Commissioner of Police v Milosevic
[2020] NZHC 2164
•25 August 2020
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE
CIV 2018-463-000027
[2020] NZHC 2164
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
THE COMMISSIONER OF POLICE
Applicant
AND
FRANK AMADEUS MILOSEVIC
First Respondent
AND
IRENE RAKI
Second Respondent
Hearing: 7 July 2020 Appearances:
A J Pollett and J A Sutton for the Applicant W T Nabney for the First Respondent Second Respondent in person
D M A Wiseman for the Official Assignee
Judgment:
25 August 2020
JUDGMENT OF VAN BOHEMEN J
This judgment was delivered by me on 25 August 2020 at 3.00pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors/Counsel:
Crown Solicitor, Pollett Legal Ltd, Tauranga W T Nabney, Barrister, Tauranga
Meredith Connell, Auckland
THE COMMISSIONER OF POLICE v MILOSEVIC [2020] NZHC 2164 [25 August 2020]
Introduction
[1] The Commissioner of Police applies under the Criminal Proceeds (Recovery) Act 2009 (the Act) for an order to restrain the property of Frank Milosevic and his partner, Irene Raki, and for an order for sale of certain items of that property.
[2] Mr Milosevic and Ms Raki oppose the Commissioner’s application. Three people apply for relief from restraint in respect of three motor vehicles included in the Commissioner’s application. The Commissioner opposes the applications for relief.
[3] The property subject to the proposed restraining order was subject to an earlier restraining order made on 30 July 2018. The property subject to the proposed order for sale was subject to an order for sale in accordance with a judgment of Hinton J dated 3 July 2020.1 Because of an oversight, however, the earlier restraining order expired on 30 July 2019 before the order for sale was executed. As a consequence, both the restraining order and the order for sale expired.
[4] Ms Raki and the three applicants for relief say the three motor vehicles were sold to the applicants for relief after Ms Raki learned that the restraining order had expired and before a new without notice restraining order was made.
[5] The Commissioner says all the property is still tainted property and should be restrained and that the items that had previously been ordered for sale should be sold in accordance with the Court’s earlier decisions. The Commissioner says the claimed sales of the three vehicles are not genuine and, even if the sales are held to have occurred, should be declared void in accordance with s 167 of the Act.
[6] A witness who did not give evidence before Hinton J has now given evidence that another vehicle subject to the earlier (now expired) restraining order and the order for sale was not property of Mr Milosevic or Ms Raki but belonged to the local junior rugby league club and was purchased from the proceeds of fundraising by the club. The Commissioner disputes that evidence and says the vehicle is the property of Ms Raki and should be restrained and sold.
1 Commissioner of Police v Milosevic [2019] NZHC 1554.
Relevant background
[7] In late 2017 and early 2108, the Police from the National Organised Crime Group carried out an investigation codenamed Operation Notus into suspected criminal activity by members and associates of the Kawerau chapter of the Mongrel Mob. As a result of the investigation, various arrests were made and charges laid. Among those arrested and charged were Mr Milosevic, who is patched member of the Kawerau chapter of the Mongrel Mob and is understood to hold a senior position in the gang, and his partner, Ms Raki.
[8] Mr Milosevic faces a number of charges of supplying and offering to supply a Class A controlled drug (methamphetamine), all of which carry a maximum sentence of life imprisonment, and a variety of other drug related charges. Mr Milosevic is currently in custody awaiting trial. Ms Raki faces charges of money laundering. Ms Raki has been remanded on bail pending trial.
[9] On 22 March 2018, the Commissioner applied without notice for a restraining order over specified property and all property owned by Mr Milosevic and Ms Raki. By minute dated 23 March 2018, Woodhouse J granted the restraining order as sought.
[10] On 27 March 2018, the police executed a search warrant at the address of Mr Milosevic and Ms Raki and seized various of the items subject to the restraining order. The police subsequently seized other items of property of Mr Milosevic at other premises. The seized property was placed under the custody and control of Official Assignee.
[11] On 29 March 2018, the Commissioner applied on notice for a restraining order over the same property as that which had been restrained by his without notice application and, but with the addition of two items of property located by the police after the initial order had been made. The on-notice application sought a restraining order over:
(a)A property at 31 Domett Street, Kawerau;
(b)Various motor vehicles, trailers and watercraft:
(i)A 2013 Harley Davidson VRSCDX motorcycle, registration number A1YTD (the Harley);
(ii)A 2112 Ford Falcon F150 Raptor utility, registration number XRKUTE (the Raptor);
(iii)A 2012 Toyota Hiace van, registration number GKT684 (the Hiace);
(iv)A 2005 Toyota Hilux utility, registration number HWJ15 (the Hilux);
(v)An AC Cobra kitset convertible car (the Cobra);
(vi)A Kawasaki Ultra jetski and trailer found at 31 Domett Street (the jetski);
(vii)A 2007 boat trailer, registration number L969S;
(viii)An Eliminator Hydroplane powerboat (the Hydroplane); and
(ix)A 6.5 m aluminium fishing boat, with Yamaha outboard motor and trailer, without registration plates (the fishing boat).
(c)All funds in six identified accounts with the Central Credit Kawerau;
(d)All funds in five identified accounts with the ANZ New Zealand Bank Ltd (ANZ); and
(e)All other property of Mr Milosevic and Ms Raki.
[12] On 25 May 2018, the Commissioner applied for a further order associated with the order sought in the on-notice application of 29 March 2018. The further order was for sale of the property listed at [11](b) above and to hold the funds until the resolution of this proceeding.
[13] By minute dated 30 July 2018, Lang J noted there was no opposition to his making the restraining order sought by the Commissioner in his application of 29 March 2018 and granted the order as sought.
[14] On 29 and 30 April 2019, the application for the order for sale of the specific items of property was heard by Hinton J. With the exception of the Cobra, which was excluded from the order for sale, Hinton J granted the order as sought on 3 July 2019.2
[15] On 10 September 2019, the office of the Official Assignee realised that the restraining order made by Lang J on 30 July 2018 had expired and notified the police. Later that day, the Commissioner filed the present on-notice application for a restraining order over the property previously restrained by the order made by Lang J and for an order for sale of the same property previously ordered to sold by Hinton J.
[16] On 17 September 2019, changes of ownership of the Harley, the Raptor and the Hilux were registered with the New Zealand Transport Agency. The Harley was registered in the name Gary Tumanako Te Rire, a senior member of the Kawerau Mongrel Mob, the Raptor in the name of Paula Janet Aroha Edwards, a daughter of Ms Raki, and the Hilux in the name of Te Aopururangi Gabriel Kemp, a nephew of Ms Raki.
[17] Also, on 17 September 2019, the Commissioner filed a without notice application for a restraining order over the same property subject to the order made by Lang J on 30 July 2018. That order was made by Jagose J on 18 September 2019.
Evidence in relation to the application
[18] In support of the application filed on 10 September 2019, the Commissioner relied on affidavits previously filed in the proceeding, the minute made by Lang J on 30 July 2018 and the judgment of Hinton J of 3 July 2019.
[19] On 29 October 2019, Ms Raki affirmed an affidavit in which she said she became aware on 11 September 2019 that the restraining order that had been in place
2 Ibid.
had expired and she said that she had then sold the Harley, the Raptor and the Hilux on 16 September 2019. She annexed copies of the certificates of registration dated 17 September 2017 recording that the Harley was registered in the name of Mr Te Rire, the Raptor in the name of Ms Edwards and the Hilux in the name of Mr Kemp.
[20] On 21 November 2019, Mr Milosevic affirmed an affidavit in which he said he had been advised by his lawyer in September 2019 that the restraining order made in 2018 had expired and no application for an extension had been sought before it had expired. He said he had instructed his lawyer to take steps to have the property delivered to Ms Raki. Mr Milosevic said he understood from Ms Raki’s affidavit that three of the vehicles had been sold after the expiry of the restraining order.
[21] On 22 November 2019, Mr Te Rire affirmed an affidavit in which he said he had been “notified” on 16 September 2019 to transfer ownership of the Harley and was taking ownership of the Harley on behalf of the Mongrel Mob Kawerau.
[22] Also on 22 November 2019, Mr Kemp affirmed an affidavit in which he said that on 16 September 2019 he had purchased the Hilux from Ms Raki and that Ms Raki had undertaken to deliver the vehicle to him when it was returned to her possession.
[23] On 26 November 2019, Ms Edwards affirmed an affidavit in which she said that she was approached by Ms Raki on 13 September 2019 about a proposed sale of the Raptor and that on 16 September she agreed to purchase the Raptor from Ms Raki.
[24] Also, on 26 November 2019, Ms Raki affirmed a further affidavit in which she said she needed the savings in:
(a)Three identified Credit Union bank accounts to be returned to their rightful owners who, she said were her grandson, Romeo To Ohorere Kanye Raki, her granddaughter, Sky Hinehukurere Ciara Raki, and her daughter, Te Raina Nikita Hinehukurere Milosevic; and
(b)One other identified Credit Union bank account and an identified ANZ Bank account to be returned to her.
[25] Also, on 22 November 2019, Ms Te Raina Milosevic affirmed an affidavit in which she said she wanted the savings in her Credit Union bank account.
[26] On 14 February 2020, Detective Watt swore an affidavit in response to the affidavits of Ms Raki, Mr Milosevic, Me Te Rire, Ms Edwards and Mr Kemp. In his affidavit, Detective Watt said:
(a)The Harley, the Raptor and the Hilux were in the custody and control of the Official Assignee at the time of the alleged sales;
(b)There was no evidence of any funds passing as a result of these sales;
(c)Mr Milosevic’s assertions that he owned the Harley on behalf of the collective membership of the Kawerau Mongrel Mob had been found by Hinton J to be unconvincing;
(d)The Raptor had been purchased for $90,000; and
(e)Ms Edwards and Mr Kemp had limited means.
[27] Also, on 14 February 2020, Jose Setefano, of the Ministry of Business, Innovation and Employment, swore an affidavit in which she said that she had realised on 10 September 2019 that the restraining order made by Lang J on 30 July 2018 had expired and she had immediately informed the police. Ms Setefano also stated that since the expiry of the restraining order on 30 July 2019, the Official Assignee had not received any requests for the release of the property previously subject to that order.
[28] At the hearing on 7 July 2020, Ms Raki, Mr Te Rire, Ms Edwards, and Mr Kemp gave evidence about the alleged transfers of ownership of the Harley, the Raptor and the Hilux on 16 September 2019. Krystal Tennille Karangaroa Nuku, the secretary of the Patauaki Stags Rugby League Club who had not given evidence at the hearing before Hinton J, gave evidence about the acquisition of the Hiace.
Relevant provisions of the Criminal Proceeds (Recovery) Act 2009
[29]Section 3(1) provides that:
The primary purpose of this Act is to establish a regime for the forfeiture of property—
(a) that has been derived directly or indirectly from significant criminal activity; or
(b)that represents the value of a person’s unlawfully derived income.
[30] Section 24(1) provides that the Court may make a restraining order over specific property if it is satisfied it has reasonable grounds to believe the property is tainted property.
[31] Section 25 provides that the Court may make a restraining order over a respondent’s property if it is satisfied it has reasonable grounds to believe the respondent has unlawfully benefited from significant criminal activity.
[32]Section 5(1) provides that tainted property:
(a)means any property that has, wholly or in part, been—
(i)acquired as a result of significant criminal activity; or
(ii)directly or indirectly derived from significant criminal activity; and
(b)includes any property that has been acquired as a result of, or directly or indirectly derived from, more than 1 activity if at least 1 of those activities is a significant criminal activity.
[33]Section 6(1) provides that:
… unless the context otherwise requires, significant criminal activity means an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending—
(a) that consists of, or includes, 1 or more offences punishable by a maximum term of imprisonment of 5 years or more; or
(b) from which property, proceeds, or benefits of a value of $30,000 or more have, directly or indirectly, been acquired or derived.
[34]Section 7 provides that:
… unless the context otherwise requires, a person has unlawfully benefited from significant criminal activity if the person has knowingly, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person undertook or was involved in the significant criminal activity).
[35] Section 37(1)(a) provides that a restraining order expires one year after the date on which it was made. Section 37(2) provides various exceptions to s 37(1) which do not apply in the present case. Section 37(3) provides that any further order associated with a restraining order expires when the restraining order expires.
[36] Section 112(1)(a) provides that property seized pursuant to a warrant when a restraining order is in place must, unless it is the subject of a forfeiture order, be returned after the expiry of the restraining order.
[37] Section 167(2) provides that the Court may declare an arrangement, which includes an agreement, to be void if it is satisfied the arrangement is for the purposes of directly or indirectly defeating, avoiding, preventing, or impeding the operation of the Act.
Consequences of the above provisions
[38]There is no dispute that:
(a)In accordance with s 37(1), the restraining order made by Lang J expired on 30 July 2019;
(b)In accordance with s 37(3), the order for sale made by Hinton J on 3 July 2019 also expired on 30 July 2019; and
(c)In accordance with s 112(1)(a), there was an obligation to return the property subject to the restraining order made by Lang J when that order expired.
Issues arising from the applications and the evidence
[39] Counsel for the Commissioner and for Mr Milosevic agree that if the Court finds valid grounds for a restraining order, the Court can impose a sale order on the basis of the earlier decision of Hinton J.
[40]On that basis, the following issues arise:
(a)Is Commissioner’s application for a new restraining order affected by the expiry of the order made by Lang J on 30 April 2018 and the failure to return the property subject to that order?
(b)Can the Court be satisfied it has reasonable grounds to believe that the property identified in the Commissioner’s application is tainted property or that Mr Milosevic and Ms Raki have unlawfully benefited from significant criminal activity?
(c)Were the Harley, the Raptor and the Hilux sold when there was no valid restraining order in place so they are no longer the property of Mr Milosevic and Ms Raki.
(d)If the Harley, the Raptor and the Hilux were sold, should those sales be declared void under s 167 of the Act?
(e)Who owns the Hiace?
Submissions for the Commissioner
[41] The Commissioner, through his counsel Ms Pollett and Ms Sutton, says the fact the property subject to the restraining order made by Lang J and in the custody of the Official Assignee was not returned to Mr Milosevic and Ms Raki when the restraining order expired is not relevant to the Court’s consideration of the Commissioner’s fresh application. The Commissioner says that, apart from the claimed sales of the Harley, the Raptor, the Hilux and the ownership of the Hiace, the
non-return of the property is the only ground on which Mr Milosevic and Ms Raki oppose the new restraining order the Commissioner seeks.
[42] With respect to the Harley, the Raptor and the Hilux, the Commissioner says there is no evidence of any consideration or of any written agreement for the sale and purchase of the vehicles which were not in the possession of Ms Raki or Mr Milosevic when they were allegedly sold. The Commissioner also says the registration of change of ownership is not evidence of an actual transfer of ownership, and that the evidence of Mr Te Rire, Ms Edwards and Mr Kemp was vague and unreliable, and that the Court can infer that the sales did not occur. The Commissioner also says that Detective Watt’s affidavit of 14 February 2020 establishes that Ms Edwards and Mr Kemp had limited income with which to purchase the Raptor and the Hilux. As a fallback, the Commissioner says that even if the Court were to hold the sales to be legitimate, they were made for the purpose of defeating the operation of the Act and should be declared void.
[43] With respect to the Hiace, the Commissioner acknowledges that Ms Nuku’s evidence was not before Hinton J. He says, however, that Ms Nuku’s evidence has to be considered together with that offered before Hinton J. He also submits that Ms Nuku has not provided documents to establish the Club’s ownership of the vehicle or to support her claim that the cash Ms Raki used to buy the vehicle came from fundraising activities. The Commissioner says the evidence establishes that Mr Milosevic and Ms Raki purchased the vehicle and had effective control over it and are the owners of it.
Submissions for the respondents
[44] Mr Nabney, counsel for Mr Milosevic submits that all of the property included in the restraining order made by Lang J should have been returned to the respondents when that order expired on 30 July 2019 and, until the ex parte order made by Jagose J on 18 September 2019, it was held unlawfully. Mr Nabney says that in the period between the expiry of the restraining order and the making of the ex parte order, Mr Milosevic was entitled to deal with the property.
[45] Mr Nabney says Ms Raki sold the Harley, the Raptor and the Hilux with Mr Milosevic’s consent and the evidence of Ms Raki, Mr Te Rire, Ms Edwards and Mr Kemp is that there were oral agreements for those sales. He says further that the sales should not lead to an automatic inference that they were made for the purpose of defeating the operation of the Act.
[46] Mr Nabney also says Ms Nuku’s evidence establishes that the Hiace belonged to the Patauaki Stags Rugby League Club.
Positions of other participants at hearing
[47] The Official Assignee was represented at the hearing but did not make submissions or call witnesses. Mr Wiseman, counsel for the Official Assignee, filed closing submissions in accordance with timetable directions I made at the conclusion of the hearing. In those submissions, Mr Wiseman refutes any suggestion the Official Assignee had knowingly held property that was no longer subject to a restraining order and refers to the account of events given in the affidavit of Ms Setefano.
[48] Ms Raki, Mr Te Rire, Ms Edwards and Mr Kemp also filed closing submissions. Their submissions are similar and say that Ms Raki had returned the Harley to Mr Te Rire and sold the Raptor to Ms Edwards and the Hilux to Mr Kemp when there was no valid restraining order in effect, and that each was within their legal rights to enter into these transactions. They also submit that the Commissioner and the Official Assignee should be prosecuted for theft and unlawful possession of property.
[49] Although a witness rather than a party or an applicant for relief, Ms Nuku also filed closing submissions. In particular, Ms Nuku responds to the Commissioner’s submission that she has not provided documents evidencing the Rugby League Club’s ownership of the Hiace or to support her claim that the Hiace was bought with cash generated by fundraising activities. Ms Nuku puts forward information which she says shows the Club was able to raise significant quantities of cash from fundraising activities. Ms Nuku summarises fundraising activities undertaken in the period 2016
– 2019 and the amounts raised in each year.
[50] In support of her submission, Ms Nuku provides 67 pages of screen shots of text messages referring to fundraising activities, invoices of purchases made for the Club members, advertisements and group messages advising of fundraising activities and photographs of such activities. The sources of this material are not identified. The period to which the material relates appears to be from March 2016 to June 2019.
[51] In a memorandum dated 24 August 2020 from Ms Sutton, the Commissioner says Ms Nuku’s submissions are an attempt to adduce new evidence and objects on the basis that that evidential material it is out of time, uncorroborated and was not subject to cross-examination. Ms Sutton submits that the material should be disregarded.
[52] The Commissioner’s objections are valid. However, for the reasons I note below, the material does not alter my assessment on ownership of the Hiace.
Analysis
Relevance of expiry of earlier restraining order and non-return of property
[53] Mr Nabney does not dispute the Commissioner’s right to a new restraining order if the Commissioner can satisfy the Court that an order is appropriate in terms of the Act. I agree with the Commissioner that even if he was in default in terms of his obligations under s 112 for about six weeks, that default has no bearing on the fresh application. The standard tests in ss 24 and 25 of the Act apply.
Is the property tainted property and have Mr Milosevic and Ms Raki unlawfully benefited from significant criminal activity?
[54] In his application for a restraining order dated 29 March 2018, the Commissioner said all of the property included in the application was tainted property and that Mr Milosevic and Ms Raki had unlawfully benefited from significant criminal activity.
[55] In support of that application, the Commissioner relied on an affidavit sworn by Detective Watt on 22 March 2018 in which the Detective summarised Operation
Notus and the offences with which Mr Milosevic and Ms Raki were charged. The affidavit also stated, by reference to exhibits, that:
(a)Mr Milosevic was the owner of 31 Domett Street, Kawerau;
(b)The Harley, the Raptor, the Hilux, the Hiace, and the 2007 boat trailer were registered in the names of either Mr Milosevic or Ms Raki or both;
(c)Mr Milosevic owned the Cobra and the Hydroplane.
[56] Detective Watt’s affidavit also provided estimates of the values of the above property and analysed deposits and withdrawals of bank accounts operated by Mr Milosevic and Ms Raki and stated that:
(a)Over an 18-month period (November 2015-May 2017) prior to the commencement of Operation Notus, Ms Raki had deposited not less than $140,000 into her bank accounts without declaring that income to the Inland revenue Department;
(b)Mr Milosevic and Ms Raki had a pool of vehicles with a combined value of approximately $245,000, and, in a period of 12 months, had purchased three of those vehicles, with a combined value of approximately $135,000, while in receipt of a combined yearly income of approximately $25,000.
(c)Detective Watt believed that Mr Milosevic and Ms Raki were living beyond their means from funds generated from Mr Milosevic’s involvement in criminal activity and had purchased assets and laundered drug dealing money through Ms Raki’s bank accounts and, as such, the assets and the money in the bank accounts were tainted property.
[57] In a further affidavit sworn on 29 March 2018, Detective Watt said the Raptor, the Cobra and the jet ski were located at 31 Domett Street, and that the Hilux was
parked outside the address when the house was searched on 27 March 2018 and Mr Milosevic and Ms Raki were arrested.
[58] In an affidavit sworn in July 2018, Mr Milosevic acknowledged that he owned the Cobra, the Raptor, the Hilux, and the fishing boat, but said that he owed the Harley as trustee for the Kawerau Mongrel Mob, that his daughter Te Raina owned the jet ski, and that the Hiace was the property of the Patauaki Stags Rugby League Club. In an affidavit sworn on 9 July 2018, Ms Raki also said the Hiace was the property of the Rugby League Club. Ms Raki also said she owned the Hilux and asked that it be returned to her for reasons of hardship.
[59] In an affidavit sworn on 3 August 3018, Ms Te Raina Raki said Mr Milosevic and Ms Raki purchased the jetski for herself and her sister, Ms Edwards, to use. As Hinton J said in her judgment, that evidence does not support Mr Milosevic’s assertion that his daughter owns the jetski.3
[60] With the exception of the Hiace, the Harley and the jetski, Mr Milosevic and Ms Raki do not deny owning the property listed in the Commissioner’s application of 29 March 2018 or that the property was tainted property. Moreover, as noted in LangJ’s minute of 30 July 2018, Mr Milosevic and Ms Raki did not oppose the restraining order that Lang J made that day.
[61] With the exception of the Harley, the Raptor and the Hilux, and the bank accounts identified in Ms Raki’s affidavit of 26 November 2019, Mr Milosevic and Ms Raki do not deny owning the property listed in the Commissioner’s application of 10 September 2019 or that the property was tainted property.
[62] Accordingly, and leaving aside the claimed sales of the Harley, the Raptor and the Hilux and the ownership of the Hiace, I am satisfied there are reasonable grounds to believe that the specific property listed the Commissioner’s application, including the jetski and the bank accounts, are tainted property. I am also satisfied that there are reasonable grounds to believe that Mr Milosevic and Ms Raki have unlawfully benefited from significant criminal activity.
3 At [50].
[63] I am satisfied, therefore, that a restraining order should be made as sought in the Commissioner’s application dated 10 September 2019, subject to resolution of the ownership of the Harley, the Raptor, the Hilux and the Hiace.
Were the Harley, the Raptor and the Hilux sold when there was no valid restraining order in place?
[64] In their affidavits, Ms Raki, Mr Te Rire, Ms Edwards and Mr Kemp say the transactions for the transfer of ownership of the Harley, the Raptor and the Hilux took place on 16 September 2019. It is apparent from the exhibit to Ms Raki’s affidavit of 29 October 2019 that changes of ownership were registered on 17 September 2019.
[65] I accept that transactions of some kind took place between Ms Raki on the one side and Mr Te Rire, Ms Edwards and Mr Kemp on the other side when there was no valid restraining order in place. Whether those transactions were genuine transfers of ownership is another question.
[66] In her oral evidence, Ms Raki admitted that she entered into the transactions after she had been served with the Commissioner’s on-notice application of 10 September 2019 for a new restraining order. Ms Raki said she understood from the application that the earlier restraining order had expired but that she did not read any further to understand that the Commissioner was seeking a new application.
[67] I do not accept Ms Raki’s account of her reading and understanding of the Commissioner’s application. I do not accept that Ms Raki did not know the purpose of the Commissioner’s application. Ms Raki would have been well aware of the import of the application from the applications for restraining orders made in March 2018. The affidavit she swore in July 2018 shows she understood the consequences of restraining orders. I am satisfied that the main purpose of the transactions Ms Raki made with Mr Te Rire, Ms Edwards and Mr Kemp was to try to remove the Harley, the Raptor and the Hilux from the ambit of new restraining order that she knew was imminent, and that the alleged transfers of ownership were not genuine.
[68] My reasons are as follows. First, it is clear that Ms Raki was not looking to raise any money from the proposed sales. No price was asked of Mr Te Rire. No
specific price was asked of either Ms Edwards or Mr Kemp. All Ms Edwards and Mr Kemp were asked was to pay what they could afford, when they could afford it. At the hearing on 7 July 2020, almost nine months after the claimed sales occurred, Ms Raki and Ms Edwards both said Ms Edwards had paid Ms Raki $700 in instalments of $50 and $100. That is 2 per cent of $32,000, which Hinton J accepted was the value of the Raptor, notwithstanding the evidence filed on behalf of the Commissioner that Mr Milosevic paid $90,000 for the vehicle in February 2016.4 At that rate, and on the basis of the valuation accepted by Hinton J, it would take Ms Edwards over 30 years to pay off the vehicle. Even allowing that Ms Edwards is Ms Raki’s daughter, such an arrangement has an air of extreme commercial unreality and is not consistent with a genuine intention to sell and transfer title to the vehicle.
[69] The figures are less extreme in the case of the Hilux. Mr Kemp says he had paid Ms Raki about $1,000 as at the date of the hearing. That is 13 per cent of $9,000 which Hinton J accepted was the value of the Hilux.5 At that rate, it would take Mr Kemp seven years to pay off a vehicle with a low value. Even that arrangement has an air of commercial unreality. In addition, Mr Kemp’s evidence itself casts doubt on Ms Raki’s assertion that she had irrevocably sold, that is passed ownership of, the Hilux. Mr Kemp said Ms Raki told him he would not get the vehicle until the court process had concluded. He also said he had an understanding with Ms Raki that she would refund him any money he paid to her if she did not get the Hilux. If there was a genuine sale, therefore, it was conditional on Ms Raki obtaining possession of the vehicle, which she has not. Accordingly, because the condition has not been satisfied, ownership has not passed. More fundamentally, however, it is apparent that the arrangement was structured around Ms Raki’s attempt to pre-empt the Commissioner’s new application and was not a genuine sale.
[70] I am satisfied, therefore, that neither of the claimed sales were genuine and did not transfer ownership of the Raptor or the Hilux from Mr Milosevic and Ms Raki, notwithstanding the changes of ownership that were registered at the NZ Post Shop at Kawerau.
4 At [35]-[38].
5 At [44].
[71] The transaction regarding the Harley is somewhat different. While Ms Raki said in her affidavit of 29 October 2019 that she sold the Harley, at the hearing she said she had returned the Harley to its rightful owner. Mr Te Rire’s evidence is to similar effect. In his affidavit of 22 November 2019, he refers to a transfer of ownership rather than a sale. In his oral evidence, he said he had put the Harley in his name in order to recover the asset for the Kawerau Mongrel Mob. This is consistent with the position taken by Mr Milosevic in his affidavit of July 2018.
[72] In her decision of 3 July 2019, Hinton J found the evidence of claimed Mongrel Mob ownership of the Harley unconvincing and ordered its sale.6 Whether or not Mr Te Rire knew of Hinton J’s decision, I am satisfied Ms Raki knew of it. I am also satisfied that in enlisting Mr Te Rire to change the ownership of the Harley, Ms Raki was seeking to circumvent the import of Hinton J’s decision and to remove the Harley from the ambit of the Commissioner’s application. For these reasons, I am also satisfied that the transaction was not a genuine transfer of ownership.
[73] Accordingly, I am satisfied that ownership of the Harley, the Raptor and the Hilux did not transfer from Mr Milosevic and Ms Raki under the arrangements made on 16 and 17 September 2019. It follows that ownership of those vehicles remained with Mr Milosevic and Ms Raki on 19 September 2019 when Jagose J made his ex parte order and were included in the scope of that order. It also follows, consistently with my finding at [63], that the Harley, the Raptor and the Hilux should be included in any restraining order made in response to the Commissioner’s application dated 10 September 2019.
Possible application of s 167
[74] Because I have concluded that there was no genuine transfer of ownership of the Harley, the Raptor and the Hilux, there is no need to consider the application of s 167. As is apparent from the discussion above, however, if I held that there had been genuine arrangements transferring ownership of those vehicles, I would have declared those arrangements void because I am satisfied they would have been made for the purpose of avoiding the operation of the Act.
6 At [35]-[38].
What is the position with respect to the Hiace?
[75]It is common ground that Ms Raki purchased the Hiace on 6 April 2016 for
$43,000, which she paid in cash. That is clear from the affidavit sworn on 20 July 2018 by Peter Clark, the owner of Clarks Cars in Rotorua, which annexed a copy of the agreement for sale. In his affidavit, Mr Clarks says Ms Raki told him she was buying the van for a sports club and that she had drawn the money out of the bank for the purchase. Mr Clark also says that while he was not 100 per cent sure of the denominations used, the money was “mainly in fifties and hundreds”.
[76] In an affidavit sworn on 18 July 2018, and in her oral evidence before me on 7 July 2020, Ms Nuku said the Patauaki Stags Rugby League Club owned the Hiace which had been purchased from fund-raising over a four-year period involving hāngī sales, fun runs, raffles, club barbeques, and barbeques at Kawerau Summer Nights Markets. In his oral evidence before Hinton J, Detective Watt said that if someone had raised that amount in the small denominations likely to have been generated from those kinds of cash sales, they would have had to have taken it to a bank to change it over into larger notes. That would have triggered the requirements of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 and the money would have had to go through a bank account. No records have been produced to show that had been done.
[77] Ms Nuku says the Club raised the money over a considerable period and that she handed over the money to Slobodan Milosevic, who is Mr Frank Milosevic’s son and club captain of the Patauaki Stags Rugby League Club. It is conceivable that the money was changed into larger denominations in amounts small enough not to trigger the Anti-Money Laundering Act’s requirements. Ms Nuku also said that tickets for at least some of the raffles were $100 a time and were purchased with $100 notes. Ms Nuku also explained that the Hiace had enabled the club to take teams to play in other centres such as Tauranga and Whakatāne.
[78] At the hearing on 7 July 2020, Ms Nuku was unable to produce any documents to show that the Club was the owner of the van and or to show that the money used to purchase it had come from fund-raising activities. Ms Nuku gave various reasons in
explanation. One reason was that she put Club funds through her personal account even though the Club had its own account because that’s how things happened. Another reason was that the Club minutes she kept over the relevant period were typed at a computer at her previous workplace and she assumed they would have been deleted by now. Ms Nuku also said there was a piece of paper that showed the Club owned the Hiace but that was with Mr Slobodan Milosevic because he was Club captain. None of that evidence was convincing, given that Ms Nuku did not give evidence of her personal bank accounts or of any effort to obtain information from her previous employer or Mr Slobodan Milosevic.
[79] Ms Pollett put to Ms Nuku the evidence of Stephen Goddard, the President of the Kawerau Sports Club which is the parent body of the Rugby League Club, which was that the claim to have raised $43,000 in fundraising from the kinds of activities Ms Nuku had described was unrealistic in Kawerau. In response, Ms Nuku said it could be done and it had been done because of the hard mahi of the people and the community and the contributions they had provided by kai koha.
[80] While I have no reason to doubt Ms Nuku’s assurances of the mahi and generosity of the Kawerau community and while I accept that Hiace was a considerable asset to the Rugby League Club, the reality is that the Hiace was bought by Ms Raki using large denominations of cash and there are no bank accounts or other records to show how that money was raised or kept. I accept that record keeping was not a strength of Ms Nuku or the Club Committee and that a great deal of what took place was based on trust and whānau links. I also accept that the club secretary and club captain may, from time to time, have kept significant quantities of cash at home after fundraising events. But it strains credulity to accept that a sum of $43,000 would have been accumulated over a four-year period and that none of that cash was put through a bank account or subject to some other form of record keeping in that time.
[81] The evidential material in Ms Nuku’s closing submission, regardless of the objections appropriately raised by the Commissioner, does not assist Ms Nuku’s case. First, if Ms Nuku is able to provide that kind of evidence of fundraising activities in the four years after the purchase of the Hiace, the question must be asked why there is no comparable evidence of the fundraising that took place in the four years before the
purchase of the Hiace. Secondly, if that level of fundraising was required to meet the expenses of the club in the years 2016-2019, it must be assumed a similar level of funding-raising would have been required to meet club expenses in 2012-2015 when Ms Nuku says fundraising was carried out to buy the Hiace. Even if a lesser level of day to day expenditure was incurred in that earlier period, it is not credible that the Club could have raised over $40,000 on top of what was required to meet the regular club expenses.
[82] For these reasons, I find that Ms Nuku’s evidence regarding the origins of the funds for the Hiace is not credible, even though I accept that the Hiace is now used by and treated as the property of the Patauaki Stags Rugby League Club, whose name is emblazoned on it. The evidence of the Commissioner provides a more plausible account of what happened with respect to the purchase of the Hiace. I am satisfied, therefore, that there are reasonable grounds to believe that the Hiace was obtained with money derived as a result of significant criminal activity and, as a result, is tainted property. As a result and consistently with my finding at [63], the Hiace should also be included in the restraining order as sought in the Commissioner’s application dated 10 September 2019.
Sale order
[83] Because I have found that a restraining order should be made with respect to all of the specified items in the Commissioner’s application of 10 September 2019 as set out at [11](b) above, it follows that, in accordance with Hinton J’s decision of 3 July 2019, those items should be made the subject of a sale order as sought in the Commissioner’s application.
Result and orders
[84] I make the restraining order and the order for sale as sought in the Commissioner’s application dated 10 September 2019.
Postscript
[85] I have made the orders as requested by the Commissioner. I note, however, that the Commissioner retains a discretion as to whether to implement the orders to their full extent. While I have concluded the Hiace was obtained with funds derived from criminal activity, the evidence also establishes that the Hiace has served a valuable social purpose in transporting the young children of Kawerau to games and other activities in the region, and it appears to have been used largely if not exclusively for the purposes of the Patauaki Stags Rugby League Club. Its removal from the community will have a significant impact on the lives of young people whose families may have limited resources. Having regard to principles (a) to (c) of section 8 of the Policing Act 2008,7 the Commissioner may wish to consider whether there may be greater community benefit in leaving the Hiace with the Rugby League Club, rather than selling it and banking the proceeds until such time as the Commissioner’s forfeiture application is determined.
G J van Bohemen
7 Section 8 of the Policing Act 2008 provides:
This Act is based on the following principles:
(a)principled, effective, and efficient policing services are a cornerstone of a free and democratic society under the rule of law:
(b)effective policing relies on a wide measure of public support and confidence:
(c)policing services are provided under a national framework but also have a local community focus: