Commissioner of Police v Townshend

[2017] NZHC 938

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2017-409-292 [2017] NZHC 938

IN THE MATTER OF

an application pursuant to ss 22, 24 and 25

of the Criminal Proceeds (Recovery) Act
2009

BETWEEN

THE COMMISSIONER OF THE NEW ZEALAND POLICE Applicant

AND

JOSHUA FRANCIS TOWNSHEND First Respondent

PUBLIC DEFENCE SERVICE, CHRISTCHURCH

Second Respondent

Hearing:	10 May 2017
Counsel:	C Lange and K South for the Applicant
Judgment:	10 May 2017

JUDGMENT OF MANDER J

[1]      This is a without notice application for a restraining order under the Criminal Proceeds  (Recovery)  Act  2009  (the Act)  in  respect  of  property  owned  by  the respondent, Joshua Townshend. The details of that property are as follows:

(a)       $10,000 in cash, being exhibit FL09, seized from 5 Flock Lane on 15

April  2015,  and  which  is  currently  in  the  possession  of  the

New Zealand Police;

(b)The sum of $47,000, currently in the form of a bank cheque in the sum of $47,000 held by the Public Defence Service at Christchurch,

and the funds the bank cheque represents; and

THE COMMISSIONER OF THE NEW ZEALAND POLICE v TOWNSHEND & ANOR [2017] NZHC 938 [10

May 2017]

(c)      A grey MV Augusta Brutale motorcycle, registration B7JLZ, valued at approximately $15,000, currently registered in the name of Joshua Francis Townshend.

[2]      I have read the affidavit of Detective Duncan Bull who is an officer attached to the Southern Asset Recovery Unit of the Christchurch Police.   He deposes that Mr Townshend has pleaded guilty to 129 charges filed under the Medicines Act 1981 for advertising and selling non-approved medicines and being in possession of prescription medicines without reasonable excuse.  The details of that offending are set out in Detective Bull’s affidavit.

[3]      In short, Mr Townshend operated an unlawful steroid supply business, selling illegal steroids and other image and performance enhancing drugs to hundreds of customers over a period of many months between 2014 and 2015.  The investigation undertaken by the Ministry of Health revealed that Mr Townshend recorded sales of around $350,000 over one year.

[4]      Ten thousand dollars in cash was seized from Mr Townshend’s address at

5 Flock Lane during the execution of a search warrant in April 2015.  The cash was located in a safe in Mr Townshend’s bedroom, along with one kilogram of Clenbuterol powder and prescription medicines which he did not have a reasonable excuse to possess.  The police also located paraphernalia associated with medicines, courier labels and other evidence of illicit trade in prescription medicines.

[5]      Detective Bull deposes that he believes the $10,000 cash is tainted property acquired as a result of significant criminal activity, being offending engaged in by Mr Townshend.   He notes there is no provision under the Medicines Act or the Sentencing Act that addresses the forfeiture of moneys obtained from the sale of medicines.

[6]      Further  inquiries  made  by  the  Commissioner  has  made  him  aware  that Mr Townshend is the registered owner of a motorcycle, registration B7JLZ, valued at approximately $15,000.  The source of the funds used to purchase the motorcycle is yet unknown, however, it is believed that Mr Townshend has unlawfully benefitted

from significant criminal as a result of his offending against the Medicines Act to the extent of approximately $350,000, as outlined in the uncontested summary of facts upon which he will be sentenced.

[7]      Mr  Townshend  is  for  sentence  in  the  Christchurch  District  Court  this afternoon at 2.15 pm.  Sentencing submissions have been filed on Mr Townshend’s behalf by the Public Defence Service.  Those submissions reveal that Mr Townshend has retained control of  a $47,000 profit  generated as  a result of his significant criminal activity.   He has provided his counsel with a bank cheque payable to the Ministry of Health for $47,000.   Accompanying the sentencing submissions is a letter written by Mr Townshend which refers to him having $47,000 left from the money he obtained from his offending, which he declares he wishes to surrender so as to “leave this part of my life behind”.  Mr Townshend states that he wants nothing to do “with the profits” of his actions which he deeply regrets.

[8]      The Commissioner has acknowledged that Mr Townshend intends to make what his counsel has described as “a reparation payment to the Ministry of Health”, but does not accept that the $47,000 cheque can properly be characterised as reparation.  Rather, as acknowledged by Mr Townshend himself, the funds form part of the profit he generated from his offending.  I understand this will be the stance taken by the Crown at sentencing.

[9]      I am satisfied there are reasonable grounds to believe that Mr Townshend has unlawfully benefitted from significant criminal activity, namely from selling new medicines in contravention of the Medicines Act, advertising new medicines, and possession  of  prescription  medicines  without  reasonable  excuse  from  which property, proceeds or benefits of a value of $30,000 or more have been acquired or derived.  Further, I am satisfied there are reasonable grounds to believe the items of property the subject of the application are tainted property.

[10]     I also accept there is a risk that the proposed restrained property may be disposed of, altered, or concealed, if notice is given to Mr Townshend.   Because there is no provision under the Medicines Act or the Sentencing Act to address forfeiture  of  moneys  obtained  from  the  sale  of  medicines,  in  the  absence  of  a

restraining order Mr Townshend may request the police return the $10,000 to him on the basis that presently the police have no lawful authority to retain the funds.  In relation to the motorcycle there is a reasonable risk that unless that item is restrained Mr Townshend may take immediate steps to dispose or conceal the motorcycle.

[11]     The position in respect of the $47,000 bank cheque is less clear, and I have some residual concerns regarding the relationship between the Commissioner’s application and the imminent sentencing of Mr Townshend which is to take place before the District Court this afternoon.

[12]     The Commissioner’s position is outlined in Detective Bull’s affidavit.   He accurately observes that Mr Townshend will rely upon the $47,000 as a type of reparation payment to obtain additional credit as a mitigating factor which may influence the District Court to impose a sentence of home detention, as opposed to one of imprisonment as formally indicated at a sentencing indication hearing on

9 February 2017.   The Commissioner’s concern is that if Mr Townshend is made aware of the Crown’s position disputing that reparation can properly be made in the circumstances of this case, or that the District Court may not have jurisdiction to receive the payment, there is a very high risk that Mr Townshend will instruct his counsel from the Public Defence Service to return the bank cheque to him.

[13]    Counsel is likely to be under an obligation to follow Mr Townshend’s instructions to return the cheque and in the absence of a restraining order preventing that from occurring the funds may be disposed of or concealed.  The Commissioner notes that as he does not know which bank issued the bank cheque, he would have little information to act upon to trace the funds. The Commissioner is concerned that should Mr Townshend appreciate the $47,000 was at risk of being forfeited under the Act, as opposed to being treated as reparation, he may cancel the bank cheque and dispose or conceal the funds.  Earlier inquiries undertaken by the Commissioner in

2014 into Mr Townshend’s financial position did not result in the identification of assets or funds of this size. The Commissioner therefore believes Mr Townshend has the means to conceal the profits of his offending.

[14]     I accept there are reasonable grounds to believe that should the $47,000 not be able to be utilised for the purposes intended at sentencing, Mr Townshend may take actions to dispose or conceal those funds, and it is appropriate that a restraining order be issued without notice to Mr Townshend.

[15]     However, the granting of an order in respect of the $47,000 cheque must not be  allowed  to  interfere  with  the  sentencing  process  before  the  District  Court. Because of the circumstances by which knowledge of the $47,000 became known and the timing of the Commissioner’s application, the restraint of those funds should not be allowed to interfere with the jurisdiction of the sentencing Court.

[16]     It will be a matter for the sentencing Judge as to the approach to be taken to Mr Townshend’s offering of the $47,000 cheque made out to the Ministry of Health. The order I make restraining the sum of $47,000, currently in the form of a bank cheque, is expressly subject to any decision by the sentencing Judge regarding the status of the bank cheque and the use to which he or she considers the funds can properly be put, if any, in sentencing Mr Townshend.

[17]     I make the following orders:

(a)       $10,000 in cash, being exhibit FL09, seized from 5 Flock Lane on 15

April 2015, and which is currently in the possession of New Zealand Police, is not to be disposed of, or dealt with, other than as is provided for in the restraining order, and is to be in the Official Assignee’s custody and control.

(b)A grey MV Augusta Brutale motorcycle, registration B7JLZ, valued at approximately $15,000, and currently registered in the name of Joshua Francis Townshend, is not to be disposed of, or dealt with, other than as is provided for in the restraining order, and is to be in the Official Assignee’s custody and control.

(c)      Subject to any order, if any, made by the sentencing Judge regarding the  $47,000  bank  cheque  as  part  of  the  sentence  imposed  on

Mr Townshend for offending against the Medicines Act, the sum of

$47,000, currently in the form of a bank cheque held by the Public Defence Service at Christchurch, and the funds the bank cheque represents, is not to be disposed of, or dealt with, other than as provided for in  the  restraining order,  and  is  to  be in  the Official Assignee’s custody and control.

Solicitors:

Raymond Donnelly & Co, Christchurch

Public Defence Service, Christchurch