COMMISSIONER OF POLICE v SWARBRICK [2023] NZHC 430

COMMISSIONER OF POLICE v SWARBRICK [2023] NZHC 430 [9 March 2023]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2022-409-439[2023] NZHC 430BETWEEN COMMISSIONER OF POLICEApplicantAND SCOTT ANDREW SWARBRICKRespondentAND SARAH JANE ECKHOLDInterested PartyHearing: On the papersJudgment: 9 March 2023JUDGMENT OF HARLAND JIntroduction[1] It is in the interests of justice that those who undertake or are associated withcriminal activity do not profit from such activity. The Criminal Proceeds (Recovery)Act 2009 (the Act) sets out provisions for the confiscation of the proceeds of crimeand property used to commit serious offences. The purpose of the Act is to establisha regime for the forfeiture of property that has been derived directly or indirectly fromsignificant criminal activity or represents the value of a person's unlawfully derivedincome.1[2] The Commissioner initially applied for two orders against the respondent:1 Criminal Proceeds (Recovery) Act 2009, s 3(1).(a) a profit forfeiture order to the value of $93,338.29 in relation to twoamounts of cash totalling $25,305 and unexplained income deposited intothe respondent's bank account of $68,033.29; and(b) an assets forfeiture order in relation to two amounts of cash totalling$25,305.[3] The Commissioner has since advised that the application for a profit forfeitureorder is not pursued. The only application now pursued is the assets forfeiture order.I proceed on this basis.[4] An application for an assets forfeiture order can be determined by way offormal proof.2 The respondent, Mr Swarbrick, and the interested party, Ms Eckhold,have been served. Neither party appeared at the first call of this matter, nor have theyindicated they wish to contest the Commissioner's application. Both Mr Swarbrickand Ms Eckhold have been served with the Minute of Nation J dated 31 October 2022which outlined that the application would proceed by way of formal proof in theabsence of any steps being taken by them to defend it.[5] Given that no further steps have been taken, I determine the application by wayof formal proof, based on the affidavit of Reon Deane Blake, affirmed 15 September2022 and filed in support of the application.[6] I have decided to grant the assets forfeiture order. This judgment sets out thereasons for my decision.Factual Background[7] On 25 May 2021 at 7:20 am, the Police executed a search warrant at [],which was the home address of the respondent, Mr Swarbrick, and his associate [].Mr Swarbrick's partner, Ms Eckhold, lived at a separate property, but she would visitthis address and stay there with Mr Swarbrick from time to time.2 Commissioner of Police v Mauga [2015] NZHC 1071.[8] During the search, two substantial cannabis growing operations, a large amountof drug paraphernalia and ammunition (a mixture of .44 Magnum, .22 calibre, andshotgun rounds) were found. The drug paraphernalia included digital scales, driedcannabis leaf and hypophosphorous acid, a chemical commonly used for convertingephedrine/pseudoephedrine to methamphetamine.[9] On the same morning, Police executed a surveillance device warrant tointercept Mr Swarbrick's personal phone calls.[10] At approximately 8:48 pm, Mr Swarbrick called an unknown person andorganised to meet at Mairehau High School to sell that person one gram ofmethamphetamine for $500.[11] On 26 May 2021 at approximately 3:00 pm, the Police stopped Mr Swarbrickin his car. Ms Eckhold was also in the vehicle.[12] On Mr Swarbrick's seat was a jacket with two sunglass cases inside, onecontaining cash amounting to $13,000 and the other containing cash amounting to$10,000. A further $2,000 in cash was found in Mr Swarbrick's pocket and $305 cashwas found in his wallet. Scales, a methamphetamine pipe, cell phones, a taser, and182.37 grams of cannabis in zip lock bags were found on the backseat of the vehicle.[13] Mr Swarbrick was charged and later pleaded guilty to charges of unlawfullycarrying/possession of explosives,3 failing to carry out obligations in relation to acomputer search,4 offering to supply methamphetamine,5 and possession of cannabisplant for the purposes of supply.6 He was convicted and sentenced to nine months'home detention.[14] Ms Eckhold was charged and convicted for unlawfully carrying a restrictedweapon.7 She was sentenced to 80 hours' community work and nine months'supervision.3 Arms Act 1983, s 45(1); maximum penalty 4 years' imprisonment or $5,000 fine or both.4 Search and Surviellance Act 2012, s 178; maximum penalty 3 months' imprisonment.5 Misuse of Drugs Act 1975, s 6(1)(c) and (2)(a); maximum penalty life imprisonment.6 Sections 6(1)(f) and 2(c); maximum penalty 8 years' imprisonment.7 Above n 3.Legal considerations[15] Section 50 of the Act provides:850 Making assets forfeiture order(1) If, on an application for an assets forfeiture order, the High Court issatisfied on the balance of probabilities that specific property is taintedproperty, the Court must make an assets forfeiture order in respect of thatspecific property.(2) Subsection (1) is subject to section 51.(3) The Court must specify in an assets forfeiture order the property to whichthe order applies and that the property—(a) vests in the Crown absolutely; and(b) is in the custody and control of the Official Assignee.(4) Despite subsection (1), the Court may not make an assets forfeiture orderin relation to property that no person has claimed an interest in, unlessthe Court is satisfied, on the balance of probabilities, of the followingadditional matters:(a) that a restraining order was earlier made in relation to the sameproperty; and(b) that the restraining order has been in place for a period of at least 1year; and(c) that the Commissioner has contacted or made all reasonable effortsto contact any person the Commissioner believes may have aninterest in the property.(5) If any property that is land is vested in the Crown absolutely as aconsequence of an assets forfeiture order made under subsection (3), aninterest recorded on the title to the land that is not affected by the assetsforfeiture order is not extinguished.(emphasis added)[16] Section 5 defines "tainted property" as:tainted property—(a) means any property that has, wholly or in part, been—(i) acquired as a result of significant criminal activity; or8 Above n 1. This section is subject to the exclusionary rule in s 51. On an application made by therespondent, the Court may consider whether undue hardship is likely to be caused to therespondent. No such application has been received and this issue is therefore not engaged in thecurrent proceeding.(ii) directly or indirectly derived from significant criminal activity; and(b) includes any property that has been acquired as a result of, or directly orindirectly derived from, more than 1 activity if at least 1 of those activitiesis a significant criminal activity(emphasis added)[17] Section 6 defines "significant criminal activity" as:6 Meaning of significant criminal activity(1) In this Act, unless the context otherwise requires, significant criminalactivity means an activity engaged in by a person that if proceededagainst as a criminal offence would amount to offending—(a) that consists of, or includes, 1 or more offences punishable by amaximum term of imprisonment of 5 years or more; or(b) from which property, proceeds, or benefits of a value of $30,000 ormore have, directly or indirectly, been acquired or derived.(2) A person is undertaking an activity of the kind described in subsection(1) whether or not—(a) the person has been charged with or convicted of an offence inconnection with the activity; or(b) the person has been acquitted of an offence in connection with theactivity; or(c) the person's conviction for an offence in connection with the activityhas been quashed or set aside.(3) Any expenses or outgoings used in connection with an activity of the kinddescribed in subsection (1) must be disregarded for the purposes ofcalculating the value of any property, proceeds, or benefits undersubsection (1)(b).Analysis[18] As the Act provides, if I am satisfied that it is more probable than not that thecash sums totalling $25,305 are tainted property, I am required to make an assetsforfeiture order in relation to them.[19] Both drug offences, to which Mr Swarbrick pleaded guilty, come within themeaning of "significant criminal activity" in s 6(1)(a) of the Act. The first part of thedefinition of "tainted property" is met. I must next determine whether the $25,305 isderived or acquired from that significant criminal activity.[20] The affidavit filed by the Commissioner outlines the extent of Mr Swarbrick'sdrug dealing. The sequence of events is instructive. I have already referred to whatwas located during the search of Mr Swarbrick's property on 25 May 2021. In relationto two cannabis operations, 16 plants, heat lamps and extraction fans were found, aswell as various ammunition. On the same day as the search, the Police intercepted MrSwarbrick's phone calls and heard of his plan to sell one gram of methamphetamineto an unknown person for $500. The next day, scales, cell phones, a taser, zip lockbags containing cannabis, and the $25,305 in cash were found in Mr Swarbrick'svehicle. The cash was in various denominations of $100, $50, $20, $10, and $5 notes.[21] All the items located in Mr Swarbrick's home and vehicle, and the interceptedphone call, are indicative of his involvement in the sale of methamphetamine andcannabis.[22] The affidavit filed by the Police records that, in the 23 months prior to hisarrest:(a) Mr Swarbrick's bank account included 206 unexplained cash deposits,ranging from $10 to $4,650, totalling $68,033.29. The transactions weremade by 50 different people, 29 of whom it is deposed are known drugusers, partners of drug users or drug suppliers; and(b) an analysis of Mr Swarbrick's bank account showed there were fewindividual day-to-day purchases such as groceries, clothing, phone andelectronic purchases, suggesting he used cash to pay for his livingexpenses.[23] The cash deposits and use of cash for living expenses are reflective of MrSwarbrick's involvement in a cash generating activity. The market formethamphetamine and other drugs primarily involves the use of cash.[24] Although an assets forfeiture order is not dependent on the outcome ofcriminal proceedings, Mr Swarbrick's guilty plea to charges of offering to supplymethamphetamine and possession of cannabis plant for the purpose of supply is anadditional factor in favour of finding the cash is tainted.9[25] However, the question here is not simply whether Mr Swarbrick was supplyingmethamphetamine and cannabis. Rather, it is whether, on the balance of probabilities,I can find that the $25,305 is derived from that activity. Although people who deal indrugs largely transact their business in cash and can therefore amass large amounts, itis important to recognise that there can also be reasons why a person may havelegitimately accumulated or obtained a large amount of cash.[26] This evidence reveals that, between 1 July 2019 and 26 May 2021, the 23months prior to his arrest, Mr Swarbrick received $9,236.15 in benefit payments fromthe Ministry of Social Development and $38,439.17 for work he undertook for apainter decorator and timber merchant.[27] The interested party, Ms Eckhold, has a similarly low income. In the same 23-month period, her total declared income was $43,789.32, derived from benefitpayments from the Ministry of Social Development. She also stated that the money (Iinfer the $25,305) did not belong to her.[28] Mr Swarbrick has provided no alternative explanation as to where the extracash came from or how it was accumulated and has not come forward to claim it.[29] Considering these matters in combination, I conclude it is more probable thannot that the $25,305 found in Mr Swarbrick's car and on his person was derived fromhim supplying methamphetamine and/or cannabis.Conclusion[30] I am satisfied that the cash sum of $25,305 is likely to have been derived fromsignificant criminal activity undertaken by Mr Swarbrick, being the supply ofmethamphetamine and/or cannabis. It is therefore tainted property for the purposes of9 Above n 1, s 15.s 50(1) of the Act. As it is mandatory for the Court to make the assets forfeiture orderin these circumstances, I grant the Commissioner's application.Result[31] I order that the following property is to vest in the Crown absolutely and is tobe in the Official Assignee's custody and control:(a) The sum of $23,000.00 (plus any interest accrued) located on the frontpassenger's side of a Suzuki Swift motor vehicle registration HPJ325 on26 May 2021 where the respondent, Mr Swarbrick, had been sitting; and(b) The sum of $2,305.00 (plus any interest accrued) located on therespondent, Mr Swarbrick, when searched by Police after getting out ofthe Suzuki Swift motor vehicle registration HPJ325 on 26 May 2021.____________________Harland JSolicitors:Raymond Donnelly & Co., Christchurch.