Commissioner of Police v Sulusi
[2025] NZHC 670
•27 March 2025
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE
CIV-2020-441-84
[2025] NZHC 670
UNDER the Criminal Proceeds (Recovery) Act 2009 IN THE MATTER
of an application under section 41 of the Criminal Proceeds (Recovery) Act 2009
BETWEEN
THE COMMISSIONER OF THE NEW ZEALAND POLICE
Applicant
AND
LAKI LEATITALA SULUSI (Deceased)
First Respondent
JOSEPH JOHN MORRELL (Deceased)
Second Respondent
LILLY ANN ERIHAPETI MORRELL
First Interested Party.
CIV-2020-441-18 UNDER
the Criminal Proceeds (Recovery) Act 2009
IN THE MATTER
of an application under s 41 of the Criminal Proceeds (Recovery) Act 2009
BETWEEN
THE COMMISSIONER OF THE NEW ZEALAND POLICE
Applicant
AND
LAKI LEATITALA SULUSI (Deceased)
First Respondent
JOSEPH JOHN MORRELL (Deceased)
Second Respondent
PARMJIT KAUR
First Interested Party
THE COMMISSIONER OF THE NEW ZEALAND POLICE v SULUSI [2025] NZHC 670 [27 March 2025]
ITUFA SULUSI
Second Interested Party
LILLY ANN ERIHAPETI MORRELL
Third Interested Party
Hearing: On the Papers Counsel
M J M Mitchell for Applicant
Judgment:
27 March 2025
JUDGMENT OF McQUEEN J
[1] The Commissioner of Police (the Commissioner) applies for profit forfeiture and effective control orders under the Criminal Proceeds (Recovery) Act 2009 (the Act).
[2] The first call of these applications was on 6 May 2024, at which time counsel for the Commissioner, Ms Mitchell, signalled that there had been no indication that any of the respondents and interested parties wished to be heard further. The Court invited the Commissioner to file an affidavit of service together with a memorandum setting out the legal and evidential basis on which the orders sought can be made so that the applications could then be put before the Duty Judge for determination on the papers.1
[3] Accordingly, I proceed to determine the applications made by the Commissioner.
Parties and service
[4] Affidavits of service have been provided to the Court from the two Police Special Investigators who undertook service of the applications and other related papers on Itufa Sulusi, Dean Treves and Natasha Grimmett. The affidavit from Special Investigator Quine confirms that neither Parmjit Kaur nor Lilly Morrell have
1 Commissioner of Police v Sulusi HC Napier CIV-2020-441-18 (the -18 proceeding) and CIV- 2020-441-84 (the -84 proceeding), 6 May 2024
taken any steps to participate in these proceedings nor do they claim any interest in the property with which they appear to be associated.
[5] It is apparent from the Commissioner’s evidence that Laki Sulusi died in September 2020 and Jospeh Morrell died in May 2021. The Commissioner does not know the executor of Mr Laki Sulusi’s estate, as enquiries of his widow (Ms Grimmett) and previous counsel have gone unanswered. The executor of Mr Morrell’s estate has confirmed the estate does not wish to be heard in relation to these proceedings.
[6] As the evidence and the property being pursued by the Commissioner developed throughout the proceedings, the position of the parties has changed. On 24 March 2025, I issued a Minute seeking information from the Commissioner about the parties that were not included in the profit forfeiture and effective control applications but who were subject to the restraining orders made in the proceedings.
[7] The Commissioner clarified that the investigations conducted in anticipation of the applications found no evidence of Ms Grimmett having any interest in the property beyond what might be inferred from her relationship with Mr Laki Sulusi. Mr Treves has no interest in the proceedings as the property in which he had a legal interest has been removed from restraint. Neither Ms Grimmett nor Mr Treves have taken any step following service on them of the Commissioner’s applications. Mr Itufa Sulusi was included as an interested party because Mr Laki Sulusi named him as the owner of a vehicle sought to be forfeited. While there was an initial indication from Mr Itufa Sulusi that he wished to be heard on the applications, his last contact with counsel for the Commissioner was in September 2024 and no document has been filed in the Court. Kane Tahau has no interest in the proceeding as the property in which he had a legal interest has been removed from restraint and is no longer sought for forfeiture. The intituling of the proceedings has therefore been updated to accurately reflect the parties who have an interest in the proceedings.
Background
[8] Justice Gwyn summarised the initial investigation of the underlying offending in this matter as follows:2
[6] During 2019 and 2020 the Hawke’s Bay Police Organised Crime Unit (OCU) conducted an investigation codenamed Operation Casino that targeted the criminal activities of persons involved in the sale and distribution of methamphetamine in the Hawke’s Bay area. The inquiry centred on the respondent, Laki Sulusi.
[7] The Central Asset Recovery Unit (ARU) was involved in the Operation Casino investigation to assist the criminal team and identify Mr Sulusi’s assets, resulting from his alleged criminal activity, including his assets concealed in the names of third parties.
[8] Operation Casino evidence throughout the 214 days that the first respondent’s phone data was captured, was that Mr Sulusi supplied 313 grams of methamphetamine and conspired to supply a further 6.1 kilograms of methamphetamine. At the time of Mr Sulusi’s alleged offending,
6.413 kilograms was valued at $979,000.
[9] The Operation Casino investigation terminated on 19 May 2020, with the execution of search warrants at Mr Sulusi’s home address and other properties associated with him.
[10] Mr Sulusi was arrested and charged, primarily with serious drug- related offences pertaining to supplying the Class A controlled drug methamphetamine.
[11] The offences that Mr Sulusi was charged with constitute significant criminal activity in terms of s 6 of the Act.
[9] Restraining orders in both CIV-2020-441-18 (the -18 proceeding) and CIV-2020-441-84 (the -84 proceeding) have been extended since they were first made (by consent) in 2020 and 2021 respectively.3
[10] The restraining order in the -18 proceeding related to real property, various specified motor vehicles and other property owned by Mr Laki Sulusi or said to be under his effective control. The restraining order was varied by the release of some
2 Commissioner of Police v Sulusi [2023] NZHC 938 (Early sale orders in the -18 proceeding).
3 Without notice restraining orders were granted by Cooke J on 15 May 2020 in the -18 proceeding. Subsequently an on notice restraining order was granted by Cull J on 29 June 2020. Without notice restraining orders were granted by Doogue J on 8 December 2020 and 10 December 2020 in the - 84 proceeding. Subsequently an on-notice restraining order was granted by Isac J on 29 March 2021. The duration of the on notice restraining orders in both the -18 and -84 proceedings were further extended, most recently by Gwyn J on 4 March 2024.
property from restraint in July 2022.4 And in April 2023, the Commissioner’s application for sale orders was granted in relation to certain vehicles subject to restraint, resulting in the Commissioner holding funds and accruing interest instead.5 The restraining order in the -84 proceeding relates to a bank account in the name of Ms Morrell.
[11]The restraining orders are now to expire on 29 March 2025.
Law relating to grant of profit forfeiture orders
[12] Section 55 of the Act sets out the criteria for the grant of a profit forfeiture order as follows:
55 Making profit forfeiture order
(1)The High Court must make a profit forfeiture order if it is satisfied on the balance of probabilities that—
(a)the respondent has unlawfully benefited from significant criminal activity within the relevant period of criminal activity; and
(b)the respondent has interests in property.
(2)The order must specify—
(a)the value of the benefit determined in accordance with section 53; and
(b)the maximum recoverable amount determined in accordance with section 54; and
(c)the property that is to be disposed of in accordance with section 83(1), being property in which the respondent has, or is treated as having, interests.
Subsections (1) and (2) are subject to section 56.
(4)A profit forfeiture order is enforceable as an order made as a result of civil proceedings instituted by the Crown against the person to recover a debt due to it, and the maximum recoverable amount is recoverable from the respondent by the Official Assignee on behalf of the Crown as a debt due to the Crown.
4 The -18 proceeding, 11 July 2022 (Minute of Ellis J).
5 Early sale orders in the -18 proceeding, above n 2, at [50].
[13]“Unlawfully benefited” is defined in s 7 of the Act as follows:
7Meaning of unlawfully benefited from significant criminal activity
In this Act, unless the context otherwise requires, a person has unlawfully benefited from significant criminal activity if the person has knowingly, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person undertook or was involved in the significant criminal activity).
[14]“Significant criminal activity” is defined in s 6 of the Act as follows:
6 Meaning of significant criminal activity
(1)In this Act, unless the context otherwise requires, significant criminal activity means an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending—
(a)that consists of, or includes, 1 or more offences punishable by a maximum term of imprisonment of 5 years or more; or
(b)from which property, proceeds, or benefits of a value of the threshold amount or more have, directly or indirectly, been acquired or derived.
(2)A person is undertaking an activity of the kind described in subsection (1) whether or not—
(a)the person has been charged with or convicted of an offence in connection with the activity; or
(b)the person has been acquitted of an offence in connection with the activity; or
(c)the person's conviction for an offence in connection with the activity has been quashed or set aside.
(3)Any expenses or outgoings used in connection with an activity of the kind described in subsection (1) must be disregarded for the purposes of calculating the value of any property, proceeds, or benefits under subsection (1)(b).
[15] Following the established process for determination of applications of this nature,6 the first step for the Court is to determine whether the Commissioner has proved, on the balance of probabilities, that the respondent has knowingly derived a
6 Pulman v Commissioner of Police HC Auckland, CIV-2010-404-5666, 27 May 2011 at [10]–[13] adopted in Commissioner of Police v Irwin [2020] NZHC 1370 at [9]–[10].
benefit from activity (during the relevant period) that, if charged as a criminal offence, would be punishable by a term of imprisonment of five years or more.
Has Mr Laki Sulusi knowingly derived a benefit from significant criminal activity?
[16] The Commissioner says that Mr Sulusi knowingly derived a benefit from the supply of methamphetamine (an offence punishable by life imprisonment).
[17] In 2020, Mr Sulusi was charged with supply of methamphetamine, conspiracy to supply methamphetamine and participation in an organised criminal group. However, in September 2020, he died, rendering the criminal proceedings redundant.
[18] Before his death, Mr Sulusi spoke to Detective Kennard, as detailed in the Detective’s affidavit dated 26 July 2023. Mr Sulusi admitted to being a methamphetamine dealer on a large scale, selling up to five kilograms per week.
[19] The criminal activity of Mr Sulusi has been summarised in the affidavit of Special Investigator Quine dated 28 February 2024, on which the Commissioner relies. The independent evidence (through intercepted communications under surveillance device warrants) in the criminal proceedings indicated that Mr Sulusi had directly sold at least 313 grams of methamphetamine, and conspired to sell a further
3.1 kilograms, during the relevant period namely, between 5 November 2019 and 19 May 2020.7 The Police operation established that Mr Sulusi had at least four street level dealers working under his direction (all of whom subsequently pleaded guilty to drug dealing and all of whom were sentenced on the basis that their activities were conducted for the benefit of Mr Sulusi).The evidence is that Mr Laki Sulusi’s total minimum unlawful benefit from the sales of methamphetamine during the relevant period is $2,347,800.
[20] Financial analysis also establishes that Mr Sulusi (who was the recipient of a benefit during the relevant period) had access to large amounts of cash and would use the bank accounts of associates to launder the proceeds of his drug dealing. Indicia of
7 See Criminal Proceeds (Recovery) Act 2009, s 5 for the definition of “relevant period of criminal activity”.
the availability of extensive cash reserves included a social media post in which he counted out $50,000 in $50 notes, and his investment in and renovation of property (under the names of others) using cash.
[21] Accordingly, I am satisfied that Mr Sulusi knowingly derived a benefit from significant criminal activity. The requirements of s 55(1)(a) of the Act are established.
Mr Sulusi’s interests in property
[22] Counsel for the Commissioner submits that the vehicles identified at para [1](c)(i) and (ii) of the application for profit forfeiture were registered in Mr Sulusi’s name and there is no dispute as to their ownership.
[23] In respect of the remaining property (particularised at para [1](c)(iii)–(vii) of the application) the Commissioner has made an application for an order of effective control.
[24] Section 17A of the Act permits the Court to declare that a respondent has an interest in or owns property notwithstanding that such interest or ownership is not reflected in the legal record. The section relevantly reads:
17ACourt may treat effective control over property as interest in property
(1) If the High Court is satisfied that a respondent has effective control over property, the Court may, on an application made by the Commissioner, order that the property is to be treated as though the respondent had an interest in the property specified by the Court.
…
[25]Section 17A was described in Commissioner of Police v Read as follows:8
This section enables the Court to go behind any corporate structure or trust which disguises the true and effective control of property and determine the actual factual position of the respondent in relation to that property. It allows the Court to consider the practical reality of ownership, rather than being limited by legal forms. In particular, it has been used to set aside corporate
8 Commissioner of Police v Read [2015] NZHC 2055 at [60] (footnotes omitted). Note the equivalent section at the date of this judgment was s 58, but it was renumbered to s 17A on 27 July 2023.
structures and trusts to identify the person exercising control over the property. The fundamental question is whether, in fact, the respondent has the capacity to control, use, dispose of, or otherwise treat the property as their own.
[26] Although the standard of proof is not explicitly set out in s 17A, this Court has held that the test is whether the Commissioner has satisfied the Court on the balance of probabilities that the respondent has effective control of the property.9
[27] The Commissioner asserts that several vehicles and a quantity of cash, although nominally held in the names of associates or relatives, were in fact the property of Mr Sulusi. Evidence from Special Investigator Quine in his affidavit dated 28 February 2024 outlines intercepted communications and NIA records that confirm Mr Sulusi was in possession of the specified vehicles. The evidence also confirms that Mr Sulusi would pay for repairs and services of some of the vehicles. As far as the funds held in the bank account in the name of Ms Morrell are concerned, Ms Morrell has disclaimed any interest in those funds and this, together with the evidence that Mr Sulusi was the source of these funds, supports the Commissioner’s argument in relation to that property. In the circumstances I am satisfied that the property particularised at para [1](c)(iii)–(vii) of the profit forfeiture application was, on the balance of probabilities, in the effective control of Mr Sulusi.
[28] I am satisfied that, as required by s 55(1)(b) of the Act, Mr Laki Sulusi has interests in property, being the property specified in para [1](c) of the profit forfeiture application.
[29] I turn now to consider the value of the unlawful benefit obtained by Mr Laki Sulusi.
What is the value of the unlawful benefit?
[30]Section 53 of the Act reads as follows:
53 Value of benefit presumed to be value in application
(1)If the Commissioner proves, on the balance of probabilities, that the respondent has, in the relevant period of criminal activity, unlawfully
9 Commissioner of Police v McGoldrick-Savaii [2018] NZHC 936 at [42].
benefited from significant criminal activity, the value of that benefit is presumed to be the value stated in—
(i) the application under section 52(c); or
(ii) if the case requires, the amended application.
(2)The presumption stated in subsection (1) may be rebutted by the respondent on the balance of probabilities.
[31] The effect of s 53 is that the value of the unlawful benefit in the present case is assumed to be $2,347,800, unless Mr Laki Sulusi can establish that it is more likely than not to be a lower figure.
[32] In determining the unlawful benefit figure, any expenses or outgoings associated with the criminal activity must be disregarded, with the figure relating to gross proceeds or receipts as opposed to profit as it might be understood in the accounting sense.10
[33] The Court of Appeal in Commissioner of Police v Akavi has recently confirmed that the Court is required to accept the value of the unlawful benefit as being that stated by the Commissioner, in the absence of any evidence querying it.11 There is no such rebuttal evidence in this case, where Mr Sulusi is deceased and there has been no participation in the proceeding by any of the other parties.
[34] In these circumstances, I must determine the unlawful benefit figure on the basis of the evidence filed by the Commissioner.
What is the maximum recoverable amount?
[35] Before the Court makes a profit forfeiture order, s 54 of the Act requires it determine the maximum recoverable amount. There is a strong evidential basis, including admissions by Mr Sulusi, from which to conclude that he unlawfully benefited from methamphetamine dealing. In calculating the value of that unlawful benefit, the Police have adopted the street price of the methamphetamine which
10 Criminal Proceeds (Recovery) Act 2009, s 6(3). See also Commissioner of Police v Slessor [2022] NZHC 3511 at [64] citing Commissioner of Police v Tang [2013] NZHC 1750 at [24]– [25].
11 Commissioner of Police v Akavi [2024] NZCA 367 at [24].
Mr Sulusi had, prior to his death, been charged with dealing. In the absence of any parallel forfeiture orders, the maximum recoverable amount is the full value of the unlawful benefit as stated by the Commissioner, being $2,347,800.12
Conclusion
[36] I conclude that a profit forfeiture order under s 55(1) of the Act should be made as I am satisfied that Mr Sulusi has unlawfully benefited from significant criminal activity within the relevant period of criminal activity and has interests in the property specified in the Commissioner’s application.
Result
[37]I therefore make the following orders:
(a)An order under s 17A of the Criminal Proceeds (Recovery) Act 2009 that the property described at para [1](i)-(v) of the Commissioner’s application for an effective control order, dated 25 April 2024, be treated as though Laki Leatitala Sulusi had an ownership interest in it.
(b)An order under s 55 of the Criminal Proceeds (Recovery) Act 2009 that:
(i)the value of the benefit determined in accordance with s 53(1)(b) of the Criminal Proceeds (Recovery) Act 2009 is
$2,347,800;
(ii)the maximum recoverable amount determined in accordance with s 53 of the Criminal Proceeds (Recovery) Act 2009 is
$2,347,800; and
12 Criminal Proceeds (Recovery) Act 2009, ss 54 and 55(2)(b).
(iii)the property described in para [1](c) of the Commissioner’s application for profit forfeiture order, dated 25 April 2024, is to be realised.
McQueen J
Solicitors:
Elvidge & Partners, Napier for Applicant
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