COMMISSIONER OF POLICE v SNOW [2023] NZHC 3310

COMMISSIONER OF POLICE v SNOW [2023] NZHC 3310 [21 November 2023]IN THE HIGH COURT OF NEW ZEALANDTIMARU REGISTRYI TE KŌTI MATUA O AOTEAROATE TIHI-O-MARU ROHECIV-2018-476-000050[2023] NZHC 3310UNDER Sections 22, 24, 25 and 26 of the CriminalProceeds (Recovery) Act 2009BETWEEN COMMISSIONER OF POLICEApplicantAND TIMOTHY LIONEL TE RAWARAKISNOWFirst RespondentAND SHENGNI (ANNIE) ZHANGSecond RespondentHearing: On the papersAppearances: A R McRae for ApplicantK J Beaton KC for Respondent SnowA M Toohey for Respondent ZhangJudgment: 21 November 2023JUDGMENT OF EATON JIntroduction[1] The Commissioner of Police and the respondents, Mr Snow and Ms Zhang,apply for an order approving a settlement under s 95 of the Criminal Proceeds(Recovery) Act 2009 (the Act). This application has been referred to me as duty Judgeto be dealt with on the papers. The background and proposed settlement is set out ina joint memorandum of counsel dated 13 November 2023.Background[2] The first and second respondents are married. They owned a property at129 King Street, Temuka (the property). Shortly after purchase, the property wasrented to Damien Richardson. Between 5 July 2016 and 22 February 2017,Mr Richardson, together with Matthew Anderson, converted the building on theproperty into a substantial cannabis growing operation totalling 891 plants. Theconversion was undertaken with the knowledge and assistance of Mr Snow, whoprovided equipment for the cultivation operation from his hydroponic business basedin Dunedin.[3] On execution of a police search warrant at the property on 22 February 2017,police located 36 one-ounce (28 grams each) bags of cannabis head material. Thesebags were packed in a plastic carton weighing a total of 1.036 kilograms. A further1.692 kilograms of dried cannabis head was found on a drying rack ready forpackaging.[4] Mr Snow was receiving $1,000 a week from the cannabis cultivation operation.He pleaded guilty to two charges of cultivating a Class C controlled drug and twocharges of possession of a Class C controlled drug for sale. On 15 April 2021, he wassentenced to nine months' home detention and 120 hours of community work.[5] Mr Richardson pleaded guilty to drug offending. Mr Anderson was foundguilty at trial.[6] On 9 June 2020, this Court granted an application for an on-notice restrainingorder in relation to the property. That order was extended on 24 May 2021 for a furtherterm of 12 months. On 13 August 2021, the restraining order was varied to permit thesale of the property with the net proceeds of sale, totalling $81,173.40, remainingrestrained.[7] On 27 August 2021, the property was sold, and the net proceeds of sale weretransferred to the Official Assignee pursuant to the terms of the restraint.[8] On 21 December 2021, the restraining order was varied permitting the sum of$50,000 to be paid by the Official Assignee to Mr Snow's parents to repay a debt owedto them by both respondents in relation to the purchase of the property. The parents'interest in the property had been documented and was accepted by the Commissioneras genuine.[9] Following repayment of the debt to the parents, the balance of $31,173.40 plusaccrued interest was held by the Official Assignee.[10] On 2 June 2023, the Commissioner filed an on-notice applications for a profitforfeiture order and for an assets forfeiture order (the on-notice applications). In asupporting memorandum, the Commissioner contended that between 5 July 2016 and22 February 2017, the respondents unlawfully benefited from significant criminalactivity, namely the cultivation of a Class C controlled drug and the possession of aClass C controlled drug for sale, to the value of $48,300.The proposed settlement[11] Discussions have been ongoing between the parties in relation to the on-noticeapplications. The parties have now reached a settlement. Pursuant to that agreement,it is acknowledged that the first and second respondents have an interest in theproperty, namely the sum of $31,173.40 plus interest accrued and held under restraintby the Official Assignee.[12] The respondents consent to a profit forfeiture order in the sum of $28,173.40(plus accrued interest since 27 August 2021) with the remaining restrained sum of$3,000 being released to Ms Zhang and all other costs to lie where they fall.[13] The orders sought are:(a) the value of the benefit determined in accordance with s 53 of the Actis $28,173.40 plus interest accrued;(b) the maximum amount recoverable is $28,173.40 plus interest accrued;(c) the sum of $28,173.40 plus interest accrued on that sum since27 August 2021 held under restraint by the Official Assignee is to berealised; and(d) the sum of $3,000, being the balance of the restrained funds, is to bepaid to the trust account of Patient & Williams, solicitors for the secondrespondent. Bank account no. .Jurisdiction under s 95[14] Section 95 of the Act governs settlements and 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.[15] The essential purpose of the Act is the establishment of a regime for forfeitureof property that has been derived directly or indirectly from significant criminalactivity or that represents the value of a person's unlawfully derived income.1 Beyondthat primary purpose, the Act is intended to eliminate the opportunity for persons toprofit from undertaking or being associated with significant criminal activity and todeter significant criminal activity and its expansion.2[16] In concluding a proposed settlement, the Court will engage in a broad inquiry.Such an inquiry is consistent with the obligation to have regard to the overall interestsof justice. In Commissioner of Police v Zhang,3 this Court observed that beyond its1 Criminal Proceeds (Recovery) Act 2009, s 3(1).2 Section 3(2)(a) – (b).3 Commissioner of Police v Zhang [2016] NZHC 930 at [8].supervisory jurisdiction, it is "equally important that the Court carry out a broadinquiry and acknowledge, where appropriate, that settlements can be in the interestsof justice, bearing in mind the savings of time and cost and the litigation risk to theparties." The Court may see fit to approve a settlement advanced on economic andpragmatic grounds reflecting a sensible compromise between the parties.4 The Court'sapproval is not a "rubber stamping" exercise, however, if the Court is satisfied thatsettlement is consistent with both the purposes of the Act and the overall interest ofjustice, then it must approve the settlement.Discussion[17] The respondents do not dispute that the value of the criminal activity fromwhich they unlawfully benefited has been assessed as $48,300. Given thatacknowledgement, they consent to a profit forfeiture order in the sum sought with thebalance of $3,000 being released to Ms Zhang. The Commissioner has taken apragmatic position in relation to the settlement in agreeing to the balance of $3,000being released to Ms Zhang.[18] 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 settlementwill save the time and cost of a hearing and, given the comparatively low dollar valueof the restrained property following repayment of debt, there is much benefit inresolving the case short of a substantive hearing.[19] Accordingly, I approve the settlement and I make a profit forfeiture order asfollows:(a) the value of the benefit, determined in accordance with s 53 of the Act,is $28,173.40 plus interest accrued;(b) the maximum amount recoverable pursuant to s 54 of the Act is$28,173.40 plus interest accrued;4 The Commissioner of Police v Douglas [2015] NZHC 1293 at [6].(c) the sum of $28,173.40 plus interest accrued on that sum since27 August 2021 held under restraint by the Official Assignee is to berealised;(d) the sum of $3,000, being the balance of the restrained funds is to bepaid to the trust account of Patient & Williams, solicitor for the secondrespondent. Bank account no. ....................................................Eaton JSolicitors:Gresson Dorman & Co, TimaruCounsel:K J Beaton KC, ChristchurchA M Toohey, Christchurch