Commissioner of Police v Needham
[2022] NZHC 470
•15 March 2022
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE
CIV-2021-441-40
[2022] NZHC 470
UNDER the Criminal Proceeds (Recovery) Act 2009 IN THE MATTER
of an application under ss 21 and 24 of the Criminal Proceeds (Recovery) Act 2009
BETWEEN
THE COMMISSIONER OF POLICE
Applicant
AND
LUKE NEEDHAM
First Respondent
MICHELLE ANN ROBINSON
Second Respondent
AND
TERRY ANTHONY WESTON
Interested Party
Hearing: 15 March 2022 Appearances:
M Mitchell for the Applicant
K I Jefferies for the Interested Party
Judgment:
15 March 2022
JUDGMENT OF COOKE J
[1] The Commissioner of Police applies for two on-notice restraining orders under the Criminal Proceeds (Recovery) Act 2009 (the Act), namely:
(a)by an amended application dated 24 June 2021 in relation to cash totalling $164,080; and
(b)by an application dated 4 November 2021 in relation to cash totalling
$24,550.
THE COMMISSIONER OF POLICE v NEEDHAM [2022] NZHC 470 [15 March 2022]
[2] These orders are not opposed by the first and second respondents who are the respondents to the first of these applications, but are opposed by Mr Weston as an interested party to the first application and the respondent to the second application.
[3] The applications are supported by an affidavit of Constable Hyun Lee sworn 3 June 2021 formerly of the New Zealand Police, and now of the Northern Territory Police. Notices of opposition has been filed by Mr Weston to the first application dated 24 June 2021, and to the second application dated 10 November 2021. He has also provided affidavit evidence to support his opposition, including in his affidavit dated 27 September 2021. A further affidavit has been filed by Constable Lee responding to this affidavit evidence sworn 19 October 2021. Supplementary affidavits have also ben filed by Mr Weston sworn 15 January 2022, and Detective Constable Duncan Moonlight sworn 4 February 2022.
[4] Somewhat unusually the Commissioner’s two witnesses were cross-examined on their affidavits. Given the approach to restraining orders described below I doubt that this should be regarded as the normal approach. Cross-examination in Part 19 proceedings is subject to judicial control.1 I did no find the cross-examination to be of assistance. Ms Mitchell did not pursue her intended cross-examination of Mr Weston when I indicated this.
Relevant background
[5] In March 2021 police executed a search warrant at Ms Robinson’s home address. She was at that stage in a relationship with Mr Needham. She had previously been in a long term relationship with Mr Weston and they have two children together. When police executed the search warrant Ms Robinson was not there but Mr Needham was standing next to his vehicle parked in the driveway, and Mr Weston (who explained he was living in the garage at the property) was also present.
[6]A search of Mr Needham’s vehicle located the following items:
(a)electronic scales;
1 Commissioner of Police v Bracken [2021] NZHC 2597 at [8].
(b)a cannabis grinder;
(c)a large number of unused snap lock bags;
(d)two zip-lock bags, each containing approximately one gram of methamphetamine;
(e)two glass pipes;
(f)$9,110.00 cash located in his backpack;
(g)a small plastic case containing a Micro SD Adapter and 3 Micro SD cards;
(h)a number of rubber bands;
(i)a half sandwich-sized plastic snap-lock bag, containing one gram of dried and manicured cannabis head; and
(j)a white Apple i-phone.
[7]The cash in the backpack was in organised bundles secured with rubber bands.
[8] Police then searched the house. In Mrs Robinson’s bedroom drawers a shoe box was found. The shoe box contained $164,080. The cash was divided into five individual vacuum sealed bags, each containing bundles of $30,000, with two other plastic sandwich sized snap lock bags containing the balance. Each of the bundles was secured with a rubber band. In another bedroom belonging to Ms Robinson’s daughter police located a zip lock bag containing a large amount of small plastic snap lock bags each depicting a cannabis leaf insignia on one side.
[9] A search warrant was executed the following day on Mr Needham’s home. During this search police located:
(a)eight plastic zip-lock deal bags;
(b)a large plastic zip-lock bag containing dried and manicured cannabis head of above average quality, weighing 15.4 grams;
(c)a large plastic zip-lock bag containing a small plastic zip-lock bag of white crystalline substance believed to be MSN, a methamphetamine cutting agent (but not yet tested);
(d)several unused, soluble gelatine capsules;
(e)several hard drives;
(f)financial documents; and
(g)two glass methamphetamine pipes soaking in cleaning solution, inside a blue ice cream container.
[10] CCTV cameras were operating around the perimeter of Mr Needham’s home. Police were able to view recorded CCTV videos. They showed Mr Needham supplying Ms Robinson a glass pipe of methamphetamine to consume, him weighing cannabis in scales, and selling what appeared to be bags of cannabis to a male associate. Text messages were also retrieved suggesting cannabis selling.
[11] The second application relates to cash totalling $24,550 located in a vehicle driven by Mr Weston on 25 September 2021. On that day Mr Weston was seen driving at speeds of excess of 145 kilometres per hour in an area of Hawkes Bay. He was pursued by a police car with the lights activated, and eventually stopped when his vehicle was successfully “spiked” by police with a device put on the road. At the time of his arrest he had a methamphetamine pipe up his sleeve containing what police say was fresh unused methamphetamine. Police further located scales and a cell phone as well as the $24,550 in his vehicle.
[12] In his affidavit Mr Weston says that the money in the shoe box belongs to him and represents what he has managed to accumulate from legitimate activity over 53 years. It was in the possession of Ms Robinson as he retains a good relationship with her and he trusts her. The activities that he explains gave rise to the accumulation of
these funds involved working in the forestry industry, ACC pay-outs, money lending, successful gambling, the sale of a customised Harley Davidson motorcycle at a profit, employment as a gib stopper, and car dealing. In relation to the second incident in September Mr Weston says that he was in the process of moving home, that the cash in his car was associated with his loan business, that there was no methamphetamine in the methamphetamine pipe, and that he is not involved in drug dealing.
The requirements
[13]Section 24 of the Act provides:
24 Making restraining order relating to specific property
(1)A court hearing an application for a restraining order relating to specific property may, if the court is satisfied it has reasonable grounds to believe that any property is tainted property, make an order that the property (restrained property)—
(a)is not to be disposed of, or dealt with, other than is provided for in the restraining order; and
(b)is to be under the Official Assignee’s custody and control.
(2)A restraining order may be made under subsection (1) whether or not there is a respondent in relation to whom the restraining order relates.
[14] Tainted property is defined in s 5 to broadly mean property that has been derived from “significant criminal activity”, and “significant criminal activity” is defined in s 6 and broadly involves offending punishable by a maximum term of imprisonment of five years or more, or from which property or proceeds worth more than $30,000 is directly or indirectly acquired.
[15] The approach of the applications for restraining orders was outlined by the Court of Appeal in Vincent v Commissioner of Police in the following terms:2
…
Restraining orders are effectively interim orders of limited duration and may be made without notice.3 The explanatory note to the Criminal Proceeds (Recovery) Bill identified the purpose of restraining orders as being “to preserve property while the Crown is gathering evidence to support an
2 Vincent v Commissioner of Police [2013] NZCA 412 at [45](a) and (b).
3 Sections 37–42 of the Criminal Proceeds (Recovery) Act deal with the duration of restraining orders and further orders.
application for forfeiture”.4 They may subsequently lead to forfeiture orders, but that requires the completion of a further process.5 So, for example, before an assets forfeiture order may be made, the Commissioner must file and serve a further application and the court cannot make the order unless it is satisfied, on the balance of probabilities, that the relevant property is tainted property.6
It is important to recall what the judge must be satisfied about before issuing a restraining order. He or she must be satisfied that there are “reasonable grounds to believe” that the property is tainted property7 or that the relevant person unlawfully benefited from significant criminal activity.8 The judge is not required to make a finding that the relevant property is tainted property or that the particular person did in fact unlawfully benefit from significant criminal activity. …
[16]The Court further said:9
By way of explanation, restraining orders will often need to be obtained in situations of urgency, as is illustrated by the provision for “without notice” applications. They are, as we have said, temporary orders, which give the police time to gather further evidence, and may lead to forfeiture but only on the completion of further processes. Restraining orders are issued on the basis of reasonable grounds to believe, rather than proof, that the target has unlawfully benefited from significant criminal activity. This means, in our view, that affidavits such as those filed by the two police officers are admissible, without the need for a formal application under s 19 of the Evidence Act. Rather, they fall within r 7.30 of the High Court Rules and s 20 of the Evidence Act. The alternative to allowing what are, technically at least, hearsay statements in affidavits such as those at issue would be to require a very elaborate evidentiary basis for the issue of restraining orders, which would be impractical and inconsistent with the approach taken in other contexts.10 We note that the same approach has been taken in other jurisdictions which have legislation similar to the Act.11
[17] It is the Court itself that must form the required belief. In this respect it is different from many search and seizure powers where it is the searching police officer that must form the belief. The belief may be based on a wide range of evidence that would not be admissible at the stage where forfeiture orders are considered, let alone
4 Criminal Proceeds (Recovery) Bill explanatory note, Section 5(1): definition of “property”. The explanatory note to the Criminal Proceeds (Recovery) Bill 2007 states that one of the Bill’s purposes was to facilitate cooperation with other jurisdictions in respect of the recovery of criminal proceeds: Criminal Proceeds (Recovery) Bill 2007 (81-1) (explanatory note), at 2.
5 Sub-pt 3 of the Act deals with civil forfeiture orders.
6 Section 50.
7 Section 24.
8 Section 25.
9 At [47].
10 See Trustees Executors Ltd v Eden Holdings (2010) Ltd HC Wanganui CIV-2010-483-1010, 12 August 2010 at [31]–[32].
11 See, for example, Director of Public Prosecutions (ACT) v Hiep (1998) 86 FCR 33 at [46] and [48]–[49].
at a criminal trial. For example a prior criminal record of the alleged serious offending might go into the mix. This approach is justified on the basis that the restraining orders do no more than preserve the position until substantive applications are later considered. The only limitation is that the grounds for the belief must be reasonable. It seems to me that the provisions contemplate a realistic, or real world assessment of the circumstances.
Application in the present case
[18] As a first point Mr Jefferies argued that it was procedurally inappropriate for the second application to be heard together with the first application. It had not been timetabled for hearing as had the first application, disclosure had not taken place in the criminal proceedings, and it was prejudicial for it to be heard together with the first application.
[19] I do not accept those submissions. The second application was dated 4 November 2021. I see no difficulty with it being filed in this proceeding as it involved further property associated with the same person that the Commissioner seeks to restrain. It concerns an alleged continuation of the same offending from which proceeds are said to be derived. The application complied with the time requirements arising for originating applications under the High Court Rules 2016. Under r 7.24(1), applicable as a consequence of r 19.10, a notice of opposition needed to be filed by the end of the tenth working day after the application was served and no less than three working days before the hearing date. Under r 7.25 any affidavit was required to be filed with the notice of opposition. Mr Weston has had plenty of time in accordance with the rules to arrange his opposition. The question of disclosure in the criminal proceedings is irrelevant. Discovery in originating applications is possible but not routine, particularly in relation to what is only a restraining order at this stage, and in any event would have required an application to the Court.12
[20] There is also no inappropriate prejudice arising from the two applications being heard together. At the restraint stage there is no need for the applicant to prove that the property is the product of significant criminal activity. The applicant only needs
12 See Roe-Shaw v Body Corporate 81340 [2022] NZHC 2114 at [26]-[27].
to show there are reasonable grounds to believe the property is the product of that activity. The evidence that can be taken into account goes to the reasons for the beliefs, which need not be based on strictly admissible evidence at this stage — for example it can be hearsay evidence. It is here as Constable Lee did not herself execute the search warrants, and see the matters in question. Given the question is limited to whether there are reasonable grounds for a belief that the items of cash were the product of significant criminal activity, the activities surrounding the first application are relevant and admissible in relation to the second application, and vice versa. That is because they go to a belief that Mr Weston has been involved in drug dealing activities from which the cash has been derived.
[21] I accept that the evidence filed in relation to both applications establishes there are reasonable grounds to believe that both sets of cash are the product of significant criminal activities, namely drug dealing activities. The amount of $164,080 found in the shoe box was in vacuum bags of carefully arranged bundles of neatly arranged banknotes secured by rubber bands. Drug dealing paraphernalia was found in the house. Drug dealing paraphernalia was also found on Mr Needham who was present at the property. It was also found at his own address. Mr Needham is in a relationship with Ms Robinson. Mr Weston was present at, and living at the property. The inferences are obvious that this money is the product of drug dealing, and was being used for that drug dealing. Evidence of Mr Needham, Ms Robinson and Mr Weston’s sources of income has been put in evidence and none of their legitimate activities could explain these amounts of money. Mr Needham and Mr Weston have previous convictions for drug dealing. All of these matters are highly suggestive of drug dealing activity.
[22] The circumstances surrounding the finding of the second amount of cash in Mr Weston’s car are also highly suggestive of it being the product of drug dealing. He was seeking to evade police when he was caught, a methamphetamine pipe said to contain methamphetamine was found hidden up his sleeve, and there were scales in the car. It is also a significant amount of cash to have in one’s car, and I do not find Mr Weston’s explanations persuasive. When that is added to the broader circumstances a strong inference is to be drawn.
[23] Mr Weston’s explanations in relation to the first amount of cash are also not persuasive. The very circumstances surrounding this cash suggest it was from drug dealing — it was contained in neatly arranged bundles, in vacuum packed bags, in the home of a person who is in a relationship with a man who was found with extensive drug dealing paraphernalia. Mr Weston’s evidence that his former partner was keeping it by way of safe-keeping for him, and that it was the product of a lifetime of legitimate activities is difficult to accept. The evidence provided in reply by Detective Constables Lee and Moonlight call into question these explanations. For example Mr Weston says that he made a significant profit for the sale of a motorcycle but he has never had a motorcycle drivers licence. Moreover, Constable Lee explains the majority of the case is in banknotes released by the Reserve Bank in 2015 and 2016, so it is hard to see that these neatly arranged bundles of sets of $30,000 in more recently issued banknotes can be cash accumulated over the last 53 years.
[24] Mr Jefferies argued that the fact that neither Mr Needham nor Mr Weston were charged with drug dealing as opposed to possession offences also showed that the standards required to grant the application were not met.13 I do not accept this. It may be that the prosecution decided not to charge them with the more serious offending because they considered they would be unable to prove such charges beyond reasonable doubt. But the relevant standard for obtaining forfeiture orders involves establishing the allegations on the balance of probabilities. And in any event at the restraint stage the Commissioner does not need to prove the allegations at all. He only needs to establish reasonable grounds to believe that the property sought to be restrained is the product of such significant criminal activity. As the Court of Appeal emphasised in Vincent restraining orders are merely interim orders preserve the property in the meantime.
[25]For these reasons I grant both of the applications in the terms sought.
Cooke J
13 Mr Needham was originally charged with dealing, but that charge was not proceeded with.
Solicitors:
Elvidge & Partners, Napier for the Applicant Jefferies Law, Wellington for the Interested Party
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