Commissioner of Police v Doyle [2021] NZHC 1209 (27 May 2021)

Last Updated: 10 December 2021

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2149 [2021] NZHC 1209

UNDER	the Criminal Proceeds (Recovery) Act 2009
BETWEEN	COMMISSIONER OF POLICE Applicant
AND	WAYNE STEPHEN DOYLE First Respondent HARATA RAEWYN PAPUNI Second Respondent

Hearing:	10 May 2021
Counsel:	C R Purdon for Applicant R M Mansfield and S L Cogan for Respondents
Judgment:	27 May 2021

JUDGMENT OF BREWER J

This judgment was delivered by me on 27 May 2021 at 3.30 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Meredith Connell (Auckland) for Applicant Dominion Law (Auckland) for Respondents

COMMISSIONER OF POLICE v DOYLE & PAPUNI [2021] NZHC 1209 [27 May 2021]

Introduction

• [1] The Criminal Proceeds (Recovery) Act 2009 (“the Act”) establishes a regime for the forfeiture of property¹ –

(a) that has been derived directly or indirectly from significant criminal activity; or

(b) that represents the value of a person’s unlawfully derived income.

• [2] The forfeiture regime established by the Act uses the civil procedures of the Court. Applications must be made by originating application.²

• [3] The Commissioner of Police (“the Commissioner”), using the powers and procedures contained in the Act, seeks forfeiture orders against the respondents for sums totalling $10,222,792. In the alternative, the Commissioner seeks asset forfeiture orders over property including real estate, funds held in bank accounts, cash and a vehicle.

• [4] The Commissioner, as he had to, brought his proceeding by originating application supported by affidavits. The issue for this Judgment is whether, in doing so, the Commissioner has sufficiently informed the respondents of his case against them. Mr Mansfield, for the respondents, submits that the Commissioner has not sufficiently particularised his case against the respondents. He has applied to the Court for an order directing the Commissioner to file a statement of claim. Mr Mansfield’s submission is that such an order would force the Commissioner to plead his case with sufficient particularity.³

• [5] The law is clear on when a court should order the Commissioner to file a statement of claim. I respectfully adopt the following observations of Lang J in Commissioner of Police v Li:⁴

¹ Criminal Proceeds (Recovery) Act 2009, s 3(1).

² High Court Rules 2016, r 19.2(r).

³ Rule 19.5A permits a Judge to direct the parties to file a statement of claim and a statement of defence respectively.

⁴ Commissioner of Police v Li [2018] NZHC 292, (2018) 24 PRNZ 268.

[9] ... The discretion to require a statement of claim to be filed should only be exercised in cases where that is both necessary and proportionate having regard to the nature of the proceeding.

...

[13] The starting point must be the fact that those who drafted the rules considered the originating application procedure to be appropriate to ensure the speedy and inexpensive determination of applications brought under the Act. The fact that the originating application procedure is now used for that purpose as a matter of routine, coupled with the dearth of cases in which a statement of claim has been directed, suggest it is generally suited to the purpose.

...

[17] ... The Court would only be justified in directing the Commissioner to file a statement of claim where the originating application procedure has failed to achieve its desired object of communicating the Commissioner’s case to the Court and the respondents. Even then the Court would need to have regard to issues of proportionality.

The respondents’ submissions

• [6] Mr Mansfield’s principal submissions are:

(a) The originating application is conclusionary. It does no more than state amounts and describe property, with linkages to the grounds for forfeiture provided by the Act; and

(b) The affidavit evidence in support of the application is contained in 33 affidavits containing thousands of pages:

It is no answer ... for the Commissioner to assert that the particulars are “in the evidence”. There is 9,000 pages of evidence. Thousands more pages of disclosure has subsequently been drip fed to the Respondents. It is not for the Respondents to sift through this volume of material and guess as to what the Commissioner’s case which, if successful, will result in the forfeiture of over $8 million worth of assets – may be. The Commissioner must know. He took over three years to prepare and file his Forfeiture Application. As a matter of basic fairness, the Respondents are entitled to know the case they are required to meet. The Court will likewise be assisted, particularly when it comes to assess issues of admissibility and to determine the substantive issues on the Forfeiture application, by particulars of the matters identified at paragraph 3.3 above.

• [7] In a 21-page letter dated 8 March 2021,⁵ the Commissioner supplied the respondents with particulars in response to a request by Mr Mansfield in a letter dated 2 December 2020. Mr Mansfield’s submission is that this letter does not go far enough. In the hearing before me, Mr Mansfield, helpfully, provided me with a schedule listing the particulars he submits are outstanding:

SCHEDULE OF PARTICULARS SOUGHT / PROVIDED / OUTSTANDING

PARTICULARS SOUGHT	COMMISSIONER’S LETTER 8 MARCH 2021	COMMISSIONER’S SUBMISSIONS	OUTSTANDING
The benefits alleged to have been derived by the first and second respondents	$8,784,959, made up of 14 other sums which are set out.
From which significant criminal activity	For each sum, states the offence provisions but not (where not the Respondents). No cross-references to any of the evidence.	4.11 But with four exceptions (on the current evidence), the Commissioner’s case is circumstantial, and is predicated on the proposition that the Head Hunters are readily engaged in a variety of criminal offending, including offences of manufacture, possession for supply, and sale of various class A, B and C controlled drugs, and violent property related offending, and that a portion of those unlawful benefits flow to the Head Hunters Gang and its President, Mr Doyle.	The conduct said to constitute the alleged offence and who carried it out (other than for the four exceptions).
		4.12 Those four exceptions are:
		(a) The $425,219 from the misappropriation of the property of Duncan McFarlane. This unlawful benefit is addressed in the Principal Submissions, and is independently particularised in the affidavit of Stephen Llewellyn Peat in support of civil forfeiture orders, dated 26 May 2020 (Peat Affidavit).
		(b) The $465,800 in “taxings” paid by the Operation Ark illicit drug syndicate. This unlawful benefit is addressed in the Principal Submissions, and is independently particularised in the Peat Affidavit.
		(c) The $275,973 of wrongfully/fraudulently obtained benefit payments from the Ministry of Social Development. The details of that significant criminal activity is particularised at part 13 of the Peat Affidavit. It is alleged that Mr Doyle made 55 applications to MSD for benefits between 1998 and 2017. It is further alleged that in those applications, Mr Doyle has claimed to have care of his grandchildren, although he did not, and which entitled him to additional benefits. It is also alleged that Mr Doyle failed to disclose cash and non-cash assets, including his interest in the property at 13 Russel Street, Freemans Bay; his ownership of multiple motor vehicles; his interest in 232 Marua Road, Ellerslie; his shareholders equity in East 88 Finance Ltd; the value of the shares

⁵ The letter is actually dated 8 March 2020. But that is clearly a typographical error and I will use “2021” to avoid confusion.

		he beneficially owned in East 88 Property Holdings Ltd; and the drawings, giftings, cash deposits and substantial beneficiary account balances in the Anglo Pacific Bloodstock Trust. Had Mr Doyle informed MSD of those assets, he would not have received any benefits. (d) The $58,000 “koha” relating to the Operation Morepork offending. The details of that significant criminal activity is particularised at paragraphs [20.18] – [20.21] of the Peat Affidavit. It is alleged that six persons, who were either Head Hunters members or associated, kidnapped a Chinese national who was forced to commit robberies of other drug dealers to repay a debt he owed, netting a total of $290,000. It is further alleged that Mr Doyle expressly requested a koha, or a portion of the unlawfully derived $290,000, be paid to the Head Hunters. It is alleged that 20 per cent, or $58,000, is how much would have been paid.
The primary facts upon which the Commissioner relies to assert that the respondents have knowingly derived that benefit from significant criminal activity.	No reference to Commissioner’s case being circumstantial. Commissioner says he relies on: His status as President of the Head Hunters; his control over TWTTIN’s formation and management. his control over TWTTIN’s finances; his effective control of the property at 232 Marua Road, Mount Wellington, Auckland (232 Marua Road); the majority of the deposits being made in cash; his direct involvement in making a large number of those deposits on behalf of various Head Hunters; members and associates; the lack of records kept for TWTTIN; his knowledge of the criminal offending of Head Hunters members and associates; the 20 per cent of criminal earnings that are paid by members and associates to the Head Hunters and Mr Doyle’s knowledge of it; that deposits with “rent” related references were being made by Head Hunters members and associates who were not residing at 232 Marua Road; and many purported renters being Head Hunters members and associates and having insufficient legitimate income to meet rent payments.	The respondents requested the “primary facts” upon which the Commissioner relies to assert that unlawful benefits were knowingly obtained. The Commissioner has provided those primary facts which form the basis on which the Commissioner asserts the respondents would have been aware that the benefits they were deriving were sourced in significant criminal activity. In large part, and in keeping with the circumstantial nature of the Commissioner’s case, the primary facts are largely predicated on the following (extensively evidenced in the affidavits): (a) Mr Doyle’s status as President of the Head Hunters; (b) Mr Doyle’s control over the formation, management and finances of the Doyle Entities; (c) Mr Doyle’s control over the real properties in this proceeding, in particular, 232 Marua Road, Mount Wellington – the Headquarters of the Head Hunters East Chapter; (d) Mr Doyle’s knowledge that the Head Hunters are involved in criminal offending; (e) Mr Doyle’s knowledge that Head Hunters members and associates are required to provide 20 per cent of their criminal earnings to the Head Hunters; (f) Mr Doyle’s direct involvement in making large numbers of cash deposits into accounts associated with the Doyle entities on behalf of members of the Head Hunters; (g) that those Head Hunters members and associates lacked the legitimate income to fund those deposits; and (h) that those deposits were not for the ostensible purposes which they were otherwise described as being for, i.e. “rent”.	Facts said to support allegations that: Mr Doyle is President of the Head Hunters; deposits were being made by Head Hunters members and associates who were not residing at 232 Marua Road; many purported renters having insufficient legitimate income to meet rent payments; and Respondents knew of financial position and/or source of income of payers.
(c) how the relevant assets are alleged to have been tainted; and	Essentially alleges that deposits that were proceeds of the offence provisions identified above were paid into accounts. Again, does not identify the conduct said to constitute the relevant significant criminal activity relied upon or who is said to have carried it out. Cross-references are to the offence provisions, not any allegations of fact.		The conduct said to constitute the relevant significant criminal activity relied upon and who is said to have carried it out. Tracing the alleged proceeds from such activity to the alleged tainted assets.
(d) why the respondents are alleged to have effective control of the relevant assets.	Particulars provided on property by property basis.

The Commissioner’s submissions

• [8] The principal submissions on behalf of the Commissioner are:

(a) The Commissioner has done all that can be expected of him. The originating application is detailed, the affidavits contain the evidence in support of the originating application, and if there was any uncertainty then the letter of 8 March 2021 fills the gaps; and

(b) The level of particularity contended for by the respondents goes beyond the requirements for pleadings in a statement of claim. If the Commissioner had to file a statement of claim it would serve no purpose because it would repeat the material already before the respondents.

Discussion

• [9] As Mr Mansfield submits, this is a more complex application than many brought by the Commissioner pursuant to the Act’s regime. Neither of the respondents has been convicted of any offence underlying the Commissioner’s applications. Instead, the Commissioner’s case is based on the first respondent’s alleged status as President of the Head Hunters gang and the financial benefits alleged to have accrued to the respondents as a result of the first respondent’s status.

• [10] In certain important respects, the Commissioner’s case is circumstantial. The Commissioner will invite the trial court to draw inferences of criminal activity and knowledge of criminal activity from proven facts relevant to these inferences.
• [11] Having said that, there is a great deal of detailed information in the affidavits filed in support of the Commissioner’s applications. The Commissioner puts particular emphasis on the affidavits of Mr Peat and Ms Cairns.

• [12] The affidavit of Mr Peat sworn on 26 May 2020 summarises the evidence to be called on behalf of the Commissioner. The affidavit itself has 125 pages of detailed descriptions of property and linkages with the respondents. I accept the Commissioner’s submission that it contains the detail, and more, that might be expected of a statement of claim.

• [13] Similarly, the affidavit of Ms Cairns sworn on 26 May 2020 sets out the financial analysis on which the Commissioner relies. It is detailed, links to documentary evidence, and contains 105 pages.

• [14] The originating application brought by the Commissioner is also detailed. For example, the profit forfeiture order applied for relates to $8,784,959. This figure is broken down into 14 components each linked to a particular asset or source.

• [15] The Commissioner’s letter of 8 March 2021 is also detailed. It expands on the sums claimed in respect of the profit forfeiture order to which I have just referred, giving a description of the Commissioner’s case regarding each of the component sums. For example:

Sum #1, $349,545

7 The Commissioner alleges that Mr Doyle has, directly or indirectly, derived a benefit of $349,545 from significant criminal activity in the form of deposits made into the bank accounts of the That Was Then This Is Now Charitable Trust Board (TWTTIN) with “rent” related references,⁶ and that those deposits were money laundering transactions and/or constituted receiving,⁷ and/or represented the proceeds of tax related offending, including failing to declare income and pay tax and fraudulently obtaining charitable status for TWTTIN.⁸

8 The Commissioner alleges that at least some of the deposits were the proceeds of offending by various Head Hunters Gang members and

⁶ Application at 1(a)(i)(A)(i).

⁷ Offences under ss 243 and 246-247 of the Crimes Act 1961.

⁸ Offences under ss 143, 143A and 143B of the Tax Administration Act 1994 and s 240 of the Crimes Act 1961.

associates, including Mr Doyle. The Commissioner alleges that such predicate offending included:

(a) drug dealing offending, including manufacture, possession for supply, supply and sale of various class A, B and C controlled drugs, including methamphetamine, methamphetamine precursors, LSD, MDMA, cannabis and controlled drug analogues (ss 6 and 9 of the Misuse of Drugs Act 1975);

(b) property related offending, including theft (s 219 of the Crimes Act 1961), conversion (s 226 of the Crimes Act 1961), dishonestly taking or using a document (s 228 of the Crimes Act 1961), burglary (s 231 of the Crimes Act 1961), aggravated burglary (s 232 of the Crimes Act 1961), robbery (s 234 of the Crimes Act 1961), aggravated robbery (s 235 of the Crimes Act 1961), demanding with intent to steal (s 239 of the Crimes Act 1961) and obtaining by deception (s 240 of the Crimes Act 1961).

9 The primary facts the Commissioner relies upon (at this stage) to assert that Mr Doyle has knowingly derived an unlawful benefit from the alleged money laundering and receiving are: his status as President of the Head Hunters; his control over TWTTIN’s formation and management; his control over TWTTIN’s finances; his effective control of the property at 232 Marua Road, Mount Wellington, Auckland (232 Marua Road); the majority of the deposits being made in cash; his direct involvement in making a large number of those deposits on behalf of various Head Hunters members and associates; the lack of records kept for TWTTIN; his knowledge of the criminal offending of Head Hunters members and associates; the 20 per cent of criminal earnings that are paid by members and associates to the Head Hunters and Mr Doyle’s knowledge of it; that deposits with “rent” related references were being made by Head Hunters members and associates who were not residing at 232 Marua Road; and many purported renters being Head Hunters members and associates and having insufficient legitimate income to meet rent payments.

10 The primary facts the Commissioner relies upon (at this stage) to assert that Mr Doyle has knowingly derived an unlawful benefit from the alleged tax-related offending, are: his control over TWTTIN’s formation and management; his control over TWTTIN’s finances; his involvement in obtaining charitable status; and the lack of charitable services provided by TWTTIN.

• [16] I accept the Crown’s submission that the degree of particularity sought by the respondents is too great. In the schedule of particulars sought which I set out above, Mr Mansfield submits that what is outstanding in one area is a description of the conduct said to constitute the alleged events and who carried it out (other than for four stated exceptions).
• [17] In the hearing before me, Mr Mansfield accepted an example I gave him of the level of particularity he seeks. In summary, Mr Mansfield seeks the names of the Head Hunters who provided funds, the specific criminal offences alleged to have generated the funds, and the amounts alleged to have accrued to the respondents from each of the specified criminal offences.

• [18] Mr Purdon for the Crown submitted that the Commissioner does not have to provide that degree of particularity. This is a circumstantial evidence case. The Commissioner’s onus, on the balance of probabilities, under the Act is to satisfy the Court that money has accrued to the respondents from significant criminal activity. In this case, the Commissioner intends to prove that despite declaring no income for many years, the respondents accrued millions of dollars in assets. The Commissioner’s detailed evidence goes to the overall sources of those assets and values them. If the Commissioner discharges his onus to prove on the balance of probabilities that the assets were derived from significant criminal activity then it will be for the respondents to disprove the quantum.⁹

• [19] Mr Mansfield submits that the Commissioner does not specify whether the Commissioner relies on specific pleaded unlawful actions on the part of the respondents that taint the property they propose to seize, or whether he alleges that knowledge of unlawful activity is only inferred from the respondents’ alleged roles in the Head Hunters. I consider that the Commissioner adequately indicates that he relies on the latter argument in his letter of 8 March 2021. I note that the letter sets this out in relation to each item of property that the Commissioner aims to seize, at [10], [17], [25], [28], [31], [34], [39], [42], [49], [52], [57], [60], [63]-[65], and [69]-[71]. I consider that this adequately sets out the Commissioner’s case.

• [20] I consider that the originating application, the affidavits, and the letter of 8 March 2021 together constitute sufficient particularity to communicate the Commissioner’s case to the Court and the respondents. Having regard to the statutory emphasis on the swift and efficient conduct of forfeiture matters, I consider that no

⁹ At s 53(2).

formal statement of claim is necessary. It would not, pragmatically, add anything. I am also mindful that it would risk delaying this complex proceeding.

Decision

• [21] In my view, the originating application procedure has not miscarried. The respondents know both the allegations against them and the evidence upon which the Commissioner will rely to prove them. The affidavits of Mr Peat and Ms Cairns, to which I have referred, and the letter of 8 March 2021 provide narratives of the Commissioner’s case.

• [22] The application is dismissed.

• [23] If there are issues of costs, the parties are to file their memoranda within 10 working days of the date of this Judgment.

Brewer J