POLICE v WOOD [2021] NZHC 310

POLICE v WOOD [2021] NZHC 310 [26 February 2021]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2020-409-000608[2021] NZHC 310BETWEEN COMMISSIONER OF POLICEApplicantAND STEVEN JAMES WOODRespondentHearing: 24 February 2021Appearances: C C White for the ApplicantNo appearance by or on behalf of the RespondentJudgment: 26 February 2021JUDGMENT OF NATION J[1] On 30 April 2020, during the COVID-19 lockdown, the Police stopped a cartravelling between Richmond and Motueka. The respondent (Mr Wood) was thedriver of the car. There were two other passengers. In the car the Police found variouscell phones, a baseball bat and a Tribesmen gang patch on the front seat. In a bag inthe boot of the car, they found 12 bundles of cash to a total value of $56,370. TheCommissioner has applied for an asset forfeiture order as to that cash pursuant to ss43 to 51 of the Criminal Proceeds (Recovery) Act 2009 (the Act).[2] Mr Wood was served with a copy of the Commissioner's application and theaffidavits filed in support of the application on 11 December 2020. He was thenadvised as to when the proceedings would be called in Court. He did not appear at thefirst call of the matter on 9 February 2021. Mr Wood had not filed any notice ofopposition to the application.[3] The proceedings were set down for a formal proof hearing on 24 February 2021at 10.00 am. Counsel for the Commissioner appeared at that time, with Detective Bullin attendance to answer any questions if necessary. Detective Bull advised the Courtthat Mr Wood had been in the Law Courts building just prior to the case being called.He did not however appear in Court when the case was called, despite the case beingannounced over the building speaker system on two occasions and his being directedto come to the Court in connection with the case. The hearing thus proceeded on aformal proof basis.[4] For the Commissioner to obtain an assets forfeiture order, the High Court mustbe satisfied on the balance of probabilities that the cash is tainted property.1 Here, theCommissioner says the cash is tainted property as defined in s 5 of the Act as havingbeen acquired from significant criminal activity, namely the supply ofmethamphetamine.[5] I am satisfied, on the balance of probabilities, that the cash was acquired fromsuch criminal activity.[6] Mr Wood was the driver of the vehicle when it was stopped. The vehicle wasregistered in the name of his mother. Karen Chappell was in the front passenger seat.Scott Radford was in the rear passenger seat.[7] When spoken to by the Police, Mr Radford declined to be interviewed. Afterbeing given her New Zealand Bill of Rights Act 1990 (NZBORA) warning, MsChappell said she knew nothing about the baseball bat or cash found in the vehicle.Mr Wood said the baseball bat found behind the driver's seat was his to take with hisnephew to the park to play ball. When asked about the cash, Mr Wood told Police hewas buying a boat but refused to answer any further questions about this.[8] I accept the evidence of the Police that, commonly, people involved in illicitdrug dealing do so while armed in some way for protection, for example being inpossession of a baseball bat.1 Criminal Proceeds (Recovery) Act 2009, s 50(1).[9] On 4 May 2020, Mr Wood contacted the Police regarding the return of the cash.He told the Police he "did not believe in banks so keeps all his money as cash in hisvehicle".[10] The Police subsequently obtained information as to how Mr Wood had usedvarious bank accounts. That evidence showed how Mr Wood used an account withthe ANZ bank for day to day banking. The Police also obtained evidence that MrWood regularly used an account with the New Zealand Credit Union Baywide, tradingas New Zealand Credit Union South.[11] Mr Wood has convictions for cannabis cultivation and possession of cannabisfor supply. He is a member of the Tribesmen gang. There are proceedings pursuantto the Act regarding other Tribesmen members who have been found in possession ofsubstantial quantities of cash allegedly obtained from dealing in illicit drugs. Therewas no challenge to Detective Bull's evidence that, in his experience, drug dealing isgenerally carried out in cash and the presence here of a large sum of cash wasconsistent with the sale of controlled drugs.[12] Mr Wood was provided with an opportunity to explain how he came to be inpossession of the cash through being served with an examination order under s 107 ofthe Act requiring him to attend the Christchurch Central Police Station. He failed todo so on a number of occasions and refused to answer questions on one occasion whenhe did turn up. His reluctance to attend the examination and provide a legitimateexplanation for the source of the cash is consistent with his being incapable of doingso.[13] At the time of her arrest on 30 April 2020, Ms Chappell was subject to bailconditions relating to charges of sale and supply of methamphetamine and possessionof LSD, ecstasy and methamphetamine. She subsequently pleaded guilty to thecharges for which she was on bail.[14] One of the items seized from the car on 30 April 2020 was a cell phone usedby Ms Chappell. Based on messages extracted from that cell phone, Ms Chappell wascharged with offering to supply and supplying methamphetamine and possession ofbutanediol, a class B controlled drug. She subsequently pleaded guilty to the chargesbased on those messages.[15] There was evidence of SMS conversations between Ms Chappell and MrWood. These include a message sent by Mr Wood to Ms Chappell on 22 April 2020stating "Ive gotta kg of hyp can u sort something for it". Ms Chappell replied with amessage which indicated she was responding positively to Mr Wood's request.[16] On that cell phone, there was messaging from 20 April 2020 indicating thattwo other people were messaging Ms Chappell in an attempt to obtain one or twoounces of methamphetamine, the cost of which Ms Chappell believed would bebetween $10,000 and $12,000 per ounce. Between 25 and 30 April 2020, there was afurther exchanging of messages consistent with Ms Chappell offering to supplymethamphetamine at $750 for a gram and the other person wanting half an ounce ofmethamphetamine that he would pay $6,000 for.[17] On 30 April 2020, there was messaging between Mr Wood and Ms Chappellconsistent with their arranging to meet but their being alert to and concerned aboutPolice activity at the time.[18] There was evidence from which the Police were able to attribute another cellphone to Mr Radford. From that cell phone, the Police extracted messages betweenMr Radford and Mr Wood between 22 April 2020 and 30 April 2020, consistent withMr Radford having $1,000 for Mr Wood in return for which Mr Radford was to receiveillicit drugs.[19] I accept the evidence from Detective Gaskell, who analysed the messaging onrelevant cell phones, that the messaging was consistent with people talking in codeand it is common for people to talk in code when discussing illicit drugs.[20] Analysis of the messaging on cell phones located in the vehicle establishes thatMr Wood, Mr Radford and Ms Chappell were associates and had made arrangementsto meet. Ms Chappell was supplying methamphetamine in large quantities at therelevant time.[21] The $56,370 in cash was packaged in separate bundles consistent withindividual payments from customers who had purchased drugs. There is no alternativeexplanation before the Court as to why the cash was packaged in bundles.[22] Mr Wood's total declared earnings from 2018 to 2020, before tax, and frombenefits from 2019 to 2020 totalled $70,288.74. Information from the householdeconomic survey 2019 compiled by Statistics New Zealand recorded, on average, asingle person's living expenditure per year was $33,540.[23] I am satisfied the cash found in the vehicle, which Mr Wood has claimed washis, could not have been legitimately derived from income and benefits.[24] The Court is accordingly satisfied on the balance of probabilities that the cashfound in a bag in the boot of the car was acquired as a result of, or derived directly orindirectly from, the supply of methamphetamine. The supply of methamphetamine issignificant criminal activity, being an offence punishable by a maximum term ofimprisonment of five years or more.2 It is also significant criminal activity becausethe evidence establishes that property, the cash of $56,370, is more than $30,000directly or indirectly acquired or derived from the supply of methamphetamine.3[25] Section 50(1) of the Act states:50 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.[26] Section 50(1) is subject to s 51 which would permit the Court to decline anassets forfeiture order because of the undue hardship that might result from such anorder. There was no application for that proviso to be applied in this case.2 Section 6(1)(a).3 Section 6(1)(b).[27] Mr Wood had claimed an interest in the cash so the limitation on the makingof an assets forfeiture order referred to in s 50(4), where no person has claimed aninterest in the property, does not apply.[28] The Court accordingly makes an order that the $56,370 in cash found in thecar driven by Mr Wood on 30 April 2020 vests in the Crown absolutely and is to be inthe Official Assignee's custody and control.Solicitors:Crown Solicitor, Christchurch.Copy to:Steven Wood, Respondent.