Crown Solicitor at Invercargill v Lang [2012] NZHC 2584 (5 October 2012)

Last Updated: 13 October 2012

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2012-425-000028 [2012] NZHC 2584

IN THE MATTER OF an application pursuant to the Criminal

Proceeds (Recovery) Act 2009

BETWEEN THE CROWN SOLICITOR AT INVERCARGILL

Applicant

AND BARRY ALAN RICHARD LANG Respondent

Hearing: 4 October (On the Papers) (Heard at Christchurch)

Appearances: S N McKenzie for Applicant

Judgment: 5 October 2012

_{JUDGMENT OF FOGARTY J}

Solicitors:

Preston Russell Law, Crown Solicitors, PO Box 355, Invercargill. (DX YA 90011)

THE CROWN SOLICITOR AT INVERCARGILL V LANG HC INV CIV-2012-425-000028 [5 October 2012]

[1] This is an ex parte application by the Crown Solicitor in Invercargill on a

Without Notice Application for an order to preserve property.

[2] The respondent has been charged indictably with cultivation of cannabis. On

24 August 2012, a search of the residential property by the police found that it was being used for the cultivation, drying, packaging and storage of the sale of cannabis. On that basis it is clearly property that may be the subject of an application under the Criminal Proceeds (Recovery) Act 2009 (“the Act”).

[3] The reason for the ex parte application is that the applicant has become aware that the property is for sale and the auction date is listed for Wednesday 24 October

2012. It is, of course, possible that the property could be sold in the meantime.

[4] There was a case for this application none-the-less to be served on the respondent as the sale process indicates that it is highly unlikely that he would enter into an agreement for sale of property in the next 24 hours or so. Nonetheless I proceed on the basis of an application without notice.

[5] The application seeks two orders:

(a) That the property not be disposed of or dealt with other than is provided for in the restraining order; and

(b) Is to be in the Official Assignee’s custody and control.

[6] The application is made in reliance on ss 22 and 26 of the Act. Section 26(1)

of the Act provides:

26 Making restraining order relating to instrument of crime

(1) A court hearing an application for a restraining order relating to an instrument of crime may, if either of the circumstances in paragraph (a) or (b) of subsection (2) exist, make an order that the property it specifies in the order (“restrained property”)—

(a) is not to be disposed of, or dealt with, other than is provided for in the restraining order; and

(b) is to be under the Official Assignee's custody and control.

[7] That is a discretionary power conferred on the High Court. The Criminal Proceeds (Recovery) Regulations 2009 r 4(3) provide that a restraining order should be made in Form 5. Ms McKenzie seeks both (a) and (b). She submits they always go together because of the word “and”. She also relies on Form 5 for the proposition that an order that the High Court makes must be made in accordance with s 26, in other words, two orders.

[8] The respondent having pleaded guilty, has not been remanded in custody. He is remanded on bail. He is in possession of the house. From time to time his eight- year old son also lives with him. It is far from certain at this stage whether he will be given a custodial sentence. He has not been heard in the making of this application.

[9] As I have indicated this application was prompted by notice that the property is being marketed for sale. The property can be secured from being sold to a third party by the making of the first order (a), without the need for (b). That order can be registered against the Title on the application of the Crown Solicitor by reason of s 27(2) of the Act which provides:

27 Registration of restraining orders on registers

(2) If this subsection applies, any authority responsible for administering an enactment of the kind referred to in subsection (1) must, if requested to do so by the applicant for the restraining order, record on the register the particulars of the restraining order.

[10] I anticipate that the Crown Solicitor will make that application to the Land

Information New Zealand Registrar.

[11] Section 26 can be read as one power to make two orders which must be made together. But this application is ex parte. It is for interim relief. It is not a final order. It is a precautionary step to preserve the property for the hearing of the issue as to whether it should be acquired by the Crown. In such situations the common law principles require the restraint to be so far as needed, no more. This section is

enacted into a common law legal section. The word “and” in context is ambiguous.

The ambiguity should be resolved to be consistent with common law principle.

[12] This order is made on an interim basis. The question of whether or not there should be a final order and any supplementary orders will be heard by a High Court Judge after the sentencing in the District Court, which is set down for 15 November. When that sentencing is complete the application for a permanent restraining order and any further applications under the Act will be heard on notice to the respondent following the High Court procedure.

[13] In the meantime the following orders are made:

(a) There is an order that the land and the building at 33 Holloway Street, Invercargill, excluding the registered mortgage to Westpac New Zealand secured by Mortgage Instrument No. 8548649.2 having the legal description of being Lot 27 Deposited Plan 5596, Computer Freehold Register Identifier of SL220\89 (Southland Land Registration District) be not disposed of, or dealt with, until further order of this Court.

(b) The respondent has leave to apply to this Court to cancel or vary this order. That leave includes to apply for an order allowing the auction to proceed, with appropriate safeguards as to the proceeds of sale.

[14] The costs of the application are reserved.

[15] In the interests of clarity this order leaves the respondent in possession of the

property, the property is not in the Official Assignee’s custody and control.