M v Police HC Whangarei CRI 2008-488-7

[2008] NZHC 1075

This case has been anonymized

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CRI 2008-488-7

M

Appellant

v

THE POLICE

Defendant

Hearing:         19 June 2008

Appearances: J E A Dickens for appellant

P J Magee for respondent

Judgment:      9 July 2008

JUDGMENT OF ALLAN J

Solicitors:

Dickens Law, Whangarei  [email protected]

Crown Solicitor Whangarei

M V POLICE HC WHA CRI 2008-488-7  9 July 2008

[1]      This is an appeal from an order made in the Whangarei District Court on

15 February 2008, confiscating the appellant’s motor vehicle pursuant to s 129 of the

Sentencing Act 2002.

Background

[2]      At about 10.30 pm on 10 January 2008, the appellant was the driver of a motor vehicle travelling north on State Highway 1 near Ruakaka in Northland.  His vehicle was observed by another motorist to swerve  over  the  centre  line.    The appellant was stopped by a police patrol.   He displayed signs of recent alcohol consumption; a subsequent breath test disclosed a reading of 525 micrograms of alcohol per litre of breath.

[3]      The appellant had two previous convictions arising from breaches of the breath alcohol provisions of the Land Transport Act.  On 12 November 1996 he was fined $550 and disqualified from driving for six months commencing on 29 January

1997, following a breath alcohol reading of 575 micrograms per litre of breath. More recently, on 27 April 2005, he was fined $900 and Court costs of $130, and disqualified from driving for six months commencing 30 June 2005, in consequence of a breath alcohol reading of 417 micrograms per litre of breath.

[4]      The appellant appeared in the Whangarei District Court on 16 January 2008. A plea of guilty was entered.  He was sentenced to 250 hours community work, and was disqualified from holding or obtaining a motor vehicle licence for 12 months commencing on 16 January 2008.  A final warning was noted on the information.

[5]      Section 129 of the Sentencing Act 2002 provides:

129    Confiscation of motor vehicle after second offence

(1)    This section applies if,—

(a)    on or after 26 July 1996, a person commits an offence (the first offence) against any of  sections 32(1)(a)  or  (b),  35(1)(a) or  (b),

36(1), 36A(1)(a) or (c), 39(1), 56(1) or (2), 58(1), 60(1), 61(1), 61(2)

or 62(1) of the Land Transport Act 1998 (which relate to driving offences) or section 171 of the Crimes Act 1961 (but only where the manslaughter involved the use of a motor vehicle); and

(b)     within 4 years after the date of the commission of that offence, the person commits a further offence (the second offence) against any of those provisions of the Land Transport Act 1998.

(2)     For the purpose of subsection (1), it does not matter whether or not the second offence is of the same kind as the first offence, but it must be an offence that arises from a different incident from the one that gave rise to the first offence.

(3)     If the court by or before which the offender is convicted of the second offence is satisfied that any motor vehicle owned by the offender or in which the offender has any interest was being driven by, or in the charge of, the offender at the material time, the court must order that the motor vehicle be confiscated.

(4)      Despite subsection (3), the court must not make an order under that subsection if it will result in extreme hardship to the offender or undue hardship to any other person.

(5)     For the purposes of this section, a conviction for an offence against a provision of the Transport Act 1962 that corresponds to an offence specified in subsection (1) must be treated as a conviction for an offence specified in that subsection.

[6]      The effect of this section is that where, as here, an offender is convicted of a second offence as defined in the section, the Court must order the confiscation of “… any motor vehicle owned by the offender or in which the offender has any interest

…” which was being driven by the offender at the material time, subject only to the caveat that the Court must not make an order if to do so would result in extreme hardship to the offender or undue hardship to any other person.

[7]      It appears that the question of s 129 was raised by counsel for the appellant at the time of  sentencing;    no  order  for  confiscation  was  made on  that  day.    An application by the appellant for an order directing that the vehicle driven by him at the time of his apprehension not be confiscated, came before Judge Harvey in the Whangarei District Court on 15 February 2008.  The Judge ruled at that time that the appellant had failed to discharge the onus on him of establishing extreme hardship for the purposes of s 129(4).  Accordingly, an order was made for confiscation of the vehicle concerned.

[8]      On 27 February 2008, Judge Harvey granted a stay of the confiscation order, pending the outcome of the present appeal.

[9]      In the District Court Judge Harvey said, in the course of determining to make a confiscation order:

[18]     As I have said it is clear that the applicant is a man of assets.  The Court can understand why he is anxious to retain those assets, but that is no reason for the Court to refuse to confiscate a motor vehicle based on extreme hardship.  The reality of the situation is that the applicant is in a much better position financially than many persons who find themselves subject to a s 129 application.

[19]      I appreciate that the confiscation of the motor vehicle may well cause the applicant personal difficulties, but of course that is a consequence of  his  decision to  drive  after  consuming alcohol,  particularly as he  had previously been convicted on two earlier occasions.

[20]      In the submissions that have been filed on his behalf, it is said there is more involved here than just having the inconvenience of having a motor vehicle for business purposes.  It would cause a real risk to the solvency of the  business  and  the  offender  personally.    It  is  accepted,  in  my  view properly, that the loss of employment or loss of a business will not in all circumstances be extreme hardship.  I accept also that in some circumstances that could amount to extreme hardship.  Reliance is placed in that regard on the decision of O’Brien v Ministry of Transport.

[21]      I do have to say however that this application is framed in such a way as to leave the Court in some doubt as to the exact nature  of the applicant’s financial position.  There are no valuations before the Court of either the apartment, the home, the Coopers Beach property or the rental property.  I know what is owing on them, I do not know what they are worth. It is absolutely clear that the burden of establishing extreme hardship is the civil  standard  and  rests  with  the  applicant.    I am not  satisfied  that  the applicant has met the very high threshold that he must meet to satisfy the Court that confiscation would cause him extreme hardship.   The applicant himself says:

If I am forced to pay the balance owing under the agreement I (sic) will cause further hardship, thus jeopardising my business, my solvency, my family and the interests of my staff and patients.

[22]      In the following paragraph he says:

If the car was confiscated I would not be able to continue with my work and this would cause extreme hardship to my employees, my partners, my children and her child and the patients.

[23]      These are broad sweeping statements but I am not at all satisfied that they have been justified.  It is plain that there are assets available for sale in the  event  that  the  consequences  of  confiscation  are  as  extreme  as  the applicant claims.  There is nothing in the documentation that I have seen to

enable me to say that the confiscation of the vehicle will cause extreme hardship  to  the  applicant  or  undue  hardship  to  any  other  person.    The hardship that is caused is simply a consequence of the applicant’s decision to drive after consuming alcohol.

[10]     It will be observed that the Judge was critical of the appellant’s failure to place before the District Court information that was sufficiently detailed to justify the claim to extreme hardship.  For the purposes of this appeal the appellant filed a further very detailed affidavit, together with an affidavit from his partner.  The sworn evidence available to me included material that was not placed before the District Court Judge.

[11]     Mr Magee did not formally oppose the filing of fresh evidence.  That was a responsible approach on his part.   He was however critical of the fact that the appellant had contented himself with obtaining valuations of various properties from a real estate agent rather than a registered valuer.  In that respect I think Mr Magee might be expecting a little much of the appellant.  In my view evidence from a real estate agent is sufficient for present purposes.

[12]     Because I have the advantage of material that was not placed before the

District Court Judge, it is appropriate to consider the matter afresh.

Relevant principles

[13]     The judgment of Laurenson J in Police v Rihari HC WHA AP10/98 23 July

1998 is often cited for its helpful summary of matters to be taken into account in determining whether the legal test for extreme hardship has been met in the relevant case.   Laurenson J  dealt with s 84(2A) of the Criminal Justice Act 1985,   the predecessor section of s 129 of the Sentencing Act.

[14]     He said (at p 7):

In my view, if regard is paid to these authorities the issue of what may constitute extreme hardship for the purposes of s.84(2A) can be determined on the basis of the following guidelines:

(a)      The term is used in a section of the Transport Act 1962 which is concerned with preventing drivers with a proved disposition

towards driving with excess blood alcohol limits from having access to vehicles.

(b)       The legislation was enacted as a measure to prevent a grave social problem which is directly related to the high incidence of accidents and injuries on the road.

(c)       By prescribing a standard in terms of “extreme hardship”, the Legislature clearly indicated that a very high level of hardship had to be demonstrated by a qualifying offender.

(d)       The determination of what amounts to “extreme hardship” must be determined in a common-sense way and in relation to the facts of a particular case.  It is to be determined objectively and not on the basis of how the particular offender may perceive the extent of the hardship.

(e)       To constitute “extreme hardship”, the hardship must be such that  in  the  particular  circumstances  it  is  excessive,  even  when viewed in relation to the concerns underlying the enactment of s.84.

[15]     The onus of satisfying the Court as to any hardship is upon the offender, the relevant burden being the civil standard of the balance of probabilities: Hunt v Police HC WN AP232/99 29 September 1999.   The potential financial loss arising by reason of the forced sale of a motor vehicle does not of itself amount to extreme hardship:  Rahui v Police HC NAP AP28/01 26 October 2001.

[16]     Cases in which extreme hardship is found to be established often involve consequences beyond those which would normally be contemplated as flowing naturally from the confiscation of a motor vehicle.  So in Hughes v Police HC NEL AP8/03 29 August 2003, Ellen France J held that the real possibility of bankruptcy as the consequence of loss of a confiscated vehicle, was sufficient to reach the threshold.

The appellant’s circumstances

[17]     The appellant’s financial affairs are somewhat complicated.   He is a neuro clinical  psychologist  specialising in  persons  with  brain  and  spinal  injuries.    He summarises his work in the following manner:

I am a clinical psychologist providing specialist services.   My company contracts to the ACC doing assessments and treatments for people with brain injuries and spinal disorders.   There are multiple contracts for assessment

and rehabilitation with ACC currently in place at the moment.   I am a specialist in my field and there are very few experienced enough to do this work for the ACC.  I spend two days in the office doing reports and seeing local clients and three days travelling in between Kaitaia and Thames.   I have an office in Whangarei and an office in Auckland, which allows me to complete my work in the Auckland area and South.  I have also been sent to the South Island by ACC to provide specialist services.  I am the only Maori psychologist working in the upper North Island and the requirement for my services is spreading in locality (sic).

[18]     Although  he  is  the  only  psychologist  doing  core  work,  he  employs  an operations manager, two full time office administration assistants, a part time occupational therapist, a contract clinical psychologist and a number of home care workers and support staff on contract.

[19]     Unfortunately, the appellant’s overall financial position can be described only as parlous.  Although the District Court Judge was correct to describe the appellant as “a man of assets”, I am satisfied having seen rather more detailed information than was available to the District Court Judge, that the appellant’s debts exceed the value of his assets.  Not all assets are held by the appellant in his own name.  Some are held by an operating company controlled by the appellant, and some are in a family trust in which the appellant has no beneficial interest, but of which he and his partner are trustees.

[20]     The vehicle which is the subject of the present application is leased in the name  of  the  appellant.    Its  market  value  is  now  minimal  –  certainly less  than

$10,000, but upon termination of the lease, as would occur upon the making of a confiscation order, the appellant would be obliged to pay about $70,000 to the lessor. That is because for some years the appellant has entered into successive leases with the same lessor company with respect to a succession of cars.  On each occasion the financial arrangements have been rolled over, so that the deficit payable upon the termination of one lease has simply been refinanced and included in the amount owing under the next lease.  If a confiscation order is made the lease will terminate and the appellant will become liable for a sum which he cannot pay.

[21]     I do not propose to traverse the detail of the appellant’s financial position. There are several properties, all highly geared and imposing on the appellant a heavy burden in respect of servicing costs.   Although, as Judge Harvey remarked, the

solution ought ordinarily to be found in selling off assets and reducing debt, I am satisfied that in the appellant’s case, and in the light of the currently falling property market, that approach is not feasible;  the result would be to crystallise debt which the appellant is currently unable to pay.  His present hope is that he will be able to ride out the down turn, and reduce his holdings in an orderly fashion when the market stabilises.  I am satisfied that there is no asset which, if sold, would produce an equity which could be applied in satisfaction or extinction of the amount owing in respect of the present vehicle lease.

[22]     In those circumstances the appellant says that following termination of the vehicle lease he will be faced with a claim by the lessor for the arrears, and then legal proceedings followed by a bankruptcy application which he would be unable to resist.  Not only would that result in the loss of his vehicle, it would also bring to an end the appellant’s ACC contract which terminates should he become insolvent. In that event, the appellant would lose his livelihood, or at least the benefit of his current contractual arrangements, and those employed by, or contracted to him or his company, would likewise lose the benefit of their connection with the appellant, and in some cases their employment.

Discussion

[23]     In my view this case is not unlike Hughes v Police where the Court found that confiscation would give rise to a real possibility of bankruptcy and that the extreme hardship threshold was therefore met.

[24]     It is to be noted also that in O’Brien v Ministry of Transport (1986) 3 CRNZ

35, Holland J held in the context of a limited licence application, that the loss of employment or a business might constitute extreme hardship in some circumstances.

[25]     A confiscation order does not operate as a forfeiture order.  That is because the proceeds of sale are returned after payment of costs of sale and prior charges to the offender: Cameron v Police HC HAM AP32/02 3 July 2002.   The legislative purpose is not to impose an additional financial penalty by way of forfeiture, but rather to mark the seriousness of recidivist offending by putting offenders to the cost

and inconvenience of the loss of the vehicle utilised by the offender at the time of the offending.

[26]     I accept that the mere prospect of the loss of employment will not in every case justify the Court in declining to make a confiscation order.  One example of a case in which the Court ordered confiscation despite the threatened loss of employment is Police v Rihari.

[27]     This present case is however a little different from some.  The appellant is a highly qualified man who is offering to the community a specialised and important service.  Although he cannot currently drive he is employing a driver full time so that he can continue to travel throughout the area covered by his ACC contract.   The complete loss of that contract would plainly have devastating financial and professional consequences for him.  In my opinion the appellant has shown that the confiscation of his vehicle will result in extreme hardship.

[28]     Moreover, in my opinion, this is a case in which other persons will suffer undue hardship.  They include, obviously, the appellant’s partner (also employed full time in the appellant’s business) and his children, but more particularly his staff and contracted  workers,  and  that  part  of  the  community  which  is  reliant  upon  his services.   The termination of the appellant’s contract must inevitably result in hardship to those financially dependent on him for their livelihood, and must also result in a degree of dislocation for those who use his services.

[29]     This is one of those relatively rare cases in which the possibility of a loss of employment on the part of an offender does justify the refusal of the confiscation order which must ordinarily follow recidivist breath alcohol offending.

Result

[30]     For the foregoing reasons the appeal is allowed and the confiscation order made in the District Court is quashed.

C J Allan J