THE COMMISSIONER, THE NEW ZEALAND POLICE v STEVEN ALBERT BLANCE [2020] NZHC 418

THE COMMISSIONER, THE NEW ZEALAND POLICE v STEVEN ALBERT BLANCE [2020] NZHC 418 [6March 2020]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2017-485-197[2020] NZHC 418UNDER the Criminal Proceeds (Recovery) Act 2009IN THE MATTER of an application pursuant to ss 21, 25 and58BETWEEN THE COMMISSIONER, THE NEWZEALAND POLICEApplicantAND STEVEN ALBERT BLANCERespondentTRACEY MELANIE SNOOKFirst Interested PartyTHE CO-OPERATIVE BANK LIMITEDSecond Interested PartyHAYLEY KINI-WAI KIRWINThird Interested PartyTANYA MICHELLE GRACEFifth Interested PartyROBERT SHANE BROMLEYSixth Interested PartyKARL WILLIAM GRUEBNERSeventh Interested partyDAVID ALASTAIR MINKEEighth Interested PartyWIREMU HAMILTON WORKMANNinth Interested PartyHearing: 5 March 2020Counsel: S B McCusker for ApplicantP H Surridge for Respondent (on instructions from E A Hall)and Eighth Interested PartyS J Fraser for First Interested PartyJudgment: 6 March 2020JUDGMENT OF THOMAS J[1] The Commissioner of Police (the Commissioner) seeks profit forfeiture ordersor alternatively asset forfeiture orders in respect of property currently restrainedpursuant to the Criminal Proceeds (Recovery) Act 2009 (the Act).[2] Two interested parties oppose the application, as follows:(a) The first interested party, Tracey Snook, opposes the forfeitureapplications in relation to the sale proceeds from the residentialproperty located at 12 Roberts Street (the Property). She also seeksrelief from forfeiture on the grounds of undue hardship.1(b) The eighth interested party, David Minke, has signalled his oppositionto the forfeiture of a 2000 Isuzu N series mobile home (the MobileHome).[3] The respondent, Mr Blance, does not oppose the application (as far as his ownposition is concerned) but supports the interested parties in their opposition to theapplication.1 Criminal Proceeds (Recovery) Act 2009, ss 61 and 67.[4] Following a police surveillance operation, Mr Blance was convicted andsentenced on 22 June 2018 to 14 years and six months' imprisonment for possessionand supply of a Class A drug, methamphetamine.Ms Snook[5] Ms Snook's position requires a brief recap of the background.[6] Ms Snook was an associate of Mr Blance. She was the registered owner of theProperty, which she had lawfully acquired, and had lived there since 2003. She paidthe mortgage.[7] In early 2015, Ms Snook sought to sell the Property and obtained a real estatevaluation of $280,000-$285,000. Mr Blance offered to purchase the Property for$270,000 in cash with there being no estate agent fees.2 They agreed that Ms Snookwould remain in the Property, rent-free, and continue to pay mortgage repayments.Mr Blance paid regular cash instalments and the purchase price was fully paid on oraround June 2015. The Property was never transferred into Mr Blance's name.[8] In June 2015, Police were alerted when Ms Snook attempted to deposit$170,000 into her bank account but could not provide a sale and purchase agreementfor the Property. She attempted to make further smaller deposits into her bank accountand the bank accounts of her son and daughter-in-law. $44,500 of the money was usedas a deposit for another property in Jillett Street (the Jillett Street Property).[9] On 28 September 2015, the High Court granted without notice restrainingorders over all three bank accounts and the Jillett Street Property (the Sale Proceeds).[10] In April 2017, at the termination of the police surveillance operation, a withoutnotice restraining order was placed over property held by Mr Blance, including the2 There was a minor dispute over this figure in an earlier High Court decision which I refer to at[11] of this judgment: Commissioner of Police v Snook [2018] NZHC 2537 (CIV-2015-485-736,CIV-2015-485-772) ("Commissioner of Police v Snook") at [7]. In that case, Ms Snook said thatMr Blance paid $30,000 lump sum payments until he reached $250,000. Interceptedcommunications during the surveillance operation placed the figure at $270,000. However, nochallenge to this figure was submitted in these proceedings nor would the analysis change if thepayments totalled $250,000.Property. On 31 August 2017 a sale order was made by consent over the Property. Itwas subsequently sold in May 2018 for $325,000. The residual sale proceeds,$153.541.33, were paid to the Official Assignee Trust Account (the PropertyProceeds).The Snook proceedings[11] This application for forfeiture is interrelated with the parallel proceedings inCommissioner of Police v Snook in which the Commissioner sought asset and profitforfeiture orders over the Sale Proceeds.3[12] In a judgment dated 27 September 2018, the High Court found that:(a) the $270,000 paid by Mr Blance to Ms Snook represented "the proceedsfrom the sale and supply of methamphetamine by Messrs Blance andBerkland";4(b) by taking and depositing money in accounts operated by her, her sonand daughter-in-law, Ms Snook had engaged in a money launderingtransaction for the purposes of s 243 of the Crimes Act 1961, makingthem party to the offending;5(c) the cash deposited by Ms Snook and her family into the bank accounts,and used for the deposit of the Jillett Street Property were accordingly"tainted property" for the purposes of the Act;6 and(d) an asset forfeiture order could accordingly be made in respect of theSale Proceeds.73 Commissioner of Police v Snook, above n 2.4 At [8].5 At [45].6 At [44].7 At [49].[13] The Court declined to make a profit forfeiture order, on the grounds that it didnot consider that Ms Snook had "unlawfully benefitted from significant criminalactivity" under s 55(1)(a) of the Act.8[14] Ms Snook had also applied for relief from forfeiture on the grounds of unduehardship under s 51 of the Act. The Court considered that Ms Snook's application forrelief was more properly dealt with in the course of the current proceedings:9[78] In my view, however, the question of undue hardship to Ms Snook ismore appropriately addressed in the Blance proceedings rather than in thesepresent. That is because it is the nature and extent of Ms Snook's interest inthe Roberts Street property that seems more naturally the proper focus of as 51 inquiry in her case. While, on the basis of the information before me, Iwould be inclined to the view that undue hardship would be caused toMs Snook in the event that the cash she received from Mr Blance and theproceeds from the sale of the Roberts Street property are all entirely forfeit, Iam reluctant to come to a firm conclusion about that in the absence of acomplete evidentiary picture.Ms Snook's opposition[15] Ms Snook's position on the applications for forfeiture of the Property Proceedswas that:(a) Mr Blance had no legal or beneficial interest in the Property; and(b) Ms Snook was the lawful registered proprietor and the legal, equitableand beneficial owner of the Property.[16] Ms Snook therefore opposed the application for forfeiture orders and soughtrelief from forfeiture.The Commissioner[17] The Commissioner's position was:(a) the Property Proceeds should be forfeited on the grounds that either:8 At [64].9 Commissioner of Police v Snook, above n 2, at [78].(i) they are "tainted property" for the purposes of an asset forfeitureorder under s 50 of the Act; or(ii) Mr Blance has an "interest" in them for the purposes of a profitforfeiture order by way of an equitable interest, or his effectivecontrol over the Property;(b) Ms Snook, as a bare trustee of the Property, does not have an "interest"in the Property Proceeds capable of giving rise to a claim for reliefunder ss 66 or 67 of the Act; and(c) even if Ms Snook did have an interest capable of giving rise to a claimfor relief, the Commissioner's position was that the Court shouldexercise its discretion under s 66 or s 67 to make no award of relief.Forfeiture applications[18] There is no doubt that the Property Proceeds are tainted property; thatMr Blance had an equitable interest in them10 following from his payment of the$270,000 to Ms Snook; and that he clearly had control over the Property which couldalso be treated as an interest in the Property Proceeds.11Application for relief from forfeiture[19] Ms Snook alternatively applied for the Property Proceeds to be excluded fromany forfeiture order on the grounds of undue hardship. As bare trustee of the Property,however, Ms Snook does not have an interest capable of giving rise to a claim forrelief.12[20] The Commissioner's position was also that, in any event, no relief should begranted. This was on the basis of the need to be consistent with the purposes of the10 Section 5 of the Act.11 Section 58 of the Act.12 Section 66 or s 67. See Commissioner of Police v Li HC Tauranga CIV-2010-470-48, 3 March2011 at [51]-[54] and R v Matamua CA569/95, 10 July 1996 at 3.Act, in particular deterrence.13 In the Commissioner's view, forfeiture was aproportionate outcome for Ms Snook, having regard to her own significant criminalactivity and the purposes of the Act.[21] Given the circumstances, it is now apparent that Ms Snook's claim for relieffrom forfeiture should have been in respect of the Sale Proceeds.Settlement[22] In light of the difficulties with the case, the parties responsibly undertooksettlement discussions. They have now reached a settlement in the matter which theyhave asked the Court to approve.14 I have seen the terms of the settlement.[23] I am satisfied that it is appropriate to approve the settlement. It is consistentwith the purposes of the Act and the overall interests of justice.[24] In particular, in this case, there are procedural difficulties with the way inwhich the matter has progressed. There is benefit to the system in the matter beingsettled without the need to expend further resources of the justice system, and indeedthose of Ms Snook.[25] The result is a proportionate outcome for Ms Snook, having regard to her ownbehaviour as already discussed in Commissioner of Police v Snook. It also reflects thefact that there is some money which the Commissioner has not recovered. Ms Snookacknowledges that she has no interest in the Property capable of giving rise to a claimfor relief. However, the Commissioner responsibly recognises that it is appropriatethat some monetary recognition be provided to Ms Snook in light of the hardship shemay face following the forfeiture of the Property Proceeds and the Sale Proceeds.15[26] For these reasons, the settlement is approved.13 Section 3 of the Act.14 Section 95 of the Act.15 Commissioner of Police v Snook, above n 2, at [78].Mr Minke's Opposition[27] Mr Minke has filed no formal notice of opposition nor an application for relief.However, the Commissioner takes no issue with that, being on notice of the opposition.[28] The Commissioner's position was that forfeiture of the Mobile Home can beestablished on one or all of the following grounds:(a) the Mobile Home is "tainted property";(b) Mr Blance had effective control and therefore had an interest in it; and(c) Mr Blance has a right "in connection with" the Mobile Home undercontract to recover part payment of $20,020 given in consideration forthe vehicle.[29] On the morning of the hearing, the Commissioner and Mr Minke reachedagreement on terms of the settlement. This is in full and final settlement of any claimsMr Minke may have against the Commissioner in the proceeding.[30] I am satisfied that the agreed settlement is consistent with the purpose of theAct and the overall interests of justice, given that the Commissioner acknowledgesthat Mr Minke retains some measure of equity in the vehicle. The sum to be paid byMr Minke reflects how much the Commissioner could reasonably expect to retain forthe Mobile Home if an application for relief by Mr Minke were made and granted.Result[31] The settlements between the Commissioner and Ms Snook, and between theCommissioner and Mr Minke are approved. As agreed, costs are to lie where they fall.Thomas JSolicitors:Crown Solicitor's Office, Wellington for ApplicantJeffries Law, Wellington for Second Respondent