Commissioner of Police v Parkes [2019] NZHC 397

Commissioner of Police v Parkes [2019] NZHC 397 [11 March 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2016-404-590[2019] NZHC 397UNDER Criminal Proceeds (Recovery) Act 2009BETWEEN COMMISSIONER OF POLICEApplicantAND GERRARD GORDON PARKESFirst RespondentWHITNEY CHANTEL HARRISSecond RespondentROGER EMMANUEL AL HACHACHEThird RespondentTONI CLARE NIKORAFourth RespondentHearing On the papersCounsel: K Eastwood for applicantRM Mansfield for fourth respondentJudgment: 11 March 2019JUDGMENT OF FITZGERALD J[As to approval of settlement]This judgment was delivered by me on 11 March 2019 at 3:30pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors: Meredith Connell, AucklandTo: RM Mansfield, Auckland[1] The Commissioner of Police and the fourth respondent (Ms Nikora) apply byjoint memorandum for Court approval of a settlement pursuant to s 95 of the CriminalProceeds (Recovery) Act 2009 (the Act).Background[2] Counsel for the parties explain in their joint memorandum that between August2015 and early 2016, the Police carried out a large-scale criminal investigationtargeting a number of individuals, including Ms Nikora, who were believed to beinvolved in the manufacture and supply of methamphetamine and other controlleddrugs.[3] The investigation established that one of the respondents manufacturedmethamphetamine which was then on-sold to Ms Nikora. Ms Nikora in turn on-supplied the methamphetamine to a number of customers in smaller quantities.[4] On 2 March 2016, Police searched Ms Nikora's address and seized varioussums of cash with a total value of $10,910. A quantity of methamphetamine was alsoseized. As a result, Ms Nikora was arrested and charged with the possession of a ClassA controlled drug for supply.[5] Execution of further search warrants later in March 2016 resulted in Ms Nikorabeing charged with further drug-related offences. Ms Nikora ultimately pleaded guiltyto a range of drug-related charges, including 64 charges of supplyingmethamphetamine.[6] Ms Nikora was sentenced in December 2017 to 10 years' imprisonment, witha minimum period of imprisonment of four years.[7] In parallel to the above, between March and November 2016, theCommissioner applied for and obtained seven sets of restraining orders in relation tovarious property associated with Ms Nikora and others who were the subject of theinvestigation. The total value of the restrained property attributed to Ms Nikora isapproximately NZ$12,370 (plus interest accruing on those funds since their initialrestraint). I say "approximately", given a small portion of the seized property is cashin foreign denominations.[8] On 3 August 2018, the Commissioner filed an application for civil forfeitureorders for all of the property restrained in relation to this matter as at that date. TheCommissioner and Ms Nikora have agreed to settle the question of the civil forfeitureof assets as between themselves, subject to the Court's approval under s 95 of the Act.The settlement[9] The proposed terms of settlement as between the Commissioner andMs Nikora are as follows:(a) assets forfeiture orders would be made by consent under s 50 of the Actover all of the restrained property attributed to Ms Nikora, that is, theNew Zealand cash and foreign cash seized from 42/26 Mary Street;(b) the Commissioner will not pursue his application for profit forfeitureorders against Ms Nikora and that application would be dismissed;(c) the settlement would be in full and final settlement of the currentproceedings against Ms Nikora, and any other proceedings that mightbe brought by the Commissioner against Ms Nikora under the Actarising out of, or relating directly to, the 'Operation Bunk' criminalinvestigation;(d) in accordance with (c), Ms Nikora would abandon all claims she mighthave in relation to any of the property restrained in this matter, eitherunder the Act or otherwise, and would undertake not to take any stepsto oppose the civil forfeiture of that property; and(e) costs would lie where they fall.Legal principles[10] The legal principles are not in dispute and have been addressed on a numberof occasions in recent High Court decisions. I can do no better than respectfully adoptthe recent summary by Muir J in Commissioner of Police v Wellington:1[10] Section 95 of the Act governs settlements and provides:95 High Court must approve settlement between Commissionerand other party(1) The Commissioner may enter into a settlement with anyperson as to the property or any sum of money to be forfeitedto the Crown.(2) A settlement does not bind the parties unless the High Courtapproves it.(3) The High Court must approve the settlement if it is satisfiedthat it is consistent with—(a) the purposes of this Act; and(b) the overall interests of justice.[11] In enacting s 95, Parliament expressly empowered the Commissionerto enter into settlements with respondents (and interested parties) relating tothe forfeiture of assets. I accept the proposition in the parties' jointmemorandum that Parliament is likely to have had in mind the significantcosts associated with a civil litigation and the benefits to all parties if suchproceedings could be resolved in a timely and just way. There is a strongpublic interest in litigation of this nature being brought to a prompt conclusionprovided the settlement reflects the likely costs and risks inherent in theunderlying litigation. Parliament has entrusted the Court with supervisoryjurisdiction aimed at ensuring any settlements reached are consistent with itsintent in enacting the legislation and with the overall interests of justice.2[12] Section 95(3) directs the Court to consideration of the purposes of theAct and the overall interests of justice.[13] The primary purpose of the Act is contained in s 3(1). That is theestablishment of a regime for forfeiture of property that has been deriveddirectly or indirectly from significant criminal activity or that represents thevalue of a person's unlawfully derived income. Ancillary purposes are to"eliminate the chance" for persons to profit from undertaking or beingassociated with significant criminal activity (s 3(2)(a)) and to "deter"significant criminal activity (s 3(2)(b)).1 Commissioner of Police v Wellington [2018] NZHC 2502 (footnotes in original).2 Commissioner of Police v Know-All Group Ltd HC Auckland CIV-2010-404-403, 7 November2011, per Brewer J at [11].[14] The overall interests of justice requirement predicates a broad inquiry.As this Court has previously said, although it is proper that it should have asupervisory jurisdiction, it is "equally important that the Court carry out abroad inquiry and acknowledge, where appropriate, that settlements can be inthe interests of justice, bearing in mind the savings of time and cost and thelitigation risks to the parties".3[15] The Court has recognised that decisions to settle proceedings underthe Act may be made on economic and pragmatic grounds and often reflect "acommon-sense compromise" between the parties.4[16] If the Court is satisfied in respect of the two matters identified ins 95(3) then it must approve the settlement.Analysis[11] Having reviewed the papers and considered the matters raised in counsels' jointmemorandum, I am satisfied it is appropriate to approve the proposed settlement.[12] A key factor is that all of the restrained assets attributable to Ms Nikora are tobe forfeit under the proposed settlement. Counsel note there is also a profit forfeitureorder being sought by the Commissioner, at a value of $391,329. There is obviouslya relatively large shortfall between the value of the currently restrained propertyattributable to Ms Nikora and the value of the profit forfeiture order. However, theCommissioner is not aware of any unrestrained assets of significant value held byMs Nikora which might be available to meet that shortfall. The Commissionertherefore considers that in the circumstances of this case, there would be little utilityin pursuing a profit forfeiture order for a sum that is very unlikely to be recovered infull. There would inevitably be further costs involved in pursuing such an order, andin my view, the Commissioner is entitled to take a pragmatic and realistic approach tothe utility of pursuing such an order, versus the likelihood of securing any substantialbenefit from it.[13] I am accordingly satisfied that the proposed settlement is consistent with thepurposes of the Act as well as being in the overall interests of justice.3 Commissioner of Police v Zhang [2016] NZHC 930 at [8].4 Commissioner of Police v Douglas [2015] NZHC 1293 at [6]; and Commissioner of Police v Venn[2014] NZHC 361.Result[14] I accordingly approve the settlement.[15] In order to give effect to the settlement, and by consent, I make orders inaccordance with paragraph 6.1 of the parties' joint memorandum dated 20 February2019.[16] The parties have also asked the Court to "record" certain terms of thesettlement between the Commissioner and Ms Nikora.[17] I do not consider it is necessary or appropriate for the Court to "record" thosefurther terms. The Court having approved the settlement, it is now binding on theparties and thus enforceable between them. Nothing is added by the Court recordingthe terms of an agreement reached by the parties. Should the Commissioner considerMs Nikora is acting contrary to the terms of the settlement agreement, then he will beable to seek to enforce those terms in the ordinary way.____________________Fitzgerald J