Commissioner of Police v Nicholls

[2019] NZHC 3328

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2014-454-000026

[2019] NZHC 3328

IN THE MATTER OF

an application pursuant to the Criminal Proceeds (Recovery) Act 2009

BETWEEN

THE COMMISSIONER OF POLICE

Applicant

AND

RICHARD JAMES NICHOLLS

First Respondent

SARAH MICHELLE NICHOLLS
Second Respondent

AND

WESTPAC NEW ZEALAND LIMITED

Interested Party

On the Papers
Judgment:	16 December 2019

JUDGMENT OF DOOGUE J

[1]        The  parties  ask  the  Court  to  approve  a  settlement   agreement  dated      4 November 2019.1

[2]        It is agreed that Mr Nicholls was involved in significant criminal activity as defined in the Act, namely cultivation of cannabis, theft of electricity, supplying cannabis and benefit fraud.

[3]        Mr and Ms Nicholls acquired a criminal benefit from their significant criminal activity.

1      Pursuant to s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).

THE COMMISSIONER OF POLICE v NICHOLLS [2019] NZHC 3328 [16 December 2019]

[4]        It is further agreed that the property that has been tainted by the proceeds acquired from that criminal activity is:

(a)a property situated at 97 McDonald Road, Levin; and

(b)a Toyota Hilux.

[5]        The Commissioner of Police (Commissioner) asserted that the maximum recoverable amount should be calculated as follows:

(a)Proceedings for the sale/supply of cannabis:                 $81,326.00

(b)Fraud attributable to MSD overpayments:  $62,964.58

$144, 290.58

[6]        The settlement proposed requires Mr and Ms Nicholls to pay the Official Assignee without set-off or deduction the sum of $134,000.00 and that those funds will vest in the Crown absolutely.

[7]        Further any interest that accrues on the retained funds from 23 October 2019 until the disbursement of the settlement sum to the Crown will vest in the Crown absolutely.

[8]        Mr and Ms Nicholls also agree to forfeit a Kiwi-Kraft Fisherman boat with an Evinrude motor and trailer in order to recognise part of the unlawful benefit obtained from their significant criminal activity.

[9]        The agreement then sets out the steps the Commissioner will take on payment and forfeiture of the aforementioned cash and property. It also sets out what will happen in the event that Mr and Ms Nicholls fail to pay the settlement sum and/or surrender the boat and trailer.

The law

[10]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.

[11]      As observed by Brewer J in Commissioner of Police v Know-All Group Limited:2

The approval of this Court of a proposed settlement is not a stamping exercise. Parliament has entrusted the Court with a supervising jurisdiction aimed at ensuring that settlements are consistent with Parliament’s intent in enacting the statute.

[12]The purpose of the Act is set out in s 3:

3        Purpose

(1)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.

(2)The criminal proceeds and instruments forfeiture regime established under this Act proposes to –

(a)eliminate the chance for persons to profit from undertaking or being associated with significant criminal activity; and

(b)deter significant criminal activity; and

(c)reduce the ability of criminals and persons associated with crime or significant criminal activity to continue or expand criminal enterprise; and

(d)deal with matters associated with foreign restraining orders and foreign forfeiture orders that arise in New Zealand.

[13]      The primary purpose of the Act is the establishment of a regime for 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.

2      Commissioner of Police v Know-All Group Limited HC Auckland CIV 2010-404-403, 7 February 2011 at [11].

[14]      The issue in this case has always been the amount sought for forfeiture. Forfeiture itself has never been in contention.

[15]      The parties submit that the settlement reached between them is consistent with the purposes of the Act and the overall interests of justice.

[16]      In particular, the parties acknowledge that there will be saving of time and costs if forfeiture can be dealt with by consent. The parties further consider that the settlement provides them with control and certainty as to the outcome given the inherent litigation risks for both parties.

[17]      I am satisfied that the settlement agreement is consistent with the purposes of the Act and the overall interests of justice and that it should therefore be approved.

Orders

[18]I make the following orders:

(a)The application to vary the conditions of the restraining order granted by Williams J on 30 July 2014 is granted.

(b)The condition preventing the respondents from disposing of or dealing with the property identified at 97 McDonald Road, Levin, is varied such that the respondents may obtain finance leveraged against the property for the purpose of settling the instant matter.

(c)This variation is to last for no more than three months from the date of this judgment unless extended by consent between the parties.

(d)The respondents shall pay without set-off or deduction the sum of

$134,000.00  to  the Official Assignee.   Such funds shall vest in the Crown immediately.

(e)Any interest that accrues on the restrained funds from 22 October 2019 until the disbursement of the settlement sum to the Crown shall vest in the Crown entirely.

(f)The respondents shall forfeit forthwith the Kiwi-Kraft Fisherman boat with the Evinrude outboard motor and trailer.

[19]      Leave is granted to the parties to seek any further orders necessary in the event of either compliance or non-compliance with the terms of the settlement agreement’s provisions concerning implementation of orders (c) – (f) inclusive.

Doogue J

Solicitors:

Crown Solicitor, Palmerston North