Commissioner of Police v Taniora
[2019] NZHC 2580
•10 October 2019
IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY
I TE KŌTI MATUA O AOTEAROA TŪRANGANUI-A-KIWA ROHE
CIV-2018-416-24
[2019] NZHC 2580
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
THE COMMISSIONER OF POLICE
Applicant
AND
WHARO DANIEL TANIORA
First Respondent
JACQUELINE SOPHIA TANIORA
Second Respondent
ETERE WAINUI BROOKING TANIORA
Third Respondent
TE WHETU MARAMA POHOIKURA WAITOA
Fourth Respondent
AND
GORDON JEFFREY FREELAND
First Interested Party
Hearing: On the papers Counsel:
M J M Mitchell for the Applicant B Nabney for the Respondent
Judgment:
10 October 2019
JUDGMENT OF COOKE J
[1] By joint memorandum dated 9 September 2019 the parties to these proceeding have sought approval for a proposed settlement of the proceedings, and approval of the Commissioner’s application that property be forfeit. The Court gives its approval to such settlements under s 95 of the Criminal Proceeds (Recovery) Act 2009 (the CPR Act). That joint memorandum was referred to me in my capacity as Duty Judge in the
THE COMMISSIONER OF POLICE v TANIORA [2019] NZHC 2580 [10 October 2019]
week of 9 September 2019. There are, however, complications with the present case, as the sentencing court for the related criminal proceedings is the District Court. Forfeiture orders may affect some of the property that will be addressed in that Court. This complicates the proposed settlement. As a consequence I have heard further from the parties at a telephone conference, and then received further written submissions. I now deliver this judgment on their application having considered how matters should be addressed when the functions to be exercised by the High Court and District Court on questions of forfeiture, and relief from forfeiture, potentially overlap.
Background
[2] The first and second respondent have pleaded guilty to a number of charges relating to the cultivation and possession of cannabis for sale. They are due to be sentenced in the District Court on 29 November 2019. The Commissioner has already sought and obtained restraining orders under the CPR Act. Agreement has now been reached on the question of forfeiture, and relief from forfeiture, in relation to the property subject to restraint.
[3]The property that is the subject of the settlement is:
(a)A rural property at Hicks Bay, Gisborne (the Gisborne property);
(b)The proceeds of sale of a 2016 Toyota Hilux;
(c)The proceeds of sale of a 2016 Toyota Hilux;
(d)Cash in the sum of $12,910;
(e)The balance of funds in account in the name of Wharo Daniel Taniora;
(f)The balance of funds in account in the name of Wharo Daniel Taniora;
(g)The balance of funds in account in the name of Jacqueline Sophia Taniora; and
(h)The balance of funds in account in the name of Jacqueline Sophia Taniora.
[4] Counsel have explained that the vehicles in paragraph (b) and (c) above have been sold for a total price of $75,000, and that the agreed total forfeiture amount is approximately $128,000. The current restraining order in respect of all of this property was due to expire on 1 October 2019. Given that the present application was before me at that stage, and that I had sought further submissions, by order made on 1 October 2019 I extended the restraining orders pending determination of the present application.
Relevant circumstances
[5] The first and second respondent are married and resided at the Gisborne property with their two daughters. It is a secluded rural property. On 21 February 2018 Police executed a search warrant at the property and the surrounding area. Police uncovered a total of 758 cannabis plants growing in five plots, as well as drying lines to hang cannabis and several blue drums on the property containing 13.6 kilos of partially processed cannabis head, and a wool bag containing 6.3 kilos of processed head material. The plots were in neighbouring property. Police also discovered
$12,910 in cash and four firearms. The total yield for all cannabis at the property has an estimated street value of $1.2 million.
[6] On 2 August 2018 the first and second respondent were arrested and charged with cultivation of cannabis.1 Further charges subsequently added, including possession of cannabis for sale and attempting to import cannabis seeds.
[7] On 6 August 2018 the Commissioner for Police applied to this Court for a restraining order under the CPR Act in respect of Gisborne property, vehicles, cash and funds in accounts belonging to the first and second respondent and “all property of Wharo Daniel Taniora and Jacqueline Sophia Taniora". The application was made on the grounds the Gisborne property was an instrument of crime, and that property as
1 Misuse of Drugs Act 1975, s 9(1), maximum penalty 7 years’ imprisonment.
well as the other property identified in the application was tainted property.2 On 1 October 2018 Churchman J granted the restraining order sought.3
[8] The parties have now agreed to settle the question of forfeiture of the restrained property on the terms set out in a joint memorandum dated 9 September 2019, subject to the Court’s approval under s 95 of the CPR Act. That section provides:
95High 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.
[9] Under the agreement the respondents will forfeit a half share of the Gisborne property at sentencing pursuant to s 142N of the Sentencing Act 2002, and forfeit all remaining property outlined at [3] above under orders of this Court under the CPR Act. The reason for relief against forfeiture of the half share of the Gisborne property is to allow the respondents to retain the property within the family, thereby eliminating any hardship to the wider whanau. This will be achieved by a purchase of the half share of the property otherwise to be forfeited.
The scheme of the CPR Act
[10] The CPR Act spells out a detailed regime to regulate the forfeiture of the proceeds of crime, and relief from forfeiture. The regime operates in the civil jurisdiction, independently of any criminal proceedings. The purpose of the CPR Act is described in the following terms:
2 Criminal Proceeds (Recovery) Act 2009, ss 24–26.
3 Commissioner of Police v Taniora HC Gisborne CIV-2018-416-24, 1 October 2018.
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.
[11] Broadly speaking there are two types of forfeiture order that are contemplated by the CPR Act, namely:
(a)An asset forfeiture order under s 50 requiring “tainted property” to be forfeited. Tainted property is defined in s 5 to include property acquired, or directly or indirectly derived from significant criminal activity.
(b)A profit forfeiture order under s 55 over property of a person who has benefited from significant criminal activity. Once the value of the benefit is identified, the person stands to forfeit any property in which they have an interest up to that value.
[12] There is a further relevant category of forfeiture order, namely an instrument of crime forfeiture order. Notwithstanding the wording of s 3(2) of the CPR Act, this does not occur under the CPR Act but occurs under s 142N of the Sentencing Act 2002. The CPR Act only regulates the consequential mechanics of instrument of crime forfeiture orders. All three types of forfeiture have relief against forfeiture provisions,
with the relief against forfeiture decisions relating to the instrument of crime forfeiture being made under the Sentencing Act.
[13] There are two further features of the CPR Act that are significant. The first is that the CPR Act sets up a system for restraining orders where the Commissioner of Police initially applies for orders that certain property be restrained pending the application for forfeiture regime. As a matter of practice, proceedings under the CPR Act usually commence by an application that such restraining orders be made. Under s 26 such a restraining order can restrain instruments of criminal offending notwithstanding that any subsequent forfeiture will occur under s 142N of the Sentencing Act.
[14] Secondly, the CPR Act contemplates that the parties may reach a settlement of the forfeiture claims. Section 95 then allows the Court to receive and approve of that settlement. What is contemplated is that the property that may be subject to potential forfeiture, and potential relief from forfeiture, will be dealt with in the agreement that the Court approves under s 95. Once the approval is given, the relevant powers of the Court in relation to forfeiture, restraint, and relief under the CPR Act can be exercised in accordance with the agreement.
[15] Importantly the decisions in relation to forfeiture under s 142N of the Sentencing Act are not made under, or controlled by the CPR Act. That forfeiture, and the relief from that forfeiture under ss 142J to 142M, is a matter for the sentencing court, in this case the District Court. The provisions in the CPR Act which contemplate the instrument of crime forfeiture do no more than deal with initial restraint, and then the procedural aftermath of decisions made by the sentencing court.
The forfeiture overlap
[16] This case is an illustration of how forfeiture under the CPR Act, and under the Sentencing Act can overlap. The Gisborne property is said by the Crown to be an instrument of the criminal activity subject to the criminal proceedings in the District Court, and accordingly eligible for forfeiture under s 142N of the Sentencing Act. That is because it is said that the processing of cannabis occurred at that property, notwithstanding the growing itself occurred on an adjacent property. Equally the
Commissioner alleges in these proceedings under the CPR Act that the Gisborne property is “tainted property” because improvements were made to it from proceeds derived from the offending. The other property that is currently subject to restraint orders made under the CPR Act is also alleged to be tainted property. As far as I understand it is not alleged that the other property comprised instruments of crime.
[17] The overlap between the forfeiture regimes may cause complications at sentencing, where the effects of forfeiture can potentially be taken into account.4 For example in R v Gray a settlement was reached which was addressed by the court on sentencing.5 A five per cent discount on the sentence was given to reflect the forfeiture order.6 None of this presents an issue if the sentencing court, and the civil forfeiture court, is the same court. But if the civil forfeiture court and the sentencing court are different the task can be more complex. In Commissioner of Police v Moody a reasonably complex settlement was proposed for approval under s 95 which contemplated that the High Court forfeiture order could change in the event the District Court made orders other than those contemplated by the parties.7 A figure was held in trust by the Commissioner pending the decision of the District Court. The sentencing that was ultimately engaged in in that case involved a discount on the sentence to reflect the forfeiture order.8
[18] Further difficulties arise because the forfeiture provisions under the CPR Act and the Sentencing Act have different requirements, different purposes, and a different burden of proof.9 Surrendering the profits made from the offending should not give the offender a credit on sentencing as it does not occur as a penalty. But surrendering the instruments used in the offending may have a punitive effect, and when it does it may give rise to some credit on sentencing. The CPR Act operates independently of criminal proceedings, and can apply even if there is no conviction, or even criminal proceedings. The difference in the purposes of the different regimes may not be so apparent in all cases, however. There may be situations where surrendering the profits
4 Sentencing Act 2002, s 10B. 5 R v Gray [2013] NZHC 450. 6 At [30], [40] and [41].
7 Commissioner of Police v Moody [2015] NZHC 1208.
8 R v Moody [2015] NZDC 25926 at [17] and [25].
9 Henderson v R [2017] NZCA 605 at [36]–[44].
from the offending in the manner regulated by the CPR Act will have a punitive element. For example in the present case the forfeiture of the Gisborne property under the CPR Act arises only because it is alleged it has become tainted property as improvements made to buildings on the property potentially make the whole landholding tainted, and thereby subject to forfeiture. The definition of “tainted property” includes property that has “in part” derived from significant criminal activity.
[19] In the present case a relevant issue emerges because both the civil forfeiture court (the High Court) and the sentencing court (the District Court) potentially have jurisdiction in relation to forfeiture, and relief from forfeiture, in relation to the Gisborne property. The parties have addressed the potential overlap by seeking complex orders. They are that:
(a)their settlement is approved under s 95;
(b)the application for forfeiture in relation to the Gisborne property is adjourned pending the outcome of the decisions in the District Court;
(c)the Gisborne property is restrained until the outcome in the District Court; and
(d)the other property subject to the existing restraining orders is forfeit under the CPR Act.
[20] If the District Court then makes a decision consistent with the parties’ agreement, forfeiture will proceed in that Court as contemplated, and no further orders of this Court will be required. The parties seek approval of their agreement under s 95, and the forfeiture and restraint orders accordingly.
Analysis
[21] The ultimate issue is which court should take the main responsibility for the forfeiture, and the relief against forfeiture decisions when there is jurisdictional overlap in this way.
[22] There is much to be said for the proposition that the High Court should take the lead in this kind of case and make the relevant decisions concerning forfeiture, and relief against forfeiture. Section 95 expressly gives the High Court the jurisdiction to approve settlement agreements which are not binding until approved by the Court. That is not a rubber-stamping exercise, and this Court has emphasised the need for the proposed agreement to be fully explained so that the assessment required of it under s 95(3) can be undertaken.10 On that basis the High Court would deal with all issues within its jurisdiction, with the District Court then dealing with any remaining issues in light of the High Court decision. In the present case, adopting that approach, effectively there would be no forfeiture or relief from forfeiture decision to be made by the District Court. Or at least the decision of the High Court that only half of the Gisborne property should be forfeit, and the remainder subject to relief against forfeiture, would not likely be contradicted by the District Court.
[23] But there is a major problem with giving the High Court the primary role in these circumstances. The Court of Appeal explained in Henderson v R that whilst property subject to an instrument of crime forfeiture can potentially be taken into account at sentencing, property that is subject to forfeiture under the CPR Act is not except in exceptional circumstances.11 For this Court to make all relevant decisions about the forfeiture of the Gisborne property in those circumstances may deprive the respondents of potential credit on sentencing.
[24] It seems to me, therefore, that the appropriate policy of both the CPR Act and the Sentencing Act in a case like the present is normally best served by allowing the sentencing process, and the decisions concerning forfeiture and relief in relation to the instrument of crime, to be completed before the forfeiture decisions are made under the CPR Act. The other advantage of proceeding in this way is that it allows the sentencing court, which would normally have a fuller explanation of the facts and circumstances of the case, to make informed decisions about forfeiture, and relief
10 Commissioner of Police v Veevers [2017] NZHC 80 at [10].
11 Henderson v R, above n 9, at [42]–[43] following its earlier decision in R v Brough [1995] 1 NZLR 419 (CA). When forfeiture under the CPR Act does have a punitive element — for example with “tainted property” as explained in [18] above, these may be within the exceptional or unusual circumstances referred to by the Court of Appeal.
against forfeiture, and consider the consequential impacts on sentencing. The case is accordingly dealt with in a comprehensive way.
[25] In any event, the decisions of the sentencing court will no doubt be informed by the agreement reached between the parties in relation to relief against forfeiture. Although it is not treated as binding on the parties to the civil proceedings under the CPR Act, the parties to the criminal proceedings can still agree on a common position to put to the District Court. The extent of their agreement can be taken into account by that Court. That commonly happens in relation to forfeiture, and relief against forfeiture in other contexts.12 But it is not controlled by the orders made under s 95 of the CPR Act. Neither do the parties need to obtain permission from the High Court prior to reaching such an agreed position.
[26] This approach is consistent with Parliament’s decision to exclude the forfeiture and relief from forfeiture decisions from the CPR Act, and include them in the Sentencing Act. Parliament contemplated that restraint orders could be made over instruments of crime pending the forfeiture and relief decisions of the sentencing court. It also seems to me that s 95 of the CPR Act is only concerned with the proceedings under the CPR Act. The CPR Act does not regulate forfeiture, and relief against forfeiture, of the instruments of the criminal offending.
[27] There may be some cases of overlap where it is more appropriate for the High Court to deal with the civil forfeiture, and relief from forfeiture issues before sentencing in the District Court. That would be the case when the exceptional or special circumstances referred to by the Court of Appeal may exist, and civil forfeiture may have a punitive element. In such cases the District Court may wish to know the outcome of the civil forfeiture applications before sentencing proceeds. But such cases are not likely to be common. Normally there will not be an issue of overlap, and there will be no need for concern in relation to the order in which steps are taken in each court.
12 See, for example, Sajo Oyang Corporation v The Ministry for Primary Industries [2018] NZHC 3041 at [10].
[28] I have considered whether the orders proposed by the parties here should be made against that background. They involve a kind of half-way house, with the agreement approved under s 95 and some preliminary civil forfeiture ordered, but with the main forfeiture decision then made by the District Court, and further orders of this Court only arising if the District Court makes different orders from those anticipated. I do not think it is appropriate for the High Court to give approval under s 95 on that basis, not only because of the unnecessary complexity, but because it might carry the inference that the High Court had decided what instrument of crime forfeiture should occur. A more straightforward approach should be followed. The High Court can simply address civil forfeiture once the criminal proceedings have been completed. That seems to me to make the legislation work as Parliament must have intended.
Outcome
[29] In the circumstances I decline to make an order under s 95 approving the settlement that has been reached, and decline to make the forfeiture orders over the more limited category of property in accordance with that agreement. I extend the restraint over all property for a period of six months from the day of issue of this judgment.
[30] Declining the applications made should not be taken as any indication the Court is not supportive of the settlement that the parties have reached. Their agreement on the way forward can be appropriately presented to the District Court. I note I have not had full details of the justification for the agreement and particular issues arising from relief against forfeiture, however. By itself that highlighted a difficulty with what the parties were asking this Court to approve. But it is the District Court that should determine what property is subject to forfeiture under the instrument of crime forfeiture provisions, what relief from forfeiture should be granted, and what impact that may have on sentencing. Once that has occurred any remaining civil forfeiture issues should then be dealt with in this Court.
Cooke J
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