COMMISSIONER OF POLICE v ARMSTRONG [2023] NZHC 3501

COMMISSIONER OF POLICE v ARMSTRONG [2023] NZHC 3501 [4 December 2023]IN THE HIGH COURT OF NEW ZEALANDHAMILTON REGISTRYI TE KŌTI MATUA O AOTEAROAKIRIKIRIROA ROHECIV-2021-419-000096[2023] NZHC 3501IN THE MATTER OF the Criminal Proceeds (Recovery) Act 2009BETWEEN COMMISSIONER OF POLICEApplicantAND QUENTIN JAMES ALEX ARMSTRONGRespondentTENOHOTU TAHUInterested PartyANZ BANK OF NEW ZEALANDInterested PartyHearing: 28 November 2023Appearances: R Guthrie for the ApplicantT Tran for the RespondentJudgment: 4 December 2023JUDGMENT OF WALKER J[Approving settlement]This judgment was delivered by me on 04 December 2023 at 4.30 pmPursuant to Rule 11.5 High Court RulesRegistrar/Deputy RegistrarIntroduction[1] Before the Court is a joint memorandum of counsel for the Commissioner ofPolice and counsel for Quentin Armstrong. The memorandum invites the Court toapprove a proposed settlement reached between the Commissioner and Mr Armstrong.[2] Any settlement made in relation to proceedings brought under the provisionsof the Criminal Proceeds (Recovery) Act 2009 (the Act) is required to be approved bythis Court.1Background[3] These proceedings arose following the execution of a search warrant atMr Armstrong's home address on 26 September 2019. Located within the address wasa sophisticated indoor cannabis growing operation conducted within the garage.Police located 92 growing cannabis plants at varying stages of maturity together withnine packaged resealable plastic ounce bags of cannabis head. Electronic scales,tinfoil and unused resealable plastic bags were also found as was a diary recordingcultivation cycles and cannabis yield.[4] On 30 July 2020, Mr Armstrong was sentenced in the Hamilton District Courtto eight months' home detention in respect of charges of possession of cultivation ofcannabis, possession of cannabis for supply and unlawful possession of a pistol.[5] The subsequent investigation conducted by the Waikato Asset Recovery Unit(ARU) included analysis of power consumption; Mr Armstrong's power consumptionwas five times above the national average for a family of a similar size and much waslate at night which is consistent with indoor cannabis cultivation.[6] Cannabis yields were also analysed from detailed diary notes prepared byMr Armstrong for 2018 and 2019. Analysis of text messages was also conducted.Police concluded between January 2018 and September 2019 the respondent had1 Criminal Proceeds (Recovery) Act 2009, s 95(2).cultivated cannabis with an approximate financial benefit to him of between$224,926.50 and $358,281.60.Second set of offending[7] On 26 May 2021 while serving civil restraining orders on Mr Armstrong,Police located a second similar commercial cannabis cultivation operation at[REDACTED]. A total of 40 cannabis plants of various stages of maturity were foundwithin a tent in the garage and in a sleepout.[8] On 1 April 2022, Mr Armstrong pleaded guilty to a further charge of cultivatingcannabis and was sentenced to a further eight month term of home detention.[9] Further investigation was undertaken by the ARU. Genesis Energy recordsshowed the power consumption from [REDACTED] was between two and threetimes the national average for a comparable family. The consumption patterns weresimilar to those reviewed in 2018 and 2019.[10] Police undertook an analysis of yield and financial benefit and identified therespondent had cultivated cannabis with an approximate financial benefit to him ofbetween $213,150 and $340,264.This proceeding[11] The Commissioner of Police applied for a profit forfeiture order by way ofapplication dated 15 September 2022 against Mr Armstrong to the value of$437,076.50 pursuant to ss 43, 44 and 52 of the Act.[12] The Commissioner's case is that Mr Armstrong has in the relevant period ofcriminal activity unlawfully benefitted to that value from significant criminal activity.[13] Mr Armstrong filed a notice of opposition and affidavit in support. He assertsthat if he has unlawfully benefitted from significant criminal activity the amountwould be between $83,300 and $116,550 from both sets of offending.Settlement for approval[14] The proposed settlement, which will bind the parties in the event this Courtapproves it is that:(a) The respondent accepts that he has unlawfully benefitted fromsignificant criminal activity, namely the cultivation and supply ofcannabis.(b) Within the relevant period of criminal activity the value of that unlawfulbenefit was $275,000.(c) The parties agree that the maximum recoverable amount is $275,000.(d) The respondent will pay to the Commissioner $275,000 (settlementsum) in full and final settlement within six months of the date the profitforfeiture order is sealed.(e) Upon the Official Assignee providing written confirmation that thesettlement sum has been paid in full, the property at [REDACTED] isto be released from restraint.(f) Each party will bear their own costs.Approval of settlements under the Act[15] Section 95 of the Act provides:95 High Court must approve settlement betweenCommissioner and other 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.[16] Parliament has expressly empowered the Commissioner to enter intosettlements as to the forfeiture of property under the Act. It has entrusted the HighCourt with a supervisory jurisdiction to approve settlements when satisfied they areconsistent with the purposes of the Act in the overall interests of justice.2[17] The s 95 requirement is that the Court have regard to the overall interests ofjustice. This reflects the strong public interest in proceedings under the Act beingbrought to a prompt conclusion, reflecting the likely costs and risks inherent in thedetermination of a contested application and the desirability of proceedings under theAct being made on economic and pragmatic grounds reflective of common sensecompromise.3Decision[18] Approval of the settlement so that it becomes binding is, in my view, consistentwith the purposes of the Act and the overall interests of justice. The amount to be paidin settlement represents a significant portion of the value of Mr Armstrong'sunlawfully derived income as identified by the agreed maximum recoverable amount.There will be a saving of time and expense if the proceeding is resolved by consentwithout the need for a substantive hearing. The estimated amount to be forfeited issignificant. It will be a deterrent to Mr Armstrong and others who may learn of theconsequences of the application of the legislation.[19] The settlement is approved accordingly.Result[20] I make the following orders, so as to give effect to the settlement:2 Commissioner of Police v No-All Group Limited HC Auckland CIV-2010-404-404, 7 November2011 at [11].3 Commissioner of Police v Douglas [2015] NZHC 1293 at [6].(a) The respondent will pay to the Commissioner $275,000 (settlementsum) in full and final settlement within six months of the date the profitforfeiture order is sealed.(b) Upon the Official Assignee providing written confirmation that thesettlement sum has been paid in full the property at [REDACTED] isto be released from restraint.(c) Each party will bear their own costs.(d) In the event the settlement sum is not paid within the timeframeidentified above, the Commissioner will sell the property and pay theproceeds of sale in the following order to satisfy the settlement sum:(i) First, deduct the Official Assignee's actual cost in effecting asale;(ii) Second, repay any secured loan(s) to ANZ Bank of NewZealand;(iii) Third, effect forfeiture of $275,000 (or less if partial paymentof the settlement sum has been made) in accordance withparagraph [14](d) above;(iv) Finally, return the balance of the sale proceeds to a bank accountnominated by the respondent.(e) For the purposes of effecting the sale of any property, the OfficialAssignee has the power to execute any deed or instrument in the nameof Mr Armstrong, and do anything necessary to give validity andoperation to the deed and instrument.............................................................Walker J