Commissioner of Police v Wellington
[2018] NZHC 2502
•24 September 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-1927 [2018] NZHC 2502
UNDER Criminal Proceeds (Recovery) Act 2009 BETWEEN
COMMISSIONER OF POLICE Applicant
AND
RIKI WILLIAM WELLINGTON First Respondent
CHRISTIANA KANEIHANA MOANA Second Respondent
Hearing: On the papers Counsel:
M R Harborow and D M A Wiseman for Applicant
M Ryan for RespondentsJudgment:
24 September 2018
JUDGMENT OF MUIR J
This judgment was delivered by me on Monday 24 September 2018 at 4.45 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date: ………………………….
Counsel: M W Ryan, Barrister, Auckland
Solicitors: Meredith Connell, Auckland
COMMISSIONER OF POLICE v WELLINGTON [2018] NZHC 2502 [24 September 2018]
Introduction
[1] This is an application by the Commissioner of Police and the respondents (Mr Wellington and Ms Moana) to approve a settlement under s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).
Background
[2] In 2006, the Police commenced an investigation, code named Operation Virunga, into the sale and distribution of methamphetamine in both Auckland and Christchurch.
[3] On 2 November 2016, Mr Wellington and his associates were arrested, at which time he had on his person $1,250 cash. On the same date, Police searched a motel unit in Christchurch, rented by one of Mr Wellington’s associates, and found
336 grams of methamphetamine, four ounces of synthetic cannabis and various drug paraphernalia. A Toyota Hiace was located in the motel carpark, the keys of which were in Mr Wellington’s possession.
[4] On the same date, the Police executed a search warrant at the home address of Mr Wellington and Ms Moana in Christchurch. They located $158,990 cash in a bag in the wardrobe. Ms Moana denied any knowledge of the cash. A Toyota Mark X was also located at this address.
[5] At trial, Mr Wellington was found guilty of four charges of possession of methamphetamine for supply and two charges of supplying methamphetamine. He was sentenced to 13 years’ imprisonment.
[6] The Commissioner’s investigation into the finances of Mr Wellington and
Ms Moana identified them as having minimal legitimate income over the last seven years. However, four vehicles had been purchased by them over a five-week period between September to October 2016 and all had been paid for in cash.
[7] The following assets are currently restrained and in the custody and control of the Official Assignee:
(a) $1,250 cash seized 2 November 2016;
(b) $158,990 cash seized 2 November 2016;
(c) the proceeds of sale of a 2005 Toyota Mark X;
(d) the proceeds of sale of a 2004 Audi A8;
(e) the proceeds of sale of a 2005 Volkswagen Tourareg (the Volkswagen);
and
(f) the proceeds of sale of a 2006 Toyota Hiace.
The total value of the restrained property is $180,790.11, (plus any annual interest).
The proposed settlement
[8] The Commissioner, Mr Wellington and Ms Moana have now agreed to settle the Commissioner’s application for forfeiture of assets, subject to the Court’s approval. The proposed terms of settlement are:
(a)the proceeds of sale of the Volkswagen ($4,445.29) are to be remitted to Ms Moana;
(b) asset forfeiture orders are to be made by consent under s 50(1) of the
Act over all remaining restrained property;
(c)the Commissioner will not pursue an application for profit forfeiture orders against either Mr Wellington or Ms Moana; and
(d) costs will lie where they fall.
[9] The total sum to be forfeited as a result of the proposed settlement is in the vicinity of $176,344.
Jurisdiction under s 95
[10] Section 95 of the Act governs settlements and provides:
95 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.
[11] In enacting s 95, Parliament expressly empowered the Commissioner to enter into settlements with respondents (and interested parties) relating to the forfeiture of assets. I accept the proposition in the parties’ joint memorandum that Parliament is likely to have had in mind the significant costs associated with a civil litigation and the benefits to all parties if such proceedings could be resolved in a timely and just way. There is a strong public interest in litigation of this nature being brought to a prompt conclusion provided the settlement reflects the likely costs and risks inherent in the underlying litigation. Parliament has entrusted the Court with supervisory jurisdiction aimed at ensuring any settlements reached are consistent with its intent in enacting the legislation and with the overall interests of justice.1
[12] Section 95(3) directs the Court to consideration of the purposes of the Act and the overall interests of justice.
[13] The primary purpose of the Act is contained in s 3(1). That is the establishment of a regime for 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
1 Commissioner of Police v Know-All Group Ltd & Anor HC Auckland CIV-2010-404-403, 7
November 2011, per Brewer J at [11].
from undertaking or being associated with significant criminal activity (s 3(2)(a)) and to “deter” significant criminal activity (s 3(2)(b)).
[14] The overall interests of justice requirement predicates a broad inquiry. As this Court has previously said, although it is proper that it should have a supervisory jurisdiction, it is “equally important that the Court carry out a broad inquiry and acknowledge, where appropriate, that settlements can be in the interests of justice, bearing in mind the savings of time and cost and the litigation risks to the parties”.2
[15] The Court has recognised that decisions to settle proceedings under the Act may be made on economic and pragmatic grounds and often reflect “a common-sense compromise” between the parties.3
[16] If the Court is satisfied in respect of the two matters identified in s 95(3) then it must approve the settlement.
Discussion
[17] The Commissioner considers that he can make out a strong case that all of the restrained property is tainted property (so as to support an assets forfeiture orders) and that Mr Wellington and Ms Moana unlawfully benefitted from significant criminal activity (so as to support profit forfeiture orders against each of them).
[18] While the quantum of the profit forfeiture orders would be larger than the value of the restrained assets, the Commissioner is unaware of any other asset that could be realised to satisfy such orders. Accordingly, he is prepared to take a pragmatic approach to the profit forfeiture applications. For her part, Ms Moana claims that although the Volkswagen motor vehicle was registered to Mr Wellington, she was the true owner of it and she contributed to its purchase with monies untainted by criminal
activity.
2 Commissioner of Police v Zhang [2016] NZHC 930 at [8].
3 Commissioner of Police v Douglas [2015] NZHC 1293 at [6]; and Commissioner of Police v Venn
[2014] NZHC 361.
[19] I accept that there will be a significant saving of time and cost if the matter can be resolved by consent, without the need for a substantive hearing, and I accept the Commissioner’s submission that the proposed settlement realises, for the Crown’s benefit, the “vast majority” of the property that is subject to restraint. Having regard to the small sum ($4,445.29) that it is proposed be returned to Ms Moana and her claims in relation to the Volkswagen, I consider the settlement represents a pragmatic and common-sense compromise of the competing positions and both satisfies the purposes of the Act and the overall interests of justice.
[20] I accordingly approve the settlement.
Orders
[21] I make the following orders to give effect to the settlement reached:
(a) Variation of restraining order under s 34 of the Act: the sum of
$4,445.29 (the proceeds of sale of the 2005 Volkswagen Touareg, registration FKH420) is released from restraint and the Official Assignee is directed to deposit that sum to a bank account nominated by Ms Moana.
(b)Assets forfeiture orders under s 50 of the Act: the following property vests in the Crown absolutely and is to be in the Official Assignee’s custody and control:
(i) $1,250 cash seized by police on 2 November 2016 from
Mr Wellington;
(ii) $158,990 cash seized by police on 2 November 2016 from
45 Manurere Street, Hei Hei, Christchurch;
(iii) the proceeds of sale of a 2005 Toyota Mark X, registration
KDG624, registered to Ms Moana;
(iv) the proceeds of sale of a 2004 Audi A8, registration JPT748, registered to Mr Wellington; and
(v) the proceeds of sale of a 2006 Toyota Hiace, registration
GHY243, registered to Mr Wellington.
[22] I record that the Commissioner will not pursue profit forfeiture orders against
Mr Wellington or Ms Moana arising out of the significant criminal activity evidenced in the proceedings.
Muir J
6
3
1