THOMPSON V THE COMMISSIONER OF POLICE CA224/2014 [2014] NZCA 261

THOMPSON V THE COMMISSIONER OF POLICE CA224/2014 [2014] NZCA 261 [24 June 2014]IN THE COURT OF APPEAL OF NEW ZEALANDCA224/2014[2014] NZCA 261BETWEEN SYDNEY PHILLIP THOMPSONApplicantAND THE COMMISSIONER OF POLICERespondentHearing: 17 June 2014Court: Ellen France, Venning and Mallon JJCounsel: P K Hamlin for ApplicantK E Hogan and K Eastwood for RespondentJ V Perry for Interested PartyJudgment: 24 June 2014 at 10 amJUDGMENT OF THE COURTA The application for an extension of time to appeal is dismissed.B The applicant must pay the respondent costs for a standard application on a band A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Ellen France J)Introduction[1] Mr Thompson seeks an extension of time to appeal against a decision of Gilbert J delivered in the High Court on 6 November 2013.1 Gilbert J made a profit1 Commissioner of Police v Thompson [2013] NZHC 2926.forfeiture order under s 55 of the Criminal Proceeds (Recovery) Act 2009 (the Act) in relation to Mr Thompson's interest in a property at 1/281 Shirley Road,Papatoetoe, Auckland (the Shirley Road property). Mr Thompson's interest wasvalued at $59,396.[2] The application for an extension of time is opposed by the respondent, the Commissioner of Police, and by Michael Tautalanoa, a party interested under the Act. Mr Tautalanoa is the registered owner of the Shirley Road property and he has acquired Mr Thompson's interest by paying the sum of $59,396 to the OfficialAssignee.Background[3] The Commissioner applied in October 2013 for an order under s 55 of the Act forfeiting Mr Thompson's interests in the Shirley Road property. AlthoughMr Thompson had indicated to the Court that the application would be opposed, no notice of opposition or affidavit in support was ever filed. The profit forfeiture order was made by Gilbert J without any appearance on behalf of Mr Thompson.[4] Gilbert J recorded in his judgment that Mr Thompson was facing 17 charges, including 10 of obtaining over $400,000 by deception in breach of s 240(1)(a) of the Crimes Act 1961.2 These offences are punishable by a maximum of seven years imprisonment.3 The Judge noted that the charges related to allegations of fraudulently obtaining monies from Work and Income New Zealand over an extended period.[5] Against this background, Gilbert J said he was satisfied that Mr Thompson had benefited from significant criminal activity as defined in s 6 of the Act to the value of $406,814.37.[6] The Judge was also satisfied that Mr Thompson had an interest in the Shirley Road property. Gilbert J explained:2 At [3].3 Crimes Act 1961, s 241(a).[7] Mr Thompson claims to be entitled to a one half share in the equity in the property at 1/281 Shirley Road, Papatoetoe, Auckland, described in the certificate of title NZ128B/17 being Flat 1 DP 199721 on Lot 2 DP 44805. This property is registered in the name of Mr Tautalanoa who purchased the property from Mr Thompson in 2007 on the basis that hewould take responsibility for the mortgage and pay for Mr Thompson's ex wife's share of the property. I am satisfied that Mr Thompson has an interest in this property. The two requirements set out in s 55(1) of the Act having been satisfied, I am obliged to make a profit forfeiture order.[7] It was agreed by the Commissioner of Police and Mr Tautalanoa that the value of Mr Thompson's equity in the property was $59,396 and that was theproperty to be disposed of.[8] Finally, the Judge recorded that Mr Tautalanoa consented to the terms of the order and to acquiring Mr Thompson's interest by paying the sum of $59,396 to the Official Assignee. Mr Tautalanoa paid that sum to the Official Assignee on 26 November 2013.The application for an extension of time[9] The factors relevant to the decision whether to extend time are discussed inMy Noodle Ltd v Queenstown Lakes District Council.4 The factors include the reasons for and length of the delay, the conduct of the parties and the extent of any prejudice caused by the delay. Further, this Court has said that an applicant for an extension of time is seeking an indulgence from the Court, and the Court will not grant such an indulgence in a case where the proposed appeal has no merit.5 As was also made clear in Havanaco Ltd v Stewart, the ultimate test is whether granting the extension of time would meet the overall interests of justice.6[10] We address these factors in turn.Delay[11] The notice of appeal should have been filed by 4 December 2013 but was not filed until 1 May 2014. There is an explanation for some of that delay. Initially,4 My Noodle Ltd v Queenstown Lakes District Council [2009] NZCA 224, (2009) 19 PRNZ 518 at [19].5 Havanaco Ltd v Stewart (2005) 17 PRNZ 622 (CA) at [22].6 At [5].Mr Thompson sought to have Gilbert J's judgment set aside by filing an applicationin the High Court. By that point, the judgment had been sealed and Gilbert J determined that Mr Thompson would have to appeal.7 There were then some delays in obtaining legal aid. Legal aid was granted some time later in February 2014. However, on the best case for Mr Thompson, the delay of about two months from the point by which he had legal aid, is unexplained in the affidavits before us. Overall, the delay is a factor that weighs against Mr Thompson although not significantly.The parties' conduct[12] This factor is neutral.Extent of prejudice[13] Mr Tautalanoa has filed a memorandum supporting the Commissioner'sopposition to the application for an extension of time. Mr Tautalanoa explains that he bought the Shirley Road property in 2007 from Mr Thompson and Mr Thompson's former wife. Under the parties' oral arrangement, Mr Thompson left equity in the property and remained living in a part of it on certain terms until evicted following a dispute over non-payment of rental.[14] Mr Tautalanoa explains that, reflecting Gilbert J's order, he has paid $59,396to the Official Assignee. He says he has proceeded on the basis of the forfeiture order and has had plans prepared to allow him to renovate that part of the property previously occupied by Mr Thompson. He says he will be prejudiced by delay in that he will be unable to proceed with the planned renovations and had made arrangements to accommodate a family member in the property.[15] We accept there will be some prejudice to Mr Tautalanoa, albeit not significant, by further delay. Essentially, he has incurred some cost and ordered his affairs on the basis of the orders made.7 Thompson v Commissioner of Police HC Auckland CIV-2013-404-4407, 12 December 2013 (Minute of Gilbert J).Prospective merits of the appeal[16] At the hearing before us, Mr Thompson sought to advance his proposed appeal on two bases. First, he says that if he had been heard in the High Court a restraining order might have been made to preserve the position in the interim rather than a permanent order.8 That is primarily because, he contends, it would have been seen as in the interests of justice to defer making a final order pending his criminal fraud trial which is to take place in March 2015. Mr Thompson also says it is relevant to this analysis that the property was his relationship property with his former wife. In other words, it was prior, legitimately acquired, property.[17] Secondly, Mr Thompson says he may have been able to show that his interest in the property was valued at a figure in the order of $70,000 and not approximately $59,000 as the Judge found.[18] We deal first with the arguments arising from the fact the hearing proceeded in Mr Thompson's absence.[19] Mr Thompson's position is that he thought a lawyer, Mr Wimsett, wouldappear for him in the High Court at the second call on 6 November 2013. Mr Thompson also places some weight on an email from Mr Wimsett to the registry of 5 November 2013 immediately prior to the hearing on 6 November 2013 in which Mr Wimsett notes that Mr Thompson made two attempts to have Mr Wimsett appear on his behalf to oppose the application. The email goes on to explain why Mr Wimsett was unable to do so (although he asked his chambers clerk to find representation for Mr Wimsett for 6 November) and that he did not consider himself instructed. The email also notes that Mr Thompson intends to oppose the application. Mr Thompson says the contents of the email should have been conveyed to Gilbert J.[20] Mr Thompson says he did not know that Mr Wimsett did not consider that he was instructed to act for Mr Thompson although he fairly accepts he has some responsibility for this misunderstanding. It seems clear from the material before us8 He says he would accept the making of a restraining order.that whilst Mr Thompson wanted to instruct Mr Wimsett to act for him, attempts for the two to meet to discuss the case came to nothing suggesting there was no formal instruction.[21] Whatever the position in terms of any miscommunication between Mr Thompson and Mr Wimsett, when Mr Thompson appeared for himself on the first call of the matter on 23 October 2013 he told the Court he wished to oppose the application. He was told by Asher J that he would need to get a lawyer, file a notice of opposition and an affidavit in support. He knew that the matter would be dealt with again on 6 November 2013. He must have known that no notice of opposition had been filed by then because he had not had any discussion about that with Mr Wimsett who had not been given a copy of the Commissioner's application.[22] The issue of non-appearance may well have assumed more significance if Mr Thompson's proposed appeal advanced any answer to the Judge's findings thatthe two prerequisites for making the profit forfeiture order were met. We turn now to discuss that aspect.[23] As we have indicated, the order was made under s 55 of the Act. Under s 55, the High Court must make a profit forfeiture order if satisfied on the balance of probabilities that:(a) the respondent has unlawfully benefited from significant criminal activity within the relevant period of criminal activity; and(b) the respondent has interests in property.[24] Section 7 of the Act, in turn, defines "unlawfully benefited from significant criminal activity" as follows:In this Act, unless the context otherwise requires, a person has unlawfully benefited from significant criminal activity if the person has knowingly, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person undertook or was involved in the significant criminal activity).[25] There is no question that the fraud offending, for which Mr Thompson willstand trial in early 2015, is "significant criminal activity".9[26] The Judge described the offending in these terms:[4] The evidence provided on behalf of the Commissioner, which has not been contradicted, is that Mr Thompson and another person fraudulently obtained monies from Work and Income New Zealand (WINZ) over an extended period. The scheme involved Mr Thompson registering with WINZ as a pre-approved service provider of dental and optometry treatment under the trading name Vichson Dentists and Optometry. Mr Thompson is not a qualified dentist or optometrist and does not have a dental surgery or optometry clinic. He then solicited friends and associates to apply for Special Needs Grants and allowances to pay for such services. The payments were made into Mr Thompson's bank account and then split withthe claimants. A total of $374,315.64 was paid by WINZ to this account in respect of services claimed to have been provided to 280 beneficiaries.[5] WINZ also approved Mr Thompson as a supplier of furniture and whiteware under the trading name Thompson and Thompson Rentals. He similarly defrauded WINZ using this business. A total of $32,498.73 was paid by WINZ to the Thompson & Thompson bank account in respect of goods claimed to have been supplied to beneficiaries.[27] Mr Thompson's proposed appeal would not address the finding that, on the balance of probabilities, the Judge was satisfied that Mr Thompson had unlawfully benefited from this activity other than by way of the general submission that a final order should await the outcome of his trial on these charges.10[28] The only other point advanced is that the figure representing Mr Thompson'sinterest should have been some $10,000 higher. However, the increased amount Mr Thompson wishes to argue for is still comfortably within the value of the benefit ascribed to the alleged offending.[29] When these matters are considered overall, we do not consider the interests of justice favour the grant of an extension of time. The position is that the delay, albeit in part explicable, has caused some prejudice to a third party. Moreover, there is nothing to suggest that the order was not properly made.9 Criminal Proceeds (Recovery) Act 2009, s 6.10 In Commissioner of Police v Wei [2012] NZCA 279 at [41] this Court said the question of whether a civil forfeiture proceeding should be adjourned because of a pending criminal trial was a fact-specific question calling for a balancing exercise.Result[30] The application for an extension of time to appeal is dismissed.[31] The applicant must pay the respondent costs for a standard application on a band A basis and usual disbursements.Solicitors:Law & Associates, Auckland for ApplicantCrown Solicitor, Auckland for RespondentKeegan Alexander, Auckland for Interested Party