COMMISSIONER OF POLICE v REED [2015] NZHC 328

COMMISSIONER OF POLICE v REED [2015] NZHC 328 [3 March 2015]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2011-404-007808[2015] NZHC 328BETWEEN COMMISSIONER OF POLICEApplicantAND GEORGE JEFFREY REEDRespondentHearing: (On the papers)Counsel: Mark Harborow for the ApplicantSiobhan Buckley for the RespondentFiona McGeorge for Abi ReedJudgment: 3 March 2015JUDGMENT OF MOORE JTHIS JUDGMENT WAS RE-CALLED AND RE-ISSUEDON 4 MARCH 2015 AT 3:00PMThis judgment was delivered by on 3 March 2015 at 11:00ampursuant to Rule 11.5 of the High Court Rules.Registrar/ Deputy RegistrarDate:Solicitors:Crown Solicitor, AucklandMs Buckley, AucklandMs McGeorge, Auckland[1] The parties seek this Court's approval under s 95 of the Criminal Proceeds (Recovery) Act 2009 ("the Act") to approve a settlement.[2] The circumstances are set out in a joint memorandum of counsel as tosettlement and are repeated, in part, below.[3] On 16 November 2011, "Operation Ark" terminated and the respondent, Mr Reed, was arrested and charged with offences under the Misuse of Drugs Act 1975 relating to the manufacture and possession for supply of class B and C controlled drugs in the form of ecstasy pills.[4] Evidence available to the Police indicated that Mr Reed had been engaged inlarge scale "pill pressing" for the primary offender, "CC".[5] The Commissioner of Police ("the Commissioner") sought and obtainedrestraining orders over property associated with Mr Reed which included three pieces of real estate, a vehicle and a boat.[6] The value of the property which is currently subject to restraining orders is in the region of $1.3 million.[7] At a trial in this Court last year Mr Reed was discharged before verdict on some of the charges he faced by the trial Judge and in relation to those charges which remained before the jury, acquitted on all.[8] Notwithstanding Mr Reed's acquittals, the Commissioner indicated anintention to proceed with an application against Mr Reed and Mrs Reed. Following the evincing of that indication the parties entered discussions with a view to settlement. A settlement agreement has been reached between the Commissioner and Mr and Mrs Reed. Under s 95 of the Act any such settlement is required to be approved by this Court.[9] This Court must approve settlement if it is satisfied that it is consistent with:(a) the purposes of the Act; and(b) the overall interest of justice.[10] As this Court has previously observed, Parliament has entrusted the Court with a supervisory jurisdiction to ensure that settlements are consistent with the parliamentary intention.1 One of the primary purposes of the Act is the establishment of a regime for forfeiture of property that has been derived directly or indirectly from significant criminal activity.2[11] The parties submit that the settlement arrived at between them is "consistent with the purposes of [the] Act and the overall interests of justice".[12] In particular the parties submit:(a) there will be a saving of time and specially cost if forfeiture can be dealt with by consent. All parties consider the settlement provides them with control and certainty as to outcome;(b) the Commissioner considers he has a good case to show that the restrained property is tainted property (so as to support an assets forfeiture order) as well as that Mr and Mrs Reed have unlawfully benefited from significant criminal activity (so as to support profit forfeiture orders). He does, however, acknowledge a contestedhearing carries with it risk, particularly in light of Mr Reed'sacquittals. In particular, the Commissioner acknowledges evidence put forward by Mr Reed that he received less financial reward for the"pill pressing" than the Commissioner had initially considered. As well, the Commissioner acknowledges that the basis of Mr Reed'sdefence at the criminal trial (that he lacked mens rea) could adversely impact on any application for civil forfeiture orders;(c) Mr Reed disputes the strength of the Commissioner's case andemphasises that he successfully defended all charges against him.1 Commissioner of Police v Know-All Group Limited & Anor, High Court Auckland, CIV-2010-404- 403, 7 November 2011, per Brewer J at [11].2 Criminal Proceeds (Recovery) Act 2009, s 3(1)(a).However, he recognises the differences between the criminal trial and an application for civil forfeiture orders. He also wishes to resolve the matters at this point in time so he can settle relationship property matters with Mrs Reed;(d) Mrs Reed is not in the best position to assess the strength of theCommissioner's case which relates to the evidence principally againstMr Reed. However, Mrs Reed understands that a contested hearing would carry risk for her. Against that risk, the ongoing restraint of the property is causing hardship to her. She, too, wishes to resolve the matter in a way that provides her with control and certainty as to outcome, and the settlement will allow her relationship property matters with Mr Reed to be dealt with expeditiously.[13] I am satisfied that in all the circumstances the settlement is consistent withthe purposes of the Act and the overall interests of justice. In those circumstancesthis Court is required to approve the settlement.[14] Accordingly I make the following orders upon settlement being approved, namely:(a) a profit forfeiture order against Mr Reed and Mrs Reed, jointly, under s 55(1) of the Act in the following terms:(i) the value of the benefit is $340,000;(ii) the maximum recoverable amount is $340,000;(iii) the property that is to be disposed of in accordance with s 83(1) of the Act is a payment of $340,000 to be made by Mr Reed and Mrs Reed to the Official Assignee within three months of the order being made by the Court;(b) the restraining orders over the following properties are lifted and the Official Assignee is directed to move the orders from the titles:(i) the property at 90 Mays Road, Onehunga, Auckland, certificate of title NA28B/640;(ii) the property at 18A Laud Avenue, Ellerslie, Auckland, certificate of title 209322;(c) Mr and Mrs Reed are released from the undertakings they gave to the Court in respect of the 2009 Silver Toyota vehicle (registration FBK785) on 19 and 20 April 2012 respectively;(d) the restraining orders in respect of the Senator boat and trailer (registration G846D) are lifted and the Official Assignee is directed to return the boat and trailer to Mr Reed as soon as is practicable;(e) in the event Mr and Mrs Reed do make a payment of $340,000 to the Official Assignee within three months of the order being made by the Court, the restraining order over the following property lapses and the Official Assignee is directed to remove the order from the title:(i) the property at 75A Market Road, Epsom, Auckland, certificate of title NA80C/303;(f) in the event Mr and Mrs Reed do not make a payment of $340,000 to the Official Assignee within three months of the order being made by the Court, the following property may be disposed of in accordance with s 83(1) of the Act:(i) the properties at 90 Mays Road, Onehunga, Auckland, certificate of title NA28B/640 and 18A Laud Avenue, Ellerslie, Auckland, certificate of title 209322 (or the proceeds of sales of either one or both of these properties);(ii) the property at 75A Market Road, Epsom, Auckland, certificate of title NA80C/303;(g) the settlement is on the basis of no acceptance of wrongdoing or liability by Mr Reed and Mrs Reed; and(h) costs as between the Commissioner and Mr Reed and Mrs Reed will lie where they fall.Moore J