Commissioner of Police v McMillan

[2025] NZHC 1244

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-232

[2025] NZHC 1244

UNDER

the Criminal Proceeds (Recovery) Act 2009

IN THE MATTER

of an application under ss 17A, 43, 44, 49,

50, 52 and 55

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

KENNY LESLIE McMILLAN

Respondent

DEAN ANTHONY MORIARTY
First Interested Party

ATC GROUP LIMITED

Second Interested party

MANTIS ASSOCIATES LIMITED
Third Interested Party

JITESH MISTRY

Fourth Interested Party

Hearing:

On the papers

Counsel:

E M Ferrier and J A Corbett for Applicant K E Hogan for Respondent

K Jefferies for Fourth Interested Party

Judgment:

20 May 2025

COSTS JUDGMENT OF BOLDT J

COMMISSIONER OF POLICE v McMILLAN (COSTS) [2025] NZHC 1244 [20 May 2025]

Introduction

[1]    On 12 February 2025, I made substantial asset and profit forfeiture orders against the respondent, Kenny McMillan.1 Mr McMillan is serving a term of 18 years’ imprisonment on charges of supplying methamphetamine and possession of methamphetamine for supply.

[2]    I made no order for costs against Mr McMillan. I did, however, indicate I considered it would be appropriate to award costs against the fourth interested party, Jitesh Mistry.2 Mr Mistry applied for an order that $50,000 of the funds seized from Mr McMillan should be excluded from forfeiture. Mr Mistry said that money belonged to him.

[3]    Mr Mistry is a self-employed travel broker. He gave evidence that in early 2019 Mr McMillan had told him he was planning to import damaged cars from Australia to repair and sell. He said the scheme appeared a good investment opportunity, so he decided to lend Mr McMillan $50,000 at one per cent per annum, with both principal and interest repayable on demand. There is no doubt he transferred

$50,000 to Mr McMillan on 14 March 2019. He also produced a document, apparently dated three days earlier, which purported to record the loan.

[4]    Mr McMillan was arrested less than two months after the funds were transferred. Mr Mistry did not seek repayment until March 2024.

[5]    I declined Mr Mistry’s application for third party relief. I indicated I considered his account entirely implausible. He was cross-examined before me. My findings included the following passage:

[73]   I reject Mr Mistry’s explanation for the $50,000 transfer and I decline to accept any part of his evidence apart from the fact the funds were transferred. Whatever the real purpose of the transfer, I am satisfied it had nothing to do with the importation of damaged cars. It is also clear the true explanation is not one either Mr Mistry or Mr McMillan wishes to disclose. Mr Mistry’s evasiveness when accused of financing Mr McMillan’s dealing operation was telling. I do not accept the “loan agreement” was a genuine document, or that it accurately described the nature of the transaction.

1      Commissioner of Police v McMillan [2025] NZHC 147.

2 At [94].

[6]    Having indicated Mr Mistry should make a contribution to the costs the Commissioner incurred in opposing his application for third party relief, I invited the parties to agree if they  could.  I  indicated  my  preliminary  assessment  was  that Mr Mistry should pay the Commissioner’s costs on at least a 2B basis.

[7]    Mr Mistry and the Commissioner were not able to agree on an appropriate award of costs. The Commissioner suggests Mr Mistry should pay $2,947.63. It seeks a contribution for the final five steps in the process — preparation of a case management memorandum, attendance at a case management conference, compiling Detective Buckley’s affidavit and the relevant attachments, preparation for hearing and appearance at the hearing. The Commissioner’s proposal discounts the normal contribution of a party who is liable for 2B costs by two-thirds, bearing in mind that most of counsel’s efforts concerned the application against Mr McMillan.

[8]    Mr Jefferies, on behalf of Mr Mistry, submitted Mr Mistry’s involvement in the hearing was “miniscule in comparison to that of [Mr McMillan]”. He noted that Mr Mistry spent no more than 45 minutes in the witness box and that his submissions at the end of the hearing were “extremely brief” in comparison to Mr McMillan’s. He submitted a cost award of “no more than $350” would be fair and reasonable.

[9]    It is not correct to describe Mr Mistry’s role in the hearing as “miniscule”. He was cross examined at  some length as Ms Ferrier explored his  account.    Once    Mr Mistry had made his claim and filed evidence in support, the Commissioner was obliged to spend time investigating his account, preparing an affidavit in response, preparing submissions in response and preparing to cross examine him.  It is true   Mr Mistry’s submissions at the end of the hearing were brief, but that is principally because all parties agreed the success of his application would turn on my findings about his credibility. Mr Mistry was an equal participant in the final case management conference.

[10]   Moreover, Mr Mistry is poorly placed to seek any indulgence from the Court. My findings carried an inevitable implication that his application was not brought honestly or in good faith. In those circumstances, an award of solicitor and client costs would not have been out of the question.

[11]   That said, it is fair to observe that Mr Mistry’s application did not occupy a full third of the hearing, nor (anything like) a third of the Commissioner’s written submissions. Mr Jefferies is right to note that the principal focus of the hearing was Mr McMillan’s submission that I should make a profit forfeiture order which was significantly smaller than the sum the Commissioner was seeking.

[12]   In those circumstances, an allocation of one-third of the costs that would normally be recoverable risks infringing r 14.2(1)(f) of the High Court Rules 2016, which confirms that an award should not exceed the actual costs incurred the party to whom the award is made. While apportioning an award between a major and a minor participant in a hearing of this kind is not a scientific exercise, I consider an award of 20 per cent of the relevant costs would be a fairer reflection of the time and effort required to respond to Mr Mistry’s application.

[13]   On that basis, I award costs against Mr Mistry, and in favour of the Commissioner, in the sum of $1,768.60.

Boldt J

Solicitors:

Luke Cunningham Clere, Wellington for Applicant