Commissioner of Police v Rose
[2018] NZHC 189
•19 February 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2014-404-2679
[2018] NZHC 189
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
COMMISSIONER OF POLICE
Applicant
AND
PAUL KENNETH ROSE
First Respondent
JANE CLARE ROSE
Second Respondent
Hearing: On the papers Counsel:
M R Harborow and L J Fraser for the Applicant D Dufty for the First Respondent
M E Goodwin for the Second Respondent
A J Lloyd and JJK Spring, for interested party Mercury NZ LimitedJudgment:
19 February 2018
JUDGMENT OF MUIR J
This judgment was delivered by me on Monday 19 February 2018 at 4.30 pm Pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:…………………………
Counsel/Solicitors:
M Harborow and L Fraser, Meredith Connell, Auckland D Dufty, Barrister, Auckland
M E Goodwin, Barrister Auckland
A J Lloyd and JJK Spring, Minter Ellison Rudd Watts, Auckland
COMMISSIONER OF POLICE v ROSE [2018] NZHC 189 [19 February 2018]
Introduction
[1] The applicant (the Commissioner of Police) and the second respondent (Mrs Rose) have reached settlement regarding restrained assets to be forfeited to the Crown. They seek this Court’s approval for the settlement under s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).
[2]This approval is granted for the reasons set out below.
Background
[3] Mrs Rose’s husband was an employee of Mighty River Power Ltd (now Mercury NZ Ltd) (MRP). In 2006 and 2010–2012, two companies he was associated with, Penrose Electrical Ltd and Aero Automation ltd (AAL), supplied goods to MRP. His employment agreement with MRP required him to disclose conflicts of interest. He did not do so. An investigation by the Serious Fraud Office found that MRP had deposited a total of $2,122,841 into the AAL bank accounts in 2010–2012. Payments totalling $879,223.41 were paid from AAL accounts into personal and business bank accounts controlled by Mr and Mrs Rose.
[4] In March 2016, Mr Rose was convicted of nine representative charges of obtaining by deception for offending in 2006 and 2010–2012, relating to payments of approximately $2,200,000.1
[5] Mrs Rose was the sole director and shareholder of AAL and was responsible for the day-to-day running of the business during 2010–2012. She was convicted as a party to eight representative charges of obtaining by deception for offending in 2010– 2012, relating to payments totalling approximately $1,800,000.
Assets currently restrained
[6] The following assets are currently restrained under ss 21, 24 and/or 25 of the Act as a result of a decision of Wylie J on 16 March 2015:
1 Under the Crimes Act 1961, s 240.
(a)the proceeds from the sale of 71 Takutai Avenue, Half Moon Bay, Auckland, being $1,021,218;
(b)the proceeds from the sale of 15 Charles Dickens Drive, Mellons Bay, Auckland, being $216,878;
(c)the proceeds from the sale of 11 Quilbray Place, Botany Downs, Auckland, being $124,513;
(d)the proceeds of the sale of the 2008 Audi RS6 vehicle, registration HPN460, being $46,566;
(e)a 1979 Ducati Desmo motorcycle, registration 64RSE; and
(f)a 2009 white Audi A3 Sportback, registration FDB737, which is currently in the possession of Mrs Rose.
[7] The total value of the restrained property is approximately $1,430,000, excluding any interest earned on the funds.
Proposed Settlement
[8] The Commissioner and Mrs Rose have agreed to settle the Commissioner’s forfeiture claims, subject to this Court’s approval under s 95. The proposed settlement is as follows:
(a)a sum of $15,000 from the restrained property will be released to a bank account nominated by Mrs Rose;
(b)the Audi A3 shall be released from the restraining orders;
(c)Mrs Rose consents to asset forfeiture orders being made in respect of her interest in the remainder of the restrained property, being half of the proceeds from the sale of the properties described at [6](a)–[6](c) above;
(d)no profit forfeiture orders will be pursued by the Commissioner against Mrs Rose and that aspect of the Commissioner’s civil forfeiture application (dated 13 July 2017) is dismissed; and
(e)costs are to lie where they fall.
[9] The approximate amount forfeited to the Crown as a result of the settlement will be $666,000. The approximate amount to be returned to Mrs Rose is $25,000. Approximately $31,159 has already been released to Mrs Rose as a result of variations to the restraining orders made by the Court. The Commissioner does not seek recovery of such sums.
[10] Further, the Commissioner notes that it is not his intention to engage with media regarding the terms of the settlement. Should the media approach the Commissioner to confirm details of the settlement, he will oblige. Similarly, the Commissioner will not oppose any media requests for access to the Court file.
Law
[11] Parliament has expressly empowered the Commissioner to enter into settlements with respondents and interested parties by enacting s 95. The Court has a supervisory jurisdiction, aimed at ensuring that any settlements reached are consistent with its intent in enacting the legislation.2
[12] Section 95 requires that any settlement between the Commissioner and any other party must be approved by the Court. The Court must approve the settlement if it is satisfied that the settlement is consistent with the purposes of the Act, and the overall interests of justice.3
2 Commissioner of Police v Know-All Group Ltd & Anor HC Auckland CIV-2010-404-403, 7 November 2011 at [11].
3 Section 95(3).
[13]The purposes of the Act are contained in s 3:
3 Purpose
(1)The primary purpose of this Act is to establish a regime for the forfeiture of property—
(a)that has been derived directly or indirectly from significant criminal activity; or
(b)that represents the value of a person's unlawfully derived income.
(2)The criminal proceeds and instruments forfeiture regime established under this Act proposes to—
(a)eliminate the chance for persons to profit from undertaking or being associated with significant criminal activity; and
(b)deter significant criminal activity; and
(c)reduce the ability of criminals and persons associated with crime or significant criminal activity to continue or expand criminal enterprise; and
(d)deal with matters associated with foreign restraining orders and foreign forfeiture orders that arise in New Zealand.
[14] The Supreme Court has said that the language in s 3(2)(a) is “aspirational” and provides a “clear and emphatic signal as to the legislative purpose”.4
[15] Whether a settlement is in the interests of justice is a broad enquiry. Relevant factors include the saving of time and expense, and the litigation risk to both the Commissioner and the respondent(s).5 The Court has previously recognised that the decision to settle proceedings under the Act may be made on economic and pragmatic grounds and reflect a “common sense approach” between the parties.6
Discussion
[16] The parties submit that the settlement is consistent with the purposes of the Act and in the interests of justice. In particular the Commissioner says that:
4 Marwood v Commissioner of Police [2016] NZSC 139, [2017] 1 NZLR 260 at [12].
5 Commissioner of Police v Kree [2013] NZHC 2972 at [11].
6 Commissioner of Police v Douglas [2015] NZHC 1293 at [6].
(a)he has a strong case to show all of the restrained property is tainted property. Funds from AAL bank accounts were used to purchase and/or maintain the mortgage payments on the residential properties owned by Mr and Mrs Rose. It is therefore appropriate that the vast majority of proceeds from the sale of the properties be forfeited;
(b)he has a strong case to show Mrs Rose unlawfully benefitted from the significant criminal activity, which would support a forfeiture order against her. Mrs Rose has already been convicted as a party to the offending;
(c)he accepts Mrs Rose may have grounds for a claim of undue hardship under ss 51 and 56. However, the Commissioner considers it unlikely such claim would succeed. Mrs Rose has already received $31,159 of the restrained funds, and under the settlement will receive a further payment of $15,000 to adequately address any hardship claim;
[17] Mrs Rose recognises that if an application for forfeiture was pursued and if it was established on the balance of probabilities that the property was tainted, the Court would be required to make an assets forfeiture order.7 She recognises the difficulties she would have in opposing such an application having regard to her convictions and the Commissioner’s evidence.
[18]Both parties agree:
(a)there will be a saving of time and cost if the matter can be resolved without the need for further litigation; and
(b)all parties wish to have certainty over the outcome of these matters.
[19] I am satisfied this settlement is consistent with the purposes of the Act. A significant portion of the proceeds of these crimes were used to purchase and maintain the relevant properties. Forfeiting Mrs Rose’s interest in them strips her of the
7 Section 50(1)
accruing benefit and fulfils the purposes of s 3(2) of the Act. The modest allowance in her favour appropriately recognises Mrs Rose’s claims to undue hardship as a result of her personal situation involving the care of young children. It does not materially compromise the statutory purpose. The settlement eliminates the litigation risk inherent in all such proceedings and results in a saving of time and cost to both the parties and the court system. It is in my view consistent with the purposes of the Act and the overall interests of justice.
Decision
[20]As such, I approve the settlement. I make the following orders:
(a) Further orders ancillary to the restraining orders under ss 33–35 of the Act:
(i)The official assignee is directed to pay from the restrained property the sum of $15,000 to a bank account nominated by Mrs Rose;
(ii)The 2009 Audi Sportback vehicle, registration FDB737, is released from the restraining orders.
(b) Assets forfeiture order under s 50(1) of the Act:
(i)The following property vests in the Crown absolutely and is to be under the Official Assignee’s custody and control:
(i)Mrs Rose’s half share of the net proceeds of the sale of the following properties (including all interest accruing on sums following the sale), but less the funds released to her:8
1. 71 Takutai Avenue, Half Moon Bay, Auckland;
8 This includes the funds of $15,000 released to her per my order at [20](a)(i), as well as the sum of
$31,159 released to her previously as a result of the variations to the restraining orders
2. 15 Charles Dickens Drive, Mellons Bay, Auckland;
3. 11 Quilbray Place, Botany Downs, Auckland.
(c)No profit forfeiture orders will be pursued by the Commissioner against Mrs Rose and that aspect of the Commissioner’s application dated 13 July 2016 is dismissed.
(d)Costs are to lie where they fall in relation to all matters.
Muir J
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