THE COMMISSIONER OF POLICE v EDWARDS & ANOR [2014] NZHC 1773

THE COMMISSIONER OF POLICE v EDWARDS & ANOR [2014] NZHC 1773 [30 July 2014]IN THE HIGH COURT OF NEW ZEALANDPALMERSTON NORTH REGISTRYCIV-2012-054-000133[2014] NZHC 1773IN THE MATTER of an application pursuant to the CriminalProceeds (Recovery) Act 2009BETWEEN THE COMMISSIONER OF POLICEApplicantAND HUIA MAXWELL EDWARDSRespondentCHERIE LOUISE KINGIFirst Interested PartyHearing: 28 July 2014Counsel: D J Flinn for CrownNo appearance for RespondentC L Kingi (in person)Judgment: 30 July 2014JUDGMENT OF WILLIAMS JBackground[1] The respondent, Mr Huia Edwards, is a senior member of the Aotearoa chapter of the Mongrel Mob and was involved in the manufacture, supply and sale of methamphetamine in Manawatu, Whanganui and Horowhenua. His arrest, alongwith a number of others, followed a police investigation named 'Operation Stamp'which concluded in February 2011. Following a sentencing indication, he pleaded guilty to one charge of possession of methamphetamine for supply, and one charge of manufacturing methamphetamine. His various relationships and arrangements accounted for between 1.2 and 1.6 kilograms of methamphetamine. He wassentenced to nine and a half years' imprisonment.[2] The first interested party is Cherie Louise Kingi. Mr Edwards and Ms Kingi have been in an on-again off-again relationship for many years and together they have four children.[3] On 21 May 2012, Ronald Young J granted the Commissioner restraining orders in respect of cars and cash in which, the Commissioner argued, Mr Edwards had an interest. The total cash was $16,100 of which $1,000 was seized from the purse of Cherie Kingi. Three vehicles were also restrained as follows:(a) 2003 Hummer, said to be valued at $60,000;(b) 2004 BMW X5, said to be valued at around $51,700; and(c) Holden Commodore, said to be valued at $12,700.[4] The Commissioner applied for asset forfeiture orders under the Criminal Proceeds (Recovery) Act 2009 (the Act) in relation to the property on 12 August 2013. On 19 November 2013, the respondent disclaimed any interest in the items identified but requested that the personalised registration plate for the BMW X5 –SIK4LF – be removed and returned to Ms Kingi.[5] On 3 June 2014, Collins J made unopposed asset forfeiture orders in respect of all of the property listed except:(a) the 2004 BMW X5;(b) the SIK4LF personalised plate; and(c) $1,000 in cash seized from the purse of Cherie Kingi.[6] In respect of these items, the Commissioner seeks asset forfeiture orders under s 50 of the Act. Alternatively, he seeks orders that Mr Edwards had effective control over the items in terms of s 58 so that profit forfeiture orders under s 55 may be made.[7] Ms Kingi says these items belong to her and are not tainted in any way by Mr Edwards' drug dealing.[8] Ms Kingi has made no application under s 61 for relief against forfeiture, but the tenor of the affidavit she filed in opposition and of her submissions in person before me was such that (in the absence of legal representation), it is in order for me to treat her as if she had made an application under s 61.[9] Ms Kingi said the car and plates belonged to her. She said she bought the carfor $28,000 from "Marisa", the partner of another member of the drug ring, Mr Craig Matthews. She said she got the money to buy the vehicle in the following ways:(a) By selling a 1948 Ford Bonus truck that had been given to her and Mr Edwards as a present by an individual named, Lay Alatili. The truck was partially restored using parts from a similar truck belonging to her father and then sold for $17,000.(b) Through the sale of a 2004 Toyota Estima to a Mob associate named Reece. She said the van had been sold for $19,000 or $22,000 (she could not remember which and the price changed over the course of her interviews and affidavits). She said Reece paid $15,000 upfront and was paying the remainder off in fortnightly instalments of $1,000. She said that the Estima had been upgraded by Huia Edwards with new mags fitted, two new on-board TVs fitted, and a new "free" paint job completed by one of Huia Edwards' friends.[10] Ms Kingi said she still owed $3,000 of the $28,000 purchase price for theBMW and that the $1,000 found in her purse was one of Reece's instalments. Shesaid he had paid it the night before the cash was seized by the police.[11] Ms Kingi said she did not herself make the BMW purchase. Rather, she gave the money to Huia Edwards and he made it. She said she did not see the vehicle until it was delivered two weeks after the purchase was made. She said she relied onHuia Edwards' connections and recommendations in sourcing and then deciding to buy the vehicle.[12] The effect of Ms Kingi's evidence was that the money used to purchase theBMW and the $1,000 cash in her purse had nothing to do with Huia Edwards or his methamphetamine enterprise.[13] Ms Kingi said in fact that she was somewhat estranged from Huia Edwards at the relevant time. He was living with gang associates elsewhere, and in fact was having an affair with her best friend.[14] I do not believe that Cherie Kingi is telling the truth, or at least not the whole truth. My reasons are as follows:(a) Ms Kingi's story is inconsistent in important respects with that ofCraig Matthews. When he was interviewed by the police in June 2013, he said that he had purchased the BMW with drug money and then sold it to Ms Kingi for either $30,000 or $40,000. He said she paid the money in person and in cash. According to Mr Matthews, Ms Kingi told him at the time that she obtained the cash from selling bulldog pups. Mr Matthews said Huia Edwards had no involvement in the sale at all other than being in the room when the cash changed hands.If Mr Matthews is to be believed, then payment of cash in such a large single sum has all the hallmarks of drug proceeds. In addition, Ms Kingi makes no mention of bulldog pups in her explanation to police.(b) Even setting aside Craig Matthews' version of events, it is clear thatHuia Edwards had a great deal to do with the upgrading and restoration of both the Ford truck and the Estima van. They weremore likely his projects than Cherie Kingi's. Of the two, Mr Edwards was the car nut, and had all the contacts necessary to source thevehicles, obtain the parts, and pull in the favours. As Ms Kingi advised me in Court, Huia Edwards had run his own automotive modification business which he called SIK Automotive.(c) Ms Kingi did not have sufficient income to keep the home and four children and still buy a high-end vehicle such as the BMW X5. Indeed, that is true whether its average value of $51,000 is taken or the alleged purchase price of $28,000 is used. Constable Beattie'saffidavit of 9 August 2013 demonstrates the point. Ms Kingi'sincome was around $1,100 per fortnight, and her mortgage outgoings alone were $762 per fortnight. There is simply no way, on that income, she could have afforded to purchase this vehicle, even at the reduced price she claimed. Rather, she would have relied heavily on access to funds from Huia Edwards. Those funds were almost undoubtedly derived from drug activity.(d) As Mr Flinn submitted for the Commissioner, the sale and purchase of high-end vehicles is a common means by which those in the drug fraternity use up the significant surplus cash funds generated from drug supply activities. Vehicles are often purchased by the individual flush with cash and put in the name of friends and family of the actual purchaser in order to deflect attention from the drug dealer himself.(e) In this case, the drug world relationships between the parties involved in the purchase of this vehicle were doubly close. That is because not only was Huia Edwards involved on the purchase side of the deal but it was sold to Cherie Kingi (and, I infer, Huia Edwards) by Craig Matthews, a leading member of the drug ring. And Mr Matthews admitted that he acquired it using drug money. There was something of an auto-go-round in operation here.[15] Seen in its proper context, it defies commonsense to suggest that Cherie Kingi was not an active participant in, and a beneficiary of, the sale and purchase of high-end vehicles on non-commercial terms within and outside this drug ring. Evenif she did not know where the funds came from to complete the purchases (and frankly I am sceptical about that), Ms Kingi must still have benefitted from the flow of drug money into the household via Huia Edwards when she made the purchase of what she says was her own vehicle. That would be so either directly (with drugmoney) or indirectly (through Huia Edwards' expenditure on, and likely beneficialownership of, the two vehicles Ms Kingi said she sold to purchase the BMW X5). She could not have afforded the vehicle otherwise.[16] Nor do I believe that the $1,000 in Ms Kingi's purse was from Reece. Therehas been no corroboration of this story from Reece. The cash should rather be seen in the context of the other $14,000 or so found in the house.[17] Even if all of that is wrong, and Ms Kingi's story about Reece is true, the Estima itself derived a significant proportion of its value from Huia Edwards' inputand it is therefore indirectly derived from drug benefits anyway.[18] I am bound to conclude therefore that the BMW X5 and the $1,000 cash are tainted property within the meaning of s 5 of the Act in that both were directly or indirectly derived from significant criminal activity, either in whole or in part. That is because, either (on Craig Matthews' version of events), the vehicle was purchased with money and the $1,000 found in Cherie Kingi's purse was drug money, orbecause (if Cherie Kingi is to believed), the contributory vehicles (the Estima and the Ford) obtained a material proportion of their value through inputs from Huia Edwards where such inputs were necessarily funded through drug income.[19] And even if the latter option is wrong, the facts provide a basis for a profit forfeiture order under s 55 of the Act. That is because the value of the benefits obtained by the respondent through drug dealing equalled or exceeded the value of the BMW X5 and the cash, and it is clear on the evidence of Ms Kingi that Huia Edwards was a beneficial owner of the contributory vehicles (the Estima and the Ford) and the BMW and cash.[20] In addition, the forfeiture of the items claimed by the Commissioner will not produce undue hardship in terms of s 56 of the Act. Insofar as the cash is concerned,Ms Kingi has provided no evidence to suggest that the loss of this cash produces undue hardship. Insofar as the vehicle is concerned, Ms Kingi owns at least two (and perhaps three) other vehicles.[21] The Crown will be entitled to asset forfeiture orders accordingly.___________________________Williams JSolicitors:Ben Vanderkolk & Associates, Palmerston North