Commissioner of Police v Warwick-Dalley

[2025] NZHC 272

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2024-485-393

[2025] NZHC 272

BETWEEN

THE COMMISSIONER OF POLICE

Applicant

AND

LEEROY JOHN WARWICK-DALLEY

Respondent

Hearing:

12 February 2025

Appearances:

H Savage for Applicant

A L Hill and N Mitskevitch for Respondent

Judgment:

24 February 2025

JUDGMENT OF McHERRON J

(Early Sale Order)

[1]                  Leeroy Warwick-Dalley faces 37 charges mainly relating to alleged importation, possession and supply of controlled drugs. He will stand trial, in respect of some of the charges, in the Wellington High Court in November 2025.

[2]                  In the meantime, the Commissioner of Police seeks an early sale order in respect of Mr Warwick-Dalley’s 2018 Mitsubishi Triton Ute. This vehicle is subject to an on notice restraining order, made by consent on 20 September 2024.1 The Commissioner submits that a sale order is necessary “in order to preserve the value of” the vehicle.2

[3]                  Mr Warwick-Dalley opposes the application for an early sale order. He says the vehicle has sentimental value to him and he does not wish to lose it. In the

1      Commissioner of Police v Warwick-Dalley HC Wellington CIV-2024-485-393, 20 Sepember 2024 (Minute of Boldt J).

2      Criminal Proceeds (Recovery) Act 2009 (the Act), s 35(e)(v).

THE COMMISSIONER OF POLICE v WARWICK-DALLEY [2025] NZHC 272 [24 February 2025]

alternative, if the Court makes the sale order, Mr Warwick-Dalley asks that the personalised plates attached to the vehicle be excluded from the order. Mr Warwick- Dalley acknowledges, however, that even if excluded from the sale order, the personalised plates would remain subject to the restraining order, at least in the interim.

[4]                  The Commissioner submits an early sale order in respect of the vehicle is appropriate in light of storage costs and depreciation of the vehicle, which will erode its value if it is not sold. As Mr Warwick-Dalley’s criminal proceedings are at an early stage, these costs and depreciation will be incurred for some time.

[5]                  The Commissioner produced what was described as a valuation of the vehicle dated 25 June 2024 by Turners Cars for $16,000.3 However, this valuation appears to have been undertaken based on photographs only. The valuation does not take account whether the vehicle could be started, the condition of its engine, or whether any components were working. As the valuation notes, the vehicle has no current warrant of fitness.

[6]                  To establish the storage costs and the vehicle’s depreciation in value, the Commissioner provided an affidavit from the specialist investigator for the Central Asset Recovery Unit at the New Zealand Police.

[7]                  The specialist investigator deposed that the Official Assignee stores vehicles on behalf of the Police at a cost of $17.90 per day, or $6,533.50 per year.

[8]                  The specialist investigator referred to Inland Revenue’s general depreciation rates.4 Using Inland Revenue’s straight line method, a light commercial vehicle depreciates every year by the same amount, 21 per cent of its original cost price. Application of this figure to the $16,000 valuation for the vehicle results in a projected depreciation of $3,360 per year.

3      Turners Cars is not named on the valuation, rather it is completed on the Official Assignee’s Ministry of Business, Innovation and Employment letterhead.

4      Inland Revenue “General depreciation rates” (IR265, August 2024).

My assessment

[9]                  The evidence of likely depreciation needs to be sufficiently specific to enable the court to properly consider this application. In my view, the Commissioner has not employed Inland Revenue’s depreciation guide correctly. The guide states that depreciation rates assume that the useful life of a light commercial vehicle such as the Triton is 6.6 years. As the vehicle is now seven years old, applying the straight line depreciation rate of 21 per cent, the vehicle would already have been depreciated to a zero book value within that useful life span. According to the Inland Revenue guide, the vehicle has already reached the end of its useful life for depreciation purposes.

[10]              The vehicle clearly has some value, and it will likely continue to depreciate. However, the Commissioner has produced no useful evidence to establish what rate of depreciation is likely.

[11]              The Court has been disinclined to make a sale order where the Commissioner does not provide suitable evidence of a restrained asset’s depreciation in value.5 As Mr Warwick-Dalley submits, depreciation of the Triton may have largely “bottomed out” such that any future depreciation occurs at a low rate.6

[12]              Section 35 of the Criminal Proceeds (Recovery) Act 2009 confers a discretion on the Court. The fact that storage costs are being incurred is a factor which can be considered in the exercise of the discretion, providing a sale order is otherwise appropriate to preserve the value of the restrained property.7

[13]              However, where the evidence does not point to a decrease in value, the costs of storage alone will not justify a sale,8 particularly where the vehicle is of significance to the respondent.9

5      Commissioner of Police v Collins [2024] NZHC 1660.

6      As in Commissioner of Police v Feleti [2022] NZHC 2051 at [22]. In that case, Wylie J considered the vehicle was likely to continue to depreciate at a modest rate — say by $250. I have no evidential basis to make a similar finding in the present case.

7      McQuade v Commissioner of Police [2024] NZCA 46 at [27].

8      Commissioner of Police v McQuade [2023] NZHC 798. The Court of Appeal expressed its broad agreement with this proposition: McQuade v Commissioner of Police [2024] NZCA 46 at [27]; leave to appeal declined McQuade v Commissioner of Police [2024] NZSC 99.

9      Commissioner of Police v Milosevic [2019] NZHC 1554 at [29].

[14]              In the present case, Mr Warwick-Dalley has given evidence that he does not want the Triton to be sold, as it has sentimental value to him. Mr Warwick-Dalley received the vehicle from a friend after he was granted electronically monitored bail in early 2024. When he originally received the vehicle it was in poor condition. It had structural and panel damage and needed attention to bring it to a standard where it could pass a warrant of fitness.

[15]From January 2024, Mr Warwick-Dalley:

(a)worked on the vehicle, changing the windows, repairing the engine and having structural damage repaired;

(b)had a panel beater cut out some structural damage and replace the metal;

(c)painted the vehicle himself in his back yard.

[16]              Mr Warwick-Dalley considers the work that he completed on the vehicle while on electronically monitored bail was a:

… positive thing for me to focus on, and a healthy use of my time as it had given me some purpose. I was proud of it.

…

I view the vehicle as a symbol of something positive that I can do when I put my mind to it. I will lose that if the Triton is sold.

[17]              Mr Warwick-Dalley believes that the vehicle would now pass a warrant of fitness after the work he did on it. However, his counsel, Ms Hill, candidly submitted that it is possible that Mr Warwick-Dalley’s work may have in fact reduced the vehicle’s value.

[18]              Ms Hill said that she had not been able to obtain a valuation herself, as the vehicle is currently under restraint. However, she submitted the $16,000 valuation was likely too high. I accept this submission.

[19]              The Commissioner acknowledged that different judges have taken different views in relation to the relevance of storage costs to an application for sale orders.

[20]              In Commissioner of Police v Evans, Brown J did not consider it appropriate to take expenditure associated with storage, and insurance into account in addressing the question posed by s 35(e)(v) (does the value of the restrained property need to be preserved?).10 Brown J noted that:

Were it otherwise, then in order to defeat an application for sale an owner would need to demonstrate that the vehicle was likely to appreciate in value at a rate at least equal to the annual cost of storage, maintenance and insurance. I do not consider that this section imposes that obligation.

[21]              In Commissioner of Police v Blance,11 Dobson J noted that in the case of vehicles where the rate of depreciation has bottomed out, the reduction in eventual return caused by holding costs will not be sufficient of itself to warrant an order for sale.

[22]              Perhaps by contrast, in Commissioner of Police v Parker,12 Hinton J considered that in some unusual cases an order for sale could be made based on storage costs where there is no likely depreciation.

[23]              Finally, the Commissioner referred to Commissioner of Police v Marwood, in which Woodhouse J held that the Court must balance the competing interests of the Commissioner to seek to preserve the value against the possibility that the Commissioner will succeed, and the interests of the respondents who are the owners of the vehicles and in the end may be held to be entitled to them.13

[24]              However, Marwood did not involve an asset with special value to the owner. That is in clear contrast to the present case, in which Mr Warwick-Dalley has established that the vehicle has special value to him.

10     Commissioner of Police v Evans [2015] NZHC 1240 at [33].

11     Commissioner of Police v Blance [2018] NZHC 108 at [52].

12     Commissioner of Police v Parker [2019] NZHC 1506 at [31].

13     Commissioner of Police v Marwood [2018] NZHC 458 at [15].

[25]              Based on the limited evidence in the present case in relation to depreciation, and the case law I have outlined, I accept Mr Warwick-Dalley’s submission that an order for early sale of the vehicle is not appropriate in the present case.

[26]              As acknowledged by Ms Hill, the vehicle will nevertheless remain subject to the restraining order.

[27]              However, I note that the Court has considered alternative arrangements mitigating the impact of holding costs where appropriate undertakings can be arranged.14 If the parties wish to come to some arrangement of that nature, they may file a joint memorandum seeking a telephone conference.

Result

[28]              The Commissioner’s application for a sale order in respect of Mr Warwick- Dalley’s Mitsubishi Triton is declined.

[29]Costs are reserved.

McHerron J

Solicitors:

Luke Cunningham & Clere, Wellington for Applicant A L Hill, Barrister & Solicitor, for Respondent

14     Commissioner of Police v Smith [2017] NZHC 10 at [42]–[43].