Commissioner of Police v Parkes

[2019] NZHC 1087

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-000590

[2019] NZHC 1087

UNDER

Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

GERRARD GORDON PARKES

First Respondent

AND

WHITNEY CHANTEL HARRIS

Second Respondent

AND

ROGER EMMANUEL AL HACHACHE

Third Respondent

AND

TONI CLARE NIKORA

Fourth Respondent

On the papers
Appearances:	K Eastwood and Y Wang for Applicant M Pecotic for First Respondent
Judgment:	20 May 2019

JUDGMENT OF WALKER J

This judgment was delivered by me on 20 May 2019 at 10.00 am Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors

Crown Solicitor, Auckland M Pecotic, Auckland

COMMISSIONER OF POLICE v PARKES [2019] NZHC 1087 [20 May 2019]

Introduction

[1]    I have received a joint memorandum filed by counsel for the Commissioner of Police (the Commissioner) and counsel for Gerrard Gordon Parkes (Mr Parkes), the first respondent. The memorandum invites the Court to approve a proposed settlement reached between the Commissioner and Mr Parkes under s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).

[2]    Any settlement made in relation to proceedings brought under the provisions of the Act is required to be approved by this Court.1

Background

[3]    On 31 March 2016, Mr Parkes was charged with various charges relating to the supply of methamphetamine. The charges followed the termination of a Police investigation known as “Operation Bunk”. That operation targeted Mr Parkes along with a number of his associates.

[4]    In September 2017, Mr Parkes was convicted of the following charges in this Court:

(a)supplying methamphetamine (x 10);

(b)possession of methamphetamine for supply (x1); and

(c)possession of material capable of being used in the manufacture of methamphetamine (iodine), intending that it be used for that purpose.

[5]    Following a disputed facts hearing, Mr Parkes was found to have supplied or possessed for supply a total quantity of 568.8 grams of methamphetamine.2 The evidence showed that Mr Parkes supplied methamphetamine to Ms Toni Nikora (the fourth respondent), who then on-sold the methamphetamine to others in smaller

1      Criminal Proceeds (Recovery) Act 2009, s 95(2).

2      R v Parkes [2017] 2935.

quantities. On 8 December 2017, Mr Parkes was sentenced to 11 years' imprisonment, imposed with a minimum period of imprisonment of 40 per cent.3

These proceedings

[6]    Between March and November 2016, the Commissioner applied for and obtained seven sets of restraining orders in relation to various property associated with the respondents.

[7]    The second respondent, Ms Whitney Harris, was Mr Parkes’ de facto partner at the time of the criminal offending. Ms Harris was not charged with any criminal offences as a result of Operation Bunk.

[8]Mr Parkes has interests in the following restrained property:

(a)The proceeds of sale of a 1998 Nissan Skyline GT-R motor vehicle (registration JNZ870), VIN 7A8DH120705042693 formerly registered to Mr Parkes;

(b)The proceeds of sale of a 2006 Land Rover motor vehicle (registration JND724),  VIN  SALLSAA336A933687,  formerly  registered  to   Ms Harris;

(c)The proceeds of sale of a 2015 Kawasaki ZX 1000N motorcycle (registration A9ZWM), VIN JKAZXCN13FA000559, formerly registered to Ms Harris;

(d)The proceeds of sale of a 1998 Harley Davidson Wide Glide motorcycle (registration 88YLN), VIN 1HD1GEV17XY305696, formerly registered to Ms Harris;

(e)A   2007   Ducati    1098S    motorcycle    (registration    37ZRH), VIN ZDMH700AA7B008346 (Ducati), registered to Ms Harris;

3 R v Parkes [2017] NZHC 3077.

(f)The proceeds of sale of a 1975 Chevrolet Camaro (registration ERU811), VIN 7A82R070708590163, formerly registered to Magnets New Zealand Limited;

(g)A 1997 Dodge Ram 2500 SLT motor vehicle (registration R4M1T) VIN 1B7KC23Z8WJ122369 (Dodge Ram), registered to an unknown person at 6 Baird Road, Tokoroa;

(h)The proceeds of sale of a Haines Hunter SF535 motor boat named "Licence to Thrill", serial number SF535/31656;

(i)The proceeds of sale of a DMW Premier 535 boat trailer (registration Y892D, serial number 12709, registered to persons unknown;

(j)The proceeds of sale of a 2003 Holden SS V8 utility motor vehicle (registration HUZ159) VIN 6G1YK42F53L947023, formerly registered to Brett Kolkrabs (Holden SS V8); and

(k)The proceeds of sale of a 1998 Harley Davidson 99 Dyna Super Glide motorcycle (registration B9ASW) VIN 1HD1GJV16XY309697, formerly registered to Michael Thomas (1998 Harley Davidson).

[9]    The total approximate value  of  the  restrained  property  associated  with  Mr Parkes is approximately $197,275.00 (plus interest accruing on the proceeds of sale).

Application for civil forfeiture orders

[10]   On 3 August 2018, the Commissioner filed an application for civil forfeiture orders (with supporting evidence) against the respondents.

[11]   The Commissioner applied, amongst other things, for a profit forfeiture order against Mr Parkes and Ms Harris (jointly and severally) in the sum of $478,312.70, which was calculated as follows:

(a)$211,500.00  being  the  value  of  methamphetamine   underlying   Mr Parkes' convictions; plus

(b)$34,702.70, being the total value of cash deposits made into Ms Harris' bank accounts between 5 January 2015 and 22 January 2016; plus

(c)$232,110.00, being the combined total value of the property.

[12]   The Commissioner also applied for assets forfeiture orders over the property on the basis that it is tainted property.

[13]   The Commissioner has subsequently reached settlements with the third and fourth respondents. Those settlements have been approved by the Court.

[14]According to the joint memorandum of counsel:

(a)The registered owner of the Holden SS V8 has not taken any steps to claim an interest in the vehicle, having told Police that he had sold the vehicle. The purchaser has indicated that she does not wish to claim any interest in the Holden SS V8, or the proceeds of sale, and does not wish to take any further part in this proceeding.

(b)Similarly, the registered owner of the 1998 Harley Davidson at the time it was restrained has confirmed that he has no interest in it.

[15]   Mr Parkes filed a notice of opposition to the Commissioner's application for civil forfeiture orders  on  4 April  2019.  No  supporting  evidence  was  filed  by  Mr Parkes.

[16]   A two-day civil fixture has been allocated for the hearing of the Commissioner's civil forfeiture application on 2 and 3 September 2019.

Terms of the proposed settlement

[17]   The Commissioner and Mr Parkes have now agreed to settle the question of the civil forfeiture of the restrained property on the terms set out in the joint memorandum dated 10 May 2019, subject to the Court’s approval. The Commissioner and Mr Parkes now seek the Court's approval under s 95(3) of the Act.

[18]   The proposed terms of settlement as between the Commissioner and Mr Parkes are:

(a)The restraining orders over the Ducati and the Dodge Ram would be rescinded (neither vehicle is presently in the custody and control of the Official Assignee as they were not located on termination of the investigation);

(b)Assets forfeiture orders would be made by consent under s 50 of the Act over all of the remaining restrained property;

(c)The Commissioner would not pursue an application for a profit forfeiture order against Mr Parkes, or Ms Harris;

(d)Mr Parkes would abandon all claims, under the Act or otherwise, to the restrained property; and

(e)Costs would lie where they fall.

[19]   The approximate total value of the property to be forfeited to the Crown as a result of the proposed settlement is $153,875.76. The approximate value of the two vehicles that are to be released from restraint is $43,400.00.

Legal principles

[20]   Section 95 of the Act governs Court-approved settlements and provides as follows:

95       High 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.”

[21]   Section 95 had no predecessor under the former legislation (Proceeds of Crime Act 1991). In enacting s 95, Parliament expressly empowered the Commissioner to enter into settlement discussions with respondents and interested parties regarding the forfeiture of assets. I accept the proposition in the parties’ joint memorandum that, in doing so, Parliament is likely to have had in mind the significant cost associated with civil litigation and the benefits to all parties if proceedings can be settled and resolved by consent.

[22]   As has been previously observed, Parliament has entrusted the High Court with a supervisory jurisdiction to ensure that settlements are consistent with the parliamentary intention.4

[23]   The primary purpose of the Act is contained in s 3(1). It is the establishment of a regime for the forfeiture of property which has been derived directly or indirectly from significant criminal activity or that represents the value of a person’s unlawfully derived income. Ancillary statutory purposes are to “eliminate the chance” for persons to profit from  undertaking or being  associated  with  significant  criminal  activity  (s 3(2)(a)) and to “deter” significant criminal activity (s 3(2)(b)). The Court of Appeal in Hayward v Commissioner of Police recently affirmed the Act has a “strongly expressed statutory purpose”.5

4      Commissioner  of  Police  v  Know-All  Group  Limited   HC  Auckland,  CRI-2010-404-403,     7 November 2011 per Brewer J at [11].

5      Hayward v Commissioner of Police [2014] NZCA 625 at [29].

[24]   The overall interests of justice requirement calls for a broad inquiry. In considering whether a settlement is in the interests of justice, relevant factors will include the savings of time and cost and the litigation risk of a hearing to both the Commissioner and the respondent.6 The Court has recognised the decision to settle proceedings under the Act may be made on economic and pragmatic grounds and reflect a “common sense compromise” between the parties.7

The result – the threshold for settlement approval met

[25]   The parties submit the settlement is consistent with the purposes of the Act and is in the overall interests of justice, reflecting the principles in s 95(3) of the Act. Having considered the matters in the joint memorandum dated 10 May 2019, I agree for the following reasons:

(a)The majority of the restrained assets are to be forfeit under the proposed settlement which is appropriate given the serious nature of the criminal offending. The approximate total value of the property to be forfeited to the Crown as a result of the proposed settlements is $153,875.76;

(b)Although Mr Parkes denies that he personally received a substantial financial benefit from his drug offending, I agree that the Commissioner has a strong case that Mr Parkes has unlawfully benefited to the extent of $478,312.70 from drug offending. The estimated value of the quantity of methamphetamine Mr Parkes was found to have supplied, or possessed for the purposes of supply, was a total of 568.8 grams. The modest declared income of both Mr Parkes and Ms Harris is inconsistent with the large asset base (estimated value of $232,110) acquired during the relevant period. There were also unexplained cash deposits into Ms Harris’ bank accounts between January 2015 and January 2016. Neither Mr Parkes nor Ms Harris have provided an explanation for the source of the cash deposits.

6      Commissioner of Police v Kree [2013] NZHC 2972 at [11].

7      Commissioner of Police v Douglas [2015] NZHC 1293 at [6]; Commissioner of Police v Venn

[2014] NZHC 361.

(c)In my view, the relatively modest amount of the restrained assets which will not be forfeit, and in respect of which the restraining orders will be rescinded, properly reflects that pursuing a forfeiture order through a substantive hearing to conclusion will involve not insignificant time and cost. The cost to be weighed includes the allocation of scarce Court resources away from other litigants and the need for significant further investment of public resources. I note in this regard that neither of the two vehicles to be released from restraint are presently in the custody and control of the Official Assignee;

(d)An approved settlement will allow the parties to have certainty and control as to the outcome.

Orders sought: a proposed settlement

[26]   The Commissioner and Mr Parkes jointly seek the following orders by consent to give effect to the terms of the settlement:

(a)Further orders under ss 34 and 35 of the Act, in particular the following property is released from the restraining orders:

(i)A 2007 Ducati  1098S  motorcycle  (registration  37ZRH), VIN ZDMH700AA7B008346    (Ducati),    registered     to  Ms Harris;

(ii)A 1997 Dodge Ram 2500 SLT motor vehicle (registration R4M1T) VIN 1B7KC23Z8WJ122369 (Dodge Ram), registered to an unknown person at 6 Baird Road, Tokoroa;

(b)Assets forfeiture orders under s 50(1) of the Act, in particular, the following property vests in the Crown absolutely and is in the Official Assignee's custody and control:

(i)The proceeds of sale of a 1998 Nissan Skyline GT-R motor vehicle (registration JNZ870), VIN 7A8DH120705042693 formerly registered to Mr Parkes (plus any accrued interest);

(ii)The proceeds of sale of a 2006 Land Rover motor vehicle (registration JND724), VIN SALLSAA336A933687, formerly registered to Ms Harris (plus any accrued interest);

(iii)The proceeds of sale of a 2015 Kawasaki ZX 1000N motorcycle (registration A9ZWM), VIN JKAZXCN13FA000559, formerly registered to Ms Harris (plus any accrued interest);

(iv)The proceeds of sale of a 1998 Harley Davidson Wide Glide motorcycle (registration            88YLN),                  VIN 1HD1GEV17XY305696, formerly registered to Ms Harris (plus any accrued interest);

(v)The proceeds of sale of a 1975 Chevrolet Camaro (registration ERU811), VIN 7A82R070708590163, formerly registered to Magnets New Zealand Limited;(plus any accrued interest);

(vi)The proceeds of sale of a Haines Hunter SF535 motor boat named "Licence to Thrill", serial number SF535/31656 (plus any accrued interest);

(vii)The proceeds of sale of a DMW Premier 535 boat trailer (registration Y892D, serial number 12709, registered to persons unknown (plus any accrued interest);

(viii)The proceeds of sale of a 2003 Holden SS V8 utility motor vehicle (registration HUZ159) VIN 6G1YK42F35L947023, formerly registered to Brett Kolkrabs (Holden SS V8) (plus any accrued interest); and

(ix)The proceeds of sale of a 1998 Harley Davidson 99 Dyna Super Glide motorcycle     (registration           B9ASW) VIN 1HD1GJV16XY309697, formerly registered to Michael Thomas (1998 Harley Davidson) (plus any accrued interest).

(c)The Commissioner's application for a profit forfeiture order against Mr Parkes and Ms Harris, contained at paragraph 1(a) of his application for civil forfeiture orders (dated 3 August 2018) is dismissed; and

(d)Mr Parkes' notice of opposition to the Commissioner's civil forfeiture application (dated 4 April 2019) is dismissed; and

(e)Costs between the Commissioner and Mr Parkes will lie as they fall in relation to all matters.

[27]   In addition, the parties ask the Court to record the further terms of settlement between the Commissioner and Mr Parkes:

(a)Mr Parkes abandons all claims he might have in relation to any of the property restrained in this matter, either under the Act or otherwise, and undertakes not to take any steps to oppose the civil forfeiture of that property; and

(b)The settlement is in full and final settlement of the current proceedings brought by the Commissioner against Mr Parkes under the Act.

Orders

[28]   Being satisfied that the proposed settlement is consistent with the purposes of the Act and is in the overall interests of justice I make the orders in terms of [26] above.

.....................................................

Walker J