In the High Court of New Zealand Wellington Registry Civ 2014-485-009652 [2015] Nzhc 1240

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV 2014-485-009652 [2015] NZHC 1240 IN THE MATTER of an application pursuant to the Criminal Proceeds (Recovery) Act 2009 BETWEEN COMMISSIONER OF POLICE Applicant AND PETER WILLIAM EVANS Respondent AND CHAD WILLIAM EVANS First Interested Party AND CATHERINE MURA POIHIPI Second Interested Party AND ROBERTS CONSOLIDATED LIMITED Third Interested Party AND MARTIN ALLAN PINHEY Fourth Interested Party Hearing: 20 and 28 May 2015 Counsel: E M Light for Applicant P H Surridge and A O'Connor (28 May only) for Respondent Judgment: 4 June 2015 JUDGMENT OF BROWN J COMMISSIONER OF POLICE v EVANS [2015] NZHC 1240 [4 June 2015] [1] On 29 September 2014 Collins J made restraining orders in respect of property comprising motor vehicles and several amounts of cash under the Criminal Proceeds (Recovery) Act 2009 (the Act). The motor vehicles the subject of that order are: (a) A red 2012 Harley Davidson CVO Breakout motor cycle, registration HFFH1, including ignition keys registered to the respondent and under his effective control; (b) A gold 1970 Pontiac GTO motor vehicle, registration 7OGTO, including ignition keys registered to the first interested party (C W Evans) and under the effective control of the respondent; (c) A black 2002 Holden Monaro GTO motor vehicle, registration CSS945, including ignition keys registered to the second interested party (Poihipi) and under the effective control of the respondent; (d) A silver 1994 BMW 730i motor vehicle, registration ZR7030, including ignition keys registered to the respondent and under his effective control. [2] In the notice of application dated 28 July 2014 an order was also sought under s 35(e)(v) of the Act directing the Official Assignee to sell those vehicles in order to preserve their value. [3] The respondent does not oppose the application in respect of the fourth vehicle. [4] In its submissions dated 14 May 2015 the applicant advised that he no longer pursued the application in respect of the second vehicle because he accepts the evidence advanced by the respondent that that vehicle appears to be relatively rare and the respondent has owned that vehicle for some time. [5] Consequently the present application relates only to the Harley Davidson motor cycle and the Holden Monaro GTO car. The law [6] Section 35(e)(v) of the Act states: 35 Types of further order Without limiting the generality of section 34(1), a court may, on an application under section 33(1), make 1 or more of the following further orders in relation to restrained property: … (e) an order relating to the Official Assignee that– … (v) directs the Official Assignee to sell restrained property (including, without limitation, a business) in order to preserve the value of the restrained property: [7] As explained in Proceeds of Crime Law in New Zealand what are colloquially called “immediate sale orders” are typically applied for by the Commissioner in relation to motor vehicles and houses, in the case of motor vehicles because they have a clear tendency to depreciate and cost money to store, maintain and insure. 1 This reduces the ultimate quantum of property available for forfeiture. [8] In Commissioner of Police v Chen Courtney J observed:2 The underlying purpose of the restraining order is to preserve the subject property because it represents a monetary value to the parties concerned. The legislature can be taken to have appreciated that property may be subject to a restraining order for a considerable time and that circumstances may change over the life of the order that so as put the property at risk. Some risks may be of a kind that action, including disposition of the property itself, may be needed to preserve the value that the property represents. If there were no mechanism for responding to such risks the rationale for the scheme would be significantly undermined. 1 H McKenzie Proceeds of Crime Law in New Zealand (LexisNexis Wellington 2015) at [5.17.2]. 2 Commissioner of Police v Chen [2013] NZHC 2259 at [30]–[31]. Section 35(e)(v) specifically recognises the need to preserve the value of the restrained property through the sale of it. There are many foreseeable circumstances that might justify such an order. These include a significant drop in the property market, the risk of a mortgagee sale and the reduction in value caused by lack of funds to maintain the property. For these reasons I consider that the ancillary orders can properly be made in the terms sought. [9] Specifically in the context of an application concerning inter alia motor vehicles and motor cycles in Commissioner of Police v Cavanagh Venning J said:3 [7] … Typically sale orders are pursued by the Commissioner where the restrained assets in relation to which the sale orders are sought have high depreciation rates combined with additional costs of storage and insurance which ultimately decrease the potential return to the Commissioner and/or be parties who claim an interest in the assets. There is a further additional benefit in the sale in that, once the assets are sold, the Official Assignee is able to hold the funds in an interest bearing account. … [9] Detective Latimer’s most recent evidence discloses that the Inland Revenue Department applies depreciation rates to motor cycles at 30 per cent per year, motor vehicles at 30 per cent per year and for pleasure vessels 13 per cent per year. Mr Harborow accepted that those are maximum rates of depreciation for accounting purposes but I accept his submission they give an indication of and support the instinctive view one might take that cars and boats are depreciating assets. That is particularly so where the cars, motor cycles and boats are of recent vintage and have no particular value in terms of speciality or uniqueness. The Official Assignee has obtained estimates valuations of a number of the vehicles which reflects and supports the view that they are wasting assets. State of the evidence at hearing on 20 May 2015 [10] In the description of the vehicles in the notice of application dated 28 July 2014 a value was attributed to the motor cycle of approximately $20,000 and to the Holden car of approximately $25,000. [11] Detective Constable Neville explained in his affidavit dated 28 July 2014 that an order for immediate sale was sought because the ongoing costs associated with the storage, insurance and general management of the vehicles would mount considerably and there was likely to be further depreciation of the vehicles which would reduce the likely return to the community for many forfeiture proceedings. 3 Commissioner of Police v Cavanagh [2014] NZHC 2978. [12] He deposed to enquiries made in relation to the cost of the vehicles by use of the Veda Advantage online application, an online credit agency used by the Police to research, among other things, vehicle ownership. He explained that the value of vehicles in the Veda Advantage database is listed as either the amount known to have been paid for the vehicle or a value provided from the car valuation specialist RedBook, an online database using information provided by the New Zealand Transport Agency. [13] In the case of the motor cycle the Veda Advantage search had provided two indicative prices: the wholesale price of $33,000 and a retail price of $44,000. Inquiry of the Infolog Search facility identified the respondent as the first registered owner of the motor cycle. [14] An Infolog inquiry established that the Holden was acquired by the respondent on 24 April 2006 and was transferred into the name of the second interested party, Catherine Poihipi, on 9 July 2013. A search on the Veda Autoplus website had provided two indicative prices for the car: a wholesale price of $21,000 and a retail price of $25,500. [15] With reference to the Holden car Detective Constable Neville’s affidavit included the following observations: 137. The vehicle has rarely come to the notice of Police and I believe that it has been stored as an investment to hold its value. 138. By placing it into the name of the second interested party (Poihipi) the respondent is given a level of separation from the vehicle and therefore protection against law enforcement and other agency action. 139. An Infolog search for the Odometer History shows very limited use over recent years when the Odometer reading has been recorded at Warrant of Fitness Inspections: 139.1 61,115km on 21/10/2011; 139.2 63,301km on 28/05/2012; 139.3 63,554km on 21/12/2012; and 139.4 66,548km on 27/06/2013. [16] The only evidence filed by the respondent was an affidavit of Mr S M Billington, a qualified mechanic with 35 years experience, who has operated a company trading as New Zealand Vehicle Consultants since 2004. The limited nature of his evidence was explained in para 4 of his affidavit: 4. I was asked as to whether or not I could assist in seeking information from the Land Transport Agency as a means of ascertaining how many vehicles were currently registered in New Zealand of the type that were the subject of the proceedings. I was not asked to comment or give an opinion on the results obtained and don’t intend to do so. I simply provide the results and my method in obtaining the information to assist the court. [17] His enquiry of the Land Transport Agency revealed that as at 5 March 2015 there were current registrations for six Harley Davidson CVO Breakout motor cycles, 48 Holden Monaro HSV GTO Coupes (automatic) and 30 Holden Monaro HSV GTO Coupe (manual) vehicles.

Load more