COMMISSIONER OF POLICE v PARKES [2019] NZHC 1087

COMMISSIONER OF POLICE v PARKES [2019] NZHC 1087 [20 May 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2016-404-000590[2019] NZHC 1087UNDER Criminal Proceeds (Recovery) Act 2009BETWEEN COMMISSIONER OF POLICEApplicantAND GERRARD GORDON PARKESFirst RespondentAND WHITNEY CHANTEL HARRISSecond RespondentAND ROGER EMMANUEL AL HACHACHEThird RespondentAND TONI CLARE NIKORAFourth RespondentOn the papersAppearances: K Eastwood and Y Wang for ApplicantM Pecotic for First RespondentJudgment: 20 May 2019JUDGMENT OF WALKER JThis judgment was delivered by me on 20 May 2019 at 10.00 amPursuant to Rule 11.5 High Court RulesRegistrar/Deputy RegistrarSolicitorsCrown Solicitor, AucklandM Pecotic, AucklandIntroduction[1] I have received a joint memorandum filed by counsel for the Commissioner ofPolice (the Commissioner) and counsel for Gerrard Gordon Parkes (Mr Parkes), thefirst respondent. The memorandum invites the Court to approve a proposed settlementreached between the Commissioner and Mr Parkes under s 95 of the CriminalProceeds (Recovery) Act 2009 (the Act).[2] Any settlement made in relation to proceedings brought under the provisionsof the Act is required to be approved by this Court.1Background[3] On 31 March 2016, Mr Parkes was charged with various charges relating tothe supply of methamphetamine. The charges followed the termination of a Policeinvestigation known as "Operation Bunk". That operation targeted Mr Parkes alongwith a number of his associates.[4] In September 2017, Mr Parkes was convicted of the following charges in thisCourt:(a) supplying methamphetamine (x 10);(b) possession of methamphetamine for supply (x1); and(c) possession of material capable of being used in the manufacture ofmethamphetamine (iodine), intending that it be used for that purpose.[5] Following a disputed facts hearing, Mr Parkes was found to have supplied orpossessed for supply a total quantity of 568.8 grams of methamphetamine.2 Theevidence showed that Mr Parkes supplied methamphetamine to Ms Toni Nikora (thefourth respondent), who then on-sold the methamphetamine to others in smaller1 Criminal Proceeds (Recovery) Act 2009, s 95(2).2 R v Parkes [2017] 2935.quantities. On 8 December 2017, Mr Parkes was sentenced to 11 years' imprisonment,imposed with a minimum period of imprisonment of 40 per cent.3These proceedings[6] Between March and November 2016, the Commissioner applied for andobtained seven sets of restraining orders in relation to various property associated withthe respondents.[7] The second respondent, Ms Whitney Harris, was Mr Parkes' de facto partnerat the time of the criminal offending. Ms Harris was not charged with any criminaloffences as a result of Operation Bunk.[8] Mr Parkes has interests in the following restrained property:(a) The proceeds of sale of a 1998 Nissan Skyline GT-R motor vehicle(registration JNZ870), VIN 7A8DH120705042693 formerly registeredto Mr Parkes;(b) The proceeds of sale of a 2006 Land Rover motor vehicle (registrationJND724), VIN SALLSAA336A933687, formerly registered toMs Harris;(c) The proceeds of sale of a 2015 Kawasaki ZX 1000N motorcycle(registration A9ZWM), VIN JKAZXCN13FA000559, formerlyregistered to Ms Harris;(d) The proceeds of sale of a 1998 Harley Davidson Wide Glide motorcycle(registration 88YLN), VIN 1HD1GEV17XY305696, formerlyregistered to Ms Harris;(e) A 2007 Ducati 1098S motorcycle (registration 37ZRH),VIN ZDMH700AA7B008346 (Ducati), registered to Ms Harris;3 R v Parkes [2017] NZHC 3077.(f) The proceeds of sale of a 1975 Chevrolet Camaro (registrationERU811), VIN 7A82R070708590163, formerly registered to MagnetsNew Zealand Limited;(g) A 1997 Dodge Ram 2500 SLT motor vehicle (registration R4M1T)VIN 1B7KC23Z8WJ122369 (Dodge Ram), registered to an unknownperson at 6 Baird Road, Tokoroa;(h) The proceeds of sale of a Haines Hunter SF535 motor boat named"Licence to Thrill", serial number SF535/31656;(i) The proceeds of sale of a DMW Premier 535 boat trailer (registrationY892D, serial number 12709, registered to persons unknown;(j) The proceeds of sale of a 2003 Holden SS V8 utility motor vehicle(registration HUZ159) VIN 6G1YK42F53L947023, formerlyregistered to Brett Kolkrabs (Holden SS V8); and(k) The proceeds of sale of a 1998 Harley Davidson 99 Dyna Super Glidemotorcycle (registration B9ASW) VIN 1HD1GJV16XY309697,formerly registered to Michael Thomas (1998 Harley Davidson).[9] The total approximate value of the restrained property associated withMr Parkes is approximately $197,275.00 (plus interest accruing on the proceeds ofsale).Application for civil forfeiture orders[10] On 3 August 2018, the Commissioner filed an application for civil forfeitureorders (with supporting evidence) against the respondents.[11] The Commissioner applied, amongst other things, for a profit forfeiture orderagainst Mr Parkes and Ms Harris (jointly and severally) in the sum of $478,312.70,which was calculated as follows:(a) $211,500.00 being the value of methamphetamine underlyingMr Parkes' convictions; plus(b) $34,702.70, being the total value of cash deposits made into Ms Harris'bank accounts between 5 January 2015 and 22 January 2016; plus(c) $232,110.00, being the combined total value of the property.[12] The Commissioner also applied for assets forfeiture orders over the propertyon the basis that it is tainted property.[13] The Commissioner has subsequently reached settlements with the third andfourth respondents. Those settlements have been approved by the Court.[14] According to the joint memorandum of counsel:(a) The registered owner of the Holden SS V8 has not taken any steps toclaim an interest in the vehicle, having told Police that he had sold thevehicle. The purchaser has indicated that she does not wish to claim anyinterest in the Holden SS V8, or the proceeds of sale, and does not wishto take any further part in this proceeding.(b) Similarly, the registered owner of the 1998 Harley Davidson at the timeit was restrained has confirmed that he has no interest in it.[15] Mr Parkes filed a notice of opposition to the Commissioner's application forcivil forfeiture orders on 4 April 2019. No supporting evidence was filed byMr Parkes.[16] A two-day civil fixture has been allocated for the hearing of theCommissioner's civil forfeiture application on 2 and 3 September 2019.Terms of the proposed settlement[17] The Commissioner and Mr Parkes have now agreed to settle the question ofthe civil forfeiture of the restrained property on the terms set out in the jointmemorandum dated 10 May 2019, subject to the Court's approval. The Commissionerand Mr Parkes now seek the Court's approval under s 95(3) of the Act.[18] The proposed terms of settlement as between the Commissioner and Mr Parkesare:(a) The restraining orders over the Ducati and the Dodge Ram would berescinded (neither vehicle is presently in the custody and control of theOfficial Assignee as they were not located on termination of theinvestigation);(b) Assets forfeiture orders would be made by consent under s 50 of theAct over all of the remaining restrained property;(c) The Commissioner would not pursue an application for a profitforfeiture order against Mr Parkes, or Ms Harris;(d) Mr Parkes would abandon all claims, under the Act or otherwise, to therestrained property; and(e) Costs would lie where they fall.[19] The approximate total value of the property to be forfeited to the Crown as aresult of the proposed settlement is $153,875.76. The approximate value of the twovehicles that are to be released from restraint is $43,400.00.Legal principles[20] Section 95 of the Act governs Court-approved settlements and provides asfollows: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."[21] Section 95 had no predecessor under the former legislation (Proceeds of CrimeAct 1991). In enacting s 95, Parliament expressly empowered the Commissioner toenter into settlement discussions with respondents and interested parties regarding theforfeiture of assets. I accept the proposition in the parties' joint memorandum that, indoing so, Parliament is likely to have had in mind the significant cost associated withcivil litigation and the benefits to all parties if proceedings can be settled and resolvedby consent.[22] As has been previously observed, Parliament has entrusted the High Court witha supervisory jurisdiction to ensure that settlements are consistent with theparliamentary intention.4[23] The primary purpose of the Act is contained in s 3(1). It is the establishmentof a regime for the forfeiture of property which has been derived directly or indirectlyfrom significant criminal activity or that represents the value of a person's unlawfullyderived income. Ancillary statutory purposes are to "eliminate the chance" for personsto profit from undertaking or being associated with significant criminal activity(s 3(2)(a)) and to "deter" significant criminal activity (s 3(2)(b)). The Court of Appealin Hayward v Commissioner of Police recently affirmed the Act has a "stronglyexpressed statutory purpose".54 Commissioner of Police v Know-All Group Limited HC Auckland, CRI-2010-404-403,7 November 2011 per Brewer J at [11].5 Hayward v Commissioner of Police [2014] NZCA 625 at [29].[24] The overall interests of justice requirement calls for a broad inquiry. Inconsidering whether a settlement is in the interests of justice, relevant factors willinclude the savings of time and cost and the litigation risk of a hearing to both theCommissioner and the respondent.6 The Court has recognised the decision to settleproceedings under the Act may be made on economic and pragmatic grounds andreflect a "common sense compromise" between the parties.7The result – the threshold for settlement approval met[25] The parties submit the settlement is consistent with the purposes of the Act andis in the overall interests of justice, reflecting the principles in s 95(3) of the Act.Having considered the matters in the joint memorandum dated 10 May 2019, I agreefor the following reasons:(a) The majority of the restrained assets are to be forfeit under the proposedsettlement which is appropriate given the serious nature of the criminaloffending. The approximate total value of the property to be forfeitedto the Crown as a result of the proposed settlements is $153,875.76;(b) Although Mr Parkes denies that he personally received a substantialfinancial benefit from his drug offending, I agree that theCommissioner has a strong case that Mr Parkes has unlawfullybenefited to the extent of $478,312.70 from drug offending. Theestimated value of the quantity of methamphetamine Mr Parkes wasfound to have supplied, or possessed for the purposes of supply, was atotal of 568.8 grams. The modest declared income of both Mr Parkesand Ms Harris is inconsistent with the large asset base (estimated valueof $232,110) acquired during the relevant period. There were alsounexplained cash deposits into Ms Harris' bank accounts betweenJanuary 2015 and January 2016. Neither Mr Parkes nor Ms Harris haveprovided an explanation for the source of the cash deposits.6 Commissioner of Police v Kree [2013] NZHC 2972 at [11].7 Commissioner of Police v Douglas [2015] NZHC 1293 at [6]; Commissioner of Police v Venn[2014] NZHC 361.(c) In my view, the relatively modest amount of the restrained assets whichwill not be forfeit, and in respect of which the restraining orders will berescinded, properly reflects that pursuing a forfeiture order through asubstantive hearing to conclusion will involve not insignificant timeand cost. The cost to be weighed includes the allocation of scarce Courtresources away from other litigants and the need for significant furtherinvestment of public resources. I note in this regard that neither of thetwo vehicles to be released from restraint are presently in the custodyand control of the Official Assignee;(d) An approved settlement will allow the parties to have certainty andcontrol as to the outcome.Orders sought: a proposed settlement[26] The Commissioner and Mr Parkes jointly seek the following orders by consentto give effect to the terms of the settlement:(a) Further orders under ss 34 and 35 of the Act, in particular the followingproperty is released from the restraining orders:(i) A 2007 Ducati 1098S motorcycle (registration 37ZRH),VIN ZDMH700AA7B008346 (Ducati), registered toMs Harris;(ii) A 1997 Dodge Ram 2500 SLT motor vehicle (registrationR4M1T) VIN 1B7KC23Z8WJ122369 (Dodge Ram), registeredto an unknown person at 6 Baird Road, Tokoroa;(b) Assets forfeiture orders under s 50(1) of the Act, in particular, thefollowing property vests in the Crown absolutely and is in the OfficialAssignee's custody and control:(i) The proceeds of sale of a 1998 Nissan Skyline GT-R motorvehicle (registration JNZ870), VIN 7A8DH120705042693formerly registered to Mr Parkes (plus any accrued interest);(ii) The proceeds of sale of a 2006 Land Rover motor vehicle(registration JND724), VIN SALLSAA336A933687, formerlyregistered to Ms Harris (plus any accrued interest);(iii) The proceeds of sale of a 2015 Kawasaki ZX 1000N motorcycle(registration A9ZWM), VIN JKAZXCN13FA000559, formerlyregistered to Ms Harris (plus any accrued interest);(iv) The proceeds of sale of a 1998 Harley Davidson Wide Glidemotorcycle (registration 88YLN), VIN1HD1GEV17XY305696, formerly registered to Ms Harris(plus any accrued interest);(v) The proceeds of sale of a 1975 Chevrolet Camaro (registrationERU811), VIN 7A82R070708590163, formerly registered toMagnets New Zealand Limited;(plus any accrued interest);(vi) The proceeds of sale of a Haines Hunter SF535 motor boatnamed "Licence to Thrill", serial number SF535/31656 (plusany accrued interest);(vii) The proceeds of sale of a DMW Premier 535 boat trailer(registration Y892D, serial number 12709, registered to personsunknown (plus any accrued interest);(viii) The proceeds of sale of a 2003 Holden SS V8 utility motorvehicle (registration HUZ159) VIN 6G1YK42F35L947023,formerly registered to Brett Kolkrabs (Holden SS V8) (plus anyaccrued interest); and(ix) The proceeds of sale of a 1998 Harley Davidson 99 Dyna SuperGlide motorcycle (registration B9ASW)VIN 1HD1GJV16XY309697, formerly registered to MichaelThomas (1998 Harley Davidson) (plus any accrued interest).(c) The Commissioner's application for a profit forfeiture order againstMr Parkes and Ms Harris, contained at paragraph 1(a) of his applicationfor civil forfeiture orders (dated 3 August 2018) is dismissed; and(d) Mr Parkes' notice of opposition to the Commissioner's civil forfeitureapplication (dated 4 April 2019) is dismissed; and(e) Costs between the Commissioner and Mr Parkes will lie as they fall inrelation to all matters.[27] In addition, the parties ask the Court to record the further terms of settlementbetween the Commissioner and Mr Parkes:(a) Mr Parkes abandons all claims he might have in relation to any of theproperty restrained in this matter, either under the Act or otherwise, andundertakes not to take any steps to oppose the civil forfeiture of thatproperty; and(b) The settlement is in full and final settlement of the current proceedingsbrought by the Commissioner against Mr Parkes under the Act.Orders[28] Being satisfied that the proposed settlement is consistent with the purposes ofthe Act and is in the overall interests of justice I make the orders in terms of [26] above......................................................Walker J