S-G V ALLISON HC AK CIV.2000-404-2587

S-G V ALLISON HC AK CIV.2000-404-2587 30 June 2006IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV.2000-404-2587UNDER Proceeds of Crime Act 1991 BETWEEN SOLICITOR-GENERAL FOR NEW ZEALAND Applicant AND BRETT LIONEL ALLISON Defendant Hearing: 22 June 2006 Counsel: David Johnstone for Solicitor-General David Reece for Brett Lionel Allison and Ian Harold Allison Judgment: 30 June 2006 at 3:00pmRESERVED JUDGMENT OF WILLIAMS JThis judgment was delivered by Hon. Justice Williams On30 June 2006 at 3:00pmpursuant to Rule 540(4) of the High Court Rules..Registrar/Deputy Registrar Date: ...The net proceeds of Mr Brett Allison's assets as defined in the pecuniary penalty judgment of 3 February 2006 (para [46] p 23-24) are directed to be paid to the Crown without deduction in favour of the estate of Ian Harold Allison for the claimed interest in the motor cycle.____________________________________________________________________Issue[1] This judgment deals with an application by the late Mr Ian Allison, father of Mr Brett Allison, for recognition by deduction of the sum of $40,000 he claimed to have lent his son in 2000 to enable him to purchase a Harley Davidson motor cycle, from the amount of the pecuniary penalty order of $710,894.34 imposed on Mr Brett Allison in the Court's reserved judgment delivered on 3 February 2006. In effect, though raised only at the pecuniary penalty hearing, it was an application by Mr Ian Allison for relief as a third party to a forfeiture application pursuant to the Proceeds of Crime Act 1991, s 17.Background[2] The circumstances relating to the acquisition of the motor cycle were described in the Court's reserved judgment in the trial of Mr Brett Allison by Judge alone on money laundering counts (para [61] pp 21-22) :[61] A Mr Pratt of Universal Motorcycles said Mr Allison came into his premises in about April 2000 to buy a Road Rage custom motorcycle in his father's name. He picked out a black America's Cup bike which Mr Pratt said was correctly described as a 2000 Harley Davidson model, Road Rage Custom Sport, registration 97UFW. On 16 May 2000, an agreement was entered into in the name of Mr Allison Snr for the purchase of the motor cycle for $70,000, that being $65,000 for the motor cycle and $5,000 for a nitrous oxide performance enhancement system which Mr Allison wanted fitted. The accused paid the deposit of $15,000 by way of a bank cheque which Ms Nutsford [the Police financial analyst] said was drawn against his personal account. He paid a further $15,100 on 26 May 2000, all in cash. That was $100 more than was due. He told Mr Pratt to "buy some beers for the guys" with the extra. He paid a further $30,000 on 6 July 2000, again in cash, and made two further payments each of $5,000 and again in cash on 13 and 26 July 2000, taking delivery on the latter date.[3] In the pecuniary penalty judgment of 3 February 2006 (paras [44] [46] pp23- 24) timetable orders were made relating to Mr Allison snr's claim. [4] He filed an affidavit in support, sworn on 27 February 2006. Mr Allison suffered long-term ill health and as a consequence, he was unable to attend earlierhearings of this matter. Unfortunately, he died before being able to swear an affidavit in reply to evidence adduced by the Solicitor-General. He had, however, prepared a handwritten response dated 29 March 2006 to Detective Peat's evidence which was admitted by consent at the hearing pursuant to the Evidence Amendment Act (No.2) 1980, s 3.Evidence[5] Mr Allison snr's affidavit said he lent his son a total of $40,000 to enable him to buy the motorcycle. He said he lent the sum of $15,000 on 25 May 2000, $20,000 on 17 July 2000 (though the exhibited receipt or acknowledgement of loan appears to date this advance as 7 July 2000) and $5,000 on 26 July 2000. The money, he said, "came from my savings that I had in the bank and cash winnings that I received from Sky City Casino". The only documentary proof he was able to adduce was an undated loan agreement which reads :"Agreement between Brett Lionel Allison and Ian Harold Allison (Father) to lend money to purchase motor bike from Universal Motor Cycles Lt. of New Lynn. The first loan of $15,000 given on 27-5-2000. A further loan given 7.7.2000 of $20,000-00. 5000-00 given 26-7-2000 to pick up the bike. This payment is to cover xtras as ordered. I will hold ownership until loans are repaid or I wish to have the bike returned to me in lieu of payments. Sig: "I H Allison Lender Sig: B Allison Borrower."[6] Though termed a "receipt", since it was self-evidently prepared at some stage after the last of the claimed loans was made, it is probably more accurately described as an acknowledgement of debt. [7] Mr Allison snr said the acknowledgement of debt/receipt was the only documentary record he had as his other banking and financial records were "seized by the Police when they raided my flat at the termination of Operation Flower". [8] In that last assertion, Mr Allison would appear to have been mistaken.[9] Operation Flower, the Police operation which ultimately led to Mr Brett Allison being convicted of manufacturing methamphetamine and conspiring to supply the same, and also ultimately led to his conviction for money laundering, was terminated on 1 November 2000 and a number of persons were arrested on that day. It was not, however, until 9 November 2000 that Police were able to locate Mr Brett Allison operating a clandestine methamphetamine laboratory in Kelston and arrested him. [10] Detective Peat had, however, gone with Ms Nutsford to visit Mr Allison snr at his Glen Innes home on 2 November 2000 to inquire why the motor cycle was registered in his name. According to the Detective, Mr Allison snr said that he had no interest in the motor cycle and that "my son bought the bike last year. He didn't have a motor cycle licence so he asked me to sign the papers", a comment recorded by the Detective in his notebook. [11] That assertion was challenged by Mr Allison snr in his handwritten response. He said, of Detective Peat's evidence, that he "felt there was no reason to reveal my loan to the Police" and reiterated the dates and amounts of loans to his son. He concluded :"Some people use banks for their savings. I chose to keep my money at home. I earned it and it was my choice, be it right or wrong."[12] In a further affidavit, Detective Peat responded to Mr Allison snr's memorandum. He repeated what he said about the 2 November 2000 visit and the fact that no search warrant was executed at Mr Allison snr's address at the termination of Operation Flower. He had, on further inquiries, however, ascertained that a search warrant was executed at Mr Allison snr's address on 6 August 2002 as part of Operation Illusion and a number of documents uplifted. [13] The documents taken under search warrant included Mr Allison snr's ATM receipts from 1998-2002. He put those for the period December 1999-18 November 2000 in evidence. They showed that between May-July 2000, the maximum credit in the account was $10,010.98. That largely resulted from a credit of $10,000 on 22 May 2000 following which there was a series of relatively small withdrawals untilthe account was boosted from $5,393.59 to $9,393.59 by a deposit of $4,000 on 9 June 2000. Thereafter a series of small withdrawals continued until a credit of $3,780.00 on 19 June 2000 lifted the balance to $8,563.64. The series of small withdrawals then continued until a small overdraft was reversed by a $2,000.00 deposit on 11 July 2000 leaving the balance of $1,993.83. The numerous small withdrawals then continued until, by 26 July 2000, the date of the last claimed loan, Mr Allison snr's bank credit was only $711.23.Discussion and Decision[14] While it is at least, of course, possible that Mr Allison had other bank accounts or other assets, the evidence on this application suggests he was a man of modest means. In particular, his bank records in evidence showed a credit of $9,801.48 at the time when he claimed he lent his son $15,000 on 27 May, a credit of only $1,003.43 on 7 July 2000 and $2,457.53 on 17 July when he asserts the second loan, this time of $20,000, was made and, as noted, a credit of only $711.23 when he said the final loan, that of $5,000, was advanced. Those comparisons point against a conclusion that Mr Allison snr has discharged the onus on him of showing on the balance of probabilities that the claimed loans were genuine. [15] Further, apart from the credit of $10,000 on 22 May 2000, none of the other large credits mentioned are anywhere near the size of the claimed loans. [16] Then, while the acknowledgement of debt/receipt is specific in its detail, it was obviously not prepared until after 26 July 2000. Even then, the date of its preparation and execution is unclear. Though he implies it was signed in 2000, it was plainly not at his residence when the search warrant was executed on 6 August 2002. That provides a hint, but no more, that it may have been signed after the date of execution of the search warrant. [17] Given Mr Allison snr's staunch support of his son throughout the period since Operation Flower was terminated, it may also be significant that, despite requests from the Police for Mr Allison's explanation of the Source and Disposition statement, the loan acknowledgement/receipt was never produced to Ms Nutsfordwhen, had it been produced, it would have benefited Mr Brett Allison both in relation to his money laundering trial – in which Ms Nutsford's Source and Disposition statement bulked large – and at the pecuniary penalty hearing. [18] It is also significant that Mr Allison snr disavowed any interest in the motor cycle when interviewed on 2 November 2000. Operation Flower had been terminated the previous day and it may well be the case that Mr Brett Allison was aware of that fact even though he was not apprehended for another week. Mr Allison snr may well have recognised it was not in his son's interest for him to tell the Police that he, Mr Allison snr, had no financial interest in the motor cycle. However, any such conclusion would be little more than speculation, particularly given his handwritten response. [19] Caution also needs to be exercised in evaluating Detective Peat's affidavit as to the date of execution of the search warrant and his production of the ATM receipts since, of course, Mr Allison snr had no opportunity to comment on that material before his death. [20] However, balancing all those issues one against the other and being properly cautious in undertaking the exercise because of Mr Allison snr's death, the conclusion must nonetheless be that he has failed to discharge the onus on him of showing on the balance of probabilities his claimed loans to his son totalling $40,000 between 27 May 2000-26 July 2000 were genuine loans giving him an interest in the Harley Davidson motor cycle. [21] The Court accordingly finds itself unable to accept Mr Allison snr's application for relief as a third party with the consequence that the net proceeds of Mr Brett Allison's assets as defined in the pecuniary penalty judgment (para [46] p 23-24) are directed to be paid to the Crown without deduction in favour of the estate of Ian Harold Allison for the claimed interest in the motor cycle. ..WILLIAMS JSolicitors:Crown Solicitor, Auckland, for Solicitor-General Email: david.johnstone@meredithconnell.co.nz Dennis J Gates, P O Box 222, Whangaparaoa Copy for: David Reece, P O Box 4208 Shortland Street, Auckland Email: davidreece@nzcriminallawyer.com Wendy Pukeiti, Auckland High Court Civil Registry Email: Wendy.Pukeiti@justice.govt.nz Fax to: Brett Lionel Allison, Auckland Prison (West) (Fax: 413 7772) Private Bag 50-124 Albany