Commissioner of Police v Taylor
[2017] NZHC 1144
•30 May 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-002099 [2017] NZHC 1144
BETWEEN COMMISSIONER OF POLICE
Applicant
AND
CLINTON KELVIN TAYLOR First Respondent
JACKIE ANN COX Second Respondent
Hearing: On the papers Judgment:
30 May 2017
JUDGMENT OF WYLIE J
This judgment was delivered by Justice Wylie
On 30 May 2017 at 12.30pm Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Date:…………………………
Solicitors/counsel:
Meredith Connell, Auckland
M Gibson, Auckland
C B Wilkinson-Smith, Auckland
H F Brown, Auckland
COMMISSIONER OF POLICE v TAYLOR [2017] NZHC 1144 [30 May 2017]
Introduction
[1] A joint memorandum has been filed on behalf of the applicant and the respondents. They ask the Court to approve a settlement of these proceedings under s 95 of the Criminal Proceeds (Recovery) Act 2009.
[2] I raised a concern with counsel regarding moneys seized during a search of a house in Kirby Street, Glendene. Counsel have responded. I address this issue shortly.
Background
[3] The first respondent, Mr Taylor, was involved in the manufacture and supply of methamphetamine between 2014 and 2016. His partner, the second respondent, Ms Cox, was involved in the cultivation and supply of cannabis in 2014 and benefit fraud. Both were also involved in tax evasion.
[4] On 5 April 2014, the police executed a search warrant on a property in Glen Eden, Auckland. Ms Cox and another associate were residing in the property. Drug- related items and $59,700 in cash were located in Ms Cox’s bedroom. She accepted that the items and the money were hers. She was charged and convicted on 8 May
2014, following a guilty plea, for cultivation and possession of cannabis and its utensils.
[5] On 11 June 2014, the police conducted a search of a room in the Hobsonville Motor Inn. The search was without a warrant. The police found quantities of methamphetamine and other drug related paraphernalia, and cash totalling $98,790. Mr Taylor and other associates were in the room. Mr Taylor was charged with the possession of the methamphetamine and the utensils. However, the evidence
obtained through the search was ruled inadmissible,1 and the charges were
withdrawn.
[6] In September 2014, the police executed a further search warrant at a storage unit rented by Mr Taylor. Again, drug-related items were found. Mr Taylor and an associate were charged with manufacturing methamphetamine and the possession of
precursor substances. The evidence was again ruled inadmissible, on the basis that the search warrant had been issued based on the evidence that had earlier been ruled inadmissible.2 Again, the charges against Mr Taylor were withdrawn.
[7] On 14 September 2014, the police searched Mr Taylor’s room in a central hotel, pursuant to the Search and Surveillance Act 2012. They found methamphetamine and utensils for its use and cannabis. Mr Taylor and another were charged, and Mr Taylor subsequently pleaded guilty to possession of methamphetamine and possession of a methamphetamine pipe.
[8] On 8 July 2016, the police searched a property in Glendene. They found drug-related paraphernalia and cash of $10,735 (“the Kirby Street cash”). Swabs from the room suggested that the paraphernalia had been used for the manufacture of methamphetamine and/or the smoking of methamphetamine. In the search, the police located documentation relating to another storage unit.
[9] On 12 July 2016, police searched the further storage unit and found two separate containers of iodine, as well as a Dodge Avenger car, registered in Mr Taylor’s name.
[10] Mr Taylor and another associate have been charged with manufacturing methamphetamine, possession of precursor substances, equipment and material, possession of methamphetamine and utensils, and ill treatment of a child. They have pleaded not guilty and lodged an application under s 147 of the Criminal Procedure Act 2011. That application is yet to be heard.
Restraining orders
[11] In August and September 2014, the Commissioner applied for restraining orders, and ultimately orders were made by consent in relation to the following:
(a) 2002 LVV Custom Big Dog motorcycle, registration A8SQP, VIN number 1B91HBH1X2W374113 registered to Mr Taylor (“Big Dog motorcycle”);
(b) 2008 Harley Davidson Night Rod Special motorcycle, registration
8ZRH, VIN number 5HD1HHH139K802947 registered to Mr Taylor
(“Harley Davidson”);
(c) 2007 Aprilia RSV 1000R motorcycle, registration A2UUF, registered
to Mr Taylor (“Aprilia”);
(d)2004 Holden Crewman motor vehicle, registration HGP570, VIN number 6G1ZK34F85L354416 registered to Mr Taylor (“Holden Crewman”);
(e) Dodge Avenger motor vehicle, registration EUY24, VIN number
1B3A4F6D29N526914 registered to Mr Taylor (“Dodge Avenger”);
(f) 2006 Toyota Hilux motor vehicle, registration DKG827, VIN number
MR0CZ12G900008781 registered to Mr Taylor (“Toyota Hilux”);
(g) approximately $59,700 cash located by police in a bedroom at the
Glen Eden address on 5 April 2014 (“Longbill Place cash”);
(h) approximately $98,790 cash located by police in a room at
Hobsonville Motor Inn on 11 June 2014 (“Hobson Motor Inn cash”);
(i) Yamaha VX jet ski, serial number US-YAMA1197L213 (“Jet Ski”);
and
(j) 2014 jet ski trailer, registration Y693K registered to Mr Taylor
(“trailer”).
[12] No restraining order was made in respect of the Kirby Street cash. The cash was seized pursuant to a warrant issued under s 6 of the Search and Surveillance Act. It is in police custody and the police currently hold it pursuant to s 151 of that Act.
[13] Sale orders were made in respect of all vehicles other than the Big Dog motorcycle.
[14] The Dodge Avenger, the Aprilia and the Holden Crewman were not initially able to be located by the police.
[15] On 26 March 2015, Peters J ordered that Mr Taylor swear an affidavit answering a list of questions in relation to his dealings with the vehicle. He deposed that:
(a) the Dodge Avenger was not in his possession and that he did not know where it was. However, it was subsequently located in one of the storage units along with documentation in Mr Taylor’s name. The vehicle is now in the custody and control of the Official Assignee;
(b)he had sold the Holden Crewman to an associate. However, in February 2017 the police observed the Holden Crewman at Ms Cox’s address. When the police returned to uplift the vehicle, Ms Cox said that Mr Taylor had asked her to store it at her address, but that he had since collected it. The police had not been able to locate or uplift the Holden Crewman since.
(c) that the Aprilia had been taken by its previous owner as he was unable to pay the purchase price. The police have not been able to locate or uplift that vehicle either.
Other evidence
[16] Other evidence disclosed from the affidavits filed show that in the tax years ending 2006 to 2014, Mr Taylor’s only declared income came from state-funded benefits from the Ministry of Social Development.
[17] Similarly, for the tax years ended 2006 to 2014, Ms Cox’s declared income was predominantly comprised of state-funded benefits. She received minimal further income in the tax years ended 2008, 2009 and 2010.
[18] The affidavits disclose that between January 2014 and August 2014, Mr
Taylor acquired interests in vehicles with a combined estimated value of $105,650.
[19] Ms Cox asserted that the cash found in her bedroom in the Glen Eden property was part of an inheritance she had received in December 2013. However, she did not declare the receipt of this cash to the Ministry of Social Development, despite being in receipt of state-funded benefits.
[20] The Commissioner has prepared a draft financial analysis, which indicates that Ms Cox received a lump sum payment in January 2012, and not December 2013 as asserted by her, and that the funds had been spent or withdrawn by February 2013.
Proposed settlement
[21] The proposed settlement is as follows:
(a) Assets forfeiture orders be made by consent under s 50 of the Criminal Proceeds (Recovery) Act in relation to the following restrained property:
(i) Big Dog motorcycle;
(ii)proceeds of sale of the Harley Davidson plus any interest accrued;
(iii) proceeds of sale of the Toyota Hilux plus any interest accrued; (iv) Dodge Avenger;
(v)proceeds of sale of the jet ski and trailer plus any interest accrued;
(vi) Longbill Place cash;
(vii) Hobson Motor Inn cash; and
(viii) Kirby Street cash.
[22] If the settlement is approved, approximately $221,000 of property will be forfeited to the Crown. As yet un-located property, to an estimated value of $25,000, will be released from the restraining orders.
Threshold for approval
[23] Section 95 of the Criminal Proceeds (Recovery) Act provides as follows:
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.
[24] As can be seen, Parliament has empowered the Commissioner to enter into settlement discussions with respondents and interested parties regarding the forfeiture of assets. It has entrusted the Court with a supervisory jurisdiction, aimed at ensuring that any settlement reached is consistent with the purposes of the Act and with the overall interests of justice.3
[25] The primary purpose of the Criminal Proceeds (Recovery) Act is contained in s 3(1) – namely the establishment of a regime for the 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. Ancillary purposes are to eliminate the chance for persons to profit from undertakings, or being associated with, significant criminal activity.
[26] The Act has a strongly expressed statutory purpose,4 and the language provides a clear and emphatic signal in this regard.5
[27] In considering whether to approve a settlement, the Court has a supervisory jurisdiction, which requires it to carry out a broad inquiry. Where appropriate,
3 Commissioner of Police v Know-All Group Ltd HC Auckland CIV-2010-404-403, 7 November
2011 at [11].
4 Hayward v Commissioner of Police [2014] NZCA 625 at [29].
5 Marwood v Commissioner of Police [2016] NZSC 139 at [12].
settlements can be in the interests of justice, bearing in mind the savings in time and cost and the litigation risk to parties.6 The Courts have accepted that decisions to settle proceedings can be made on economic and pragmatic grounds, and that they will often reflect a common-sense compromise between parties.7
Analysis
[28] Section 50(1) of the Criminal Proceeds (Recovery) Act provides as follows:
If, on an application for an assets forfeiture order, the High Court is satisfied on the balance of probabilities that specific property is tainted property, the Court must make an assets forfeiture order in respect of that specific property.
[29] The Commissioner has not as yet filed any application for civil forfeiture orders. However, the parties engaged in discussions regarding the possible settlement of the proceedings, and they have agreed to settle the issue of forfeiture of the assets as between themselves, subject to the Court’s approval, effectively as though an asset forfeiture order had been applied for.
[30] All assets other than the Kirby Street cash have been restrained. The Kirby Street cash is held by the Commissioner pursuant to s 151 of the Search and Surveillance Act. None of the circumstances detailed in s 151(1)(a) to (f) has occurred. The Commissioner will be required to release the cash unless an assets forfeiture order is made in respect of it. Counsel for the respondents did not seek this. Rather, he consented on behalf of the respondents to the orders sought.
[31] Section 11 of the Criminal Proceeds (Recovery) Act provides that property may, but need not, be restrained property before it becomes forfeited property. Although it is commonly the case that asset forfeiture orders are sought in respect of restrained property, there is no legal requirement to that effect. If unrestrained assets are also likely to be tainted property, they can be the subject of an assets forfeiture
order.
6 Commissioner of Police v Zhang [2016] NZHC 930 at [8]; Commissioner of Police v Kree
[2013] NZHC 2972 at [11].
7 Commissioner of Police v Douglas [2015] NZHC 1293 at [6]; Commissioner of Police v Venn
[2014] NZHC 361 at [6].
[32] I am satisfied that the proposed settlement is within the Court’s jurisdiction and that the proposed settlement is consistent with the purposes of the Act and in the overall interests of justice. In particular, I am satisfied that:
(a) Mr Taylor and Ms Cox have derived a benefit from significant criminal activity – namely the manufacture and supply of methamphetamine in Mr Taylor’s case, the cultivation and supply of cannabis in Ms Cox’s case, as well as benefit fraud by Ms Cox, and tax evasion by both of them;
(b)the Commissioner has a good case in respect of any asset forfeiture that might be sought, in light of the proven drug offending, and the further evidence adduced by way of affidavit in these proceedings, albeit that some of the evidence was not admissible in the criminal proceeding;8
(c) Mr Taylor acquired vehicles of a value which cannot be explained by his legitimately earned income;
(d)Ms Cox was in possession of significant quantities of cash, with no legitimate explanation available to her;
(e) the Commissioner’s case in respect of the cash found in Ms Cox’s bedroom in the course of the Glen Eden search, and the cash found in the course of the search of the room in the Hobsonville Motor Inn is strong;
(f) all quantities of cash were found along with controlled drugs or related paraphernalia;
(g)the restrained property, and the Kirby Street cash, are, on the balance of probabilities, tainted property;
8 Marwood v Commissioner of Police, above n 5. The Supreme Court has recently confirmed that evidence which is improperly obtained in criminal proceedings may still be admissible in civil proceeds of crime proceedings.
(h)there is a risk that the Commissioner may not succeed in forfeiting some of the motor vehicles attributed to Mr Taylor;
(i) there is a risk that some of the vehicles will never be found.
[33] If the settlement is approved the Act’s purposes will be met. Mr Taylor and Ms Cox will be deprived of the majority of the assets they acquired as a result of their offending. They will retain some relatively minor assets, but there are both litigation and practical risks to the Crown in respect of these assets. There is also the cost that would be involved in pursuing an application in respect of these assets.
[34] The legal aid debt of Mr Taylor and Ms Cox will be paid by operation of s
82(1)(b) of the Criminal Proceeds (Recovery) Act.
[35] I am satisfied that the proposed settlement is sensible and pragmatic. There will be a significant saving of time and cost if the matter is resolved as proposed.
[36] Accordingly, I make:
(a) assets forfeiture orders under s 50(1) of the Criminal Proceeds (Recovery) Act in respect of the following property so that it vests in the Crown absolutely and is to be under the custody and control of the Official Assignee:
(i) Big Dog motorcycle;
(ii)the proceeds of the sale of the Harley Davidson plus any interest accrued;
(iii)the proceeds of the sale of the Toyota Hilux plus any interest accrued;
(iv) Dodge Avenger;
(v)the proceeds of the sale of the jet ski and trailer plus any interest accrued;
(vi) cash in the sum of $98,790 seized from Hobson Motor Inn on
11 June 2014 plus any interest accrued; and
(vii) cash in the sum of $10,735 seized from Kirby Street on 8 July
2016 plus any interest accrued.
(b)an order under s 34 of the Criminal Proceeds (Recovery) Act varying the restraining orders in place over the Holden Crewman and Aprilia so that they are released from restraining orders.
[37] I record that the following agreements have been reached between the parties:
(a) the Commissioner will not to pursue assets forfeiture orders in respect of the Holden Crewman or Aprilia;
(b)the Commissioner will not pursue a profit forfeiture order against either Mr Taylor or Ms Cox; and
(c) Mr Taylor and Ms Cox will not pursue any application for relief from forfeiture.
The assets forfeiture orders are made on this basis.
[38] I direct that costs are to lie where they fall in relation to all matters.
Wylie J
6
0