SOLICITOR-GENERAL OF NZ V WILSON HC AK CIV 2007-404-007163

SOLICITOR-GENERAL OF NZ V WILSON HC AK CIV 2007-404-007163 29 February 2008IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2007-404-007163IN THE MATTER OF an application under the Proceeds of Crimes Act 1991 BETWEEN THE SOLICITOR-GENERAL OF NEW ZEALAND Applicant AND JAMES DEAN HEMI WILSON Respondent Hearing: 29 February 2008 Appearances: B Finn for the Applicant RAA Weir for the Respondent Judgment: 29 February 2008ORAL JUDGMENT OF PRIESTLEY JCounsel/Solicitors: B Finn, Crown Solicitor, P O Box 2213, Auckland RAA Weir, P O Box 46 281, Herne Bay, Auckland Tetley-Jones Thom Sexton, P O Box 111, Auckland[1] I am able to deliver this judgment as a result of discussions with counsel who in broad measure agreed on an appropriate outcome. I specifically record, however, that Mr Weir is not consenting but is sensibly not mounting any opposition. [2] I attach to this judgment my minute of 14 February 2008 which sets out in a general way most of the salient issues. The adjournment which Mr Weir requested, to give him and the respondent the opportunity to negotiate certain matters, has not led to a fruitful outcome.. That, however, lies outside the compass of this application. [3] The jurisdiction I am being asked to exercise is that conferred by ss 39(1)(b) and 43(1) of the Proceeds of Crime Act 1991. This latter provision relevantly states: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.[4] Although on the alleged facts there is an arguable case that ss (a) applies, the stronger ground available to the plaintiff is clearly that stipulated in s 43(1)(b). [5] It is pertinent to observe that the only evidence before the Court is that of the officer-in-charge, Constable M K Clubb. The respondent, doubtless for good reason, has not filed any affidavits. [6] As counsel accept, the order sought at this stage is really in the nature of an interim order to hold the position. The policy of the statute, and in particular whether or not the property should be used to satisfy, in whole or in part, any orders made under Part II has yet to be considered. Particularly forfeiture orders and pecuniary penalty orders, are possibilities.[7] However, before those aspects of the statute come into play the respondent must first be convicted of a serious crime. His trial is still some time away. Secondly, the court must have before it appropriate information to assess the extent of any orders sought by the Crown. The registered and unregistered interests of people other than the respondent in the residential property in question (10 Beazley Place, Glendene) would obviously need consideration, as would the extent of the respondent's culpability and the financial aspects of his alleged offending. [8] The major arguments in opposition to making an order at this stage advanced by counsel were: i. The unsatisfactory state of the evidence placed before this Court when ex parte orders were sought (refer [7] – [10] of my minute). This criticism is supplemented by a possible challenge to the veracity or otherwise of the statements of fact annexed to Mr Clubb's affidavit. He appears not to have been the author of those documents. ii. A legal argument to the effect that given the bulk of the allegedly received property was not stored at 10 Beazley Place (although some was), it would be pure conjecture to say that the respondent had derived a direct or indirect benefit (s 43(1)(b)) from the alleged offence. [9] The extent to which, if convicted, the respondent's financial welfare may have benefited from the proceeds of the crime of receiving and the extent also to which there may be some tainting under s 43(1)(a) of the residence are matters which lie ahead. [10] Despite Mr Weir's principled argument it seems to me that there must be indirect benefits which flow to convicted perpetrators of property crimes or indeed any crimes which generate cash flows for the benefit of the offender. [11] On the issue of Mr Clubb's affidavit and incorrect information initially placed before the Court, I do not consider I should exercise my discretion by settingaside the interim order. The errors stemmed from carelessness rather than from an attempt to mislead or paint a false picture. [12] Another aspect, which was of legitimate concern to Mr Weir and also to the respondent's partner Ms Tania Souness who resides at the Glendene property, was the extent to which the Official Assignee should have access to the property. Clearly there are logistical benefits in having a neutral party exercising overall supervision until the application is finally determined. There is no contest that this supervisory function is traditionally carried out by the Official Assignee when orders are made under the Act. [13] Counsel, however, have conferred on this aspect. I am of the view that the Official Assignee should not visit the property without having first obtained the consent of Ms Souness, the current occupier. Any such requests and consents may be organised through counsel. In the event of a request to the Official Assignee being contested, then the matter will need judicial determination. Leave is reserved for that purpose. [14] The orders I thus make are as follows: 1. An order in terms of paragraph (1)(a) of the inter partes application dated 21 November 2007, but modified to stipulate as being excluded not only the interest of Tania Souness, the joint owner, but also the interest of the Auckland Savings Bank as registered mortgagee. 2. The Official Assignee shall take custody and control of the property on the condition that he is not to visit the property for any purpose without the prior consent of Tania Souness or leave of this Court. [15] Leave is reserved to the parties. I state the obvious that these orders shall remain in force until such time as varied or modified by this Court.Costs[16] Costs are reserved............................................ Priestley JIN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2007-404-007163 IN THE MATTER of an application under the Proceeds of Crimes Act 1991 BETWEEN THE SOLICITOR-GENERAL OF NEW ZEALAND Applicant AND JAMES DEAN HEMI WILSON Respondent Date of Minute: 14 February 2008 Counsel: B Finn for the Applicant RAA Weir for the Respondent ____________________________________________________________________ MINUTE OF PRIESTLEY J ____________________________________________________________________Counsel/Solicitors: B Finn, Crown Solicitor, P O Box 2213, Auckland RAA Weir, P O Box 46 281, Herne Bay, Auckland Tetley-Jones Thom Sexton, P O Box 111, Auckland[1] This is an opposed application seeking a restraining order under the Proceeds of Crime Act 1991. [2] The purpose of this minute is to record that, at counsel's request, I am adjourning the proceedings part heard, to give some preliminary indications of the areas where the parties are apart, and possibly to indicate my preliminary views. [3] The respondent faces a large number of serious charges (there being no dispute that statutory term is relevant here) relating to receiving stolen property. [4] Central to the applicant's evidence is an affidavit of a police officer, the officer in charge Constable M K Clubb, sworn on 19 November 2007. [5] It is not necessary for me to set out the detail contained in that affidavit. Suffice to say that between January and November 2007, as a result of executing four separate search warrants at various addresses in West Auckland, various caches of allegedly stolen property were discovered to a total value of $165,000. [6] The first warrant in time was executed on a property which the respondent jointly owned at 10 Beazley Place, Glendene. Harrison J was persuaded to make an interim restraining order in respect of that property on 21 November 2007. [7] There were, as Mr Finn candidly acknowledges, a number of unsatisfactory aspects about the ex parte documentation. The least egregious of these is the omission in the body of the affidavit of Constable Clubb's second name. Both the affidavit and counsel's memorandum asserted that the property was mortgage-free thus heightening the risk of being sold. What was before the Court, however, was the clear information the property was jointly owned by both the respondent and one Tania Sauness who is apparently the respondent's partner. [8] The incorrect information about various registered interests in the land came about because, instead of searching the title, the Solicitor-General has relied on a Terralink print-out which was an error.[9] Matters got worse because when subsequently on 4 December 2007 Mr Edgar (a well known financial analyst who acts for the Crown) swore an affidavit addressing the issue of the mortgage (in favour of the ASB), he annexed as a purported certificate of title of the property a certificate of title which had nothing to do with this particular case. [10] Understandably perhaps Mr Weir has seized on these problems making the point that the Court, in making an ex parte order, had incorrect information placed before it by the applicant. This should be a factor to consider in the exercise of the relevant judicial discretion. [11] It is to that aspect I now turn. Restraining orders of the type sought are authorised by s 39. There is no contest that s 39(1)(b) applies as I have already indicated. [12] The Court's discretion to make a restraining order is contained in s 42(1). Of some relevance too may be the provisions of s 43(1)(b) which authorises the Court to direct the Official Assignee to take custody and control of a property if satisfied that "it is desirable to do so". One of the issues engaging Mr Weir is whether that degree of official oversight is necessary in this case. [13] The real jurisdictional contest, however, revolves around s 43(1). That provision limits somewhat the Court's discretion, prohibiting it from making an order unless it "is satisfied that there are reasonable grounds for believing" the matters set out in ss (a) and (b). [14] Although both counsel have toyed with the possibility of ss (a) applying, on the basis that the Beazley Road property was tainted, there may be difficulties with that assertion given the nature of the crime, the available evidence, and the relatively small amount of the allegedly stolen property ($10,600) found at that address. Nonetheless an argument might be available to the Solicitor-General, that if one uses one's residence as a storing place for stolen property, the subsection applies.[15] Mr Finn, however, realistically accepted he was on much stronger ground with s 43(1)(b). At first sight there is a strong argument that if one is eventually convicted of receiving stolen property, there being evidence of such property being stored deliberately in separate parts of Auckland, that the offender has "derived a benefit directly or indirectly". To advance that argument Mr Finn relied on the definition of "benefit" contained in s 2(3) and also on the definition of "property" contained in s 27(2)(9). Although s 27 is related to the assessment of pecuniary penalty orders, there is obviously a linkage between the value of stolen property and the type of order which a court might be justified in making. [16] Mr Weir for his part, and he has yet to develop his argument fully in this area, is of the view that it would be wrong to assert, particularly prior to a conviction, that allegedly stolen property could be classified as derivative of a direct or indirect benefit to the respondent in this case. I do not for the moment decide the point. [17] Mr Weir also attacked the quality of the evidence. In Mr Weir's submission the evidence is largely untested. That may well be, but it is equally relevant to observe that the respondent does not challenge the affidavit in any way. There certainly has been no challenge or contradictory evidence so far as the central thrust of Constable Clubb's affidavit is concerned. On the issue of the Court being "satisfied", in the absence of any contrary evidence, on the central features of the affidavit, the Court would have little option but to accept most of the affidavit at its face value. [18] At the afternoon tea adjournment counsel had a discussion. It emerges that one matter of central importance to the respondent (who is in custody) is that the police currently hold property which he regards as being either his personal property or legally owned by other people. Mr Weir realistically advised the Court that he would like to obtain instructions. If this issue of concern to the respondent can be speedily resolved then it may well be he would withdraw his opposition to the application sought.[19] Counsel see some benefit in me remaining in charge of this file. Fortunately I have some time available. The case is thus adjourned to 9 am on Friday 29 February 2008 for resolution. [20] If counsel are able to resolve matters by consent in the interim all that is required is a consent memorandum seeking the appropriate orders in which case appearances can be excused. [21] It might be helpful to counsel and the parties if I were to make the following observations: a) Although it would appear the Court has correct information before it now, I accept Mr Weir's submission that the incorrect information inadvertently placed before the court last year is a relevant matter for me to weigh in the exercise of my discretion. Exactly what weight I give it is currently problematic. b) I lean to the view that given the policy of the Act, allegedly stolen goods would, if convictions ensued, be caught by the definition of a benefit, particularly if there were evidence that suggested extensive commercial activity in this area by the respondent and/or relevant prior convictions. c) I consider that the appointment of the Official Assignee is the standard and tidiest way to deal with the property which is subject to an interim restraining order. But I would be receptive to attaching conditions if so asked delineating exactly what activities the Official Assignee should undertake in the interim so far as the property is concerned................................................. Priestley J