Commissioner of Police v Rika

[2013] NZHC 3531

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2013-419-386 [2013] NZHC 3531

IN THE MATTER             of an application pursuant to ss  43, 44 and

49 of the Criminal Proceeds (Recovery) Act 2009

BETWEEN  THE COMMISSIONER OF POLICE Applicant

ANDWILLIAM WEROHIA RIKA Respondent

Hearing:                   9 December 2013

Appearances:           P V Cornege for Applicant

W T Nabney for Respondent

Judgment:                20 December 2013

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 20 December 2013 at 11 am pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date: ...................................

Solicitors:           Almao Douch, Crown Solicitor, Hamilton

Counsel:            W T Nabney, Hamilton

COMMISSIONER OF POLICE v RIKA [2013] NZHC 3531 [20 December 2013]

Introduction

[1]      This is an application by the Commissioner of Police (“Commissioner”) for an assets forfeiture order (“order”) pursuant to the Criminal Proceeds (Recovery) Act

2009 (“Act”).1

[2]      The assets (“cash”) in respect of which the order is sought are:

(a)      $36,166.97 cash.  On 29 June 2012 the Police seized $43,410 from the Respondent  (“Mr Rika”).    $36,166.97  is  the  sum  remaining  after payment of outstanding Court fines; and

(b)      $3,990 cash that the Police seized from Mr Rika on 23 September

2012.

[3]      The Commissioner’s case is that the cash is “tainted property” as it was acquired as a result of, or directly or indirectly derives from, “significant criminal activity” namely the manufacture and/or supply of methamphetamine.2

[4]      Mr Rika opposes the making of the order and submits that the cash derived from legitimate sources.

Evidence

[5]      The  evidence  comprises  affidavits  sworn  by  Detective  Mark  Watt  on

22 March 2013 and 28 November 2013 and by Mr Rika on 15 November 2013. Both were cross-examined on their affidavits.  In addition, Detective Watt produced a report prepared by Ms Erina Mayo, a forensic scientist, on which she was cross- examined.    Ms Mayo’s report addressed the findings from swabs taken of various surfaces when the Police executed a search warrant at Mr Rika’s address in August

2012.

1 Application for Assets Forfeiture Order dated 22 March 2013.

2 Criminal Proceeds (Recovery) Act 2009, ss 5, 6 and 50(1).

Background

[6]      On 29 June 2012 Mr Rika was stopped on a traffic related matter.   He gave the Police false details, and was arrested and searched.   In a brown shoulder bag underneath his jacket, the Police found the sum of $43,410 in bundles and wrapped in  glad  wrap.    Questioned  as  to  why  the  money  was  in  glad  wrap,  Mr Rika’s response  was  that  was  how  he  carried  it  as  it  made  the  package  small. Detective Watt’s evidence is that wrapping cash in glad wrap is a practice employed by some persons involved in drug dealing.  Mr Rika said to the Police that the money derived from work involving painting, fixing cars and labouring and that he was carrying it for the possible purchase of a motorcycle (a “Big Chopper”) for sale on Trade Me for $36,000 and situated in Auckland.

[7]      On 23 September 2012 the Police executed a search warrant at an address in Taupo,  seeking  stolen  property.    Mr Rika  was  at  the  address  with  his  partner, Ms Walsh.    The  Police  searched  Mr Rika  and  found  the  sum  of  $3,990  in  his possession.  Mr Rika declined to comment as to the origin of the cash.

[8]      The Police also located a substance wrapped in tin foil and then glad wrap which Mr Rika told them was iodine for rubbing on injuries to his dogs’ legs.

[9]      Iodine is commonly used in the manufacture of methamphetamine.   The Police consider that the iodine in Mr Rika’s possession had the appearance of having been extracted to a purer form preferred by methamphetamine “cooks”.   Mr Rika declined to say from whom he had acquired the iodine and, in my view, gave a wholly unconvincing and evasive explanation as to how he had acquired the iodine.

[10]     The Police had also found a cannabis “bong” and a methamphetamine pipe in a bedside cabinet beside the bed in which Mr Rika and Ms Walsh were sleeping, and one gram of methamphetamine in Ms Walsh’s purse.   Ms Walsh has since been convicted of possession of methamphetamine.

Statutory provisions

[11]     Section 50(1) of the Act provides:

50       Making assets forfeiture order

(1)       If, on an application for an assets forfeiture order, the High Court is satisfied on the balance of probabilities that specific property is tainted property, the Court must make an assets forfeiture order in respect of that specific property.

[12]     Section 50(1) is mandatory.  A forfeiture order must be made if the Court is satisfied of the various matters to the required standard.  There is no dispute that the cash is “specific property” for the purpose of s 50(1).

[13]     The expression “tainted property” is defined in s 5(1) of the Act as meaning any property that has, wholly or in part, been:

(a)       acquired as a result of significant criminal activity; or

(b)      directly or indirectly derived from significant criminal activity.

[14]     Tainted property is defined to include “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”.3

[15]     There is no dispute that the manufacture and/or supply of methamphetamine is “significant criminal activity” for the purposes of the Act.

Approach

[16]     Counsel for the Commissioner refers to the Court of Appeal’s decision in R v Dryland4   and  submits  that  the  first  step  to  consider  is  whether  Mr Rika’s explanation(s) as to the source of the cash is plausible.  If not, the second step is for the Court to consider all the evidence and determine whether it is satisfied it on the

balance of probabilities that the property is tainted property.  I proceed on that basis.

3 Criminal Proceeds (Recovery) Act 2009, s 5(1)(b).

4 R v Dryland [2013] NZCA 247.

Mr Rika’s explanations

[17]     Mr Rika  has  given  several  explanations  as  to  how  he  came  to  be  in possession of the cash, none of which I consider plausible.

[18]     I have already referred to the explanation that Mr Rika gave the Police when stopped on 29 June 2012.

[19]     On   3   July   2012   (former)   counsel   acting   for   Mr Rika   contacted Detective Senior Sergeant Hamilton and requested the return of the $43,410 sum, stating that it formed part of a $60,000 inheritance that Mr Rika had received.5    In support of that statement, counsel supplied the Detective with a bank statement recording a deposit of $60,000 into Mr Rika’s account on 28 January 2010.

[20]     On investigation the Police learned that the $60,000 sum had been withdrawn from Mr Rika’s account by cash and ATM withdrawals, and EFTPOS purchases, so that by 26 October 2010 the balance of the account was $0.51.   This was some

20 months prior to June 2012.  Mr Rika must have known that he had withdrawn the funds when he allowed his counsel to give the Detective that information.

[21]     The same legal advisor contacted Detective Hamilton again on 10 August

2012.  Detective Watt’s affidavit states that counsel said the cash “may have been” derived from Mr Rika “doing up vehicles” which were sold to generate cash.6   There is no dispute that Mr Rika does do mechanical and other work on vehicles and that he does trade them, to some extent.  The Crown does not accept, however, that the income that generates is the source of the $43,410 sum.

[22]     On 28 November 2012, the Police examined Mr Rika pursuant to s 106 of the Act.  At that time Mr Rika stated that approximately $30,000 of the $43,410 sum was from the money that he had inherited.   He said that he had withdrawn and retained the cash.   He said the balance derived from buying and selling motor

vehicles and motorcycles.  Mr Rika gave the Police a two page handwritten list to

5  On later occasions the $60,000 was referred to as an investment but I shall refer to it as an inheritance.

6   Affidavit  evidence  of  Detective  Mark Andrew Watt  in  Support  of  an Application for Assets

Forfeiture Order sworn 22 March 2013 at [26].

show how he had derived the cash (“November 2012 list”).  The November 2012 list documents motor vehicles and motorcycles and states the price for which they were purchased (or the item for which they were traded) and sold.

[23]     For  the  reasons  that  follow,  I  accept  counsel  for  the  Commissioner’s submission that, on its face, the November 2012 list does not account for the funds.

[24]     Detective Watt’s calculation, which is not disputed, is that the difference between the bought and sold columns is $15,200 ($97,500 sold and $72,300 bought). In addition, the sold total includes $18,000 in respect of a “95 Fat Boy” motorcycle. In the course of his evidence Mr Rika advised that $18,000 had been used to meet legal and other expenses.  Deduction of that amount reduces the sold total to $79,500 and the surplus to $7,200.  I add that these are gross amounts and take no account of money spent to improve or repair the vehicles.

[25]     Counsel for the Commissioner also submits that, in any event, whatever surplus was shown on the schedule could not account for the cash that the Police seized.  That is because Mr Rika said repeatedly that he required the income earnt from these activities to meet family expenses.

[26]     Mr Rika was in receipt of the Domestic Purposes Benefit between 2007 and

2012.  He also received accommodation and hardship grants from time to time.  A separate issue arises as to his receipt of these benefits if he was earning and/or had assets  such  as  the  inheritance.     Putting  that  to  one  side,  however,  Mr Rika emphasised in evidence that the amount received as a beneficiary was insufficient and that he had to earn additional funds.  I accept the Commissioner’s submission that, if that were so and the income earned from trading motor vehicles/motorcycles was needed to support the family, then those same funds could not be the funds seized by the Police.

[27]     Mr Rika gave a similar explanation for the $43,410 sum in his affidavit of

15 November 2013.   In his affidavit, Mr Rika said that the inheritance money was mainly used to purchase motor vehicles and that the money seized from him was the

proceeds of sale of various vehicles and other items.7   He then referred to a number of vehicles (some of which had been on the November 2012 list and some of which had not).  I do not propose to traverse that evidence in any detail.  Suffice to say it does not provide any convincing or plausible explanation as to how the funds were derived.

[28]     As to the $3,990 sum, in his interview on 28 November 2012, Mr Rika said that the sum was “left over money” that he had.   In his affidavit of 15 November

2013, Mr Rika explained that the $3,990 sum came from “further deals involving motor vehicles” since the $43,410 sum was seized.8

[29]     Mr Rika has  not  provided  any evidence  of further transactions  involving motor vehicles since 29 June 2012 when the $43,410 sum was seized.

[30]     Overall, I do not consider Mr Rika’s explanations as to the source of the cash to be plausible.

Other evidence

[31]     I turn now to consider the other evidence relied upon by the Commissioner in support of the application.  The critical issue is whether, taken together, this evidence is sufficient to satisfy me on the balance of probabilities that the cash derived from the manufacture and/or supply of methamphetamine.

[32]     The evidence is as follows.

[33]     First,  in  November  2004  Mr Rika  was  sentenced  in  the  High  Court  for possession for supply of methamphetamine.9    Mr Rika was sentenced to a term of imprisonment of 4 years, 3 months.   Mr Rika also has previous convictions for possession  and  cultivation  of  cannabis,  for  which  he  has  either  been  fined  or

sentenced to community work.

7 Affidavit of William Werohia Rika sworn 15 November 2013 at [10] and [16].

8 Ibid, at [69].

9 R v Rika HC Rotorua CRI-2004-463-23, 3 November 2004.

[34]     Secondly, the Commissioner relies on the manner in which the cash was packaged and Mr Rika’s possession of the iodine.  There was no evidence before me as to the quantity of iodine and whether the quantity was sufficient to serve any practical  purpose.    I  accept,  however,  that  the  manner  in  which  the  cash  was packaged is highly suspicious.

[35]     Thirdly, the Commissioner relies on evidence relating to the purchase by

Mr Rika of a solvent, “Fuelite”, from Bunnings Warehouse in Cambridge on 14 June

2012, some 15 days before the $43,410 sum was seized.  Fuelite is commonly used in the manufacture of methamphetamine.  CCTV footage shows that Mr Rika and an unidentified woman got out of the vehicle in which they were travelling, and then separated immediately on entering the store.   On Detective Watt’s evidence, the woman went straight to the aisle in which the Fuelite held, and purchased two 1 litre bottles of Fuelite.   Mr Rika first uplifted another item, made an enquiry of a staff member and then purchased two 1 litre bottles of Fuelite.   The staff at Bunnings were suspicious and notified the Cambridge Police.

[36]     The  Police  questioned  Mr Rika  about  this  when  they  examined  him  on

28 November 2012.  Mr Rika’s explanation was that he required the Fuelite to clean vehicle parts, that he knew it was used in the manufacture of methamphetamine, and that he always bought two bottles because shops limited the quantity they would sell. Mr Rika produced photographs of a tank he uses to clean vehicle parts.

[37]     The Commissioner rejected this explanation.   In my view the compelling point is that the manner in which Mr Rika and his associate separated was suspicious and plainly intended to avoid giving any impression that between them they were buying four bottles.

[38]     Fourthly, the Commissioner relies on the evidence of Ms Mayo.  For my part, I do not consider this evidence to be of much assistance.

[39]     The Police found a glass methamphetamine pipe containing a small quantity of methamphetamine in the shed but no equipment at the address to indicate that methamphetamine had been manufactured there.  Swabs taken from surfaces in the

shed were consistent with the consumption of methamphetamine.   The level of methamphetamine in swabs taken from a kitchen led Ms Mayo to conclude that methamphetamine had been manufactured there.  There are, however, two dwellings on the site and no evidence that the swabs were taken in the dwelling occupied by Mr Rika.  Secondly, the samples were not aged.  Accordingly Ms Mayo could not say if manufacture had taken place after Mr Rika began living at the property, in

2008.

[40]     Fifthly, the Commissioner relies on text messages that they obtained as a result of search warrants executed in respect of two cellphones found in Mr Rika’s possession on 29 June 2012.   These texts are to Mr Rika from different numbers. The Commissioner relies on them as evidence that the different senders considered Mr Rika to be involved in the manufacture and/or supply of methamphetamine. Counsel for Mr Rika does not submit the texts are inadmissible but submits they are of little weight.

[41]     Several texts provide some support for the Commissioner’s contention but there is no evidence as to the reply (if any) or whether any voice calls followed.  So their probative value is limited. The texts of particular note are:

28/08/2012     10.36 am        “U stil need water”

14/09/2012     5.10 pm         “i can get 6 spot. maybe 8”

15/09/2012     6.15 pm         “U get sum flight”

16/09/2012     3.21 pm         “I got 1.4 more waiting 4 more”

17/09/2012     9.12 pm         “Na timz da 1 dat has it!! He’s got lik a kg or sumthing! Ring dat numbr bro”

18/09/2012     11.33 am        “Hey bro howsit all goin?’ I’m just out n

bout got ovr hlf ur coin just susn nxt deal now; how’s things goin for u guys?”

[42]     Detective Watt’s evidence is that the text data was reviewed by a specialist in this area, Detective Nicholas Rolley, who considers that the texts are consistent with the manufacture and/or supply of methamphetamine.  For instance “water” is a term regularly used when referring to hypophosphorus acid and “flight” is regularly used to refer to Fuelite.  Mr Rika’s explanation for the water was that it was, in fact, a

reference  to  water  as  the  well  at  his  property  is  contaminated.    There  was  no evidence as to who sent that text and I do not accept that explanation for it.

Result

[43]     Taking all of the matters that the Commissioner relies upon, I am satisfied to the required standard that the cash is tainted property.  I am particularly influenced by the manner in which the cash was packaged, the lack of any explanation (let alone a consistent one) for the cash, and the manner in which Mr Rika and his associate purchased the Fuelite.

[44]     Having reached that conclusion I therefore make an assets forfeiture order pursuant to s 50(1) of the Act, in respect of the sums of $36,166.97 and $3,990. Such sums are hereby vested in the Crown absolutely, and are in the control and custody of the Official Assignee.

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

M Peters J