Solicitor-General v Brown HC Auckland CIV-2008-404-006760 [2011] NZHC 838 (20 June 2011)

Last Updated: 11 August 2011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV-2008-404-006760}

IN THE MATTER OF an application under the Proceeds of Crime

Act 1991

BETWEEN THE SOLICITOR-GENERAL OF NEW ZEALAND

Applicant

AND RONALD TERENCE BROWN Respondent

Hearing: 20 June 2011

Appearances: R Burns for the Applicant

D Reece for the Respondent

Judgment: 20 June 2011

JUDGMENT (NO 1) OF WOOLFORD J (As to forfeiture)

Solicitors/Counsel:

Meredith Connell, DX CP24063, Auckland.

David Reece, Barrister, PO Box 4208, Auckland 1140

THE SOLICITOR-GENERAL V BROWN HC AK CIV-2008-404-006760 20 June 2011

[1] By notice of application for forfeiture orders and/or pecuniary penalty orders dated 2 February 2011, the Crown seeks orders that the following property, which is currently restrained by order of this Court, shall vest absolutely in the Crown:

(a) Motor vehicles:

(i) 2003 BMW M3 CSL Coupe, registration CQU342, registered to Rona Teresa Brown;

(ii) 2007 BMW M3, registration EER640, registered to Raymond

William Brown;

(iii) 2006 Volkswagen Golf R32, registration DHB591, registered to Raymond Brown;

(iv) 2007 Porsche 911 GT Coupe, registration EBM55, registered to Kellie Sheree Simanu;

(v) 2006 Volkswagen Passat SW, registration EMM993, registered to Chamo Limited; and

(vi) 2004 Mini Cooper S Hatchback, registration EDB137, registered to Raymond Brown.

(b) Cash sums:

(i) seized by New Zealand Customs Service on 5 June 2008, NZ$122,400, €37,795 and US$99,200 (when converted, NZ$320,948.15 in total) from the luggage of Martynas Cikas and Donatas Jukna as they left New Zealand; and

(ii) seized by police on 12 August 2008:

1. NZ$295,040 from ASB Vault Safe Deposit Box 3642, situated on the corner of Albert Street and Customs Street, Auckland;

2. NZ$59,895 from a safe at the Pull Bar & Lounge, 214

Karangahape Road, Newton;

3. NZ$8,535, €100,000 and 10 Swiss Francs (when converted, NZ$204,972.18 in total) from Povilas Grigaliunas at Room 502, New President Best Western Hotel, Victoria Street, Auckland;

4. NZ$5,385, €1,020 and 50 Swiss Francs (when converted, NZ$7,449.08 in total) from 5 Rawene Avenue, Westmere, Auckland.

5. NZ$10,000.00 from the 2006 Volkswagen Passat, registration EMM993.

(c) Land and buildings at 5 Rawene Avenue, Westmere, Auckland described by Certificate of Title No 378/181, Lot 52 Deposited Plan

10231, the registered proprietors of which are the respondent and Raymond Brown, excluding the interest of ANZ National Bank Limited secured by Mortgage Instrument 7361119.2 dated 17 May

2007.

(d) Items of jewellery:

(i) seized by police on 12 August 2008 from the Pull Bar & Lounge, 214 Karangahape Road, Newton, Auckland.

1. Rado wristwatch, valued at $3,450; and

2. Longines wristwatch, valued at $1,650; and

(ii) seized by police on 12 August 2008 from 5 Rawene Avenue, Westmere, Auckland:

1. Chopard wristwatch, valued at $24,000;

2. Technos wristwatch, valued at $650;

3. Neckchain 43.14 grams, valued at $4,400;

4. Neckchain 114.18 grams, valued at $12,500; and

5. Neckchain 103.18 grams, valued at $11,450.

[2] The grounds on which the orders are sought are that the respondent was convicted on 20 October 2010 of a number of serious drug offences and that the property is tainted property in respect of the offences and, further or alternatively, that the respondent derived a benefit of at least $4.5m from the commission of the offences.

[3] The Crown has had discussions with counsel for the respondent and for his brother, Mr Raymond Brown. As a result of those discussions the Crown proposes that:

(a) Before confiscation is ordered there is to be paid from restrained funds the reasonable legal expenses of the respondent and his brother, Raymond Brown, and a debt owed to the Ministry of Social Development by the respondent in the sum of $19,835.60.

(b) The motor vehicles, cash sums and items of jewellery be forfeited under s 15(1) Proceeds of Crime Act 1991 as tainted property.

(c) The Court make a pecuniary penalty order against the respondent under s 25 of the Act assessing the value of his benefit to be $4.5m less the value of the property forfeited to the Crown.

(d) The Court make an order declaring that the respondent’s half share in

5 Rawene Avenue, Westmere, be available to meet the pecuniary penalty order.

(e) The Court make an order that the Official Assignee sell the property at

5 Rawene Avenue, Westmere, in partial satisfaction of the pecuniary penalty order, subject to a condition that the Brown family be given the right to purchase the respondent’s half-share in the property by paying it to the Official Assignee.

(f) The Court make an order that the Official Assignee pay the Crown an amount equal to the proceeds of sale of the respondent’s share in the property less any liabilities under the mortgage raised against the property.

[4] The respondent agrees that it is appropriate to make the orders sought by the Crown as set out in paras [3] (a) to (c) above. However, he submits that 5 Rawene Avenue, Westmere, should not be sold to satisfy any pecuniary penalty order for the following reasons:

(a) The property was left to the respondent and his brother as tenants in common by their mother when she died. The respondent’s brother, Mr Raymond Brown, believes that it is important that the property stay in family hands for the benefit of generations to come and, in particular, the respondent’s severely disabled son Peter.

(b) Mr Raymond Brown feels that his half-share in the land and house is far more valuable to him than a half-share of the cash obtained from the sale of the property.

(c) The respondent is now mildly disabled having suffered two strokes and will require a stable living environment which the property will provide to the respondent when he is released from prison.

[5] The family have indicated that there is a possibility that a sum could be raised to pay a pecuniary penalty order, but that the figure arrived at would be less than

$490,000 which is said to be a half-share of the property.

[6] Today, counsel for both the applicant and the respondent seek an adjournment on the basis that there is insufficient evidence before the Court to enable it to properly consider exercising its discretion to order the payment of a pecuniary penalty order which is less than the respondent’s half-share in the property at

5 Rawene Avenue, Westmere. I agree.

[7] However, because there is no dispute that the motor vehicles, cash sums and items of jewellery are properly to be forfeited to the Crown. I therefore make the following orders.

[8] The following property is forfeited to and shall vest absolutely in the Crown pursuant to s 15 Proceeds of Crime Act 1991.

(a) Motor vehicles:

(i) 2003 BMW M3 CSL Coupe, registration CQU342, registered to Rona Teresa Brown;

(ii) 2007 BMW M3, registration EER640, registered to Raymond

William Brown;

(iii) 2006 Volkswagen Golf R32, registration DHB591, registered to Raymond Brown;

(iv) 2007 Porsche 911 GT Coupe, registration EBM55, registered to Kellie Sheree Simanu;

(v) 2006 Volkswagen Passat SW, registration EMM993, registered to Chamo Limited; and

(vi) 2004 Mini Cooper S Hatchback, registration EDB137, registered to Raymond Brown.

(b) Cash sums:

(i) Seized by New Zealand Customs Service on 5 June 2008, NZ$122,400, €37,795 and US$99,200 (when converted, NZ$320,948.15 in total).

(ii) Seized by police on 12 August 2008:

1. NZ$295,040 from ASB Vault Safe Deposit Box 3642, situated on the corner of Albert Street and Customs Street, Auckland;

2. NZ$59,895 from a safe at the Pull Bar & Lounge, 214

Karangahape Road, Newton;

3. NZ$8,535, €100,000 and 10 Swiss Francs (when converted, NZ$204,972.18 in total) from Povilas Grigaliunas at Room 502, New President Best Western Hotel, Victoria Street, Auckland;

4. NZ$5,385, €1,020 and 50 Swiss Francs (when converted, NZ$7,449.08 in total) from 5 Rawene Avenue, Westmere, Auckland.

5. NZ$10,000.00 from the 2006 Volkswagen Passat, registration EMM993.

(c) Items of jewellery:

(i) seized by police on 12 August 2008 from the Pull Bar & Lounge, 214 Karangahape Road, Newton, Auckland.

1. Rado wristwatch, valued at $3,450; and

2. Longines wristwatch, valued at $1,650; and

(ii) Seized by police on 12 August 2008 from 5 Rawene Avenue, Westmere, Auckland:

1. Chopard wristwatch, valued at $24,000;

2. Technos wristwatch, valued at $650;

3. Neckchain 43.14 grams, valued at $4,400;

4. Neckchain 114.18 grams, valued at $12,500; and

5. Neckchain 103.18 grams, valued at $11,450.

[9] In respect of the balance of the Crown’s application, in particular the matter of a pecuniary penalty order, the application is adjourned for one month until

9:00 am on 2 August 2011 before me. At that stage I envisage that I will hear argument on the amount of the pecuniary penalty order to be awarded against the respondent. In that regard, I would be grateful if the respondent’s counsel would provide updated information to the Court about the circumstances which the respondent submits warrants an award of less than the respondent’s half-share in the property and, in particular, the current situation and requirements of the respondent’s severely disabled son. In addition, I would be grateful if Crown counsel would obtain an up-to-date valuation of the property together with information about the

_{rates and mortgage liabilities in respect of the property.}

Woolford J