Commissioner of Police v Skinner
[2013] NZHC 2956
•8 November 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2013-404-3490 [2013] NZHC 2956
UNDER the Criminal Proceeds (Recovery) Act
2009
BETWEEN COMMISSIONER OF POLICE Applicant
ANDJOHN WARD SKINNER Respondent
Hearing: 8 November 2013
Appearances: M Harborow for the Applicant
M Dyhrberg and R McCausland for the Respondent
D Dickinson for Ms Preece, an interested party
Judgment: 8 November 2013
(ORAL) JUDGMENT OF WOODHOUSE J
Solicitors / Counsel:
Mr M Harborow, Meredith Connell, Office of the Crown Solicitor, Auckland
Ms M Dyhrberg, Barrister, Auckland
Mr B Dickinson, Barrister, Auckland
COMMISSIONER OF POLICE v SKINNER [2013] NZHC 2956 [8 November 2013]
[1] The applicant has sought orders under the Criminal Proceeds (Recovery) Act
2009 (the 2009 Act).
[2] The respondent, Mr Skinner, and his partner Ms Preece, who claims an interest in the property in question, contend that there is no jurisdiction to proceed under the 2009 Act because the Solicitor-General had taken steps under the Proceeds of Crime Act 1991 (the 1991 Act).
[3] The primary issue now for determination is whether there is jurisdiction for the Commissioner to proceed under the 2009 Act. There appears to be no decision directly on point.
[4] There are two further submissions for Mr Skinner and Ms Preece, who I will refer to collectively as the respondents. The first submission, by Ms Dyhrberg for Mr Skinner, arises from the fact that Mr Skinner pleaded guilty to offences under the Misuse of Drugs Act 1975 before the 2009 Act came into force. Ms Dyhrberg submits, in essence, that it will now be unfairly prejudicial to him if the Commissioner is able to proceed under the 2009 Act. There is a further submission by Mr Dickinson, on behalf of Ms Preece, to the essential effect that application under the 2009 Act would amount to what might be seen in a broad sense as collateral attack.
The background facts
[5] The background facts of immediate relevance cover the procedural history. This is conveniently based on the summary in Ms Dyhrberg’s submissions.
[6] On 30 September 2008 an information was laid alleging that the respondent manufactured methamphetamine between 25 November 2005 and 11 September
2008.
[7] On 26 November 2009 a notice of application by the Solicitor-General for restraining orders was filed in the High Court at Auckland with a supporting affidavit.
[8] On 8 February 2010 restraining orders under s 42 of the 1991 Act were made by this Court in respect of nine items of property (five vehicles, cash, jewellery and other items in a safety deposit box, real estate, and funds in two bank accounts, one in Ms Preece’s name).
[9] Following severance from other matters before the Court, the respondent confirmed a plea of not guilty to one count of manufacturing methamphetamine on indictment on 13 October 2010.
[10] An amended indictment was presented to the Court on 18 March 2011 containing one count of manufacturing methamphetamine and a further count of possession of methamphetamine for supply.
[11] On 11 April 2013, on a further amended indictment presented by the Crown, the respondent pleaded guilty to charges of possession, on or about 11 September
2008, of precursor substances, materials and equipment for the manufacture of methamphetamine contrary to s 12A(2) of the Misuse of Drugs Act 1975.
[12] On 5 July 2013 the respondent was sentenced to 3 years imprisonment for the offences to which he pleaded guilty.
[13] The respondent is currently a sentenced prisoner, having been convicted of these three counts, and further charges not relevant to this application.
[14] The original restraining orders were extended by the Court on a number of occasions pursuant to s 66 of the 1991 Act. Restraining orders under the 1991 Act remained in force until 25 July 2013.
[15] At the time the respondent entered guilty pleas, and when he was sentenced, all of the property was being dealt with under the 1991 Act pursuant to the restraining orders.
[16] On 17 July 2013 the Commissioner of Police filed the application under the
2009 Act now before the Court. Four types of order are sought: effective control orders; restraining orders; asset forfeiture orders; and profit forfeiture orders.
[17] I add to the above summary, taken from Ms Dyhrberg’s submissions, that the Solicitor-General’s application for restraining orders under the 1991 Act was made by originating application under the High Court Rules. Restraining orders were the only orders sought. No other application has been brought under the 1991 Act. In particular, the Solicitor-General has not at any time made an application under the
1991 Act for forfeiture orders.
Jurisdiction
[18] The answer to the jurisdiction issue turns in large measure on interpretation of the 2009 Act. The central provision is s 172. The immediately preceding section, s 171, repealed the 1991 Act. Section 172 then provides:
172 Proceeds of Crime Act 1991 continues in force for certain purposes
Despite section 171, the Proceeds of Crime Act 1991 continues in force for the purposes of—
(a) continuing and completing any proceedings or other matter commenced under that Act before the commencement of this Act (including the making or enforcement of any order arising from those proceedings):
(b) the exercise of any power or function under that Act in relation to any matter referred to in paragraph (a).
[19] Other provisions of relevance for the purposes of interpretation are ss 3, 4, 9 and 15 which are as follows, so far as material:
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.
4 Overview
(1) In general terms, this Act—
(a) provides for the restraint and forfeiture of property derived as a result of significant criminal activity without the need for a conviction; and
(b) sets out certain procedural matters relating to the forfeiture of instruments of crime if a conviction has been or may be entered. Many aspects of the conviction-based forfeiture regime are included in the Sentencing Act 2002.
…
(3) This overview is by way of explanation only. If any provision of this
Act conflicts with this overview, the other provision prevails.
9 Application
This Act applies in respect of—
(a) qualifying instrument forfeiture offences or, if applicable, foreign qualifying forfeiture offences committed, or believed to have been committed, before, on, or after the commencement of this section; and
(b) significant criminal activity or, if applicable, significant foreign criminal activity engaged in, or believed to have been engaged in, before, on, or after the commencement of this section.
15 No criminal proceedings required for civil forfeiture order or in registering foreign forfeiture order
The significant criminal activity or significant foreign criminal activity on which a civil forfeiture order or registration of a foreign forfeiture order in New Zealand is based does not need to be, or to have been, the subject of any criminal proceedings in New Zealand or a foreign country.
[20] For the Commissioner, Mr Harborow submitted that s 172 is permissive – it permits the Solicitor-General to continue a proceeding commenced under the 1991
Act but does not require the Solicitor-General to complete a proceeding under that
Act. Mr Harborow adopted the opinion in the commentary on s 9 in Adams, which is as follows:
Because the Act is retrospective in its application , the Proceeds of Crime
Act 1991 has been repealed and ceased to have effect from 1 December
2009. But s 172 provides an exception to that: where proceedings under the Proceeds of Crime Act were commenced before this Act came into force, they may be completed and any order made under them enforced under the Proceeds of Crime Act. It would be open to the Commissioner of Police or any prosecuting agency to withdraw proceedings that had been commenced under the Proceeds of Crime Act, and to bring proceedings under this Act relating to the same property.
Emphasis was placed on the final sentence. It was submitted for the Commissioner that s 9 makes clear, when read in conjunction with s 172, that the Crown can proceed under the 2009 Act and, by necessary inference, notwithstanding that steps may have been taken under the 1991 Act.
[21] There were careful submissions from Ms Dyhrberg and Mr Dickinson to the contrary effect. Without seeking to capture the full extent of the submissions I believe they can be reasonably summarised as follows:
(a) The language of s 172 is mandatory in its terms. Emphasis was placed on particular words in that provision – “continues in force for the purposes of”, and the words in parenthesis in s 172(a).
(b)It was submitted, and in particular by Mr Dickinson, that s 172 must be read in conjunction with s 171. Reading the two together can be taken as meaning that the repeal of the 1991 Act by s 171 does not apply in respect of matters already commenced under the 1991 Act.
(c) That last submission in turn provided an answer to the Commissioner’s reliance on s 9 which, of course, applies only to the extent that the 2009 Act is in force or applicable.
(d) Reference was made to five cases: Beckham,1 Bujak,2 Wikitera,3
Rhodes4 and Monk.5
1 Solicitor-General v Beckham HC Auckland CIV-2009-404-1226, 18 February 2010.
[22] If s 172 is read in isolation it may be interpreted as at least leaning towards a requirement that an existing proceeding under the 1991 Act must continue under that Act. However, in my judgment, this is by no means clear from the language used in the section itself. Section 172 does not say that an existing proceeding under the
1991 Act must continue under that Act. By the same token it does not say that an existing application may be continued under that Act. In other words, there are no express mandatory terms or permissive terms.
[23] However, s 172 cannot be read in isolation. In my opinion ss 3 and 9 indicate that s 172 was intended by Parliament to be permissive but not mandatory. This is given emphasis by the fact that the 2009 Act in essence gives rise to what in conventional civil proceeding terms would be described as a new cause of action. The scope of the 2009 Act was substantially broader. The point of distinction may be made in different ways. One point of distinction arises from a comparison of s 3 of the 2009 Act with s 7 of the 1991 Act. Section 7 is directed to the application of the 1991 Act and s 7(1) provides, so far as relevant, that the 1991 Act “applies only to serious offences committed, or believed to have been committed, after the commencement of the Act”.
[24] Sections 3 and 9 of the 2009 Act support a conclusion that Parliament intended that resort to the wider powers under the 2009 Act compared with the 1991
Act should not be restricted by the fact that an application had been made under the
1991 Act.
[25] If Parliament had intended that 1991 Act applications had to be completed under that Act it would be expected that the simple course of stating that in the legislation would have been adopted. The obvious place to make clear that s 172 was mandatory – in the sense that that expression is used in this judgment – would have been in s 172 itself. Another possibility was raised by Mr Harborow – that s 9
could have been expressly declared to be subject to s 172. And in the latter respect it
2 Solicitor-General v Bujak [2012] NZHC 2453; Solicitor-General v Bujak [2012] NZHC 1049.
3 Solicitor-General v Wikitera HC Auckland CIV-2008-404-946, 12 May 2012.
4 Solicitor-General v Rhodes HC Auckland CIV-2007-404-3773, 16 February 2012.
5 Solicitor-General v Monk HC Whangarei CIV-2011-488-10, 11 October 2011.
may be noted that s 9 is a fairly pivotal operative provision at the beginning of the
Act. At least in broad terms, s 172 is a fairly conventional saving provision.
[26] The absence of express words gives support to a conclusion that s 172 is permissive and permissive for procedural reasons – the Solicitor-General having commenced a proceeding under the 1991 Act is able to continue that proceeding if the Solicitor-General chooses to do so. This may also be found in the words in s 172 that the 1991 Act continues in force “for the purposes of”. The words “for the purposes of” can be read as meaning “to enable”. In my judgment those alternatives words do not strain the meaning of the words actually used.
[27] If s 172 is mandatory, the question whether a person’s property will be subject to the 1991 Act or the 2009 Act could depend on fortuitous events or circumstances. Ms Dyhrberg and Mr Dickinson accepted that if there had been no application against Mr Skinner under the 1991 Act, the 2009 Act would apply, notwithstanding the Commissioner’s allegation that the alleged criminal activity occurred before the commencement of the 2009 Act. That was a responsible acknowledgement. Section 9 is quite clear in its terms. A self-evident corollary to this is that, if there had been no application under the 1991 Act in respect of the alleged criminal activity before the 1991 Act was repealed, obviously there could have been no application under it once it had been repealed. What has just been described is not what happened in fact. But it would seem that clear words would be required to give rise to these different outcomes which are quite possible and which would in turn result in a substantially different statutory regime applying.
[28] The point may be illustrated in another way. If the respondents are correct this would mean that the law applying to these respondents would be different from the law applying to another person whose alleged criminal activity was carried out jointly with the respondent (and I emphasise that this is hypothetical) but whose activities were not discovered until after repeal of the 1991 Act. Again, it may be said that clear words would be necessary to produce these quite different outcomes in terms of applicable law applying to the same criminal activity. As Mr Dickinson submitted, there can be inconsistent outcomes when new law is introduced, but that cannot be determinative of the interpretation of legislation. I accept that it is not
determinative, but it does, as I have said, tend to support the conclusion that s 172 was not intended by Parliament to be mandatory.
[29] I have considered the cases referred to by counsel for the respondents. I am satisfied they are not on point. All of them were concerned with applications under the 1991 Act. Wikitera, Rhodes and Monk simply note the application of s 172 – that although the 2009 Act was in force when the Court came to consider the matter under the 1991 Act, s 172 enabled the particular application before the Court to continue under the 1991 Act. That is no more than a conclusion that s 172 is permissive.
[30] Ms Dyhrberg placed some emphasis on Beckham. However, I am satisfied that that decision is distinguishable. Beckham involved an application by the respondent to vary an existing restraining order over the respondent’s property made under the 1991 Act. The Crown was not seeking to proceed under the 2009 Act. A possible jurisdiction issue was noted by counsel for the Solicitor-General, but it was not a point that was argued in any significant way. The Judge’s decision is limited to a conclusion that s 172 did permit an application for variation of an existing order and in that case being a variation sought to enable fees of the respondent’s lawyer to be paid. The essential aspects of that decision, including the point made for the Crown, are at [14](a) and [17].
[31] If s 172 is mandatory, there is a further important question as to the scope of s 172. The question is: What is meant by the words “proceedings or other matter”, which words have to be read with the expanded definition in paragraphs (a) and (b) of s 172? The issue can perhaps be put by asking the question: Is the assumed mandatory effect of s 172 confined to “proceedings” that are already before the Court and to the orders that may already have been made?
[32] As earlier recorded the only application made by the Solicitor-General was for restraining orders. These were orders sought in an originating application for that purpose. The Solicitor-General had not brought a further originating application, being the standard procedure under the 1991 Act, for forfeiture or pecuniary penalty orders under that Act. In my judgment the matters I am referring to are not mere
technicalities. In terms of the High Court Rules the only “proceeding” ever brought by the Solicitor-General was the originating application for restraining orders. If, as is presently being assumed, s 172 is mandatory, the mandatory effect extends only to that originating application for restraining orders and, as recorded in parenthesis in s 172(a), “the making or enforcement of any order arising from those proceedings”.
[33] The words “proceedings or other matter” can cover a wide range of legal steps. But in the absence of clear words I am satisfied that they do not extend to applications for particular types of relief which have never been before the Court.
[34] In Solicitor-General v Beckham the Judge said, agreeing with a submission of counsel for the Solicitor-General, that the words “any proceeding or other matter” should be given a large and liberal interpretation. Ms Dyhrberg submitted that this supports the primary submission that s 172 is mandatory. In my judgment with respect, this does not bear on the issue whether s 172 is mandatory or permissive. Nor does it support a construction of s 172 which would in my judgment strain the clear words beyond any reasonable meaning.
[35] The jurisdiction argument for the respondents is accordingly dismissed.
The relevance of Mr Skinner’s guilty pleas
[36] The heart of Ms Dyhrberg’s submission in this regard was as follows:
60.If the Crown argument is that discontinuance of a civil proceeding would be completing it then the Court must take into account the particular circumstances of this case, in which the respondent has pleaded guilty to a range of serious charges and been sentenced in reliance on the forfeiture action taken by the Crown under the 1991
Act. He has significantly altered his position. Sentencing has been completed. The sentencing outcome might have been quite different
if forfeiture under the 2009 Act had been taken into account.
Reference was also made to observations of Ellis J in Commissioner of Police v Sheehan.6 Those observations relate to Sentencing Act provisions concerned with the impact of forfeiture orders on sentences.
6 Commissioner of Police v Sheehan HC Hamilton CIV-2011-419-1024, 7 December 2011, at [6]
and [7].
[37] I am not persuaded that this submission alters the conclusion on jurisdiction or should result in some other order from this Court which might prevent the Commissioner from proceeding. My reasons may be summarised as follows:
(a) What has occurred procedurally did not involve “discontinuance of a civil proceeding”, at least not in the ordinary sense of that expression. The reasons for that observation are contained in the earlier discussion.
(b)The jurisdiction issue turns on the words in the 2009 Act. The provisions in the Sentencing Act do not in my judgment bear on this.
(c) There is no evidence relating to the matters contained in the submission. Mr Skinner will not be prevented from adducing relevant evidence for the purpose of the substantive application by the Commissioner. And there are provisions in the 2009 Act which would enable such matters to be brought into account.
(d)In any event, it is doubtful that it could be said that Mr Skinner pleaded guilty to and was sentenced “in reliance on the forfeiture action taken by the Crown under the 1991 Act”. This is because no such application had been made. I recognise that Ms Dyhrberg’s submission was made in a broader sense. But looking at it more broadly, if I am right in my conclusions about jurisdiction, then Mr Skinner, to the extent that he took these matters into account, proceeded on a wrong basis of law.
(e) The point made for the respondent might be relevant to a forfeiture application dependent on conviction. But the forfeiture orders the Commissioner seeks are not dependent on conviction. The distinction is brought out clearly in s 4 of the 2009 Act. Fundamentally in this regard, what the Commissioner seeks to forfeit is alleged proceeds of crime, not property allegedly used as an instrument of crime. Conceptually there is a world of difference between the two when
related to sentencing. There may be a direct correlation between sentence and what may be regarded as a penalty as a consequence of forfeiture of an instrument of crime – such as forfeiture of a house where methamphetamine may have been manufactured. However, what the Commissioner seeks is confiscation of money or proceeds obtained only through crime and which, if the allegations are borne out, Mr Skinner should not have got in the first place.
Collateral attack
[38] If collateral attack is given its conventional legal meaning I am satisfied that the circumstances of this case do not give rise to any issue of collateral attack. In fairness to Mr Dickinson I apprehend that the expression was used in a broader sense rather than the slightly more technical legal sense. However, I am satisfied that no issue arises here which would justify restraining the Commissioner from proceeding with the application under the 2009 Act.
[39] For these reasons the effective application by the respondents to dismiss the proceeding under the 2009 Act for lack of jurisdiction and for other grounds is in itself dismissed.
Costs
[40] The Commissioner seeks costs on the conventional basis that, having succeeded, costs should follow the event.
[41] Mr Skinner and Ms Preece oppose an order for costs. Both counsel mentioned impecuniosity. Impecuniosity would not in the normal course be a basis for declining an order for costs. It would be a matter to be taken into account if an order is made and the Commissioner then sought to enforce it. In practical terms it would presumably be a matter brought into account if the Commissioner proceeds and is successful to an extent in respect of the property currently restrained.
[42] An order for costs would normally be made in favour of the successful party, and that is the general practice in respect of applications under the 1991 Act and
under the 2009 Act. The only matter that makes me hesitate is that this does appear to be the first case which has directly addressed the jurisdiction issue. I am also satisfied that the respondents were justified in bringing the jurisdiction argument. For this reason the appropriate course is simply to reserve costs but on the basis that were it not for the novelty of the point there would be an order now in favour of the
Commissioner on a conventional 2B basis.
Woodhouse J
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