COMMISSIONER OF POLICE v TAUREREWA [2021] NZHC 3226

COMMISSIONER OF POLICE v TAUREREWA [2021] NZHC 3226 [29 November 2021]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2021-485-152[2021] NZHC 3226UNDER the Criminal Proceeds (Recovery) Act 2009IN THE MATTER of an application under sections 21, 24, 25and 52BETWEEN THE COMMISSIONER, THE NEWZEALAND POLICEApplicantAND TE ORA QUELINE TANIA MAKATEATAUREREWAFirst RespondentADIDAS TITA MAKATEA MIHAKASecond RespondentHearing: 29 November 2021Counsel: V M Rea and A W M Britton for ApplicantNo appearance for the RespondentsJudgment: 29 November 2021JUDGMENT OF ELLIS J[1] By an on-notice application dated 23 March 2021, the Commissioner of Policeseeks a profit forfeiture order under s 55 of the Criminal Proceeds (Recovery) Act2009 (the CPRA) for a sum of cash totalling $10,900, seized during a warrantlesssearch of a Wellington property rented by the second respondent (Mr Mihaka) and hispartner. Ms Taurerewa, the first respondent and cousin of Mr Mihaka, was present atthe time. The search also located what was believed to be cannabis (around 45g),scales, and several zip lock bags that together led Police to believe they had foundevidence of the sale and supply of cannabis.[2] During the search, Ms Taurerewa was reluctant to be searched; she insisted onusing the bathroom first. As she stood up to walk there, bank notes fell from herclothing. Police then found $10,340 in cash concealed on her person. The balance ofthe cash subject to the forfeiture application was found in a cardboard box ($160) andin a black jacket ($400).[3] Ms Taurerewa, Mr Mihaka, and Mr Tawhara (her partner) were each chargedwith possession of cannabis for supply.1[4] On 16 February 2021, the charges against all three were dismissed under s 147of the Criminal Procedure Act 2011 because the cannabis had not been tested.2[5] On 23 March 2021, the Commissioner then filed applications for on-noticerestraining orders and profit forfeiture orders, supported by affidavit evidence.3 Thesubsequent procedural chronology is as follows:(a) 27 April: Mr Mihaka filed a notice of opposition to both thoseapplications, without any supporting evidence.(b) 3 May: Isac J in his minute directed that Mr Mihaka and Ms Taurerewafile evidence in support and take steps in the proceeding by 14 June.(c) 10 June: Counsel for Mr Mihaka sought leave to withdraw, on the basisthat legal aid had not been granted.(d) 23 June: Ms Taurerewa filed a notice of opposition to theCommissioner's applications.1 Misuse of Drugs Act 1975, s 6(1). Mr Tawhara is not a party to the present application becausePolice now accept his position that he was not involved in the offending and had no interest in thecash seized.2 Wellington Police prosecutors had sought for the charges to be withdrawn under s 146 of the CPA,but counsel for Ms Taurerewa then successfully sought the s 147 orders.3 I discussed with counsel for the Commissioner whether the delay of approximately one monthbetween the dismissal of the charges and the filing of this application might be problematic, interms of the requirement to return something seized "immediately" following the dismissal of acharge under ss 151(1)(e) and 151(2) of the Search and Surveillance Act 2012. His advice wasthat Police interpret the word "immediately" as meaning after the expiry of any appeal period,which, without the benefit of argument on the point, appears to me to be reasonable.(e) 28 June: Grice J adjourned the call at the Judge's chambers list so thatMr Robinson could advise Ms Taurerewa (who had recently beengranted legal aid).(f) 23 August: Grice J granted on-notice restraining orders, with consentof Ms Taurerewa and without active opposition—in the form of eitheran appearance by, or evidence from—Mr Mihaka.(g) 15 September: Ms Taurerewa filed a memorandum of counselconfirming that she consented to the Commissioner's forfeitureapplication.(h) 30 September: Churchman J directed that:(i) the forfeiture application be set down for hearing by way offormal proof;(ii) excusing Ms Taurerewa from all further calls of the proceeding;(iii) any forfeiture orders made would be sealed after a perioddetermined by the Court, unless Mr Mihaka sought leave to varythe judgment; and(iv) the Commissioner was to serve a copy of any minute andjudgment of the Court on Mr Mihaka.[6] Further affidavits were filed by the Commissioner on 12 October and16 November 2021.Profit forfeiture: relevant law[7] Section 43 of the CPRA empowers the Commissioner to apply for civilforfeiture orders; a profit forfeiture order (as sought here) is a type of civil forfeitureorder.44 Criminal Proceeds (Recovery) Act 2009 [CPRA], s 5.[8] Section 55 then more specifically 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.(3) Subsections (1) and (2) are subject to section 56.(4) A profit forfeiture order is enforceable as an order made as a result ofcivil proceedings instituted by the Crown against the person to recovera debt due to it, and the maximum recoverable amount is recoverablefrom the respondent by the Official Assignee on behalf of the Crownas a debt due to the Crown.[9] Section 6 defines "significant criminal activity" as an offence punishable by amaximum term of imprisonment of five years or more, or an offence from which atleast $30,000 has been (directly or indirectly) acquired or derived. Section 6(2) thenmakes it clear that a person can be held to have undertaken significant criminal activitywhether or not they have been charged or convicted of the offence and, indeed,whether or not they have been acquitted of an offence connected to the activity5 or hadrelevant convictions quashed.6[10] It follows that the respondents may still have benefited from significantcriminal activity, as defined by the CPRA, notwithstanding that the charges weredismissed under s 147 of the Criminal Procedure Act. Section 15 of the CPRA5 Section 6(2)(b).6 Section 6(2)(c).underscores this point—no criminal proceedings are required before orders are madeunder the Act.[11] Finally, the Commissioner must show that the respondents have "interests" inthe property, which is defined in s 5 of the Act as follows:interest, in relation to property of any kind (including, without limitation,restrained property or forfeited property), means—(a) a legal or equitable estate or interest in the property; or(b) a right, power, or privilege in connection with the property[12] Any potential issues of the unlawful benefit's quantum, or of any deductionsfor undue hardship, are obviated by the absence of evidence from the respondents.7[13] In short, although Ms Taurerewa has consented to forfeiture and Mr Mihakahas not taken steps to defend it, s 55 of the CPRA requires me to be satisfied on thebalance of probabilities that the respondents have unlawfully benefited fromsignificant criminal activity (from which the $10,900 must be derived) and that theyhave interests in the cash.DiscussionSignificant criminal activity[14] Possession of cannabis for supply constitutes significant criminal activity forthe purposes of the CPRA, regardless of any conviction. Here, the uncontestedevidence found during the search of a property rented in Mr Mihaka's name establishes(on the balance of probabilities) that the respondents were engaged in that activity. Inote in particular:(a) the $10,340 cash concealed on Ms Taurerewa's person on that day;(b) 1.1g of material resembling cannabis and two small clear plastic pointbags found in Ms Taurerewa's purse;7 It is incumbent on the respondents to establish such matters: see s 53 and s 56 of the CPRA.(c) a black tote bag with a small set of black scales and two zip lock bags,one with remnants of material resembling cannabis and another with30g of material resembling cannabis;(d) a cardboard box with documents relating to Mr Mihaka (including apassport photo of him) and $160.00 in twenty-dollar notes;(e) a metal ammunition container with remnants of material resemblingcannabis and multiple empty zip lock bags;(f) a black jacket and backpack with Mr Mihaka's driver's licence, 4g ofcannabis, and $400 in twenty-dollar notes; and(g) a further 11.5g of material resembling cannabis found in the lounge.[15] As well:(a) the Police digital forensic unit extracted information from the microSDcard from Ms Taurerewa's phone, which contained several deletedimages of cannabis plant material being grown and weighed into bags;(b) a production order was sought over the phone's data between 30 April2020 and 30 May 2020. It revealed conversations betweenMs Taurerewa and unknown contacts about the sale and purchase ofcannabis (with codewords and phrases understood by Police, such as"full", "pineapple express", and "indoor");8 and(c) fingerprints matching Mr Mihaka's were found on zip lock bagscontaining material resembling cannabis.8 "Full" is a term used to mean an ounce of cannabis. "Pineapple express" is a common code namefor cannabis. And "indoor" is a term commonly used to describe cannabis grown indoors.Unlawful benefit[16] I am satisfied that the $10,900 seized here is unexplained, for the reasons thatfollow.9[17] First, the evidence shows that Ms Taurerewa's gross income over the last sevenyears was $93,958.56, comprised largely of benefit receipts together with $1,704 ofwage payments in 2017. She told Police that she had been working at Kilbirnie KFC,but that is inconsistent with her declared income. Ms Taurerewa's variousexplanations for the cash variously included:(a) that the cash was from her own savings combined with proceeds fromsale of an unidentified vehicle;(b) that most of it had been received from her father, who had received theCOVID-19 wage subsidy payment; and(c) that $7,000 was from her father (sourced from the wage subsidy),$1,800 was from the sale of a Toyota van registered in her name, andthe balance comprised her benefit savings over the COVID-19lockdown period.[18] Upon further inquiry, Police found that Ms Taurerewa's father had received theCOVID-19 wage subsidy on 8 April 2020 and then made nine different withdrawalsfrom ATMs, totalling $4,670. Not only is this significantly less than the sum referredto by Ms Taurerewa, but I accept the Commissioner's submission that the nature ofthe withdrawals (location, size) suggests the money was withdrawn for her father'spersonal use. He received no other income between 8 April 2020 and 20 April 2020that could have been used to cover his day-to-day living expenses.[19] Police also confirmed with the New Zealand Transport Authority on 14 April2020 that Ms Taurerewa had never had a vehicle registered in her name.9 In Commissioner of Police v de Wys [2016] NZCA 634 at [71], the Court of Appeal noted thatunexplained large cash sums "will tend to support an inference that the relevant cash has beensourced from illegitimate or criminal activity".Ms Taurerewa provided no specific details to Police about the vehicle or its sale,including to whom it was purportedly sold. Police confirmed that Ms Taurerewa hasnot sold a vehicle on TradeMe in the past.[20] Secondly, Ms Taurerewa's bank records disclosed no cash withdrawals madefrom her account between 28 March and 29 May 2020 that could explain the amountsof cash Ms Taurerewa claimed she had saved.[21] Thirdly, Mr Mihaka's declared income over the last seven years is $27,075.59,comprised mainly of benefit payments together with $3,168 wages. Although he toldPolice that the money found in the cardboard box and jacket (together $560) wasbenefit money, I accept that, on the balance of probabilities, this amount was theproceeds of cannabis dealing.Interest[22] Ms Taurerewa consistently claimed an interest in the $10,340 found on herperson during the search; this is a position that she has maintained in her variousexplanations to Police. Mr Mihaka told Police on 17 March 2021 that the remaining$560 cash was money from his benefit, withdrawn from an ATM. There is also furtherevidence supporting him having an interest in it, namely that:(a) the $160 cash in the cardboard box was found together with documentsrelating to, and a passport photo of, Mr Mihaka; and(b) the $400 cash was found in the black jacket lying on top of a blackbackpack, which contained Mr Mihaka's driver's licence.Conclusion[23] In light of the uncontested Police evidence, I am satisfied that, on the balanceof probabilities, the respondents were engaged in and unlawfully benefited from thesale and supply of cannabis. There is no plausible alternative explanation available tome. I am also satisfied that the respondents have an interest in the $10,900 seized.The only available inference is that the cash was obtained from the sale of supply ofcannabis.[24] No evidence supporting any claim of undue hardship has been filed.10 Thereare also no issues with the maximum recoverable amount.11[25] For the above reasons, I grant the Commissioner's profit forfeiture application,in the terms sought.[26] In accordance with the directions of Churchman J, the order is not to be sealedfor a period of 15 working days after service of this judgment on Mr Mihaka._____________________Rebecca Ellis JSolicitors:Luke, Cunningham Clere, Wellington for Applicant10 CPRA, s 51.11 Sections 53 and 54.