THE COMMISSIONER OF POLICE V KIRSCHBERG HC AK CIV-2012-404-2415

THE COMMISSIONER OF POLICE V KIRSCHBERG HC AK CIV-2012-404-2415 [6 December 2012]ORDER PROHIBITING PUBLICATION OF THE JUDGMENT AND ANYPART OF THE PROCEEDINGS (INCLUDING THE RESULT) IN NEWSMEDIA OR ON THE INTERNET OR OTHER PUBLICLY AVAILABLEDATABASE UNTIL FINAL DISPOSITION OF TRIAL. PUBLICATION INLAW REPORT OR LAW DIGEST PERMITTED.IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2012-404-2415[2012] NZHC 3284UNDER the Criminal Proceeds (Recovery) Act 2009BETWEEN THE COMMISSIONER OF POLICEApplicantAND MICHAEL KIRSCHBERGRespondentHearing: 18 October 2012Counsel: MR Harborow for ApplicantMN Pecotic for RespondentJudgment: 6 December 2012JUDGMENT OF BREWER JThis judgment was delivered by me on 6 December 2012 at 3:30 pmpursuant to Rule 11.5 High Court Rules.Registrar/Deputy Registrar_________________________________________________________________________________SOLICITORS/COUNSELMeredith Connell (Auckland) for ApplicantMaria Pecotic (Auckland) for RespondentIntroduction[1] Mr Kirschberg faces two criminal prosecutions in the District Court. They relate primarily to illegal drug dealing. During the course of the investigations into these alleged offences, the Police seized $71,384.70 in cash. On 3 May 2012, theCommissioner of Police ("the Commissioner") applied in the civil jurisdiction of this Court for restraining, asset forfeiture and profit forfeiture orders in relation to this cash. On-notice restraining orders were made by Hansen J on 19 July 2012.[2] Mr Kirschberg does not want the Commissioner's civil application for forfeiture orders to be determined before the criminal allegations against him havebeen disposed of. He seeks an order staying or adjourning the Commissioner'sapplication.[3] I will treat the application as being an application for an adjournment. This is more simple and allows full scope for consideration of the various issues.Background[4] Following a Police search of 17 Mataura Place, Clover Park, Mr Kirschberg (together with another person) was charged on 25 May 2011 with the manufacture of methamphetamine, possession of methamphetamine for supply, cultivating cannabis, possession of cannabis for supply, and charges relating to the unlawful possession of arms. In the course of investigating this alleged offending, the Police seized $31,384.70.[5] On 29 December 2011, Mr Kirschberg was stopped in his vehicle by Police and arrested for breaching bail conditions. Subsequent to his arrest he was found in possession of methamphetamine. Police later searched a storage facility rented by Mr Kirschberg and found a number of items allegedly relating to the manufacture of methamphetamine. $40,000 in cash was found at the storage facility and seized. Charges arising from these events are manufacturing methamphetamine, possession of precursor substances, possession of equipment, possession of materials, supplying methamphetamine, and possession of methamphetamine for supply.[6] No trial date has yet been set for the charges arising from events on 25 May 2011. There is a pre-trial hearing relating to a challenge to some of the Police evidence scheduled for January 2013.[7] A firm trial date of 24 June 2013 has been set for the charges arising from the 29 December 2011 events. Pre-trial arguments are scheduled for 13 December 2012.[8] No date has yet been set for the hearing of the Commissioner's applicationfor forfeiture orders. However, should Mr Kirschberg's application for adjournmentbe unsuccessful, there is little doubt that the Commissioner's application could be heard in the first half of next year.The law[9] The Commissioner brings his application for forfeiture orders under theCriminal Proceeds (Recovery) Act 2009 ("CPRA"). The effect of CPRA is that applications brought under it are independent of related criminal proceedings.1There is no requirement that the owner of restrained property must be convicted of relevant offences before it can be forfeited.[10] The Commissioner has taken the view that because CPRA makes forfeiture applications independent of other Court actions, he is as entitled as any other plaintiff in a civil proceeding to have his applications heard regardless of the scheduling of such other actions. However, the problem for people accused of offending whose property is subject to forfeiture applications is that if they opposethe Commissioner's applications they might have to disclose material relevant to the criminal proceedings against them. It is becoming commonplace for defendants in this situation to apply to have forfeiture applications adjourned until after the criminal proceedings against them have been disposed of.[11] The leading decision in this area is that of the Court of Appeal inCommissioner of Police v Wei.2 This decision considered two judgments of this1 Criminal Proceeds (Recovery) Act 2009, ss 15 and 16.2 Commissioner of Police v Wei [2012] NZCA 279.Court dealing with circumstances similar to those in the present case.3 The Court of Appeal held that the approach to this type of case should be as follows:4... This is a discretionary decision tailored to the facts of each case. It requires the Judge to undertake a balancing exercise, assessing the interests of each party, to reach a conclusion as to where the interests of justice lie. It is not an area where an appellate court should be making hard and fast rules.[Footnotes omitted][12] The Court of Appeal set out several statements of principle. In summary they are:(1) There is no general rule that civil proceedings must be adjourned if related criminal proceedings are pending. Equally, there is no rule that a civil plaintiff is entitled to a hearing before an impending criminal trial;(2) These cases are fact specific and call for a balancing exercise;(3) Where the prosecuting agency is, in effect, the same party as the civil plaintiff, the considerations of an entitlement to pursue the civil claim without delay are substantially diluted;(4) Where restraining orders remain in place, deferring the hearing of a forfeiture application is not inconsistent with the purpose of reducing the ability of criminals to continue or expand their criminal enterprise; and(5) While ss 15 and 16 of the CPRA make it clear that the civil proceedings and criminal proceedings are independent, the CPRA issilent as to Parliament's intention as to which proceedings should gofirst.3 Commissioner of Police v Wei HC Auckland CIV-2010-404-5461, 24 November 2011;Commissioner of Police v Corless HC Auckland CIV-2010-404-5585, 15 December 2011.4 Commissioner of Police v Wei, above n 2, at [40].Mr Kirschberg's submissions[13] Mr Kirschberg opposes the forfeiture orders sought by the Commissioner but does not wish to jeopardise his defence in the criminal proceedings by having to file evidence in the civil proceeding. Nor does he wish to be exposed to cross- examination in the civil proceeding. The reason for this is that any material filed in the civil proceeding, and any evidence given by him in that proceeding, can be used by the Commissioner in the criminal proceedings. Such use could be direct (e.g. put forward as evidence of admissions) or indirect (e.g. through the raising of further avenues of enquiry).[14] Ms Pecotic for Mr Kirschberg relies on the rights to due process in criminal proceedings recorded by the New Zealand Bill of Rights Act 1990 ("NZBORA").She submits that his right to silence in the criminal proceedings would be undermined by the civil proceeding preceding the criminal proceedings. Ms Pecotic calls in aid s 25 of NZBORA and submits that fair trial rights could be affected. Significant reliance is placed on the decision of Asher J in Commissioner of Police v Burgess.5 However, that was a case involving a very different context (the Commissioner was seeking to invoke the compulsory examination procedure of the CPRA).[15] Ms Pecotic raises also the right to justice recorded in NZBORA and submits that the provisions of the CPRA do not cross the justified limitations threshold set out in s 5 of NZBORA.[16] I do not need to examine those arguments. The decision which binds me is that of the Court of Appeal in Commissioner of Police v Wei, which Ms Pecotic does not address. I have to conduct a straightforward balancing exercise in accordance with the principles enunciated in Wei. I will, however, make some comment on how I see the right to silence in criminal proceedings interacting with CPRA.5 Commissioner of Police v Burgess [2011] 2 NZLR 703.The Commissioner's submissions[17] The first point made by Mr Harborow for the Commissioner is that Weimakes it clear that there will be some cases where an adjournment is not appropriate.[18] The second point is that there would be no situation of unfairness created by the civil proceeding going first. To defend the Commissioner's forfeiture application would require Mr Kirschberg to mount a positive defence. That is to say, to put forward evidence tending to show that the restrained property was not connected to significant criminal activity. Any such material would be exculpatory and its divulgence would not prejudice Mr Kirschberg in defending the criminal proceedings. The submission is that what Mr Kirschberg is really seeking is protection from being tactically disadvantaged. I infer from this that Mr Harborow is addressing the desire of many accused not to disclose details of their defence to the prosecution prior to the trial so as to restrict the ability of the prosecution to investigate and rebut.[19] Mr Harborow submits that tactical disadvantage is not the same as unfairness or prejudice. It should not be permitted to tip the balance in favour of adjournment.[20] It is submitted further that the Commissioner has an entitlement (albeit diluted) as a civil plaintiff to come to the Courts to seek remedies without delay. He has a public function under CPRA to eliminate the chance for persons to profit from being associated with significant criminal activity, to deter significant criminal activity and to reduce the ability of criminals and/or persons associated with the crime to continue to expand their criminal enterprise.6[21] The Commissioner points to CPRA providing for the independence of civil and criminal proceedings and submits that this factor must be given appropriate weight.[22] Two other factors are also given prominence by the Commissioner. The first is his assertion that the case for forfeiture is a strong one. I am not really in a6 Criminal Proceeds (Recovery) Act 2009, s 3(2).position to judge that but, given my understanding that at the time of first arrest Mr Kirschberg was a sickness beneficiary and given the circumstances in which the various sums of cash were found, I will accept that submission for the purposes of this judgment.[23] The second factor is that resolution of the respondent's criminal proceedingsis distant. A date has not yet been set for the first set of criminal charges and the trial of the second set of charges is not until 24 June 2013. This is in contrast to other cases where trials were only two or three months away.[24] Finally, but I infer that this is at the core of the Commissioner's position, it issubmitted that if it becomes commonplace for applications for forfeiture orders to be adjourned to allow related criminal proceedings to be heard, the CPRA "would beeffectively reduced to a results-based regime like the one that existed under the Proceeds of Crime Act 1991 (which depended on convictions before forfeitureproceedings could take place)".7 This is not what Parliament wanted. Indeed, it is what Parliament wanted to change.Discussion[25] Mr Kirschberg has identified a detriment to himself if the application for forfeiture orders precedes the disposal of his criminal charges. The detriment is that to oppose the application he would have to file evidence and expose himself to cross-examination on matters directly relevant to the criminal charges. He cannot be required to incriminate himself, but he would have to reveal information which he could not be compelled to do in the criminal proceedings.[26] I do not accept that such an outcome would result in a breach of Mr Kirschberg's fair trial rights in the criminal proceedings. The right to silence (so- called) is not engaged because he cannot be compelled to participate in the civilproceeding. However, it does, by a "side wind"8 have the potential to alter the balance of arms in the criminal proceedings.7 Submissions on behalf of the Commissioner of Police dated 15 October 2012, at para 5.12.8 Commissioner of Police v Burgess, above n 5, at [47].[27] This might aptly be characterised as Mr Kirschberg seeking to avoid a tactical disadvantage. However, it could equally be said that the Commissioner, as essentially a party to the criminal proceedings, might accrue a tactical advantage in either or both of the criminal proceedings and the civil proceeding if the latter precedes the former.[28] I find that this factor weighs in Mr Kirschberg's favour.[29] I accept that, as a civil plaintiff, the Commissioner has an entitlement (albeit substantially diluted) to pursue his claim without excessive delay. However, I do not accept that delay in this case would derogate significantly from his public function under CPRA. The cash has been restrained. It is not available to Mr Kirschberg or to any other person who might be associated with significant criminal activity. Even if Mr Kirschberg were to be acquitted of any or all of the charges brought against him, it would not affect the Commissioner's right to continue with his forfeiture orders application.[30] I find this factor to weigh only slightly in the Commissioner's favour.[31] I have accepted that the case for forfeiture is strong and I also accept that thedelay in hearing the Commissioner's application would be longer than in the othercases heard to date; probably in the order of six to eight months. However, I do not see any specific prejudice to the Commissioner arising. It costs nothing to store the cash and it is not deteriorating. The Commissioner has no personal or corporate interest in the cash which would be adversely affected by the delay.[32] I also find this factor to weigh only slightly in the Commissioner's favour.[33] I do not accept that the "core principle"9 of the independence of proceedings brought under CPRA and related criminal proceedings risks being undermined if it becomes commonplace for CPRA proceedings to await the determination of criminalproceedings. To my mind, the "core principle" of CPRA is that a conviction is not aprerequisite to obtaining a forfeiture order. That is why CPRA proceedings and9 Submissions on behalf of the Commissioner of Police, above n 7, at para 5.12.criminal proceedings can be said to be independent of each other. The order in which proceedings are heard does not affect that.Decision[34] Mr Kirschberg has identified a detriment to himself if the CPRA proceeding precedes the criminal proceedings. That detriment potentially affects his freedom toparticipate in the CPRA proceeding and, if he does, the "balance of arms" in thecriminal proceedings.[35] The Commissioner has not identified any detriment which exceeds in weight of argument the detriment to Mr Kirschberg:(a) The asset sought to be forfeited is already restrained. There is no question of it being taken away. It cannot be used to advance criminal purposes;(b) The asset is not deteriorating and costs nothing to store;(c) No other party claims an interest in it;(d) There is no specific prejudice to the Commissioner in terms of his duties under CPRA if the CPRA proceedings are delayed until some date towards the end of 2013.[36] However, I bear in mind that currently there are two separate criminal proceedings, one with a trial date and one without. $31,384.70 is restrained in respect of the charges in one prosecution and $40,000 in respect of the charges in the other prosecution. If the criminal proceedings remain separate then when the first has been determined the Commissioner might well be able to argue that Mr Kirschberg could no longer oppose the CPRA application proceeding in respect of the relevant sum.[37] I make the following orders:(a) The hearing of the Commissioner's application for forfeiture orders isadjourned to a date after the determination in the District Court of both criminal proceedings. The Commissioner is to notify the Court to have his application put again into the Duty Judge list once this condition has been satisfied;(b) Notwithstanding the above, the Commissioner may, if the criminal proceedings are determined separately, apply earlier to have that part of his application which relates to the criminal proceeding first determined, heard separately.[38] Any question of costs arising from this judgment is reserved and can, ifnecessary, be decided by the Judge who ultimately hears the Commissioner'sapplication.________________________________Brewer J