THE COMMISSIONER OF POLICE v HUNT [2023] NZHC 1773

THE COMMISSIONER OF POLICE v HUNT [2023] NZHC 1773 [7 July 2023]IN THE HIGH COURT OF NEW ZEALANDNEW PLYMOUTH REGISTRYI TE KŌTI MATUA O AOTEAROANGĀMOTU ROHECIV-2017-443-62[2023] NZHC 1773UNDER the Criminal Proceeds (Recovery) Act 2009BETWEEN THE COMMISSIONER OF POLICEApplicantAND DION JAMES HUNTFirst RespondentADA SHARON PUESecond RespondentAND ANZ BANK NEW ZEALAND LIMITEDFirst Interested PartyLEROY JAMES HUNT, TARA LEE HUNTand CARRINGTON & YOUNGTRUSTEES LIMITED as trustees of theHUNT FAMILY TRUSTSecond, Third and Fourth Interested PartiesANA DIONNE PUEFifth Interested PartyDAVID CHARLES ROSS HUNTSixth Interested PartyOn the PapersCounsel: C E Clarke for the ApplicantR Weir for the First RespondentS Abdale for the Second RespondentJudgment: 7 July 2023JUDGMENT GWYN J(Approving settlement of proceeding)Introduction[1] By joint memorandum filed on 3 July 2023, the Commissioner of Police andDion Hunt and Ada Pue, the first and second respondents, seek an order pursuant tos 95 of the Criminal Proceeds (Recovery) Act 2009 (Act) approving the proposedsettlement of the Commissioner's claim against Mr Hunt and Ms Pue.Background[2] The proceeding has its genesis in an investigation known as Operation Homes,targeting the manufacture, sale and supply of the Class A controlled drugmethamphetamine. The operation was primarily focussed on the first and secondrespondents, as well as the second respondent's son, Tony Pue, and Mr Pue's associateMawena Bidois.[3] The operation terminated on 27 July 2017 when search warrants were executedat a number of properties, including a lifestyle and property at 134 Foreman Road,Waitara (First Foreman property) and a dwelling and pastoral property at 180 ForemanRoad, Waitara (Second Foreman property).[4] On 21 September 2017 an application without notice for a restraining orderwas granted by this Court in respect of the First Foreman property, the SecondForeman property, and other properties.1[5] On 1 June 2022 the first and second respondents were convicted after a jurytrial in the New Plymouth District Court on one charge of supplying Tony Pue withmethamphetamine on 6 July 2017 and one charge of possession of methamphetaminefor supply relating to the search warrant executed at one of the properties on 27 July2017. The respondents were discharged under s 147 of the Criminal Procedure Act2011 in respect of a third charge where the Crown offered no evidence.1 Commissioner of Police v Hunt HC New Plymouth, CIV-2017-443-62, 21 September 2017. Therestraining order describes the First Foreman property as being at 180 Foreman Road, Waitara, buta subsequent judgment of Clark J records that the parties accepted that address was incorrect andshould be 134 Foreman Road, Waitara: Commissioner of Police v Hunt [2020] NZHC 1692, at[5].[6] On 22 July 2022 the first and second respondents were sentenced byJudge Greig to imprisonment of five years and five months.[7] The first and second respondents have appealed against conviction andsentence. The appeals were set down to be heard on 29 March 2023 but wereadjourned for the first respondent to obtain a psychological report.The proposed settlement[8] The parties have been in settlement discussions. The first respondent askedthe applicant to consider whether the settlement sum could be sourced through a loanto the first respondent from Clive Jury, with Mr Jury securing the loan by way of amortgage over the title of one of the Foreman properties.[9] The Official Assignee has advised the Commissioner that the most appropriatecourse to adopt is by a variation of the existing Without Notice Restraining Order dated21 September 2017 (Restraining Order) that was subject to the On Notice RestrainingOrder application dated 27 September 2017.[10] The variation to the Restraining Order would allow the first respondent to useone of the Foreman properties as security for a loan from Mr Jury (if such security isrequired by Mr Jury) and order the Official Assignee to consent to one of the Foremanproperties being used as security.[11] The variation to the Restraining Order would also order the Official Assigneeto remove the Restraining Order from the title of the Foreman properties on receipt ofthe Settlement Sum from Mr Jury, transferred to the Official Assignee's Trust Accountin cleared funds.[12] The Commissioner and Mr Hunt and Ms Pue therefore propose the followingsettlement terms (Settlement Proposal):(a) The first and second respondents are to pay the sum of $200,000(Settlement Sum).(b) The Settlement Sum is to be sourced through a loan to the firstrespondent from Clive Jury, with Mr Jury securing the loan by way ofa mortgage or other such charge over the title of one of the Foremanproperties.(c) The Settlement Sum will be held by the Official Assignee as restrainedfunds.(4) Upon notice from the Official Assignee that the Settlement Sum hasbeen received by the Official Assignee as cleared funds and is beingheld as restrained funds the applicant will file an Application for ProfitForfeiture Order for the Settlement Sum so the funds are forfeited. Therespondents consent to that forfeiture.(5) If the Settlement Sum is not transferred to the Official Assignee on orbefore 5.00 pm on 14 July 2023 the Foreman Road properties are toremain under restraint and the Restraining Order is to remain registeredon the titles of the Foreman properties.(6) Costs lie where they fall as between the Commissioner, respondentsand interested parties.(7) The settlement is in full and final settlement of all matters in thisproceeding as between the applicant, respondents and interestedparties.[13] On 14 April 2023 counsel for the first respondent confirmed that the first andsecond respondents and Mr Jury wish to proceed in the manner proposed by theOfficial Assignee.[14] The interested parties consent to the settlement proposal.[15] Counsel for the Commissioner confirms that the Settlement Proposal isconsistent with the purposes of the Act, taking account of the particular facts of thiscase, in that:(a) property derived from significant criminal activity will be forfeited.Evidence filed on behalf of the Commissioner estimates that the firstand second respondents have unlawfully benefited from significantcriminal activity in an amount of at least $264,000;(2) the profit gained by Mr Hunt and Ms Pue from criminal activity isdiminished; and(b) such forfeiture potentially deters future significant criminal activity.[16] Overall, counsel submitted that the approval of the Settlement Proposalsettlement is in the interests of justice since it avoids delay and potential litigation risk.Legal principles[17] Section 95 of the Act 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.[18] Pursuant to s 3, the purpose of the Act is to establish a regime for the forfeitureof property derived directly or indirectly from significant criminal activity or whichrepresents the value of a person's unlawfully derived income.2 A further purpose ofthe regime is to eliminate the opportunity for persons to profit from undertaking orbeing associated with significant criminal activity and to deter significant criminalactivity.32 Criminal Proceeds (Recovery) Act 2009, s 3(1).3 Section 3(2)(a)–(b).[19] It is well settled that the Court's approval is not a "rubber stamping" exercise.4The Court's supervisory jurisdiction and function under s 95 requires a broad inquiry.5An assessment of s 95(3)(a) and (b) compliance will require the Court to consider thestrength of both the Commissioner's case and the respondent's defence.6 In addition,the value of assets to be forfeited and the relativity of such sum to the total value ofassets restrained as tainted property are relevant considerations.7 Further, there is alsothe litigation risk of a hearing to the Commissioner and the respondent.8 Finally, theCourt may consider such other matters, including economic and pragmatic grounds,as inform a sensible compromise to litigation that serves the Act's purposes.9 There isa strong public interest in such litigation being resolved promptly, especially where asettlement reflects the likely costs and risks inherent in adjudicating a contestedapplication.10Discussion[20] I note that the first and second respondents do not accept the applicant'ssummary of evidence as set out in counsel's joint memorandum. They dispute theirguilt and, as noted above have appealed their conviction and sentence to the Court ofAppeal. However, the respondents acknowledge that if the Settlement Proposal is notapproved, the Commissioner will present evidence consistent with the summary in thejoint memorandum at a forfeiture hearing. Each of the respondents is represented bycounsel, who have signed the joint memorandum on their behalf.[21] I am satisfied that the proposed terms of settlement are consistent with theobjectives and principles of the Act and are in the interests of justice. The finality ofthe settlement on these terms and the certainty it brings to the parties will avoid furthercosts, delay and litigation risk. I also accept that this proposal is a sensible andpragmatic basis on which to settle proceedings.4 The Commissioner of Police v Know-All Group Ltd HC Auckland CIV-2010-404-403, 7 November2011 at [11].5 Commissioner of Police v Zhang [2016] NZHC 930 at [8].6 The Commissioner of Police v Kree [2013] NZHC 2972 at [11].7 Commissioner of Police v Venn [2014] NZHC 361 at [5]–[6].8 Kree, above n 5, at [11].9 The Commissioner of Police v Douglas [2015] NZHC 1293 at [6].10 Commissioner of Police v Cotton [2017] NZHC 0021 at [7].Decision[22] The Settlement Proposal is approved, pursuant to s 95 of the Criminal Proceeds(Recovery) Act 2009.[23] The Commissioner has indicated that, in accordance with the SettlementProposal, the application for variation of the existing Without Notice RestrainingOrder dated 21 September 2017 (Restraining Order) that was subject to the On NoticeRestraining Order application dated 27 September 2017, will now be made.Gwyn JSolicitors:Crown Solicitor, New PlymouthBeattie Rickman Legal, HamiltonLegal Solutions and Carrington Ussher, New Plymouth