Commissioner of Police v Snow

[2023] NZHC 3310

IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY

I TE KŌTI MATUA O AOTEAROA TE TIHI-O-MARU ROHE

CIV-2018-476-000050

[2023] NZHC 3310

UNDER

Sections 22, 24, 25 and 26 of the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

TIMOTHY LIONEL TE RAWARAKI SNOW

First Respondent

AND

SHENGNI (ANNIE) ZHANG

Second Respondent

Hearing:

On the papers

Appearances:

A R McRae for Applicant

K J Beaton KC for Respondent Snow A M Toohey for Respondent Zhang

Judgment:

21 November 2023

JUDGMENT OF EATON J

Introduction

[1]                  The Commissioner of Police and the respondents, Mr Snow and Ms Zhang, apply for an order approving a settlement under s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act). This application has been referred to me as duty Judge to be dealt with on the papers. The background and proposed settlement is set out in a joint memorandum of counsel dated 13 November 2023.

COMMISSIONER OF POLICE v SNOW [2023] NZHC 3310 [21 November 2023]

Background

[2]                  The first and second respondents are married.  They owned  a property at  129 King Street, Temuka (the property). Shortly after purchase, the property was rented  to  Damien Richardson.  Between  5  July  2016  and  22  February  2017,   Mr Richardson, together with Matthew Anderson, converted the building on the property into a substantial cannabis growing operation totalling 891 plants. The conversion was undertaken with the knowledge and assistance of Mr Snow, who provided equipment for the cultivation operation from his hydroponic business based in Dunedin.

[3]                  On execution of a police search warrant at the property on 22 February 2017, police located 36 one-ounce (28 grams each) bags of cannabis head material. These bags were packed in a plastic carton weighing a total of 1.036 kilograms. A further 1.692 kilograms of dried cannabis head was found on a drying rack ready for packaging.

[4]                  Mr Snow was receiving $1,000 a week from the cannabis cultivation operation. He pleaded guilty to two charges of cultivating a Class C controlled drug and two charges of possession of a Class C controlled drug for sale. On 15 April 2021, he was sentenced to nine months’ home detention and 120 hours of community work.

[5]                  Mr Richardson pleaded guilty to drug offending. Mr Anderson was found guilty at trial.

[6]                  On 9 June 2020, this Court granted an application for an on-notice restraining order in relation to the property. That order was extended on 24 May 2021 for a further term of 12 months. On 13 August 2021, the restraining order was varied to permit the sale of the property with the net proceeds of sale, totalling $81,173.40, remaining restrained.

[7]                  On 27 August 2021, the property was sold, and the net proceeds of sale were transferred to the Official Assignee pursuant to the terms of the restraint.

[8]On 21 December 2021, the restraining order was varied permitting the sum of

$50,000 to be paid by the Official Assignee to Mr Snow’s parents to repay a debt owed to them by both respondents in relation to the purchase of the property. The parents’ interest in the property had been documented and was accepted by the Commissioner as genuine.

[9]                  Following repayment of the debt to the parents, the balance of $31,173.40 plus accrued interest was held by the Official Assignee.

[10]              On 2 June 2023, the Commissioner filed an on-notice applications for a profit forfeiture order and for an assets forfeiture order (the on-notice applications). In a supporting memorandum, the Commissioner contended that between 5 July 2016 and 22 February 2017, the respondents unlawfully benefited from significant criminal activity, namely the cultivation of a Class C controlled drug and the possession of a Class C controlled drug for sale, to the value of $48,300.

The proposed settlement

[11]              Discussions have been ongoing between the parties in relation to the on-notice applications. The parties have now reached a settlement. Pursuant to that agreement, it is acknowledged that the first and second respondents have an interest in the property, namely the sum of $31,173.40 plus interest accrued and held under restraint by the Official Assignee.

[12]              The respondents consent to a profit forfeiture order in the sum of $28,173.40 (plus accrued interest since 27 August 2021) with the remaining restrained sum of

$3,000 being released to Ms Zhang and all other costs to lie where they fall.

[13]The orders sought are:

(a)the value of the benefit determined in accordance with s 53 of the Act is $28,173.40 plus interest accrued;

(b)the maximum amount recoverable is $28,173.40 plus interest accrued;

(c)the sum  of  $28,173.40  plus  interest  accrued  on  that  sum  since  27 August 2021 held under restraint by the Official Assignee is to be realised; and

(d)the sum of $3,000, being the balance of the restrained funds, is to be paid to the trust account of Patient & Williams, solicitors for the second respondent. Bank account no.  .

Jurisdiction under s 95

[14]Section 95 of the Act governs settlements and provides:

95       High Court must approve settlement between Commissioner and other party

(1)The Commissioner may enter into a settlement with any person as to the property or any sum of money to be forfeited to the Crown.

(2)A settlement does not bind the parties unless the High Court approves it.

(3)The High Court must approve the settlement if it is satisfied that it is consistent with—

(a)the purposes of this Act; and

(b)the overall interests of justice.

[15]              The essential purpose of the Act is the establishment of a regime for forfeiture of property that has been derived directly or indirectly from significant criminal activity or that represents the value of a person’s unlawfully derived income.1 Beyond that primary purpose, the Act is intended to eliminate the opportunity for persons to profit from undertaking or being associated with significant criminal activity and to deter significant criminal activity and its expansion.2

[16]              In concluding a proposed settlement, the Court will engage in a broad inquiry. Such an inquiry is consistent with the obligation to have regard to the overall interests of justice. In Commissioner of Police v Zhang,3 this Court observed that beyond its

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

2      Section 3(2)(a) – (b).

3      Commissioner of Police v Zhang [2016] NZHC 930 at [8].

supervisory jurisdiction, it is “equally important that the Court carry out a broad inquiry and acknowledge, where appropriate, that settlements can be in the interests of justice, bearing in mind the savings of time and cost and the litigation risk to the parties.” The Court may see fit to approve a settlement advanced on economic and pragmatic grounds reflecting a sensible compromise between the parties.4 The Court’s approval is not a “rubber stamping” exercise, however, if the Court is satisfied that settlement is consistent with both the purposes of the Act and the overall interest of justice, then it must approve the settlement.

Discussion

[17]              The respondents do not dispute that the value of the criminal activity from which they unlawfully benefited has been assessed as $48,300. Given that acknowledgement, they consent to a profit forfeiture order in the sum sought with the balance of $3,000 being released to Ms Zhang. The Commissioner has taken a pragmatic position in relation to the settlement in agreeing to the balance of $3,000 being released to Ms Zhang.

[18]              I am satisfied that the proposed terms of settlement are consistent with the objectives and principles of the Act and are in the interests of justice. The settlement will save the time and cost of a hearing and, given the comparatively low dollar value of the restrained property following repayment of debt, there is much benefit in resolving the case short of a substantive hearing.

[19]              Accordingly, I approve the settlement and I make a profit forfeiture order as follows:

(a)the value of the benefit, determined in accordance with s 53 of the Act, is $28,173.40 plus interest accrued;

(b)the maximum amount recoverable pursuant to s 54 of the Act is

$28,173.40 plus interest accrued;

4      The Commissioner of Police v Douglas [2015] NZHC 1293 at [6].

(c)the sum  of  $28,173.40  plus  interest  accrued  on  that  sum  since  27 August 2021 held under restraint by the Official Assignee is to be realised;

(d)the sum of $3,000, being the balance of the restrained funds is to be paid to the trust account of Patient & Williams, solicitor for the second respondent. Bank account no.  .

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

Eaton J

Solicitors:
Gresson Dorman & Co, Timaru

Counsel:

K J Beaton KC, Christchurch A M Toohey, Christchurch