Commissioner of Police v Parkes
[2019] NZHC 639
•29 March 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2016-404-000590
[2019] NZHC 639
UNDER The 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
Hearing: (On the papers) Counsel:
K Eastwood and Y Wang for Applicant S Hewson for Third Respondent
Judgment:
29 March 2019
JUDGMENT OF MOORE J
This judgment was delivered by me on 29 March 2019 at 3:00 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar Date:
COMMISSIONER OF POLICE v PARKES & ORS [2019] NZHC 639 [29 March 2019]
Introduction
[1] I have received a joint memorandum filed by counsel for the Commissioner of Police (“the Commissioner”) and counsel for Roger Emannuel Al Hachache, the third respondent. The memorandum invites the Court to approve a proposed settlement reached between the Commissioner and Mr Al Hachache 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] Mr Al Hachache was arrested on 31 March 2016 following the termination of a large scale Police investigation codenamed “Operation Bunk”.
[4] This investigation targeted Mr Parkes, the first respondent, and a number of his associates who were believed to be involved in the manufacture and supply of controlled drugs, including methamphetamine.
[5] In the course of the inquiry Mr Al Hachache (and another) were identified. Their role included supplying Mr Parkes with ephedrine, a class B controlled drug. The ephedrine was used by Mr Parkes to manufacture methamphetamine which he then supplied to others, including Mr Al Hachache who, himself, supplied the drug to a customer on four occasions.
[6] Following termination a number of search warrants were executed including those of Mr Al Hachache’s business. This was Osaka Tyres situated in Otahuhu. Mr Al Hachache was living at the address at the time the search warrants were executed.
1 Criminal Proceeds (Recovery) Act 2009, s 95.
[7] During the search the Police located and seized three plastic bags containing approximately 3 kilograms of ephedrine. These were hidden in the rims of car wheels. Close by was a quantity of cash totalling $105,200. Further cash was found in the boot. This totalled $66,585.79. Also located were Sky City Casino chips valued at
$6,500.
[8] Following a jury trial in this Court in July 2017 Mr Al Hachache was found guilty of:
(a)possession of ephedrine for supply (x 1);
(b)supplying ephedrine (representative); and
(c)supplying methamphetamine (x 4).
[9] On 14 August 2017 Mr Al Hachache was sentenced to eight years’ imprisonment.2
[10] At sentencing Fitzgerald J observed that the combination of the convictions and the large sums of cash revealed that “this was no small operation”.3
These proceedings
[11] Between March and November 2016, the Commissioner applied for and obtained seven sets of restraining orders in relation to various properties associated with the respondents.
[12]The following restrained properties were attributed to Mr Al Hachache:
(a)bank account proceeds of $85,965.41 formerly held in Westpac NZ in the name of R H Auto Trading Limited;
2 R v Al Hachache [2017] NZHC 1929 at [39].
3 R v Mr Al Hachache above n 1 at [8].
(b)funds of $7,804 held by Flight Centre NZ Limited representing a refund of airline tickets previously purchased by Mr Al Hachache;
(c)a collection of 135 bottles of wine and spirits seized from Osaka Tyres during the search;
(d)$640 cash seized from the office of Osaka Tyres during the search;
(e)Sky City Casino chips valued at $6,500 and bank account proceeds to the total value of $66,585.79 representing New Zealand and foreign cash located in the boot of the car parked at Osaka Tyres during the search; and
(f)$105,020 cash from inside a tyre rim at Osaka Tyres.
[13] The total estimated value of the restrained property attributed to Mr Al Hachache is $285,000 (plus interest accruing on the monetary funds subsequent to their restraint).
Application for civil forfeiture orders
[14] On 3 August 2018 the Commissioner filed an application for civil forfeiture orders (with supporting evidence) against the respondents. This was in relation to all of the property restrained at that date.
[15] In respect of Mr Al Hachache, the Commissioner has applied for asset forfeiture orders over the property outlined above and a profit forfeiture order against him in the sum of $773,975.79. Mr Al Hachache has not filed any documents in opposition.
Terms of the proposed settlement
[16] The Commissioner and Mr Al Hachache have now agreed to settle the question of the civil forfeiture of assets as between themselves, subject to the Court’s approval under s 95(3) of the Act.
[17] The proposed terms of settlement as between the Commissioner and Mr Al Hachache are:
(a)asset forfeiture orders made by consent under s 50 of the Act over all the restrained property attributed to Mr Al Hachache except for a sum of $5,000 which will be returned to Mr Al Hachache, to be paid into a bank account nominated by him;
(b)the Commissioner will not pursue his application for a profit forfeiture order against Mr Al Hachache and that part of his application for civil forfeiture orders will be dismissed;
(c)the settlement is made in full and final settlement of the current proceedings against Mr Al Hachache under the Act;
(d)in accordance with [17](c) Mr Al Hachache will abandon all claims he might have in relation to any of the property restrained in these proceedings, either under the Act or otherwise, and will undertake not to take any steps to oppose the civil forfeiture of that property; and
(e)costs will lie where they fall.
[18] The total value of the property which would be forfeited to the Crown as a result of the proposed settlement is approximately $280,000. As noted, a modest sum of $5,000 would be returned to Mr Al Hachache from the restrained property.
Legal principles: Threshold for settlement approval
[19] Section 95 of the Act governs Court-approved settlements and provides as follows:
“(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.”
[20] 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. 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.
[21] 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
[22] The primary purpose of the Act is contained in s 3(1); 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].
[23] The statutory language, that is “overall interests of justice”, indicates a broad inquiry is required. 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
This case: Threshold for settlement approval met
[24] Reflecting the principles in s 95(3) the parties submit the settlement is consistent with the purposes of the Act and is in the overall interests of justice. I agree for the following reasons:
(a)the overwhelming majority of the restrained property attributed to Mr Al Hachache would be realised for the benefit of the Crown. The total value is approximately $280,000. I agree this is appropriate, given the serious nature of the criminal offending underlying this proceeding;
(b)the Commissioner’s case is strong. Mr Al Hachache’s only declared personal income for 2010 to 2016 was $6,429.42 derived from social welfare benefits in the 2012 tax year. Furthermore, despite being the sole director and shareholder of Osaka Tyres, he declared no personal income from the company. Despite this he was in possession of assets valued in excess of $285,000 at the time of the search, including
$170,000 in bundles of cash, much of it secreted at the premises. No explanation has been given for the source of these assets;
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)I also agree that the Commissioner has a strong case to show that Mr Al Hachache has unlawfully benefited to a substantial degree from the drug offending so as to support a profit forfeiture order being made against him. Over a 14 month period from January 2015 Mr Al Hachache’s personal bank accounts received cash deposits with a total value of $18,980. Osaka Tyres received unexplained cash deposits totalling $138,380. Three kilograms of ephedrine was found in Mr Al Hachache’s possession during the search. The approximate value of the drug is $255,000. Before being remanded on bail in December 2016 Mr Al Hachache turned over more than $4,626,120.40 at the Sky City Casino during the eight month period from December 2016, a period when he declared no sources of income;
(d)the Commissioner is not aware of any unrestrained assets of significance which could be applied to meet the likely shortfall ($488,975.79) between the profit forfeiture order sought by the Commissioner ($773,975.79) and the value of the restrained property presently available to meet it (approximately $285,000). Forfeiture of the specified items of restrained property via asset forfeiture orders (as is proposed by the parties) would relieve Mr Al Hachache of any residual debt to the Crown. The modest sum proposed to be returned to Mr Al Hachache ($5,000) will also assist him to make a fresh start on his release; and
(e)all parties acknowledge there will be significant savings of time and cost if Mr Al Hachache’s interests in the proceeding can be resolved by consent without the need for litigation. An agreed settlement would also allow the parties to have certainty and control as to the outcome.
Orders sought: The proposed settlement
[25] The Commissioner and Mr Al Hachache jointly seek the following orders by consent, so as 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 made by Thomas J on 16 August 2016 and is to be returned to Mr Al Hachache, to a bank account nominated by him:
(i)funds to the value of $5,000 formerly held in Westpac NZ Limited bank account 03-0207-0839428-025 in the name of R H Auto Trading Limited;
(b)assets forfeiture orders under s 50(1) of the Act over the following property, so that the property vests in the Crown absolutely and is to be in the Official Assignee's custody and control:
(i)all remaining funds formerly held in Westpac NZ Limited bank account 03-0207-0839428-025 in the name of R H Auto Trading Limited, valued at approximately $80,965.41, and any accrued interest;
(ii)funds to the value of $7,804 formerly held by Flight Centre NZ Limited, representing a refund of airline tickets previously purchased by Mr Al Hachache, and any accrued interest;
(iii)a collection of 135 bottles of wine and spirits seized by police from the premises of Osaka Tyres and Car Repair Limited at 32 Saleyards Road, Otahuhu, Auckland on 1 April 2016;
(iv)$640 cash seized by police from the office at Osaka Tyres on 1 April 2016, and any accrued interest;
(v)funds to the value of NZD$66,585.79 held in the Official Assignee's trust account, representing the following sums of cash located by Police inside the boot of a Mercedes motor vehicle parked at Osaka Tyres on 1 April 2016:
(1) NZD$13,800 cash;
(2) a separate bundle of NZD$29,050 cash;
(3) US$14,700 cash;
(4)FJ$5,405 cash; and
(5)any accrued interest;
(vi)funds to the value of $6,500 held in the Official Assignee's trust account, representing the Sky City Casino Chips valued at
$6,500 located by Police inside the boot of a Mercedes motor vehicle parked at Osaka Tyres on 1 April 2016, and any accrued interest;
(vii)$105,020 cash seized by Police from inside a sealed tyre located in the workshop at Osaka Tyres on 1 April 2016, and any accrued interest;
(c)the Commissioner's application for a profit forfeiture order against Mr Al Hachache, contained at paragraph l(b) of his application for civil forfeiture orders (dated 3 August 2018) is dismissed; and
(d)costs as between the Commissioner and Mr Al Hachache lie where they fall in relation to all matters.
[26] In addition, the parties asks the Court to record the further terms of settlement between the Commissioner and Mr Al Hachache:
(a)the settlement is in full and final settlement of the current proceedings brought by the Commissioner against Mr Al Hachache under the Act; and
(b)Mr Al Hachache abandons all claims he might have in relation to any of the remaining property restrained in these proceedings, either under
the Act or otherwise, and undertakes not to take any steps to oppose the civil forfeiture of that property.
Orders
[27] I am satisfied that the proposed settlement is consistent with the purposes of the Act and is in the overall interests of justice. In these circumstances the Court is mandated to approve the settlement.
[28]I thus make orders in terms of [25](a) to (d) and [26](a) and (b).
Moore J
Solicitors:
Mr Hewson, Auckland Meredith Connell, Auckland
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