Commissioner of Police v Ropiha
[2021] NZHC 2958
•3 November 2021
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
I TE KŌTI MATUA O AOTEAROA
AHURIRI ROHE
CIV 2016-441-84
[2021] NZHC 2958
UNDER the Criminal Proceeds (Recovery) Act 2009 IN THE MATTER OF
an application under ss 43, 49, 50, 52 and 55
BETWEEN
THE COMMISSIONER OF POLICE
Applicant
AND
TRIESTE MARTIN ROPIHA
Respondent
Hearing: 27 September 2021 Counsel:
C R Walker for Applicant C J Tennet for Respondent
Judgment:
3 November 2021
JUDGMENT OF MALLON J
Introduction
[1] Trieste Ropiha is presently serving a sentence of 11 years’ imprisonment for possession of methamphetamine for supply and supplying methamphetamine. As part of the Police investigation into that offending, on 21 June 2015 and 29 July 2015 cash totalling $35,927.60 was found. The Commissioner of Police (the applicant) says this cash is the proceeds of the sale of methamphetamine. He seeks an asset forfeiture order, or a profit forfeiture order in the alternative, in relation to this cash.
[2] Mr Ropiha opposes the orders in relation to some of the cash found by the Police on 21 June 2015. He contends that a total of $12,860 was held on a constructive trust for his two children and should be returned to them. He also claims $4,405 on
THE COMMISSIONER OF POLICE v ROPIHA [2021] NZHC 2958 [3 November 2021]
hardship grounds. He does not oppose the balance of the sum found that day ($1,150), nor an amount of $17,265 found on 29 July 2015.
Background
Summary of facts
[3] Between November 2014 and June 2015, Mr Ropiha was involved in the distribution of methamphetamine in Hawke’s Bay. He arranged, via mobile phones, purchases from suppliers in Tauranga and Auckland. He or associates would travel to those places to make the purchases. Mr Ropiha then supplied the methamphetamine within Hawke’s Bay at a wholesale and retail level.
[4] Text messages arranging these purchases indicated that Mr Ropiha was at times in possession of large sums of cash: on 19 May 2015 Mr Ropiha deposited $11,000 into a supplier’s bank account, and on 4 June 2015 he sent a text message to that supplier advising he had $220,000 in cash.
[5] On 21 June 2015, the Police invoked a power of search in Mr Ropiha’s garage. Mr Ropiha was present with two other persons. The search found two shoulder bags that had been thrown under a car in the garage. The first shoulder bag contained 147 g of methamphetamine divided into four zip lock bags, digital scales and $1,150 in cash. The second shoulder bag contained $17,521 in cash, a wallet containing cards and a driver’s licence in Mr Ropiha’s name, and a zip lock bag containing approximately
1.29 g of methamphetamine.
[6] Mr Ropiha fled the address. He was located on 29 July 2015 in a store car park when an associate exited a car with a shoulder bag and got into another parked car where Mr Ropiha was seated. Police approached the vehicle and saw a set of digital scales and two zip lock bags containing methamphetamine. A search of the vehicle located 429 g of methamphetamine divided into zip lock bags ready for sale, a sawn off shotgun and some shotgun shells, and $17,256 in cash. Mr Ropiha was arrested. He declined to answer any questions.
[7] The total amount of methamphetamine Mr Ropiha was involved in supplying or had his possession between 22 November 2014 and 29 July 2015 was 1.7 kg.
Sentencing
[8] Mr Ropiha pleaded guilty to representative charges of possession of methamphetamine for supply and supplying methamphetamine for the period between 22 November 2014 and 29 July 2015, and a charge of possessing an imitation firearm.
[9] In sentencing Mr Ropiha, the District Court Judge referred to his history of drug offending (this was the third time he had been found with a very large quantity of methamphetamine) and his addiction issues. His role was one of facilitating major drug suppliers and he had done this “pretty much for the last couple of decades”.1
[10] The Judge adopted a 14 year starting point for the offending. With an uplift for previous convictions and discounts for mitigating factors, an end sentence of 11 years’ imprisonment was imposed.
Law
Asset forfeiture orders
[11] If the 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 it.2 Where an alternative innocent explanation is offered, the court considers whether that explanation is plausible, and if not, whether it is satisfied by the evidence on the balance of probabilities that the property is tainted.3
[12] Property is tainted if it has been wholly or partly acquired as a result of, or directly or indirectly derived from, significant criminal activity.4 Significant criminal activity includes possession of methamphetamine for supply and supplying methamphetamine.5
1 R v Ropiha [2019] NZDC 2783 at [7].
2 Criminal Proceeds (Recovery) Act 2009, s 50.
3 Commissioner of Police v Jeffries [2014] NZCA 566 at [26].
4 Criminal Proceeds (Recovery) Act, s 5.
5 Section 6(1).
[13] On the application of the respondent, the court may exclude certain property from an assets forfeiture order if it considers that, in all the circumstances, undue hardship to the respondent is reasonably likely to be caused if that property is included in the order.6 The circumstances the court may have regard to include:7
(a)the ordinary or intended use of that property;
(b)the nature and extent of their interest in the property; and
(c)the circumstances of the significant criminal activity to which the order relates.
[14] Whether undue hardship arises as a consequence of the execution of the forfeiture order is a matter of fact and degree.8 There must be a “gross or severe disproportion between the gravity of offending and the value of the property sought to be forfeited coupled with the other punishment inflicted on the offender”.9
Profit forfeiture orders
[15] If property is not tainted property, the court may go on to consider whether to make a profit forfeiture order. The court will make a profit forfeiture order if it is satisfied on the balance of probabilities that the respondent has unlawfully benefitted from significant criminal activity within the relevant period of criminal activity and the respondent has interests in the property.10 Interest means a legal or equitable estate or interest in the property or a right, power or privilege in connection with it.11
[16] On application of the respondent, the court may exclude property from being realised under a profit forfeiture order if it considers that, having regard to all the circumstances, undue hardship is reasonably likely to be caused to the respondent by it being realised.12 The relevant circumstances include those that are relevant in an
6 Section 51(1).
7 Section 51(2).
8 Duncan v Commissioner of Police [2013] NZCA 477 at [57].
9 Lyall v Solicitor-General [1997] 2 NZLR 641 at 647.
10 Section 55.
11 Section 5.
12 Section 56.
application for relief from an asset forfeiture order and the meaning of undue hardship is the same.
Other parties
[17] A person other than the respondent who claims an interest in the property may apply for relief before an asset forfeiture or a profit forfeiture order is made.13 The court must grant relief if an applicant proves on the balance of probabilities that they have an interest in the property and have not unlawfully benefitted from the significant criminal activity.14
[18] The court may grant relief if it considers that, in all the circumstances, undue hardship is reasonably likely to be caused to the applicant if relief is not granted.15 The circumstances that the court may have regard to include: the use that is ordinarily made, or intended to be made, of the property; the nature and extent of any person’s interest in the property; the degree, if any, to which the person had knowledge of the significant criminal activity to which the property relates; and the circumstances of the significant criminal activity to which the property or order relates.16
Evidence
The contents of the 21 June bags
[19] The two bags found under the car on 21 June 2015 were black shoulder bags with separate zipped compartments. Mr Ropiha accepts that the first bag related to his drug dealing activities. Most of the 147.3 g of methamphetamine found in this bag was located in the bag’s main compartment. Two sets of digital scales, $1,150 in cash (comprising 10 x $20 notes and 19 x $50 notes), small zip lock bags, a straw and other items were also in this compartment. The other compartments contained zip lock bags, coins, a USB stick and other items.
13 Section 61.
14 Section 66.
15 Section 67(1).
16 Section 67(2).
[20] Mr Ropiha says the cash found in the second bag was all legally earned and did not relate to his drug dealing activities. The evidence as to the items found in this bag was as follows:
(a)In the front left pocket: two unopened SIM card packs and two micro SIM packs (one with the SIM missing).
(b)In the front righthand pocket: a handwritten note showing amounts added up, $11.60 in coins and a small piece of foil paper. Mr Ropiha said these coins were for everyday use.
(c)In the front lower zip pocket: several sets of vehicle and other keys and three USB sticks.
(d)In the front section of the main front pocket: $4,120 cash (comprising 18 x $100, 28 x $50 and 46 x $20 notes). Mr Ropiha said this was a result of him saving around $150 a week for his daughter (J) since 24 February 2014 and came from ACC payments made to him (discussed below).
(e)In the rear section of the main front pocket: $260 (comprising 26 x $10 notes). Mr Ropiha said he had been separating out $10 notes for weekly spending to cover takeaways, petrol, and cigarettes when needed.
(f)In the main middle pocket: packet of tobacco and filters, zigzag papers, two lighters, small zip lock bag, $2,620 (comprising 31 x $20 and 40 x
$50), a zip lock bag containing $8,740 (comprising 137 x $20 and 120 x $50) and $4.10 in coins. Mr Ropiha said the $2,620 was to buy a car, and he had been looking at a Ford Fairlane being sold by a person called Frank and a 1998 Fairmont being sold by another person (with these details noted on a piece of paper found in his wallet referred to below). Mr Ropiha said the $8,740 was the result of saving around $200 a week for his son (K) from 24 February 2014 onwards and came from ACC payments made to him (discussed further below).
(g)In the main rear top pocket: a cellphone with no SIM card, a zip lock bag containing methamphetamine, two empty zip lock bags, $1,440 (comprising 1 x $100, 6 x $50, 49 x $20 and 6 x $10), $2.70 in coins, and a leather wallet. Mr Ropiha said this was more money to purchase the car in case he needed it. The coins were for everyday use.
(h)The leather wallet contained Mr Ropiha’s driver’s licence, a Westpac Bank card, a Westpac ATM withdrawal receipt for $500, NZ Credit Union Mastercard in his name, Credit Union withdrawal receipt for
$250, a $200 receipt for using the Mastercard, various club and business cards and receipts, a vehicle registration sticker, a piece of paper with an address, number and “Fairlane”, “Frank” and “98 Fairmont” written on it, $320 (comprising 1 x $50, 13 x $20 and 2 x $5) $2.60 in coins, and another zip lock bag containing methamphetamine. Mr Ropiha says the cash was for paying bills.
[21] The two zip lock bags in this second bag contained approximately 1.2 g of methamphetamine, meaning that the total amount of methamphetamine found in both Mr Ropiha’s shoulder bags was approximately 148 g.
The money for Mr Ropiha’s children
[22] At the time of the events at issue, Mr Ropiha was living with his parents following his release from prison on parole for earlier offending. His son (K) also lived at the address. K was 22 years old. He had a brain injury from a motorcycle accident which has left him with limited function and unable to work and in need of care. Mr Ropiha’s daughter (J), who was six years old, lived with her mother although later came to live with Mr Ropiha’s parents.
[23] Mr Ropiha had become K’s primary carer following his release from prison. He filled in forms with his bank account so that ACC could pay him as K’s primary carer. Mr Ropiha said that from 9 February 2014 until 29 June 2015 he received weekly payments from ACC for $751.71 for this. K also received a sickness benefit from WINZ, which Mr Ropiha looked after.
[24] Mr Ropiha said he agreed with his parents verbally that he did not have to pay for rent or food, so that he could save up money for his son and daughter for their futures. He was saving about $200 a week for K and about $150 a week for J, but it was not exact and could be less, depending what they used for expenses or might want from time to time.
[25] He accepted that the money he was getting from ACC for caring for K was his pay for looking after K. However, he did not regard it as his own to spend as he wished because of the arrangement with his parents to save for the children in exchange for not paying for rent or anything else.
[26] Mr Ropiha said that the money he received from ACC and his son’s sickness benefit went into his bank account. His children did not have their own bank accounts. He went to the bank each week on payday, withdrew the money, went home and put it in his bag in separate compartments depending on what is was for. However, he did not make it to the bank some weeks and some weeks the payments did not come through because of mistakes. He did not keep the savings in the bank because he had “a bit of a problem with banks and kept drawing it out all the time and not trusting people”. He was told to put the savings in the bank but never got around to it and thought it would be all fine.
[27] He said the cash totalling $4,120 in the second zipped front pocket of the second shoulder bag found on 21 June 2015 was the money he was saving for J. He said the cash totalling $8,740 found in the main middle pocket of the same bag was the money he was saving for K.
[28] Hazel Ropiha, Mr Ropiha’s mother, confirmed that Mr Ropiha was the caregiver for K and J and he received money for that.17 Hazel did not refer to an arrangement with her son about saving for the children instead of paying for rent and food. However, she confirmed that her son did not put the money in a bank account and she would tell him off for that. She knew he carried a lot of money around. She is strongly opposed to her son’s offending. K and J live with her and her husband and they were now their caregivers.
17 Her evidence was in affidavit form. She was not required for cross-examination.
[29] Mr Ropiha’s bank statements for the relevant period were not before the Court for the hearing, but with the consent of the parties were provided subsequently. These:
(a)show a “Bank deposit” of $1,610.81 made on 25 February 2014 and an ATM withdrawal of $1,500 a few days later;
(b)show that he was receiving a weekly payment described as “W&I Benefit” initially of $259.15, then of $304.71 and then of $316.71 or similar amounts;
(c)confirm that he was receiving a weekly payment described as “Bank deposit” of $751.71, then of $682.77 or similar amounts;
(d)generally show a weekly ATM cash withdrawal the day following the W&I Benefit and Bank deposit payments initially of $800, but later of varying amounts generally of around $500, and sometimes $150 or
$200 a few days later;
(e)show that from 1 April 2015 until 30 June 2015, Mr Ropiha was not as regularly making cash withdrawals after receiving the W&I Benefit and “Bank deposit” payments;
(f)show two periods where the payments did not come through for a few weeks, then a larger sum of around $2,000 was paid, presumably as backpay for the prior weeks.
[30] This all accords with Mr Ropiha’s evidence that he was receiving his son’s sickness benefit (the WINZ payments) and ACC payments as his son’s carer (the Bank deposits) and sometimes there were mistakes and the payments did not come through. It is also essentially consistent with his evidence that he withdrew the money as soon as it came in. He did not operate his finances on an entirely cash basis because he made some EFTPOS payments for various things including supermarket purchases. But most of the money he received from WINZ and from ACC was withdrawn. For most of the period, the weekly balance in his account was close to zero.
[31] Mr Ropiha was cross-examined about why the money that was for his son was in zip lock bag whereas the money for his daughter was not. He was also asked why he did not label the money in his children’s names. He said maybe he should have named the money but he knew whose money it was. He was asked why, if it was only legitimate money in that bag, he threw both bags under the car. He said he was on a methamphetamine binge that week and did not make good choices. It was put to him that he was lying and both bags were involved in his drug operations, one as the predominantly drug bag, the other as more of the money bag. He did not accept this. He said he the money in the bag was his own money and that of his children and he kept this money separate from the drug money. He also said that he had never used any drug money for his children. He said he did not have any kind of drug money on him, and his parents were honest people who wanted him to save for his children honestly and so he saved for them from the money coming from ACC and WINZ.
[32]He said:
I’m only asking to have that amount of money given back to them because it was my fault it got taken away in the first place but I don’t see why my kids would suffer for my stupidity and that’s why I’m challenging today for their money back and there’s nothing else I can say about anything else.
Other evidence
[33] Mr Beattie, a financial investigator, obtained Inland Revenue reports for Mr Ropiha. Mr Ropiha did not declare income for the years ending 31 March 2011, 2012 and 2013. For the years ending 31 March 2014, 2015 and 2016 his declared income was $5,148, $40,710 and $7,890 respectively. This income was his ACC payments to care for his son.
[34] Mr Beattie also calculated the unlawful benefit from significant criminal activity as totalling $546,507.60. This was calculated prior to the conclusion of the criminal proceedings and was based on a lesser quantity of methamphetamine than that on which Mr Ropiha was sentenced.
[35] There was also evidence that Mr Ropiha purchased a Toyota on 28 July 2015 (the day before his arrest) for $2,800 cash.
Cash not in dispute
[36] Mr Ropiha accepts the cash of $17,256.60 found on 29 July 2015 was tainted property. I am satisfied that it is. Undue hardship is not claimed if this cash is forfeited. An order for forfeiture is made in respect of this cash.
[37] Mr Ropiha also accepts that the $1,150 cash in one of the two bags found on 21 June 2015 was tainted property. I am satisfied that it is. Undue hardship is not claimed if this cash is forfeited. An order for forfeiture is made in respect of this cash.
Cash in dispute
Tainted property
[38] The applicant submits the Court can be satisfied on the balance of probabilities that the $17,521 cash in the second bag found on 21 June 2015 is tainted property (as derived or acquired from methamphetamine offending). It says this inference is available from the following circumstances:
(a)it is very unusual for someone to carry around such a large amount;
(b)it was found along with 148 g of methamphetamine;
(c)Mr Ropiha has a drug offence conviction history and would know not to carry legitimate money with drugs;
(d)prior to 21 June 2015, he had supplied 1.134 kg of methamphetamine and so must have been dealing with large cash amounts in that time;
(e)despite the drugs and cash being seized, five weeks later he had a similar amount of cash along with more methamphetamine;
(f)the ACC payments were paid to his bank account and it makes no sense for him to withdraw it if he was saving it for his children;
(g)if he was saving money for his children, there was no reason for him to have confined this to his ACC payments, given what he was likely earning from selling drugs.
[39] Normally, from the presence of a large sum of cash in close association with a considerable amount of methamphetamine an inference would be readily drawn that the cash was tainted property absent an alternative plausible explanation. Here, the evidence shows that Mr Ropiha was receiving around $1,000 a week from legitimate sources and was withdrawing a good portion of that almost immediately. That provides a possible alternative explanation for some or all of the $17,521 cash at issue here. The question is whether that is a plausible explanation in all the circumstances and, if not, whether I am satisfied on the balance of probabilities that it is tainted.
[40] For Mr Ropiha it is said that the applicant’s submissions presuppose an orderly middle-class life. Mr Ropiha’s evidence was that he did not trust banks. He withdrew cash from the bank and set aside amounts to cover various things: savings for the children, daily expenses and an intended purchase of a car. He had a legitimate source for the cash and it is submitted that his evidence should be accepted.
[41] I accept Mr Ropiha’s evidence that he preferred cash to having money sitting in a bank. That fits with the fact that he usually withdrew most of what was deposited into his account from WINZ and from ACC. I accept also that if Mr Ropiha was saving for something (for example, a car) he might well withdraw cash and put that aside somewhere so that he would have that cash available for its intended purpose. That fits with his evidence that he did not trust banks and with the fact that his account was often close to zero by the end of each week. It is also supported by the fact that he appears to have used cash to purchase the Toyota on 28 July 2015. The mere fact that Mr Ropiha was in possession of a considerable amount of cash does not, therefore, necessarily mean it was related to his methamphetamine offending.
[42]I accept also that Mr Ropiha did have in mind setting aside money for K and
J. The ACC money (paid to Mr Ropiha and for him) and the WINZ benefit (paid to Mr Ropiha and for K) provided legitimate funds for that purpose. So far as one can assess these things, Mr Ropiha’s intention to have some money available for his children from these sources and his concern that his children not suffer from having had all his cash seized came across in his evidence as genuine. The fact that he accepted all of the cash found on 29 July 2015 and some of the cash found on 21 June
2015 should be forfeited supports his genuineness that he is opposing the balance primarily out of concern for his children.
[43] However, if Mr Ropiha had been saving about $150 a week for his daughter over the relevant period (roughly 70 weeks), that would total $10,500 in savings for her. This contrasts with the $4,120 he says was savings for his daughter. If Mr Ropiha had been saving about $200 a week for his son over the relevant period, that would total $14,000. This contrasts with the $8,740 he says was savings for his son. Even accounting for missed weeks and paying for some of their expenses, the savings he claimed to be making and the amounts he claims represented those savings, do not really match. This mismatch detracts from his claims to some extent but it is explained by his evidence that what he saved depended on their expenses, which varied from time to time.
[44] The way the cash is compartmentalised in the bag is neutral. It is consistent with various sums being from separate sources or intended for separate purposes. It does not indicate whether those sources or purposes are legitimate or criminal. The presence of some personal items in the bag (for example, Mr Ropiha’s wallet and a small amount of methamphetamine consistent with personal use) is consistent with some of the cash potentially being for personal use. The coins are also consistent with some of the cash being for personal use.
[45] It is somewhat suspicious that Mr Ropiha dropped both bags under the vehicle when the Police entered the garage on 21 June. However, Mr Ropiha is likely to have been in a panic about being caught with a large quantity of methamphetamine (consistent with his decision to flee) and would understand from his offending history that the cash would look suspicious and would be seized from him anyway. If he was on a methamphetamine binge at the time, which is plausible, he would likely not have been making good decisions, as he said. These factors and his right to silence would also explain why he did not tell them at the time that the cash in the second bag was his personal cash.
[46] The first shoulder bag was clearly related to his drug dealing activities. It contained the drugs, the scales and some cash. The other shoulder bag primarily
contained cash as well as some personal items. It is possible that the first shoulder bag was primarily the drugs bag and the second shoulder bag was primarily the money from the sale of drugs. However, it is also possible that the first shoulder bag was the drug dealing bag (and the cash was from the sale of some of the drugs) and the second shoulder bag was his personal bag, or at least partly his personal bag.
[47] Perhaps the strongest point in the Crown’s favour is that Mr Ropiha was found with a similar amount of cash the following month and he accepts that was associated with his criminal offending. However, on that occasion the cash seems not to have been in a bag compartmentalised in a similar way as on 21 June 2015. Moreover, he had a much smaller quantity of methamphetamine on 29 July 2015 than he did on 21 June 2015. It is possible the $17,256 was drug related money from sales already made (with his personal money already having been seized on 21 June) whereas the cash of $1,150 that was with the larger quantity of drugs in one of the two bags on 21 June was the proceeds from a smaller sale or sales already made.
[48] On balance, I am not satisfied that the disputed cash is tainted property. It may have been, but it is also plausible that it was cash derived from legitimate sources (WINZ and ACC payments) and intended for legitimate purposes. I therefore decline to make an asset forfeiture order of this cash.
Unlawful benefit
[49] If a profit forfeiture order is to be made, the first question is whether Mr Ropiha unlawfully benefited from significant criminal activity within the relevant period of criminal activity. Mr Beattie calculates the unlawful benefit at $546,507.60 and this is the amount stated in the application. The applicant submits this calculation is conservative because it was not based on the total quantity of methamphetamine supplied or for supply on which Mr Ropiha was sentenced.
[50] The submissions for Mr Ropiha do not challenge this. Mr Ropiha accepted that supplying methamphetamine of this quantity would have involved a lot of money but it was “a lot of money that I didn’t see”. It was put to him that he must have had access to “a very large amount of cash” to which he said:
I don’t think any, the access of cash was never, even on my possession as you can see through your fellas evidence that none of that was ever, ever found on me and all that was found was drugs. And with all the amount of drugs that were found how can, how can only that much cash be found? At the end of [the] day eh, I just didn’t want to bother going through all this Court procedures.
[51] The last sentence relates to his evidence that other people were involved in the supply but Mr Ropiha was not the type of person to involve those others in the charges that he faced. The summary of facts on which he was sentenced provided evidence about what prices methamphetamine can sell for but does not allege that Mr Ropiha was making a substantial financial return for his drug supplying and the sentencing Judge did not refer to this. There is some support for Mr Ropiha’s evidence that he did not have significant cash from his dealing activities in that he appears not to have had any significant assets, he was living with his parents, and the application for forfeiture relates only to the cash found at the same time as the methamphetamine was found. There appears to have been no valuable vehicles or other goods associated with him.
[52] While the reality may be that the cost to Mr Ropiha in purchasing the drugs was similar to the amount received on the sale of them (as a middleman facilitating the sales), it is unlikely that he received no financial benefit from facilitating the supply of drugs on this scale. The benefit received is determined on a gross basis (that is, disregarding expenses) rather than with reference to profit.18 No alternative method of calculating the benefit has been put forward. I therefore fix the unlawful benefit at
$546,507.60 being the amount stated in the application and supported by Mr Beattie’s evidence, which was not challenged, and noting the applicant’s submissions that it is likely to be understated.19
Mr Ropiha’s interest
[53] The next question is whether Mr Ropiha has interest in the cash. It was in his possession and, on his evidence, was obtained from cash withdrawals made from his
18 Commissioner of Police v Read [2015] NZHC 2055 at [28]. See also Commissioner of Police v Tang [2013] NZHC 1750 at [25].
19 Section 53.
bank account. At the least, he had a power in relation to the cash and so has an interest in it.
Subject to a trust
[54] As set out earlier, the Court must grant relief if an applicant for that relief proves on the balance of probabilities that the applicant has an “interest” in the property and they have not unlawfully benefitted in criminal activity. Mr Ropiha submits his children, who have not unlawfully benefitted from his criminal activity, have an interest in some of the cash because it was subject to a trust in their favour. He relies on Commissioner of Police v Irwin in which the Court held that money in a bank account in the name of the defendant (a drug dealer) was subject to a trust in favour of his son.20
[55] Mr Ropiha’s submissions were put on the basis of the agreement Mr Ropiha had made with his parents. It was said that this gave rise to a constructive trust that arose when Mr Ropiha withdrew the money. Commissioner of Police v Irwin, however, was an express trust case. I consider that is the more appropriate analysis because any arrangement Mr Ropiha may have had with his parents did not require that the money for the children be kept in a bank account. There may be a separate issue about the WINZ money (not contingent on any arrangement with Mr Ropiha’s parents) because that was K’s money, albeit under Mr Ropiha’s control, but it is ultimately not necessary to decide this.
[56] As is discussed in Commissioner of Police v Irwin the requirements for a trust are not technical. It is simply necessary that there be an intention to create a trust, certainty in relation to the property that is the subject of the trust, and certainty as to who is to receive the benefit of the trust and on what basis.21
[57] As in Irwin, I consider that whether Mr Ropiha intended to hold the cash for the benefit of his children is to be looked at realistically. What is relevant is what he
20 Commissioner of Police v Irwin [2020] NZHC 1370.
21 These long established principles are summarised in Irwin, above, at [24]-[25]. And as it is put in Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed, Thomson Reuters, Wellington, 2009) at 4.4.3(1): “inter vivos trusts of personal property do not require any particular formal requirements to be met” – because equity looks to the intent, rather than the form.
actually intended. Mr Ropiha’s evidence is that he intended to save money from the WINZ and ACC payments he was receiving for his children. The amount was not always the same because it depended on how much he received from those sources (which varied) and their expenses (which also varied). I accept this evidence because:
(a)The evidence is that he did withdraw a large portion of those payments on a mostly weekly basis over the relevant period.
(b)It seems unlikely that he needed this money to pay for drugs because his role was one of facilitating major drug suppliers. The money paid to those suppliers would be met by the ultimate purchasers of the drugs.
(c)The cash Mr Ropiha says was for the children and for his personal expenses was in a bag that did not contain the drugs that were intended for supply.
(d)I accept his evidence that he did not like banks and preferred to hold the cash.
(e)His evidence is that he separated out the cash that was for J and the cash that was for K. The fact that various bundles of cash were in different compartments of his bag provides some support for this.
(f)The WINZ payments were meant for K because his injuries meant he was unable to work.
(g)I accept that Mr Ropiha did want to put aside money from legitimate sources for the benefit of his children. I accept also that he did not want to involve his children in drug money.
[58] The applicant submits that there was no certainty of subject matter because no definite amount of savings was agreed with his parents and nor put aside. Mr Ropiha was able to and apparently did use the money from the legitimate sources for other purposes. However, Mr Ropiha’s intention was to hold the funds that he was able to
and did save each week (which would vary in amount) for the benefit of his children. The amount that he did save week to week represented the subject matter of the trust.
[59] The applicant also submits that there was no certainty of object (who was to receive it and on what basis). I consider there was sufficient certainty that K was the intended beneficiary of $8,740 and J was the intended beneficiary of $4,120. I agree that when the children would receive the money was not precise but it did not need to be. It was for their future and would be accessible by them when the trustee (Mr Ropiha) decided they should have that access.
[60] As to whether to order relief I note that K and J did not formally make an application for this.22 The submissions for the Commissioner of Police did not seek to make anything of this. Noting that K has suffered serious injuries and J is still a child and Mr Ropiha is their father, I will treat Mr Ropiha’s opposition to the profit forfeiture application as an application made on their behalf.
[61] K and J were not involved in Mr Ropiha’s offending. If they had knowledge of it, they had no realistic ability to do anything about it. It can be inferred that they are both in need of the money. K is 28 years old and will need care for the rest of his life. It appears from the bank statements that there is nothing left of the WINZ payments over the relevant period. The $8,740 savings for K is a fraction of the total WINZ payments made to Mr Ropiha for K over the relevant period (I calculate the total to be $20,890.37). K and J have a father who is serving a lengthy prison sentence (and who has served previous prison sentences). There is no suggestion that K and J are living a comfortable financial lifestyle. The evidence from Mr Ropiha’s mother is that the $4,120 would be useful for J’s school uniform, for her extracurricular activities and to meet living expenses.
[62] I consider it is appropriate to order relief to K and J in respect of the $8,740 and $4,120 cash respectively. As requested by Mr Ropiha’s mother, the $8,740 is to be paid into her husband’s bank account (as K’s caregiver) and the $4,120 is to be paid into her account (as J’s caregiver).
22 Section 61.
Undue hardship
[63] Mr Ropiha seeks the balance of the cash in the shoulder bag on the grounds of undue hardship. He says all of the cash in the shoulder bag was derived from legitimate sources (the WINZ and ACC payments). In my view he cannot show “undue” hardship given the unlawful benefit received from his significant criminal activity.
Result
[64] The application for forfeiture of the $17,256.60 cash found on 29 July 2015 is granted. The application for forfeiture of the $1,150 cash in one of the two bags found on 21 June 2015 is granted.
[65] I grant relief to K of the $8,740 cash found on 21 June 2015 in the other bag found on 21 June 2015. It is to be paid to Matene Ropiha on K’s behalf. I grant relief to J of the $4,120 cash found in this bag on 21 June 2015. It is to be paid to Hazel Ropiha on J’s behalf. I grant the application for a profit forfeiture order over the balance of the cash found in this bag.
Mallon J
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