COMMISSIONER OF POLICE v RANKIN [2023] NZHC 1792

COMMISSIONER OF POLICE v RANKIN [2023] NZHC 1792 [10 July 2023]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2023-485-139[2023] NZHC 1792UNDER the Criminal Proceeds (Recovery) Act 2009IN THE MATTER of applications under sections 21 and 25, andsections 43, 44, 52 and 55BETWEEN THE COMMISSIONER, THE NEWZEALAND POLICEApplicantAND JUSTIN RANKINRespondentAND OWHIRO BUILDERS LIMITEDInterested PartyHearing: On the papersCounsel: A W M Britton for ApplicantNo appearance for Respondent or Interested PartyJudgment: 10 July 2023JUDGMENT OF RADICH JIntroduction[1] The Commissioner of Police applies for a civil forfeiture order under theCriminal Proceeds (Recovery) Act 2009 (the Act) against the respondent, JustinRankin (Mr Rankin), over a 2018 Nissan Navara (the Nissan) which has been thesubject of restraining orders since 19 March 2021.Background[2] On 14 December 2020, the Commissioner obtained a search warrant unders 101 of the Act to seize the Nissan, understood to have been obtained by an unlawfulbenefit made by the respondent through significant criminal activity. It was seized onthat day and transferred to the Official Assignee on 16 December 2020.[3] On 18 January 2021, the Commissioner sought an on-notice restraining orderin the District Court over the Nissan on the basis that it was an instrument of crime interms of s 5 of the Act.[4] The District Court made the restraining order on 19 March 2021. NeitherMr Rankin nor the interested party appeared or opposed the application.[5] The order was extended by the District Court under s 41 of the Act for one yearto allow for Mr Rankin to be tried. The Commissioner intended to seek the Nissan'sforfeiture at Mr Rankin's sentencing in the event of his conviction.[6] On 24 July, Mr Rankin pleaded guilty to the charges brought against him andsought a sentence indication. On 25 November 2022 Mr Rankin was sentenced toseven years and five months' imprisonment for possession of methamphetamine forsupply,1 supplying GBL,2 and possession of GBL for supply.3 The sentencing datewas brought forward and, due to an oversight, the profit forfeiture order was not soughtat that time.[7] As a result, the Commissioner applied for a further on-notice restraining orderand for a profit forfeiture order under the Act on 17 March 2023. On 17 April 2023,Edwards J granted the restraining order and directed the forfeiture order application tobe heard in the Judge's Chambers List on 8 May 2023. The call was adjourned whilethe interested party (the liquidator of Owhiro Builders Limited, the company thatemployed the respondent) clarified his position.1 Misuse of Drugs Act 1975, s 6(1)(f) and (2).2 Section 6(1)(c).3 Section 6(1)(f).[8] In a memorandum of 19 May 2023, the liquidator advised that he did not intendto take any further steps in the proceeding and, in a minute of 22 May 2023, I directedthe Commissioner's application for a forfeiture order be determined on the papers.Relevant principles[9] Under s 55(1) of the Act, the Court must make a profit forfeiture order if it issatisfied on the balance of probabilities that:(a) the respondent has unlawfully benefited from significant criminalactivity within the relevant period of criminal activity; and(b) the respondent has interests in property.[10] The order must specify the value of the benefit determined in accordance withs 53, the maximum recoverable amount determined in accordance with s 54 and theproperty that is to be disposed of in accordance with s 83(1) in which the respondenthas, or is treated as having, an interest.4[11] The approach to be taken in determining orders of the type sought here wasdescribed by Lang J in Pulman v Commissioner of Police in the following way:5(a) The Court must determine under s 53 whether the Commissioner hasproved on the balance of probabilities that the respondent has benefitedfrom significant criminal activity during the relevant period. The valueof that benefit is presumed to be as stated in the Commissioner'sapplication unless rebutted by the respondent.(b) The Court must determine the maximum recoverable amount by takingthe value of the benefit, as assessed in the above step, and deducting itfrom the value of any property already forfeited.(c) The Court must determine whether any property should be excludedfrom the operation of the order because undue hardship is likely to becaused to the respondent if such property were realised.4 Criminal Proceeds (Recovery) Act 2009, s 55(2).5 Pulman v Commissioner of Police HC Auckland CIV-2010-404-5666, 27 May 2011.(d) If the Court is satisfied on the balance of probabilities the respondenthas interests in property and the above steps have been taken, it mustmake the order.[12] "Significant criminal activity" is defined in s 6 as an activity engaged in by aperson that if proceeded against as a criminal offence would amount to offending:(a) that consists of, or includes, 1 or more offences punishable by amaximum term of imprisonment of 5 years or more; or(b) from which property, proceeds, or benefits of a value of $30,000 ormore have, directly or indirectly, been acquired or derived.[13] Section 7 of the Act provides that a person has unlawfully benefited fromsignificant criminal activity if the person has "knowingly, directly or indirectly,derived a benefit from significant criminal activity" whether or not that personundertook or was involved in the activity.[14] Under s 5 a person has an "interest" in property where they have "a legal orequitable estate or interest in the property" or "a right, power or privilege in connectionwith the property".Analysis[15] The Commissioner's application seeks an order that the value of the benefit tobe determined in accordance with s 53 of the Act is not less than $50,000. He thenseeks to use his powers under the Act to forfeit the Nissan (which is valued by theOfficial Assignee at $25,000).[16] The Commissioner submits on the balance of probabilities that:(a) the respondent has been involved in "significant criminal activity" asthat term is defined in s 6 of the Act;(b) the respondent has benefited unlawfully from that significant criminalactivity in terms of s 7 of the Act in an amount of not less than $50,000;and(c) the respondent has an interest in the Nissan.Significant criminal activity[17] I am satisfied on the balance of probabilities that Mr Rankin was involved insignificant criminal activity within the meaning of s 6 of the Act. He pleaded guiltyto supply of a class B controlled drug (Gamma-butyrolactone or GBL), two chargesof possession of GBL for supply, possession of equipment for the manufacture ofmethamphetamine and possession of a class A drug (methamphetamine) for supply.All of the charges carry maximum penalties of five years' imprisonment or over.6 Aconviction on these charges is conclusive proof of the fact that Mr Rankin committedthe underlying offences.7 The summary of facts agreed between the prosecution andthe defence can be received as evidence and is a reliable record of that offending.8[18] The summary of facts describes the ways in which Mr Rankin was engaged inthe supply and sale of GBL and methamphetamine. The charges were brought in thecourse of "Operation Skipjack", a joint investigation between the New ZealandCustoms Service and the Wellington District Organised Crime Squad which focusedon the importation and supply of GBL by Mr Rankin. Between May 2017 andNovember 2020, Mr Rankin purchased 2,214.41 litres of Slide Resin Remover (SSR)and imported it into New Zealand. SSR is a primary constituent of GBL. Mr Rankinsupplied 1,798 litres of SSR which he onsold as GBL during this period of time. Whenthe operation ended in November 2020, police located ten 20-litre buckets of SRR inthe back of the Nissan. They located more SRR at Mr Rankin's address and at a MountVictoria garage. The respondent's cell phone records also support Mr Rankin'spurchase and storage of SSR, as GBL, and of methamphetamine.[19] It is estimated that Mr Rankin obtained an unlawful benefit of $1,798,000 fromthe supply of the SSR.Unlawfully benefited from the significant criminal activity[20] I am satisfied on the balance of probabilities that Mr Rankin has benefitedunlawfully from the criminal activity described above in terms of s 7 of the Act. And6 Criminal Proceeds (Recovery) Act, s 6.7 Evidence Act 2006, s 47.8 Commissioner of Police v Cheng [2023] NZHC 606 at [35] and [46].I accept that the evidence indicates that the Nissan was derived from Mr Rankin'scriminal activity.[21] Mr Rankin's bank and cash transactions between 12 September 2018 and13 November 2020 demonstrated a discrepancy of $252,214.85 between identified,legitimate cash deposits and expenditure. The analysis of the transactions showsMr Rankin to have received cash from an unknown source. The unexplaineddiscrepancies, considered alongside the sale by Mr Rankin of SSR, "tend to supportthe inference that the relevant cash has been sourced from illegitimate or criminalactivity".9[22] Although the District Court Judge at sentencing determined that Mr Rankinlikely received $1.6 million from the offending, the Commissioner seeks $50,000through this application. The maximum recoverable amount is therefore $50,000.10Interest in the Nissan[23] The Nissan was registered in the New Zealand Transport Agency (NZTA)database in the name of:(a) the original owner between 24 August [year?] and 7 March 2019;(b) an unknown person between 8 and 17 March 2019; and(c) Mr Rankin's employer on 18 March 2019.[24] The Nissan was then registered in Mr Rankin's name on 27 November 2020following his arrest. When making inquiries, police were told by Mr Rankin'semployer that the vehicle belonged to Mr Rankin.[25] Police investigated the Nissan's purchase by an unknown person in March2019 and were told that a man, who may have been a builder, bought it with $25,000in cash consisting of $20, $50 and $100 notes. When interviewed by police on9 Commissioner of Police v de Wys [2016 634 at [71].10 Criminal Proceeds (Recovery) Act, s 53. No asset forfeiture order is sought.15 February 2021, Mr Rankin claimed that the vehicle was not his, that he did not payfor it and that he used it for work.[26] In the absence of evidence to the contrary from Mr Rankin, I accept that theevidence establishes on the balance of probabilities that Mr Rankin has an interest inthe Nissan.Result[27] For the reasons given, I am satisfied that the Commissioner has established onthe balance of probabilities that Mr Rankin has engaged in significant criminal activityfrom which he has obtained an unlawful benefit of not less than $50,000 and that hehas an interest in the Nissan.Orders[28] For the reasons given:(a) a profit forfeiture order is made under s 55 of the Act in relation to theproperty described in subpara (d) below;(b) the value of the unlawful benefit to Mr Rankin from significant criminalactivity is, in terms of s 53 of the Act, not less than $50,000;(c) the maximum recoverable amount is, in terms of s 54 of the Act, notless than $50,000; and(d) the property that is to be realised and disposed of in accordance withs 83(1) of the Act is a 2018 Nissan Navara motor vehicle, includingignition keys, registration plate number LPU 574.___________________Radich JSolicitors:Crown Solicitor, Wellington for Applicant