Commissioner of Police v Tamatea [2014] NZHC 130 (13 February 2014)

Last Updated: 12 April 2014

IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY

CIV-2012-416-000184 [2014] NZHC 130

IN THE MATTER of an application pursuant to the Criminal

Proceeds (Recovery) Act 2009

BETWEEN THE COMMISSIONER OF POLICE Applicant

AND WILLIAM RODGER JUNIOR HARONGA TAMATEA

Third Respondent

Hearing: 3 February 2014

Appearances: J D Lucas for Applicant

D J Sharp for Third Respondent

Judgment: 13 February 2014

_{JUDGMENT OF VENNING J}

This judgment was delivered by me on 13 February 2014 at 3.00 pm, pursuant to Rule 11.5 of the

High Court Rules.

Registrar/Deputy Registrar

Date...............

Solicitors: Crown Solicitor, Napier

Burnard Bull & Co, Gisborne

THE COMMISSIONER OF POLICE v TAMATEA [2014] NZHC 130 [13 February 2014]

Introduction

[1] The Commissioner of Police (Commissioner) applies for asset forfeiture orders over:

(a) 2007 Harley Davidson soft-tail motorcycle, registration A3FHT; (b) 2000 Jaguar S-type saloon, registration EJN957; and

(c) 1948 Ford hot rod, registration OUR48.

[2] All three vehicles are registered in the name of Mr Tamatea.

[3] The Commissioner seeks an order forfeiting the vehicles on the grounds they are tainted property purchased by Alan Taiapa (the first respondent) using money derived from methamphetamine dealing. The first respondent was convicted and sentenced to seven years and three months’ imprisonment in June 2012 for his drug offending.

[4] Mr Tamatea opposes the application for forfeiture on the grounds that he, rather than the first respondent, is the owner of the vehicles.

Brief background

[5] The first respondent was arrested on 15 December 2011 and charged with possession of methamphetamine for supply, supplying methamphetamine, participation in an organised criminal group and related offending.

[6] Following the first respondent’s arrest the police seized a number of vehicles from three separate addresses in Gisborne. At 42 Huxley Road they seized three Harley Davidson motor cycles (none of which are the one in issue), a Toyota Hilux and the 1948 Ford hot rod. The police also seized $3,360 stored at the address in the double garage containing the hot rod.

[7] From the first respondent’s home at 2 Currie Place, the police seized the

Harley Davidson motor cycle referred to in [1] above, a Mitsubishi Pajero, a Nissan

van and a Bedford house bus. The police also found small amounts of cash at the property.

[8] Finally, the police seized the Jaguar car from 35 Dalton Street. At the time of the seizure the police found in the Jaguar two firearms as well as a safe containing two ounces of methamphetamine and in excess of $35,000 in cash.

[9] The first respondent pleaded guilty and was sentenced to imprisonment in June 2012. The Commissioner then applied for asset forfeiture orders over the various vehicles and cash.

[10] The only party to maintain any opposition to the application was Mr Tamatea.

[11] On 1 October 2013 the High Court at Gisborne granted asset forfeiture orders over the vehicles and cash seized except for the three vehicles which Mr Tamatea claimed belonged to him. In granting the orders Kós J concluded:¹

[10] I must be satisfied on the balance of probabilities that the unopposed property is “tainted property”, as defined in s 2 of the Criminal Proceeds (Recovery) Act 2009. In short it must be property acquired wholly or in [part] as a result of significant criminal activity or directly or indirectly derived from significant criminal activity.

...

[12] On the evidence filed it appears that all the unopposed property has been derived from [the first respondent’s] methamphetamine dealing. He had minimal legitimate income but acquired vehicles worth over $130,000 over six years. Various witnesses describe a person matching him as the purchaser of the vehicles. Some of the vehicles were found with methamphetamine and cash in them.

Jurisdiction for the orders and relief sought

[12] The Commissioner’s application relies on s 50(1) of the Criminal Proceeds (Recovery) Act 2009 (the Act), namely that the three vehicles are tainted property in that they were acquired by the first respondent as a result of significant criminal activity or were directly or indirectly derived from such activity. The drug dealing the first respondent was convicted of is such significant criminal activity.

[13] Mr Tamatea seeks relief from the order sought by the Commissioner on the basis that he has an interest in the vehicles in that he owns them.

The issue

[14] The single issue for the Court on this application for relief is whether the vehicles in question belong to the first respondent or Mr Tamatea.

[15] If the finding is that the first respondent owns the vehicles then, like Kós J, I am satisfied there is no basis upon which the first respondent could lawfully have purchased the vehicles and they would therefore be tainted property. If, on the other hand, Mr Tamatea paid for the vehicles and owns them then they were clearly not acquired from the proceeds of the first respondent’s drug dealing. There is no evidence before the Court to suggest that Mr Tamatea has in any way unlawfully benefited from the significant criminal activity of the first respondent, so that is not

in issue.²

Onus

[16] Although an applicant for relief normally carries the burden of proof, in the circumstances of the present case counsel proceeded on the basis that it was for the Commissioner to establish on the balance of probabilities that Mr Tamatea did not own the vehicles and that the vehicles belonged to the first respondent.

Evidence

[17] The evidence for the Commissioner was provided by Detective Rolley. He swore two affidavits, an initial affidavit to support the application and then a further affidavit filed on 3 December 2012. Mr Tamatea has filed his own affidavit and an affidavit of Ms Wilson, both dated 17 December 2013. Detective Rolley has sworn a further affidavit in reply. All three were called for cross-examination. I have had the advantage of seeing and assessing all three as they gave their evidence.

Discussion

[18] The following emerges from the evidence before the Court in affidavit form and given orally.

[19] Of the 11 vehicles seized following the arrest of the first respondent (including the three which Mr Tamatea claims to own), some were registered in the first respondent’s name and some in the name of other people, including Mr Tamatea’s.

[20] The first respondent had insufficient legitimate income to have allowed him to have purchased the vehicles.

[21] The vehicles registered in Mr Tamatea’s name were registered on the following dates:

the Harley Davidson 8 January 2011 the hot rod 16 March 2011 the Jaguar 04 August 2011.

[22] Mr Tamatea does not hold a motor cycle licence.

[23] The vendor of the Harley Davidson said he was approached by a male called “Alan” who was interested in buying the bike. The vendor described the purchaser as having tattoos on his forehead consistent with the appearance of the first respondent. He says he was paid $21,000 cash, made up of $20, $50 and $100 notes. When spoken to by the police on 25 January 2012, Mr Tamatea says he only paid

$10,000 for the Harley Davidson and changed the ownership straight away.

[24] The previous owner of the hot rod said he sold it for $35,000 cash to a group of three males, two of whom were Maori in about August 2010. His description of the tattoo on one of the males is consistent with the tattoo on the first respondent’s forehead. Mr Tamatea told the police officer who spoke to him he bought it from a photo the first respondent showed him.

[25] The vendor of the Jaguar confirmed that the first respondent purchased the Jaguar from him, paying $14,500 in cash. As noted, when the Jaguar was seized the police located two firearms and a safe containing two ounces of methamphetamine and $35,010 in cash. Ms Temaera, whose address the Jaguar was located at, said the first respondent had arrived in the Jaguar about two months earlier and asked to store the car in her shed. He subsequently locked it in her shed. In early December the first respondent had moved the Jaguar so that she could hold a birthday party for her son and then later he had returned it to the shed. The vendor also said that after the first respondent’s arrest he received a message asking him to tell the police he still owned the Jaguar and to have it returned to him.

[26] Mr Tamatea told the police officer he bought the Jaguar off the first respondent for $14,500.

[27] In total Mr Tamatea says he paid $59,500 for these vehicles. He says on each occasion he gave the first respondent cash to purchase the vehicles.

[28] The first respondent is known to Mr Tamatea. Mr Tamatea’s aunt is the mother of the first respondent’s two eldest children (now in their early twenties). Mr Tamatea regards his aunt as his sister and the first respondent’s eldest children as his niece and nephew.

[29] The first respondent was involved in the purchase of all three vehicles and had custody and control of all three at all material times, including when they were seized.

[30] Since about 2000 Mr Tamatea has been a chef at the Food for Thought café.

[31] The café business is owned by Sue Wilson. She has owned it for about 15 years. Sue Wilson is the mother of Mr Tamatea’s partner and grandmother of their child.

[32] Mr Tamatea’s earnings since 2002 as per IRD records or telephone advice are as follows:

Year Earnings Total

2002 $10,387 $10,387

2003 $10,270 $20,657

2004 $15,722 $36,379

2005 $16,467 $52,846

2006 $15,878 $68,724

2007 $15,249 $83,973

2008 $12,690 $96,663

2009 $15,210 $111,873

2010 $6,900 $118,773

2011 $3,251 $122,024

2012 $9,937 $131,961

[33] On or around 30 June 2009 Food for Thought was severely damaged by fire. The fire officer has confirmed that a tin was located in the safe.

[34] Mr Tamatea has a number of bank accounts with ANZ:

(a) A joint loan account with his mother in the sum of $150,000 (the

$150,000 loan);

(b) A joint loan account with his mother in the sum of $70,000 (the

$70,000 loan).

Both of these loans are secured by way of a registered first mortgage over properties situated at 42 and 42A Waihirere Domain Road, Gisborne. The

$150,000 and $70,000 loans were drawn down on 20 December 2006. On the same day a direct credit transfer was made in the sum of $220,000 to “Ed Hunt Settlement”. Mr Hunt is a solicitor. The “Ed Hunt Settlement” consists of:

(c) a current account in the joint name of Mr Tamatea and his mother;

and

(d) a Freedom account solely in his name.

[35] A third loan of $9,322 was drawn down on 4 July 2008.

[36] Mr Tamatea’s current account is used principally for the transactions associated with servicing the loans and receipt of some rental income. A limited number of transfers have been made into that account:

18/11/09 $5,000.00 Food for Thought

11/12/09 $2,000.00 Food for Thought

09/03/10 $3,000.00 “ex Kate Downs Family Trust”

30/04/10 $2,000.00 Food for Thought

18/06/10 $1,000.00 Susan Wilson Food for Thought

16/07/10 $2,000.00 Food for Thought

09/09/10 $2,000.00 Food for Thought

19/11/10 $800.00 Susan Wilson

03/12/10 $2,035.00 Transfer from Freedom account

The Commissioner’s case

[37] The Commissioner’s case is that the first respondent was well known to Mr Tamatea. The first respondent used Mr Tamatea as a means of hiding the profits of his drug activity, and Mr Tamatea for his own reasons permitted the first respondent to have his name recorded as the registered owner of the vehicles. Mr Tamatea did not have sufficient funds available to him to purchase the three vehicles in the eight month time period between January 2011 and August 2011. Mr Tamatea and his witness Ms Wilson are lying when they say otherwise.

Mr Tamatea’s case

[38] Mr Tamatea’s case is that he and the first respondent had a common interest in classic vehicles. Mr Tamatea considered them to be an investment. He saved his money from the café over a number of years but rather than bank it, kept it in a tin in the safe at the café. He used his cash savings to purchase the vehicles.

[39] Mr Tamatea’s explanation for the first respondent being in possession of the vehicles is that he had lost property from his home and for security reasons he left the vehicles with the first respondent. Mr Tamatea’s evidence is generally supported by Ms Wilson.

[40] Mr Sharp emphasised that Mr Tamatea has no criminal convictions and has been in steady employment for some time. He submitted the Commissioner was wrong to only refer to Mr Tamatea’s earnings between 2008 and 2012 and noted that Mr Tamatea had earned a lot more before that. On Mr Sharp’s calculation, allowing for savings of $80 to $100 a week over 11 years between 2001 and 2011 Mr Tamatea could have saved as much as between $45,760 and $57,200.

[41] Mr Tamatea says he bought into the business of Food for Thought in about

2006 when he took out the loans from the bank. However, even though a company was incorporated in 2010 to run the business, he was not made a director and shareholder until July 2013, almost a year after these proceedings were issued.

[42] Mr Sharp submitted that at most there may be a suspicion as to Mr Tamatea’s explanation but that was not sufficient for the Commissioner to satisfy the onus on him: Police v Nelson.³

[43] Although Mr Sharp also submitted that relief under s 67 of the Act may be available on the grounds of undue hardship, I do not consider that s 67 can apply in the present case. Either Mr Tamatea assisted the first respondent by taking the registration of the vehicles in his name in which case the vehicles belonged to the first respondent and there can be no undue hardship in disallowing Mr Tamatea’s claim or, if Mr Tamatea’s evidence is accepted, he paid for the vehicles himself and they are his. In such a case the issue of forfeiture does not arise as they would have

_{been legitimately purchased by Mr Tamatea.}

³ Police v Nelson HC Auckland CIV-2010-409-989, 30 July 2010.

Discussion

[44] I did not find either Mr Tamatea or Ms Wilson to be credible or reliable witnesses. Having considered their affidavit evidence and observed them being cross-examined, I considered the following features disclose the unreliability of their evidence and support the Court’s rejection of the evidence on this principal issue.

[45] First, when initially spoken to by the police about the vehicles in January

2012, Mr Tamatea told the police he had purchased the vehicles over a period of approximately two to three years. He also said that he registered the change of ownership of the hot rod and motorcycles immediately he bought them. However, the change of ownership of all three vehicles was registered between January and August 2011, within a year of his interview with the police.

[46] Mr Sharp submitted that Mr Tamatea’s explanation for getting the dates of the purchase of vehicles wrong was understandable. He had never been in trouble with the police before and was concerned that he might be implicated in the first respondent’s drug dealing and panicked. However, even bearing that in mind there was no reason for him to have been so wrong in the dates. This was not an error of a month or two but over a year or more. Further, on Mr Tamatea’s evidence these vehicles were his principal assets and the fruits of his labour over the last 10 or so years. One would expect he would know very well when he had purchased them. On its own this point is not conclusive. But there is more.

[47] Next, Mr Tamatea and Ms Wilson’s evidence concerning his involvement in the café, particularly his interest in the part-share in the café as an owner, is just not credible. On their evidence Mr Tamatea became a partner and had an interest as an owner of the café since late 2006 when he took out the loan to buy into the business. However, that is inconsistent with the documentation which discloses that the company was not registered until 2010 and Mr Tamatea only became a shareholder in July 2013, well after these proceedings were issued. Neither was able to properly explain what his interest was before then.

[48] Further, and importantly, the proposition now advanced to the Court has not been raised before. Following the fire at the café in June 2009 Mr Tamatea was

interviewed by fire investigators appointed by the insurance company. In an interview with a Mr Donnellan on 2 July Mr Tamatea said he had worked for Sue for over six to eight years, and made no mention of having an interest in the business.

[49] When spoken to by Detective Sergeant Ford about the fire in an interview on

11 September 2009 the following exchange took place:

DSF ... now just in terms of the um, the structure of the business so Sue’s the?

WT Owner.

DSF She’s the owner. WT Yeah.

DSF Okay and she, who does the day to day running of the business? WT Ah, Sue oversees everything.

And later:

DSF: ... in the business, is there, is there some sort of arrangements regarding um, the profit from the business or is that solely Sue?

WT Ah, solely Sue. ...

DSF: Okay. So you’re on a wage? WT: Ah, yes sir.

Later when asked whether he was aware of any insurance arrangements he said he was not and went on to say:

WT: ... What happens with Sue’s business I sort of. They kept everything quite separate. It, it’s sort a easier for me.

...

WT: Sort of when I clock out I can sort of, you know, don’t have to worry about what, what’s, what’s, whats the haps.

[50] If, as Mr Tamatea and Ms Wilson say at that time he was involved in the business, and had an ownership share in the business (whatever that structure may have been) there was no reason for him not to have disclosed it at that time. His statements at the time (in 2009) are contrary to his evidence in 2014.

[51] Further, and significantly, on Mr Tamatea’s story by the time of the fire in June 2009 he must have saved approximately $49,000 to $50,000 towards the purchase of these vehicles. This is because the vehicles were purchased during 2011 and, on his evidence, cost $59,500. His reported earnings for the years ended March

2010 and 2011 were only just over $10,150 in total.

[52] So on Mr Tamatea’s evidence he had accumulated approximately $50,000 cash which he kept in a tin in the safe at the café by the time of the fire. Despite that, when interviewed after the fire Mr Tamatea made no mention of having that money in a safe at work to the investigator. In fact, when discussing the matter on 10 July

2009 with the investigator Mr McKinnel, there was the following exchange:

Q: Did you have any stuff in there? A: Up in the office?

Q: Yeah.

A: A couple of little, you know just personal papers, not a lot though.

Just like, just our bank, my banking but nothing of great value.

[53] If Mr Tamatea had kept $50,000 savings in the safe there was no reason for him not to have told the investigator. Given the investigator was seeking to determine whether there were suspicious circumstances involving the fire, it would have improved or supported Ms Wilson’s position if Mr Tamatea, who was close to her, had said he kept substantial sums of money in the tin in the safe, which had been put at risk in the fire. But rather, he disavowed that he had anything of great value at all.

[54] So while I accept that the fire officer found a tin in the safe following the fire and that Mr Tamatea may have kept some money in that tin from time to time, I do not accept he kept his entire savings or kept anything like the substantial amounts he says he did. It is a relatively minor point but I also note that in her affidavit Ms Wilson first said Mr Tamatea kept his money in a bag. There was no mention of the tin.

[55] Next, the suggestion that Mr Tamatea kept such substantial sums of money in the safe just does not make any sense in practical terms either. If, as is his evidence,

he had accumulated in excess of $59,000 by 2011 it is difficult to understand why he would have felt the need to borrow $220,000 from the bank in 2006. One would expect that he would have applied his savings to buy into the business and reduce the sum borrowed, particularly when the alternative was to leave the money in a tin without earning any interest.

[56] Next, the circumstances of the borrowing itself are unusual. Mr Tamatea initially said he had only one bank account but it is quite clear he had a number of bank accounts including the loan accounts. At one stage he and Ms Wilson said he paid $130,000 for the business and kept back $20,000, but then later Ms Wilson talked of him paying $140,000 and the balance in lump sums. The evidence is confusing and unreliable and entirely unsupported by any documentary trail.

[57] Next, and perhaps another lesser point, Mr Tamatea denied that he had any knowledge of the third loan of just over $9,000 which was a joint loan with his mother, yet the loan document confirms that he signed the application for the loan when it was taken out in July 2007.

[58] When spoken to by the police, Mr Tamatea said he saved between $80 and

$100 a week, to explain how he had funded his purchase of the vehicles. Mr Sharp calculated that could amount to between $45,760 and $57,200 over 11 years from

2001. Mr Sharp conceded that did not quite equate to the $59,500 Mr Tamatea said he had spent. (If the purchase price for the motorcycle was $21,000, as the vendor said, rather than the $10,000 Mr Tamatea says he paid, the position is worse from Mr Tamatea’s point of view).

[59] The circumstances relating to the purchase of the vehicles and the apparent control of them by the first respondent are also a relevant consideration. Mr Tamatea effectively conceded that the first respondent was involved in negotiating and completing the purchase of all three vehicles. Indeed he says he bought the Jaguar off the first respondent. The vehicles were effectively completely under control of the first respondent. Mr Tamatea’s statement to the police he paid $35,000 for the hot rod which he bought off a photograph and without seeing it is just not credible. On Mr Tamatea’s evidence if he wanted to use the vehicles he went to the first

respondent’s place and picked them up but, as noted, he had no motorcycle licence and on the statement of Ms Temaera, the first respondent appeared to have complete control over the Jaguar. Mr Tamatea’s explanation that having paid his entire savings for these vehicles which he regarded as an investment, yet then allowed the first respondent to control their use is not credible.

[60] There is then the evidence of Ms Wilson. Although Ms Wilson sought to support Mr Tamatea, I consider that her evidence is neither credible nor reliable either. Ms Wilson had reason to support Mr Tamatea’s story. Mr Tamatea is her daughter’s partner and the father of her grandchild. He has also had a close working relationship with her in the café for a number of years.

[61] Further, although Ms Wilson described an arrangement with the former accountant to keep money for Mr Tamatea in the tin in the safe, she was not able to say how much money was actually kept there on Mr Tamatea’s behalf. Further, I note that when spoken to by Detective Park concerning the fire at the café, she made no mention whatsoever in that of the tin containing Mr Tamatea’s money and the fact that it contained substantial sums of money.

[62] Again, for the reasons noted above, considering that the police were investigating whether were any suspicious circumstances surrounding the fire, if Mr Tamatea had kept substantial sums of money in the safe I consider it inevitable that Ms Wilson would have known and that she would have said as much to the police to support her explanation that the fire was accidentally lit, and certainly not lit by anyone associated with the business.

[63] Further, in a statement to the insurers’ investigator, Mr McKinnel, Ms Wilson said that there was cash in the building of about $30,000, but it is apparent from what she said that that was her money, rather than Mr Tamatea’s money. The following exchange took place:

Q. Was there also cash in the building?

1. Yes. The Police were there when I went in and showed them. It was about $30,000.

Q. Where is it now?

A. I have hidden it again.

Q. Where did that come from?

A. The shop. Food for Thought.

17. Why did [you] have that much money from the shop in cash and not in the bank?

A. It was nest egg.

Q. So did you pay tax on any of that money? A. No.

17. Does that mean you are prepared to commit a criminal offence, tax evasion, for financial gain?

1. No. I was trying to do things in the shop and I was going to use that money.

[64] There was no suggestion in that exchange that the money involved was Mr Tamatea’s. However, when giving evidence before the Court she attempted to say part of the money was Mr Tamatea’s. She said about $10 to $15 thousand was the cafe’s and “I sort of took a guess at William’s”. That is quite different to her explanation to the insurance investigator. In that Ms Wilson clearly claimed the money as her own.

[65] For the above reasons I reject Mr Tamatea’s and Ms Wilson’s evidence insofar as it supports his explanation that he bought the vehicles from money that he had saved from income and kept in a tin in the safe at the café.

[66] A number of other points arise. The fact the vehicles were registered in Mr Tamatea’s name is not evidence of ownership. It is, as Detective Rolley confirmed, a practice adopted by drug dealers in an attempt to conceal the true position.

[67] Next, it is relevant that the vehicles in question were similar to other vehicles seized by the police which were owned by the first respondent. I also note that, despite the apparent relationship between the first respondent and Mr Tamatea, the first respondent has not taken any steps to support Mr Tamatea. There was a reason

for Mr Tamatea to allow his name to be used by the first respondent given the familial relationship Mr Tamatea had with him.

Summary/result

[68] For the above reasons, I reject the evidence of Mr Tamatea and Ms Wilson that Mr Tamatea paid for the purchase of the three vehicles.

[69] On the balance of probabilities the Commissioner satisfies the Court that the vehicles in question were not purchased by Mr Tamatea from money he had saved. The vehicles are not owned by him. They were the property of the first respondent. Given the limited resources of the first respondent apart from his drug dealing the vehicles are tainted property.

[70] The vehicles are to be forfeited to the Crown.

Costs

[71] I am not aware whether Mr Tamatea is in receipt of legal aid. I reserve the issue of costs but I indicate that if Mr Tamatea is not in receipt of legal aid then costs on a 2B basis, together with disbursements as fixed by the Registrar would be

_appropriate.

Venning J