Commissioner of Police v Paul
[2024] NZHC 2104
•31 July 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-1155
[2024] NZHC 2104
BETWEEN COMMISSIONER OF POLICE
Applicant
AND
NGAKAU AROHA PAUL
First Respondent
ZANDALEE KILLEEN
Second RespondentEVELYN TUHIWAI
Third RespondentBRIAN TITO
Fourth Respondent
Hearing: 8 and 9 April 2024 Appearances:
A Mackenzie and L Lai for the Applicant S Kilian for the Respondents
Judgment:
31 July 2024
JUDGMENT OF MOORE J
[Application for restraining and ancillary orders]
This judgment was delivered by me on 31 July 2024 at 3.00 pm, Pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date: ………………………..
Solicitors:
Meredith Connell, Auckland Kilian & Associates, Auckland
COMMISSIONER OF POLICE v PAUL [2024] NZHC 2104 [31 July 2024]
Introduction
[1] The applicant, the Commissioner of Police (the Commissioner), seeks on notice restraining (and effective control) and other orders over the property of Ngakau Paul, Zandalee Killeen and Evelyn Tuhiwai pursuant to an application made under the Criminal Proceeds (Recovery) Act 2009 (the Act), dated 15 June 2023.
[2] The Commissioner claims that Mr Paul sold methamphetamine on multiple occasions for profit. His one-week trial on 29 charges of Class A drug dealing is scheduled to commence on 20 January 2025 in the Whangārei District Court.
[3] Ms Killeen is Mr Paul’s long-term partner and Ms Tuhiwai is Ms Killeen’s mother. Neither faces charges arising out of the Police’s investigation.
[4] The Commissioner’s application is brought on the dual basis that all three benefited from Mr Paul’s drug dealing and that the property sought to be restrained is tainted, having been acquired from the proceeds of Mr Paul’s offending.
[5] The orders sought in respect of Mr Paul and Ms Killeen relate to a vehicle and jewellery. The orders sought in respect of Ms Tuhiwai relate to two vehicles.
[6] At all material times, Mr Paul and Ms Killeen (and their young son) lived in rented accommodation at [REDACTED], Whangārei with Ms Killeen’s parents, Ms Tuhiwai and Mr Patrick Killeen. Ms Tuhiwai was the tenant on the lease and was responsible for meeting all rent payments. The Commissioner claims that Ms Tuhiwai received weekly rental payments and other cash sums from Mr Paul and Ms Killeen knowing those funds were the proceeds of Mr Paul’s drug dealing. The Commissioner’s case against Ms Tuhiwai is that the two vehicles were purchased using those funds and that she and Mr Killeen were wilfully blind to the criminal source of those funds.
[7] The Commissioner also seeks sale orders for the vehicles on the grounds that such orders are necessary to preserve their value and other ancillary orders authorising the Police and/or the Official Assignee to enter property to locate and seize restrained property.
[8] Mr Paul and Ms Killeen oppose the Commissioner’s application, primarily on the basis that the property in question does not belong to them. They claim the owner of the property is Mr Paul’s father, Te Huki Paul (Mr T Paul). Ms Tuhiwai, supported by Mr Killeen, opposes the application to restrain their two vehicles on the basis that neither of them unlawfully benefited from Mr Paul’s methamphetamine dealing because they were not aware of his criminal offending or the source of the funds they received.
Restraining orders and the relevant property
[9] On 2 June 2023, the Commissioner applied for without notice restraining orders over various property of the respondents, including the items which are the subject of this judgment. On 9 June 2023, Johnstone J made orders to that effect.
[10] On 15 June 2023, the Commissioner applied on notice for restraining and further orders over the property. At that time, the list of property was various and significant, comprising of six vehicles, four items of jewellery and two separate bundles of cash. Details follow:
Vehicles
(a)2013 Harley Davidson Nightrod motorcycle (Harley Davidson), registered to Mr Paul;
(b)2016 Ford Ranger XLT (Ford Ranger), registered to Mr T Paul;
(c)2022 Yamaha Raptor motorcycle (Yamaha Raptor), jointly owned by Mr Paul and Ms Killeen;
(d)2022 Yamaha PW50 motorcycle (Yamaha PW50), jointly owned by Mr Paul and Ms Killeen;
(e)2006 Toyota Hilux (Toyota Hilux), registered to Ms Tuhiwai; and
(f)2014 Mazda 3 Hatchback (Mazda 3), registered to Ms Tuhiwai.
Jewellery
(g)gold and diamond Black Power ring inscribed with the words “black power” and the numbers “275” and “433” (gold and diamond ring), identified by the Police in the Ford Ranger at [REDACTED] during the execution of a search warrant on 13 December 2022;
(h)gold “1%” ring (gold 1% ring), identified by the Police in the Ford Ranger at [REDACTED] during the execution of the December 2022 search warrant;
(i)gold and diamond Full Sovereign coin pendant and chain (gold necklace), located by the Police on 13 June 2023 at [REDACTED],
Mt Wellington, Auckland,1 owned by Ms Killeen; and
(j)gold coloured pendant with horse coin in the middle and diamond type stones around the edge (gold pendant), located by Police on 13 June 2023 at [REDACTED], owned by Ms Killeen.
Cash
(k)$12,245.10 cash located on 13 December 2022 in the bedroom occupied by Mr Paul and Ms Killeen at [REDACTED] (Anzac cash); and
(l)$4,150 cash located on 13 June 2023 at [REDACTED] (Malone cash).
[11] Shortly before the hearing of the application, the respondents advised that the Commissioner’s restraining orders were opposed only in relation to the Ford Ranger, the gold and diamond ring, the gold 1% ring (collectively, the rings), the Mazda 3 and the Toyota Hilux.
[12] As a consequence, and in the absence of opposition, I was asked by the Commissioner to make orders in terms of his on notice application of 15 June 2023.
1 This was Mr Paul’s bail address.
Having considered the evidence filed in support, I am satisfied that such orders sought should be made and I so order in respect of the following property:
(a)the Harley Davidson;
(b)the Yamaha Raptor;
(c)the Yamaha PW50;
(d)the gold necklace;
(e)the gold pendant;
(f)the Anzac cash; and
(g)the Malone cash.
[13] Sale orders are sought by the Commissioner in respect of all vehicles. I shall deal with that aspect of the Commissioner’s application later in this judgment. At the hearing, the Commissioner withdrew his application for sale orders in respect of all the jewellery, being items [10(i)] and [10(j)] above.
Issues for determination
[14] Mr Mackenzie, for the Commissioner, helpfully set out, both in his opening and closing submissions, the issues for determination in these proceedings. I gratefully adopt his summary with some modifications.
[15] The Commissioner applies for restraining orders under ss 25 and 24 of the Act, orders for the sale of the vehicles to preserve their value and further orders empowering entry into and onto property by the Police and the Official Assignee to take custody of the rings, neither of which was seized from inside the Ford Ranger when the search warrant was executed at [REDACTED]. The whereabouts of the rings is unknown to the Commissioner.
[16]The issues are:
Section 25: unlawful benefit from significant criminal activity
(a)Whether there are reasonable grounds to believe that Mr Paul, Ms Killeen and Ms Tuhiwai have unlawfully benefited from significant criminal activity; and
(b)whether the Court is satisfied:
(i)that Mr Paul and Ms Killeen have interests in, or effective control over, the Ford Ranger and the rings; and
(ii)Ms Tuhiwai has an interest in, or effective control over, the Toyota Hilux and the Mazda 3; or, alternatively.
Section 24: tainted property
(c)whether there are reasonable grounds to believe that the alleged tainted property was, wholly or in part:
(i)acquired as a result of significant criminal activity; or
(ii)directly or indirectly derived from significant criminal activity.
Further orders (under ss 33–35)
(d)Whether the Court should:
(i)order the sale of the Ford Ranger, the Yamaha Raptor, the Yamaha PW50 and the Mazda 3; and
(ii)make an order empowering the Police and the Official Assignee to go onto and into property to locate and seize the rings.
The opposition
[17] In opposing the Commissioner’s forfeiture application, the respective positions of the respondents are as follows:
(a)Mr Paul and Ms Killeen, supported by Mr T Paul, oppose the making of restraining orders in respect of the Ford Ranger and the rings. This is on the basis that they have not unlawfully benefited from significant criminal activity, nor is the property tainted. However, in any event, Mr Paul says that the Ford Ranger and the two rings belong to his father.
(b)Ms Tuhiwai, supported by Mr Killeen, oppose the restraining orders in respect of the Toyota Hilux and the Mazda 3. They say that they had no idea that Mr Paul was involved in methamphetamine dealing, whether as a result of direct knowledge or by being wilfully blind as claimed by the Commissioner. They say they purchased the Toyota Hilux and the Mazda 3 with identifiable and legitimate funds, and not directly or indirectly from the proceeds of Mr Paul’s offending.
[18] Given the starkness of their respective positions, it is convenient to deal with the respondents’ opposition separately, although a number of the elements of which the Court is required to be satisfied are common to both.
Legal principles
Restraining orders
[19] Before issuing a restraining order, the Court must be satisfied there are reasonable grounds to believe either that the property sought to be restrained is tainted property (s 24), or that the respondents have unlawfully benefited from significant criminal activity (s 25). The Court of Appeal described the purpose of restraining orders in Vincent v Commissioner of Police:2
[45]… we make three preliminary points:
2 Vincent v Commissioner of Police [2013] NZCA 412 at [45(a)].
(a) Restraining orders are effectively interim orders of limited duration and may be made without notice. The explanatory note to the Criminal Proceeds (Recovery) Bill identified the purpose of restraining orders as being “to preserve property while the Crown is gathering evidence to support an application for forfeiture”. They may subsequently lead to forfeiture orders, but that requires the completion of a further process…
(b) It is important to recall what the judge must be satisfied about before issuing a restraining order. He or she must be satisfied that there are “reasonable grounds to believe” that the property is tainted property or that the relevant person unlawfully benefited from significant criminal activity. The Judge is not required to make a finding that the relevant property is tainted property or that the particular person did in fact unlawfully benefit from significant criminal activity.
…..
[47] … restraining orders will often need to be obtained in situations of urgency, as is illustrated by the provision for “without notice” applications. They are, as we have said, temporary orders, which give the police time to gather further evidence, and may lead to forfeiture but only on the completion of further processes. Restraining orders are issued on the basis of reasonable grounds to believe, rather than proof, that the target has unlawfully benefited from significant criminal activity.
[citations omitted]
[20]Katz J in Commissioner of Police v Li, referring to Vincent, observed:3
The threshold required for making restraining orders is therefore relatively low, consistent with their role as a “holding” measure.
Definitions
[21] The term “significant criminal activity” is defined in the Act as an activity engaged in by a person that, if proceeded against as a criminal offence, would amount to offending consisting of one or more offences punishable by a maximum term of imprisonment of five years or more.4 It is common ground that the offending with which Mr Paul is charged meets the definition of “significant criminal activity”.
[22] The phrase “unlawfully benefited from significant criminal activity” is also defined in the Act:5
3 Commissioner of Police v Li [2014] NZHC 479 at [8].
4 Criminal Proceeds (Recovery) Act 2009, s 6.
5 Section 7.
In this Act, unless the context otherwise requires, a person has unlawfully benefited from significant criminal activity if the person has knowingly, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person undertook or was involved in the significant criminal activity).
[23] It is unnecessary for the property sought to be restrained to be, itself, derived from the offending. Nor is it necessary that the person who owns the property undertook or was involved in the significant criminal activity. What matters is the knowing receipt of financial reward from the qualifying offending, here dealing in methamphetamine. Knowledge in this context also includes wilful blindness.6
[24] Proof of the required knowledge often requires the Court to draw inferences from proved facts. As Venning J observed in Commissioner of Police v Hayward:7
… The Commissioner can invite the court to infer … that the respondent was involved in other significant criminal activities that he was not charged with. The Commissioner can also, for instance, rely on the disparity between moneys passing through the respondent’s bank account or finding its way into the purchase of assets as compared to his declared legitimate income to prove or establish the benefit the respondent received from his significant criminal activities.
[25] The Commissioner must also satisfy the Court that the respondent has “an interest in the property” sought to be restrained. Section 5 of the Act defines the relevant terms. “Property” includes real or personal property. “Interest” is broadly defined. It includes a legal, equitable estate or interest in the property or a right, power or privilege in connection with the property. Interest also includes “effective control” of the property.8 In that context, the Court may ask what de facto position the respondent held relative to the property — in other words, whether the respondent had the ability to treat the property as their own.9 Relevant considerations under that head also include the power to acquire, control, use and dispose of the property as if it was their own, irrespective of what particular legal structure may have been used to evince
6 Vincent v Commissioner of Police, above n 2, at [48]–[53].
7 Commissioner of Police v Hayward [2012] NZHC 1097 at [22].
8 Criminal Proceeds (Recovery) Act 2009, s 17A.
9 Solicitor General v Bartlett [2008] 1 NZLR 87 (HC) at [27].
ostensible ownership.10 In the context of motor vehicle ownership, it is well settled that registration is not determinative of ownership.11
Tainted property
[26] Section 24 of the Act governs the principles where a restraining order is based on tainted property. This is an alternative mechanism to the unlawful benefit procedure in s 25.
[27] Under s 24, the Court may make a restraining order if it is satisfied it has reasonable grounds to believe that the property is “tainted property”. The definition of tainted property is broad:12
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.
[28] This definition makes it plain the Court need not be satisfied that the acquisition of the property in question was derived wholly from significant criminal activity. It is well established that if only part of the property was derived from significant criminal activity, orders may be made. The respondent need not be engaged in the significant criminal activity themselves, provided that the property was “wholly or in part” derived from significant criminal activity.13
10 At [27].
11 Otago Finance Ltd v District Court [2003] 1 NZLR 336 at [48]–[49]; Commissioner of Police v Pirini [2022] NZHC 2326, [2023] 2 NZLR 70 at [41] and [62].
12 Criminal Proceeds (Recovery) Act 2009, s 5.
13 Doorman v Commissioner of Police [2013] NZCA 476, [2014] 2 NZLR 173 at [13]. See also the discussion at [32]–[36].
The Ford Ranger and the rings
Has Mr Paul and/or Ms Killeen unlawfully benefited from significant criminal activity?
[29] The first question under this heading is whether I believe, on reasonable grounds, that Mr Paul has unlawfully benefited from significant criminal activity.
[30] That question is answered to my satisfaction on the unchallenged affidavit evidence filed by the Commissioner in support. The relevant evidence may be summarised as follows:
(a)In August 2022, the Organised Crime Unit of the Whangārei Police commenced an investigation into the sale and supply of methamphetamine in the Whangārei area. It was codenamed Operation Ciro and focused, primarily, on members and associates of the local Black Power gang. Phone records for Mr Paul, Ms Killeen and Mr Tito were obtained. The investigation revealed that Mr Paul was President of the Black Power 433 Chapter. Mr Tito is an associate of Mr Paul’s and is also believed to be a member of the Black Power gang.
(b)On ten separate occasions between 27 April 2022 and 12 October 2022, Mr Tito supplied or offered to supply quantities of methamphetamine. However, other evidence uncovered suggested that both Mr Paul and Mr Tito likely dealt more than the amounts alleged. For example, Mr Tito was twice found in possession of tick lists and a large amount of cash. Both men used a variety of mobile phones and phone numbers.
(c)On 12 October 2022, the Police executed a search warrant at Mr Tito’s address where they located 10 g of methamphetamine, over $9,000 of cash and two tick lists, which the Police believe lists who owes outstanding payments for drugs totalling over $40,000. Mr Tito was charged but later bailed. However, on 13 November 2022, he was rearrested on a charge of breach of bail. He was found in possession of two mobile phones, a set of digital scales, $590 cash and a tick list for
$4,500, along with methamphetamine and assorted dealing paraphernalia.
(d)Another co-defendant, also believed to be connected to the Black Power gang holding the rank of “Captain” in the Whangārei chapter, was a Mr Carran. Text messages revealed Mr Carran addressing someone believed to be Mr Paul and referring to them as “Prez” or “my Prez”. In another communication with a third party, Mr Carran referred to dropping money to the “Prez”. In the evidence filed by the Police, it is said that in terms of gang culture and practice, it is the President who maintains control over the funds obtained from methamphetamine dealing. The opinion that is expressed is that Mr Carran was selling methamphetamine for Black Power and accounting the funds received therefrom to Mr Paul as President.
(e)As for the charges Mr Paul faces arising out of the Police investigation, intercepted text message data indicates Mr Paul sold or offered to sell at least 30g of methamphetamine over a five-month period between 25 March 2022 and 13 August 2022, totalling some $12,000.14
[31] Mr Kilian, for all respondents, accepted that while the charges Mr Paul faces are yet to be determined, the fact that criminal charges have been laid is sufficient to meet the evidential threshold set by the Act that he was engaged in significant criminal activity. The evidence also supports the conclusion he benefited from this activity through the receipt of significant amounts of cash.
[32] It follows I am easily satisfied Mr Paul benefited from the significant criminal activity in which he was involved.
[33] The next question is whether Ms Killeen benefited from Mr Paul’s criminal activity. I am satisfied there are reasonable grounds to support such a belief. My reasons follow.
14 Offering to supply methamphetamine (x 28) and supplying methamphetamine (Misuse of Drugs Act 1975, s 6(1)(c)).
[34] First, Ms Killeen was (and it seems remains) Mr Paul’s life partner. They lived together, sharing a bedroom at [REDACTED]. They have a young child together who lived with them at [REDACTED]. For reasons more fully explored later in this judgment, the domestic dynamics at [REDACTED] were unusual. Although Mr Paul and Ms Killeen shared a bedroom, I am satisfied that their contact and involvement with others in the household, particularly in the case of Mr Paul, was limited. The evidence I heard suggests that the bedroom the couple shared was very much their personal space which others in the household rarely, if ever, entered. A reasonable inference is that Ms Killeen would have known what was in her bedroom. This adds to the Commissioner’s related submission that Ms Killeen would have known what Mr Paul was engaged in, whether from her direct knowledge or through being wilfully blind. This makes what was found in that bedroom when the warrant was executed especially significant.
[35]Various items consistent with drug dealing were located. These included:
(a)A Black Power “President” patch, further supporting the Police’s claim that Mr Paul was the leader of the local chapter. In his evidence, Mr Paul claimed the presidential patch belonged to his father. Although he admitted his membership of Black Power, Mr Paul denied he was the local President. That denial is difficult to accept in the face of the body of evidence tending to contradict it, particularly the text messages. This feature is also relevant to Ms Killeen’s knowledge of Mr Paul’s involvement in criminal offending — the Crown’s case against Mr Paul is that he led and coordinated Black Power members or associates in his drug dealing enterprise. It stretches credulity that Ms Killeen would not have been aware of this. Indeed, there are some text messages between Mr Paul and Ms Killeen which strongly infer that she knew what nefarious activities her partner was engaged in.
(b)Five mobile phones, again consistent with the phone data evidence indicating that Mr Paul operated multiple mobile phones using encrypted messaging platforms.
(c)Damaged pieces of New Zealand currency which, apparently, are commonly used as tokens in money laundering.
(d)Of particular significance in my assessment was the finding of the Anzac cash which totalled more than $12,000. Given that both Mr Paul and Ms Killeen were unemployed, with limited sources of legitimate income, it is in my view inconceivable that Ms Killeen was unaware of the existence of the cash in her bedroom or its origins.
(e)Mr Paul and Ms Killeen’s lifestyle, which was inconsistent with their minimal declared income. This included overseas holidays and the purchase of expensive jewellery.
Does Mr Paul and/or Ms Killeen have an interest in or effective control over the Ford Ranger and the rings?
[36] This is a separate question. The respondents’ evidence on this issue relied primarily on the affidavits of Mr Paul, Ms Killeen and Mr T Paul. All were cross-examined. The question for me, at its simplest, is whether I am satisfied there are reasonable grounds to believe Mr Paul and Ms Killeen have an interest in the property or whether I am satisfied, on the balance of probabilities, that Mr Paul and Ms Killeen had effective control of the property in question. I am satisfied that whichever test is applied, the property should be restrained. I shall start with the Ford Ranger.
(a)The Ford Ranger
[37] In summary, the respondents’ opposing position is that the Ford Ranger was purchased by Mr T Paul using the proceeds of life insurance paid out to him as a beneficiary following the death of his wife in early 2019. Although he did not become the registered owner of the vehicle until some months after he acquired it, he owned and used the vehicle and permitted members of his family to use it, including Mr Paul and Ms Killeen.
[38] For the reasons which follow, I am satisfied that both Mr Paul and Ms Killeen had an interest in and/or effective control over the Ford Ranger.
[39] The first relates to the circumstances of the purchase of the vehicle. These are unusual and, in my view, inconsistent with the respondents’ assertion the Ford Ranger was bought by Mr Paul on behalf of his father when considered in their totality.
[40] It is common ground, for the reasons discussed earlier in this judgment, that registration alone does not prove ownership. The vehicle is presently registered in Mr T Paul’s name. The Commissioner does not accept this reflects the true proprietorial position.
[41] The purchase was completed sometime between 15 and 18 October 2022. The vendor was a Mr Saheb. Mr Saheb had advertised the vehicle on Facebook Marketplace. Mr Paul said he was in Auckland at the time and referred the advertisement to his father who was in Whangārei, because he said he knew his father was on the lookout for a truck. Mr T Paul deposed that after this he contacted Mr Saheb directly “and arranged for the purchase.” Mr Saheb could not remember Mr T Paul contacting him at this time.
[42] On Mr Paul’s account, his father liked the vehicle and instructed his son to come up to Whangārei to collect cash from him to purchase it with. Mr Paul said he did that. He travelled to Whangārei where he said his father gave him $34,000 in cash. Mr Paul claimed that he returned to Auckland the next day.
[43] Contrary to Mr T Paul’s version of events, Mr Saheb confirmed that he was contacted by “Paora Nark”, Mr Paul’s Facebook name. Mr Saheb said that Mr Paul turned up to view the car at a pre-agreed place in Manukau, Auckland. Mr Paul took it for a test drive. He confirmed he wanted to purchase it and paid $34,000. But there are other aspects of this transaction which, in my assessment, add to the implausibility that Mr T Paul was the purchaser.
[44] In my assessment, that Mr Paul travelled from Auckland to Whangārei for the sole purpose of obtaining the funds from his father and the amount he was given just
happened to be what Mr Saheb later accepted, is an odd coincidence. But the oddities engaged in this transaction do not stop there.
[45] At the hearing, Mr Saheb said he signed a handwritten agreement given to him by Mr Paul and also completed one himself but has since mislaid it. Mr Saheb claimed that Mr Paul told him at the time that he was buying the vehicle on behalf of his father. Mr Paul told Mr Saheb his father’s name was Te Huki Paul. According to Mr Saheb, Mr Paul left before Mr Saheb obtained any of the new owner’s details to complete the documentation for the change of ownership. Although not covered in his very abbreviated affidavit, at the hearing, Mr Saheb claimed that he used Paora Nark’s name on the change of ownership form because he forgot Te Huki Paul’s name and yet, somewhat inexplicably, was able to recall it when making his affidavit and giving evidence nearly three years later.
[46] There is another oddity. Mr Saheb recorded Narks/Paora’s address as at 87 Mt Wellington Highway. Under cross-examination, he said he did so because Mr Paul told him:
...he came from Mt Wellington Highway. That was, it was just a numb address that I had at the top of my mind when I went to fill out the form. Obviously, I didn’t want any ticket in my name so I had to get it out of my name. I remember when we were communicating he did mention he came from somewhere about 87 Mt Wellington Highway. And when I was doing the disposal, which is right after that, I had put that address. So, I’m not too sure if it’s the correct address or not.
[47] 87 Mt Wellington Highway is the address of Panmure District School. Mr Paul’s bail address was [REDACTED], immediately behind the Panmure District School. Mr Paul giving an address which was proximate to (but not exactly) his bail address, and Mr Saheb remembering that when he recorded the so-called “numb address”, is inherently implausible.
[48] Another rather surprising aspect of the witness’ accounts of the transaction is that, while Mr Paul said he was on the phone talking to his father about the transaction as it evolved, Mr Saheb said he had no recollection of that happening. Had Mr Saheb believed that Mr Paul was acting as his father’s agent, it might be expected he would have remembered this aspect of the transaction.
[49] I also regard the explanations given for Mr T Paul deciding to buy the Ford Ranger when he did as not ringing true. Both Mr Paul and his father explained that the reason the latter wanted a Ford Ranger was because Mr T Paul had previously owned a Toyota Hilux which could not pull a digger or a boat he wanted to buy. Mr T Paul also complained that the Toyota was unstable. It was sold on 28 February 2019. On the evidence, he was looking to replace it with a sturdier truck. At that time, Mr T Paul had more than enough funds on hand to purchase a more suitable vehicle. But he did not, or at least not straight away. No explanation has been given as to why Mr T Paul waited more than three years before buying a replacement.
[50] Secondly, and in my view most importantly in this part of the analysis, are the circumstances which led up the vehicle being re-registered in Mr T Paul’s name. When viewed in their totality, a reasonable inference may be drawn that the change into Mr T Paul’s name was an attempt to defeat any claim the Commissioner might make under the Act. The chronology follows.
[51] The Ford Ranger remained registered to Mr Paul from shortly after its purchase in October until 22 December 2022, when it was registered to Mr T Paul, who at that time was in custody, a period of about two and a half months.
[52] The timeline is revealing. The Police searched [REDACTED] and the Ford Ranger on 13 December 2022. The following day, Mr Paul and Mr T Paul were arrested and placed in the same cell together. They remained together for a week. At the hearing, Mr Paul was adamant that he and his father did not discuss the Ford Ranger during this time. In fact, he claimed all they talked about was how to get out of jail. Mr T Paul could not remember whether they did or not. However, on or about 19 December 2022, Mr Paul was released from custody while Mr T Paul remained in prison. Just two days later, on 22 December 2022, the Ford Ranger was registered in Mr T Paul’s name. This was undertaken by Mr Paul’s younger sister, Honey, apparently on Mr T Paul’s instructions.
[53] Honey’s evidence is difficult to reconcile with her father’s on the point. For example, in his affidavit, Mr T Paul said he was unaware the vehicle was registered in his son’s name until after the search warrant was executed at [REDACTED]. How he
came to know at that particular time — despite claiming to have owned the vehicle since mid-October — is not immediately obvious, despite his attempts to explain. In cross-examination, he said he rang Honey from prison, and it was she who told him the Ford Ranger was not in his name. That would appear, on his account, to be the first time he realised he was not the registered owner. How and why Honey did that at that time was left unexplained. Mr T Paul’s account was put to Honey in cross-examination. Notably, she said she could not remember telling her father that. Her account was that it was her father who called from prison and directed her to change the registration details which she did. That seems a good deal more likely given that father and son were in prison together and well aware of the Police search and the presence of the Ford Ranger at that address.
[54] What cannot be disputed is that within days after the warrant was executed at [REDACTED], the Ford Ranger’s ownership details were transferred from Mr Paul to his father. From this chronology, a reasonable inference may be drawn that there is no innocent coincidence in the timing of the change of registration. Following the search, Mr Paul recognised the likelihood the Ford Ranger would be of interest to the Commissioner. He and his father discussed this while they were together in prison. Honey was instructed to undertake the re-registration to a person unconnected to Operation Ciro.
[55] It follows that I am satisfied that the Ford Ranger was purchased by Mr Paul for his own use and that the claim he did so on behalf of his father is untrue. I am satisfied there are reasonable grounds to believe Mr Paul has both an interest in the vehicle and effective control over it.
[56] Thirdly, I am fortified in that finding by other circumstantial evidence to which I now turn, which tends to support the inference that Mr T Paul never acquired the vehicle nor had effective control over it. Indeed, the evidence viewed in its totality not only strongly supports that conclusion but also supports a finding that both shared effective control of the vehicle. This includes:
(a)Other than the respondents’ claims to the contrary, there is no independent evidence that Mr T Paul has ever driven the Ford Ranger. Nor is there any evidence that it was ever kept at his address.
(b)The Commissioner’s evidence includes a search of the AUROR database for the Ford Ranger. AUROR is a crime-prevention tool used by retailers — one of its functions is to capture images of vehicles, recognise and then log the vehicle’s registration number. These images are compiled on a database and can be searched by registration number. On 28 February 2023, a search of the database was undertaken for the Ford Ranger covering the previous 60-day period. In total, there were 18 detections of the Ford Ranger. Ms Killeen was identified as the driver on six dates between 14 January 2023 and 24 February 2023.
(c)In the remaining AUROR detections, the driver was not captured in the footage. On one occasion, an unknown male was noted as the driver with an unidentifiable female in the passenger’s seat.
(d)On 18 January 2023, Mr T Paul was released from custody. Despite that, over the next six weeks or so, there is no AUROR footage which identifies Mr T Paul as ever being the driver or a passenger in the Ford Ranger.
(e)At the hearing, Ms Killeen, despite being the only identified driver of the Ford Ranger, was unable to name anyone other than herself and Mr Paul who had ever used the vehicle.
(f)At the time the search warrant was executed , Mr Killeen told the Police that the Ford Ranger belonged to Mr Paul. He confirmed this under cross-examination when he said that to the best of his knowledge, the Ford Ranger was “Ngakau’s… [because] he drove it”. Ms Tuhiwai said she thought it belonged to “Ngakau or his family”.
(g)When the Police searched the vehicle on 13 December 2022, it contained a significant number of personal items belonging to Mr Paul and/or Ms Killeen, or items which otherwise indicated use by them. These included:
(i)the gold necklace, later found at [REDACTED] (Mr Paul’s bail address);
(ii)documents addressed to Mr Paul;
(iii)a Louis Vuitton handbag containing Ms Killeen’s driver’s licence;
(iv)the change of vehicle registration documents completed by Ms Killeen; and
(v)a child’s car seat secured in the back seat.
(h)The keys to the Ford Ranger were found in the bedroom shared by Mr Paul and Ms Killeen.
(i)Before the Ford Ranger was acquired, text messages between Mr Paul and Ms Killeen were intercepted in which they shared their aspirations of getting a truck.
(j)At the time the search warrant was executed, the Ford Ranger was parked at [REDACTED]. After Mr Paul’s arrest, he was bailed to an address at [REDACTED]. Bail checks were conducted at that address on 28 December 2022, 13 January 2023 and 15 February 2023. Each time, the Ford Ranger was noted as parked outside the address.
[57] Significantly, it does not appear that any items linked to Mr T Paul were observed inside the vehicle.
[58] For these reasons, I am satisfied that both Mr Paul and Ms Killeen had effective control of the Ford Ranger at all material times. Orders in terms of [1](a)(ii) of the Commissioner’s on notice application for restraining and further orders dated 15 June 2023 are hereby made.15
(b)The rings
[59] The rings were located in the Ford Ranger at the time the search warrant was executed. Neither the Ford Ranger nor the rings were seized pursuant to the warrant. The rings remain outstanding.
[60] Although the rings were not seized, they were photographed in situ at the time the search was conducted. They were located together, beside Ms Killeen’s gold necklace. The photographs show the items in plain view beside the gear shift.
[61] The gold and diamond ring depicted a fist with the words “black power” and the numbers “275” and “433” inscribed on them.
[62] The respondents claim that the rings belong to Mr T Paul. Mr T Paul claims they were gifted to him by a friend and fellow patched member of Black Power, Scott Barbarich. Mr Barbarich has sworn an affidavit in which he claimed that:
…. I gifted two Sovereign gold rings to Te Huki Paul … as a gift to him from our Club for obtaining a senior position in our 275 Black Power Movement Chapter.
[63]And later:
Sorry I cannot produce receipts as most of my jewellery over the last 15 years has been purchased overseas…
[64]I do not accept that the rings belonged to Mr T Paul for the following reasons.
15 The without notice application for restraining orders, which included the Ford Ranger and the rings, was granted by Johnstone J on 9 June 2023. On notice orders were later made, essentially to the same effect. On or about 14 June 2023, Mr T Paul took possession of the Ford Ranger and for the next five months, until 16 November 2023, he admitted that he had possession of the vehicle and that he had “used the Ranger until it was impounded by the Police”. Given that there were no detections of any kind that Mr T Paul was using the Ford Ranger during that period, the inference is that Mr T Paul concealed its whereabouts in order to defeat the Commissioner’s application.
[65] First, they were located in full view next to a necklace owned by Ms Killeen in a car which I have already decided was under the effective control of Mr Paul and Ms Killeen and rarely, if ever, driven by Mr T Paul.
[66] Secondly, a Facebook search undertaken by the Police located Mr Paul’s profile, “Narks Paora”. On 15 November 2022, Mr Paul posted a photograph of himself and Ms Killeen. Mr Paul is seen wearing a ring, which is indistinguishable from the gold and diamond ring photographed in the Ford Ranger when the search warrant was executed. Mr Paul claimed that he had borrowed this ring from his father.
[67] Thirdly, the gold 1% ring is a heavy square-based ring in what appears to be gold. On the face of the ring is a 1% symbol. The zeroes on the percentage symbol are depicted as fists. Mr Paul has a tattoo on his left calf which replicates this symbol, although I accept that Mr T Paul and his late wife also had similar tattoos.
[68] Mr Barbarich’s claim that the ring was gifted by him to Mr T Paul is difficult to reconcile. Mr Barbarich claimed that he gifted the rings to Mr T Paul for obtaining a senior position. However, it was Mr T Paul who accepted he founded the 275 chapter and had “always been at the top” of the gang. On that basis, he would not have moved through the ranks to a senior position as might normally be expected.
[69] Furthermore, the inscriptions on the gold and diamond ring are consistent with Mr Paul’s position as President of Black Power’s 433 Chapter. I did not understand Mr T Paul to be a member of that chapter.
[70] For this combination of reasons, I am also satisfied that there are reasonable grounds to believe that Mr Paul has an interest in the rings and, in any event, were in both his and Ms Killeen’s effective control. For these reasons, in respect of these items, I make orders in terms of [1](a)(ix)–(x) and [1](b)(i)(D)–(E) of the Commissioner’s on notice application for restraining orders dated 15 June 2023.
The Toyota Hilux and the Mazda 3
[71] The Commission also seeks restraining orders under ss 24 and/or 25 of the Act in respect of a 2006 Toyota Hilux and a 2014 Mazda 3 hatchback, both registered to Ms Tuhiwai.
[72] On 31 August 2023, Johnstone J made orders by consent that the Toyota Hilux be released from the Official Assignee’s custody for Ms Tuhiwai and Mr Killeen to meet their family and work obligations. Thus, the Toyota Hilux is in their day-to-day possession but remains subject to the restraint orders. As I understand the position, the Mazda 3 is in the possession and custody of the Official Assignee pursuant to the without notice orders.
[73] The Commissioner’s case is based on s 25 of the Act, which requires me to be satisfied:
(a)there are reasonable grounds to believe that Ms Tuhiwai unlawfully benefited from significant criminal activity; and
(b)that she has an interest in or effective control over the vehicles.
[74] Given that it is accepted both vehicles belonged to Ms Tuhiwai and were used by both her and Mr Killeen, it is common ground that the issue I must decide is whether there are reasonable grounds to believe that Ms Tuhiwai knew of the criminal source of the funds she received from Mr Paul and her daughter, Ms Killeen. The Crown’s case on this point is that Ms Tuhiwai was wilfully blind as to the true source of the funds. It is to that issue I first turn.
What is wilful blindness?
[75] Wilful blindness is a form of constructive knowledge or belief. It is a common construct of mens rea in criminal cases, but it is also encountered, as in the present case, in the civil jurisdiction.
[76] The Court of Appeal described it in the civil context in Diver v Locktronic Industries Ltd:16
As we read these authorities, the references to wilful blindness and “shuteye” knowledge suggest that more is required in this case than the possibility of the existence of a contract and an associated failure to inquire into that possibility. Rather, the required state of knowledge involves a suspicion of sufficient strength that a contract exists and a deliberate choice not to make inquiries. The fact that the existence of a contract should have been obvious is not sufficient as that is negligence. A subjective, rather than an objective, inquiry is required. Such an approach accords with the fact that this is an intentional tort.
[77] More specifically in the context of proceedings under the Act, both counsel referred me to Vincent v Commissioner of Police.17 There, for a period of 14 months, the appellant allowed cartons and boxes containing bundles of cash to be regularly stored in her lounge. They were collected by people she believed gave her false names. She did not question why this money was not banked, despite having a background in banking.
[78]On the subject of wilful blindness, the Court of Appeal observed:
[52] … It is clear from his discussion of the authorities that Priestley J appreciated that the test is a subjective one. He referred to the decisions of this Court in R v Martin and Diver v Locktronic Industries Ltd, where the concept of wilful blindness is discussed in criminal and civil contexts. Both cases identify the subjective elements, as the Judge noted: the person must have his or her suspicions aroused (for example, be aware that a particular state of affairs may exist) and must deliberately refrain from making enquiry in order to avoid learning whether the suspicion is justified. On the evidence, there is no doubt that Mrs Ashby did have concerns about the source of the money as she asked Mr Vincent about it. He told her that London Underground’s party pill business was legal. But Priestley J considered that Mrs Ashby’s suspicions remained and that she deliberately refrained from making further enquiry because she was concerned at the nature of the response.
[53] We consider that the Judge applied the correct legal test for wilful blindness. … The Judge’s conclusion that Mrs Ashby was wilfully blind was informed by his assessment of Mrs Ashby’s credibility. Both counsel and the Judge questioned Mrs Ashby closely on this aspect of the case during the course of her evidence, so that the Judge was much better placed than we are to reach a view about whether she turned a blind eye to what was happening.
[citations omitted]
16 Diver v Locktronic Industries Ltd [2012] NZCA 131, [2012] 2 NZLR 388 at [47].
17 Vincent v Commissioner of Police, above n 2, at [52].
[79] Against those statements of principle, I agree with Mr Kilian that the questions to be posed in the present case are whether there are reasonable grounds to believe:
(a)that Ms Tuhiwai and/or Mr Killeen must have had their suspicions aroused; and
(b)that Ms Tuhiwai and/or Mr Killeen deliberately refrained from making further enquires.
[80]I shall discuss each of these questions in turn.
Are there reasonable grounds to believe that Ms Tuhiwai and/or Mr Killeen must have had their suspicions aroused?
[81] Mr Mackenzie for the Commissioner rightly and responsibly accepted that the sums paid by Mr Paul and Ms Killeen to Ms Tuhiwai and Mr Killeen were mostly modest. Primarily, they comprised weekly rental payments of $200. Payments from Mr Paul’s and Ms Killeen’s bank accounts to Ms Tuhiwai totalled nearly $50,000. Mr Paul also purchased a 2006 Porsche Cayenne from Mr Killeen for $10,000.
[82] The Commissioner relies on three factors which, Mr Mackenzie submitted, lead to the conclusion that Ms Tuhiwai and Mr Killeen must have been suspicious about the legality of the source of the funds they received.
[83] The first is that for most, if not all, of the relevant period they knew that Mr Paul and Ms Killeen were unemployed. Mr Paul had been employed profitably by Mainfreight as a contract truck driver, but this ended on 19 May 2017. After this, he began receiving income through his company, Paul’s Freight Ltd, the last payment being made in January 2020. Ms Tuhiwai knew her daughter was receiving an MSD job seeker benefit and, while the Commissioner accepts that she may not have been immediately aware of when Mr Paul also became unemployed, she must have become aware sometime between January 2020 and December 2022 (the date when the search warrant was executed).
[84] The Commissioner referred to Ms Tuhiwai’s evidence that she knew Mr Paul stopped working when his mother died and noticed that his trucks were not parked at the house. The Commissioner points out that the last possible time Mr Paul could have had a truck outside the address was in January 2020, meaning that Ms Tuhiwai would have lived with an unemployed Mr Paul for a minimum of three years before the search warrant was executed without seeing a truck at the address. Mr Killeen’s evidence on the point was similar. The Commissioner thus submitted it is simply untenable for either Ms Tuhiwai or Mr Killeen to claim other than they knew that for the majority of the time Mr Paul and Ms Killeen were living with them, Mr Paul was unemployed.
[85] The second factor relied on by the Commissioner is that Ms Tuhiwai and Mr Killeen must have known that Mr Paul had an alternative source of funding while he was unemployed. Mr Mackenzie referred to the motorbikes stored at [REDACTED], Mr Paul and Ms Killeen taking an expensive family holiday on the Gold Coast and the cash payments made by Mr Paul to Mr Killeen for the purchase of vehicles.
[86] Thirdly, Mr Mackenzie relied on Ms Tuhiwai and Mr Killeen’s knowledge that Mr Paul was a patched member of the Black Power gang and necessarily their knowledge that Black Power is engaged in illegal activities, including dealing in methamphetamine.
[87] Mr Mackenzie also pointed to the inherent unreliability of Ms Tuhiwai and Mr Killeen as witnesses. He referred me to documentation which Mr Killeen, in particular, produced — notably, receipts for the sale and purchase of vehicles which, on their face, purported to be contemporaneous records but which, in cross-examination, proved to have been created for the purposes of the present proceedings. Reference was also made to the inherent implausibility of aspects of the witnesses’ evidence, particularly around their knowledge and understanding of the date when Mr Paul became unemployed.
[88] I am not satisfied that either Ms Tuhiwai or Mr Killeen must have had their suspicions aroused regarding the illicit source of the funds they received from Mr Paul and Ms Killeen. My reasons follow.
[89] First, as alluded to earlier in this judgment, the domestic arrangements at [REDACTED] during the time that Mr Paul and Ms Killeen were living with Ms Tuhiwai and Mr Killeen were extremely unusual, to say the least. The knowledge and actions of Ms Tuhiwai and Mr Killeen must be assessed in the context of those arrangements. I agree with Mr Mackenzie that, had this been a conventional residential arrangement, where parents permit their daughter, her partner and their mokopuna to live with them under the same roof, suspicions may well have been aroused and questions properly asked. But that scenario, I am satisfied, does not reflect the actual dynamics of this particular household. Having seen and heard the witnesses, especially Ms Tuhiwai and Mr Killeen, I was struck by how very dysfunctional this household was. It involved the two primary couples — being Ms Tuhiwai and Mr Killeen and Mr Paul and Ms Killeen — leading quite separate and independent lives, effectively socially insulated from each other.
[90] This deeply ingrained and reciprocated animosity was reflected in the way in which the household operated. Ms Tuhiwai and Mr Killeen rarely, if ever, ventured into the bedroom occupied by Mr Paul and Ms Killeen. Meals were virtually never shared. If a meal was cooked for more than one couple, it was never consumed communally. There was no shared common space, such as a lounge. The two couples lived entirely segregated existences where the only commonalities were the house they lived in and the child whose care they shared.
[91] Viewed in this context, knowledge of and interest in the activities of the other couple would necessarily be limited.
[92] Ms Tuhiwai and Mr Killeen knew that Mr Paul had been working for Mainfreight for a number of years. They knew that their daughter had been on a benefit and looking for work throughout most, if not all, of the relevant time.
[93] The only funds that Ms Tuhiwai herself received from Mr Paul and Ms Killeen were rent payments. These were done by bank transfer. At $200 per week, the amounts were modest.
[94] Ms Tuhiwai knew that Mr Paul stopped working at about the time that his mother died. As she said in evidence, Mr Paul’s family were deeply affected by this loss and Mr Paul spent considerable time away from [REDACTED] with his whānau.
[95] The primary link relied on by the Commissioner was the absence of trucks parked at [REDACTED] to prove that Ms Tuhiwai knew Mr Paul was unemployed. There is no suggestion that Mr Paul or Ms Killeen volunteered that Mr Paul was unemployed. There was no need to do so and, given the family dynamics, that is unsurprising.
[96] It is also necessary to add to this mix the advent of COVID-19. Ms Tuhiwai did not know whether Mr Paul returned to work full time, part time or at all. Furthermore, she herself went to work every day and was away from the house, unable to witness directly where Mr Paul was and when.
[97] As both Ms Tuhiwai and Mr Killeen repeated in their evidence, their overwhelming concern and focus was on their mokopuna, to ensure that he was well cared for, happy and supported.
[98] They were aware of the motorbikes stored at [REDACTED]. However, their explanation that Mr Paul had been employed at Mainfreight for a number of years led them not to question the source of funds used to acquire them.
[99] I also regard it as significant that neither Ms Tuhiwai nor Mr Killeen observed any indicia of overt gang or criminal activity on the part of Mr Paul or anyone else. Mr T Paul hardly visited, if ever, and certainly not socially. He never entered the house. Ms Tuhiwai and Mr Killeen would not have seen the gang patch in Mr Paul’s and Ms Killeen’s bedroom, nor would they have had any reason or opportunity to know about the existence of the cash, multiple cell phones and so on.
[100] I do not overlook the documentation produced by Mr Killeen which purported to be contemporaneous records for the sale and purchase of various vehicles. On their face, these were misleading and should not have been produced as evidence purporting to document a contemporary transaction. Quite why Mr Killeen did this is unclear. It was a very foolish and ill-considered thing to do because it presented a real risk that I, as the finder of fact, would make an adverse credibility finding against Mr Killeen. However, in my view, given the balance of the evidence which tends to provide independent support on the primary question of whether Ms Tuhiwai and/or Mr Killeen must have had their suspicions aroused as to the source of the funds they received from Mr Paul, it makes no material difference.
Are there reasonable grounds to believe that Ms Tuhiwai and/or Mr Killeen deliberately refrained from making further enquiries?
[101] The Commissioner’s case is that, with their suspicions aroused about the true source of the funds received from Mr Paul, Ms Tuhiwai and Mr Killeen deliberately refrained from making further enquiries of Mr Paul and Ms Killeen lest the answers confirmed their suspicions.
[102] Under this heading, Mr Mackenzie drew my attention to a number of passages in Ms Tuhiwai’s cross-examination which, he submitted, was evidence of a concerted and deliberate course of closing her eyes to the reality which confronted her. Repeatedly, it was put to her whether she asked questions of Mr Paul or her daughter in relation to the source of funds for various items acquired or expenses incurred by Mr Paul. Again and again, she replied that she didn’t ask questions adding that:
No, as long as they pay their rent, that’s all I cared about. As long as my moko was looked after, that’s all I care about … like I said, I didn’t get into any of my children or their partner’s business … Like I told you, my kids’ business is their business and I don’t ask no questions.
[103] I agree with Mr Mackenzie that these responses, and a good number to similar effect, might well reflect the attitude of someone who has made a conscious decision not to make an enquiry in order to avoid being told an inconvenient truth. But in my assessment, that is not the case here because, at the risk of repetition, the amounts actually received by Ms Tuhiwai for rent were modest and the dynamics and context
of the family environment were not such as to be conducive to open and frank dialogue.
[104] It follows that I am not satisfied that orders should be made in respect of the Toyota Hilux and the Mazda 3 and, accordingly, the present restraining orders in respect of those vehicles are discharged.
Sale and other orders
Orders for sale
[105] The Commissioner seeks orders for the sale of the Ford Ranger, the Yamaha Raptor and the Yamaha PW50 in order to preserve their respective values. Orders were also sought in relation to the Mazda 3. However, given my findings in respect of that vehicle and the Toyota Hilux, it is unnecessary to consider that aspect of the Commissioner’s application and, for the avoidance of doubt, I make no orders in respect of those vehicles.
[106] Further orders are sought empowering the Police and the Official Assignee to enter into and onto property to take custody of the rings, which remain outstanding.
[107] Sale orders are typically sought where assets which are restrained have a high depreciation rate, including items where the consequence of restraint includes the costs of ongoing storage, insurance and maintenance.18 The Official Assignee has a statutory duty to ensure the preservation of restrained property.19 The necessary adjunct to that obligation is to ensure the value of the asset is maintained. Where an asset’s value may increase over time, that will ordinarily not pose a difficulty to the Official Assignee. However, if the asset either maintains its value or depreciates, sale orders may be necessary to ensure value is preserved.
[108] The purpose of sale orders is to preserve the value of the property which would otherwise diminish as the combined consequence of depreciation and the costs
18 Commissioner of Police v Milosevic [2019] NZHC 202 at [95(a)].
19 Criminal Proceeds (Recovery) Act 2009, s 80.
associated with storage and maintenance of the assets accumulates during the restraint period and until final orders are made.
[109] Funds derived from sale are required to be held by the Official Assignee in an interest-bearing account until the proceedings are determined. The funds are treated as restrained property.20
[110] Where vehicles are at issue, the starting point is that motor vehicles have a clear tendency to depreciate in value and cost money to store, maintain and insure.21
[111] Plainly, vehicles of relatively recent vintage which do not have any particular or special characteristics which might cause them to maintain or increase value over time, will depreciate. In such cases, sale orders are appropriate.
[112] Other than broadly asserting that some of these motor vehicles will, actually, appreciate in value over the period of restraint, there is no specialist or expert evidence to contradict the well-accepted assumption — referred to in decisions of this Court and the Court of Appeal — that vehicles of this sort will generally depreciate in value.
[113] The Commissioner estimated the value of the Ford Ranger to be $29,100 as at December 2022. The Harley Davidson had an estimated value of $14,900 in October 2022. The two Yamaha motorcycles were purchased by Mr Paul as gifts for his young son. Their estimated market value is $4,250 and $2,500 respectively, as at December 2022.
[114] Mr Kilian submitted that while new vehicles have high depreciation rates, and would typically warrant sale orders to preserve their value where the rate of depreciation has “bottomed out”, it may not be appropriate to make an order for sale because it is no longer necessary to achieve the purpose of the provision, that is, to preserve the value of the asset.22
20 Section 36(4).
21 Commissioner of Police v Milosevic, above n 18, at [96(a)].
22 Commissioner of Police v Blance [2018] NZHC 108 at [52]; Commissioner of Police v Siloata
[2022] NZHC 1830.
[115] Mr Kilian also referred me to the recent case of Commissioner of Police v Dunn which involved a 2016 Ford Ranger.23 Mr Dunn had purchased the vehicle in 2016 for $55,000. A recent valuation put it at $22,000. Mr Kilian points out that this was a depreciation of 12.5 per cent per annum, significantly lower than the 21 percent per annum which the Commissioner relies on based on an Inland Revenue estimate. Thus, Mr Kilian submits that the value of the Ford Ranger in this case is likely to follow the same pattern and notes that the Commissioner has not provided any specific evidence on that. He submits a sale order would not be warranted and unnecessary to achieve the purpose of the provision. He also notes that given the proximity of Mr Paul’s trial, the substantive hearing in this matter is likely to be in the relatively near future, a factor which operates against the making of a sale order.
[116] While the outcome of Mr Paul’s trial is yet to be determined it is unlikely that, if forfeiture orders are opposed, a multi-day hearing can be accommodated within 12 months. Of course, if the orders are not opposed the matter can be determined in short order. Given that level of uncertainty, this factor is not something which I may sensibly take into account.
[117] Irrespective of the rate of depreciation, the Ford Ranger is of relatively recent vintage which bears no special or unique characteristics which would reduce the risk of depreciation. Certainly, I have not received any evidence to suggest otherwise.
[118] Although I have no evidence on the actual costs of storage, maintenance and insurance, these are ongoing costs which will also contribute to reduce the realisable value of the asset. In that sense, any interest which Mr T Paul might ultimately be found to have in the Ford Ranger will be best preserved by making sale orders rather than leaving a depreciating vehicle in storage for an indeterminate period.
[119] Similar reasoning applies to the Harley Davidson and the two Yamaha motorcycles.
23 Commissioner of Police v Dunn [2024] NZHC 720.
[120] I am satisfied it is appropriate to make sale orders and accordingly I make them in terms of [1](e) of the Commissioner’s on notice application dated 15 June 2023, in respect of the Harley Davidson, Ford Ranger, Yamaha Raptor and Yamaha PW50.
Other orders
[121] The Commissioner also seeks an order empowering members of the Police and the Official Assignee’s office to enter property to locate and seize the rings.
[122] As previously noted, the present whereabouts of the rings is unknown. Mr T Paul deposed in an affidavit sworn on 17 November 2023 that the rings were lent to a friend of his, Jack Hemi. He said that Mr Hemi resides in Rotorua but he does not know his exact address. He said that he had attempted to contact Mr Hemi by his mobile phone but had not been able to get through to him. He had also attempted to make contact with Mr Hemi through mutual friends, but that strategy, too, has proved unsuccessful.
[123] The Commissioner has not expressly set out the jurisdiction this Court has under the Act to make the order sought. It is not one of the orders specifically referred to in s 35 of the Act (which includes sale orders). Furthermore, absent further particularity, I am not prepared to make an order which is as broadly expressed as sought. There is no evidential threshold offered. Mr Kilian properly raises concerns that the New Zealand Bill of Rights Act 1990 protects all persons from unreasonable search and those rights need to be read in the context of the express statutory limitations contained in the Search and Surveillance Act 2012. Search warrants issued under the authority of the Search and Surveillance Act require the issuer to be satisfied that reasonable grounds exist before agents of the State may intrude on personal rights and freedoms, including privacy.
[124] Absent effective safeguards of that sort, I am not prepared to make the orders sought by the Commissioner. Leave is reserved for the Commissioner to renew his application if and when he is of the view it is proper and appropriate to do so.
Conclusion
[125] Pursuant to ss 24 or 25 of the Act, noting the lack of opposition from the respondents, I make orders for restraint in respect of the following property, per [1](a)(i), (ii)–(iv), (vii), (x)–(xi) and (xiv)–(xv) of the Commissioner’s on notice application dated 15 June 2023:
(a)the Harley Davidson;
(b)the Yamaha Raptor;
(c)the Yamaha PW50;
(d)the gold necklace;
(e)the gold pendant;
(f)the Anzac cash; and
(g)the Malone cash.
[126] I make orders restraining the Ford Ranger and rings belonging to Mr Paul and Ms Killeen, per [1](a)(ii) and (viii)–(ix) of the Commissioner’s on notice application.
[127] As to the Toyota Hilux and the Mazda 3 belonging to Ms Tuhiwai, I decline to make orders for restraint under the Act. I also discharge the present restraining orders.
[128] In respect of the Ford Ranger, the Yahama Raptor and the Yamaha PW50, I make sale orders per [1](e) of the Commissioner’s on notice application. I make no such orders in respect of the Mazda 3.
[129] I decline to make orders authorising the Police or the Official Assignee to enter property to locate the outstanding rings.
Moore J
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