Commissioner of Police v Marwood

[2019] NZHC 1529

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2012-463-79

[2019] NZHC 1529

IN THE MATTER

of an application pursuant to sections 43, 44, 52 and 58 of the Criminal Proceeds (Recovery) Act 2009

BETWEEN

THE COMMISSIONER OF POLICE

Applicant

AND

KARL LESLIE RAYMOND MARWOOD

First Respondent

ERANA KING
Second Respondent

.../cont

Teleconference:

17 May 2019

Appearances:

C H Macklin for the Applicant

M W Ryan for the First and Third respondents A G Speed for the Second Respondent

Judgment:

2 July 2019

JUDGMENT OF PALMER J

This judgment is delivered by me on 2 July 2019 at 11:30 am pursuant to r 11.5 of the High Court Rules.

.....................................................

Registrar / Deputy Registrar

Counsel/Solicitors:

A G Speed, Barrister, Auckland M W Ryan, Barrister, Auckland Crown Solicitor, Rotorua

Jennifer G Connell & Associates, Auckland

THE COMMISSIONER OF POLICE v MARWOOD [2019] NZHC 1529 [2 July 2019]

KARL LESLIE RAYMOND MARWOOD AS TRUSTEE OF THE PERRIN TRUST

Third Respondent

ANZ BANK
Fourth Respondent

What happened?

[1]    These proceedings are long-running. They involve an application for the recovery of funds under the Criminal Proceeds (Recovery) Act 2009. They have suffered delay due to a variety of interlocutory applications, which have been up to the Supreme Court and back.1 They have set precedents which benefit the development of the law but the respondents, not so much.

[2]    A nine-day trial was set down to commence before me in the Hamilton High Court on Monday 6 May 2019. Sensibly, on that date, the parties advised me they had agreed in principle to a full and final settlement. In a joint memorandum, counsel advised:

[10]      The parties have agreed a full and final settlement of any and all claims related to the proceedings CIV-2012-463-79 on the basis that $241,027 will be forfeited to the Commissioner of Police pursuant to s 55 of the [Act]. This figure is subject only to final calculations – i.e. down to dollars and cents confirmed by the Official Assignee at the date of release from restraint, particularly for 11(b) below.

[11]The final sum will be calculated as follows:

(a)$208,000 cash, raised between the first and second respondents, by a combination of increasing the mortgage and/or cash contributions; and

(b)The proceeds from the sale of the restrained vehicles, currently approximately $33,027.

[3]As I recorded in a minute of the same date:

All claims related to the proceeding will be settled on the basis $241,027 is forfeited to the Commissioner of Police under the Criminal Proceeds (Recovery) Act 2009. This comprises $208,000 in cash from cash contributions and an increased mortgage, and approximately $33,027 in proceeds from sale of restrained vehicles. The precise amount is subject to final calculations to be confirmed with the Official Assignee. Liaison also needs to occur with the ANZ bank as mortgagee. The parties agree costs will lie where they fall.

[4]    In the Minute, I indicated I was satisfied such a settlement was consistent with the purposes of the Act and with the overall interests of justice. Accordingly, I

1      Marwood v Commissioner of Police [2016] NZSC 139, [2017] 1 NZLR 260.

approved it in principle and indicated that, if confirmed in materially the same form, I would approve it under s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).

[5]As it has turned out:

(a)Mr Marwood has not been successful in re-mortgaging a property with ANZ. He has engaged a mortgage broker and is confident of arranging an increased mortgage to enable the sum of $208,000 to be paid.

(b)The parties have not been able to agree orders to implement the settlement. They jointly sought my guidance on issues of law. They offered two alternative sets of orders but the differences between them narrowed at the teleconference.

Law of approving proceeds of crime settlements

[6]    Section 55 of the Act provides the High Court must make a profit forfeiture order if it is satisfied, on the balance of probabilities, the respondent has unlawfully benefited from significant criminal activity within the relevant period and has interests in property. The order is required to specify certain matters, including the maximum recoverable amount determined by the Court in accordance with s 54.

[7]    Section 83 of the Act provides that, if the Court makes a profit forfeiture order, the Official Assignee must, as soon as practicable, dispose of the property and apply the money for five purposes in order of priority. The fourth purpose involves paying the Crown the maximum recoverable amount specified under s 55, if realising the property resulted in that or more than that amount. If realisation resulted in less than that amount, the Crown must be paid the amount realised.

[8]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.

Orders

[9]    Mr Macklin, for the Commissioner, initially submitted that a settlement under s 95 does not result in a forfeiture order made under ss 55 and 83. That would mean the property would be sold, the costs of sale accounted for and $208,000 would be forfeited to the Crown. There is logic to the general position that a settlement under s 95 does not necessarily result in a forfeiture order made under ss 55 and 83, given the nature of a settlement.

[10]   In the course of the teleconference, however, Mr Macklin responsibly conceded that paragraph [10] of the joint memorandum, recording what was settled, explicitly invokes s 55 of the Act. That requires a maximum recoverable amount be set. Mr Macklin conceded the $208,000 agreed settlement sum would be subject to the costs of sale. He submitted the maximum recoverable amount should be identified as the $208,000 plus the net proceeds of the sale of the vehicles and accrued interest on that amount until the date of the orders, as set out in the draft orders proposed by the respondents.2 Mr Speed, in turn, accepted that. I order accordingly.

[11]Counsel also all agreed:

(a)The date of payment of the settlement sum should be six weeks from the date of the orders, with consent to any further extension not to be unreasonably withheld by the Commissioner.

(b)Some minor typographical changes to the proposed orders.3

2      As set out in [3](a)–(c) of Draft B of the draft Order Approving Settlement of the Profit Forfeiture Order.

3      Paragraph [6](d) should refer to [4](b) not [3](b). Paragraph [7] should refer to paragraphs 3 and 4(a)–(b), not 4 and 5(a)–(d).

(c)There was no issue as to costs.

[12]I order accordingly.

Palmer J