Lima v R [2011] NZCA 179 (11 May 2011)

Last Updated: 17 May 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA668/2010 [2011] NZCA 179

BETWEEN RAIHA DONNA MARIA LIMA Appellant

AND THE QUEEN Respondent

Hearing: 5 May 2011

Court: Chambers, Harrison and Stevens JJ

Counsel: Appellant in Person M F Laracy for Respondent

Judgment: 11 May 2011 at 4.00 pm

JUDGMENT OF THE COURT

1. The appeal is allowed. The order made in the High Court refusing the application under s 141 of the Sentencing Act 2002 is quashed and the application is remitted to the High Court for rehearing.
2. There is no order as to costs.

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REASONS OF THE COURT
(Given by Stevens J)

A hearing misfires

[1] The appellant, Ms Lima, asks this Court to revisit the decision of the High Court dismissing her application, under s 141 of the Sentencing Act 2002, to transfer to her a vehicle owned by her brother and forfeited under s 32(4) of the Misuse of Drugs Act 1975, following his conviction for methamphetamine offending.[1]
[2] For the reasons set out below we conclude that the appeal must be allowed. This is not as a result of any view we have formed on the merits of the appeal. Rather it is because the “hearing” in the High Court misfired because Ms Lima did not attend and hence did not present her evidence and oral submissions to the Court in support of her application seeking transfer to her of the forfeited vehicle. The unfortunate circumstances surrounding Ms Lima’s non-attendance meant that she was deprived of the right to be heard, resulting in a breach of natural justice.
[3] A preliminary question raised by the appeal is whether there is jurisdiction for this Court to hear it. Resolution of that question turns on whether the application brought by the appellant under s 141 of the Sentencing Act is properly characterised as criminal or civil. On this issue we have concluded that the appeal is in substance civil in nature and s 66 of the Judicature Act 1908 confers jurisdiction to determine it. Our reasons for so deciding are expanded below.

Some more factual background

Forfeiture of Mr Kiriona’s Chevrolet van

[4] Ms Lima’s brother, Mr Stanford Kiriona, was one of several people arrested and charged as part of “Operation Pandora”, an undercover police operation targeting methamphetamine distribution in the Manawatu and Horowhenua regions. On 19 February 2010 Mr Kiriona was sentenced by Clifford J to five years and five months’ imprisonment following guilty pleas to three methamphetamine-related charges under the Misuse of Drugs Act.[2] Mr Kiriona had pleaded guilty to one charge of conspiring to supply methamphetamine, one charge of possession of methamphetamine for the purpose of supply and one charge of possession of equipment (methamphetamine pipes). The Judge also ordered, pursuant to s 32 of the Misuse of Drugs Act, that Mr Kiriona forfeit $9,600 in cash and a Chevrolet van, together with its licence plate “N1GR” registered in Mr Kiriona’s name.[3] The forfeiture was unopposed and there was no indication at the sentencing hearing, by Mr Kiriona or any other person, that any party other than Mr Kiriona had an interest in the Chevrolet van.

The appellant’s application

[5] On 7 May 2010, Ms Lima applied to the High Court for “Relief from the Instrument Forfeiture Order” made by Clifford J. The statutory basis for the application was said to be s 142J(2)(a) of the Sentencing Act. However, it was later assumed (correctly) by Ronald Young J, who determined the application, that it was an application pursuant to s 141 of the Sentencing Act.[4]
[6] In support of her application, Ms Lima filed affidavit evidence deposing that in 2004 she lent Mr Kiriona $7,000, in two instalments, to purchase the Chevrolet van. She included bank statements showing two electronic transfers totalling $7,000 to a bank account, details of which were said to have been given to her by Mr Kiriona. Ms Lima’s contention was that those transfers were to Mr Kiriona’s bank account.
[7] On 19 February 2008, some three months after the arrest of Mr Kiriona, Ms Lima had registered a “security interest” in the van on the Personal Property Securities Register. She claimed in her affidavit evidence that in January/February 2008, after discussion between herself and her brother in relation to the loan of $7,000 for the purchase of the van in 2004, her brother agreed to protect her interest in the van and that she should register a finance statement reflecting her interest.
[8] Ms Lima also filed an affidavit by Mr Kiriona in support of her application.

Steps prior to hearing

[9] The first formal step was a preliminary hearing in the High Court at Palmerston North on 11 May 2010 before Mallon J. Ms Lima was present in Court to support her application. It was apparent that the Crown intended to oppose the application and a timetable was set for the filing of further evidence by both parties. The Crown indicated that it was likely to want to cross-examine Ms Lima and others (such as Mr Kiriona) who may file affidavits in support of the application. A two hour hearing would be required and the registry indicated that a hearing may be able to take place in the week of 21 June 2010. Importantly, Mallon J noted: “The registry is to advise the parties of the date for the hearing when it has been set”.[5]
[10] As events later transpired there was a callover of the case on Wednesday 9 June 2010 at 9.30 am. The purpose was to gauge the parties’ readiness for an opposed hearing and to identify any pre-trial issues. On that day Ms Lima attended at the Court for the callover, but was directed to the wrong courtroom and was not present when the callover took place in another courtroom. It is clear by this stage that the Crown no longer wished to cross-examine Ms Lima or any of her witnesses. The Judge thought that Ms Lima had not appeared at the callover and then proceeded to determine the application. A written judgment was released on 15 June 2010.
[11] The judgment of Ronald Young J refers to a hearing having taken place on 10 June 2010. It states that counsel were E J McCaughan for Crown and R D M Lima in person. It is accepted by the parties that no hearing actually took place on that occasion or at all, Ms Lima having gone to the wrong courtroom on the day of the callover (9 June) and being unaware that there would be such a hearing. It is also accepted that Ms Lima was not, on or after 9 June, given notice by the Registrar of any hearing. There is no doubt that Ms Lima wished to be present and perhaps call additional evidence in support of her application and present oral submissions.
[12] In his judgment of 15 June 2010 Ronald Young J refused the application by Ms Lima. There is no need for us to discuss the basis upon which such a decision was made or consider the merits of the decision. This is because we have concluded that the appeal must be allowed and the matter remitted to the High Court for a rehearing.

Jurisdiction

[13] There is no prescribed right of appeal against a determination made under s 141 of the Sentencing Act. This is in contrast to the position in respect of determinations for applications for relief from instrument forfeiture orders brought under s 142J of the Sentencing Act.[6] It is clear that, if this appeal is in substance of a criminal nature, there is no jurisdiction for this Court to determine it.[7]
[14] Counsel for the respondent, Ms Laracy, acknowledges, however, that an application under s 141 of the Sentencing Act might properly be characterised as a civil matter and appealable to this Court pursuant to s 66 of the Judicature Act. She submits that this is so, even though such a determination is necessarily parasitic on a criminal matter.
[15] Ms Laracy helpfully drew the Court’s attention to the discussion of the distinction between criminal and civil matters in Mafart v Television New Zealand Ltd.[8] There Elias CJ for the majority of the Supreme Court observed that the question whether a proceeding is criminal or civil in nature depends on “the substance of the application and the order sought under it”.[9] The Chief Justice opined that “[a]pplications necessarily linked to determinations of crime or punishment are ... properly regarded as criminal proceedings”,[10] but she emphasised the need to look at the substance of the application and the order sought under it and noted that the underlying proceedings which provide the occasion for the application are not determinative.[11]
[16] The acknowledgement by the Crown, which we consider was properly made, was that an application under s 141 of the Sentencing Act is best characterised as civil. The reasons are first that it concerns a fundamentally civil application to determine a property interest. Second, it is brought by an individual who had no legal interest in the criminal proceeding and sentencing proceeding. Third, the civil classification would allow the applicant a right of appeal.
[17] We conclude that the application by Ms Lima under s 141 of the Sentencing Act was in substance a civil proceeding. As the application was determined by the High Court against her, we are satisfied that there is jurisdiction for an appeal to this Court under s 66 of the Judicature Act.

Disposition

[18] There is no doubt that Ms Lima wished to be present at the hearing of her application, possibly to present further evidence, and certainly to present oral submissions. Such intention is clear from her attendance at the pre-trial hearing before Mallon J on 11 May 2010 and the fact that she attended the High Court, despite being sent to the wrong courtroom, for the callover on 9 June 2010. She also recorded in her written submissions to this Court her wish to have been present when the application was heard in the High Court. She says that she should have been given an opportunity to address the Court orally. We agree.
[19] The circumstances in which she was not able to be present are unfortunate. It seems that Ms Lima was inadvertently directed to the wrong courtroom either by a volunteer at the court or by court staff. When she later made inquiries at the registry office about her case she was told by a senior officer that the Judge felt that he had enough information to deal with the application on the papers.
[20] At the hearing before us, Ms Laracy properly acknowledged that Ms Lima had been deprived of her right to a hearing and that there had accordingly been a breach of natural justice. On behalf of the respondent, Ms Laracy accepted that it was therefore appropriate that the appeal should be allowed and the application remitted to the High Court for a rehearing.
[21] We were informed after the hearing, following enquiries made by Ms Lima of the Registrar of the High Court at Palmerston North, that the Chevrolet van in question has not yet been sold. Apparently the vehicle is still at Turners Auctions in Palmerston North pending the outcome of the Court of Appeal hearing. The question now is whether it is appropriate that the vehicle continues to be held there pending any rehearing in the High Court.
[22] We do not have sufficient information to deal with that question in this judgment. For example, we do not know what charges are being incurred on account of storage and the like. It may be best if Ms Lima were to discuss the position with Ms Laracy to see whether the position can be resolved by agreement. If not, an interim application to the High Court may be necessary.
[23] Ms Lima is now entitled, following remission of the matter back to the High Court, to have the Court determine whether she has any encumbrance over the confiscated vehicle and whether the vehicle should be sold or transferred to her.[12] It is possible that she may wish to file further affidavit evidence in support of her contention that she held an encumbrance over the vehicle.
[24] Once the rehearing has taken place, the Court will then be in a position to make any appropriate orders regarding the vehicle and, if it is to be sold, how the proceeds of sale should be accounted for under s 141B of the Sentencing Act.

Result

[25] The appeal is allowed. The application by the appellant under s 141 of the Sentencing Act is remitted to the High Court for rehearing. There will be no order as to costs.

Solicitors:
Crown Law Office, Wellington for Respondent

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[1] R v Kiriona HC Palmerston North CRI-2008-054-1871, 15 June 2010.
[2] R v Kiriona HC Palmerston North CRI-2008-054-1871, 19 February 2010.

[3] Prior to sentencing Clifford J had held a disputed facts hearing addressing, among other things, the basis upon which the Crown sought forfeiture of the Chevrolet van: see R v Kiriona HC Palmerston North CRI-2008-054-1871, 15 June 2010 at [3].

[4] In her affidavit of 2 June 2010 Ms Lima stated that she wished to amend her application to refer to a suggestion by the Crown that it ought to have been brought under the relevant sections (those pertaining to “Confiscation of motor vehicles”) of the Sentencing Act.
[5] Minute of Mallon J, 11 May 2010 at [5].
[6] See s 78(2)(c)(i) of the Criminal Proceeds (Recovery) Act 2009.

[7] See Mafart v Television New Zealand Ltd [2006] NZSC 33, [2006] 3 NZLR 18 at [11]; see also Fairfax New Zealand Ltd v C [2008] NZCA 39, [2008] 2 NZLR 368.
[8] Ibid.
[9] Ibid at [31]; see also Fairfax New Zealand Ltd v C at [33].
[10] Ibid at [30].

[11] Citing Government of the United States of America v Montgomery [2001] UKHL 3, [2001] 1 WLR 196.
[12] Pursuant to the definition of “encumbrance” in s 127 of the Sentencing Act.