POLICE v FENNELL [2018] NZHC 2249

POLICE v FENNELL [2018] NZHC 2249 [29 August 2018]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2015-409-000783[2018] NZHC 2249BETWEEN THE COMMISSIONER OF THE NEWZEALAND POLICEApplicantAND FRANCIS GARY FENNELLRespondentHearing: 27 August 2018Appearances: H McKenzie for the ApplicantNo appearance for the RespondentJudgment: 29 August 2018JUDGMENT OF NATION J[1] On 18 February 2016, I made an order under ss 22 and 24 Criminal Proceeds(Recovery) Act 2009 (the Act) that funds attributed to ANZ Bank New ZealandLimited, account number 06-0909-0418548-00 in the name of the respondent F GFennell:(a) are not to be disposed of or dealt with other than is provided for in therestraining order; and(b) are to be in the Official Assignee's custody and control.[2] The restraining order has subsequently been extended on two occasions to 5March 2019.[3] On 16 February 2018, the Commissioner filed an application under the Act fora profit forfeiture order and, in particular, for orders that the funds attributed to theabove ANZ account in the name of F G Fennell vest in the Crown absolutely, an orderthat the value of the benefit determined in accordance with s 53 of the Act be $233,525and that the maximum recoverable amount under the Act is $233,525. The applicationwas made on the grounds the respondent had in the relevant period of criminal activity(as defined in s 5(1) of the Act), namely 22 May 2014 until 31 August 2016, unlawfullybenefitted to the value of at least $233,525 from significant criminal activity, namelyimporting and selling controlled drugs and the associated laundering of the funds fromthe sale of those drugs.[4] An affidavit of Ronan McMorrow, Police Officer of Dublin, sworn on 10February 2016, confirmed that on 20 January 2016 he served Mr Francis Gary Fennellwith documents relating to the original application for a restraining order.[5] In a further affidavit of 25 June 2018, Ronan McMorrow confirmed that he hadreceived from New Zealand various documents, including the application for profitforfeiture order, notice of hearing from the Christchurch High Court for a hearing onMonday 27 August 2018 at 10.00 am, an affidavit of Detective Duncan Robert Bull insupport of the application for forfeiture order, and an order extending the duration ofthe restraining order.[6] On 23 April 2018, Ronan McMorrow attempted to serve the documents on therespondent. Mr Fennell refused to accept them from the Police Officer.[7] On 25 June 2018, Ronan McMorrow travelled to the office of Wayne KennySolicitors in Dublin. Wayne Kenny accepted service of the documents on behalf ofhis client Francis Fennell.[8] On 3 August 2018, I made an order deeming delivery of the documents to theoffice of Wayne Kenny Solicitors in Dublin on 25 June 2018 to have been service ofthe documents on Francis Gary Fennell. I directed the Commissioner's applicationwas to proceed to hearing on 27 August 2018. The respondent was to be given noticeof these orders and direction through delivery by email to the offices of French KennySolicitors of Dublin.[9] On 27 August 2018, when the proceedings were called in Christchurch,Detective Duncan Robert Bull confirmed that, on 6 August 2018, he emailed to FrenchKenny the directions I had made as to service on 3 August 2018 and confirmation thatthe proceedings were to be called in the Christchurch High Court on 27 August 2018for a forfeiture hearing.[10] I am satisfied the respondent, Francis Gary Fennell, was served with theseproceedings and has taken no steps.[11] Section 43 of the Act provides standing for the Commissioner of Police toapply for a profit forfeiture order.[12] A profit forfeiture order is mandatory where certain requirements are met. TheCourt must make a profit forfeiture order under s 55 if it is satisfied, on the balance ofprobabilities, that the respondent has unlawfully benefitted from significant criminalactivity within the relevant period of criminal activity and has interests in property.1Importantly, property subject to a profit forfeiture order does not need to be tainted bythe significant criminal activity (or any other criminal activity) as is required for anassets forfeiture order.[13] Section 55 mandates the Court to make a profit forfeiture order if certain pre-requisites are met:55 Making profit forfeiture order(1) The High Court must make a profit forfeiture order if it is satisfiedon the balance of probabilities that—(a) the respondent has unlawfully benefited from significantcriminal activity within the relevant period of criminal activity;and(b) the respondent has interests in property.1 Criminal Proceeds (Recovery) Act 2009, s 55(1).(2) The order must specify—(a) the value of the benefit determined in accordance with section53; and(b) the maximum recoverable amount determined in accordancewith section 54; and(c) the property that is to be disposed of in accordance with section83(1), being property in which the respondent has, or is treatedas having, interests.(3) Subsections (1) and (2) are subject to section 56.(4) A profit forfeiture order is enforceable as an order made as a resultof civil proceedings instituted by the Crown against the person torecover a debt due to it, and the maximum recoverable amount isrecoverable from the respondent by the Official Assignee on behalfof the Crown as a debt due to the Crown.[14] Section 53 provides that the value of that benefit is presumed to be the valuestated in the application (here, $233,525) if the Commissioner proves, on the balanceof probabilities, that the respondent has, in the relevant period of criminal activity,unlawfully benefitted from significant criminal activity. The respondent can rebut thepresumption on the balance of probabilities.2[15] Section 54 states that the maximum recoverable amount is the value of thebenefit under s 53 less the value of any property forfeited to the Crown as a result ofan assets forfeiture order made in relation to the same significant criminal activity towhich the profit forfeiture order relates.[16] The relevant period of criminal activity is defined in s 5 as follows:Relevant period of criminal activity, in relation to an application for a profitforfeiture order, means the period that ends on the date the application is madeand starts 7 years before—(a) the date of the application for the relevant restraining order, if theapplication for the profit forfeiture order relates, wholly or in part, torestrained property; or(b) the date of the application for the profit forfeiture order, if the applicationfor the profit forfeiture order does not relate to restrained property.2 Criminal Proceeds (Recovery) Act 2009, s 53(2).[17] In the current case, the relevant period of criminal activity is 1 May 2014 until31 August 2016.[18] The quantum of a profit forfeiture order may exceed the property to be realised.The remaining balance can be recovered by the Official Assignee on behalf of theCrown as a civil debt due to the Crown under s 55(4) of the Act. The section relevantlyprovides:55 Making profit forfeiture order(4) A profit forfeiture order is enforceable as an order made as a result ofcivil proceedings instituted by the Crown against the person to recovera debt due to it, and the maximum recoverable amount is recoverablefrom the respondent by the Official Assignee on behalf of the Crownas a debt due to the Crown.[19] I consider the application in terms of the four separate steps that have to besatisfied, as noted by Lang J in Pulman v Commissioner of Police.3[20] I am satisfied, from the evidence of Detective Bull, that the respondent hasunlawfully benefitted from significant criminal activity during the relevant period.The Commissioner has proved, on the balance of probabilities, that the respondentimported or facilitated the importation of controlled drugs into New Zealand andAustralia and facilitated the transfer of funds from the sales of the drugs to himselfusing banks, Western Union and couriers. The controlled drugs were MDMA andcocaine. The drug importation offences at issue have a maximum penalty of morethan five years' imprisonment and hence qualify as "significant criminal activity".Money laundering under s 243(2) of the Crimes Act 1961 has a maximum penalty ofseven years' imprisonment which also qualifies as "significant criminal activity".[21] The application was made on the basis the maximum recoverable amount wasthe value of the benefit assessed as being the total cash deposited into the respondent'sANZ bank account from the date of the first deposit, 22 May 2014, until the fundswere restrained and transferred to the Official Assignee on 7 December 2015, together3 Pulman v Commissioner of Police, HC Auckland, CIV-2010-404-5666, 27 May 2011.with $21,095 which was transferred to the Western Union. In fact, the total depositedwas $6,000 more than this but the Commissioner asks the Court to determine themaximum recoverable amount as assessed was as originally claimed, namely$233,525.[22] No assets forfeiture order has previously been made. I thus determine the valueof the benefit, in accordance with s 53, as being $233,525.[23] I thus determine the maximum recoverable amount, in accordance with s 54,to be $233,525.[24] It has not been claimed that any property should be excluded from theapplication of the profit forfeiture order because undue hardship is likely to be causedto the respondent if such profit were to be realised.[25] The Court must make a profit forfeiture order under s 55(1) if it is satisfied, onthe balance of probabilities, that the respondent has interests in the property. Theamount which was subject to a restraining order in an ANZ account is now held by theOfficial Assignee. With interest that has accumulated to 27 August 2018, the amounton deposit was $72,739.02.[26] I accordingly make a profit forfeiture order as sought by the Commissioner:(a) the value of the benefit is $233,525;(b) the maximum recoverable amount is $233,525; and(c) the following property is to be realised:(i) funds currently held by the Official Assignee and formerly in the ANZBank New Zealand Limited, account number 06 0909 0418548 00 inthe name of F G Fennell in the sum of $72,739.02, together with suchfurther interest as may have accumulated on that sum.Solicitors:Raymond Donnelly & Co., Christchurch.