COMMISSIONER OF POLICE v CREELMAN [2022] NZHC 1393

COMMISSIONER OF POLICE v CREELMAN [2022] NZHC 1393 [14 June 2022]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-239[2022] NZHC 1393UNDER the Criminal Proceeds (Recovery) Act 2009BETWEEN COMMISSIONER OF POLICEApplicantAND DARREN ANDREW CREELMANFirst DefendantCASEY RENEE SMETHURSTSecond RespondentMEGAN ELAINE PADDISONThird RespondentDANIEL MARC WILESFourth RespondentMELODY JOSAPHINE BIDDLEFifth RespondentOn the papers:Counsel: M R Harborow and L S N Lai for applicantD B Stevens for third respondentJudgment: 14 June 2022JUDGMENT OF TOOGOOD JThis judgment was delivered by me on 14 June 2022, at 3:00 pmPursuant to Rule 11.5 High Court RulesRegistrar/Deputy Registrar Date..Solicitors/Counsel:Meredith Connell, Crown Solicitor at AucklandD B Stevens, Auckland[1] On 22 February 2022, the Commissioner of Police commenced a proceedingagainst the respondents under the Criminal Proceeds (Recovery) Act 2009 (the Act).Restraining and other orders were made under the Act on 25 March 2022 by Harvey J.Civil forfeiture orders under the Act were also sought.[2] The Commissioner and the third respondent, Megan Elaine Paddison, havenow reached agreement on the terms of a proposed settlement for which they seekapproval of the Court under s 95 of the Act. The proposed settlement involves themaking of a consent assets forfeiture order regarding $124,875 in cash seized on3 February 2021.[3] I have taken my summary of the background to the proposed settlement fromthe joint memorandum of counsel filed on 18 May 2022. I am grateful to counsel fortheir assistanceBackground[4] In September 2020, Police commenced an enquiry into the distribution of theclass A controlled drug, methamphetamine, and money laundering, targeting membersof the Head Hunters motorcycle gang.[5] The first respondent, Darren Andrew Creelman (Mr Creelman), and the secondrespondent, Casey Renee Smethurst (Ms Smethurst), were identified as manufacturersof methamphetamine.[6] On 17 November 2020, Police searched a storage unit and an address linked toMr Creelman and Ms Smethurst and located:(a) three semi-automatic assault rifles;(b) a semi-automatic shotgun;(c) $2,055 in cash (Cames Cash); and(d) 12 grams of methamphetamine.[7] On 5 February 2021, Police searched 2/213 Jervois Road, Herne Bay(Jervois Road) an AirBnB apartment used by Mr Creelman, Ms Paddison, the fourthrespondent Daniel Marc Wiles (Mr Wiles) and the fifth respondent, Melody JosaphineBiddle (Ms Biddle).[8] Police located:(a) approximately 152 grams of methamphetamine;(b) $124, 875 in cash (the Jervois Cash); and(c) a Bruni pistol with ammunition.[9] A silver Audi vehicle, registration FUA948, situated outside Jervois Road, wasseized and towed. The key for the vehicle was found inside the Jervois Roadapartment. Police executed a search warrant on the vehicle and located components ofa clandestine methamphetamine laboratory and a further firearm.Criminal proceedings[10] As a result of the searches, Mr Creelman, Ms Smethurst, Ms Paddison,Mr Wiles and Ms Biddle face a variety of criminal charges in the Auckland DistrictCourt laid under the Misuse of Drugs Act 1975 and Arms Act 1983. Ms Paddison facescharges of:(a) manufacturing methamphetamine;1(b) possession of methamphetamine for supply (x5);2(c) possession of a precursor substance/material/equipment (x4);3 and(d) unlawful possession of firearm/explosives (x6).41 Sections 6(2)(a) and 6(1)(b) Misuse of Drugs Act 1975, maximum penalty life imprisonment.2 Sections 6(2)(a) and 6(1)(f) Misuse of Drugs Act 1975, maximum penalty life imprisonment.3 Section 12A(2)(a) Misuse of Drugs Act 1975, maximum penalty five years imprisonment.4 Section 45(1) Arms Act 1983, maximum penalty four years imprisonment.The evidence[11] Financial investigations reveal Mr Creelman, Ms Smethurst, Ms Paddison,Mr Wiles and Ms Biddle declared minimal income between 2014 and 2021. Thereappear to be unexplained cash deposits made to their bank accounts.[12] A review of Ms Paddison's Inland Revenue records and bank account reveal:(a) Ms Paddison's declared income was, on average, $35,000 per annumin the last four years;(b) there were no cash withdrawals that may account for the Jervois Cash;and(c) between 2018 to 2021, approximately $6,660 of cash deposits and$26,267.36 of unexplained third party deposits were made intoMs Paddison's bank account.The principles[13] Section 95 of the Act provides that the Commissioner may enter into asettlement with any person as to the property or any sum of money to be forfeited tothe Crown, but that a settlement does not bind the parties unless it is approved by theHigh Court. The High Court must approve the settlement if it is satisfied that it isconsistent with:(a) the purposes of the Act; and(b) the overall interests of justice.[14] I have taken into account the following considerations:(a) civil litigation incurs substantial costs for the parties, a significantportion of which would not usually be recoverable under the rules ofCourt relating to payments of costs;(b) it is in the public interest to avoid the burden on the Court of complexand lengthy civil litigation;(c) there is also strong public interest in litigation of this nature beingbrought to a prompt conclusion, so long as the settlement reflects thelikely costs and risks inherent in the determination of a contestedapplication;5(d) approval of any settlement by the Court acting in its supervisoryjurisdiction requires consideration of the legislative intent and theoverall interests of justice and is not a rubber-stamping exercise;6 and(e) a broad inquiry is required, recognising that the decision to settleproceedings under the Act may be made on economic and pragmaticgrounds and often reflects a "common sense compromise" between theparties.7The proposed settlement[15] The Commissioner and Ms Paddison have agreed to settle the issue offorfeiture in relation to Ms Paddison's interests in the Jervois Cash on the terms setout in counsel's joint memorandum dated 18 May 2022, subject to the Court's approvalunder s 95 of the Act.[16] The proposed settlement is in the following terms:(a) Ms Paddison consents to assets forfeiture orders under s 50 of the Actover the Jervois Cash.(b) In the event assets forfeiture orders are not made or do not encompassthe entirety of the Jervois Cash, Ms Paddison consents to a profit5 Commissioner of Police v Cotton [2017] NZHC 21 at [7].6 Commissioner of Police v Bradley HC Rotorua CIV-2011-463-675, 5 July 2012 at [9];Commissioner of Police v Veevers [2017] NZHC 80 at [10].7 Commissioner of Police v Douglas [2015] NZHC 1293 at [6]; Commissioner of Police v Venn[2014] NZHC 361.forfeiture order against her under s 55 of the Act, subject to thefollowing conditions:(i) the maximum recoverable amount of the profit forfeiture orderdoes not exceed the amount of Jervois Cash not made thesubject of an assets forfeiture order;(ii) the amount of the Jervois Cash not made the subject of the assetsforfeiture order will be disposed of under s 83(1) of the Act tosatisfy the profit forfeiture order; and(iii) Ms Paddison will not owe any residual debt after the profitforfeiture is made.(c) Ms Paddison agrees to abandon any and all claim she has to the JervoisCash in this proceeding.(d) The Commissioner consents to Ms Paddison and her counsel'sattendance being excused from all subsequent appearances in thisproceeding.(e) Costs in this proceeding in relation to Ms Paddison would lie wherethey fall.[17] Pending the other respondents' interests in the Jervois Cash being dealt with,the Commissioner and Ms Paddison do not seek formal orders at this stage, but insteadask the Court to formally record the position.[18] In the present case, I accept the submissions of counsel that the settlementproposal is appropriate, and I agree that the proposed settlement is "consistent withthe purposes of [the] Act and the overall interests of justice", for the following reasons:(a) there will be a saving of time and cost if the matter can be resolved byconsent without the need for a hearing;(b) an agreed settlement will allow the parties to have certainty and controlas to the outcome;(c) the Commissioner considers he has a good case to show that therestrained property is tainted property (so as to support an assetsforfeiture order) and that Ms Paddison has unlawfully benefited fromsignificant criminal activity (so as to support profit forfeiture order).However, the Commissioner acknowledges a contested hearing carrieswith it risk;(d) Ms Paddison considers she does not have any legitimate (orillegitimate) interest in the Jervois Cash; and(e) the form of the prepared settlement is such that it will ensure the JervoisCash is forfeited. If assets forfeiture orders are not made in respect ofit in its entirety, only then will a profit forfeiture order be made againstMs Paddison (and only then to an amount sufficient to ensure forfeitureof the Jervois Cash). Ms Paddison will not owe any residual debt to theCrown.Order[19] Accordingly, the Court:(a) approves the proposed settlement under s 55(3) of the Act; and(b) formally records Ms Paddison's position for forfeiture orders to bemade once the remaining respondents' interests in the Jervois Cash aresettled or the Commissioner's civil forfeiture application is determined,so as to give effect to the settlement.[20] Ms Paddison and her counsel's attendance is excused for all subsequentappearances in this proceeding, except on any occasion on which the Commissionerseeks any order contrary to Ms Paddison's interests to which she does not consent.Costs[21] Costs shall lie where they fall in relation to all matters as between theCommissioner and Ms Paddison.Toogood J