COMMISSIONER OF POLICE v BROWNE & ANOR [2020] NZHC 484

COMMISSIONER OF POLICE v BROWNE & ANOR [2020] NZHC 484 [11 March 2020]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2019-409-315[2020] NZHC 484BETWEEN COMMISSIONER OF POLICEApplicantAND ELDER BROWNEFirst RespondentLORRAINE FRANCES EDWARDSSecond RespondentHearing: 10 March 2020Counsel: K South for ApplicantT Clee for RespondentsJudgment: 11 March 2020JUDGMENT OF CHURCHMAN JBackground[1] By application dated 10 June 2019, the Commissioner of Police (the applicant),applied on notice for a restraining order in respect of two sums of money. Firstly:(a) $10,695 in cash seized from 41 Gibbs Drive, Woodend, NorthCanterbury on 22 June 2016; and(b) $24,850 in cash seized from a Mazda car, registration no. GHN 241 on16 March 2019.[2] The grounds upon which the order was sought is that the property was "taintedproperty" and that Elder Browne and Lorraine Frances Edwards (the respondents)have unlawfully benefitted from significant criminal activity.[3] The application was supported by an affidavit from Detective Duncan Bulldated 5 June 2019.[4] On 18 September 2019, a notice of opposition was filed on behalf of therespondents. That denied that either sum of cash was "tainted property" and that therespondents had unlawfully benefitted from significant criminal activity.The applicant's case[5] The applicant asserted that he had reasonable grounds to believe that the twosums of cash were tainted by having been acquired in whole, or in part, as a result ofsignificant criminal activity, or that the sums were indirectly derived from significantcriminal activity.[6] The asserted "significant criminal activity" was said to be possession ofmethamphetamine for supply and the supply of methamphetamine within thepermitted relevant period of seven years before the application for restraint.[7] The facts relied upon as providing a basis for the "reasonable grounds tobelieve" were that:(a) the first respondent, Mr Browne, pleaded guilty to charges ofpossession of methamphetamine and possession of a Black MossbergPump Action shotgun and ammunition arising out of the search on22 June 2016 at 41 Gibbs Drive, Woodend, Waimakariri, when the$10,695 cash was seized. He was sentenced to 10½ months'imprisonment on those charges;(b) a residual quantity of methamphetamine and four cellphones werefound in the toilet at 41 Gibbs Drive, Woodend on 22 June 2016. Thecellphones belonged to Mr Browne and the circumstances in whichthey were found supported the inference that:(i) he had attempted to flush a larger quantity of methamphetaminedown the toilet; and(ii) he had placed the cellphones in the toilet because they werephones he had used in relation to the supply ofmethamphetamine and he wished to avoid the information onthe phones being detected.(c) the $10,695 was found in various amounts in various locations in aroom which was said to be the joint bedroom of both respondents;(d) when asked for an explanation as to how she had acquired the $10,695which she claimed was her property, Ms Edwards's response was thatshe had earnt the money, but it was not something that you receivereceipts for;(e) the respondents had not denied that they were in a domestic relationshipat the time;(f) a statutory declaration from the first respondent dated 29 June 2018referred to the money having been "confiscated from my home on 22 ofJune 2016";(g) some $5,000 of the money was found in a "Tarocash" XXL jacket in awardrobe in the bedroom;(h) some $4,800 was found in a plastic bag under the mattress in thebedroom;(i) some $850 was found in a black handbag in the bedroom;(j) that Mr Browne was a member of the Tribesmen Motorcycle Gang whowere known to be extensively involved in methamphetamine dealing;(k) that as at June 2016, Mr Browne was a beneficiary and had been forsome considerable time previously. He also spent time in prison, wherehe would not have been in receipt of any income, for the June 2016charges;(l) Ms Edwards was also a beneficiary;(m) neither was able to point to any credible explanation as to how the cashhad been acquired;(n) Ms Edwards had changed her story about how much of the money washers, initially only claiming $5,000;(o) similar grounds were advanced in relation to the sum of $24,850 seizedon 16 March 2019 from the Mazda car;(p) the cash was in a bag which also contained Mr Browne's passport andbirth certificate;(q) no credible explanation was offered by Mr Browne who said he was"holding it for a friend" whom he declined to name;(r) in addition to the matters relevant to the other sums, it was said thatMr Browne appeared on the companies' register as a shareholder in acompany called "Moneyman Ltd" which had since been removed. Thesole director of that company was said to be one Jason Brian VictorHamerton who was said to have an extensive list of drug-relatedconvictions including those involving methamphetamine;(s) both Mr Browne and Ms Edwards were still beneficiaries as at March2019, yet substantial unexplained deposits had been made intoMs Edwards' BNZ bank account totalling some $70,141 in the period1 April 2016 to 31 March 2019; and(t) there were also large cash deposits into Mr Browne's bank account inthe period 1 April 2016 to 18 April 2017 which were inconsistent withhis sole income being the benefit.[8] The applicant asserts that the Court is able to draw an inference from all ofthese factors that the applicant had reasonable grounds to believe that all of the cashwas tainted and had been acquired, in whole, or in part, as a result of significantcriminal activity directly, or indirectly.The respondents' case[9] It was submitted that Ms Edwards had claimed ownership of the monies seizedon 22 June 2016.[10] It was submitted that based on Ms Edwards' comments referred to in [7](d)above, the detective who questioned her about the source of funds, understood she wasasserting that the money was obtained through prostitution, and it was implied thatthis could provide an explanation that counted the assertion that the money came frommethamphetamine dealing.[11] It was claimed that the cash was " found in portions under her bed, in herjacket pocket, in her handbag, and in her bathroom."[12] Mr Clee also submitted that, in relation to her explanation for the funds, shewas under no legal obligation to provide any further information.[13] Mr Clee's submissions focused heavily on a number of provisions in the Searchand Surveillance Act 2012. This was the Act pursuant to which the cash sums wereseized. Mr Clee relied on ss 150 and 151 of the Act.[14] It was submitted that the applicant had filed no evidence that Ms Edwards hadat any time been in possession of, used, or in any other way involved withmethamphetamine, or its supply. He asserted that there was no evidence thatMr Browne was the owner of the money or that he had supplied it to Ms Edwards. Itwas also asserted that there was no evidence that Ms Edwards had any knowledge ofMr Browne's activity, or had participated in his activity.[15] It was submitted that there was no evidence regarding the nature of therelationship between Mr Browne and Ms Edwards as at 22 June 2016 to allow anyinference to be drawn with Ms Edwards' knowledge or involvement in any activity ofMr Browne.[16] It was also submitted that "no evidence is filed rebutting the understanding ofDetective Owen that it was earned through prostitution".[17] Mr Clee also pointed to the delays in the applicant commencing theseproceedings.Factual findings[18] The assertion that Ms Edwards has claimed ownership of the money seized on22 June 2016 is correct but needs to be seen in light of the fact that initiallyMs Edwards only claimed part of the funds and Mr Browne also filed a statutorydeclaration claiming that all of the funds were his.[19] The assertion that the cash was found under Ms Edwards' bed, in her jacketpocket, in her handbag and in her bathroom is an exaggeration. Given that there wasno dispute that the parties were in a relationship at the time, and Mr Browne filed astatutory declaration saying that the address was his "home", it seems moreappropriate to describe the bed as their joint bed.[20] So far as the jacket pocket is concerned, the jacket as an XXL jacket. Mr Cleeidentified for the Court that both Mr Browne and Ms Edwards were present in Court,although neither of them gave evidence. Having observed them, it seems improbablethat an XXL jacket belonged to Ms Edwards and much more likely that it belonged toMr Browne.[21] I accept that the $850 was found in a black handbag which is more likely tohave belonged to Ms Edwards than Mr Browne. However, given that the parties werea couple that sheds little light on its source.[22] So far as the money found in the bathroom is concerned, that was $45 found ina downstairs bathroom. It is not clear that this was Ms Edwards' bathroom. Therewere a number of other adult occupants in the house including one in whose bedroom$8,000 was located. That sum was not attributed to either of the respondents and wasreturned to the person in whose bedroom it was found.[23] In relation to the claim that there was insufficient evidence of the nature of therelationship between Mr Browne and Ms Edwards as at 22 June 2016 to draw aninference that Ms Edwards knew of any activity Mr Browne might have been involvedin, it was not disputed that the parties were in a domestic relationship at that time andthat relationship has continued and existed as at 16 March 2019. There was evidencethat correspondence addressed to Mr Browne was found in the bedroom where themoney was found; and that the shotgun and ammunition which he acknowledgedownership of were found at the property. These are all matters that support aninference that Ms Edwards is likely to have known what Mr Browne was involved in.[24] In relation to the claim that Detective Owen "understood" that Ms Edwardshad earned the $10,695 through prostitution, Detective Owen, unlike Detective Bull,was not called by Mr Clee for cross-examination. Nothing in evidence before theCourt indicates that Detective Owen believed that Ms Edwards had earned the $10,695(or any other sum) through prostitution. At best for the respondents, his statementexpressed that this was his understanding of the enigmatic words used by Ms Edwardsby way of explanation as to how she came by the money.The law[25] Section 150(1) of the Search and Surveillance Act 2012 provides:A thing seized or produced must, if it is not required for investigation orevidential purposes, or unless it is liable to forfeiture to the Crown be –(a) returned to its owner or the person entitled to possession.(Bolding added)[26] Section 151(1) of the Search and Surveillance Act 2012 provides:A seized or produced thing may, if it is required for investigative or evidentialpurposes, or it is liable to forfeiture to the Crown or any other person (whetherby operation of law or by order of a Court or otherwise) be held in the custodyof the person who exercised the search power or that person's employer oranother person acting on behalf of that person or any other person to whomthe thing is transferred in accordance with s 90(2) (except while it is beingused in evidence or is in the custody of any Court) until the first of thefollowing occurs:(a) a decision is made not to bring proceedings for an offence in respectof which the thing was seized or produced:(d) if proceedings for an offence have not been commenced before thedate that is six months after the thing was seized or produced and arequest has been made for the return of the thing, that date or theexpiration of a later time ordered by a Court under s 153 [27] Both of these sections expressly provide that if something seized is liable toforfeiture to the Crown, it may be retained. In those circumstances, the fact that adecision was made not to bring proceedings for an offence in respect of which thething was seized or produced, is irrelevant. Likewise, the fact that six months haspassed after the thing was seized does not render the holding of the object unlawful.It is not a precondition to seizure or forfeiture under the Criminal Proceeds (Recovery)Act 2009 (CPRA) that a criminal charge needs to be, or have been, laid in respect ofthe item seized.1[28] The real issue for decision in this case is what the effect is of the applicant,once the $10,695 was seized, not promptly applying for a restraining order in respectof it but waiting nearly three years until 10 June 2019.[29] There does not seem to be anything in the CPRA that imposes a particular timelimit by which the applicant must commence proceedings seeking a restraining order.2[30] The Police appeared to have formed the view that the $10,695 seized from41 Gibbs Drive on 22 June 2016 was tainted as being the proceeds of significantcriminal activity at or about the time that it was seized.Analysis[31] In the circumstances, particularly given the presence of the shotgun andammunition at the property, Mr Browne's involvement with the TribesmenMotorcycle Gang who are known to be heavily involved in methamphetamine, thepresence of the residual methamphetamine and the four cellphones in the toilet, andthe lack of credible alternative explanations for the presence of large quantities of cash1 Criminal Proceeds (Recovery) Act 2009, s 15.2 Ms South in oral submissions referred to a seven-year limit but that is found in s 5 of the CPRA.This is the definition section in the CPRA and the definition of "relevant period of criminalactivity" refers specifically to profit forfeiture orders rather than restraining orders.in the bedroom of two beneficiaries, the inference that the cash was tainted and derivedfrom a methamphetamine dealing, is a reasonable one for the Police to have drawn.[32] Despite Mr Clee's submissions to the contrary, it is clear that no member ofthe Police ever accepted that the money was the result of prostitution by Ms Edwards.[33] If the Police had, at any time after seizing the cash, formed the view that therewas a credible alternative explanation for the presence of the cash that did not involvesignificant criminal activity, they would have been obliged to promptly return it to therespondents and, if they were unsure as to which of the two respondents actuallyowned it, given that both claimed ownership of the total sum, they could have appliedto the District Court under s 154 of the Search and Surveillance Act 2012.[34] There was no delay following the seizure of the $24,850 on 16 March 2019with the application for the restraining order being filed within three months of theseizure.[35] The fact that there were two large unexplained cash sums seized on separateoccasions supports the inference that both sums are likely to be the proceeds ofmethamphetamine dealing. There was no submission made by Mr Clee that the$24,850 was the proceeds of prostitution by Ms Edwards and no plausible explanationadvanced by Mr Browne that would justify his ownership of it.[36] Mr Clee submits that there is no evidence of possession, use or otherinvolvement with methamphetamine by Mr Browne since 22 June 2016. Thissubmission ignores the obvious inference that can be drawn from the fact thatMr Browne had in his possession a sum of cash that no person whose sole source ofincome was a benefit would be expected to have. Mr Browne was still a member ofthe Tribesmen Motorcycle Gang who are known to be involved in themethamphetamine trade; he had pleaded guilty to possession of the shotgun andammunition which are the sort of things that a dealer in methamphetamine would havein their possession; and he had also been convicted of possession of the residualamount of methamphetamine found in the toilet, along with the four cellphones on22 June 2016. The presence of multiple cellphones in the same toilet that the residualmethamphetamine that Mr Browne pleaded guilty to possessing would support aninference that he was, at that stage, a methamphetamine dealer with the ownership ofmultiple cellphones and an attempt to render the data on them unrecoverable,supporting an inference of drug dealership. The fact that some three years had passedbetween the two incidents is of little relevance. The circumstances of the 2016 seizureprovided important context to the 2019 incident.Restraining order[37] The submissions on behalf of the respondents focused on what was said to bea lack of evidence and proof. This submission ignores the fact that a restraining orderis a temporary order and requires "reasonable grounds to believe" rather than "proofthat the target has unlawfully benefitted from significant criminal activity".3[38] A restraining order has been described as a "holding device" of limitedduration.4[39] Under s 25, the Court is not making a finding that the respondent has in factunlawfully benefitted from significant criminal activity. It is determining whetherthere were reasonable grounds to believe that the respondents have unlawfullybenefited from significant criminal activity.[40] The fact that only part of a sum of money or other property received is tainteddoes not prohibit a restraining order being made.5[41] For the reasons set out above, I am satisfied that there are reasonable groundsto believe that both sums of cash seized are tainted and that the respondents havebenefitted from significant criminal activity in respect of them.[42] There is no dispute that the cash was under the control of either one or both ofthe respondents.3 Vincent v Commissioner of Police [2013] NZCA 412 at [47].4 Vincent v Commissioner of Police above n 3 at [37].5 See Commissioner of Police v Doorman HC Nelson CIV-2010-442-169, 15 December 2011.[43] Accordingly, I make the following orders:(a) that the sums of $10,695 and $24,850 referred to in the application arenot to be disposed of, or dealt with, other than as provided for in thisrestraining order; and(b) that the sums are to be under the Official Assignee's custody andcontrol pending further order of the Court.Churchman JSolicitors:Crown Solicitor's Office, Christchurch for Applicantcc: T Clee, Barrister, Auckland for Respondents