Commissioner of Police v Wharehinga
[2019] NZHC 1207
•31 May 2019
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CIV-2018-470-126
[2019] NZHC 1207
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
THE COMMISSIONER OF POLICE
Applicant
AND
JORDAN MICHAEL WHAREHINGA
Respondent
Hearing: On the papers Counsel:
RW Jenson for applicant WT Nabney for respondent
Judgment:
31 May 2019
JUDGMENT OF FITZGERALD J
[As to application for assets and profit forfeiture orders]
This judgment was delivered by me on 31 May 2019 at 4 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Pollett Legal Ltd, Tauranga To: W Nabney, Tauranga
The Commissioner of Police v Wharehinga [2019] NZHC 1207 [31 May 2019]
Introduction
[1] The Commissioner of Police has applied for an asset forfeiture order against Mr Wharehinga (and in the alternative, a profit forfeiture order). The property the subject of the application is $20,000 in cash which was found hidden in a tissue box at Mr Wharehinga’s address during a Police search. During that search, Police also located a substantial quantity of methamphetamine, cannabis, and ephedrine.
[2] Mr Wharehinga opposes the application. He says the $20,000 belongs to his brother (who now resides in Australia) and is unrelated to the drugs found at his property. Mr Wharehinga says he was merely looking after the cash for his brother.
[3] The key issue I must determine is whether the Commissioner of Police has satisfied me, on the balance of probabilities, that the $20,000 is tainted property and so should vest in the Crown.
Further background
[4] This summary of events is in large part drawn from an affidavit sworn in support of the Commissioner’s application by Mr Labone, an Investigator with the New Zealand Police. There is no substantive challenge to the evidence.
[5] On 21 June 2017, the Police executed a search warrant at Mr Wharehinga’s address. During the search Police located 880.6 grams of methamphetamine,
1.7 kilograms of cannabis, 2.99 kilograms of ephedrine, scales, and plastic bags of a type commonly used to supply methamphetamine. They also found a green tissue box containing nine bundles of cash, which together totalled $20,000. That cash is the subject of the present application.
[6] Following the search, Mr Wharehinga was interviewed by Police. The transcript of the interview has been produced in evidence and I have read it. During the course of the interview, Mr Wharehinga admitted possessing the drugs to on-sell, and gave details of the likely prices he could obtain for them. The cash which was found was also discussed and photographs of it shown to Mr Wharehinga. Mr Wharehinga was not sure how much was there, but said he thought there was
around “5-10 K” and that he had “just chucked it there”. Mr Wharehinga accepted during the interview that the various items and cash found were his. He did not suggest his brother as a potential owner of the cash.
[7] At the end of the interview, the interviewing Detective gave a summary of everything Mr Wharehinga had said during the interview, including that Mr Wharehinga had confirmed that all property seized belonged to him. Mr Wharehinga agreed that summary was a fair representation. Again, he did not suggest his brother was the owner of the cash.
[8] Mr Wharehinga subsequently pleaded guilty to possession of methamphetamine for supply, possession of cannabis for supply, and possessing equipment/materials. He has already been sentenced and is currently a serving prisoner at Waikeria Prison.
[9] This is not the first time Mr Wharehinga has been convicted of drug offending. In 2015, Mr Wharehinga received a sentence of imprisonment of 3 years 9 months for supplying methamphetamine, and conspiracy to supply methamphetamine.
The proceedings to date
[10] Mr Wharehinga filed a notice of opposition to the forfeiture application in October 2018. The notice stated that the cash located at his property was not his, but instead belonged to his brother who is now resident in Australia. The notice of opposition stated that his brother “will file an application seeking relief from forfeiture and a supporting affidavit.” No affidavit by Mr Wharehinga himself was filed in support of the notice of opposition.
[11] A telephone conference was held before Woolford J on 25 October 2018. At that conference, Mr Nabney for Mr Wharehinga advised he had been in email contact with Mr Wharehinga’s brother in Australia, but had been unable to confirm instructions to file an application seeking relief from forfeiture. Woolford J accordingly adjourned the matter, and recorded that:
If no affidavit has been filed from the respondent and from his brother, together with an application seeking relief from forfeiture by the date of the
next telephone conference, the Court is liable to make an order in favour of the Commissioner of Police which would vest the sum of $20,000 cash in the Crown absolutely.
[12] Mr Wharehinga later filed an affidavit in support of his opposition, in which he deposed that the cash belongs to his brother in Australia. He said he had been looking after the cash on behalf of his brother and did not want to see him lose his money. He further stated that:
I understand [my brother] has been in touch with my lawyer who has given him advice as to what he needs to do in relation to making a claim on that cash.
[13] In the subsequent telephone conference before me on 11 December 2018, the parties were content to file submissions in support of and in opposition to the application, and for the matter to thereafter be determined on the papers. The Commissioner’s submissions were to be filed on or before 21 December 2018, with Mr Wharehinga’s to follow by 18 January 2019.
[14] The Commissioner’s submissions were duly filed and served on 19 December 2018.
[15] Mr Wharehinga’s submissions were not received until 3 April 2019. Mr Nabney submits that as the Commissioner is on notice there is a third party claiming an interest in the property, he is obliged to serve that party with the proceedings before forfeiture orders are made. Mr Nabney stated that he otherwise had no submissions in response to the matters raised in the Commissioner’s submissions.
[16] No application for relief against forfeiture or affidavit has been filed by Mr Wharehinga’s brother.
The law
[17] Asset forfeiture orders are governed by s 50 of the Criminal Proceeds (Recovery) Act 2009 (the Act), which relevantly provides:
50 Making assets forfeiture order
(1) 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.
[…]
[18]“Tainted property” is also defined in the Act:1
tainted property –
(a)means any property that has, wholly or in part, been—
(i)acquired as a result of significant criminal activity; or
(ii) directly or indirectly derived from significant criminal activity; and
(b) includes any property that has been acquired as a result of, or directly or indirectly derived from, more than 1 activity if at least 1 of those activities is a significant criminal activity
[19] “Significant criminal activity” relevantly means an activity engaged in that would amount to offending punishable by a maximum term of imprisonment of five years or more.2 Here, the seriousness of the charges on which Mr Wharehinga has been sentenced meet this definition.
[20]In terms of service, s 45(1) of the Act provides that:
(1) The Commissioner must serve a copy of an application for a civil forfeiture order, so far as is practicable to do so, on every person who, to the knowledge of the Commissioner, has an interest in the property to which the application relates (including, if applicable, the respondent).
…
(3) On an application for a civil forfeiture order, the High Court may, at any time before the application is finally determined, direct the Commissioner to serve notice of the application on a specified person or class of persons, in the manner and within the time the Court thinks fit.
[21] Finally, s 46 governs who may be heard on an application for a civil forfeiture application:
1 Criminal Proceeds (Recovery) Act 2009, s 5.
2 Section 6.
The following persons are entitled to appear and to adduce evidence at the hearing of an application for a civil forfeiture order:
(a)the applicant; and
(b) any person on whom the application is served (including, if applicable, the respondent); and
(c) any other person who claims an interest in the property to which the application relates.
Discussion
Is the cash “tainted property”?
[22] I am satisfied that the following factors, drawn from the affidavit evidence of Mr Labone, when taken together, clearly establish on the balance of probabilities that the property is tainted property:
(a)The property was found during a search that also recovered methamphetamine and cannabis, which Mr Wharehinga conceded he was supplying;
(b)The sale of drugs generally is a very cash intensive activity; and
(c)An investigation into Mr Wharehinga’s IRD records reveals that over the last six and a half years, he has received a total net income of only
$2,708.40. Although he did spend a number of years over this period incarcerated, there remains a substantial gap between his declared income and his likely actual expenditure. It can be inferred he was receiving substantial amounts of money from illegal activity.
[23] Considering the undisputed factual background, it is highly improbable that the $20,000 in cash belongs to Mr Wharehinga’s brother as claimed. In addition to the factors set out at [22] above, it is notable that in his Police interview, Mr Wharehinga acknowledged the cash belonged to him. He made no mention of his brother owning or otherwise having an interest in it. Against that backdrop, and Mr Wharehinga’s clear involvement in a cash intensive drug-related activity, the
suggestion that he was “looking after” the cash for his brother living overseas is simply not credible.
[24] The fact that Mr Wharehinga’s brother has been on notice of these proceedings for some time, and was stated in the notice of opposition to be filing an application for relief against forfeiture but has not done so, also supports the conclusion that the cash does not belong to him and rather is tainted property.
Should Mr Wharehinga’s brother be served?
[25] Nor am I persuaded the Commissioner must first take steps to serve Mr Wharehinga’s brother in Australia before the orders ought to be made. Service under s 45(1) is only required on a person who, to the knowledge of the Commissioner, has an interest in the property in question. That is not the case in relation to Mr Wharehinga’s brother. Section 46 also reflects the distinction between a person who has been served with the application (which will include anyone the Commissioner knows to have an interest in the property), and any other person who claims to have an interest in the property.3
[26] I do not propose to direct the Commissioner to serve notice of the application on Mr Wharehinga’s brother pursuant to s 45(3). His brother has clearly been on notice of the application since at least 3 October 2018, has been in contact with Mr Wharehinga’s counsel about it, and was stated to be intending to file an application for relief from forfeiture but has not done so. Woolford J made it clear in his minute dated 25 October 2018 that if no application for relief was filed before the further call of this matter on 11 December 2018, the Court was liable to make the forfeiture order. Mr Wharehinga’s brother has now had a further five months to file any application to support his claim to an interest in the property. As noted, he has not done so.
[27]In these circumstances, I propose to make an asset forfeiture order.
[28] As the Commissioner’s application for a profit forfeiture order was sought in the alternative only, it is not necessary to address it further.
3 See also s 50(4)(c) which requires attempts to “contact” any person the Commissioner believes
may have an interest in the property, rather than formal service on any such person.
Result
[29]The asset forfeiture application is granted. There are orders that:
(a)The property described in paragraph (2) of the Commissioner’s application dated 3 October 2018 vests in the Crown absolutely; and
(b)That property is to be in the Official Assignee’s custody and control.
Fitzgerald J
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