime (methamphetamine dealing) used to purchase
135 Kairua Road? [40]
Further observations [45]
Should an assets forfeiture order be made in respect of the house built
on the 224A Kairua Road property?............................................................... [53]
Background [54]
Who funded the construction of the house? [59]
Māori land under Te Ture Whenua Māori Act 1993 [74]
Is the house at 224A Kairua Road part of the land? [80] Relationship between the CPRA and Te Ture Whenua Māori Act [88] Policy considerations [104]
Should an assets forfeiture order be made in respect of the cash and
motor vehicles?................................................................................................. [109]
The Suzuki Swift [110]
The Holden Commodore [115]
Cash in the sum of $5,933.00 [118]
Cash in the sum of $7,000.00 [119]
Are the vehicles and the cash the proceeds of crime? [121]
Summary and conclusion................................................................................ [124] Result........................................................................................................................... [126]
Introduction
[1] Jay Tarahini Kiwi is a convicted methamphetamine dealer. He pleaded guilty on the third day of his trial to two charges of possession of methamphetamine for the purpose of supply,1 two charges of conspiring to supply methamphetamine,2 and one charge of threatening to kill or do grievous bodily harm.3 Judge T R Ingram sentenced him to nine years’ imprisonment.4
[2] The Commissioner of Police alleges that Mr Kiwi owns or has an interest in a property located at 135 Kairua Road, Welcome Bay; a house (but not the land it is built on) at 224A Kairua Road, Welcome Bay; two motor vehicles; and two quantities of cash (together “the Assets”). The Commissioner claims that the Assets were purchased with the proceeds of Mr Kiwi’s methamphetamine dealing. The Commissioner therefore applies for them to be forfeited to the Crown under the Criminal Proceeds (Recovery) Act 2009 (“CPRA”).
[3] Mr Kiwi does not dispute that he has been involved in significant criminal activity. He denies, however, that either the 135 Kairua Road property or the house at 224A Kairua Road were purchased with the proceeds of crime. Mr Kiwi does not oppose forfeiture of the motor vehicles or the cash.
[4] The house at 224A Kairua Road is built on Māori freehold land. The Commissioner’s application therefore raises difficult issues about the relationship between the CPRA and Te Ture Whenua Māori Act 1993. If the house is a fixture and therefore forms part of the land, can the High Court forfeit it to the Crown under the CPRA? Or do the provisions of Te Ture Whenua Māori Act, which promotes the retention and control of Māori land as taonga tuku iho by Māori owners, their whanau, their hapu, and their descendants, take precedence? Under Te Ture Whenua Māori Act, the Māori Land Court has exclusive jurisdiction over the alienation of Māori land.
1 Misuse of Drugs Act 1975, s 6(1)(f) and (2)(a). Maximum penalty of life imprisonment.
2 Misuse of Drugs Act 1975, s 6(2A). Maximum penalty of 14 years’ imprisonment.
3 Crimes Act 1961, s 306(a). Maximum penalty of seven years’ imprisonment.
4 R v Kiwi [2018] NZDC 22050.
[5] John Aitken and the Pirihima Whanau Trust are joined to the proceeding as interested parties. John Aitken claims that he and his father lent money to Mr Kiwi to enable him to purchase the property at 135 Kairua Road. The Pirihima Whanau Trust owns land adjacent to 224A Kairua Road and appeared in order to protect its interests as an adjoining landowner.
The Criminal Proceeds (Recovery) Act 2009
[6] The purpose of the CPRA is to establish a regime for the forfeiture of property that has been derived directly or indirectly from significant criminal activity, or that represents the value of a person’s unlawfully derived income.5
[7] The CPRA provides for different types of orders. Here, the Commissioner seeks an assets forfeiture order.6 For property to be subject to an assets forfeiture order, it must be “tainted property”. Tainted property is any property which has, wholly or in part, been acquired as a result of significant criminal activity, or directly or indirectly derived from significant criminal activity.7 It includes property that has been acquired as a result of, or directly or indirectly derived from, more than one activity if at least one of those activities is significant criminal activity.8
[8] “Significant criminal activity” includes activity engaged in by a person that is punishable by a maximum term of imprisonment of five years or more.9 Possessing methamphetamine for the purposes of supply and conspiring to supply methamphetamine both fall within the category of significant criminal activity.
[9] If the High Court is satisfied on the balance of probabilities that specific property is tainted property, the Court must make an assets forfeiture order in respect of that property.10 That property then vests in the Crown absolutely and is within the custody and control of the Official Assignee.11
5 Section 3(1).
6 Section 50.
7 Section 5 definition of “tainted property”.
8 Section 5 definition of “tainted property”.
9 Section 6.
10 Section 50(1).
11 Section 50(3).
Has Mr Kiwi been involved in significant criminal activity?
[10] Mr Kiwi has been convicted of methamphetamine offending. Details of his offending are set out in an affidavit sworn by Detective Mark Watt in support of the Commissioner’s application. Detective Watt is attached to the Waikato and Bay of Plenty Asset Recovery Unit of the Police.
[11] In or about August 2016, Mr Kiwi came under police surveillance. The police intercepted Mr Kiwi’s communications and, based on those, believed that he was involved with a methamphetamine distribution network in the Bay of Plenty and was intending to set up a similar distribution network in the South Island.
[12] On 9 September 2016, Mr Kiwi and an associate, William Wiki, flew from Tauranga to Dunedin. When they arrived at Dunedin Airport, the police were waiting. Mr Wiki had in his possession a bag containing 78.8 grams of methamphetamine and another bag containing three grams of methamphetamine, a number of empty zip lock bags and a glass tube. Mr Kiwi had $5,000.00 in cash in $50 denominations, as well as a further $933.00 in cash.
[13] Meanwhile back in Tauranga, the police executed search warrants at several addresses. They found a plastic bucket containing 17 bags of methamphetamine (each containing 1 ounce (28 grams) and having a total weight of 459.5 grams) concealed in the boot of a Suzuki Swift vehicle that police believed belonged to Mr Kiwi. At 224A Kairua Road, which the police understood was Mr Kiwi’s home address, they found $7,000.00 in cash.
[14] The total amount of methamphetamine seized by police was 569 grams. In September 2016, the price of one gram of methamphetamine in the Bay of Plenty was between $600 and $1,000. The price of one ounce of methamphetamine was between
$10,000 and $12,000. The methamphetamine seized was therefore worth between
$341,400 and $569,000 if sold by the gram, or between $200,000 and $240,000 if sold by the ounce.
[15] I am satisfied on the balance of probabilities that Mr Kiwi has participated in significant criminal activity (he did not suggest otherwise). The key issues are whether
the proceeds of that activity have been used to purchase the Assets and, in relation to the house at 224A Kairua Road, whether this Court has jurisdiction to order forfeiture of that asset. I will consider each asset (or group of assets) in turn.
Should an assets forfeiture order be made in respect of 135 Kairua Road?
The acquisition of the 135 Kairua Road property by Mr Kiwi
[16] The land at 135 Kairua Road was formerly Māori freehold land. On 18 June 1968, a status order was made by the Māori Land Court declaring that the status of the land “shall cease to be Māori Freehold Land and shall become General Land”. By 2013, the sole registered proprietor of 135 Kairua Road was Mr Kiwi’s uncle, Archie Warren Kiwi.12 Warren Kiwi inherited a half interest in the property and took out a loan from the Southern Building Society (“SBS”) to purchase the other half interest from a family member. Unfortunately, however, Warren Kiwi fell behind with his mortgage payments.
[17] On 18 September 2013, SBS issued a notice of demand. Bank records show that Warren Kiwi deposited $10,000 cash into his bank account on 19 February 2014 and a further $20,000 cash on 12 May 2015. The $20,000 deposit was used to repay a personal loan, loan arrears and council rates arrears. Both deposits were in
$50 denominations. When interviewed by police, Warren Kiwi gave conflicting and at times inconsistent explanations as to the source of the deposits. The Commissioner believes that the cash likely came from Mr Kiwi.
[18] By mid-2015 a mortgagee sale was imminent. This was averted when, on or about 9 July 2015, the property was sold to Mr Kiwi. The purchase price was
$150,000. $102,000 of that was paid by way of bank cheque, which was the amount required to pay off the loan from SBS. The balance of the purchase price was gifted from Warren Kiwi to Mr Kiwi, as recorded in a deed of gift. The rateable value of the property at the time it was sold to Mr Kiwi was $227,000.
12 I will refer to him as “Warren Kiwi,” as that is the name that Mr Kiwi referred to him by.
[19] Bank cheques cannot be purchased with cash. The police were therefore able to trace the source of the $102,000 payment, which proved to be an ANZ joint bank account in the names of Alex Aitken and his partner Carol Hurst. Alex Aitken is the father of John Aitken, who is a close friend and associate of Mr Kiwi. John Aitken’s former partner is Vanessa Kiwi, with whom he has two adult sons. Vanessa Kiwi and Jay Kiwi are cousins, but were raised by their grandparents as whangai siblings in the family homestead at 135 Kairua Road. As an adult, Mr Kiwi lived with John Aitken and Vanessa Kiwi for a time. Although the relationship between Vanessa Kiwi and John Aitken did not last, Jay Kiwi and John Aitken remained good friends. At the time of his arrest, Mr Kiwi was the Vice President of the Greazy Dogs motorcycle gang. John Aitken is a former President of that gang.
[20] ANZ bank records establish that the bank cheque for $102,000 was funded as follows:
(a)A cash deposit of $35,000 (all in $50 denomination) was paid into the joint bank account by Alex Aitken on 30 June 2015.
(b)A further $30,000 cash deposit paid into the joint account was made by Ms Hurst, again all in $50 denomination. This sum had been withdrawn from a bank account in the name of Michael Aitken, Alex Aitken’s brother.
(c)The balance came from funds already held in the joint account.
[21] John Aitken, Alex Aitken, Michael Aitken, Ms Hurst and Warren Kiwi were all examined by the police, using their compulsory powers of examination under the CPRA. In addition, John Aitken and Mr Kiwi gave evidence in Court.
[22] John Aitken claimed that he became involved in the purchase of the property as he did not want to see the Kiwi family homestead sold at a mortgagee sale. He asked his father, Alex Aitken, for help. His father agreed, but Warren Kiwi would only sign the property over to a member of the Kiwi whānau. That is why the property was transferred to Mr Kiwi. John Aitken said he believed that Mr Kiwi would be able to
repay the loan from the income he earned as a courier. The difficulty with that explanation, however, is that Mr Kiwi did not start working as a courier until seven months after the purchase of 135 Kairua Road. Mr Kiwi was unemployed at the time 135 Kairua Road was purchased.
[23] Alex Aitken and Ms Hurst both claimed in their examinations that they did not know either Mr Kiwi or Warren Kiwi. Ms Hurst said that the first time she met Warren was when he arrived at her property on 7 August 2017 (coincidentally the day before her police examination) thanking her for her help with the loan two years previously. Alex Aitken said that he knew Warren Kiwi’s parents as he had previously lived down the road from them. He claimed, however, that he did not know Warren Kiwi or other members of his family.
[24] Warren Kiwi stated in his examination, however, that Alex Aitken is his uncle having previously been married to his aunty, and that Ms Hurst is also his whānau. When asked why he had transferred ownership of the property to Mr Kiwi when the funds had come from Alex Aitken, Warren Kiwi said that he wanted to give his nephew (Mr Kiwi) “something back” for organising the repayment of the mortgage.
[25] Alex Aitken’s main source of income at the relevant time came from his employment as a fishing boat captain. He earned approximately $145,000 from that role in both 2014 and 2015. In addition, he and Ms Hurst operated an avocado orchard through a partnership. The partnership ran at a loss, however, prior to 2016.
[26] Alex Aitken’s explanation for agreeing to fund the transaction was that he did not want the Kiwi family property to be sold at mortgagee sale. He said that he hoped the property would ultimately be transferred into the names of his grandchildren (the two adult sons of Vanessa Kiwi and John Aitken).
[27] Ms Hurst acknowledged that prior to lending money to Mr Kiwi, she and Alex Aitken had only ever loaned money to family members. She did not know why her husband had decided to lend funds to Mr Kiwi to enable him to pay off the mortgage on 135 Kairua Road.
[28]Alex Aitken and Ms Hurst provided conflicting explanations regarding the
$35,000 cash that Alex Aitken deposited into their joint account. Alex Aitken claimed that the $35,000 came from cash of about $70,000 or so that he had “lying around at home.” He said the cash was from the cash sales of avocados from his avocado orchard and the sale of a couple of old 1947 truck engines and parts. Ms Hurst, on the other hand, believed that the $35,000 cash deposit had come from the sale of Bonus Bonds. When informed that it had not, she was unable to explain where else the cash could have come from.
[29] Ms Hurst said in her examination that she handles the family finances. She said that they never held large sums of cash at home, with $5,000 being the most they ever had in the house. Further, any cash they had was generally in small denominations ($10 and $5 notes, but mostly change) as it came from selling avocados. They never received $50 or $100 notes. Ms Hurst said she did not like having a lot of cash at home, so she would just put it in the bank.
[30] Michael Aitken was questioned by the police about the $30,000 cash that was withdrawn from his bank account and deposited into the joint account. He claimed that some years back he had a brain aneurysm and was unable to work during this time. Alex Aitken had paid all his living expenses and the deposit was repayment of those expenses, at the request of Alex Aitken.
[31] Brian Jones, a Tauranga solicitor, acted on the transaction. He deposed that in 2015, Warren Kiwi attended his office with a person he introduced as Jay Kiwi. Warren said that he wanted to gift the property to Jay:
… as [Jay] had bailed him out of his financial difficulties with SBS Bank by repaying the mortgage on his property.
…
Warren advised that Jay had repaid nearly $100,000 to SBS to clear the mortgage and that he wanted to gift the outstanding balance to Jay.
[32]Mr Jones further deposed that:
I advised Warren that the transaction was not in his best interests and that he could draw up a loan agreement with Mr Kiwi rather than transfer title of the
property. I could not understand why Warren would give away a property that he had inherited from his father, the entire transaction did not make sense.
Warren was adamant that the property was to be transferred into Jay’s name and became agitated when I questioned his decision.
[33] Mr Kiwi’s arrest on 9 September 2016 was about 14 months after his purchase of the property. A deed of debt was drawn up after his arrest and executed on 21 October 2016. It recorded a loan of $102,000 between Mr Kiwi (as borrower) and John and Alex Aitken (as lenders).
[34] The Commissioner obtained a restraining order under the CPRA in respect of the property on 8 June 2017. Alex Aitken, Ms Hurst and Warren Kiwi were all examined by Detective Thompson on 8 August 2017. Alex and John Aitken registered a caveat against the title to the property three days later on 10 August 2017.
Did Alex Aitken fund Mr Kiwi’s purchase of 135 Kairua Road?
[35] The claim that Alex Aitken funded the purchase of 135 Kairua Road from his own resources (and those of Ms Hurst) is implausible and lacks credibility, for the following reasons:
(a)Alex Aitken was not willing to give evidence. The explanation he gave in his police examination regarding the source of the cash deposits to the joint account, particularly the $35,000 deposit, was implausible and directly contradicted by Ms Hurst’s statement. Further, his explanation does not explain why the deposit was made in $50 notes.
(b)No adequate explanation has been provided as to why Alex Aitken would be willing to loan over $100,000, on an unsecured and undocumented basis, to a person he claimed not to know when he and Ms Hurst had never previously loaned money outside of the family.
(c)Such generosity is implausible, given the level of Alex Aitken’s income. While his income as a fishing captain was comfortable, the avocado orchard ran at a loss and Ms Hurst had no recorded income. Mr Aitken had adult children of his own whom he helped financially,
according to his son John. He also had adult grandchildren. At the time of Alex Aitken’s examination, his bank account was approximately
$20,000 in overdraft.
(d)If Alex Aitken’s aim was to help retain the property in the Kiwi family, Mr Kiwi was an unlikely recipient of his generosity. Alex Aitken’s two grandsons, or their mother Vanessa Kiwi, would have been much more obvious recipients. Given that a mortgagee sale was imminent, Warren Kiwi was not in a position to dictate which family member the property should be transferred to.
(e)Alternatively, Alex Aitken could have simply loaned the funds directly to Warren Kiwi to discharge the mortgage. This would also have kept the property in the Kiwi whānau.
(f)It is not clear why the cash payments had to be channelled through Alex Aitken’s bank account, particularly given the urgency. If the cash belonged to Alex Aitken (or Michael Aitken) and the source of it was legitimate, it could have simply been deposited directly into the bank account of Mr Kiwi or Warren Kiwi.
(g)No contemporaneous loan agreement was entered into between John and Alex Aitken and Mr Kiwi, despite other aspects of the transaction being formally documented, including a sale and purchase agreement and a Deed of Gift. Further, no interest rate or time frame for repayment was agreed, and no repayments (of either principal or interest) have been made since the funds were advanced in July 2015.
(h)When Warren Kiwi attended his solicitor’s office, he took Jay Kiwi with him. Warren Kiwi was adamant that the property had to be transferred to Mr Kiwi, as Mr Kiwi was the person who had repaid the mortgage on the property. There was no mention of Alex or John Aitken’s alleged involvement.
[36] For the reasons set out above, I am satisfied that the financing arrangement asserted by Jay Kiwi, John Aitken and Alex Aitken is not true, and must be put to one side.
[37] Where then did the funds to purchase the property come from? The evidence strongly supports the inference that the funds came from Mr Kiwi. This explains the numerous inconsistencies in the statements of the various witnesses/interviewees, the lack of any contemporaneous loan documents, and the need to funnel the money through Alex Aitken’s bank account (to distance Mr Kiwi from the cash and give the transaction an air of legitimacy). I further note that the cash found on Mr Kiwi at the time of his arrest was all in $50 notes, the same denomination as the $35,000 cash deposit used to fund the property purchase.
[38] There is simply no logical reason why the property would be transferred to Mr Kiwi if he had contributed nothing towards the purchase price, was not in a position to repay the loan, and was not personally known to the lender. As noted above, there were much more obvious recipients of Alex Aitken’s generosity who were also members of the Kiwi whānau.
[39] Further, Warren Kiwi was adamant in his instructions to his solicitor that the property had to be transferred to Mr Kiwi, as he was the person who had repaid the mortgage on the property. Warren Kiwi had no reason to lie to his solicitor about this. In my view this statement bears the hallmark of truth. Warren Kiwi was insistent that the property had to be transferred to Mr Kiwi and became agitated when his lawyer suggested a loan arrangement as an alternative. This is consistent with him knowing that Mr Kiwi was the person who had paid off the mortgage, rather than simply being the facilitator of a loan from a third party.
Were the proceeds of crime (methamphetamine dealing) used to purchase 135 Kairua Road?
[40] Mr Kiwi was unemployed and derived little or no income from legitimate work or state benefits in the years prior to his purchase of 135 Kairua Road. He declared just under $10,000 of income to the Inland Revenue Department between 2010 and 2016.
[41] In cross-examination, Mr Kiwi stated that prior to 2011 he lived and worked in Australia at a cardboard company, earning between $1,000 and $1,500 per week. He claimed to have saved around $15,000, which he brought back to New Zealand with him. In addition, Mr Kiwi said that he earned some income through buying and selling cars. For example, Mr Kiwi said that he restored a Pontiac car and resold it to a friend for a profit of $8,000. He refused, however, to disclose the name of the friend. Mr Kiwi was unable to provide any further details about this source of income, other than that he had bought and sold “many” cars over an eight to ten year period. He acknowledged that he had not referred to this source of income in his affidavit.
[42] Mr Kiwi’s evidence as to both the $15,000 savings he brought with him on his return from Australia, and his car sales activity, was unconvincing. He appeared to be making things up as he went along, which made it difficult for him to provide details. Further, these claimed sources of additional income were not mentioned in the affidavit he filed in advance of the hearing. Nor were they supported by any other witnesses or any contemporaneous documents. I reject this evidence as lacking credibility.
[43]Even if I were to accept, however, that Mr Kiwi returned from Australia with
$15,000, and also subsequently made some income from fixing up cars and selling them, that would not explain his ability to fund the purchase of very significant assets in 2015 and 2016. This level of savings and income, together with his declared income of $10,000 would probably not have been sufficient to even cover Mr Kiwi’s ordinary living expenses during the period 2011 to 2016, let alone fund the various assets that are the subject of the Commissioner’s application.
[44] In the absence of any other plausible explanation, the necessary inference is that the cash Mr Kiwi used to fund the purchase of 135 Kairua Road was the proceeds of his methamphetamine dealing, which is presumably why he felt it necessary to “launder” the money through Alex Aitken’s bank account rather than just paying Warren Kiwi directly. 135 Kairua Road is therefore tainted property in terms of the CPRA. Pursuant to s 50 of that Act, I am required to make an assets forfeiture order in respect of it.
Further observations
[45] Some further observations about the former status of 135 Kairua Rd as Māori freehold land, and the possible implications of that, are appropriate in this case.
[46] The Kiwi whānau have a longstanding connection to the 135 Kairua Road property. It has been owned by several generations of the family since 1968 and, presumably, was ancestral land of their wider hapū prior to that. Mr Kiwi, Vanessa Kiwi, and presumably other members of the whānau were raised in the Kiwi family homestead on that property.
[47] On 18 June 1968, a status order was made by the Māori Land Court declaring that the status of the land “shall cease to be Māori Freehold Land and shall become General Land”. It seems likely that this change in status occurred in similar circumstances to the change of status, also in 1968, of the Whakamārama land which was at issue in Nicholas v Commissioner of Police.13 Both properties are in the Tauranga district. Williams J made the following observations regarding the Whakamārama land:
[14] In 1968, it was subject to a status declaration of the Māori Land Court changing it from Māori land to European land (later to become known as general land). Such status declarations were routinely made by the Registrar of the Māori Land Court pursuant to s 6 of the Māori Affairs Amendment Act 1967. Where the provisions were satisfied, a status change was mandatory. No application was required for such status change and the owners were unlikely to know of it beforehand. Rather, the Amendment Act provided that any Māori land owned by not more than four owners could cease to be Māori land simply by administrative action of the Registrar of the relevant Māori Land Court district. The Amendment Act is generally regarded as having triggered the major Māori land protests of the 1970s and the policy reversal that ultimately led to the enactment of Te Ture Whenua Maori Act 1993.14 Had the Whakamārama land not lost its Māori land status, it would not have been alienable without first being offered to members of the Pirirākau hapū.15
(footnotes original)
13 Nicholas v Commissioner of Police [2017] NZCA 473.
14 Waitangi Tribunal The Hauraki Report (Wai 686, 2006) at 878. For the particular impacts of the Amendment Act on Tauranga Moana see Waitangi Tribunal Tauranga Moana 1886–2006: Report on the Post-Raupatu Claim (Wai 215, 2010) at 345–346.
15 The members of Pirirākau hapū are the “preferred class of alienees” in terms of s 4 of Te Ture Whenua Māori Act 1993. They are given right of first refusal by pt 7 of that Act.
[48] Similarly, in this case the change in status of 135 Kairua Road from Māori land to general land in 1968 was also likely an administrative act that was undertaken without reference to the Kiwi whānau. Had the property not lost its Māori land status, it would not have been alienable without first being offered to members of the Kiwi whānau (and may not have been alienable under the CPRA at all, as discussed further below).
[49] In Nicholas, Mr Nicholas submitted on appeal (for the first time) that forfeiture of the relevant properties would cause him undue hardship under s 56 of the CPRA, which requires the Court to have regard to “all of the circumstances” of the case in making its undue hardship assessment.16 He filed new evidence on appeal about the ancestral connection between the properties in question and the Nicholas hapū.17 The Court of Appeal referred the matter back to the High Court for the hardship question to be considered, even though the issue had not been raised at first instance. Williams J explained the Court’s reasoning as follows:
[71] … It is true, as the Commissioner points out, the Whakamārama land is general land not Māori land in the technical sense, but its formal legal status is no true indicator of its significance. The 1968 change of status to general land was no more than an administrative act, pursuant to what is now acknowledged to be controversial legislation. What is of real importance in our view is that the Whakamārama land is part of a hapū estate. Forfeiture of Mr Nicholas’ half share will sever not just his links to the land, but those of the wider hapū. Because it is now general land, the hapū have no right of first refusal and probably no standing under ss 61 and 62. Their links with the land will therefore be lost.
[72] We cannot of course predict how a judge rehearing the matter might weigh this factor against other matters, such as the nature and circumstances of Mr Nicholas’ significant criminal activity. However, we have no doubt that it will be a matter of real significance in the Court’s assessment of “all the circumstances of the case”.
[50] Similarly, in this case, other members of the Kiwi hapū have no right of first refusal as the land is now general land. The issue of whether they may have standing under s 62 is less clear cut than in Nicholas, however. Section 62 enables a person other than the respondent who claims an interest in the property to seek relief for a
16 At [3]. Section 56 relates to exclusion of the respondent’s property from a profit forfeiture order because of undue hardship. Section 51 is the equivalent provision for assets forfeiture orders.
17 At [6]-[12].
limited period after a civil forfeiture order is made.18 Although Mr Kiwi is currently the registered owner of the property, the possibility that Warren Kiwi may have an ongoing interest in the property cannot be excluded.
[51] I note in this context that Warren Kiwi sold the property to Mr Kiwi at a significant undervalue (effectively $102,000, at a time when the rateable valuation of the property was $227,000).19 He appears to have done this on the understanding, and with the intent, that the property would stay in the Kiwi whānau. In addition, Warren Kiwi does not appear to have moved out of the property following its sale to Mr Kiwi. He still lives in the family homestead, possibly with other members of the Kiwi whānau. It is not clear what occupancy rights he has (if any) and whether he asserts an ongoing equitable interest in the property.
[52] Given the Kiwi hapū’s ancestral association with the 135 Kairua Road property, it is obviously in the interests of justice that they (and in particular Warren Kiwi) have an opportunity to consider their position and take legal advice prior to any final sale of the property by the Commissioner. Counsel are accordingly requested to ensure that a copy of this decision is provided to Warren Kiwi.
Should an assets forfeiture order be made in respect of the house built on the 224A Kairua Road property?
[53] I now turn to consider whether an assets forfeiture order should be made in respect of the house that has been built on the property at 224A Kairua Road.
Background
[54] The property at 224 Kairua Road is Māori freehold land that appears to have been owned by many generations of the Kiwi whānau. In February 1999, the property was partitioned into two lots, 224A and 224B. Mr Kiwi’s uncle, Graeme Kiwi, became the registered owner of 224A Kairua Road, which was an empty site. On 9 May 2011,
18 “Interest” is defined by s 5 of the CPRA as a legal or equitable estate or interest in the property; or a right, power, or privilege in connection with the property.
19 While there are grounds for suspicion regarding the source of the earlier cash deposits to Warren Kiwi’s bank account, in my view there is insufficient evidence to establish that they came from Mr Kiwi.
Graeme Kiwi was sentenced to imprisonment for a term of 15 years. He died in prison on 16 May 2017, leaving no will.
[55] While Graeme Kiwi was in prison, a building was constructed on the 224A Kairua Road property. Mr Kiwi described this building as a “shed”. I have reviewed photographs of both the exterior and interior of the building. It cannot accurately be described as a shed. Rather, it is a small but modern house, fitted out to a high standard, and somewhat dominated by two large garages.
[56] The Commissioner alleges that Mr Kiwi was the person who arranged for the house to be built, paid for the labour and materials with cash, and oversaw its construction. Mr Kiwi allegedly then moved into the house once it was completed. The Commissioner initially argued that this was because Graeme Kiwi had agreed to transfer the property to Mr Kiwi, and Mr Kiwi had, in effect, become the de facto owner of 224A Kairua Road. The Commissioner therefore sought forfeiture of the entire property (both the land and the house).
[57] It became apparent at the initial hearing of the Commissioner’s application that s 50(4) of the CPRA was relevant as Mr Kiwi disclaimed any interest in the property. No efforts had, however, been made to contact Graeme Kiwi’s six children who had a potential interest in the property as Graeme Kiwi’s successors under Te Ture Whenua Māori Act. The hearing was accordingly adjourned part heard, to enable Graeme Kiwi’s children to be served.
[58] Graeme Kiwi’s children were located and served. They elected not to participate in this proceeding, instead focussing their resources on pursuing a claim to succession to the property in the Māori Land Court. Given this development, the Commissioner decided not to pursue his claim for forfeiture of the land and instead filed an amended application seeking forfeiture of the house only.
Who funded the construction of the house?
[59] Mr Kiwi’s evidence was that he did not own the house and had not funded or supervised its construction. Mr Kiwi’s account of the relevant events, however, was vague, inconsistent, contradictory, and lacking in credibility. For example, under
cross-examination Mr Kiwi firmly denied that he was living at 224A Kairua Road prior to his arrest. He claimed that he was living somewhere else. When he was arrested, however, Mr Kiwi gave his address as 224A Kairua Road. Further, in his affidavit, Mr Kiwi deposed that prior to his arrest in September 2016 he was living in a recently built shed at 224A Kairua Road and paying rent. Mr Kiwi was unable to explain these inconsistencies and maintained the position under cross-examination that he had never lived at the property.
[60] Police enquiries with Trustpower revealed that the electricity meter at the property had been running, consistent with someone living at the house. Somewhat surprisingly, the electricity account was in the name of Graeme Kiwi, who was in prison at the time the house was built. However, Mr Kiwi’s girlfriend was listed as the contact person for the account. Mr Kiwi admitted in cross-examination that he was aware of this and was also aware that she had paid at least one electricity bill. He was unable to explain why his girlfriend would be paying the electricity bills for the property.
[61] The police also found an invoice for the aluminium windows installed at the property at Mr Kiwi’s girlfriend’s address, along with a delivery docket from Steel and Tube for the coloursteel flashings. Mr Kiwi claimed to have “no idea” why either of those documents would have been found at her address.
[62] The police interviewed several people who were involved in the construction of the house or had knowledge of it. John Aitken, for example, said that Mr Kiwi had built the shed on the section. Another associate of Mr Kiwi, Charisse Billing, said in her statement that:
Jay has a house on Kairua Road, Welcome Bay, it is his house as far as I know that is the new house that he has built. I don’t know how he paid for it either.
[63] Mr Kiwi was evasive and defensive when asked why Mr Aitken and Ms Billings would say that he had built the house, if he had not. He was unable to offer any explanation for their evidence other than “whatever [they say] has nothing to do with me” and “you’ll have to ask [them]”.
[64] Intercepted phone calls record Derek Gibson reporting to Mr Kiwi regarding the progress of the construction and telling him that the builders were wanting to know when they would be paid. Mr Kiwi responded “Oh, nah, tell them to wait ‘til I get back ‘cos I want to see progress, how’s the progress like?” Mr Gibson then outlined the work that had been done, following which Mr Kiwi said to “chuck” the builders “1000 bucks” and tell them he would fix up whatever he owed them.
[65] A second intercepted phone call on 22 August 2016 was also put to Mr Kiwi in cross-examination, in which he again discussed details of the house construction. At this point it obviously became apparent to Mr Kiwi that he could no longer plausibly deny his role in the project, as evidenced by the following exchange:
Q.And you were project managing this construction effectively aren’t you, Mr Kiwi?
A.Yeah. Yeah, yeah, yep, yep. But like I said there was, all of my family had an involvement in that.
[66] Three other intercepted phone calls between Mr Kiwi and unknown persons on 30 and 31 August 2016 also record Mr Kiwi and the other persons discussing a construction project and the materials required for that.
[67] Police inquiries were able to establish where some of the building materials were purchased from, and that they had been paid for in cash.
[68] Tremaine Kahotea, who is Mr Kiwi’s cousin, worked on the project. Mr Kahotea said in his initial police statement on 15 November 2016 that:
I help build the house at Kairua Road. I was just a labourer but helped with it from the start. I didn’t discuss with Jay how he got the land or the build but I’m guessing where it is; it’s probably family land.
(emphasis added)
[69] Later, however, Mr Kahotea tried to distance Mr Kiwi from the project, claiming that Graeme Kiwi had contacted him from prison, and asked him to assist in the construction of a papakainga for Pikowai Ohia. Mr Kahotea said that Mr Ohia was “the guy who owns the house in front”. Mr Ohia (now deceased) is a former trustee of the Pirihima Whānau trust, which owns the adjacent land. Police inquiries with the
prison and with Marita Ranclaud, the current chair of the Pirihima Whanau Trust, established that Mr Kahotea’s claims were demonstrably false.
[70] The police located invoices made out to Mr Kahotea at Mr Kiwi’s house. Mr Kiwi was not able to explain why he had them, but acknowledged that Mr Kahotea had done building work at 224A Kairua Road.
[71] Detective Watts’ enquiries with Graham Strange Cabinetmaker revealed two invoices associated with the property, being cash sales totalling $10,473.40 with the customer recorded as “Graham”. Graham Strange said that he dealt with two people in relation to the new kitchen he provided. He believed one was the builder and the other was the owner, who gave the name of Graham. There is no evidence that any person by the name of Graham was involved in the project. As with the electricity account, the use of the name “Graham” was presumably an attempt to give the impression to third parties (who did not personally know Graeme Kiwi) that he was responsible for the construction of the house.
[72] The totality of the evidence strongly supports the inference that Mr Kiwi arranged for the construction of the house, had overall responsibility for the project, and funded it. I am also satisfied, for the reasons outlined at [40] to [43] above, that the construction was funded with the proceeds of Mr Kiwi’s methamphetamine dealing.
[73] The requirements for making an assets forfeiture order in respect of the house, under s 50 of the CPRA, therefore appear to be met. As 224A Kairua Road is Māori freehold land, however, I must consider whether I have jurisdiction to order, in effect, that the house be severed from the land and forfeited to the Commissioner. The answer depends on whether the house is a fixture, and the relationship between the CPRA and Te Ture Whenua Māori Act.
Māori land under Te Ture Whenua Māori Act 1993
[74] As noted above, Te Ture Whenua Māori Act sets out a comprehensive regime for dealing with Māori land. The special status of Māori land is recognised in the Preamble to the Act:
Whereas the Treaty of Waitangi established the special relationship between the Māori people and the Crown: And whereas it is desirable that the spirit of the exchange of kawanatanga for the protection of rangatiratanga embodied in the Treaty of Waitangi be reaffirmed: And whereas it is desirable to recognise that land is a taonga tuku iho of special significance to Māori people and, for that reason, to promote the retention of that land in the hands of its owners, their whanau, and their hapu, and to protect wahi tapu: and to facilitate the occupation, development, and utilisation of that land for the benefit of its owners, their whanau, and their hapu: And whereas it is desirable to maintain a court and to establish mechanisms to assist the Māori people to achieve the implementation of these principles.
[75] This is reinforced in s 2 of Te Ture Whenua Māori Act, which provides as follows:
2 Interpretation of Act generally
(1)It is the intention of Parliament that the provisions of this Act shall be interpreted in a manner that best furthers the principles set out in the Preamble.
(2)Without limiting the generality of subsection (1), it is the intention of Parliament that powers, duties, and discretions conferred by this Act shall be exercised, as far as possible, in a manner that facilitates and promotes the retention, use, development, and control of Maori land as taonga tuku iho by Maori owners, their whanau, their hapu, and their descendants, and that protects wahi tapu.
(3)In the event of any conflict in meaning between the Maori and the English versions of the Preamble, the Maori version shall prevail.
[76] Te Ture Whenua Māori Act bestows upon the Māori Land Court jurisdiction to deal with Māori land. No land can acquire or lose the status of Māori customary land or of Māori freehold land otherwise than in accordance with Te Ture Whenua Māori Act, or as expressly provided in any other Act.20
[77] Of particular relevance to this case, Te Ture Whenua Māori Act imposes restrictions on the alienation of Māori freehold land. Alienation is defined broadly – every form of disposition of Māori freehold land is an alienation.21 There are seven statutory exceptions included in the definition of “alienation.22 One relates to dispositions effected by order of the Māori Land Court. There is no exception, however, for dispositions effected by order of the High Court.
20 Section 130.
21 Section 4 definition of “alienation”.
22 Subsection (c) of the s 4 definition of “alienation”.
[78] In broad terms, only the owners of Māori freehold land can alienate it, and must do so in accordance with Te Ture Whenua Māori Act.23 This requires that a right of first refusal be given to certain categories of people, including children or other descendants of the owner; whānaunga of the owner who are associated in accordance with tikanga Māori with the land; other beneficial owners of the land who are members of the hapū associated with the land; trustees of persons referred to in any of prior classes; and descendants of any former owner who is or was a member of the hapū associated with the land.24
[79] An instrument of transfer has no force or effect unless and until confirmed by the Māori Land Court.25 In exercising its discretion to approve a land transfer, the Māori Land Court must have regard to the Preamble and s 2 of Te Ture Whenua Māori Act which (as noted above) recognise Māori freehold land as a taonga tuku iho of special significance to Māori people.
Is the house at 224A Kairua Road part of the land?
[80] If the house is a fixture, then it forms part of the land and can only be alienated pursuant to the provisions of Te Ture Whenua Māori Act (unless the CPRA prevails over that Act, which I consider further below). If the house is a chattel, however, it does not form part of the land, and can be forfeited to the Commissioner if the various requirements of the CPRA are met.
[81] Two recent cases of the Māori Appellate Court, both relating to the same property, have considered and clarified the law relating to improvements on Māori freehold land.26
[82] In 1991, Hare Ratana and his wife, Tei Ratana, built a house on Māori freehold land in Ruatoki. After Mr Ratana’s death, an application was filed to determine
23 Section 147(1).
24 Section 147A(1). See also the s 4 definition of “preferred classes of alienees”. Under s 18(1)(f), the Māori Land Court has jurisdiction to determine whether any person is a member of any of the preferred classes of alienees.
25 Section 156.
26 The facts and procedural history of the case (as summarised below) are set out in the most recent Māori Appellate Court decision of Ratana v Tihi – Ruatoki B Section 23 [and others] [2021] Māori Appellate Court MB 290 (2021 APPEAL 290) at [1]-[6].
ownership of the house. The Māori Land Court first determined ownership of the house in 2017. It then amended that order in 2018. The amended order was appealed to the Māori Appellate Court. In 2019, the Māori Appellate Court upheld the appeal, quashed the amended order and sent the matter back to the Māori Land Court for rehearing.27 Judge Coxhead conducted the rehearing. He found that the house was a fixture.28 The executors of Mr Ratana’s estate appealed that decision. In 2021, the Māori Appellate Court confirmed Judge Coxhead’s decision and found that the house had become part of the realty of the land and was therefore a fixture.29
[83] In the first decision of the Māori Appellate Court, Tihi v Nuku, the Court noted that under s 18(1)(a) of Te Ture Whenua Māori Act it had jurisdiction:30
… to hear and determine any claim, whether at law or in equity, to the ownership or possession of Māori freehold land, or to any right, title, estate, or interest in any such land or in the proceeds of the alienation of any such right, title, estate, or interest.
[84]The Court then stated that:
[25] The law relating to the ownership of a house on Māori land can be summarised as follows:
(a)The Court cannot create new ownership rights, only declare those that already exist at law or in equity.
(b)It may be found that a building is not a part of the land and that the owners of the land are not the owners of a building; an owner in the land may separately own an improvement.
(c)The starting point for the Court is that a house is a fixture and ownership runs with the land. On application of the test, the Court may find that the house is a chattel or that it is owned separately from the land it sits on.
(footnotes omitted)
27 Tihi v Nuku – Ruatoki B Section 23 [and others] [2019] Māori Appellate Court MB 531 (2019 APPEAL 531).
28 Tihi v Nuku – Ruatoki B Section 23 [and others] [2020] 238 Waiariki MB 127 (238 WAR 127) at [16].
29 Ratana v Tihi – Ruatoki B Section 23 [and others] [2021] Māori Appellate Court MB 290 (2021 APPEAL 290).
30 Tihi v Nuku – Ruatoki B Section 23 [and others] [2019] Māori Appellate Court MB 531 (2019 APPEAL 531) at [24]. Although, I note that “court” is defined by s 4 of Te Ture Whenua Māori Act as the Māori Land Court or Māori Appellate Court.
[85] The Māori Appellate Court considered the issue further in its second decision relating to the Ratana home – Ratana v Tihi.31 The Court noted that the leading House of Lords decision on fixtures, Elitestone Ltd v Morris, had been followed by the New Zealand Court of Appeal in Auckland City Council v Ports of Auckland Ltd.32 More recently, the Court of Appeal summarised the relevant principles in Lakes Edge Development Ltd v Kawarau Village Holdings Ltd, as follows:33
[56] The principles on which the Court proceeds in determining whether a structure on or under land is a fixture are not in dispute. As this Court found in Auckland City Council v Ports of Auckland Ltd the traditional test for whether a chattel had become part of the realty of the land on which it was situated was to determine whether it was a “fixture”. The Court pointed out that in Elitestone Ltd v Morris the House of Lords had moved away from this formulation. Instead, a broader formulation was proposed, namely whether the chattel could properly be said to have become part and parcel of the land. The two main indicators were the degree of annexation of the structure to the land and the object or purpose of the annexation. Each case would depend on its particular facts. A common sense approach was required.
(footnotes omitted)
[86] Applying this test to the facts before them, the Māori Appellate Court found that the Ratana house had become part of the realty of the land and was therefore a fixture.34
[87] I have reviewed the evidence regarding the house at issue in this case, including photographs of both the exterior and interior, and evidence regarding the construction process. The house is on concrete foundations and is firmly affixed to the land. It has a deck and there is a sealed driveway leading to it. The house was obviously intended to be a permanent structure on the land. My analysis therefore proceeds on the basis that the house is a fixture, and part of the realty of the land, although I note that any final determination as to whether the house is a fixture is arguably a matter for the Māori Land Court, exercising its s 18(1)(a) jurisdiction.
31 Ratana v Tihi – Ruatoki B Section 23 [and others] [2021] Māori Appellate Court MB 290 (2021 APPEAL 290).
32 At [18] citing Auckland City Council v Ports of Auckland Ltd [2000] 3 NZLR 614 (CA); and
Elitestone Ltd v Morris [1997] 2 All ER 513 (HL).
33 At [18] citing Lakes Edge Development Ltd v Kawarau Village Holdings Ltd [2017] NZCA 205, [2017] 3 NZLR 336 at [56].
34 At [38].
Relationship between the CPRA and Te Ture Whenua Māori Act
[88]The CPRA and Te Ture Whenua Māori Act appear to be in conflict:
(a)The definition of “property” in the CPRA is extremely broad.35 The house falls within the CPRA definition of property and, further, is tainted property, because its construction was funded by the proceeds of methamphetamine dealing. Accordingly, pursuant to s 50(1) of the CPRA the High Court must make an assets forfeiture order in respect of the house.
(b)Under Te Ture Whenua Māori Act, however, a different outcome is reached. The house is a fixture and forms part of the realty. The realty is Māori freehold land. It can only be alienated in accordance with the provisions of Te Ture Whenua Māori Act. Every form of disposition of Māori land is an alienation, with seven statutory exceptions. These do not include dispositions effected by order of the High Court. Rather, the Māori Land Court has exclusive jurisdiction over the alienation of Māori freehold land. This Court accordingly does not have jurisdiction to forfeit the house to the Crown.
[89] This appears to be the first case under the CPRA that has addressed the conflict between the CPRA and Te Ture Whenua Māori Act, although the District Court has considered the issue in relation to the predecessor legislation, the Proceeds of Crime Act 1991. In that case the Court concluded that the Proceeds of Crime Act prevailed, and that Māori freehold land could be forfeited to the Crown under that legislation.36
[90] It is not uncommon for two enactments to conflict. The authors of Burrows and Carter Statute Law in New Zealand explain that:37
Given the number of Acts in force in New Zealand, the fact that they were enacted at widely different times, and the fact that they were proposed or
35 “Property” is defined by s 5 as real or personal property of any kind; whether situated in New Zealand or a foreign country; and whether tangible or intangible; and whether movable or immovable; and includes an interest in real or personal property.
36 Solicitor-General v Job DC Gisborne CIV-2008-016-487, 5 November 2008.
37 Ross Carter Burrows and Carter Statute Law in New Zealand (6th ed, LexisNexis, Wellington, 2021) at 612.
prepared by different people or political parties, it is no surprise that there are often inconsistencies between them.
[91] The starting point is the desirability of finding an interpretation that reconciles any apparent inconsistency and enables provisions to stand together.38 In Hayward v Commissioner of Police, the Court of Appeal noted the importance of reading the one statute as subject to the other.39
[92] One way to do this is to apply the principle of implied repeal pro tanto – where a later special provision is inconsistent with an earlier general provision, the effect of that special statute is to engraft an exception on to the general one.40 It may not always be appropriate for a later provision to form an exception to an earlier provision, however, especially where that later provision is more general than the earlier provision. In such circumstances another principle of interpretation may be relevant
– generalia specialibus non derogant (general provisions do not derogate from specific ones). In Stewart v Grey County Council, the Court of Appeal explained the rationale for this approach as follows:41
When the Legislature has given its attention to a separate subject, and made provision for it, the presumption is that a subsequent general enactment is not intended to interfere with the special provision unless it manifests that intention very clearly. Each enactment must be construed in that respect according to its own subject-matter and its own terms.
[93] In such circumstances, the earlier special statute continues to have exclusive application to its own subject matter and the later general enactment is held not to apply to it, despite being expressed in terms wide enough to extend to the subject matter of that earlier enactment.42 Generalia specialibus non derogant was applied by the Court of Appeal in Miller v Minister of Mines.43 The Court held that the specific provisions of the Mining Act 1926, which provided that mining licences once granted
38 Hayward v Commissioner of Police [2014] NZCA 625 at [28(a)].
39 At [28(b)].
40 Ross Carter Burrows and Carter Statute Law in New Zealand (6th ed, LexisNexis, Wellington, 2021) at 626. See also Commissioner of Police v Snowden [2020] NZHC 2036 at [47] citing Stewart v Grey County Council [1978] 2 NZLR 577 (CA); Auckland Gas Co v Auckland City Council [1990] 2 NZLR 420 (CA); and Chief Executive of Land Information New Zealand v Luke [2008] NZCA 43.
41 Stewart v Grey County Council [1978] 2 NZLR 577 (CA) at 583 citing Barker v Edger [1898] AC 748 at 754.
42 At 583.
43 Miller v Minister of Mines [1961] NZLR 820 (CA) at 832.
attached to the land and bound subsequent purchasers, prevailed over the general indefeasibility provisions of the Land Transfer Act 1952 that a purchaser is unaffected by unregistered interests in land.44
[94] The Court of Appeal in Stewart described these two principles as “two sides of the same coin”.45 The fundamental issue will often be determining which provision is special and which is general. That is especially because, as noted by the High Court of Australia in Butler v Attorney-General for Victoria, “[t]here are some situations in which each enactment may be called general or special according to the point of view from which it is regarded”.46 The answer will necessarily depend upon the particular statutes that are being interpreted.
[95] In addition to these principles of statutory interpretation, the interpretation of the relevant provisions should be consistent with the Treaty of Waitangi, to the extent possible. As Glazebrook J recently observed, writing extra-judicially:47
I think it is probably fair to say that the courts are likely, to the extent possible, to interpret legislation consistently with the Treaty of Waitangi, even where there is no Treaty of Waitangi clause.
[96] Such an approach to interpretation is particularly apt in this case, given that the subject matter concerns Māori land and the Treaty of Waitangi is expressly referred to in the Preamble to Te Ture Whenua Māori Act, as set out at [74] above.
[97] In my view the principle generalia specialibus non derogant (general provisions do not derogate from specific ones) is of particular assistance in this case. Parts 7 and 8 of Te Ture Whenua Māori Act set out very detailed processes for the alienation of Māori freehold land. As noted in Nicholas, the significant losses of Māori land pursuant to Māori Affairs Amendment Act 1967 are generally regarded as
44 At 832.
45 Stewart v Grey County Council [1978] 2 NZLR 577 (CA) at 583.
46 Butler v Attorney-General for Victoria [1961] HCA 28, (1961) 106 CLR 268 at 280.
47 Susan Glazebrook “Do they say what they mean and mean what they say? Some issues in statutory interpretation in the 21st century” (2015) 14 Otago L Rev 61 at 79. Her Honour cites the following examples of cases making use of the Treaty without direct incorporation: Huakina Development Trust v Waikato Valley Authority [1987] NZHC 130; Barton-Prescott v Director-General of Social Welfare [1997] 3 NZLR 179 (HC); and Ngai Tahu Maori Trust Board v Director-General of Conservation [1995] 3 NZLR 553 (CA). See also PG McHugh “What difference a Treaty makes
– the pathway of aboriginal rights jurisprudence in New Zealand public law” (2004) 15 PLR 87.
having triggered the major Māori land protests of the 1970s and the policy reversal that ultimately led to the enactment of Te Ture Whenua Māori Act.48 This background is reflected in both the Preamble and s 2 of Te Ture Whenua Māori Act (set out in full above).
[98] The Preamble, amongst other things, notes that the Treaty of Waitangi established a special relationship between the Māori people and the Crown. It reaffirms the protection of rangatiratanga embodied in the Treaty of Waitangi and recognises that land is a taonga tuku iho of special significance to Māori people. It states that the Act, for that reason, aims to promote the retention of Māori land in the hands of its owners, their whanau, and their hapū. The Māori Land Court is given the responsibility, in accordance with the mechanisms set out in the Act, “to assist the Māori people to achieve the implementation of these principles”.
[99] Te Ture Whenua Māori Act is therefore highly specialised legislation, with a specific statutory purpose, administered by a specialist court. Parts 7 and 8, in my view, comprise a code for the alienation of Māori land. The relevant provisions are detailed and comprehensive, comprising 19 sections divided into two parts. If Parliament had intended that Māori land could be forfeited to the Crown pursuant to a very broad and general definition of “property” in the CPRA, I would expect that to have been made express.
[100] Further, if the CPRA was to take precedence over Te Ture Whenua Māori Act, I would have expected additional machinery provisions to be included in the CPRA to ensure that the protections and safeguards in Te Ture Whenua Māori Act continued to apply if Māori freehold land was forfeited to the Crown. For example, there is no provision in the CPRA requiring the Official Assignee (on behalf of the Crown) to dispose of any Māori freehold land to the preferred classes of alienee set out in Te Ture Whenua Māori Act (primarily whanau or hapū members).
[101] Similarly, if Parliament had intended the CPRA to take precedence over Te Ture Whenua Māori Act, the definition of “alienation” in s 4 of Te Ture Whenua Māori Act would presumably have been amended to reflect this intent. The definition
48 Nicholas v Commissioner of Police [2017] NZCA 473 at [14].
of alienation has been amended three times, in 2001, 2002 and 2009. None of the amendments, however, inserted a carve out from the definition of “alienation” to allow for dispositions of Māori freehold land by the High Court under the CPRA (similar to the existing exception to the definition of “alienation” providing for dispositions by the Māori Land Court).
[102] In conclusion, applying the principle of generalia specialibus non derogant, it is my view that Parliament intended the earlier special statute (Te Ture Whenua Māori Act) to continue to have exclusive application to its own subject matter (the alienation of Māori freehold land). The definition of “property” in the CPRA is not intended to apply to that subject matter, despite being expressed in terms wide enough to do so on a literal interpretation. Māori land can only be alienated in accordance with pts 7 and 8 of Te Ture Whenua Māori Act, and the Māori Land Court has exclusive jurisdiction over such alienation. Māori land cannot be forfeited to the Crown under the CPRA. This analysis necessarily extends to fixtures on Māori land, as they form part of the realty.
[103] I further note that this interpretation accords with the Crown’s obligations under the Treaty of Waitangi significantly better than the alternative interpretation, which is that the CPRA allows for the forfeiture of Māori freehold land to the Crown.
Policy considerations
[104] Mr Jenson, for the Commissioner, raised a policy concern with the interpretation I have set out above. He submitted that such an interpretation would provide “safe harbour” to criminals who could invest their ill-gotten gains in houses or other fixtures on Māori freehold land, knowing that such assets would be protected from forfeiture under the CPRA.
[105] The CPRA has been in force since 2009. Based on the paucity of case law addressing the relationship between the CPRA and Te Ture Whenua Māori Act, I assume that either the Commissioner has previously elected not to pursue forfeiture of Māori land, or there has not been a widespread problem with criminal proceeds being used to purchase or improve Māori land. I doubt that the floodgates will now open.
[106] Further, on the other side of the policy coin, if the CPRA “trumps” Te Ture Whenua Māori Act, this could also lead to adverse outcomes, including the alienation of the limited Māori land that remains, contrary to the clear intent of Te Ture Whenua Māori Act.
[107] I acknowledge that forfeiture of the house in this case would not cause any particular injustice. That cannot drive the statutory interpretation exercise, however. It will perhaps be of some comfort to the Commissioner that Mr Kiwi will receive no benefit from the house that he has funded and built. He has now disclaimed any interest in it, and it appears likely that Graeme Kiwi’s children will succeed to the land. The house may ultimately need to be removed, in any event, as it was built without a permit.
[108] Finally, I note that in some cases, the Commissioner will be able to pursue the alternative remedy of a profit forfeiture order. This could be executed against a respondent’s assets other than Māori land.
Should an assets forfeiture order be made in respect of the cash and motor vehicles?
[109] The Commissioner also seeks the forfeiture of a 2005 Suzuki Swift (registration number GWE808), a 2007 Holden Commodore (registration number HJJ662) and two quantities of cash. This aspect of the application is unopposed.
The Suzuki Swift
[110] On 9 September 2016, the day Mr Kiwi was arrested, police searched the Suzuki Swift motor vehicle which was at the address of Mr Kiwi’s cousin and her partner. They found a bucket containing 459.5 grams of methamphetamine, stored in 17 individual bags. Mr Kiwi has been convicted of possession of that methamphetamine.
[111] On 7 September 2016, the registration of the Suzuki Swift was transferred from Best Motors Ltd into the name of Chevrolet Gardiner. Enquiries carried out with a representative of Best Motors Ltd established, however, that the car was sold on
13 June 2016 to Shamarah Te Ahuru for $6,900, paid in cash. The car was never registered in the name of Ms Te Ahuru.
[112] When spoken to by police, Ms Gardiner said that she has children with Mr Kiwi’s cousin. She registered the Suzuki Swift in her name at the request of Mr Kiwi and as a favour to him. Ms Gardiner said that as far as she knew, the Suzuki Swift belonged to Mr Kiwi.
[113] Mr Kiwi’s cousin (at whose address the vehicle was located) told police that she understood that Mr Kiwi was the owner of both the Suzuki Swift and the Holden Commodore. She did not believe that anyone else had access to the cars, as only Mr Kiwi had the keys. She and her partner had stored both cars on their property as a favour to Mr Kiwi, who visited from time to time. Mr Kiwi’s cousin said that Mr Kiwi had used the Holden Commodore for at least two years, and regularly drove it. She stated that “it is definitely his car”.
[114] Police also intercepted telephone calls between Mr Kiwi and Hollie Stokes in which Mr Kiwi referred to having purchased the vehicles and offered to give her the Suzuki Swift.
The Holden Commodore
[115] On 4 August 2014, the registration of the Holden Commodore was transferred from Market Cars Ltd into the name of Mr Kahotea. When spoken to by police, Mr Kahotea confirmed that the Holden Commodore did not belong to him and was unsure why it was registered in his name. He did acknowledge, however, that he had known Mr Kiwi for the past 10 years.
[116] Police located a “Valet Checklist” from Autoclean Tauranga dated 28 August 2015 in the car. It recorded the client as “Jay” and the vehicle as the Holden Commodore.
[117] As noted above, Mr Kiwi’s cousin stated that Mr Kiwi possessed the keys to the car, had regularly driven it for at least two years, and stored it on her property.
Cash in the sum of $5,933.00
[118] The $5,933 in cash was found on Mr Kiwi’s person and in his luggage when he was arrested on 9 September 2016. He accepted that the money was his, and said that he intended to use it to purchase a motor vehicle in Dunedin.
Cash in the sum of $7,000.00
[119] During the police search of 224A Kairua Road on 9 September 2016, they found $7,000.00 in cash, consisting of $3,000.00 in $50 denominations and $4,000.00 in $20 denominations.
[120] I have found above that Mr Kiwi was responsible for constructing the house at 224A Kairua Road, and it was his ordinary place of residence at the time of his arrest. Mr Kiwi has failed to offer a plausible explanation for the significant sum of cash found at his address. The fact that he was arrested (on the same day as the police search of the 224A Kairua Road property) in possession of a significant sum of cash further supports the inference that the cash found at his home address belonged to him. No other person has claimed an interest in the cash.
Are the vehicles and the cash the proceeds of crime?
[121] Based on the evidence I have outlined, I am satisfied on the balance of probabilities that Mr Kiwi has an interest in both vehicles and the two sums of cash that were seized by the police.
[122] For the reasons outlined above, and in the absence of any other plausible explanation, the necessary inference is that the cash is the proceeds of Mr Kiwi’s methamphetamine dealing and that the vehicles were purchased (in whole or in part) with such proceeds.
[123] It necessarily follows that the vehicles and cash are “tainted” in terms of the CPRA. Pursuant to s 50 of that Act, I am required to make an assets forfeiture order in respect of those items.
Summary and conclusion
[124]In summary, I have found that:
(a)Mr Kiwi was involved in significant criminal activity, being methamphetamine dealing.
(b)The property at 135 Kairua Road, Welcome Bay is tainted property. The only plausible explanation for Mr Kiwi’s ownership of the property is that he funded the purchase with the proceeds of methamphetamine dealing, transferring the money through Alex Aitken’s bank account to avoid detection.
(c)Mr Kiwi funded the construction of the house at 224A Kairua Road with the proceeds of methamphetamine dealing. However, this Court has no jurisdiction to make an assets forfeiture order in respect of that asset, as it is a fixture on Māori freehold land that forms part of the realty. Te Ture Whenua Māori Act is specialised legislation in relation to Māori freehold land that reaffirms the protection of rangatiratanga embodied in the Treaty of Waitangi and recognises that land is a taonga tuku iho of special significance to Māori people. As highly specialised legislation, Te Ture Whenua Māori Act takes precedence over the CPRA. Māori land can therefore only be alienated in accordance with the provisions of Te Ture Whenua Māori Act, and the Māori Land Court has exclusive jurisdiction over the alienation of Māori land.
(d)The Suzuki Swift motor vehicle is tainted property. Mr Kiwi purchased the car in cash that was the proceeds of methamphetamine dealing and kept the car registered in other persons’ names to conceal his ownership of it.
(e)The Holden Commodore motor vehicle is tainted property. Mr Kiwi purchased the car in cash that was the proceeds of methamphetamine dealing and kept the car registered in Mr Kahotea’s name to conceal his ownership of it.
(f)The cash in the sum of $5,933.00 found on Mr Kiwi’s person, and the cash in the sum of $7,000.00 found at 224A Kairua Road, Welcome Bay on 9 September 2016 are tainted property. Given his very limited income, the only plausible explanation for Mr Kiwi possessing this amount of cash, much of it in $50 notes, is that it is the proceeds of his methamphetamine dealing.
[125] I am therefore required under s 50(1) of the CPRA to make an assets forfeiture order in relation to all of the Assets, except for the house at 224A Kairua Road, in respect of which this Court has no jurisdiction to make an order.
Result
[126] I order that the following property is to vest in the Crown absolutely and is to be in the custody and control of the Official Assignee:
(a)The property at 135 Kairua Road, Welcome Bay, Tauranga, comprising 1012 square metres, legal description Mangatawa 8C2A1B2A BLK I Te Tumu S D.
(b)The 2005 Suzuki Swift motor vehicle, registration number GWE808.
(c)The 2007 Holden Commodore motor vehicle, registration number HJJ662.
(d)The cash in the sum of $5,933.00 seized from Mr Kiwi on 9 September 2016.
(e)The cash in the sum of $7,000 seized from 224A Kairua Road, Welcome Bay on 9 September 2016.
[127] My understanding is that Mr Kiwi is on legal aid, and that no costs issues arise. If that is incorrect, the Commissioner has leave to file a memorandum on costs by 4 October 2021. Any memorandum in response on behalf of Mr Kiwi is to be filed by 18 October 2021.
Katz J
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