Commissioner of Police v Smith

[2019] NZHC 2606

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV 2017-485-000199

[2019] NZHC 2606

UNDER

Criminal Proceeds (Recovery) Act 2009

IN THE MATTER

Of applications pursuant to ss 21, 25, 33, 35

58 and 95

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

GEOFFREY WAYNE SMITH

Respondent

AND

DIANNE MARIE OLIVE SMITH

First Interested Party

AND

STEPHEN EDWARD SMITH

Second Interested Party

Hearing:

In Chambers

Determined on the papers

Counsel:

G J Burston for the Applicant

P H H Tomlinson for the First & Second Interested Parties

Judgment:

14 October 2019

JUDGMENT OF GWYN J

[on application for approval of settlement under s95 of the Criminal Proceeds (Recovery Act 2009]

This judgment was delivered by me on 14 October 2019 at 12.30pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Counsel/Solicitors:

Crown Solicitor, Wellington

P H H Tomlinson, Barrister, Auckland

COMMISSIONER OF POLICE v SMITH [2019] NZHC 2606 [14 October 2019]

Introduction

[1]                  This is an application for approval by the Court, pursuant to s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act), of a settlement between the Commissioner and the first and second interested parties in relation to the property at 32 Kowhai Avenue, Kaiaua, Pokeno (the Kaiaua Property). By joint memorandum of counsel, dated 10 July 2019, the applicant, first and second interested parties sought orders and directions by consent.

Background

[2]                  On 23 January 2018 Clark J granted an on notice application for restraining orders in this proceeding. The property subject to the restraint included the Kaiaua Property.

[3]                  The Kaiaua Property is registered in the name of the first interested party, Dianne Smith. Ms Smith is the mother of the respondent. The second interested party, Stephen Smith, is the respondent’s brother.

[4]                  The first interested party has owned the Kaiaua Property for 40 years. The property was tenanted and, unbeknownst to the first interested party at the time, the respondent laid a concrete driveway over part of the property.

[5]                  The Commissioner estimates that the respondent paid at least $9,278.00 in cash for materials, labour and machinery hire for this purpose.

[6]                  The Commissioner’s position is that the work to the property was funded by the respondent with the proceeds of sale of methamphetamine and that the work has increased its capital value.

[7]                  The first interested party accepts that the improvements made to the Kaiaua Property are tainted property in terms of s 5 of the Criminal Proceeds (Recovery) Act 2009.

[8]                  The parties acknowledge that the first and second interested parties were unaware of the respondent’s alleged and proven offending.

[9]                  The matter came before Cull J on 29 July 2019 because the original restraining orders had lapsed. By Minute dated 29 July 2019, Cull J granted the application for a restraining order and an order that the respondent’s effective control over the property, the subject of the restraining order, be treated as an interest in property. In anticipation of the application for approval of the settlement agreement being dealt with by the Duty Judge prior to consideration of the application for a restraining order, the orders sought and granted did not include the Kaiaua Property.

[10]              In the event the application for approval of settlement was not considered and it is that application that is before me.

The proposed settlement

[11]The proposed settlement provides as follows:

(a)Funds totalling $8,000 to be deposited by the first interested party into the New Zealand Insolvency and Trustee Service Proceeds of Crime Account on or before 17 July 2019.

(b)Those funds then to be forfeited as part of the agreed settlement over the Kaiaua property.

(c)The practical effect of the settlement is that the Kaiaua property is to be removed from the scope of these proceedings and returned unencumbered to the first interested party.

(d)The Commissioner will undertake to remove any reference to the restraining order from the title of the Kaiaua property once the settlement has been approved by this Court.

Decision

[12]              I am satisfied that the proposed settlement is consistent with the purposes of the Act and in the overall interests of justice. The agreed settlement amount of $8,000 is close in value to the Commissioner’s estimate of the amount paid by the respondent in cash for the materials, labour and machinery hire to construct the driveway at the Kaiaua Property. Given the costs of potential litigation relative to the value of any unlawful benefit the first interested party may have received from the work to the Property, there is a strong public interest in reaching a settlement. The settlement represents a sensible and pragmatic resolution of the claim against Ms Smith in respect of the Kaiaua Property.

Result

[13]              I approve the proposed settlement under s 95 of the Act and make orders as sought in paragraph 22 of the joint memorandum of counsel dated 10 July 2019.

Gwyn J