COMMISSIONER OF POLICE v HARDING [2019] NZHC 2470

COMMISSIONER OF POLICE v HARDING [2019] NZHC 2470 [30 September 2019]IN THE HIGH COURT OF NEW ZEALANDWHANGAREI REGISTRYI TE KŌTI MATUA O AOTEAROAWHANGĀREI-TERENGA-PARĀOA ROHECIV-2015-488-110[2019] NZHC 2470BETWEEN COMMISSIONER OF POLICEApplicantAND BROWNIE JOSEPH HARDINGFirst RespondentJOSEPH HARDINGSecond RespondentCASEY REWHAThird RespondentAMY LEIGH HARDINGInterested PartyTE PAREKURA ELLIOTInterested PartyHearing: 27 September 2019Appearances: D M A Wiseman and R S Ching for ApplicantNo appearance for First RespondentM N Pecotic for Second and Third Respondents and InterestedPartiesJudgment: 30 September 2019JUDGMENT OF LANG J[on application for approval of settlement under s 95 of theCriminal Proceeds (Recovery) Act 2009]This judgment was delivered by me on 30 September 2019 at 3.30 pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate[1] In this proceeding the Commissioner of Police (the Commissioner) seeks civilforfeiture orders against the respondents under the Criminal Proceeds (Recovery) Act2009 (the Act).[2] The applicant has now reached a proposed settlement with all parties other thanthe first respondent, Mr Brownie Harding. The terms of the settlement are set out intwo joint memoranda of counsel dated 17 and 26 September 2019 respectively. Theparties now seek an order under s 95 of the Act approving the proposed settlement.Background[3] The proceeding was filed as a result of an investigation by the Organised andFinancial Crime Agency of New Zealand into a methamphetamine manufacturing anddistribution network organised and headed by Mr Brownie Harding. This resulted inthe arrest and prosecution of a large number of persons for their alleged participationin the network.[4] Mr Brownie Harding was ultimately convicted and sentenced to a lengthy termof imprisonment on 7 April 2017 for his role in the operation.1 Mr Joseph Hardingfaced two charges of being a party to the manufacture of methamphetamine and acharge of participating in an organised criminal group. The charges against him wereultimately stayed because he was found to be unfit to stand trial by virtue of mentalimpairment.2 The third respondent, Ms Rewha, was found guilty by a jury on a chargeof participating in an organised criminal group and was sentenced to 12 months homedetention on 25 November 2016.3[5] The interested parties, Ms Amy Harding and Mr Te Parekura Elliott, are theregistered owners of a property situated at 278 Taipuha Road in Northland. This wasa remote rural property that Mr Brownie Harding and other members of his networkused as a clandestine laboratory to manufacture large quantities of methamphetaminebetween September and November 2014.1 R v Harding [2017] NZHC 675.2 Harding v R [2017] NZHC 1747.3 R v Rewha [2016] NZHC 2825.The Commissioner's application[6] In this proceeding the Commissioner sought civil forfeiture orders against thethree respondents. He sought a profit forfeiture order against Mr Brownie Harding inthe sum of $9,323,493. This represents the sum the Commissioner believes MrHarding would have received from the sale of methamphetamine manufactured underhis direction. The Commissioner applied for an order that the Taipuha Road propertybe disposed of under s 83(1) of the Act and the proceeds of sale applied in reductionof the amount owing under the profit forfeiture order. The interested parties, Ms AmyHarding and Mr Te Parekura Elliott, are the registered proprietors of this property.[7] The Commissioner sought the same order in relation to cash in the sum of$9,900 found at Ms Rewha's property.[8] Finally, the Commissioner sought profit forfeiture orders in the sums of$61,610 and $58,678 respectively against Mr Joseph Harding and Ms Rewha.The proposed settlementMs Rewha[9] On 16 December 2014 the police searched Ms Rewha's address at 1 RaumangaValley Road in Northland when they terminated the operation into Mr BrownieHarding's activities. At the address they found $9,900 in cash. That sum has beensubject to restraining orders obtained by the Commissioner since September 2016.[10] The proposed settlement with Ms Rewha involves the sum of $2,000 beingpaid to Ms Rewha and the balance of the cash being forfeit to the Commissioner. TheCommissioner would not seek any further order against Ms Rewha.Mr Joseph Harding[11] Mr Joseph Harding has no known assets. The Commissioner therefore acceptsthe application for a profit forfeiture order against him must be dismissed.The interested parties - Amy Leigh Harding and Te Parekura Elliott[12] The owners of the property at 178 Taipuha Road are to pay the Commissionerthe sum of $21,900 within six months and this is to be forfeited by way of an assetsforfeiture order. The restraining order will be discharged once the Official Assigneeconfirms receipt of this sum.[13] In default the Commissioner shall have the right to sell the property and theproceeds of sale shall be used to satisfy the assets forfeiture order. To facilitate thisprocess the existing restraining order will remain in place for a further 12 months butwill be varied to enable Ms Harding and Mr Elliott to borrow using the property assecurity should that be necessary.[14] The sum of $21,900 reflects the total cash deposits made into bank accountsthat funded mortgage payments relating to the Taipuha Road property between 2012and 2014. During this period Ms Harding and Mr Elliott were living in Australia andthe property was not deriving any rental income. For that reason the Commissionercontends the funds used to make the deposits must have been provided by Mr BrownieHarding and represent the proceeds of his network's criminal activities. Given theiragreement to the proposed settlement Ms Harding and Mr Elliott must be taken toaccept this was the case.DecisionMr Brownie Harding[15] Mr Brownie Harding has not taken any steps to defend the Commissioner'sclaim but he has no known assets and will be in prison for the foreseeable future.[16] Section 55(1)(b) of the Act only permits the Court to make a profit forfeitureorder where the respondent has interests in property. Given the fact that Mr BrownieHarding has no identifiable property the Commissioner accepts the claim against himmust be dismissed.Mr Joseph Harding[17] For the same reason the claim against Mr Joseph Harding must also bedismissed.Ms Rewha[18] Ms Rewha defended the application on the basis that she had acquired the cashthat was found at her address by legitimate means. She said it represented funds paidto her whilst she was on a benefit in Australia together with the sale proceeds of avehicle. She also refers to funds derived when she surrendered some bonus bonds.She has not, however, produced any documents to support her claim on these issues.None of these explanations are particularly credible given the fact that she was foundin possession of such a large amount of cash.[19] I consider the proposed settlement reflects a realistic assessment of thelikelihood of Ms Rewha being able to persuade the Court that the cash came fromlegitimate sources. The amount in question also makes it relatively uneconomic forthis aspect of the claim to proceed to trial from the perspective of both parties. Iapprove the proposed settlement of the claim against Ms Rewha on that basis.Ms Harding and Mr Elliott[20] Ms Harding and Mr Elliott acquired the Taipuha Road property fromMr Elliott's father in 2006. Although it is registered in the names of Ms Harding andMr Elliott, the property is in reality owned by Mr Elliott and his wife Emmarina.Emmarina is Ms Harding's daughter. The purchase of the property was funded by aloan from a bank secured by registered mortgage.[21] As I have already recorded, Ms Harding and Mr Elliott were both residing inAustralia during the period when Mr Brownie Harding used the Taipuha Roadproperty as a clandestine laboratory. They had been in Australia for several years bythat stage and only returned to New Zealand sporadically. The Commissioner acceptsthey were not involved in the manufacture or distribution of methamphetamine andthat they had no knowledge Mr Brownie Harding had taken possession of theirproperty for his own purposes. He has never had any legal interest in the property andundoubtedly used it for his own purposes without bothering to consult the owners.[22] For these reasons there is no proper basis upon which the Commissioner couldcontend the property ought to be forfeited or used to meet any profit forfeiture ordermade against Mr Brownie Harding. The fact remains, however, that cash paymentswere used to meet the mortgage payments on the property. In the absence of any othercredible explanation it is likely that these were funded by Mr Brownie Harding.[23] I am therefore satisfied the proposed settlement reflects that fact.Result[24] I approve the proposed settlement under s 95 of the Act. I make orders assought in paragraph 6.1 of the joint memorandum of counsel dated 17 September 2019and record the further terms of the settlement with Ms Rewha set out in paragraph 6.2of that memorandum.[25] I also make orders as sought in paragraph 6.1 of the joint memorandum dated26 September 2019 and record the further terms of the settlement with Ms Hardingand Mr Elliott set out in paragraph 6.2 of that memorandum.Lang JSolicitors:Crown Solicitor, AucklandCounsel:M N Pecotic, Barrister, Auckland