THE COMMISSIONER OF POLICE v HAYWOOD [2013] NZHC 2224

THE COMMISSIONER OF POLICE v HAYWOOD [2013] NZHC 2224 [29 August 2013]IN THE HIGH COURT OF NEW ZEALANDNAPIER REGISTRYCIV-2012-441-797[2013] NZHC 2224IN THE MATTER of an application pursuant to the CriminalProceeds (Recovery) Act 2009BETWEEN THE COMMISSIONER OF POLICEApplicantAND PATRICK JOHN HAYWOODRespondentHearing: On the papersAppearances: F E Cleary for applicantJ S Jefferson for respondentJudgment: 29 August 2013JUDGMENT OF LANG J[on costs]This judgment was delivered by me on 29 August 2013 at 4 pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate[1] In this proceeding, the Commissioner of Police seeks restraining and forfeiture orders under the Criminal Proceeds (Recovery) Act 2009 ("the Act") in respect of assets owned by Mr Haywood.[2] The Commissioner has now elected to discontinue the proceeding, and Mr Haywood does not oppose that occurring. The only outstanding issue relates to costs. Mr Haywood seeks an order for costs in his favour on the basis that he has been the successful party. The Commissioner opposes any award of costs being made against him. He submits that costs should lie where they fall.Background[3] The proceeding arose out of an investigation carried out by the police into suspected drug dealing activity in the Hawke's Bay region. Mr Haywood came tothe notice of the police after they obtained an interception warrant authorising them to intercept the communications of a number of persons. At the termination of theoperation, the police executed a search warrant on Mr Haywood's residential addressand on a Bayliner boat that the police believed was owned by Mr Haywood. Thepolice found the sum of $12,960 in cash hidden in the boat, and also located otherindicia of drug dealing activity in the boat and at Mr Haywood's address. As aresult, Mr Haywood faces a number of serious drugs charges in the indictablejurisdiction of the District Court at Napier.[4] Not surprisingly, the Commissioner sought restraining and forfeiture orders in respect of the Bayliner boat and the cash that was found secreted within it. The Commissioner also sought a restraining order in respect of a Chevy V8 boat motor, a Yamaha outboard motor and a boat trailer. I take all those items to be associated with the boat, although it seems that the police have not been able to locate the trailer. The police believed that all of these items were in Mr Haywood's possession and that they were potentially available for forfeiture under the Act.[5] Several factors have persuaded the Commissioner not to pursue the present application. First, the cash was handed back to Mr Haywood by a member of policestaff who was apparently unaware that it formed part of the application for restraint. The Commissioner realistically accepts that there is now no utility in pursuing the application so far as it relates to the cash.[6] Secondly, the Commissioner's staff have now interviewed two other persons who claim to own a one-quarter share each in the boat. These persons have satisfied the Commissioner that they have a genuine claim to these shares in the boat. The Commissioner also accepts that a further quarter share in the boat is held by another person. As a result, Mr Haywood only owns a quarter share in the boat. The Commissioner estimates this to be worth no more than approximately $8,700. Given the ongoing costs of maintaining and storing the boat, the Commissioner does not consider it economically viable to retain the boat and associated motors. He has therefore elected to abandon the application and return the property to Mr Haywood.The arguments[7] Counsel for Mr Haywood points out that this is a civil proceeding. As a consequence, the issue of costs is governed by Part 14 of the High Court Rules. Rule 14.1 provides that all matters in relation to costs are at the discretion of the Court. In exercising that discretion, however, the Court is required to have regard to the principles contained in r 14.2. The first of these is that a party who fails with respect to a proceeding should pay costs to the party who succeeds. Counsel for the respondent submits that Mr Haywood must be regarded as the successful party in this proceeding, because the Commissioner has elected not to proceed further.[8] In response, counsel for the Commissioner relies on r 14.7(e). This permits the Court to refuse to make an order for costs where the proceeding concerns a matter of public interest, and the party opposing costs has acted reasonably in conducting it.Decision[9] I do not consider the position to be as straightforward as counsel for MrHaywood suggests. The fact of the matter is that the Court has not yet made anydetermination in relation to the Commissioner's application. As a consequence, theproceeding remains undetermined. For that reason it can be argued that neither party has failed or succeeded in respect of the proceeding.[10] More importantly, I am satisfied that the Commissioner initiated the proceeding as a matter of public interest. When he did so, he could not have known that other parties would lay claim to significant shares in the principal assets that were the subject of the application. Once the Commissioner learned of the interests held by these parties in the assets, he promptly elected not to proceed further. Itherefore consider that the Commissioner has acted reasonably in both bringing anddiscontinuing the proceeding. For that reason, I am satisfied that it is appropriate todirect that costs lie where they fall and I so order.Lang JSolicitors:Crown Solicitor, NapierCounsel:J S Jefferson, Napier