COMMISSIONER OF THE NEW ZEALAND POLICE v VEEVERS (AKA WILLIAMS) [2017] NZHC 80

COMMISSIONER OF THE NEW ZEALAND POLICE v VEEVERS (AKA WILLIAMS) [2017] NZHC 80 [3February 2017]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV 2014-409-142[2017] NZHC 80IN THE MATTER OF an application pursuant to ss 22, 24 and 25of the Criminal Proceeds (Recovery) Act2009BETWEEN THE COMMISSIONER OF THE NEWZEALAND POLICEApplicantAND GIOVANNI SHANE ROBERTVEEVERS (AKA WILLIAMS)First RespondentKELLY BARBARA VEEVERS (AKAWILLIAMS)Second RespondentAND BANK OF NEW ZEALANDThird PartyHearing: 2 February 2017Appearances: H McKenzie for the ApplicantC Ruane for the RespondentsJudgment: 3 February 2017JUDGMENT OF MANDER J[1] The Commissioner of Police has applied for assets and profit forfeiture ordersin relation to the property of the first and second respondents, Giovanni and KellyVeevers (Mr and Mrs Williams). These applications were opposed.[2] During the course of the hearing of the Commissioner's applications for theseorders I was advised the parties had reached a settlement. Such settlement, however,is subject to the approval of the Court. Under s 95 of the Criminal Proceeds(Recovery) Act 2009 (the Act) any such settlement does not bind the parties unless theCourt approves it. I have dealt with this file at various stages during the course of itsinterlocutory processes, including giving judgment in relation to the Commissioner'sapplication for the property the subject of the Commissioner's application to berestrained and placed into the custody and control of the Official Assignee.1[3] The property the subject of the applications are the land and buildings at34 Sidey Quay, Kaiapoi, owned by both respondents, and a Chrysler motor vehicleregistered in the name of the first respondent. At the time the Commissioner made hisapplications the Sidey Quay property had a rateable value of $340,000 and was subjectto a mortgage in favour of the Bank of New Zealand for $17,499.63. The motorvehicle, as at June 2015, was valued at approximately $13,000-$15,000.[4] The grounds on which the Sidey Quay property was sought to be forfeit wasthat it had wholly or in part been acquired as a result of, or directly or indirectly from,significant criminal activity. In that regard, the first respondent was convicted ofcultivating cannabis from 13 January 2012 to 4 February 2014. This charge has amaximum penalty of seven years imprisonment and, because it carries a maximumpenalty of five years or more, under s 6(1)(a) of the Act constitutes "significantcriminal activity". Mr Williams was also convicted of a further cannabis relatedcharge of possessing equipment for the purpose of cultivation which carries amaximum five year penalty. Based on the respondents unexplained cash income, theCommissioner also considered it likely that the respondents have been engaged in taxevasion under the Tax Administration Act. The offence of tax evasion under s 143Bof that Act carries a maximum penalty of five years imprisonment and also qualifiesas "significant criminal activity".[5] The grounds on which the profit forfeiture order was sought were that therespondents have, between 1 April 2007 to 4 February 2014, unlawfully benefitted tothe value of $287,734.77 from significant criminal activity, namely cultivation ofcannabis and possession of equipment, and potentially tax evasion.1 Commissioner of New Zealand Police v Veevers [2014] NZHC 1344.[6] In support of these applications the Commissioner relies on affidavits filed bya financial analyst, Melanie van der Pol, and a senior investigator attached to theCommissioner's Southern Asset Recovery Unit in Christchurch, Wendy Riach.Mr Williams, the first respondent, filed an affidavit in opposition to theCommissioner's applications seeking to account for cash income acquired over thecourse of the period the subject of the Commissioner's investigation.[7] The Commissioner's case is based upon an analysis of the income available tothe respondents in comparison to their outgoings and standard of living. It is apparentfrom the evidence that the respondents had access to an undeclared source of funds.Mr Williams sought to account for that cash income in various ways, including familyassistance, income generated by boarders, muttonbirding, and extensive trading inlegitimate goods. The Commissioner made further inquiries. The result of thosefurther investigations and his analysis of the explanations provided by the firstrespondent does not appear to support the plausibility of these claimed sources ofincome.[8] In granting the Commissioner's application for restraining orders, I concludedas follows:[60] ... notwithstanding the respondents claims of this cash income beingsourced from legitimate activities, in my view, the discrepancy betweenidentified legitimate sources of income and the cash apparently available tothem over such an extended period remains largely unexplained. When thatis set against a not insignificant and well-established cannabis cultivationoperation, I am satisfied there are reasonable grounds to believe therespondents have unlawfully benefitted from significant criminal activity...Proposed settlement[9] The proposed settlement is as follows:(a) The first and second respondents will pay the Commissioner of theNew Zealand Police $260,000 within 28 days and consent to finalforfeiture of the black Chrysler 300C, formally registered as THBØSS(the restrained vehicle).(b) Upon payment of $260,000 within 28 days and forfeiture of the blackChrysler 300C, registration THBØSS, the Commissioner of theNew Zealand Police will discontinue his application for asset and profitforfeiture orders, and will discharge the restraining order.(c) If settlement is not thus effected by the first and second respondents theOfficial Assignee can immediately sell the property at 34 Sidey Quay,Kaiapoi, without further order of the Court, and:(i) retain $260,000; and(ii) retain the costs associated with selling the property at 34 SideyQuay, Kaiapoi; and(iii) retain the costs associated with the storage and otherwiseassociated with the Chrysler since the time of restraint; and(iv) retain and liquidate the Chrysler; and(v) will return the balance of the proceeds of the sale to the first andsecond respondents.Should the settlement be approved?[10] The Court is required to approve the settlement if it is satisfied it is consistentwith the purposes of the Act and the overall interests of justice. The purposes of theAct include deterring significant criminal activity, eliminating the opportunity to profitfrom such activity, and reducing the ability of criminals and others to continue toexpand criminal enterprises. The approval by the Court of a proposed settlement isnot a rubberstamping exercise, with the Court having been entrusted with asupervising jurisdiction to ensure that settlements are consistent with Parliament'sintention in enacting the statute.22 Commissioner of New Zealand Police v Bradley & Ors HC Rotororua CIV-2011-463-000675, 5July 2012, at [9].[11] The proposed settlement results in the payment of $260,000 to theCommissioner. The forfeiture of the restrained vehicle is a comparatively modestoutcome. The settlement provides the respondents with the opportunity to avoidforfeiture of their Sidey Quay property upon payment of the agreed sum and forfeitureof the vehicle.[12] I am satisfied that in the circumstances the settlement is consistent with thepurposes of the Act and reflects a pragmatic arrangement that provides the respondentswith the opportunity to retain their property in return for the payment of a sum ofmoney which reflects the apparent profit obtained from the significant criminalactivity. There will be a significant saving of time and cost as a result of this settlementwhich, in my view, is consistent with the purposes of the Act. The overall interests ofjustice are enhanced by this arrangement, allowing certainty to be achieved, andavoiding litigation. It represents a sensible resolution based on the state of the affidavitevidence.[13] Accordingly, I am satisfied the settlement reasonably represents the value ofthe unlawfully derived income and that, in the circumstances of the case, it is in theoverall interests of justice for the Court to approve the settlement. Accordingly, I makean order in terms of s 95(3) of the Act approving the proposed settlement as set out in[9].[14] In order to provide sufficient time for the settlement to be given effect, theCommissioner's applications are adjourned to the duty Judge list at 11.45 am on13 March 2017.Solicitors:Raymond Donnelly & Co, ChristchurchC M Ruane Barrister, Christchurch