Hunt v Commissioner of Police
[2021] NZCA 644
•2 December 2021
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA446/2020 [2021] NZCA 644 |
| BETWEEN | LEROY JAMES HUNT, TARA LEE HUNT and CARRINGTON & YOUNG TRUSTEES LIMITED as trustees of the HUNT FAMILY TRUST |
| AND | COMMISSIONER OF POLICE |
| CA447/2020 | ||
| BETWEEN | DION JAMES HUNT and ADA SHARON PUE | |
| AND | COMMISSIONER OF POLICE | |
| Hearing: | 1 July 2021 |
Court: | Brown, Clifford and Gilbert JJ |
Counsel: | N P Bourke for Appellants in CA446/2020 |
Judgment: | 2 December 2021 at 10.30 am |
JUDGMENT OF THE COURT
AThe Commissioner’s application to adduce further evidence in both appeals is granted.
B The appeal in CA446/2020 is dismissed.
C The appeal in CA447/2020 is allowed.
DThe restraining orders over 31 Leyton Place and the cash are discharged.
E We make no order for costs in CA446/2020.
F The respondent must pay the appellants in CA447/2020 costs for a standard appeal on a band A basis with usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Clifford J)
Dion Hunt and Ada Pue (the appellants in CA447/2020) face charges of producing, possessing, supplying and conspiring to supply methamphetamine. Their trial is due to start on 8 February 2022.
On 21 September 2017 the Commissioner of Police was granted without notice restraining orders under the Criminal Proceeds (Recovery) Act 2009 (the Act) over real property comprising 31 Leyton Place, Nawton, 134 and 180 Foreman Road, Waitara and over $4,825.40 in cash.
31 Leyton Place is registered in Mr Hunt’s name, as is 134 Foreman Road. 180 Foreman Road is registered in the names of the appellants in CA446/2020 as trustees (the Trustees) of Mr Hunt’s family trust (the Trust). The $4,825.40 in cash was found at 180 Foreman Road, a property suspected to have been used by Mr Hunt and Ms Pue in the course of their alleged offending.
In July 2020, Clark J in the High Court at New Plymouth declined separate applications by the Trustees and Mr Hunt and Ms Pue to discharge or vary those restraining orders as they apply to 180 Foreman Road, 31 Leyton Place and the $4,825.40 cash respectively.[1] These are appeals against those decisions: CA446/2020 by the Trustees, CA447/2020 by Mr Hunt and Ms Pue.
[1]Commissioner of Police v Hunt [2020] NZHC 1692 [Judgment under appeal].
Also before the Court is an opposed application by the Commissioner for leave to adduce further evidence in both appeals in the form of an affidavit from a Ms Anna Marie Swaine. We deal with that application before we address the substantive issues this appeal raises.
Background
Mr Hunt and Ms Pue have been in a de facto relationship since 2003. Both have considerable criminal histories. Those histories include methamphetamine offending. Following conviction and imprisonment in 2004, property with a value in excess of $710,000 was recovered from them under the Act.
Mr Hunt was released from prison in October 2008, Ms Pue in November 2007.
In June 2012 Mr Hunt had subdivided the property he then owned on Foreman Road into two lots: 134 and 180 Foreman Road. 134 Foreman is bare land, slightly less than one hectare in area: 180 Foreman is described as a “dwelling and pastoral property” comprising some 20 hectares in all. Mr Hunt settled the Trust in June 2012 on the Trustees. The final beneficiaries of the Trust are Mr Hunt’s children, Leroy, David and Tara Lee and their children.
In the first half of 2014 the Trust purchased 180 Foreman Road from Mr Hunt for $316,390. The Trust refinanced that purchase in June 2016, with funds from ANZ Bank New Zealand Ltd (ANZ). Those loans are secured by mortgages over 180 Foreman.
In December 2016 the New Plymouth Organised Crime Group commenced an investigation into the alleged manufacture, sale and supply of methamphetamine by Mr Hunt and Ms Pue. As a result of the investigation they were charged in July 2017. In September 2017, the properties were restrained.
On 30 September 2019, dissatisfied with the time being taken to resolve the criminal charges and the restraining orders, the Trustees applied for the release of 180 Foreman from restraint. On 3 October Mr Hunt and Ms Pue applied for 31 Leyton and the cash to be released as well.
Those applications were heard by Clark J in the High Court at New Plymouth on 2 March 2020.[2] On 14 July 2020 the Judge released her decision, declining all three applications.
The Commissioner’s fresh evidence application
[2]Judgment under appeal, above n 1.
The additional evidence the Commissioner seeks to adduce comprises an affidavit of Ms Swaine. Ms Swaine records the result of the police’s ongoing investigations into the affairs of Mr Hunt and Ms Pue, including the source of funds for the acquisition of the properties and, more recently, the source of funds used by the Trust to meet its ANZ funding costs. The point of the evidence is to establish the Trust has relied on funds received from external parties, including Mr Hunt, to finance the purchase of 180 Foreman.
The Trustees, Mr Hunt and Ms Pue object to the admission of that evidence, essentially on the basis that it was not before the Court when the original restraining orders were made. The Commissioner sought to adduce the evidence in the High Court, but the Judge felt able to resolve matters without reference to that evidence and, hence, did not rule on its admissibility.[3]
[3]At [53]–[55].
We are satisfied the evidence is admissible. The Act clearly provides an ongoing process whereby following the grant of initial orders issues of restraint and forfeiture are further investigated by the police. Further orders may be sought by the police and, indeed, by respondents and interested persons. Where that occurs, as is the case here, an update of the state of the police investigation is likely to be relevant, and not unfairly prejudicial. Given that ongoing investigative process, which culminates at the substantive hearing of the Commissioner’s forfeiture applications, we do not consider a respondent or interested person can oppose the adducing of that evidence just because it was not available at an earlier stage in the process.If the timing of disclosure is an issue, that can be dealt with in other ways.
We therefore grant the Commissioner’s application.[4]
Legal context
[4]Court of Appeal (Civil) Rules 2005, r 45.
Before turning to the challenged High Court decision, it is necessary to summarise the position as it was between the appellants and the police, and as regards the property, at the time of the High Court hearing. To do so, a little legal context is helpful.
The Act provides a regime for the making of orders for the restraint and forfeiture of property derived as a result of significant criminal activity. The regime applies without the need for criminal proceedings or a conviction.[5] Property may be restrained, and subsequently forfeited, or simply forfeited without prior restraint.[6]
[5]Criminal Proceeds (Recovery) Act 2009, ss 15 and 16.
[6]Section 11.
As relevant here, the Act provides for two types of forfeiture orders: assets forfeiture orders and profit forfeiture orders.[7]
[7]Sections 50 and 55.
Section 50 provides the High Court must make an assets forfeiture order as regards specific property if it is satisfied on the balance of probabilities that specific property is tainted property. Tainted property is property acquired or derived wholly or in part from significant criminal activity.[8] The owner of the property need not be responsible for or even be aware of the taint.
[8]Section 5(1).
Section 55 provides the High Court must make a profit forfeiture order as regards property in which a person has an interest where the Court is satisfied on the balance of probabilities that person has unlawfully benefitted from significant criminal activity within a certain period.
Likewise, there are two types of restraining order:
(a)Section 24 provides that a court may make a restraining order relating to specific property where satisfied it has reasonable grounds to believe that any property is tainted property.
(b)Section 25 provides that a court may make a restraining order relating to all or part of a respondent’s property if satisfied it has reasonable grounds to believe that the respondent has unlawfully benefitted from significant criminal activity.
Importantly, there is no requirement for orders under ss 25 and 55, which deal with unlawful benefits, for the restrained and/or forfeited property to be tainted.
Section 6(1) defines significant criminal activity as follows:
(1) In this Act, unless the context otherwise requires, significant criminal activity means an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending—
(a)that consists of, or includes, 1 or more offences punishable by a maximum term of imprisonment of 5 years or more; or
(b)from which property, proceeds, or benefits of a value of $30,000 or more have, directly or indirectly, been acquired or derived.
…
The Commissioner’s applications
On 11 September 2017 the Commissioner made two applications under the Act:
(a)The first of these was a without notice application under s 25 of the Act for the restraint of the real property and the cash. The Commissioner was asserting Mr Hunt and Ms Pue had an interest in that property and that they had unlawfully benefited from significant criminal activity.
(b)The second was an on-notice application under s 45 for forfeiture of three vehicles. Hence the Commissioner was asserting those vehicles were tainted property.
The Commissioner’s without notice application for a restraining order was granted as noted, on 21 September 2017. The Commissioner’s on notice application for a forfeiture order has, as yet, not been heard.
Without notice restraining orders expire after seven days unless within that period the Commissioner applies on notice.[9] On 27 September 2017, the Commissioner filed on notice applications under ss 24 and 25 of the Act for restraint of the three properties and the cash. Hence the Commissioner was at that point asserting that property was both tainted property and/or was property in which the Trustees and Mr Hunt and Ms Pue had an interest and that they had unlawfully benefited from significant criminal activity.
[9]Section 39(1) and (2).
Those on notice applications have never been heard. However, because the applications have been filed, the without notice restraining orders have remained in force ever since.
The Trustees and Mr Hunt and Ms Pue all initially sought early resolution of matters. It was subsequently agreed that, in the interests of their avoiding incrimination, the resolution of forfeiture and restraint issues should occur after the finalisation of the criminal matters. In time the vehicles which were the subject of the original on notice forfeiture application, which had been seized but not restrained, were returned.
In September 2019, and as the trial date kept slipping, the Trustees and Mr Hunt and Ms Pue indicated an intention to apply to strike-out the forfeiture and restraint proceedings, or for the release of all the property involved. Matters were then brought to a head by the filing of the applications at issue here for release from restraint.
Accordingly, and when considering the Trustees’ release application, it will be important to bear in mind the Commissioner asserts that 134 Foreman is tainted property. It was thus liable to be forfeit against the Trustees irrespective of the fact the Commissioner does not allege they were involved in Mr Hunt’s and Ms Pue’s significant criminal activity.
The High Court was satisfied it had reasonable grounds to believe Mr Hunt and Ms Pue had benefited from significant criminal activity. At the same time, it is material that when the Court made the original without notice restraining order over the real property and the cash, it did not conclude under s 24 it had reasonable grounds to believe the restrained property was tainted property. Moreover, it has not done so subsequently.
The challenged High Court decision
We summarise Clark J’s decision declining to discharge or vary the restraining orders by reference to the three items of property involved and in the order the Judge adopted. No application for the variation or discharge of 134 Foreman was made.
180 Foreman
The Trustees’ application pursuant to s 30 of the Act, that their interest in 180 Foreman should be severed and that property released, was based on three propositions:
(a)They had an interest in 180 Foreman, being its owners at law (s 30(2)(a)).
(b)They had not unlawfully benefitted from any significant criminal activity of Mr Hunt and Mr Pue comprising their alleged offending (s 30(2)(b)).
(c)Their interest in 180 Foreman was severable from Mr Hunt’s interests in the balance of the restrained property, that is 31 Leyton, 134 Foreman and the cash (s 30(1)).
Clark J declined that application.[10] It was accepted the Trustees had an interest in 180 Foreman.[11] But, the Judge reasoned, the Trustees were, jointly, the sole owners of 180 Foreman: that is they owned the whole property. There was, therefore, no other interest in that property from which their interest could be severed. So severance was not possible.[12]
[10]Judgment under appeal, above n 1, at [31].
[11]At [22] and [34].
[12]At [31].
Even if that were not the case, the Judge would still not have granted the application. The Trustees had not, in her assessment, established on the balance of probabilities they had not unlawfully benefitted from significant criminal activity.[13] Rather, given what the Judge termed Mr Hunt’s “effective control” of 180 Foreman, and the police evidence as to Mr Hunt’s involvement in the 2016 refinancing of the purchase of both 134 and 180 Foreman,[14] the Judge was satisfied that their ownership, albeit as trustees, of 180 Foreman represented an unlawful benefit for them.[15]
31 Leyton
[13]At [36].
[14]At [37].
[15]At [38].
Mr Hunt argued that restraint of 31 Leyton was disproportionate and constituted “undue hardship”,[16] given the extent of the alleged offending as accepted by the police. To explain:
(a)The restrained property is said by Mr Hunt to have a total value of $874,218 of which $166,000 is attributable to the equity in 134 Foreman.
(b)The police estimate of the unlawful benefit from the alleged offending is (at its highest) $59,000.
[16]See Criminal Proceeds (Recovery) Act, s 56.
Mr Hunt said those figures demonstrate the restraining order simply goes too far. Continuing restraint over 134 Foreman alone would be sufficient to protect the police’s interest in recovering by forfeiture the unlawful benefit from the alleged offending.
The Judge did not directly address whether disproportionality had been established. Rather she concluded the possible question of disproportionality was not relevant when restraint orders were granted or continued. It only became relevant when questions of forfeiture were considered.[17] She declined the application for the release of 31 Leyton accordingly.[18]
The cash
[17]Judgment under appeal, above n 1, at [59].
[18]At [62].
The $4,825.40 cash was seized from 180 Foreman when Mr Hunt and Ms Pue were arrested. It comprised:
(a)$3,000 found in an envelope on the kitchen bench;
(b)$498 in notes and coins found in Ms Pue’s bag; and
(c)$1,160 in notes found in Mr Hunt’s wallet.
Mr Hunt and Ms Pue based their application for release on disproportionality constituting undue hardship and on the cash not being derived from, or tainted by, significant criminal activity. In support of the second of those propositions:
(a)They relied on an affidavit from a Mr Craig McEldowney that on 26 July 2017 he had paid Mr Hunt $3,000 cash in an envelope — which he had recently earned in a “large gambling win”. That cash was the outstanding purchase price of a car, previously belonging to Ms Pue, which Mr McEldowney had purchased through Mr Hunt about a month earlier.
(b)They said:
(i)the $498 in notes and coins came from Ms Pue’s winnings at the casino at Hamilton; and
(ii)the $1,160 in notes was a cash withdrawal from the balance of an account which had been deposited with credit from a finance company to renovate 31 Leyton.
The Judge declined the application as premature.[19] It was more properly to be considered, and Mr McEldowney’s evidence tested if the Commissioner cross‑examined him, at the “on-notice” hearing.[20]
Analysis
180 Foreman
[19]At [70].
[20]At [71].
We agree with the Trustees’ interpretation of “severable” under s 30 of the Act in this context. Contrary to the view the Judge took, where real property constituting a number of separate lots is restrained, we consider each lot may be severable from the balance of the restrained property, that is, the other lots, notwithstanding that the whole of the lot to be severed is owned by the same person or persons.
But that is not to say we disagree with the Judge’s decision to decline the Trustee’s severance application. In our view Mr Hunt’s retention under the terms of the Trust of the power to appoint and remove trustees, and even more so to appoint persons, including himself, as beneficiaries is fatal to a claim that 180 Foreman is severable from the rest of the restrained property, as the concept of severability is to be understood in the context of the Act.
Section 30 of the Act provides:
30 Excluding severable interest from restrained property
(1) A person (other than the respondent) who has a severable interest in proposed restrained property or restrained property may apply to the court that is to consider, or has considered, the application for a restraining order to have that person’s severable interest excluded from—
(a)a restraining order that the court may make; or
(b)a restraining order the court has made.
(2) The court must exclude a severable interest from proposed restrained property or restrained property at, or after, the time a restraining order is made if the applicant proves on the balance of probabilities—
(a)that the applicant has an interest in the property to which the restraining order relates; and
(b)if the order was or is to be made under section 24 or 25, that the applicant has not unlawfully benefited from the significant criminal activity to which the restraining order relates; and
(c)if the order was or is to be made under section 26, that the applicant was not involved in the qualifying instrument forfeiture offence to which the restraining order relates.
(3) The court may exclude a severable interest from proposed restrained property or restrained property at, or after, the time a restraining order is made if it considers that it is in the public interest to do so, having regard to all the circumstances, including, without limitation,—
(a)any undue hardship that is reasonably likely to be caused to any person by the severable interest in property being made or having been made restrained property:
(b)the gravity of the significant criminal activity or qualifying instrument forfeiture offence with which the property in which the person has a severable interest is associated:
(c)the likelihood that the interest will become subject to a forfeiture order.
For the purposes of s 25 restraining orders, and the question of what constitutes property in which a respondent has an interest, s 58 of the Act provides that if the High Court is satisfied a respondent has effective control over property the Court may order that the property is to be treated as though the respondent had an interest in it.
The Commissioner, referencing the terms of the Trust and s 58, argued Mr Hunt had effective control over 180 Foreman, and had an interest in that property. The Judge did not adopt that analysis. Rather she reasoned effective control, constituting an interest, was not relevant to determining whether another person, with a legal or beneficial interest in the property, had a severable interest.[21] We do not agree.
[21]At [24].
If, pursuant to an application made under s 58, the High Court is satisfied that a respondent does have effective control of a property (and hence does have an interest for the purposes of the Act) the interest of separate legal or beneficial owners of that property should not be “severed” from the respondent’s interest. To do so would defeat the purpose of s 58: a grant of severance in those circumstances would allow the legal owners to deal with the property without regard to the Commissioner’s restraining order based on the respondent’s interest.
In our view the terms of the Trust do establish effective control, and hence Mr Hunt’s interest. Moreover, there is a more direct route for concluding Mr Hunt is interested in 180 Foreman and that the Trustees cannot sever their interest from that. That is the interest in 180 Foreman, a contingent equitable interest, that Mr Hunt has by virtue of his power to appoint himself a beneficiary of the Trust. Nor can the Trustees sever their interest from that of Mr Hunt, given that interest also derives from the Trust.
The possibility that, if 180 Foreman was released from restraint on the basis the Trustees were entitled to severance, Mr Hunt could thereafter appoint himself beneficiary and benefit from the Trust’s ownership of that property establishes the inconsistency of that outcome with the scheme and purpose of the Act.
The Trustees argued before us that the Commissioner could not, however, rely on the effective control route to establish Mr Hunt had an interest in 180 Foreman, as he had not initially relied on, or separately applied to the High Court to establish, Mr Hunt’s effective control. In making that argument, the Trustees were relying on the terms of s 58(1) which provide:
(1)If the High Court is satisfied that a respondent has effective control over property, the Court may, on an application made by the Commissioner, order that the property is to be treated as though the respondent had an interest in the property specified by the Court.
(Emphasis added.)
Whilst the Commissioner, when obtaining these restraining orders without notice, did not explicitly rely on s 58, it is clear he was doing so when opposing the application for the release of 180 Foreman before Clark J.
The Act establishes an ongoing process for determining matters of restraint and forfeiture. That process includes subsequent on-notice applications by the Commissioner and the provisions for respondents and others to challenge, at various points, restraint and forfeiture. In that context, the reference to “an application made by the Commissioner” in s 58(1) is to be read to include reliance on effective control in response to such a challenge, as the Commissioner does here.[22]
[22]We have not overlooked the requirement for the Commissioner to give notice of the s 58 application using form 27 of the Criminal Proceeds (Recovery) Regulations 2009. On our reading of s 58, the form will not be necessary where the Commissioner is relying on effective control in response to a challenge. In such circumstances the relevant interest holders will be made aware of the Commissioner’s argument.
Accordingly, in declining the Trustees’ application for severance in respect of 180 Foreman the Judge reached the correct decision, and we dismiss the Trustees’ appeal against that decision accordingly.
31 Leyton
On the face of things, the restraint of property worth approximately $874,000 to protect the Commissioner’s interest in a subsequent profit forfeiture order for an unlawful benefit of $59,000 from alleged significant criminal activity appears disproportionate.
In those circumstances it is useful to consider first the Judge’s conclusion that issues of disproportionality are not relevant at the restraint stage, but only at the forfeiture stage.[23] Again, we do not agree.
[23]Judgment under appeal, above n 1, at [59].
Our reason is found in the differences between the way the two types of forfeiture orders provided by the Act, asset and property forfeiture orders, work on enforcement.
Once found to be tainted, specific property — assets acquired from significant criminal activity — must be forfeited under an assets forfeiture order. As tainted property is property acquired or derived “wholly or in part” from significant criminal activity at the point of forfeiture, no question of proportionality arises. Neither does it at the restraint phase. The cases the Commissioner and the Judge relied on all related to assets restraining orders pending an application for assets forfeiture orders.
The position is different when a respondent’s property is forfeited pursuant to a profit forfeiture order.
When applying for a profit forfeiture order the Commissioner is required, amongst other things, to state the value of the unlawful benefit of the alleged criminal activity.[24] That stated value is presumptively correct, but a respondent may rebut that presumption on the balance of probabilities.[25] When making a profit forfeiture order the High Court must also determine what is known as the maximum recoverable amount.[26] That is the value of that benefit less the value of any property already forfeited to the Crown under assets forfeiture orders made in respect to the same significant criminal activity. That maximum recoverable amount is enforceable as a debt due to the Crown.[27]
[24]Criminal Proceeds (Recovery) Act, s 52(c).
[25]Section 53(2).
[26]Section 54.
[27]Section 55(4).
Following compulsory recovery by the Official Assignee of the forfeited property, the maximum recoverable amount caps the amount the Crown may recover as regards the relevant criminal benefit. That there is a cap at the point of forfeiture shows the Commissioner’s relief is limited and bears a direct relationship to the maximum recoverable amount. That mechanism ensures the seizure of the person’s property constituted by the forfeiture is, in terms of s 27 of the New Zealand Bill of Rights Act 1990, a reasonable one.
We therefore agree with Brewer J’s observation in Commissioner of Police v C:[28]
[38] The Act sets out the grounds which must be established by the applicant on the balance of probabilities before restraining orders will be made. Where, as here, the applicant seeks to restrain all of a respondent’s property, some of which is identified, he runs the risk of the Court exempting some assets from restraint, or imposing ameliorating conditions to restraint, if he cannot satisfy the Court that there is a degree of benefit alleged that is roughly proportional to the value of the assets sought to be restrained.
[28]Commissioner of Police v C [2012] NZHC 435.
At the restraint stage, no estimate of the unlawful benefit is required. Nor, on many occasions, would making such an estimate be practicable. In that situation there will be less scope for a complaint of disproportionality. But where the significant criminal activity and/or the estimated unlawful benefit alleged is towards the lower end of seriousness and scale, and a respondent’s property considerable, such an argument could well be made.
For those reasons, we disagree with the Judge’s finding that proportionality as regards a profit forfeiture order is not relevant during the restraint phase.
In our view, an assertion that continuing restraint of 31 Leyton and the cash is disproportionate in terms of the alleged benefit so that property should be released from restraint is, in principle, available to Mr Hunt and Ms Pue.
The Commissioner, as we understand is the usual practice, at the time of his without notice application provided an estimate of unlawful benefit. The supporting affidavit explained:
9.2 At this current, early stage of the investigation, we can identify an unlawful benefit to the Respondents of $32,000 to $43,000 from the sale of methamphetamine. The value of the unlawful benefit could be covered in forfeiture by the seizure of the vehicles described above, the Navara, the Hyundai and the Tractor.
9.3 However, it is probable that following further investigation by both the criminal team and Asset Recovery team, further offending and unlawful benefit will be uncovered. It is on this basis that we are seeking to restrain the properties.
Subsequently, the Commissioner has estimated the criminal benefit as being approximately $59,000. That estimation can be contrasted against the Commissioner’s estimate of total net value of approximately $874,000, including the following values:
(a)31 Leyton’s purchase price in January 2015 of $390,000 (with $304,233.47 owing to ANZ as at March 2017);
(b)134 Foreman’s equity of $166,000 (including a mortgage of $27,940.99 as at June 2017);
(c)180 Foreman’s rateable value in September 2013 of $720,000 (with a mortgage of $294,437.58 as at June 2017); and
(d)the cash of $4825.40.
On that basis, we are satisfied that continued restraint of 31 Leyton and the cash is disproportionate in the context of a s 25 restraining order to the Commissioner’s legitimate interest in a subsequent profit forfeiture order in the vicinity of $59,000.
One issue remains.
Throughout these proceedings, the police in supporting affidavits have justified the restraining of the property, including 31 Leyton and the cash, on the basis they constitute tainted property.
In considering the application to lift the restraint on 31 Leyton and the cash, the Judge reasoned, in broad terms, as follows:[29]
[61] Section 3 is the purpose provision. It provides that the primary purpose of the Act is to establish a regime for forfeiture of property that has been derived from significant criminal activity or “that represents the value of a person’s unlawfully derived income”. This broad statement of the primary purpose of the legislation is not to be confused with the specific provisions pursuant to which restraining orders are sought and made. Those specific provisions are ss 24 and 25. I have set out the principles that govern their application. There is no requirement for “proportionality” at the “restraint” stage. The application for a restraining order is made at a very preliminary stage in the police investigations and on the basis of “reasonable grounds” to believe the property is tainted property rather than on the basis of proof of either the “significant criminal activity” or the extent of the “tainted property”.
[62] [Mr Hunt] has not established that the discretion the Court undoubtedly has to vary or discharge a restraining order should be exercised in this case.
[29]Judgment under appeal, above n 1 (footnotes omitted).
There has, however, been no finding by the High Court of a reasonable belief the restrained property is tainted property. Nor did the High Court reach such a conclusion when considering the applications for discharge. In our view, in the absence of such a finding the Commissioner cannot rely on the allegedly tainted status of the property to, here, resist Mr Hunt and Ms Pue’s applications for the discharge of the s 25 restraining orders over 31 Leyton and the cash on the basis that restraint is disproportionate.
The appeals by Mr Hunt and Ms Pue in CA447/2020 against the decision of the High Court declining their application for the discharge of the restraining orders over 31 Leyton and the cash are allowed, and discharge orders are made accordingly.
We make a final observation. This matter has dragged on for far too long. It would appear that, for a time at least, all involved agreed that the resolution of restraint and forfeiture matters should await the outcome of the criminal trial. But as the Judge observed, an indefinite “holding position” was not justified on the basis of this Court’s decision in Commissioner of Police v Burgess.[30] In that case, having found the Court below did have grounds to exercise its discretion to adjourn an examination order until after the trial, this Court said:
[42] That does not mean that the Commissioner should not make an application for an examination order until after a criminal trial in every case. Nor does it mean that a Judge to whom an application for examination is made should defer the consideration of it until after the criminal trial has occurred. What is required is a careful analysis of the matters about which the Commissioner wishes to examine the potential examinee and the likely impact of answering those matters on the subsequent criminal trial. If the impact is likely to be a tactical advantage to the police or disadvantage to the examinee affecting his or her fair trial rights, then the Judge should consider whether the examination order should be deferred, having regard to the potential prejudice to the Commissioner if such a deferral occurs. In the present case no significant prejudice was identified.
(Footnote omitted.)
[30]At [77], referring to Commissioner of Police v Burgess [2012] NZCA 436.
The difference in delay between that case and the present is stark, however. In that case, the delay was 15 months; here, the proceedings have been going on for over four years. That delay falls within the assessment of potential prejudice to an examinee in balancing the factors identified in Burgess. Moreover, there are provisions in the Act to limit the extent that may be made in a criminal proceeding of evidence from the civil restraint proceedings.[31] To the extent the Commissioner relies on his untested assertion as to the tainted status of the restrained property, a proportionality challenge may be available to the Trustees in respect of 180 Foreman. In any event, it would also seem appropriate for steps now to be taken so that the unheard on notice applications are considered.
Result
[31]Criminal Proceeds (Recovery) Act, ss 165 and 166.
The Commissioner’s application to adduce further evidence in both appeals is granted.
The appeal in CA446/2020 is dismissed.
The appeal in CA447/2020 is allowed.
The restraining orders over 31 Leyton Place and the cash are discharged.
In the circumstances, we make no order for costs in CA446/2020.
The respondent must pay the appellants in CA447/2020 costs for a standard appeal on a band A basis with usual disbursements.
Solicitors:
Young Carrington + Ussher Lawyers, New Plymouth for Appellants in CA446/2020 and CA447/2020.
Crown Solicitor, New Plymouth for Respondents
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