Morell v The Queen

[2010] NZCA 570

IN THE COURT OF APPEAL OF NEW ZEALAND

CA448/2010
[2010] NZCA 570

BETWEENGARY MORELL

Appellant

ANDTHE QUEEN

Respondent

Hearing:23 November 2010

Court:Harrison, Ronald Young and Keane JJ

Counsel:Appellant in Person

N P Chisnall for Respondent
D J O'Connor for Official Assignee
C R Vinnell for Mascot Finance Ltd (in Receivership)

Judgment:30 November 2010 at 2.30 pm

JUDGMENT OF THE COURT

The appeal is dismissed.

REASONS OF THE COURT

(Given by Harrison J)

Introduction

[1] Gary Morell appeals to this Court against a decision of Judge Crosbie in the District Court at Christchurch on 9 June 2010, made under the now repealed Proceeds of Crime Act 1991 (the Act), vesting the proceeds of sale of a property at Worcester Street, Christchurch in Mascot Finance Limited (in receivership) subject to the interest of any other registered mortgagee or the Official Assignee ranking prior to Mascot. The Judge’s order followed his earlier decision (the first decision) delivered on 18 April 2008, which directed forfeiture of the property on the Solicitor-General’s application.[1] 

[1]Pursuant to the Proceeds of Crime Act 1991, s 15. Solicitor-General v Machirus DC Christchurch CRI-2007-009-12895, 18 April 2008.

[2]        Mr Morell filed written submissions in support of his appeal.  On analysis, they were a wide ranging series of unconnected complaints about process.  They did not address the merits of the decision under appeal or objections raised by both Mr Chisnall for the Crown and Mr Vinnell for Mascot about this Court’s jurisdiction to hear the appeal.  Without prior notice, Mr Morell emailed the Court just before the appeal was called for argument.  He advised that he relied on his written submissions and would not be appearing.  It was thus unnecessary to call upon counsel for the other parties. 

[3]        The proceeding has a long and complex history.  It was closely entwined with the result of a criminal trial of Mr Peter Machirus who owned a property at 43 Acheson Avenue, Christchurch, which was also subject to the Solicitor-General’s application.  However, it is unnecessary to traverse that history given our satisfaction that Mr Morell’s appeal must fail for two independent reasons: first, he has no standing; and, second, this Court does not in any event have jurisdiction.

Decision

(a)         Standing

[4]        At the time of the Solicitor-General’s originating application, Mr Morell was registered as owner of the Worcester Street property.  An issue was whether he held title as nominee or agent for Mr Machirus.  The property was subject to a mortgage in favour of Countrywide Banking Corporation Ltd.  Mascot had also registered a caveat to secure advances made to Mr Morell which were guaranteed by Mr Machirus. 

[5]        Mr Morell defaulted on his obligations to Countrywide.  It then instituted mortgagee sale proceedings.  The property was sold by this means in April 2008, apparently after the first decision was reserved but before its delivery.  In accordance with that decision Countrywide accounted to the Official Assignee for the balance of the proceeds of sale after satisfaction of its debt.  Following Judge Crosbie’s second decision, the Official Assignee paid $99,477 from this fund to Mascot’s solicitors who in turn disbursed the money to the company’s receivers in August 2010. 

[6]        Section 82 of the Act, which we shall discuss shortly, vests a right of appeal in “a person who has an interest” in the relevant property.[2]  “Interest” in relation to property is defined in s 2 of the Act as meaning either: a legal or equitable estate or interest in the property; or a right, power, or privilege in connection with the property. 

[2]See ss  82(2) and 82(4).

[7]        If we assume for these purposes that this Court had jurisdiction to entertain an appeal, it is plain that Mr Morell’s interest if any in Worcester Street was extinguished when Countrywide sold the property in April 2008.  He had no interest in it when Judge Crosbie delivered his second decision two years later.  Accordingly, he has no right or standing to bring this appeal. 

(b)         Jurisdiction

[8]        In any event, we are satisfied that this Court has no jurisdiction to determine Mr Morell’s appeal. 

[9]        The first decision, which is not subject to appeal, granted the Solicitor-General’s application for orders forfeiting the Worcester Street property.  On 15 May 2009 the Crown applied for directions under s 20 of the Act which materially provides:

20          Minister may apply for directions

(1)         In any case where there is a question as to the validity of any claim made pursuant to section 19(4) of this Act, the Minister may apply to a District Court for directions concerning the claim, and the Court may give such directions in the matter as it thinks just.

(2)Where an application is made under subsection (1) of this section,-

(a)The Minister shall serve notice of the application on every person that the Minister has reason to believe may have an interest in the application:

(b)The Court may, at any time before the final determination of the application, direct the Minister to serve notice of the application on a specified person or class of persons, in such manner and within such time as the Court thinks fit:

(c)Every person who claims an interest in the application is entitled to appear and to adduce evidence at the hearing of the application.

[10]       Judge Crosbie’s second decision determined that application.  As noted, the net proceeds of sale had been held by the Official Assignee in the interim.  The only issue was whether the funds should go to Mascot, the Official Assignee or another creditor entitled to priority over Mascot.  That issue was resolved by the Official Assignee.  Nevertheless a formal order was necessary because the Official Assignee was then holding the funds as the statutory authority under the Act as agent for the Crown. 

[11]       Appeals against orders made under the Act generally are governed by these provisions:

82          Appeals

(1)In this section, relevant conviction, in relation to a forfeiture order, a pecuniary penalty order, or an order under section 29(3) of this Act, means the conviction of a serious offence which was relied on to support the order.

(2)A person who has an interest in property against which a forfeiture order is made may appeal against that order as if the order were a sentence imposed on the person in respect of the relevant conviction.

(3)A person against whom a pecuniary penalty order is made may appeal against that order as if the order were a sentence imposed on the person in respect of the relevant conviction. 

(4)Where a Court makes a pecuniary penalty order and makes an order under section 29(3) of this Act declaring that certain property is available to satisfy the order, a person who has an interest in that property may appeal against the order under section 29(3) of this Act as if the order were a sentence imposed on the person in respect of the relevant conviction.

(5)The Solicitor-General may appeal against a forfeiture order, a pecuniary penalty order, or an order under section 29(3) of this Act, or against the refusal of a Court to make any such order, as if the order or refusal were a sentence imposed in respect of the relevant conviction.

(6)Where an application is made to a Court for an order under section 18 of this Act, the applicant or the Solicitor-General may appeal against the whole or any part of the decision of the Court on that application as if the decision were a sentence imposed,-

(a)In the case of an appeal by the applicant, on the applicant in respect of the conviction in respect of which a forfeiture order is sought or has been made:

(b)In the case of an appeal by the Solicitor-General, in respect of the conviction in respect of which a forfeiture order is sought or has been made.

83          Procedure on appeal

(1)An appeal under section 82 of this Act shall be made to the Court of Appeal, and the provisions of Part 13 of the Crimes Act 1961 shall, with all necessary modifications, apply as if the appeal were an appeal under section 383 of that Act.

(2)On any appeal under section 82 of this Act, the Court of Appeal may confirm the decision or order or refusal appealed against, or vary it, or set it aside and make such other order or decision as the Court of Appeal thinks ought to have been made in the first place. 

[12]       Counsel for the Crown and Mascot submit that the combined effect of these provisions is to limit the right of appeal to this Court to three types of orders made under the Act – a forfeiture order, a pecuniary penalty order and an order under s 29(3). 

[13]       However, the vesting order made by Judge Crosbie did not fall into any of those three categories.  It was an order made on the ground that a forfeiture order had already been made, which was not the subject of appeal, determining an application for directions under s 20 of the Act.  In these circumstances the appropriate course was for Mr Morell, if he had standing and he wished to challenge the decision, to appeal to the High Court under s 72 of the District Courts Act 1947 or to apply by way of review.  He did take either of those steps and we have no jurisdiction to determine his appeal.

Result

[14]       Mr Morell’s appeal is dismissed. 

Solicitors:

Crown Law Office, Wellington for Respondent