Commissioner of Police v Paora

[2018] NZHC 1419

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2016-470-000211

[2018] NZHC 1419

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

STACY WALTON DENNIS PAORA

First Respondent

intituling cont’d over …

Hearing:

15 May 2018

Appearances:

R Jenson for Applicant

R Mansfield for First Respondent and First Interested Party S Wimsett for Second Respondent

Judgment:

14 June 2018

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 14 June 2018 at 4.30 pm

pursuant to R 11.5 of the High Court Rules Registrar / Deputy Registrar

Date ………………………

COMMISSIONER OF POLICE v PAORA & ORS [2018] NZHC 1419 [14 June 2018]

MARK TANE MORGAN

Second Respondent

DAYTONA BYRON WITERI RANUI
Third Respondent

KRISTEL MONIQUE HORO-PHILLIPS

Interested Party

ROBERT RAWIRI PARATENE PAORA

Interested Party

WESTPAC NEW ZEALAND LIMITED

Interested Party

ANZ BANK NEW ZEALAND LIMITED

Interested Party

Introduction

[1]    Following a police investigation into the manufacturing and supply of methamphetamine in the Bay of Plenty region, the Commissioner of Police formed the view that the respondents were engaged in significant criminal activity and/or had benefited from significant criminal activity. He obtained restraining orders in respect of a number of items of real and personal property on the ground that it was tainted property. Through oversight the Commissioner did not seek to extend the orders and they expired, together with subsequent associated orders.1 The Commissioner has applied for fresh orders.

[2]The original orders were made by Edwards J on 4 April 2017 in respect of:

(a)The property situated at 12 Heale Street, Matata, being 1012 square metres more or less legally described in the Certificate of Title SA970/9 of the South Auckland Land Registration District, issued 20 July 1950 as a fee simple estate, Allotment 23 Town of Richmond, other than the interest of Westpac NZ Limited under the registered mortgage 9784877.2;

(b)The 1995 Isuzu truck registration #AND718;

(c)The 1997 Toyota truck registration #CEB940;

(d)The $100,000 cash paid to undercover police officers by Mr Morgan on 3 December 2016 at Auckland;

(e)The $10,000 cash found buried in sand at Papamoa Beach and recovered by police on 7 December 2016;

(f)All funds in the ANZ bank accounts numbered 06-0491-0198225-00 and 06-0491-0198225-25;

(g)$15,125 cash seized by Police from motor vehicle registration #HRG686 on 20 December 2016;

1      Criminal Proceeds (Recovery) Act 2011, s 37(1) and (3).

(h)Jewellery seized by Police from the motor vehicle registration #HRG686 on 20 December 2016 being a gold bracelet, a gold necklace and two gold rings;

(i)$860 cash seized by Police from 27 Ponga Place on 20 December 2016;

(j)Jewellery seized by Police from 27 Ponga Place on 20 December 2016 being two gold rings and a gold chain; and

(k)The Chevrolet Impala motor vehicle, coloured red, located by Police at Te Kaha on 21 December 2016.

[3]    Edwards J was not prepared to make restraining orders in relation to two items of property, a 2015 Harley Davidson motorcycle and a 2008 Mercedes Benz, because Robert Paora, Mr Paora’s brother, had only been served with the proceeding and an earlier minute the day before, on 3 April 2017.

[4]    Subsequently, Brewer J made restraining orders in relation to those two items of property. Robert Paora abandoned his application for release of restrained property and withdrew his opposition to the on-notice application for restraining orders:

(a)The 2015 Harley Davidson motorcycle registration #A4ZJJ; and

(b)The 2008 Mercedes Benz motor vehicle registration #HRG686.

[5]Subsequently, the following associated orders were made:

(a)On 15 November 2017, Woolford J made an order for the sale of the Isuzu truck registered number AND718 and the payment of part of the proceeds of that sale to an interested party; and

(b)On 28 February 2018, Davison J made orders for the sale of the Mercedes Benz HRG686 and the Chevrolet Impala motor vehicle.

[6]    At the time of making the orders on 4 April 2017, Edwards J also made orders in relation to another proceeding, on the basis that the two sets of orders arose from

the same factual circumstances. Messrs Petersen, Huirama and Wine and the respondents in the other proceeding, CIV-2016-470-212 (CIV212) were alleged to have been involved in the same criminal conduct as the respondents in this proceeding. An application for fresh orders in relation to the orders in the CIV212 proceeding will be the subject of a separate judgment.

[7]    The current application seeks restraining orders in relation to the same items as those for which restraining orders were made by Edwards J on 4 April 2017, with two exceptions. First, the application seeks to restrain the proceeds of the sale of the 1995 Isuzu truck #AND718, rather than the vehicle itself, as it was sold pursuant to Woolford J’s order on 15 November 2017. Secondly, the Chevrolet Impala has not yet been sold, and so the current applications include an application for a sale order for that vehicle, as the order made by Davison J lapsed when the underlying restraining order expired.

[8]    The current application does not seek a restraining order in relation to the property which was restrained by Brewer J’s orders of 30 June 2017, i.e. the 2015 Harley Davidson motorcycle #A4ZJJ, or the 2008 Mercedes Benz motor vehicle #HRG686 (or the proceeds of the sale, which was ordered by Davison J on 26 February 2018).

[9]    There was no opposition to the Commissioner’s earlier applications. Likewise, the respondents and interested parties either consent or have not taken steps to oppose the current applications. On 16 May 2018, counsel for Mr Paora (the first respondent), Ms Horo-Phillips (the first interested party) and Mr Morgan appeared at a telephone conference and confirmed those parties’ consent to the applications. Mr Ranui had been served but had taken no steps. The other respondents in that proceeding had not been served but either had no interest in the subject matter of the proceedings (Robert Paora) or were not affected by the applications because their interests were excluded from the proposed restraining order (Westpac and ANZ).

Jurisdiction

[10]   This Court may make a restraining order under the Criminal Proceeds (Recovery) Act 2009 (CPRA) if it is satisfied that it has reasonable grounds to believe

that the subject property is tainted property.2 Property is tainted property if it has wholly or partly been acquired as a result of significant criminal activity or directly or indirectly derived from significant criminal activity.3 “Significant criminal activity” is criminal activity engaged in by a person that, if proceeded against as a criminal offence, would amount to offending that consists or, or includes, offences punishable by a maximum of five years’ imprisonment or more; or from which property, proceeds, or benefits of a value of $30,000 or more have been acquired or derived, either directly or indirectly.4

[11]   The Court may also make a restraining order in relation to all or specified parts of a respondent’s property if it is satisfied it has reasonable grounds to believe that the respondent has unlawfully benefited from significant criminal activity.5 This means knowingly, directly or indirectly, deriving a benefit from significant criminal activity whether or not the person was involved in the significant criminal activity.6

Application

The police investigation

[12]   Mr Paora, Mr Morgan and Mr Ranui were all known associates affiliated with the Head Hunters gang, with Mr Paora being a patched member. Ms Horo-Phillips is Mr Paora’s wife. Mr Paora’s total income, disclosed for tax purposes for the combined tax years 2011 to 2016, was $355,048.

[13]   Mr Paora and another man signed a residential tenancy agreement in May 2014 for a property in Thornton Road, Whakatane. A few weeks later that property was the subject of a suspicious fire. The subsequent scene examination resulted in Mr Paora and two other men being jointly charged with possessing precursor equipment, substances and materials with intent to manufacture methamphetamine and with aggravated robbery. The charges against Mr Paora were dismissed.

2      Criminal Proceeds (Recovery) Act 2011, s 24.

3      Criminal Proceeds (Recovery) Act 2011, s 5.

4      Criminal Proceeds (Recovery) Act, 2011, s 6(1).

5      Criminal Proceeds (Recovery) Act 2011, s 25.

6      Criminal Proceeds (Recovery) Act 2011, s 7.

[14]   Subsequently, the police undertook a covert investigation which included the interception of the private communications of the respondents and another associate, Joshua Petersen (a respondent in the CIV212 proceeding), and the use of surveillance devices to track the movements of a vehicle suspected of being used to transport methamphetamine and cash, a Toyota Hilux GBF943, which belonged to Mr Petersen.

[15]   The Commissioner alleges that Mr Paora controlled a criminal enterprise with which the other respondents were associated and which was concerned with the manufacture and supply of methamphetamine. It is alleged that he controlled a company that was ostensibly a freight forwarding business but, in reality, operated as a front for the methamphetamine business. Some of the property that is the subject of the application is said to be tainted property. In this category are the property at Heale Street, an Isuzu truck and Isuzu ute, cash amounts of $100,000 and $10,000 and bank accounts. The other property that is the subject of the application is not said to be tainted but is sought to be restrained on the basis that the respondents have benefited from the methamphetamine operation.

Purchase of 12 Heale Street, Matata

[16]   On 30 June 2014, Mr Paora signed a sale and purchase agreement to buy     12 Heale Street, Matata. The purchase price was $230,000 and the settlement date was 22 July 2014. Mr Paora borrowed $165,000 from Westpac. This required him to source $65,000 himself.

[17]   The Westpac file recorded that Mr Paora’s mother, Harriett Paora, who lived permanently in  Australia, had gifted Mr Paora $50,000.  The Crown asserts that the

$50,000 was not provided by Mrs Paora but instead was the proceeds of drug-related offending. It points to the fact that between 5 June and 4 July 2014, seven cash deposits totalling $50,000 were made into Mrs Paora’s ANZ account (Mrs Paora was only in New Zealand on the date the initial deposit was made). Each of these deposits were less than $10,000, a notable fact given that New Zealand banking institutions are bound to report cash deposits of $10,000 or more to the Financial Intelligence Unit. The deposits were made by the use of a swipe card and manual deposit slips. The manual deposit slips showed the depositor on one of the deposits as Mr Paora’s

brother, Robert Paora, and in the case of two others as “Kristel Paora” (Ms Horo- Phillips’ first name is Kristel). The words “House Deposit” were hand printed under the heading “Reference” in one of the manual deposit slips made by “Kristel Paora”.

[18]   On 4 July 2014, the $50,000 that had progressively been deposited over the preceding month was transferred into Mr Paora and Ms Horo-Phillips’ Westpac account. On 18 July 2014, a few days before settlement, $45,272.57 was transferred from Mr Paora and Ms Horo-Phillips’ account to the account of Robinson Law Ltd trust, the solicitors acting for Mr Paora on the purchase.

The undercover operation involving the purchase of a precursor substance

[19]   The following evidence relates to the applications to restrain the $100,000 cash paid to undercover police officers by Mr Morgan on 3 December 2016 at Auckland, the $10,000 cash found buried in sand at Papamoa Beach and recovered by police on 7 December 2016, and all of the funds in the ANZ bank accounts number 06-0491- 0198225-00 and 06-0491-0198225-25.

[20]   Mr Paora’s partner, Ms Horo-Phillips, is the sole director and shareholder of RJ & RJ Limited which traded as a freight forwarder under the name Priority Movers. The company had bank accounts with ANZ in the name of “RJ and RJ Limited T/A Orgy Coffee”. Orgy Coffee was a business interest of Ms Horo-Phillips and Mr Paora prior to Priority Movers. The Crown asserts that Priority Movers was a front for a money laundering business, and that proceeds from Mr Paora’s drug dealing were passed through RJ & RJ Limited’s bank accounts in an attempt to disguise their origins.

[21]   In an undercover operation, police officers hired Priority Movers on two occasions to move freight between Tauranga  and Auckland.  On 7 October 2016,  Mr Morgan loaded the freight in Tauranga. In Auckland, Mr Ranui and another associate, Mr Edwards, helped to unload it. The following week, on 14 October 2016, police officers again hired Priority Movers to transport freight from Tauranga to Auckland. On that occasion Mr Morgan and Mr Paora arrived to load the freight. The officers acted in a way that implied that the nature of the freight was illicit.

[22]   In Auckland, Mr Paora said to one of the police officers that “this is my business but it’s a front”. We don’t give a fuck about moving stuff but I need to know what I’m moving”. A conversation then ensued from which the officer inferred that Mr Paora was interested in participating in whatever the illicit business was. There were subsequent conversations along the same lines, from which the Commissioner infers that Mr Paora was in charge of operations at Priority Movers and controlled those working there.

[23]   A few weeks later, Mr Morgan approached the undercover officer to discuss the officer supplying “kilos”, which the officer took to  mean  methamphetamine.  Mr Morgan said that Mr Paora was “banged up” (in custody) and that while he was away Mr Morgan and another man had “been running things”. This led to a meeting between Mr Morgan, Mr Petersen and two undercover officers. Mr Petersen confirmed that while “our boss” was unavailable he was authorised to make decisions. He said that they were looking for a source of “precursor ephedrine”, about a kilo a month. Agreement was reached for the supply of ephedrine at $100,000 per kilo. On 24 November 2016, Mr Petersen advised that “his boss” was back home for the weekend and was pleased with the connection that had been made. Mr Paora had, in fact, been released on bail for the weekend 19/20 November 2016.

[24]   On 4 December 2016, Mr Morgan and Mr Ranui purchased ephedrine from undercover officers for $100,000 cash. Mr Ranui buried the ephedrine in sand dunes at Papamoa Beach. Police recovered it. When it was recovered it was found inside a bucket that also contained $10,000 cash.

Toyota truck CEB940

[25]   A Toyota  flat-deck truck CEB940  was registered in Mr  Paora’s  name on  22 January 2016, and shortly afterwards changed into the name of Ms Horo-Phillips trading as RJ & RJ Limited. The Crown alleges  that  CEB940 was purchased  by  Mr Paora for the business of Priority Movers, and likely involved money acquired from Mr Paora’s methamphetamine dealing.

[26]   This vehicle was stopped by police in the lower North Island in mid-April 2016. The occupants were Mr Edwards and Mr Ranui, who told the police that the

pair had been from Tauranga to Wellington to “do a drop off” and had uplifted a couch and were returning back home, suggesting that the vehicle was being used for the Priority Movers business.

Isuzu truck AND718

[27]   The 1995 Isuzu ELF truck registered #AND718 was registered in Mr Morgan’s name on 15 June 2016 and was subsequently used by Priority Movers. Four-and-a- half months previously another Isuzu flat-deck  truck  JAH414  was  registered  in Mr Morgan’s name and was subsequently the subject of a restraining order made by Davison J. In November 2015, approximately two months before he became the registered owner of JAH414, Mr Morgan had become the registered owner of a Toyota Hilux Surf BJB505, which was the subject of a security registered in favour of three entities. Details of the debt were unable to be established but Mr Morgan’s total income disclosed for tax purposes for the combined tax years from 1 April 2012 to 22 November 2016 was $28,006.26. This made his acquisition of three vehicles within a space of six months from taxable income unlikely. The Crown alleges that AND718 was purchased with money from methamphetamine dealing.

Supplying Gayne (“Gee”) Huirama

[28]   In October 2016, intercepted communications between Joshua Petersen and an associate, Gayne Huirama (known as “Gee”) disclosed the supply of two ounces of methamphetamine by Mr Petersen to Mr Huirama, to be sourced from Mr Paora. The evidence included Mr Petersen saying on 7 October 2016 that he needed to confirm the position because “the bro was shooting off to Auckland today” and would not be back till Sunday, having “[b]ullshitted something to Probation”. This coincided with Mr Parora’s known movements; he had obtained a variation to his bail conditions to enable him to travel to Auckland on 9 October 2016 and return to Tauranga on Sunday 7 October 2016. It is said that this shows that Mr Petersen needed Mr Paora to sanction the deal. Texts showed that Mr Huirama decided to postpone the deal until the following week.

[29]   On 13 October 2016, tracking device data put Mr Petersen’s vehicle, registered GBF943 at Mr Paora’s house in the morning and other intercepted communications

that day included a conversation between Mr Petersen and his partner, Ms Cobb, in which Mr Petersen complained that the could not contact Mr Huirama and asked Ms Cobb to do so. A conversation followed between Ms Cobb and Mr Huirama in which Mr Huirama said he would meet ‘J’ at the Maungatapu shops in five minutes. Tracking data on Mr Petersen’s vehicle showed him at the shops in Maungatapu Road, Tauranga five minutes later and staying for just under an hour. The Commissioner surmises that this was the opportunity for the supply of the methamphetamine to Mr Huirama.

[30]   The next day police observed Mr Petersen and Mr Huirama meeting at a shopping centre in Tauranga and travelling in convoy to an associate’s property (in CIV212 the Commissioner alleges that Mr Huirama left his car for Mr Paora as security for the methamphetamine).

[31]   Two days later, on 16 October 2016, Mr Huirama was arrested following a search of his rental vehicle while waiting at the inter-island ferry terminal. Two ounces of methamphetamine, scales and four cellphones were found.

The search of 27 Ponga Place

[32]   On 20 December 2016, Mr Paora, Mr Petersen and Mr Ranui were arrested and charged with drug-dealing offences relating to the manufacture and supply of methamphetamine, and participation in an organised criminal group.

[33]   On that day, the police executed search warrants at various properties, including at 27 Ponga Place, which was the home of Mr Paora and Ms Horo-Phillips.

[34]   The 2008 Mercedes Benz HRG686 was located at the property. Cash and jewellery were found in both the house and that car.

[35]   A deposit bag on top of a filing cabinet in an office area of the house contained the $860 cash. A jewellery box in the master bedroom of the house contained two gold rings and a gold chain.  The Crown asserts that the bedroom was Mr Paora’s  and   Ms Horo-Phillips’, and that the jewellery belonged to either of them.

[36]   A gold bracelet, a gold necklace and two gold rings were seized from the Mercedes Benz HRG686, located in the centre console between the two front seats. Cash totalling $15,125 was found in different areas of the vehicle, $10,000 in $100 notes in the glovebox and $4,525 was found in wads bound together with rubber bands in the centre console. There were large items of clothing in the car, some of which bore the Head Hunter insignia. The clothing was for a large man, and some were labelled 4XL. Detective Camplin, in his affidavit sworn 22 December 2016, stated that Mr Paora was a very large man and the clothing appeared suitable for his size. A further $100, alongside Mr Paora’s driving licence, was located in a zip-up pocket of a leather vest and five $100 bank notes were found in the pocket of some trousers found in the boot of the vehicle.

The search of 6528 State Highway 35, Te Kaha

[37]   This property is the family home of Mr Paora’s parents. The Chevrolet Impala was located in a shed on the property. The registration plate was ERJ262, but vehicle registration records showed that this registration plate should have been affixed to a Mitsubishi motor vehicle last registered in the name of a Mr Hayden Kirkwood, an associate of Mr Paora’s. Mr Camplin, in his affidavit sworn 22 December 2016, stated that police had been unable to locate any details to assist in establishing the actual vehicle identity at the time of the the affidavit.

[38]   On 19 October 2016, an audio surveillance device in Mr Petersen’s Toyota Hilux intercepted a conversation between Mr Petersen and Mr Trent Woocock. The two were discussing Mr Paora’s vehicles, and they referred to his Impala and that it was going down the coast to Mr Paora’s parents. Detective Camplin notes that Chevrolet Impalas are not common vehicles in New Zealand, and Mr Paora’s parent’s property at Te Kaha is a coastal property.

Restraining orders

[39]   I am satisfied that there are reasonable grounds to believe that the respondents were involved in significant criminal activity, namely the manufacture and supply of methamphetamine. I am satisfied that the Heale Street property, the $100,000 cash, the $10,000 cash and the funds held in the ANZ accounts, the Toyota CEB940, the

Isuzu AND718 and the cash found at Ponga Place were all tainted property and amenable to restraint. There is no evidence of the jewellery or the Chevrolet Impala having been obtained through the criminal activity, though that is possible. However, I am satisfied that the respondents (and Ms Horo-Phillips) have benefited from the criminal conduct so that the jewellery and Chevrolet Impala are also amenable to restraint.

[40]   I accordingly make orders that the property referred to at [2](a) – (k) of the Commissioner’s application for a restraining order, dated 16 April 2018, is not to be disposed of, or dealt with, other than as is provided for in the restraining order, and is to be in the Official Assignee’s custody and control.

[41]I also make ancillary orders that the Official Assignee is authorised to:

(a)sell the Chevrolet Impala vehicle, referred to at [2](k) of the Commissioner’s application for a restraining order dated 16 April 2018; and

(b)hold the funds derived from the sale of that vehicle in an interest- bearing trust account until the resolution of these proceedings.

P Courtney J