The Queen v Piper [2003] NZCA 258; (2003) 20 CRNZ 520 (11 November 2003)

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The Queen v Piper [2003] NZCA 258 (11 November 2003); (2003) 20 CRNZ 520

Last Updated: 16 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA276/03THE QUEEN

v

COLIN DAVID PIPER

Hearing: 29 October 2003

Coram: Tipping J Rodney Hansen J Paterson J

Appearances: Appellant in Person
B M Stanaway for Crown

Judgment: 11 November 2003

JUDGMENT OF THE COURT DELIVERED BY RODNEY HANSEN J

Introduction

[1] The appellant appeals against a forfeiture order made in the District Court at Christchurch under s 15(1) of the Proceeds of Crime Act 1991 (“the Act”) in respect of a house property at 524 Tuam Street, Christchurch (“the property”). The order followed the appellant’s conviction in September 2000 on a charge of conspiring to sell cannabis. He was sentenced to imprisonment for five and a half years. He has now completed his sentence.

Background facts

[2] The appellant’s conviction followed a covert police operation which established that the appellant was at the head of a syndicate which sold cannabis through a number of dealing houses in suburban Christchurch. Cannabis was purchased in bulk and broken down into small quantities wrapped in foil known as “tinnies” and cannabis cigarettes (joints). The cannabis was sold from rented houses operated by other members of the syndicate. Each of the houses had a prepaid cellphone supplied by the appellant, which was used to reorder cannabis when stocks were running low. Two other houses were used for the storage and packaging of the cannabis. There was clear evidence that the appellant was responsible for sourcing bulk supplies of cannabis, for establishing the dealing houses, recruiting operatives and supplying the “shopkeepers” who received a commission on sales.
[3] The appellant had owned the property since 1990. It was located in the same general area as the dealing houses. It was not customarily used for the sale or storage of cannabis. The Solicitor-General applied for its forfeiture on the grounds that it was used for the occasional sale of cannabis and to facilitate the syndicate’s dealing operations elsewhere.
[4] The application for a forfeiture order was opposed by the appellant on the grounds that the property was not “tainted property” as defined in s 2 of the Act. He opposed an alternative application for a pecuniary penalty order under s 25(1) of the Act, on the grounds that there was no satisfactory evidence that he derived benefits from the commission of the offence. The appellant’s parents applied for relief under s 18 of the Act, relying on an equitable interest in the property arising out of advances they made to the appellant to fund the deposit when he purchased the property and to assist with repayment of mortgages. That application for relief was opposed by the Solicitor-General on the grounds that the advances were personal loans and did not result in the appellant’s parents acquiring an equitable interest in the property.

Judgment appealed from

[5] In a careful and comprehensive judgment, the Judge considered the relevant provisions of the Act, noting that the definition of “tainted property” in s 2(1) is “property used to commit, or to facilitate the commission of, the offence”. He reviewed the evidence, which included affidavits filed on behalf of the Solicitor-General, the deposition of a prosecution witness who gave evidence at depositions, and affidavits by the appellant and his father. The appellant also gave evidence at the hearing. The Judge analysed the evidence relied on by the Solicitor-General to establish that the property had been used by the appellant, either for the direct sale of cannabis or to facilitate its sale from the syndicate’s dealing houses, as falling into three categories.
[6] First, there was evidence of unusual security installations in the property including fortified doors, sensor lighting, perspex sheeting on the inside of windows and hidden cavities. Secondly, there was direct evidence of sales of cannabis from the property. This was given by a former resident and also by police officers engaged in surveillance activities. Thirdly, there was evidence of the appellant’s use of the property as a centre of operations for the cannabis dealing syndicate. This included evidence that receipts for the purchase of the cellphones used at the dealing houses were found at the property and of visits to the property by second tier members of the syndicate who worked most closely with the appellant. Finally, the Judge noted that the other houses used by the syndicate were generally only a short distance from the property.
[7] The Judge found that although the syndicate’s dealing operations were principally conducted from the rented dealing houses, he was satisfied that the appellant organised his cannabis selling operation from the property and that it was in effect used as the headquarters of the syndicate. He also found that, on occasions, visitors to the property purchased cannabis. He rejected the appellant’s contentions that modifications to the house were made solely to protect the property from burglars and that, on specific occasions identified by the police, he had not sold cannabis from the house.
[8] The Judge concluded that the property was tainted by reference to the activities which were the subject of the conspiracy charge.
[9] The Judge went on to review the evidence and the legal principles relating to the claim by the appellant’s parents for relief from forfeiture. He determined that the advances they made to the appellant did not result in an equitable interest in the property or that, on any other basis, they were entitled to relief. That finding is not contested in this appeal.
[10] The Judge then went on to consider whether he should make a forfeiture order, noting that the power is discretionary. He identified a number of factors which are relevant to the exercise of the discretion, including the value of the property; the nature of the offender’s interest; the value of the drugs involved; whether the property had been acquired from the proceeds of sale of drugs; the extent to which the property was connected with the commission of the offence; and considerations such as the utility of the property to the offender and the length of ownership.
[11] The Judge concluded that although the association of the property with the commission of the offence was not as significant as is the case with a fulltime dealing house, it weighed in favour of a forfeiture order being made. He considered whether, in terms of s 15(2)(b) of the Act, undue hardship would be caused to the appellant, noting that for this purpose “undue hardship” means hardship which is greater than the hardship which would normally result from a forfeiture order – Lyall v Solicitor-General [1997] 2 NZLR 641. He referred to the appellant’s previous convictions for selling cannabis and to the further offending having commenced soon after his release from prison in 1998. He noted that, although previous similar offending from the property cannot be relevant to a determination of its status as tainted property, it is relevant to the exercise of the discretion: Lyall v Solicitor-General (supra) at p 649. The Judge considered the consequences of forfeiture to the appellant’s parents. In the absence of evidence to suggest that their current financial situation was other than secure, he was not prepared to conclude that the failure of the appellant to repay the advances totalling some $25,000 would cause them undue hardship.
[12] Having regard to the requirement in s 15(2)(d) of the Act to consider the nature and circumstances of the offence and the offending, including the gravity of the offence, the Judge concluded that the property should be forfeited. He referred to the highly organised and systematic cannabis dealing operation as within the broad band of the most serious cases of its kind. Taking into account also the appellant’s blatant disregard for the law in resuming drug dealing following previous offending, he concluded that to not order forfeiture would be to ignore the clear deterrent purpose of the Act.
[13] Although it was unnecessary for the purpose of his decision, the Judge went on to consider the decision he would have made had he been required to consider the alternative application for a pecuniary penalty order. He assessed the benefits, which the appellant derived from the offending, as not less than $750,000. However, there was evidence that the property was worth no more than $140,000, that it was subject to a mortgage of $35,000 and that it was the appellant’s only substantial asset. The Judge recognised the futility of imposing a pecuniary penalty order. He concluded that an appropriate order would be for $100,000.

Appellant’s submissions

[14] In his admirably concise and balanced oral submissions, the appellant contested the Judge’s finding that the property was tainted by his drug dealing activities. He denied selling cannabis from the property and said the evidence of the former resident should not have been accepted. He had no recollection of the sale claimed to have been witnessed by a police officer. The appellant said evidence based on police surveillance of the property should not have been accepted as a lot of people, unconnected with the syndicate, lived there. He said the security arrangements were made for perfectly legitimate reasons. He denied that the conspiracy was connected in any way with the property, saying it began after he moved to one of the houses rented by the syndicate.
[15] The appellant’s challenge to the exercise by the Judge of his discretion to order forfeiture, focused on the hardship which would result for him personally. He said that while in prison he had successfully completed an alcohol and drug rehabilitation programme. He had come to terms with the extent of his offending and the reasons for it. He wished to return to a crime-free lifestyle. He had found work for the first time for many years. He had formed a new relationship and wished to settle in his house and continue rebuilding his life.
[16] The appellant asked that, instead of forfeiture, the Court impose a pecuniary penalty order of a sum that he could pay without having to lose his house.

Decision

[17] There has been no tenable basis put forward to undermine the Judge’s finding that the property was used to commit or to facilitate the commission of the drug dealing conspiracy. The Judge heard the appellant deny the evidence of sales of cannabis, his explanation for the security arrangements and his denial that the house was in any way associated with the operation of the syndicate. Either expressly or by implication, he rejected that evidence and drew conclusions from the evidence relied on by the Solicitor-General, unchallenged by cross-examination, of the former resident of the property and the police officers involved in the investigation. That evidence provided a sufficient foundation for the Judge’s findings that the property was tainted.
[18] In exercising his discretion, the Judge gave careful consideration to each of the relevant factors set out in s 15(2) of the Act which provides:

“In considering whether or not to make an order under subsection (1) of this section in respect of particular property, the Court may have regard to—

(a) The use that is ordinarily made, or was intended to be made, of the property; and

(b) Any undue hardship that is reasonably likely to be caused to any person by the operation of such an order; and

(c) The nature and extent of the offender's interest in the property (if any), and the nature and extent of any other person's interest in it (if any); and

(d) In addition to the matter referred to in section 14(1)(b) of this Act, any other matter relating to the nature and circumstances of the offence or the offender, including the gravity of the offence.”

As earlier noted, the Judge gave particular consideration to whether undue hardship would be caused to the appellant or to his parents. He was clearly mindful of the fact that forfeiture would result in the loss of the appellant’s house and his only significant asset. He recognised that the involvement of the property in the offending was incidental in nature. He concluded that forfeiture should occur despite these considerations. He had particular regard to the seriousness of the offending and the appellant’s calculated decision to engage in a sophisticated drug dealing operation soon after his release from prison for similar offending.

[19] We have some sympathy for the appellant’s position. We accept he is sincere in his resolve to change his lifestyle. We understand that it would assist his rehabilitation if he were able to settle in his house and rebuild his life and his finances from that base. However, we cannot fault the way in which the Judge came to his decision. He gave full and balanced consideration to all relevant factors. The outcome may seem harsh, particularly given the appellant’s wish to make a fresh start, but it is fully in accord with legislation which gives primacy to the need to deter drug offending.
[20] As there is no basis for disturbing the forfeiture order, there is no necessity for us to consider the alternative of a pecuniary penalty order. We observe, however, that based on the Judge’s finding as to the profits the appellant derived from the syndicate’s operations, the penalty he would have imposed does not, on its face, seem to be excessive.

Result

[21] For the reasons we have given the appeal is dismissed.

Solicitors:
Crown Solicitor, Christchurch