COMMISSIONER OF POLICE v SMITH [2023] NZHC 1317

COMMISSIONER OF POLICE v SMITH [2023] NZHC 1317 [30 May 2023]NOTE: BANK ACCOUNT DETAILS IN PARA [4(k)] ARE REDACTEDIN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2017-485-199[2023] NZHC 1317UNDER the Criminal Proceeds (Recovery) Act 2009IN THE MATTER of applications pursuant to sections 21, 25,33, 35 and 58BETWEEN THE COMMISSIONER, THE NEWZEALAND POLICEApplicantAND GEOFFREY WAYNE SMITHRespondentAND DIANNE MARIE OLIVE SMITHFirst Interested PartySTEPHEN EDWARD SMITHSecond Interested PartyJAMES GAVIN DONOVANThird Interested PartyRODNEY MARTIN FOSTERFifth Interested PartyASB BANK LIMITEDSixth Interested PartyOn the papersCounsel: S B McCusker for ApplicantM Taylor-Cyphers for RespondentJudgment: 30 May 2023JUDGMENT OF RADICH J[1] The applicant and the respondent have asked the Court to approve, under s 95of the Criminal Proceeds (Recovery) Act 2009 (the Act), a settlement between themthat would bring these profit forfeiture proceedings under the Act to an end.The underlying proceeding[2] The respondent (Mr Smith) faced two charges of supplying methamphetamine,one representative charge of supplying methamphetamine, one charge of possessionof methamphetamine, one charge of unlawfully possessing a firearm and one chargeof unlawfully possessing ammunition. He pleaded guilty to the charges and wassentenced by Collins J on 17 August 2018 to 13 years and six months' imprisonment.1The quantity of methamphetamine involved was valued conservatively at $5,250,000.2This proceeding[3] This proceeding was initiated by a without notice restraining order, granted byMallon J on 6 April 2017. An application for on notice restraining orders was filed on12 April 2017.[4] In a judgment of Clark J of 23 January 2018,3 restraining orders were made byconsent over all of the assets sought for restraint, which were as follows:(a) All interests in the property at 6 Broadview Place, Howick, Manukau,registered in the names of Dianne Marie Olive Smith, Stephen EdwardSmith and James Gavin Donovan, and described in certificate of titleNA13B/109, legal description Lot 32, DP 58632, which isunencumbered;(b) Proceeds from the sale of the 2008 Mercedes-Benz C63A AMG saloonmotor, registration JHW926, namely funds in the amount of$33,512.40, along with any interest accrued;1 R v Smith [2018] NZHC 2118.2 At [15].3 The Commissioner of New Zealand Police v Smith [2017] NZHC 10 (Restraining and Sale OrdersJudgment).(c) A 1991 Chevrolet Corvette motor vehicle including ignition keys andpersonalised registration plate IMEANI, registered in the name ofMr Smith (the Corvette);(d) A Holden Commodore utility motor vehicle including ignition keys,registration GJN195, currently registered to Christopher WilliamLeigh;(e) A 2009 Nissan Navara utility motor vehicle including ignition keys,and personalised registration plate PRIMO;(f) Proceeds from the sale of a bobcat Digger, namely funds in the amountof $22,587, along with any interest accrued;(g) All interests in the property at 32 Kowhai Avenue, Kaiaua, RD3,Pokeno 2473, registered in the name of Dianne Smith and described inthe certificate of title NA26B/817, legal description Lot 3 DP 41462,shown as being mortgaged with ASB Bank Limited;(h) A Lidgard 34 Launch including ignition keys;(i) A 2003 boat trailer, registration: U330Y, registered in the name ofMr Smith with a Seadoo Jetski (the Boat Trailer and Jetski).(j) Proceeds from the sale of a 1994 Ford Trader 4.0T EXLWB tow truck,registration HUC990, namely funds in the amount of $4,402.62, alongwith any interest accrued; and(k) A Westpac bank account [ ] personalised in the name of Geoffrey Smithand containing a balance of funds in the amount of $4,894.33.[5] Mr Smith consented to all of the restraining orders. He consented to the relatedsale orders for all of the items of property in which he had an interest with theexception of the Corvette and the Boat Trailer and Jetski. Clark J declined, in thosecircumstances, to make sale orders over those two assets.4[6] On 28 February 2019, an application was made for profit forfeiture ordersunder s 52 of the Act. The application was made over the same property as that whichwas subject to the restraining order (the forfeiture application). The forfeitureapplication has been adjourned pending settlement discussions between the applicant,the respondent and the first and second interested parties – the mother and brother ofthe respondent. Aspects of those negotiations resulted in the making of asset forfeitureorders by the Court on 14 October 20195 and on 13 December 2021.6Interested parties[7] The Court has approved a settlement with the first interested party relating tothe Kaiaua property.7 A settlement was approved also with the second and thirdinterested parties, relating to the Manukau property.8 A notice of discontinuance wasfiled in relation to the involvement of the fourth interested party.9 The fifth interestedparty is the registered owner of the Nissan Navara motor vehicle. I am satisfied froma job sheet from Detective Brown attached to the 24 May 2023 memorandum ofcounsel seeking approval of this settlement that these proceedings have been broughtto the attention of Mr Brown on several occasions and that he has said that he wishesnothing further to do with the proceedings or with the vehicle – and that "they can dowhat they like with it".[8] The Court approved a settlement with the former seventh interested party on22 January 2020.10 As a result of the settlements, the interests of each of the interestedparties have been accommodated.4 At [43] and [50].5 Commissioner of Police v Smith [2019] NZHC 2606.6 The Commissioner, the New Zealand Police v Smith [2021] NZHC 3402.7 Commissioner of Police v Smith, above n 5.8 The Commissioner, the New Zealand Police v Smith, above n 6.9 Memorandum in regard to discontinuance between the applicant and the fourth interested partydated 18 March 2019.10 The Commissioner, the New Zealand Police v Smith HC Wellington CIV-2017-485-199,7 February 2020 (Order of Clark J approving settlement).Settlement[9] The terms of settlement are as recorded in the orders made in this judgment.By way of summary, Mr Smith, or Mr Darryl Slater on his behalf, are to pay $30,000plus transport costs of $320 plus GST (the payment) into the New Zealand Insolvency& Trustee Service Proceeds of Crime Account by 30 June 2023. The Corvette and theBoat Trailer and Jetski will then be released from the ambit of the restraining order.The payment and the assets that remain subject to the restraining order will then beforfeit pursuant to a profit forfeiture order. These arrangements will bring theproceedings against the respondent to an end.Legal principles[10] I am satisfied that the profit forfeiture order is able to be made. Under s 52(c)of the Act, the application for the order is to state the value of the benefit therespondent is alleged to have obtained in the relevant period of criminal activity. Interms of s 53(1) of the Act, Mr Smith's unlawful benefit is $7 million.11 Under s 54,before the High Court makes a profit forfeiture order, it is to determine the maximumrecoverable amount by taking the value of the benefit determined under s 53 anddeducting the value of any property forfeited to the Crown as a result of assetsforfeiture orders. As a result of the settlements referred to in paragraphs [7] and [8]above – which became subject to assets forfeiture orders – the maximum recoverableamount is $6,912,000.[11] I am satisfied, in terms of s 55 of the Act, that Mr Smith has unlawfullybenefited from significant criminal activity within the relevant period of criminalactivity and (as recorded in the joint memorandum of counsel of 24 May 2023) interms of s 55(1)(b) of the Act that Mr Smith accepts that he has an interest in (oreffective control over) all of the property to be realised for the purposes of the profitforfeiture order.[12] The joint memorandum of counsel records also that, if Mr Smith does not makethe payment of $30,000 referred to above by 30 June 2023, then Mr Smith agrees that11 Affidavit of Paul Brown dated 26 February 2019 at [9.1]–[9.4].the Corvette and the Boat Trailer and Jetski will be realised pursuant to the profitforfeiture orders and that the proceeds of their sale will be forfeit in accordance withs 83(1) of the Act.[13] I am content that the settlement is in order to be approved under s 95 of theAct. That section provides:High Court must approve settlement between Commissioner and otherparty(1) The Commissioner must 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—(i) the purpose of this Act; and(ii) the overall interests of justice.[14] I am satisfied that the settlement is consistent with the purposes of the Act, asdescribed in s 3, and with the overall interests of justice, which involves a broadinquiry taking into account the savings of time and costs and litigation risk to theparties – often reflecting a common sense compromise between the parties.12 Theparties have agreed in this case, and I concur with their assessments that:(a) The Corvette, the Jetski and the boat trailer can be dealt with separatelyas proposed on the basis of the sentimental value they hold forMr Smith;(b) A valuation of the Corvette by Turners in late 2020 for the OfficialAssignee valued it at between $33,500 and $38,000 and the Jetski isvalued at less than $5,000 if sold at auction;(c) In the circumstances, the forfeiture of $30,000 in exchange for theCorvette, the Boat Trailer and Jetski, while below what might be12 Commissioner of Police v Wellington [2018] NZHC 2502 at [14]–[15].realised if the assets were sold at auction, will be offset by cost savingsto the Commissioner in not having to continue to litigate the case andnot having to incur further costs through putting the assets put up forsale. The outcome here is pragmatic.(d) The total value of the assets to be forfeited under the proposed profitforfeiture order, as well as those already forfeit under asset forfeitureorders, is approximately $240,000. The forfeiture of this property isconsistent with the statutory purpose of the Act.(e) There is considerable benefit to the parties and to the Court in bringingthis longstanding proceeding to a close.[15] For these reasons, I make the orders in the terms set out in the draft orderssubmitted with the joint memorandum of counsel seeking approval of settlement unders 95 of the Act, dated 24 May 2023._____________________Radich JSolicitors/Counsel:Crown Solicitor, Wellington for ApplicantM Taylor-Cyphers, Dunedin for Respondent