R v King [2012] NZHC 3296 (6 December 2012)

Last Updated: 10 January 2013

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2011-004-0017585 [2012] NZHC 3296

THE QUEEN

Applicant

v

DEREK LESTER KING

Respondent

Hearing: 29 November 2012

Counsel: J Jelas for Crown

N Wintour for Accused

Judgment: 6 December 2012

JUDGMENT OF TOOGOOD J [APPLICATION FOR FORFEITURE]

This judgment was delivered by me on 6 December 2012 at 5:30 pm

Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:

J Jelas, Meredith Connell, Auckland: [e-mail]

N Wintour, Barrister, Auckland: [e-mail]

R V KING HC AK CRI-2011-004-0017585 [6 December 2012]

Introduction

[1] On 22 August 2012, following trial by jury, Derek Lester King was convicted of nine counts of receiving commercial sexual services from a person under

18 years; three counts of having sexual connection with a person aged 12 to 16 years; three counts of supplying the Class C controlled drug cannabis to a person under 18 years; and one count of encouraging a person under 18 to provide commercial sexual services. The following day, Mr King also pleaded guilty to two historic counts of indecent assault on a young woman in 1985. He is due to appear for sentence on 12 December 2012.

[2] The nature and the span of the offending over several decades, and the offender’s previous history of convictions for offences of a similar nature, led to Mr King being notified that the Court would consider preventive detention as an appropriate sentence. Psychiatric and psychological reports have been prepared accordingly.

[3] In the meantime, the Crown has applied under s 142B Sentencing Act 2002 for an instrument forfeiture order in respect of Mr King’s residential property in central Auckland, on the basis that it was used to commit or facilitate the offending.

[4] Whether a forfeiture order should be made in this case is a decision which will be influenced by my conclusion as to whether Mr King should be sentenced to preventive detention or a finite term of imprisonment. I will not be in a position to make that determination until after I have heard counsel’s submissions as to sentence.

[5] For reasons which are developed below, however, I indicated to counsel that, after considering their submissions on the forfeiture application, I would issue a judgment explaining my views on the appropriateness of making a forfeiture order. I said that, in the event that I determined that an order might be made, I would also give my views on the implications of forfeiture for the alternative available sentences of preventive detention and imprisonment for a finite term.

[6] Instrument forfeiture orders are provided for by sub-part 5 of Part 2 of the Sentencing Act 2002 (“the Act”). They are part of the sentencing process and can be made in relation to any offence punishable by a maximum term of imprisonment of five years or more.1 The making of an order requires the Court to be satisfied that the property to be forfeited is an “instrument of crime”, which is defined as “property used (wholly or in part) to commit, or to facilitate the commission of, a qualifying instrument forfeiture offence”.2

[7] It is common ground that s 142N provides a discretion as to whether an instrument forfeiture order should be made in any case where the grounds for such an order exist. When considering whether to make an order for the forfeiture of an instrument of crime, the Court may have regard to the factors set out in s 142N of the Act. Those which are relevant to this case are:

(a) the use that is ordinarily made, or was intended to be made, of the instrument of crime;

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

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

(d) any other matter relating to the nature and circumstances of the qualifying instrument forfeiture offence or the offender, including the gravity of the qualifying instrument forfeiture offence.

[8] Even where the property has been used only in part to commit a crime, the entire property is an instrument of crime and may be subject to forfeiture.3 It is open

1 _{Sentencing Act 2002, s 4.}

2 _Ibid.

3 Elliott v R [2011] NZCA 386, [2011] 3 NZLR 811 at [38].

to the Court to make an order for partial forfeiture4 which, in the present case, would involve sale of the property and a division of the proceeds, some of which might be returned to the offender.

[9] If an instrument forfeiture order is made, the Court must take that order into account in sentencing the offender.5 Although the extent to which an instrument forfeiture order mitigates any sentence imposed is a matter of discretion, it is logical that, generally, the greater the loss suffered by an offender by reason of the forfeiture, the greater the discount on sentence ought to be.6

[10] Since the making of a forfeiture order forms an integral part of the sentencing process, the discretion whether to make an order and, if so, as to what amount, should be exercised in light of the general purposes and principles of sentencing set out in the Act and relevant case law.

The procedure which has been followed

[11] The requisite steps for the making of an instrument forfeiture order have been taken in this case. On 2 October 2012, the Crown filed and served a notice requesting the Court to consider making an instrument forfeiture order under s 142B of the Act in respect of Mr King’s property in Auckland City.

[12] By Minute dated 15 October 2012, I directed the Crown to take the steps prescribed in ss 142E and 142F of the Act which require the prosecutor to take steps to notify persons other than the offender who may have an interest in the property in question that an instrument forfeiture order is under consideration, and to provide the Court with additional information concerning the value of the property, the extent of the offender’s interest in the property, and other relevant matters. Those steps have been taken. The mortgagee of the property has not applied for relief from forfeiture but, in the event of an order, any secured indebtedness of Mr King to third parties

_{will be recognised.}

4 _{Elliott, at [41].}

5 _{Sentencing Act 2002, s 10B.}

6 R v Sharp HC Tauranga CRI-2010-063-4641, 22 July 2011.

[14] In conference with counsel, I directed that a separate hearing of the Crown’s notice to consider forfeiture should be conducted, following the exchange of written submissions. However, to then issue a judgment containing a final determination on the making of a forfeiture order would be likely to require pre-determination of the appropriate sentence to be imposed. I told counsel, therefore, that I would issue a judgment indicating whether I considered the making of an instrument forfeiture order to be likely and, if so, suggesting what effect any such order might have on the range of sentences which might be imposed upon Mr King for his offending.

[15] Holding a discrete hearing in this way may not be necessary in the ordinary run of cases where an instrument forfeiture order is sought. Where a sentence of imprisonment for a finite term or any non-custodial sentence is in contemplation, counsel should be able in many cases to address their arguments in support of or in opposition to the making of any forfeiture order at the same time as they make submissions as to sentence. I perceived, however, and counsel recognised, that particular issues will arise in any case where preventive detention is seriously contemplated, and the Court is invited to consider making an instrument forfeiture order. There is an inherent difficulty in modifying a sentence of preventive detention in a manner which suitably recognises, by some reduction, the punitive elements of forfeiture.

Factual background

[16] Mr King’s property comprises part of a small enclave of older residential properties located at the edge of a reserve in a somewhat secluded location which is nevertheless readily accessible to persons in the Auckland CBD. The dwelling is situated on leasehold land, the fee simple title being owned by a Maori Trust. For rating purposes, it was valued in July 2011 as having a land value of $470,000 with the improvements being valued at $55,000. There is no evidence of the current market value before the Court. I indicated to counsel that, if necessary, I would seek an independent valuation of Mr King’s interest in the property. His

interest is currently secured by mortgages totalling approximately $90,000 and there is a caveat on the title as security for legal aid costs totalling in excess of $28,000. Mr King is 66 years old and does not enjoy good health. He is not working and currently receives some form of benefit of around $140 a week.

[17] I am satisfied from the evidence that I heard at trial, and from the information contained in the psychiatric and psychological reports received for sentencing purposes, that Mr King has operated what became, in effect, a night shelter for homeless street kids over a period of several decades. The address appears to have been well known to streetwise girls and young women, many of whom were addicted to drugs and engaged in prostitution. Not only did Mr King understand the notoriety of his residence, he encouraged it by modifying the property to provide a sleeping area to the rear and in the basement; by providing mattresses and pillows for use in that area; and by leaving a key in a hiding place known to many so that they could freely come and go from that part of the property. Moreover, in recent years Mr King was assisted by a young woman with whom he had a close association to encourage girls and young women to visit him and stay on the property. He made them welcome by giving them food and money, as well as shelter, and kept a supply of female clothing and cosmetics on hand. As evidence of the identification which the visitors had with the property as a place in which they could feel at home and to which they could return frequently, the walls of several rooms were covered with tags or identifying marks and slogans from scores of visitors.

[18] When he gave evidence at his trial, Mr King described the setting up of this facility in terms which suggested that he saw himself as providing a social service in conjunction with the Police and welfare authorities. While he characterised the property as having been turned into “a safe place” for these young women, I am satisfied that the provision of food, shelter and money at his specifically modified residence was designed to provide him with a regular source of supply of vulnerable girls and young women whom he could exploit for his own sexual gratification. Witnesses who had stayed at Mr King’s home, and those who had visited on several occasions, gave evidence that he was rarely if ever seen wearing anything other than a dressing gown. I was left with the firm impression that the residence itself was far

more instrumental in the offending than in most cases where sexual offending occurs in the home.

[19] It was not disputed by Ms Jelas on behalf of the Crown that, had the residence merely been the venue for the offending, it might not have been regarded as an instrument of crime. But I have no doubt that the Crown is correct in arguing that the way in which the property was modified and equipped by Mr King, and the manner in which he used it, were intended to facilitate his sexual misconduct with the complainants and others, squarely bringing the property within the definition in s 4 of the Act. Mr Wintour has not argued otherwise. Prima facie, therefore, the case is one in which an instrument forfeiture order would be justified.

The submissions for the Crown

[20] This is not a case in which a forfeiture order is sought on the basis that the property in question amounts to the proceeds of crime. Submitting that the primary purpose of forfeiture in the present case would be deterrence,7 Ms Jelas also argued that an element of community protection would be involved in the making of a forfeiture order, given the integral involvement of the premises in the current offending.

[21] The Crown’s position is that if a finite term of imprisonment were to be imposed on Mr King, an order requiring him to forfeit the full extent of his net interest or equity in the property would be appropriate, with a suitable reduction being made to the term of imprisonment ultimately imposed. If preventive detention is ordered, however, the Crown’s submission is that forfeiture of something in the order of 10 to 15 percent of the offender’s net interest would be appropriate.

[22] While the latter course might provide Mr King with a cash sum, I could not say in the absence of valuation evidence whether that would be sufficient to enable

_{him to purchase another property upon release from imprisonment.}

7 R v Brazendale HC Auckland CRI-2009-092-17133, 20 August 2010 at [20]; aff ’d [2011] NZCA

494, [2011] NZCA 494; (2011) 25 CRNZ 580 at [39].

Discussion

[23] It is important to consider the issue of forfeiture in the context of the Court’s overall approach to the sentencing of the offender, as is recognised by s 10B(1) of the Act.8

[24] The predominant sentencing purposes relevant to this case are:

(a) holding Mr King accountable for the harm done to his victims and the community by his offending;

(b) promoting in him a sense of responsibility for and an acknowledgment of that harm;

(c) denouncing his conduct;

(d) deterring him and others from committing the same or similar offences;

(e) providing community protection from him; and

(f) assisting in his rehabilitation and reintegration.9

[25] I accept that it is arguable that forfeiture of the property would reduce the prospect that, upon his eventual release from what inevitably will be a lengthy term of imprisonment, Mr King might return to his former lifestyle and continue to promote his property as a safe haven for vulnerable girls and young women.

[26] However, I am not persuaded that there is any significant community protection benefit in ordering forfeiture of Mr King’s residence. While I acknowledge that the property has certain advantages in terms of its central location

_{and relative seclusion if Mr King was minded to reoffend in the future, there would}

8 _{Macpherson v R [2012] NZCA 552 at [58].}

9 Sentencing Act, s 7(1).

be no real impediment to the offender setting up a similar facility for young victims in a rental property elsewhere in the central city.

[27] The predominant purposes for forfeiture in this case, therefore, would be to punish the offender and, particularly, to deter him and others from further offending. In those circumstances I need to consider whether imposing a forfeiture order for those purposes would assist in meeting the sentencing purposes which are particularly applicable to this case.

[28] It would not be right, at this stage of the sentencing process, to express any firm views about the appropriateness of preventive detention instead of a finite term of imprisonment. However, I have received a pre-sentence report from the Probation Service, a psychologist’s report, a psychiatrist’s report, and four victim impact statements. Having presided over the trial I have a good knowledge of the circumstances of Mr King’s offending. I am able, therefore, to give an informed indication of the likely sentencing approach I will take, subject to hearing further submissions from counsel.

Is a lengthy finite term of imprisonment a possibility?

[29] Taking the convictions under s 134(1) of the Crimes Act 1961, for which the offender is liable to a maximum of 10 years’ imprisonment on each charge as the lead offending, I would apply the following considerations to determining a likely sentencing starting point relative to the circumstances of the offending:

(a) The close relationship between all offences would justify the imposition of concurrent terms of imprisonment.

(b) The victims were particularly vulnerable to exploitation, the youngest of them being only 14 years old, and all of them lacking parental care and control.

(c) An initial starting point of five to seven years’ imprisonment would reflect the position of the offending in the mid to upper range of offending of this type.

(d) Separate uplifts to that starting point would be necessary to adequately reflect the charges related to the supply of cannabis and the charges involving encouraging or inducing the complainants to provide commercial sexual services. The number of prostitution charges and the number of victims, against a background of offending obviously having taken place over of number of years, suggests that an uplift of at least two years could be applied to the original starting point on account of that offending. A further one year’s uplift would be justified to reflect the drug offending.

[30] This would result in a global starting point, reflecting the totality of the

offending, of eight to 10 years’ imprisonment.

[31] In the present case, there are few if any mitigating personal factors, Mr King having expressed little or no remorse for his offending. It is only in the context of his affidavit in relation to the forfeiture application that he has professed any insight into the risks of reoffending which he presents. I am mindful of the offender’s age and state of health. While keeping an open mind as to what submissions Mr Wintour may make about the significance of those factors, I do not think either of them would be likely to result in a substantial discount.

[32] An aggravating personal factor is that in April 2002 Mr King was sentenced to imprisonment for two-and-a-half years on three counts of having sexual intercourse with girls aged between 12 and 16 years. That sentence appears to have had no inhibiting effect on his behaviour; all but three of the 18 charges for which he is now to be sentenced were committed after his release. While being mindful that it would not be appropriate to impose a further sentence for earlier offending, the reoffending indicates that Mr King presents a greater risk to the community than a person having no previous convictions. The need for deterrence and protection of

the community suggests, in such circumstances, that a further uplift of two years’

imprisonment on account of personal factors would arguably be appropriate.

[33] This means that the available range for the imposition of a finite sentence might be in the region of 10-12 years’ imprisonment. The circumstances of the offending and the offender in this case might also justify the imposition of a minimum period of imprisonment under s 86 of the Act.

Is preventive detention an available sentence in this case?

[34] The sentencing principles applicable to this case also require consideration of whether the purpose of community protection requires a sentence of preventive detention under s 87(3) of the Act, on the ground that Mr King poses a significant and ongoing risk to the safety of members of the community. The outcome of that consideration will depend on whether the Court can be satisfied that a finite term of imprisonment, coupled with a minimum period of imprisonment, would be sufficient to provide adequate protection. Whether that is so will turn on whether I conclude that Mr King represents a significant and ongoing risk of reoffending after his release.

[35] While it would be wrong to come to a view on that matter at this point, it is sufficient to say that the psychiatrist and the psychologist who have reported to the Court on this issue agree that Mr King has a high motivation to re-offend. This is related to a sustained pattern of strong deviant sexual attraction to young teenagers which does not appear to have reduced with age. He lacks insight into his offending, and lacks remorse and empathy for his victims. He is placed, therefore, in a medium to high risk category for future offending. Although Mr King was ordered to undertake a sex offender’s rehabilitation programme upon his last release from imprisonment, he failed to complete that course satisfactorily.

[36] There is a real possibility, therefore, that I will be driven to the conclusion that Mr King should be imprisoned indefinitely so that the question of his release back into the community will be a matter to be determined by the Parole Board on the basis of how Mr King responds to treatment while in prison. The protection of

the community and Mr King’s ultimate rehabilitation, therefore, assume primary

significance in determining the appropriate sentence to be imposed.

Conclusion as to forfeiture

[37] It is difficult to see, therefore, how the making of an instrument forfeiture order would assist to achieve these sentencing purposes. The only way in which the making of a forfeiture order could be adequately recognised, so as to avoid punishing Mr King more severely than another offender merely because he owns a substantial asset which is available for forfeiture, would be to reduce the length of any finite sentence of imprisonment that was imposed. It is difficult to see how forfeiture could be accommodated if a sentence of preventive detention was imposed, except possibly by reduction in the length of the minimum period of imprisonment which would be required to be imposed under s 89(1) of the Act.

[38] In either case, the reduction of the imprisonment period would undermine the purpose for imposing the lengthy sentence of imprisonment in the first place, namely protection of the community and rehabilitation.

[39] Bearing in mind, therefore, that Mr King faces either a lengthy finite term of imprisonment or preventive detention, an instrument forfeiture order would not be appropriate. Counsel should approach their submissions on sentencing on the basis that no forfeiture order will be made.

.......................................

Toogood J