Commissioner of Police v Verwey

[2024] NZHC 666

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2024-441-025

[2024] NZHC 666

UNDER

the Criminal Proceeds (Recovery) Act 2009

IN THE MATTER OF

an application under ss 22 and 24

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

VERONICA JANE HEALEY VERWEY

First Respondent

HENRICUS VERWEY
First Interested Party

DENISE MARY VERWEY

Second Interested Party

WESTPAC NEW ZEALAND LIMITED

Third Interested Party

On the papers:
Counsel:	M J M Mitchell for Applicant
Judgment:	22 March 2024

JUDGMENT OF GRAU J

[Without notice application for restraining order]

Application for restraining order

[1]                 The Commissioner of Police (the Commissioner) applies for a restraining order pursuant to s 24 of the Criminal Proceeds (Recovery) Act 2009 (the Act).

[2]The property sought to be restrained (the Property) is:

COMMISSIONER OF POLICE v VERWEY [2024] NZHC 666 [22 March 2024]

All interests in the property at 28 Hislop Avenue, Onekawa, Napier registered in the name of Henricus Verwey and Denise Mary Verwey and described under the record of title unique identifier HBD2/1392, legal description Lot 60 Deposited Plan 12225, other than the registered interests of Westpac Bank.

[3]The grounds on which the order is sought are:

(a)the Property is tainted property; and

(b)there is a risk of the proposed restrained Property being disposed of, altered, or concealed if notice were given to any of the persons who, to the applicant’s knowledge, have an interest in the proposed restrained Property.

[4]                 The respondent lives at the Property, which is owned jointly by her parents, the first and second interested parties. The respondent has been charged with supplying cannabis. The Commissioner contends that mortgage payments and improvements to the Property have been paid from the proceeds of the respondent’s cannabis dealing, when she is not otherwise in receipt of any substantial legitimate income.

Background to the application

[5]                 The application arises out of a Police investigation called “Operation Vaughan,” relating to the investigation of the sale and supply of cannabis in Hawkes Bay. A comprehensive background is set out in the affidavit of Detective Shaun Kennard filed in support of the application.

[6]                 The respondent came to the attention of the Police following a search of a vehicle, then the home address of the sister of the respondent’s partner, where the Police located just over a kilogram of cannabis weighed into ounce, half ounce and quarter ounce amounts. Police then obtained data for her mobile phone which is said to identify significant volumes of cannabis being purchased from the respondent. Data from the respondent’s mobile phone was also obtained, confirming the respondent was supplying cannabis to her sister-in-law. The data also showed the respondent as being in regular contact with another person who, it is said, was burying large amounts of cash for her at his address and which he supplied back to her on request (although

Police did not find any cannabis or buried money when they executed a search warrant at his address).

[7]                 On 19 February 2024, the respondent was arrested and charged with seven charges of selling cannabis. Police consider that she sold at least 75.5 pounds and seven ounces of cannabis between 5 June 2023 and 18 October 2023. She declined to make any statement to Police. Her next appearance is in the Napier District Court on 27 March 2024.

[8]                 The text messages obtained by Police reveal what is said to be significant dealing in cannabis along with a discussion of buried money, in particular, a sum of

$140,000. The Commissioner contends that, given the respondent is unemployed and her only legitimate income was a MSD benefit, that sum was derived from the sale of cannabis. Police also contend that discussions about the buried money refer to her using that money to pay for renovations at the Property.

[9]                 Other text messages refer to the Property being for her and her children, and that, if she separated from her partner, it would remain hers. The Police contend that the respondent paid money to her parents to service the mortgage. The Police also contend that the respondent’s interest in remaining in the Property explains why she would spend money renovating a property that she did not appear to own. There are also text messages between the respondent and her partner relating to her (and possibly his) interest in the Property.

[10]              Police executed a search warrant at the Property on 20 December 2023 and Detective Kennard observed a new fence and a large deck which had not been present in May 2021 when Detective Kennard had previously visited the  Property.  Detective Kennard also deposes as to evidence of recent renovations inside the Property, including a new bathroom and a renovated laundry with new appliances, corroborating text messages between the respondent and trade persons.

Grounds for the application

[11]              A restraining order may be made in relation to specific property if the Court is satisfied it has reasonable grounds to believe the property is tainted property.1

[12]              Property is tainted if it has, wholly or in part, been acquired as a result of significant criminal activity, or if it has been directly or indirectly derived from significant criminal activity.2

[13]              Significant criminal activity is criminal activity engaged in by a person that, if proceeded against as a criminal offence, would amount to offending that consists of, or includes, offences punishable by a maximum of five years’ imprisonment or more, or from which property, proceeds, or benefits of a value of $30,000 or more have been acquired or derived, either directly or indirectly.3

[14]              Having read the evidence of Detective Kennard, I am satisfied there are reasonable grounds to believe that the Property sought to be restrained is tainted property, having been directly or indirectly derived from significant criminal activity, namely the sale of cannabis.

Application made without notice

[15]              Under s 22(1) of the Act, a Court may determine an application for a restraining order without notice being given to affected persons if satisfied that there is a risk of the proposed restrained property being destroyed, disposed of, altered or concealed if notice were given.

[16]The application has been made without notice on the basis of the risk that:

(a)although the Property is encumbered, it would be relatively straightforward to use as security against a loan thereby dissipating the equity in the property; and

1      Criminal Proceeds (Recovery) Act 2009, s 24.

2      Section 5(1), definition of “tainted property”.

3      Sections 6 and 5(1), definition of “threshold amount”.

(b)it would not be difficult to dispose of the Property by sale. The sale proceeds could then be rapidly dispersed by electronic means and become difficult to recover.

[17]              A without notice restraining order would ensure the Property is restrained and secured while further information in relation to the offending is gathered and a full financial analysis is completed.

[18]              I am satisfied in the circumstances there is a risk of the Property being disposed of if notice of application was given to the respondent and interested parties.

[19]              The without notice order will cease to be in force at the end of the period of seven working days from the date it is granted unless, prior to its expiry, the Commissioner makes an on-notice application for another restraining order in relation to the same Property.

Order

[20]The property, as identified above, namely:

All interests in the property at 28 Hislop Avenue, Onekawa, Napier registered in the name of Henricus Verwey and Denise Mary Verwey and described under the record of title unique identifier HBD2/1392, legal description Lot 60 Deposited Plan 12225, other than the registered interests of Westpac Bank:

(a)is not to be disposed of, or dealt with, other than as provided for in the restraining order; and

(b)is to be in the Official Assignee’s custody and control.

Grau J

Solicitors:

Elvidge & Partners, Napier for Applicant