COMMISSIONER OF NEW ZEALAND POLICE v MATTHEW AARON ROWLAND [2019] NZHC 3314

COMMISSIONER OF NEW ZEALAND POLICE v MATTHEW AARON ROWLAND [2019] NZHC 3314 [13December 2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2018-485-166[2019] NZHC 3314UNDER the Criminal Proceeds (Recovery) Act 2009IN THE MATTER OF an application under ss 21,24 and 25BETWEEN COMMISSIONER OF NEW ZEALANDPOLICEApplicantAND MATTHEW AARON ROWLANDFirst RespondentAND ASHLEIGH MARIE ZAMMITSecond RespondentAND NICOLA ELIZABETH ALLENFirst Interested PartyAND MARTIN ALBERT ZAMMITSecond Interested PartyHearing: 9 December 2019Appearances: S B McCusker for ApplicantV Nisbet and P Paino for Second RespondentJudgment: 13 December 2019JUDGMENT OF GRICE JIntroduction[1] The applicant (the Commissioner) seeks an on notice application forrestraining orders, effective control orders, and sale orders against property held bythe first and second respondents under the Criminal Proceeds (Recovery) Act 2009(the Act).[2] Mr Rowland and Ms Zammit have both reached terms of settlement with theCommissioner. The Court's approval of these settlements is sought under s 95 of theAct.[3] This proceeding is related to Commissioner of Police v Peita.1 A settlementmemorandum for Peita has also been filed. The respondent in that proceeding, MrStephen Peita, is an associate of Mr Rowland. The restrained property in thatproceeding includes a Chevrolet motor vehicle registered in Mr Peita's name. MrPeita's position is that this vehicle was at all times under the effective control ofMr Rowland. Mr Rowland acknowledges that this vehicle was under his effectivecontrol, and should be forfeit pursuant to his proposed profit forfeiture order in thisproceeding.Background[4] On 13 September 2018, Mr Rowland was convicted on seven charges inrelation to the importation, possession and supply of a class C controlled drug.[5] Mr Rowland agrees that he received an unlawful benefit of $1,750,000 as aresult of his significant criminal activity.[6] As part of a proposed settlement, Mr Rowland has agreed to a profit forfeitureorder for $1,7500,000. He also agrees that all property currently held under restraintwill be forfeit to the Crown save for the following items which will be returned toMr Rowland:(a) A gold bracelet seized from the first respondent at the time of his arreston 8 March 2018.(b) A gold necklace seized from the first respondent at the time of his arreston 8 March 2018.1 Commissioner of Police v Peita, CIV-2018-485-165.(c) A Rolex watch seized from 41 Te Puia Drive, Aotea, Porirua on 8 March2018.[7] The restrained property will include the Chevrolet motor vehicle inCommissioner of Police v Peita referred to above.2[8] The settlement outlined above is proposed to be full and final settlement of thisproceeding against Mr Rowland. Costs are to lie where they fall.Proposed resolution[9] On 16 August 2018, Ms Zammit pleaded guilty to one representative charge ofmoney laundering.[10] As part of a proposed settlement, Ms Zammit disclaims any interest in theproperty said to be registered in her name, on the basis that it was all material timesunder the sole effective control of Mr Rowland. This property is to be forfeit as partof the profit forfeiture order agreed as part of Mr Rowland's settlement.[11] However, Ms Zammit continues to maintain an interest in a 2014 Mini Coopermotor vehicle currently subject to restraint orders.[12] The 2014 Mini was purchased with a $15,000 loan provided by Ms Zammit'sparents and an $8,000 trade-in of a 2003 Mini Cooper motor vehicle registered inMs Zammit's name. Ms Zammit acknowledges that the 2003 Mini Cooper waspurchased through the proceeds of her significant criminal offending.[13] On the basis that the 2014 Mini was acquired through a combination oflegitimate and tainted funds, the Commissioner and Ms Zammit have agreed that$8,000 (being the trade-in value of the tainted 2003 Mini) should be forfeit to theCrown as part of an assets forfeiture order.2 Commissioner of Police v Peita, at 1, above.[14] If the settlement is approved on receipt of the funds, the Commissionerproposes to return the 2014 Mini to its registered owner, Mr Martin Zammit.BackgroundOperation Manuka[15] In 2017, the Wellington District Covert Operations Group Drug Squadcommenced a criminal investigation called 'Operation Manuka' targeting theimportation and sale of large quantities of the class C controlled drug N-Ethylpentylone, primarily focussing on Mr Rowland and his associates.[16] Two without notice restraining orders were granted by the Court in thisproceeding. The first related to assets held by Mr Rowland and Ms Zammit inNew Zealand. The second concerned various assets held by Mr Rowland in theUnited Kingdom.The first restraining order[17] On 7 March 2018, the Commissioner made a without notice application forrestraining order in respect of property held by Mr Rowland and Ms Zammit. A globalorder was sought in respect of all property located on termination of OperationManuka.[18] The without notice restraining order was granted by the Court on 7 March2018.[19] On 8 March 2018, the police terminated Operation Manuka. Mr Rowland andMs Zammit were arrested and charged the same day.[20] On 13 March 2018, the applicant filed its first on notice application forrestraining orders. The first on notice application related to property which wassubject to the earlier without notice restraining order, as well as property which waslocated and restrained following termination of Operation Manuka.[21] An amended version of the first on notice application was filed with the Courton 10 May 2018. The property subject to this application was extensive.The second restraining order[22] Following termination of Operation Manuka, the Commissioner conducted ananalysis of bank accounts belonging to Mr Rowland, Ms Zammit and other interestedparties. The analysis revealed the transfer from these accounts to bank accounts heldby Mr Rowland in the United Kingdom.[23] Further investigation of Mr Rowland's bank records revealed the existence ofseveral properties in the United Kingdom which he appeared to have an ownershipinterest in.[24] On 20 April 2018, the Commissioner filed an application for a without noticerestraining order in respect of the property held by Mr Rowland in theUnited Kingdom, as well as his United Kingdom bank accounts.[25] The without notice restraining order was granted by the Court on 26 April2018.3 An on notice application in respect of this property was filed on 2 May 2018.[26] The restraining order relates exclusively to assets held by Mr Rowland in theUnited Kingdom.[27] Following the grant of orders in New Zealand, a request was made by theAttorney-General to the United Kingdom pursuant to s 21 of the Mutual Assistance inCriminal Matters Act 2002 (MACMA) for enforcement of the restraining order.[28] A restraining order was made by the Crown Court at Preston on 10 July 2018under the UK Proceeds of Crimes Act 2002 (the POCA Restraining Order) in relationto these assets.3 Commissioner of New Zealand Police v Rowland & Zammit, HC Wellington CIV-2018-485-166,26 April 2018 (Order of Simon France J).Mr Rowland's sentencing[29] On 28 June 2018 Mr Rowland pleaded guilty to the following chargesfollowing a sentencing indication hearing:(a) One charge of conspiring to import a class C controlled drug, pursuantto s 6(2A)(c) of the Misuse of Drugs Act 1975 (MODA).(b) One charge of importing a class C controlled drug, pursuant toss 6(1)(a) and 2(c) of the MODA.(c) Three charges of supplying a class C controlled drug pursuant to ss6(1)(e) and 2(c) of the MODA.(d) One charge of possession of a Class C controlled drug for sale, pursuantto ss 6(1)(f) and 2(c) of the MODA.[30] The notes of sentencing indication record that Mr Rowland organised 28imports of N-elthylpentylone from a two year period from April 2016 to March 2018.The importations totalled 17.3 kg, with a street value of at least $1,750,000.[31] On 13 September 2018, Mr Rowland was sentenced to four years and sevenmonths imprisonment.Ms Zammit's sentencing[32] On 16 August 2018, Ms Zammit pleaded guilty to one representative charge ofmoney laundering.[33] The Summary of Facts establish that Ms Zammit laundered $219,489 in theproceeds of Mr Rowland's drug dealing.Jurisdictional issues regarding enforcement of restraining order[34] As noted above, several of the restrained assets in this proceeding are locatedin the United Kingdom.[35] As the Commissioner and the respondent agree that this property should beforfeit, the Attorney-General will be required to make a request to United Kingdomauthorities pursuant to s 21(b) of the MACMA.[36] If the proposed settlement is approved by the Court, a mutual assistance requestwill be made by the Commissioner to Crown Law. On receipt of the request, it isanticipated that the authorities in the United Kingdom will deal with the order underthe Proceeds of Crimes Act 2002 (UK) and apply for orders necessary in thatjurisdiction.Mr Rowland and Ms Zammit's interests in the property to be forfeitMr Rowland's interests in the property to be forfeitMr Rowland's interests[37] Mr Rowland acknowledges that he either has an ownership interest in, oreffective control of, the property referred to at paragraph (c) of the draft profitforfeiture order attached.[38] He agrees that the property should be forfeit on that basis.Ms Allen's interests[39] The property referred to at paragraphs (c)(iii), (vii), (xiv)–(xvii) of the draftprofit forfeiture order (attached) are said to be registered in the name of the firstinterested party, Ms Nicola Elizabeth Allen (Ms Allen).[40] Ms Allen is Mr Rowland's mother. She acknowledges having no interest inthe property said to be registered in her name, and agrees that it is under Mr Rowland'seffective control. She is a signatory to the memorandum for that purpose.Mr Peita's Chevrolet[41] A 1991 Chevrolet C1500 Utility motor vehicle, registration plate KES455 (theChevrolet) is restrained pursuant to a without notice restraining order in theproceedings relating to Mr Rowland's associate, Mr Peita.[42] Mr Peita has disclaimed any interest in the Chevrolet on the basis that it was atall times under the effective control of Mr Rowland.[43] Mr Rowland accepts that the Chevrolet was under his effective control, andshould be forfeit pursuant to a profit forfeiture order in his name.Ms Zammit's interest in the property to be forfeit[44] The amended on notice application for restraining order dated 10 May 2018records the following property allegedly owned by Ms Zammit:(a) All interests in the property situated at 117 Grey Street, Woodville,registered in the name of Ashleigh Marie Zammit, and described incertificate of title HBP2/1011, legal description Lot 4 DP 22562 (theGrey Street Property); and(b) A 2006 Audit motor vehicle including ignition keys, registration plateB5GHL, and registered in the name of Ashleigh Marie Zammit (theAudi).[45] Ms Zammit disclaims any interest in the Grey Street property and the Audi onthe basis that both items of property were under the effective control of Mr Rowland.Mr Rowland acknowledges and accepts that the Grey Street property and the Audiwere under his effective control at all material times.[46] Ms Zammit also disclaims any interest in property said to be under her jointeffective control with Mr Rowland, on the basis that Mr Rowland exercised effectivecontrol over that property at all material times.[47] The exception to this is the property referred as:A 2014 Mini Cooper motor vehicle including ignition keys, registration plateKUK259, and registered in the name of the second interested party, MartinAlbert Zammit and under the effective control of the respondents (Rowland)and (Zammit) (the 2014 Mini).[48] Mr Rowland agrees that, with the exception of the 204 Mini, he exercised soleeffective control over all the property currently under restraining and which is intendedto be subject to the proposed profit forfeiture order.The 2014 Mini[49] The 2014 Mini was purchased on 17 February 2018 for $23,000.[50] The vehicle was purchased with a $15,000 loan provided by Ms Zammit'sparents and an $8,000 trade-in on a 2003 Mini Cooper (the 2003 Mini), the registrationplate BSM535, registered in the name of Ms Zammit.[51] The 2014 Mini was registered in the name of Ms Zammit's father, Mr MartinZammit. The affidavit in support of the without notice restraining order notes thatMr Zammit offered to put the vehicle into his name on the basis that he may laterpurchase it off Ms Zammit.[52] The Commissioner has undertaken inquiries of the previous owner of the 2003Mini who confirms that $8,400 was deposited into a UDC Finance account to pay forthe vehicle. There is no evidence of withdrawals from Mr Rowland's or Ms Zammit'sbank accounts around this time to account for payment of the vehicle.[53] The Commissioner, Ms Zammit, and Mr Rowland agree that the 2003 Miniwas acquired with funds procured from Ms Zammit's significant criminal activity.Consequently, the parties further agree that Ms Zammit's interest of $8,000 in the 2014Mini is tainted property for the purposes of s 5 of the Act.[54] The Crown accept that Mr Zammit had no knowledge of, or involvement with,the significant criminal activity undertaken by the respondents. As registered ownerof the vehicle, he consents to the release of the 2014 Mini in the manner outlined inthe draft asset forfeiture order attached. He is a signatory to the settlementmemorandum for that purpose.Proposed settlement for Mr Rowland[55] The Commissioner and Mr Rowland agree:(a) Mr Rowland has been involved in significant criminal activity asdefined by s 6 of the Act.(b) Mr Rowland received an unlawful benefit of $1,750,000 from hissignificant criminal activity for the purposes of s 53 of the Act.(c) The maximum recoverable amount under s 54 of the Act is $1,750,000.(d) The property to be disposed of are those assets listed at paragraph (c)of the draft profit forfeiture order (attached). This will include theChevrolet restrained in the proceedings Commissioner of Police vPeita.4(e) On the granting of the orders, the following items should be releasedfrom restraint and returned to Mr Rowland:(i) The gold watch;(ii) The gold necklace; and(iii) The Rolex.[56] The parties have agreed the proposed settlement will be in full and finalsettlement of any claims the Commissioner may have against Mr Rowland and costswill lie where they fall.4 Commissioner of Police v Peita HC Wellington CIV-2018-485-165.Approval of settlement[57] The Commissioner and Mr Rowland sought approval of the High Court for thissettlement pursuant to s 95 of the Act on the grounds that it is consistent with thepurposes of the Act and the other overall interests of justice.[58] In the parties' submission:(a) The assets to be forfeit are valued at approximately between $1,640,000to $1,750,000.(b) All assets accepted to be under Mr Rowland's ownership or effectivecontrol – save for the gold watch, the gold necklace and the Rolex – areto be forfeit to the Crown. The Commissioner is not aware of any otherassets of value belonging to Mr Rowland which are capable of beingforfeit.(c) The gold watch, gold necklace and Rolex are valued at approximately$24,800. Valuations were produced. The Commissioner acknowledgesthese have sentimental value for Mr Rowland.(d) Further given the costs of any potential litigation relative to the valueof these items, the Commissioner submits that the settlement reachedis fair and equitable.Proposed settlement for Ms Zammit[59] The Commissioner and Ms Zammit have agreed subject to orders of the Courtthat:(a) Ms Zammit disclaims any interest in all of the property restrained inthis proceeding with the exception of the 2014 Mini.(b) Ms Zammit's $8,000 interest in the 2014 Mini was directly or indirectlyderived from her significant criminal activity and is tainted property forthe purposes of s 5 of the Act.(c) An asset forfeiture order is to be made in relation to funds totalling$8,000 which are to be deposited by Ms Zammit into the New ZealandInsolvency & Trustee Service Proceeds of Crime Account.(d) Upon approval of this settlement by the Court:(i) Ms Zammit will deposit $8,000 into the Trust Account.(ii) On forfeiture of the funds, the Commissioner will return the2014 Mini to its current registered owner, Mr Zammit.(iii) This settlement will be in full and final settlement of any claimsthe Commissioner may have against Ms Zammit in CIV-2018-485-166. Costs will lie where they fall.(iv) Mr Zammit, as registered owner of the 2014 Mini, consents toan order being made on this basis.Approval of settlement[60] The Commissioner and Ms Zammit seek approval of the High Court for theproposed settlement pursuant to s 95 of the Act on the grounds that it is consistent withthe purpose of this Act and the overall interests of justice.[61] In my view the agreed settlement is consistent with the purpose of the Act andthe overall interests of justice as:(a) The settlement amount of $8,000 represents the totality ofMs Zammit's tainted interest in the 2014 Mini.(b) While Ms Zammit pleaded guilty to laundering the proceeds ofMr Rowland's significant criminal activity to the amount of $219,489,and there are other restrained assets in Mr Rowland's name (notablythe Audi and Grey Street property) which may be able to meet a profitforfeiture order, Ms Zammit has disclaimed in any interest in thisproperty on the grounds that it was at all times under Mr Rowland'seffective control. As noted above, the Audi and the Grey Streetproperty will be forfeit by Mr Rowland as part of his proposed profitforfeiture order. On the basis that all other property under restraint willbe subject to Mr Rowland's profit forfeiture order, there are no knownassts belonging to Ms Zammit which might be able to meet thisshortfall.Orders sought by consent[62] The Commissioner and Mr Rowland agree that the following orders anddirections can be made by consent:(a) That the profit forfeiture orders can be made in terms of the draft orderattached.(b) Costs are to lie where they fall.[63] The Commissioner and Ms Zammit agree that the following orders anddirections can be made by consent:(a) That the asset forfeiture orders be made by consent in terms of the draftorder attached.(b) Following the making of the order and the transfer of the $8,000 to theTrust Account, the Commissioner is to return the 2014 Mini to itsregistered owner, Mr Zammit.(c) Once those orders have been granted, these proceedings againstMs Zammit will be at an end.(d) Costs are to lie where they fall.[64] I am satisfied on the basis set out above that the grounds have been made outfor the orders sought in terms of s 58 of the Act (the property is to be treated as thoughhe has an interest in it) and/or s 25 that the relevant party has benefited from significantcriminal activity as set out above.[65] Orders are made accordingly._________________Grice JSolicitors:Crown Law Office, Wellington for RespondentSCHEDULEProperty – RowlandDRAFT ORDER(a) The value of the benefit determined in accordance with s 53 of the Actis $1,750,000;(b) The maximum recoverable amount is $1,750,000; and(c) The following property is to be realised:(i) All interests in the property situated at 117 Grey Street,Woodville, registered n the name of Ashleigh Marie Zammit,and described in certificate of title HBP2/1011, legal descriptionLot 4 DP 225562, which is unencumbered and under theeffective control of the first respondent (Rowland)(the GreyStreet property);(ii) All interests in a removable house identified by the referenceS570 and currently stored at Alpha Specialised Movers Limited,1110 Maymorn Road, Maymorn, Upper Hutt and under theeffective control of the first respondent (Rowland)(theremovable house);(iii) A 2013 Holden HSV Clubsport motor vehicle including ignitionkeys, registration plate HDD135, and registered in the name ofthe first interested party, Nicola Elizabeth Allen and under theeffective control of the first respondent (Rowland) (the Holden);(iv) A 2007 Mercedes-Benz motor vehicle including ignition keys,registration plate JAH195, and registered in the name of the firstrespondent (Rowland)(the Mercedes-Benz);(v) A 2006 Audi motor vehicle including ignition keys and apersonalised registration plate BADRS4, and registered in thename of the second respondent (Zammit)(the Audit);(vi) A 2013 Harley Davidson motor cycle including ignition keys,registration plate B5GHL, and registered in the name of the firstrespondent (Rowland) (the 2013 Harley Davidson);(vii) A 2012 Harley Davidson motorcycle including ignition keys,registration plate A6TAK, and registered in the name of the firstinterested party, Nicola Elizabeth Allen and under the effectivecontrol of the first respondent (Rowland)(the 2012 HarleyDavidson);(viii) Approximately $3,781.91 in funds, being the contents of a Bankof New Zealand bank account numbered 0772-003607-00 in thename of Matthew Rowland and under the effective control ofthe respondent (Rowland);(ix) Cash totalling $1,912.60 seized from the first respondent at thetime of his arrest on 8 March 2018;(x) A Mercedes-Benz wheel with tyre seized from 41 Te Puia Drive,Aotea, Porirua on 8 March 2018;(xi) Cash totalling $13,088.30 seized from 41 Te Puia Drive, Aotea,Porirua on 8 March 2018;(xii) 14.13 Bit Coins seized from the first respondent's virtual onlinewallet on 8 March 2018;(xiii) 34.999601 Ethereum seized from the first respondent's virtualonline wallet on 8 March 2018;(xiv) Cash totalling $250,000 seized from a storage locker at All SafeStorage, 1 Heriot Drive, Porirua on 8 March 2018 registered inthe name of the first interested party, Nicola Elizabeth Allen andunder the effective control of the first respondent (Rowland);(xv) Four matching Mercedes-Benz wheels and tyres seized from astorage locker at All Safe Storage, 1 Heriot Drive, Porirua on 8March 2018 registered in the name of the first interested party,Nicola Elizabeth Allen, and under the effective control of thefirst respondent (Rowland);(xvi) One Mercedes-Benz wheel and tyre seized from a storage lockerat All Safe Storage, 1 Heriot Drive, Porirua on 8 March 2018registered in the name of the first interested party, NicolaElizabeth Allen, and under the effective control of the firstrespondent (Rowland);(xvii) Cash totalling $155,000 seized from a storage locker at StorageOne, 4 Jupiter Grove, Trentham, Upper Hutt on 8 March 2018registered in the name of the first interested party, NicolaElizabeth Allen, and under the effective control of the firstrespondent (Rowland);(xviii) $6,547.97, being a refund from Mitre 10 Porirua of a cashdeposit paid by the first respondent (Rowland) for a kitchen andbathroom suite for the removable house, currently being held bythe Official Assignee;(xix) A refundable bond of $2,400 held by Tenancy Services butunder the effective control of the first respondent (Rowland);(xx) All interests in the property situated at 18 Orme Street,Blackpool, FY1 4AL, United Kingdom, registeredin the nameof Matthew Aaron Rowland, and described in certificate of titleLA452692, which is unencumbered and under the effectivecontrol of the first respondent (Rowland) (the 18 Orme Streetproperty);(xxi) All interests in the property situated at 19 Orme Street,Blackpool, FY1 4AL, United Kingdom, registered in the nameof Matthew Aaron Rowland, and described in certificate of titleLAN130921, which is unencumbered and under the effectivecontrol of the respondent (Rowland)(the 19 Orme Streetproperty);(xxii) All interests in the property situated at 33 Montrose Avenue,Blackpool, FY1 4AS, United Kingdom, registered in the nameof Matthew Aaron Rowland, and described in certificate of titleLA749794, which is unencumbered and under the effectivecontrol of the respondent (Rowland)(the Montrose Avenueproperty);(xxiii) All interests in the property situated at 40 South King Street,Blackpool, FY1 4NJ, United Kingdom, registeredin the nameof Matthew Aaron Rowland, and described in certificate of titleLA657978, which is unencumbered and under the effectivecontrol of the respondent (Rowland) (the South King Streetproperty);(xxiv) The contents of a Halifax bank account number: 12287962 andSort Code number: 11-00-65 in the name Matthew Rowland,with a balance of just under £48,330.52 as at 19 April 2018, andunder the effective control of the respondent (Rowland);(xxv) The contents of a Royal Bank of Scotland account number:10191133 and Sort Code number: 16-30-25 in the name ofMatthew Rowland, with a balance of £61,000 as at 16 April2018 and under the effective control of the respondent(Rowland);(xxvi) The contents of a Co-Operative Bank account number:05208917 and Sort Code number: 08-90-66 in the nameMatthew Rowland, with a balance of £18,300 as at 16 April2018, and under the effective control of the respondent(Rowland); and(xxvii) The net rental income, after deductions for contractual propertymanagement fees and maintenance costs, earned from theproperties described in subparagraphs (xxiii)-(xxvi) above.(xxviii) A 1991 Chevrolet C1500 Utility motor vehicle includingignition keys registration plate KES455, registered in the nameof Steven Trent Peita and under the effective control of therespondent (Rowland) (the Chevrolet), and currently restrainedint e proceeding Commissioner, The New Zealand Police v PeitaCIV-2018-485-165.[66] The following property is to be returned to the first respondent:(a) A gold bracelet seized from the first respondent at the time of his arreston 8 March 2018;(b) A gold necklace seized from the first respondent at the time of his arreston 8 March 2018;(c) A Rolex watch seized from 41 Te Puia Drive, Aotea, Porirua on 8 March2018.[67] The following property is property over which the Court is satisfied thatMatthew Aaron Rowland has effective control of the items of property referred to atparagraphs 4(c)(1)-(iii), (vii)–(viii), (xiv)–(xxvi) and (xxviii).Property – Zammit(a) Funds totalling $8,000 to be deposited by the second respondent,Ms Ashleigh Marie Zammit, into the New Zealand Insolvency &Trustee Service Proceeds of Crime Account.