THE COMMISSIONER, NEW ZEALAND POLICE v CLARKE [2021] NZHC 1981

THE COMMISSIONER, NEW ZEALAND POLICE v CLARKE [2021] NZHC 1981 [3 August 2021]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2020-485-41[2021] NZHC 1981UNDER the Criminal Proceeds (Recovery) Act 2009IN THE MATTER of an application under sections 43, 44, 49and 52BETWEEN THE COMMISSIONER, NEW ZEALANDPOLICEApplicantAND WAYNE TE AWAWA JOHN CLARKERespondentHearing: 23 July 2021Appearances: V Rae for the ApplicantT D Clee for the RespondentJudgment: 3 August 2021JUDGMENT OF COOKE J(Formal Proof)[1] By application dated 4 September 2020 the Commissioner seeks assetsforfeiture orders and profit forfeiture orders under ss 50 and 55 of the CriminalProceeds (Recovery) Act 2009. The relevant property subject to the application is cashtotalling $29,605 seized by police at an address in Lower Hutt when exercisingwarrantless search powers in relation to drugs and firearms under the Search andSurveillance Act 2012 in September 2019.[2] The Court has previously made on notice restraining orders on 19 June 2020,and following the filing and service of the forfeiture application, and advice from therespondent that he did not oppose the application, it proceeded before me by way offormal proof.[3] Prior to the hearing counsel for the respondent filed a memorandum advisingthat the respondent claimed no interest in the cash, and accordingly did not oppose theorders. I gave counsel leave to be excused from the hearing.Relevant facts[4] The facts relevant to the application were originally set out in the affidavit ofKathryn Groube, a specialist investigator in the Asset Recovery Unit of the Police. Atthe hearing I raised with Ms Rea whether it was appropriate for the Commissioner torely on this affidavit as Ms Groube could not give evidence herself of the underlyingevents, and the facts surrounding the respondent's alleged possession of items in themanner described below. It is clear that the Commissioner cannot rely on hearsayevidence of this kind at the forfeiture stage. The position is different at the restraintstage. As has been indicated in a line of authorities, at the restraint stage hearsaystatements of belief are potentially admissible under r 7.30 of the High Court Rules2016 and s 20 of the Evidence Act 2006.1 But at the forfeiture stage the Commissioneris required to prove the allegations by admissible evidence. For that reason I adjournedthe formal proof hearing and allowed the Commissioner to file further affidavits toprovide admissible evidence of the underlying matters.[5] Affidavits have now been filed from Constable Aaron Wilkins and ConstableEthan Bland-Cocker describing the matters outlined below. I note that the evidencenow filed includes additional matters and further details that have relevance to theallegations which were not provided in the affidavit of Ms Groube.[6] On 12 September 2019 police attended an address in Naenae, Lower Huttseeking to find a person by the name of Matthew Hughes who had allegedly removedhis electronic monitoring bracelet required as a condition of EM bail. A police cordonwas put around the property where Mr Hughes was thought to be. A vehicle was in1 See Vincent v Commissioner of Police [2013] NZCA 412 at [45]; Commissioner of Police v Smith[2017] NZHC 10 at [10]; Commissioner of Police v Rae [2020] NZHC 3132 at [24]–[25].the driveway and Constable Wilkins approached it. As he did so a man in the back ofthe vehicle got out and attempted to run away. He was pursued by police officers anda dog that was deployed. Other persons were seen also trying to get away. A personthe officers identify as Darren McKinley was seen throwing a number of plastic bagsover a fence as he sought to leave the property. On examination the bags appeared tocontain methamphetamine, and after Mr McKinley was caught he was arrested forpossession.[7] Constable Bland-Coker then identified a second person at the rear of theproperty crawling underneath a sleepout. He recognised him as Matthew Hughes. Hewas also arrested.[8] Police then exercised warrantless searching powers under the Search andSurveillance Act 2012 and entered the sleepout. Two persons were found inside. Thefirst was Joseph Tobin. He is described by Constable Wilkins as being very compliantand slightly intoxicated. The second was the respondent, Wayne Clarke. He wassearched and found to be in possession of a single round of ammunition. A LouisVuitton backpack was also found in the sleepout. It contained a magnum revolverhandgun, a holster and ammunition pouches, four grams of methamphetamine and therespondent's New Zealand passport. A further box of ammunition was found on thefloor of the sleepout along with an electronic money counter, electronic scales andgang related clothing.[9] On the bedside cabinet $135 cash was located, $3,560 was found underneaththe bed, and $25,910 was located in a blue Timberlands satchel beside the bed. Therespondent was then arrested.[10] In addition to the other above matters the Commissioner relies on evidence ofa lack of alternative means by which the sums of money involved could have beenearned by the respondent.2 Between 2012 and 2019 the respondent earned limitedbenefits from the Ministry of Social Development. He has had limited opportunity toearn income in the community as over the last seven years he has spent only 238 days2 Commissioner of Police v De Wys [2016] NZCA 634 at [71].outside of prison. He has provided no explanation of any income earning activitiesthat would explain this level of cash in his possession.[11] The respondent was subsequently charged with offences including the offenceof possession for supply of methamphetamine and amphetamine. He subsequentlypleaded guilty to amended charges including firearms offending and possession of aclass A controlled drug (and not possession for supply) and was sentenced to 17months' imprisonment.Assets forfeiture order[12] Section 50 of the Act provides: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 istainted property, the Court must make an assets forfeiture order inrespect of that specific property.(2) Subsection (1) is subject to section 51.(3) The Court must specify in an assets forfeiture order the property towhich the order applies and that the property—(a) vests in the Crown absolutely; and(b) is in the custody and control of the Official Assignee.(4) Despite subsection (1), the Court may not make an assets forfeitureorder in relation to property that no person has claimed an interest in,unless the Court is satisfied, on the balance of probabilities, of thefollowing additional matters:(a) that a restraining order was earlier made in relation to the sameproperty; and(b) that the restraining order has been in place for a period of atleast 1 year; and(c) that the Commissioner has contacted or made all reasonableefforts to contact any person the Commissioner believes mayhave an interest in the property.(5) If any property that is land is vested in the Crown absolutely as aconsequence of an assets forfeiture order made under subsection (3),an interest recorded on the title to the land that is not affected by theassets forfeiture order is not extinguished.[13] Tainted property is defined in s 5 of the Act in the following terms:tainted property—(a) means any property that has, wholly or in part, been—(i) acquired as a result of significant criminal activity; or(ii) directly or indirectly derived from significant criminal activity;and(b) includes any property that has been acquired as a result of, or directlyor indirectly derived from, more than 1 activity if at least 1 of thoseactivities is a significant criminal activity[14] Section 6 of the Act defines significant criminal activity as an offencepunishable by a maximum term of imprisonment of five years or more, or whichinvolves $30,000 or more proceeds or benefits in the matter specified (s 6(1)(b)).Section 6(2) makes it clear that a person can be held to have undertaken significantcriminal activity whether or not they have been charged or convicted of the offence.This is reiterated by s 15 of the Act which provides that no criminal proceedings arerequired before orders are made under the Act.[15] The question is whether the Commissioner has satisfied me on the balance ofprobabilities that the cash in question is property that has been acquired or derivedfrom significant criminal activity. Whilst Mr Clarke knowingly pleaded guilty to acharge of possession, which is a charge that is not within the definition of significantcriminal activity, I accept from the evidence available to me that it is more likely thannot that the cash was acquired or directly or indirectly derived from the activity ofsupply of methamphetamine. The existence of items such as the electronic moneycounter, electronic scales, methamphetamine, firearms and cash are all characteristicsof a drug dealing operation which I find was in existence, with the cash in existence,associated with that activity. That cash was a substantial amount for someone likeMr Clarke.[16] Mr Clarke disclaims any interest in this cash. His counsel filed a memorandumbefore the hearing reiterating that he had no interest in it. Notwithstanding his stanceI accept that, on the balance of probabilities, he did have an interest in this cash. Itwas located in the sleepout next to the bed alongside other personal effects belongingto him, including his passport and the Louis Vuitton bag. That clearly establishes abasis to find that he had an interest in the cash. It is likely that others, and in particularMr Hughes and Mr McKinley also had an interest in this cash, or may have had aninterest in that cash. They have not claimed an interest in it and neither has anybodyelse.[17] In accordance with s 50(4) it is necessary for a restraining order to be in placefor one year, and for the Commissioner to make all reasonable efforts to contact anyperson the Commissioner believes may have had an interest in the property before aforfeiture order may be made. The on notice restraining order was made on 19 June2020, so one year has elapsed. In Ms Groube's supplementary affidavit of14 December she explains the attempts made to contact Messrs McKinley and Hughesin relation to the cash. No efforts appear to have been made to identify if Mr Tobinhas any interest in the property. But I accept the Commissioner's argument and it isapparent from the evidence that he does not have an interest in the property, and thathe was not residing at the sleepout. He was not even arrested for the drug offending.I accept based on that evidence that the Commissioner has made reasonable efforts toidentify whether any other person has an interest in the property.Profit forfeiture application[18] Ms Rae confirmed that, should I make the assets forfeiture application theCommissioner did not proceed with the profit forfeiture application.Conclusion[19] For the above reasons I grant the Commissioner's asset forfeiture applicationin the terms sought.Cooke JSolicitors:Luke Cunningham Clere, Wellington for Applicant