THE COMMISSIONER OF POLICE v FLAVELL, STRAUSS and FLAVELL as executors of the Estate of Vanessa Anna Maria Strauss [2023] NZHC 195

THE COMMISSIONER OF POLICE v FLAVELL, STRAUSS and FLAVELL as executors of the Estate ofVanessa Anna Maria Strauss [2023] NZHC 195 [15 February 2023]IN THE HIGH COURT OF NEW ZEALANDHAMILTON REGISTRYI TE KŌTI MATUA O AOTEAROAKIRIKIRIROA ROHECIV-2021-419-79[2023] NZHC 195UNDER the Criminal Proceeds (Recovery) Act 2009BETWEEN THE COMMISSIONER OF POLICEApplicantAND WILLIAM RAIN STRAUSS FLAVELL,ERIC AWANUI STRAUSS and JOHNFLAVELL as executors of the Estate ofVanessa Anna Maria StraussRespondentsHearing: On the papersCounsel: R Guthrie for the ApplicantP Cornegé for the RespondentsJudgment: 15 February 2023Reissued: 23 February 2023JUDGMENT OF GAULT JThis judgment was delivered by me on 15 February 2023 at 3:00 pmpursuant to r 11.5 of the High Court Rules 2016.Registrar/Deputy RegistrarSolicitors / Counsel:Ms R Guthrie and Mr K Whyte, Hamilton Legal, Office of the Crown Solicitor, HamiltonMr P Cornegé, Barrister, Hamilton[1] The parties in this proceeding seek Court approval of a proposed settlementpursuant to s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).Factual background[2] Following a police investigation and charges against Ms Vanessa Anna MariaStrauss (Ms Strauss) and co-offenders, Ms Strauss pleaded guilty and was sentencedon 23 October 2019 to four years' and nine months' imprisonment on a representativecharge of supplying methamphetamine during the period from 1 June 2017 to 9 May2018. She was sentenced on the basis that she had supplied 197.55 grams ofmethamphetamine over that period. The sentencing judge observed that she had alsoconspired to supply a further 35 grams of methamphetamine during that period.[3] Police analysis of her communications identified that she regularly purchasedmethamphetamine in quantities of a quarter of an ounce (7 grams) for approximately$2,400 and sold in gram amounts for $600 to $650. She sold half grams for $350.It was clear as a result of the investigation that she also made quarter ounce sales andounce sales. Based on the lower end of the sale price of $600 per gram, the 197.55grams (7.055 ounces) of methamphetamine supplied by her over the relevant periodhad a value of some $118,530.[4] Ms Strauss had only modest means to fund all lifestyle and living relatedexpenses on the income declared by her. That suggests funds used to purchase themethamphetamine for further sales were likely to have been derived from previousmethamphetamine sales.[5] In addition to the financial benefit obtained by her from the sale ofmethamphetamine, the police investigation revealed that between 1 June 2013 and6 May 2018 Ms Strauss was receiving the domestic purposes benefit and sole parentsupport benefit from the Ministry of Social Development (MSD). There is evidencethat she provided false and misleading information to MSD for the purpose ofobtaining the benefits and as a result obtained more than $79,000 to which she wasnot entitled. The provision of false information in that manner would support a chargeof obtaining by deception.The proceeding[6] On 13 April 2021 the Commissioner of Police applied, without notice, for arestraining order against Ms Strauss under s 24 and/or s 25 of the Act and for furtherorders under s 33 of the Act.[7] On 23 April 2021 Campbell J made orders as sought in the application.[8] On 23 April 2021 the Commissioner applied on notice for a restraining order.[9] On 23 June 2021 Lang J made orders as sought in the on-notice application.[10] On 14 June 2022 Harland J extended the restraining order for one year.[11] On 9 November 2022 the Commissioner applied for a profit forfeiture orderthat:(a) the value of the benefit determined in accordance with s 53 of the Actis $197,849; and(b) the maximum recoverable amount is $197,849.[12] The application for profit forfeiture order seeks to realise the followingproperty (the property):(a) all that parcel of land known as 130b Goldfields Road, Manaia and 130Goldfields Road (Unit B), Manaia, Waikato Region, being all that landcomprised and described in the record of title unique identifierSA14A/827, South Auckland Land Registration District being 5.6985hectares more or less, Waiwhau C1 Block excluding the interest of themortgagee and any secured creditor; and(b) all that parcel of land known as 130b Goldfields Rd, Manaia and 130Goldfields Rd (Unit B), Manaia, Waikato Region, being all that landcomprised and described in the record of title unique identifierSA31D/315, South Auckland Land Registration District being 1.9172hectares more or less, Waiwhau C2 Block excluding the interest of themortgagee and any secured creditor; and(c) all that parcel of land known as 130b Goldfields Rd, Manaia and 130Goldfields Rd (Unit B), Manaia, Waikato Region, being all that landcomprised and described in the record of title unique identifierSA11C/136, South Auckland Land Registration District being 3.8344hectares more or less, Waiwhau C3 Block excluding the interest of themortgagee and any secured creditor; and(d) all that parcel of land known as 130b Goldfields Rd, Manaia and 130Goldfields Rd (Unit B), Manaia, Waikato Region, being all that landcomprised and described in the record of title unique identifierSA14A/848, South Auckland Land Registration District being 3.6649hectares more or less, Waiwhau C4 B Block excluding the interest ofthe mortgagee and any secured creditor.[13] Ms Strauss was the registered owner of the property and resided there prior toher arrest in May 2018. She had been the registered owner since 6 December 1996.[14] Also on 9 November 2022, the Commissioner applied, without notice, fororders substituting the respondents in their capacity as executors of the estate ofMs Strauss following her death and carrying on the proceeding (the new parties order).On 10 November 2022 Campbell J made the new parties order.[15] The parties have reached an agreement pending Court approval of the proposedsettlement. In summary the parties agree that:(a) the sum of $197,849 was unlawfully benefitted by the deceased;(b) the restrained property is to be sold, ancillary to the restraining order,at a fair market value; and(c) the respondents forfeit the sum of $197,849 unlawfully benefitted, tobe paid from the restrained property's sale proceeds.Analysis[16] 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.[17] In relation to profit forfeiture orders, s 55 of the Act relevantly provides:55 Making profit forfeiture order(1) The High Court must make a profit forfeiture order if it is satisfied onthe balance of probabilities that—(a) the respondent has unlawfully benefited from significantcriminal activity within the relevant period of criminalactivity; and(b) the respondent has interests in property.(2) The order must specify—(a) the value of the benefit determined in accordance with section53; and(b) the maximum recoverable amount determined in accordancewith section 54; and(c) the property that is to be disposed of in accordance withsection 83(1), being property in which the respondent has, oris treated as having, interests.[18] I am satisfied that the respondents have unlawfully benefitted from "significantcriminal activity" within the "relevant period of criminal activity" to the value of$197,849. Supplying methamphetamine and obtaining by deception are bothsignificant criminal activity as defined by the Act. The relevant period of criminalactivity, in relation to an application for a profit forfeiture order, means the period thatends on the date the application is made,1 that is 9 November 2022. By that date, therespondents had taken office as executors of Ms Strauss' estate.2 I am also satisfiedthat the respondents have an interest in the property, namely effective control of theproperty as executors of Ms Strauss' estate.[19] The parties submit that the forfeiture of the cash will meet the purposes of theAct and consider the expense of a contested court hearing analysing the legitimateincome made by Ms Strauss over the relevant period would not be justified by thepotential increase in the amount recovered of $197,849, having regard to the extent ofthe forfeiture here. They submit that in terms of deterrent, the amount to be forfeitedis significant and will no doubt act as a deterrent to others who may learn of theconsequences of the application under the legislation. I accept those submissions.I am satisfied that the settlement is consistent with the purposes of the Act and theoverall interests of justice.[20] Accordingly, I approve the settlement of the Commissioner's claim through theforfeiture to the Crown of the cash totalling $197,849.Result[21] I make orders in the terms sought in the draft profit forfeiture order submittedwith the joint memorandum of counsel dated 31 January 2023.________________________________Gault J1 Criminal Proceeds (Recovery) Act 2009, s 5(1).2 The evidence also indicates that two of the executors, Ms Strauss' eldest and youngest sons, wereco-offenders arrested at the termination of the police operation, but it is common ground that therespondents had no involvement with the relevant offending.