Commissioner of Police v Palmer

[2024] NZHC 2413

IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY

I TE KŌTI MATUA O AOTEAROA TŪRANGANUI-A-KIWA ROHE

CIV-2023-416-26

[2024] NZHC 2413

UNDER

the Criminal Proceeds (Recovery) Act 2009

IN THE MATTER

of an application under ss 21, 24 and 25

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

WARRENA JACQUES PALMER

Respondent

Hearing:	On the papers
Appearances:	M Mitchell for Applicant
Judgment:	27 August 2024

JUDGMENT OF McHERRON J

Introduction

[1]    On 12 December 2023, the Commissioner of Police (the Commissioner) applied on notice for a restraining order in respect of $79,171.60 cash plus any accrued interest (the Property). The respondent, Mr Palmer, was personally served with the relevant documents on 19 February 2024, after his counsel was served with the documents via email on 15 December 2023.

[2]    After counsel for the Commissioner advised that no steps had been taken by the respondent in the intervening period, and therefore a determination of the restraint application was sought, Gwyn J directed on 8 April 2024 that counsel for the Commissioner file a brief memorandum setting out the legal and evidential grounds on which the application may be granted.

COMMISSIONER OF POLICE v PALMER [2024] NZHC 2413 [27 August 2024]

[3]    Counsel for the Commissioner filed a memorandum dated 22 August 2024 which was referred to me as Duty Judge for a decision on the papers.

Background

[4]    The $79,171.60 cash that is the subject of the application was seized from  Mr Palmer in four separate interactions with police between 2018 and 2020. The Property is currently held in the New Zealand Police Trust Account for the Eastern District.

The law

[5]    The Commissioner seeks an order for restraint on the basis that the cash is tainted property under s 24 of the Criminal Proceeds (Recovery) Act 2009 (the Act), and/or that it represents an unlawful benefit from significant criminal activity under  s 25 of the Act.

[6]    No evidence has been adduced to suggest that the cash was legitimately obtained. Therefore, the Commissioner relies solely on s 24, which provides:

24 Making restraining order relating to specific property that is potentially tainted

(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.

[7]“Tainted property” is defined in s 5 of the Act as follows:

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

[8]“Significant criminal activity” is defined in s 6 of the Act as follows:

6       Meaning of significant criminal activity

(1)In this Act, 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 the threshold amount or more have, directly or indirectly, been acquired or derived.

(2)A person is undertaking an activity of the kind described in subsection

(1) whether or not—

(a)      the person has been charged with or convicted of an offence in connection with the activity; or

(b)      the person has been acquitted of an offence in connection with the activity; or

(c)      the person's conviction for an offence in connection with the activity has been quashed or set aside.

(3)Any expenses or outgoings used in connection with an activity of the kind described in subsection (1) must be disregarded for the purposes of calculating the value of any property, proceeds, or benefits under subsection (1)(b).

[9]    Under the Misuse of Drugs Act 1975, the maximum penalty for possession of methamphetamine for supply and the sale of methamphetamine is life imprisonment.1

1      Misuse of Drugs Act 1975, s 6(2)(a).

[10]   Under the Crimes Act 1961, the maximum penalty for theft and receiving property valued at over $1,000 is seven years’ imprisonment.2

[11]   The Commissioner must satisfy the Court that there is an objective and credible basis for a belief that the property in question is tainted.3 The threshold for granting such orders is low: a finding on the balance of probabilities is not required, but merely the satisfaction of the Court of a proper basis for such a belief.4

[12]   This lower threshold is consistent with the interim nature of such orders, the purpose of which is simply to preserve property while the Commissioner is gathering evidence for an application for forfeiture.5

Basis for restraint

[13]   In the present case, Mr Palmer is alleged to have engaged in theft, receiving, possession of methamphetamine for supply and selling methamphetamine.

[14]   In support of that conclusion, the affidavit of the Police investigator Ya Tsui dated 5 December 2023 describes the following:

(a)Mr Palmer is a senior patched member of the Mongrel Mob;

(b)Mr Palmer has 11 previous drug-related convictions, six of which relate to methamphetamine and were incurred during the period that the cash was seized;

(c)the cash was accumulated over four discrete incidents, where it was located together with methamphetamine, either in Mr Palmer’s direct possession or in vehicles or rooms linked to him;

2      Crimes Act 1961, s 223(b).

3      R v Williams [2007] NZCA 52.

4      Vincent v Commissioner of Police [2013] NZCA 412.

5      Ibid.

(d)$40,000 of the cash was bundled into $1,000 units and wrapped in plastic wrap, consistent with the way drug dealers commonly protect cash;

(e)Mr Palmer’s explanations as to the sources and quantum of the cash at examination were not credible and insufficient to explain his purchase of that quantity of drugs, in addition to his claimed methamphetamine habit estimated to cost $2,100 per week; and

(f)financial analysis demonstrates that Mr Palmer was funding his lifestyle outside of the banking system, receiving inadequate legitimate income to meet his needs and suggesting access to large quantities of cash during this period.

[15]The conclusion of Ya Tsui’s investigation was that:

(a)The total of $79,171.60 cash includes $1,162.10 located in Mr Palmer’s wallet on 24 December 2018 which was indirectly derived from the significant criminal activities of theft and/or receiving, and is therefore tainted property.

(b)The balance of the cash $78,009.50 is likely  to be the  proceeds  of Mr Palmer’s dealing in the class A controlled drug methamphetamine and is therefore tainted property.

No steps taken by respondent

[16]   Mr Palmer was personally served with the Commissioner’s  application on  19 February 2024 and has not responded.

Decision

[17]   Based on the material provided by the Commissioner, in particular the findings of Ya Tsui as summarised above at [14] and [15], I am satisfied there are reasonable grounds to believe that the Property is tainted property. In my view,  the

Commissioner’s belief is more than surmise or suspicion.6 Ya Tsui’s investigation shows there is an objective and credible basis for the Commissioner to have that belief.

[18]   I therefore order that the $79,171.60 plus any accrued interest is not to be disposed of or dealt with other than to remain in the Police Trust Account and is to be under the Official Assignee’s custody and control.

McHerron J

6      R v Laugalis (1993) 10 CRNZ 350 (CA) at 355.