COMMISSIONER OF NEW ZEALAND POLICE v HE [2023] NZHC 1326

COMMISSIONER OF NEW ZEALAND POLICE v HE [2023] NZHC 1326 [30 May 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-2685[2023] NZHC 1326UNDER the Criminal Proceeds (Recovery) Act 2009BETWEEN COMMISSIONER OF NEW ZEALANDPOLICEApplicantAND WEI DA HEFirst RespondentYUMEI LISecond RespondentHearing: On the papersAppearances: S M Earl and LSN Lai for ApplicantE Ho and L James for First RespondentA Speed for Second RespondentJudgment: 30 May 2023JUDGMENT OF MANDER J[1] The Commissioner of Police (the Commissioner) and Ms Yumei Li seek ordersof the Court, pursuant to s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act),approving a settlement reached between them.[2] Ms Li and her partner, Mr He, were arrested on 4 December 2019 followingthe execution of search warrants at two properties, including a Housing New Zealandproperty tenanted by Ms Li at 22 Simmonds Avenue where $51,995 in cash and 2.4 kgof methamphetamine were located. While the police were searching this address,Ms Li arrived driving a Honda Touring motor vehicle (the Honda vehicle).[3] Ms Li was found guilty following a jury trial on 13 August 2021 on a chargeof permitting premises to be used for the commission of an offence against the Misuseof Drugs Act 1975.1 She was sentenced to 10 months' home detention.[4] On 6 March 2020, Katz J made a restraining order in respect of the Hondamotor vehicle registered to Ms Li. A sale order was also made at that time in respectof the vehicle.2[5] On 28 May 2020, Muir J approved a settlement agreement between theCommissioner and Mr He. As part of the settlement, Mr He agreed to abandon anyand all claims he had to the Honda vehicle and consented to its forfeiture.3[6] Subsequently, on 13 December 2022, the Commissioner filed an applicationfor civil forfeiture orders. The Commissioner and Ms Li have now agreed to settle thematter of civil forfeiture of assets between them which, subject to the Court's approval,will bring the Commissioner's application to an end.Relevant principles[7] Section 95 of the Act governs settlement, and provides:95 High Court must approve settlement between Commissioner andother party(1) The Commissioner may enter into a settlement with any person as tothe property or any sum of money to be forfeited to the Crown.(2) A settlement does not bind the parties unless the High Court approvesit.(3) The High Court must approve the settlement if it is satisfied that it isconsistent with—(a) the purposes of this Act; and(b) the overall interests of justice.1 Misuse of Drugs Act 1975, s 12(1) and (2)(a) — maximum penalty 10 years' imprisonment.2 Criminal Proceeds (Recovery) Act 2009, ss 33-35.3 Commissioner of Police v He [2020] NZHC 1145 at [17](c).[8] Section 95 requires this Court to be satisfied that the overall interests of justiceare consistent with such a settlement. This indicates a broad enquiry is required thatincludes regard being had to the savings of time and costs, and the litigation risk to theparties.4 The Court has recognised that decisions to settle proceedings can be madefor economic and pragmatic reasons that often reflect a common sense compromisebetween the parties.5[9] As noted in counsel's joint memorandum, Parliament is likely, whenempowering the Commissioner to enter into settlement agreements, to have had thisin mind, and in particular the significant costs associated with civil litigation and thebenefits to all parties from being able to resolve claims by consent. I accept there is astrong public interest in litigation of this kind being brought to a prompt conclusionprovided the settlement reflects the likely costs and risks inherent in the determinationof a contested application of this type.The proposed settlement[10] The terms of the proposed settlement are:(a) an assets forfeiture order be made under s 50(1) of the Act, by consent,over the sale proceeds of the Honda vehicle, and any interest accrued;(b) Ms Li agrees to abandon any and all claims she has (under the Act orotherwise) to the Honda vehicle;(c) the Commissioner will not pursue an application for a profit forfeitureorder against Ms Li in respect of the significant criminal activityalleged in this proceeding to date;(d) the settlement is in full and final settlement of the civil forfeitureapplication (dated 13 December 2022) brought by the Commissioneragainst Ms Li under the Act; and4 Commissioner of Police v Zhang [2016] NZHC 930 at [8].5 Commissioner of Police v Douglas [2015] NZHC 1293 at [6].(e) the costs in relation to the matter between the Commissioner and Ms Liare to lie where they fall.[11] The approximate value of the property being forfeited is $25,742.70.Discussion[12] I am satisfied the proposed settlement is consistent with the purpose of the Actand the overall interests of justice. In reaching that conclusion, I have taken intoaccount the following considerations:(a) There will be significant savings of time and cost from the matter beingresolved by consent which will obviate the need for the Commissionerto expend time and resources in pursuing his application in respect ofproperty of relatively low value.(b) I accept there is a good case to show the Honda vehicle is taintedproperty because there is evidence that it has wholly (or in part) beenacquired as a result of significant criminal activity, namely the supply(including sale) of methamphetamine, and permitting premises to beused for the commission of an offence against the Misuse of Drugs Act1975. It follows that the proceeds of its sale would be liable to beforfeited. Alternatively, as contended by the Commissioner, Ms Li hasunlawfully benefited from significant criminal activity to the value ofat least as much as approximately $66,500, and the property is thereforeliable to be forfeited to meet a profit forfeiture order.(c) Ms Li, by her own admission and at trial, admitted that Mr He fundedthe purchase of the Honda vehicle and that she was well aware of hisdealing activities but deliberately turned a blind eye in order to enjoythe benefits of her relationship with him. Mr He pleaded guilty to andwas convicted of a representative charge of supplyingmethamphetamine and two charges of possessing that drug for supply.He received a total of $1,393,071.50 in unexplained cash deposits andinternational money transfers. In the same period Ms Li's only form oflegitimate income was from a benefit. Having regard to Ms Li'sadmissions and her minimal income, there is a firm basis for theCommissioner's position that the purchase of the Honda vehicle waslikely funded by Mr He's methamphetamine offending, and that Ms Liunlawfully benefited from facilitating that offending.(d) The form of the proposed settlement is such that it will ensure the saleproceeds of the Honda vehicle will be forfeited.(e) There are no other substantial assets belonging to Ms Li of which theCommissioner is aware that could be realised to satisfy a profitforfeiture order.(f) While Ms Li disputes aspects of the Commissioner's case against her,she acknowledges a contested hearing carries risks for her. An agreedsettlement will allow the parties to have certainty and control as to theoutcome of the proceeding.[13] I therefore approve the settlement, pursuant to s 95(2) of the Act.Result[14] I make (by consent) the following orders:(a) An assets forfeiture order under s 50(1) of the Act on the terms that thefollowing property vests in the Crown absolutely and is to pass into theOfficial Assignee's custody and control:(i) the sale proceeds of the Honda vehicle, approximately $25,110,and any interest accrued.(b) Costs are to lie where they fall in relation to all matters between theCommissioner and Ms Li.[15] In addition, I record the following terms of the agreed settlement:(a) Ms Li agrees to abandon any and all claims she has under the Act orotherwise to the Honda vehicle or any of the other property that hasbeen restrained in this proceeding;(b) the Commissioner will not pursue an application for a profit forfeitureorder against Ms Li in relation to the significant criminal activityalleged to underlie this proceeding;(c) the settlement is in full and final settlement of the civil forfeitureapplication (dated 13 December 2022) brought by the Commissioneragainst Ms Li under the Act.Solicitors:Crown Solicitor, AucklandFocus Law, AucklandAndrew Speed, Auckland