Commissioner of Police v Parkes
[2019] NZHC 397
•11 March 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2016-404-590
[2019] NZHC 397
UNDER Criminal Proceeds (Recovery) Act 2009 BETWEEN
COMMISSIONER OF POLICE
Applicant
AND
GERRARD GORDON PARKES
First Respondent
WHITNEY CHANTEL HARRIS
Second RespondentROGER EMMANUEL AL HACHACHE
Third RespondentTONI CLARE NIKORA
Fourth Respondent
Hearing On the papers Counsel:
K Eastwood for applicant
RM Mansfield for fourth respondent
Judgment:
11 March 2019
JUDGMENT OF FITZGERALD J
[As to approval of settlement]
This judgment was delivered by me on 11 March 2019 at 3:30pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Meredith Connell, Auckland To: RM Mansfield, Auckland
Commissioner of Police v Parkes [2019] NZHC 397 [11 March 2019]
[1] The Commissioner of Police and the fourth respondent (Ms Nikora) apply by joint memorandum for Court approval of a settlement pursuant to s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).
Background
[2] Counsel for the parties explain in their joint memorandum that between August 2015 and early 2016, the Police carried out a large-scale criminal investigation targeting a number of individuals, including Ms Nikora, who were believed to be involved in the manufacture and supply of methamphetamine and other controlled drugs.
[3] The investigation established that one of the respondents manufactured methamphetamine which was then on-sold to Ms Nikora. Ms Nikora in turn on- supplied the methamphetamine to a number of customers in smaller quantities.
[4] On 2 March 2016, Police searched Ms Nikora’s address and seized various sums of cash with a total value of $10,910. A quantity of methamphetamine was also seized. As a result, Ms Nikora was arrested and charged with the possession of a Class A controlled drug for supply.
[5] Execution of further search warrants later in March 2016 resulted in Ms Nikora being charged with further drug-related offences. Ms Nikora ultimately pleaded guilty to a range of drug-related charges, including 64 charges of supplying methamphetamine.
[6] Ms Nikora was sentenced in December 2017 to 10 years’ imprisonment, with a minimum period of imprisonment of four years.
[7] In parallel to the above, between March and November 2016, the Commissioner applied for and obtained seven sets of restraining orders in relation to various property associated with Ms Nikora and others who were the subject of the investigation. The total value of the restrained property attributed to Ms Nikora is approximately NZ$12,370 (plus interest accruing on those funds since their initial
restraint). I say “approximately”, given a small portion of the seized property is cash in foreign denominations.
[8] On 3 August 2018, the Commissioner filed an application for civil forfeiture orders for all of the property restrained in relation to this matter as at that date. The Commissioner and Ms Nikora have agreed to settle the question of the civil forfeiture of assets as between themselves, subject to the Court’s approval under s 95 of the Act.
The settlement
[9] The proposed terms of settlement as between the Commissioner and Ms Nikora are as follows:
(a)assets forfeiture orders would be made by consent under s 50 of the Act over all of the restrained property attributed to Ms Nikora, that is, the New Zealand cash and foreign cash seized from 42/26 Mary Street;
(b)the Commissioner will not pursue his application for profit forfeiture orders against Ms Nikora and that application would be dismissed;
(c)the settlement would be in full and final settlement of the current proceedings against Ms Nikora, and any other proceedings that might be brought by the Commissioner against Ms Nikora under the Act arising out of, or relating directly to, the ‘Operation Bunk’ criminal investigation;
(d)in accordance with (c), Ms Nikora would abandon all claims she might have in relation to any of the property restrained in this matter, either under the Act or otherwise, and would undertake not to take any steps to oppose the civil forfeiture of that property; and
(e)costs would lie where they fall.
Legal principles
[10] The legal principles are not in dispute and have been addressed on a number of occasions in recent High Court decisions. I can do no better than respectfully adopt the recent summary by Muir J in Commissioner of Police v Wellington:1
[10]Section 95 of the Act governs settlements and 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] In enacting s 95, Parliament expressly empowered the Commissioner to enter into settlements with respondents (and interested parties) relating to the forfeiture of assets. I accept the proposition in the parties’ joint memorandum that Parliament is likely to have had in mind the significant costs associated with a civil litigation and the benefits to all parties if such proceedings could be resolved in a timely and just way. There is a strong public interest in litigation of this nature being brought to a prompt conclusion provided the settlement reflects the likely costs and risks inherent in the underlying litigation. Parliament has entrusted the Court with supervisory jurisdiction aimed at ensuring any settlements reached are consistent with its intent in enacting the legislation and with the overall interests of justice.2
[12] Section 95(3) directs the Court to consideration of the purposes of the Act and the overall interests of justice.
[13] The primary purpose of the Act is contained in s 3(1). That 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. Ancillary 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)).
1 Commissioner of Police v Wellington [2018] NZHC 2502 (footnotes in original).
2 Commissioner of Police v Know-All Group Ltd HC Auckland CIV-2010-404-403, 7 November 2011, per Brewer J at [11].
[14] The overall interests of justice requirement predicates a broad inquiry. As this Court has previously said, although it is proper that it should have a supervisory jurisdiction, it is “equally important that the Court carry out a broad inquiry and acknowledge, where appropriate, that settlements can be in the interests of justice, bearing in mind the savings of time and cost and the litigation risks to the parties”.3
[15] The Court has recognised that decisions to settle proceedings under the Act may be made on economic and pragmatic grounds and often reflect “a common-sense compromise” between the parties.4
[16] If the Court is satisfied in respect of the two matters identified in s 95(3) then it must approve the settlement.
Analysis
[11] Having reviewed the papers and considered the matters raised in counsels’ joint memorandum, I am satisfied it is appropriate to approve the proposed settlement.
[12] A key factor is that all of the restrained assets attributable to Ms Nikora are to be forfeit under the proposed settlement. Counsel note there is also a profit forfeiture order being sought by the Commissioner, at a value of $391,329. There is obviously a relatively large shortfall between the value of the currently restrained property attributable to Ms Nikora and the value of the profit forfeiture order. However, the Commissioner is not aware of any unrestrained assets of significant value held by Ms Nikora which might be available to meet that shortfall. The Commissioner therefore considers that in the circumstances of this case, there would be little utility in pursuing a profit forfeiture order for a sum that is very unlikely to be recovered in full. There would inevitably be further costs involved in pursuing such an order, and in my view, the Commissioner is entitled to take a pragmatic and realistic approach to the utility of pursuing such an order, versus the likelihood of securing any substantial benefit from it.
[13] I am accordingly satisfied that the proposed settlement is consistent with the purposes of the Act as well as being in the overall interests of justice.
3 Commissioner of Police v Zhang [2016] NZHC 930 at [8].
4 Commissioner of Police v Douglas [2015] NZHC 1293 at [6]; and Commissioner of Police v Venn
[2014] NZHC 361.
Result
[14]I accordingly approve the settlement.
[15] In order to give effect to the settlement, and by consent, I make orders in accordance with paragraph 6.1 of the parties’ joint memorandum dated 20 February 2019.
[16] The parties have also asked the Court to “record” certain terms of the settlement between the Commissioner and Ms Nikora.
[17] I do not consider it is necessary or appropriate for the Court to “record” those further terms. The Court having approved the settlement, it is now binding on the parties and thus enforceable between them. Nothing is added by the Court recording the terms of an agreement reached by the parties. Should the Commissioner consider Ms Nikora is acting contrary to the terms of the settlement agreement, then he will be able to seek to enforce those terms in the ordinary way.
Fitzgerald J
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