COMMISSIONER OF POLICE v VINCENT [2015] NZHC 1024

COMMISSIONER OF POLICE v VINCENT [2015] NZHC 1024 [14 May 2015]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV 2014-404-56[2015] NZHC 1024BETWEEN COMMISSIONER OF POLICEApplicantAND LEE VINCENTFirst RespondentDIANE ERLENE ASHBYSecond RespondentHearing: 14 May 2015Counsel: T J Rainey and S T Ellis for Mr Vincent and Ms AshbyT Refroy-Butler for Commissioner of PoliceJudgment: 14 May 2015(ORAL) JUDGMENT OF HEATH JSolicitors:Rainley Law, AucklandMeredith Connell, Auckland[1] Mr Vincent and Ms Ashby seek an adjournment of a hearing of proceedings brought under the Criminal Proceeds (Recovery) Act 2009 (the Act). The proceeding is set down for hearing in this Court for four days, commencing on 6 July 2015. The proceeding, in broad terms, seeks two types of orders. The first is a profit forfeiture order.1 The second is an asset forfeiture order.2[2] Obtaining the former is dependent on proof that Mr Vincent and/or Ms Ashby"unlawfully benefited from significant criminal activity".3 For that to be proved it must be established on a balance of probabilities that the relevant person has"knowingly" derived a benefit from that activity, whether directly or indirectly.4[3] The asset forfeiture order will be granted if the Court is satisfied on a balance of probabilities that specific property is "tainted property", as defined.5 In suchcircumstances, the Court "must make an asset forfeiture order in respect of that specific property".6 There is no separate element of knowledge. The definition ofthe term "tainted property" is itself dependent upon the existence of "significant criminal activity"7 from which property has been acquired or directly or indirectly derived.[4] The primary reason for the adjournment application is the existence of appeals from convictions in criminal proceedings arising out of Operation Ark. There is a challenge to directions given by Woodhouse J on the mens rea element of the charges of importation and dealing in a Class C controlled drug.8[5] There is no dispute that substances known as "party pills" were brought intoNew Zealand sold. The appellate question is whether the defendants in the criminal prosecution (which did not involve Mr Vincent or Ms Ashby) had knowledge of the fact that the product was a Class C controlled drug, through the analogue provisions1 Criminal Proceeds (Recovery) Act 2009, s 55.2 Ibid, s 50.3 Ibid, s 55(1)(a).4 Ibid, s 7, definition of "unlawfully benefitted from significant criminal offending".5 Ibid, s 5(1), definition of "tainted property".6 Ibid, s 50.7 Ibid, s 6, definition of "significant criminal activity".8 The appeal is being brought by Case Stated and the issues are set out fully in the Case.of the Misuse of Drugs Act 1975, and intended to import or deal with them on that basis.9 No date for the appeal has yet been fixed to the best knowledge of counsel.[6] The Commissioner of Police intends to rely on convictions of various defendants in the Operation Ark prosecutions to establish the "significant criminal activity" in issue. Mr Rainey, for Mr Vincent and Ms Ashby, is concerned about thepossibility that the Court of Appeal make take a different view and hold either that the drugs were not Class C controlled drugs, or that the convicted defendants did not have the requisite intent to deal with the products on that basis.[7] As a result of discussions with counsel, it emerged that there were two separate issues for determination. The first concerns the question whether anyproperty was acquired or derived from "significant criminal activity", so as to giverise to the need for an asset forfeiture order. The way in which the Commissioner wishes to run his case means that the existence or otherwise of such activity will be determined by the decision of the Court of Appeal.[8] However, in relation to the profit forfeiture application it will be necessary to address the factual question whether Mr Vincent and/or Ms Ashby had knowledge that the activities from which they were deriving property was from the importation and sale of a Class C controlled drug, as opposed to some legitimate importation andsale of "party pills". That issue will fall to be determined independently of the Courtof Appeal judgment. The requisite knowledge is to be assessed by reference to the time of receipt of property, as opposed to the criminal proceedings in which knowledge of each convicted defendant turned on the coincidence of a guilty mind with the importation and sale and knowledge that the products were controlled drugs.[9] It seems to me that the fact that there is an appeal pending on the mens reaelement does not prohibit a Court from determining whether Mr Vincent and/or Ms Ashby had the requisite knowledge for the purpose of the profit forfeiture order. There is no reason why that aspect of the case cannot proceed to trial in July.9 For background, see R v Chase [2014] NZHC 3144 (Woodhouse J).[10] However, the second aspect which is applicable to both the profit and asset forfeiture applications concerns whether there has been "significant criminal activity". That will be determined one way or the other by the Court of Appeal'sdecision. It seems to me that a Judge could await the outcome of that decision, after (perhaps) issuing an interim judgment on the knowledge aspect of the profit forfeiture application or reserving generally, pending decision of the Court of Appeal. That would have the benefit of having all relevant evidence before the Court dealt with so that once the Court of Appeal decision was available the proceeding could be resolved. An alternative is for the Judge to deal with all issues, but (if the Commissioner were successful) to issue a stay pending the Court of Appeal decision.[11] To what extent the Judge who presides over the proceeding decides to proceed in terms of these indications will be for him or her to determine. But, the existence of these options mean, in my view, that an adjournment of the current hearing is unnecessary.Result[12] The application for an adjournment is dismissed.[13] On 30 April 2015, when I initially dealt with the application for an adjournment that had been filed, I made a series of adjustments to existing timetabling directions on the basis that the adjournment application would be determined prior to the need for written witness statements to be filed and served. Counsel are agreed that those directions shall remain in force.10 I therefore confirm those directions:(a) The Commissioner shall file and serve witness statements on or before 20 May 2015.(b) Mr Vincent and Ms Ashby shall file and serve witness statements on or before 10 June 2015.10 Commissioner of Police v Vincent and Ashby HC Auckland CIV-2014-404-56, 30 April 2015, at paras [5] and [6].(c) The Commissioner shall file and serve any witness statements that are strictly in reply on or before 25 June 2015.(d) Counsel shall confer and file a common bundle of all documents to which the presiding Judge will need to refer at the hearing of the proceeding. That should be done no later than two working days prior to the first day allocated for the substantive hearing.[14] Leave is reserved generally for any of the parties to apply for further directions should that be necessary. Any such application shall be referred to the Civil List Judge or, if a trial Judge has been identified, to that Judge.[15] All questions of costs are reserved._________________________________P R Heath J