THE COMMISSIONER OF POLICE v BAYLEY [2023] NZHC 1571

THE COMMISSIONER OF POLICE v BAYLEY [2023] NZHC 1571 [23 June 2023]IN THE HIGH COURT OF NEW ZEALANDTAURANGA REGISTRYI TE KŌTI MATUA O AOTEAROATAURANGA MOANA ROHECIV-2023-470-67[2023] NZHC 1571UNDER the Criminal Proceeds (Recovery) Act 2009BETWEEN THE COMMISSIONER OF POLICEApplicantAND JAMES SPENCER BAYLEYRespondentHearing: On the papersCounsel: R W Jenson for the ApplicantB Nabney for the RespondentJudgment: 23 June 2023JUDGMENT OF HARVEY JThis judgment is delivered by me on 23 June 2023 at 12pmpursuant to r 11.5 of the High Court Rules......................................................Registrar / Deputy RegistrarSolicitors: Crown Solicitor, TaurangaCounsel: William Nabney, Barrister, TaurangaCopy to: S Best, ManagerMinistry of Social DevelopmentClient Service Integrity WaikatoIntroduction[1] By a joint memorandum filed 16 June 2023, the Commissioner of Police andJames Bayley seek an order per s 95 of the Criminal Proceeds (Recovery) Act 2009(the Act) approving the proposed settlement of the Commissioner's claim againstMr Bayley.Background[2] On 3 May 2020, after a search without a warrant of Mr Bayley's address, 18The Mall, Mount Maunganui, the Police found drugs, a firearm and $31,690 in cash.Mr Bayley accepted that this cash is tainted property acquired from drug and fraudrelated offending.[3] Mr Bayley also accepted that he owes the Ministry of Social Development(MSD) $21,314 in wrongfully received COVID-19 wage subsidies. It is agreedbetween the Commissioner and Mr Bayley that his debt to the Ministry can be repaidfrom the funds seized, with the balance being forfeited under an asset forfeiture order.The proposed settlement[4] The Commissioner and Mr Bayley propose the following settlement terms,which MSD has also agreed to:(a) $21,314.00 is to be repaid to the Ministry of Social Development for wagesubsidy payments wrongfully received.(b) The balance of the $31,690.00 seized by Police on 2 May 2020 vests in theCrown absolutely under the custody and control of the Official Assignee.[5] The purpose of this arrangement is that if the funds were forfeited, they wouldnot be payable to MSD under s 82 of the Act as part of the distribution of forfeitedfunds. The Commissioner has accordingly agreed to forego forfeiture of an amountequivalent to that owed by Mr Bayley to MSD on the basis that sum is paid out of thefunds.[6] Both counsel confirm that the proposed settlement is consistent with thepurposes of the Act, taking account of the particular facts of this case, in that:(a) property derived from significant criminal activity will be forfeited;(b) the profit gained by Mr Bayley from criminal activity is diminished; and(c) such forfeiture potentially deters future significant criminal activity.[7] Overall, counsel submitted that the approval of the proposed settlement is inthe interests of justice since it provides for the prompt forfeiture of relevant propertyand repays MSD without the need for further recovery proceedings.Legal principles[8] Section 95 of the Act provides:95 High Court must approve settlement between Commissioner andother party(1) The Commissioner may 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—(a) the purposes of this Act; and(b) the overall interests of justice.[9] Pursuant to s 3, the purpose of the Act is to establish a regime for the forfeitureof property derived directly or indirectly from significant criminal activity or whichrepresents the value of a person's unlawfully derived income.1 A further purpose ofthe regime is to eliminate the opportunity for persons to profit from undertaking orbeing associated with significant criminal activity and to deter significant criminalactivity.21 Criminal Proceeds (Recovery) Act 2009, s 3(1).2 Section 3(2)(a)–(b).[10] It is well settled that the Court's approval is not a "rubber stamping" exercise.3The Court's supervisory jurisdiction and function under s 95 requires a broad inquiry.4An assessment of s 95(3)(a) and (b) compliance will require the Court to consider thestrength of both the Commissioner's case and of the respondent's defence.5 Inaddition, the value of assets to be forfeited and the relativity of such sum to the totalvalue of assets restrained as tainted property are relevant considerations.6 Further,there is also the litigation risk of a hearing to the Commissioner and the respondent.7Finally, the Court may consider such other matters, including economic and pragmaticgrounds, as inform a sensible compromise to litigation that serves the Act's purposes.8There is a strong public interest in such litigation being resolved promptly, especiallywhere a settlement reflects the likely costs and risks inherent in adjudicating acontested application.9Discussion[11] Mr Bayley has consented to an assets forfeiture order per s 50 of the Act inrespect of the cash. He also agrees to abandon all claims he may have, under the Actor otherwise, to any of the property to be forfeited. As foreshadowed, the search ofhis premises was undertaken without a warrant and subsequently that search was foundto be unlawful. However, Mr Bayley has conceded the cash is related to criminaloffending. The Commissioner and Mr Bayley accordingly accept that this agreementsettles all matters in the proceeding arising out of the Police search of his address on3 May 2020.[12] I am satisfied that the proposed terms of settlement are consistent with theobjectives and principles of the Act and are in the interests of justice. The finality ofa settlement on these terms and the certainty it brings for the parties will avoid furthercosts, delay and litigation risk. I also accept that this proposal is a sensible andpragmatic basis on which to settle the proceedings.3 The Commissioner of Police v Know-All Group Ltd HC Auckland CIV-2010-404-403, 7November 2011 at [11].4 Commissioner of Police v Zhang [2016] NZHC 930 at [8].5 The Commissioner of Police v Kree [2013] NZHC 2972 at [11].6 Commissioner of Police v Venn [2014] NZHC 361 at [5]–[6].7 Kree, above n 5, at [11].8 The Commissioner of Police v Douglas [2015] NZHC 1293 at [6].9 Commissioner of Police v Cotton [2017] NZHC 0021 at [7].Decision[13] The proposed settlement is approved, per s 95 of the Criminal Proceeds(Recovery) Act 2009.[14] The property to which this order applies:(a) vests in the Crown absolutely; and(b) is to be in the Official Assignee's custody and control.[15] This order applies to the following property, namely sums remaining from the$31,690.00 in cash seized by Police on 3 May 2020 after the debt owing by therespondent to the Ministry of Social Development for wage subsidy payments, being$21,314.00 is re-paid.[16] There is no order as to costs._____________________________Harvey J