S-G V FONOTIA HC AK CIV 2006-404-3529

S-G V FONOTIA HC AK CIV 2006-404-3529 27 July 2006IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2006-404-3529UNDER the Proceeds of Crime Act 1991 BETWEEN THE SOLICITOR-GENERAL OF NEW ZEALAND Applicant AND DELIA MAREE FONOTIA Respondent Hearing: 27 July 2006 Court: Williams J Andrews J Counsel: K E Hogan for the Applicant J Soondram for the Respondent Judgment: 27 July 2006ORAL JUDGMENT OF THE COURT [Delivered by Williams J]Solicitors:Crown Solicitor, PO Box 2213, Auckland J Soondram, Barrister, 12A/8 Quay Street, Parnell, AucklandStewart Scorgie, Team Leader, Auckland High CourtEmail: stewart.scorgie@justice.govt.nz[1] A 2003 Holden Commodore SS5.7 V8 manual saloon, registration number DDG501, is registered in the ownership of Denise Waioria Staveley and has been in her ownership since 27 January 2006. The question for determination in this application is whether that vehicle should be the subject of a restraining order in favour of the Solicitor-General until determination of current criminal proceedings against the respondent, Ms Fonotia. [2] The background is that Ms Fonotia, who described herself as unemployed, was apprehended on 9 October 2005, according to an affidavit from Detective Peat, at the Sky City Casino, and charged with a number of offences. They included using a forged bank note, possession of methamphetamine for supply, possession of lysergide for supply, possession of a shotgun, a pistol, a stun gun and another restricted weapon, possession of a precursor substance, pseudoephedrine, to be used for producing methamphetamine, and hypophosphorous acid capable of the same purpose. When she was arrested on that occasion, she had $16,429 cash in her handbag, together with three tablets of lysergide, two tablets of what was erroneously thought to be Ecstasy, 1.389 ounces of methamphetamine, three point bags of that substance, and a number of empty point bags, a set of scales, and other drug paraphernalia. [3] She was then driving a 1997 BMW parked in the Casino carpark. When that was searched under warrant, it was found to contain a pump-action shotgun. [4] She gave her address at that stage as 9 Tangaroa Street, Pt England, Auckland. That, too, was searched under warrant and was found to contain an array of drug paraphernalia, including scales, glass "P" pipes, snaplock bags, burners, pseudoephedrine, point bags of methamphetamine, a loaded pistol and a tubular stun gun. [5] Just after she was bailed in respect of all those matters, she was apprehended again. That was on 27 April 2006 in the Hotel Albion carpark in Auckland, and as a result of her apprehension on that occasion, she was charged again with possessionof methamphetamine for supply and dealing in methamphetamine. She on that occasion was in the vehicle in question, the Holden Commodore DDG501. She was watching the police and texting on a cellphone. The police spoke to her on that occasion. She told them she had half a gram of methamphetamine in the car. It smelt strongly of cannabis. The vehicle was searched, 5 grams of methamphetamine was found in it, together with snaplock bags, electronic scales, a tick book and $27,853 in cash, plus a glass "P" pipe and another half gram of methamphetamine in the glove box. [6] On that occasion when she was arrested she told police that she had borrowed the vehicle from Ms Staveley with whom she lived in Panmure. [7] The Police, as a result, spoke with Ms Staveley on 12 May 2006. She gave them an extensive statement but declined to sign it. On that occasion, however, she said that she had purchased the vehicle herself from a person called Lisa. She paid $30,000 cash for the car, obtaining those funds from real estate proceeds held by her solicitor. She said she lent it to Ms Fonotia. In fact she said that Ms Fonotia used it for a lengthy period, Ms Staveley having another vehicle available for her own purposes. She said effectively she had left the vehicle with Ms Fonotia for a lengthy period until after her arrest. [8] The Police then spoke to Ms Lisa Butterworth. That took place on 8 June 2006. She gave them a signed statement saying she had sold the 2003 Holden Commodore to Ms Fonotia just before she was arrested in September or October 2005. It must have been just before her arrest on 9 October. Ms Butterworth said she was given $10,000 in cash and another car was left for her as an earnest for full payment of the balance. Ms Fonotia did not pay the balance for a period but in the first week of January 2006, came and gave Ms Butterworth another $20,000 in cash. She made arrangements to remove her personalised number plates from the vehicle and have it re-registered, hence the recent issue of the number plates it currently bears. Most of the cash she was given, Ms Butterworth said, was in $100 notes. [9] The Police went back to Ms Staveley, this time on 19 June, and questioned her again. A job sheet was put in evidence by Detective Peat in that regard.Effectively she still claimed she owned the vehicle but acknowledged lying to the Police earlier. [10] This application for a restraining order was filed on 22 June 2006 and is opposed on behalf of Ms Fonotia on the basis that the Holden is not tainted property and in fact is not her property. Ms Staveley has been served, first with an interim order made by Heath J on 29 June 2006 and later with the application and affidavit which formed the subject of today's hearing. Notwithstanding that service, she has taken no step in the proceeding. [11] The application is brought pursuant to the Proceeds of Crime Act 1991, initially under s 39. In that regard, Mr Soondram, for Ms Fonotia, accepts that some, at least, of the charges she currently faces and which will be tried in October this year, are a "serious offence" within the meaning of the Act. He also accepts that the evidence before the Court does give rise to "reasonable grounds to believe" that she may be guilty on some of those offences. [12] The application is next based on s 42 seeking, of course, a direction that the property be restrained and continue in the possession and control of the Official Assignee. [13] Ms Hogan, for the Solicitor-General, based her application under either s 43(1) or (3). Those two sub-sections read:43. Grounds for making restraining order – (1) Where an application under section 39 of this Act seeks a restraining order against specified property of the defendant, the Court shall not make an order against the property unless the Court is satisfied that there are reasonable grounds for believing that - (a) The property is tainted property in relation to the relevant serious offence; or (b) The defendant derived a benefit, directly or indirectly, from the commission of the offence.(3) Where an application under section 39 of the Act seeks a restraining order against specified property of a person other than the defendant, theCourt shall not make an order against the property unless the Court is satisfied that there are reasonable grounds for believing that - (a) The property is tainted property in relation to the relevant serious offence; or (b) The property is subject to the effective control of the defendant, and the defendant derived a benefit, directly or indirectly, from the commission of the offence.[14] Looking first at subs (1), given Mr Soondram's concession of reasonable grounds to believe Ms Fonotia may be guilty of a serious offence, the first question is whether there are reasonable grounds for believing that the Holden is tainted property in relation to the relevant serious offence. "Tainted property" is defined in s 2 of the Act and relevantly reads:In relation to a serious offence means: (i) property used to commit or to facilitate the commission of the offence; or (ii) proceeds of the offence.[15] In relation to Ms Fonotia's apprehension in April of this year, immediately following being bailed on the earlier charges, she was in the vehicle with significant sums of money and significant drugs secreted in and about the vehicle. There were, therefore, reasonable grounds to believe that the vehicle was tainted in the sense that it was being used to facilitate the commission of offences under the Misuse of Drugs Act and possibly to convey proceeds of earlier drug dealing. (In that regard, Ms Hogan made clear that although currently the indictment for the April offending specifically relates only to the day of the offending, an application will be made for leave to amend the charge so as to extend the period of offending back a number of months before that date). [16] The alternative under subs (1) is whether there are reasonable grounds to believe that Ms Fonotia derived a benefit directly or indirectly from the commission of the offence. Once again, it is important to note the proposed extension of the period of offending back to a number of months prior to 27 April 2006. It is relevant also to note the considerable sums held by Ms Fonotia on each of the two occasions when she was apprehended and particularly when she was apprehended on 27 April2006. In that regard, too, it is pertinent to note the two substantial sums paid in cash to Ms Butterworth for the purchase of the car. In that regard, both in its use and its purchase and in all the circumstances, it seems appropriate to conclude that there are reasonable grounds for believing Ms Fonotia derived a benefit from the commission of the offence. [17] The alternative is the application under s 43(3) which, given the current registration of the Holden, may be the more appropriate subsection under which the Solicitor-General applies. That debars the making of an order against the property unless it is appropriate to conclude that there are reasonable grounds for believing it is tainted property. In respect of that, the previous conclusion is equally apposite. And secondly, that Ms Fonotia derived a benefit from the commission of the offence, which again calls to mind the previous conclusion. [18] Subsection (3), however, also has a third condition, namely that the property is subject to the effective control of the defendant. Here, the evidence is that when the police apprehended Ms Fonotia in the Holden Commodore, it was in her control; she was using it as her own; it contained, as mentioned, a number of items relating to the commission of offences; it was clearly under her dominion; she could do pretty much as she liked with it, and accordingly it was plainly under her effective control. [19] Even if regard is had to Ms Staveley's unsigned statement to the police in which she asserts her ownership of the vehicle, it is clear that she, on her own admission, allowed Ms Fonotia to use the vehicle pretty much as her own for a period. That too would suggest that it was under the effective control of the respondent. [20] A further argument may be that even if Ms Fonotia may not have been the entire owner of the Holden, it may well come within the extended definition of "property" in s 2 of the Act since it may well be that she had an interest in it and accordingly that, too, would bring it within the ambit of the subsections.[21] In light of all of that, although no final view needs to be arrived at concerning who is the owner of the Holden Commodore, enough has been shown to demonstrate that there is jurisdiction to make a restraining order against the vehicle whether under s 43(1) or (3). Therefore, it is appropriate to confirm the interim orders made in relation to DDG501 by Heath J at an earlier stage and confirm the order that the vehicle remains in the custody and control of the Official Assignee. [22] Ms Hogan sought costs in the event the Court reached that conclusion, suggesting that costs were routine in applications such as this which were opposed. If routine, it is beyond this Court's experience in that regard. Therefore it seems appropriate to reserve leave to the Solicitor-General to seek costs concerning this matter at a later stage of this case should it be considered appropriate and in that regard it is relevant to record that the hearing, including delivery of judgment, occupied 45 minutes. ..WILLIAMS J27 July 2006