Commissioner of Police v Keenan [2014] NZHC 527 (20 March 2014)

Last Updated: 28 March 2014

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2011-463-674 [2014] NZHC 527

BETWEEN THE COMMISSIONER OF POLICE Applicant

AND RICHARD SHANE KEENAN First Respondent

JOANNE EAGLE Second Respondent

SUZANNE MAUD KEENAN Third Respondent

THE BANK OF NEW ZEALAND Fourth Respondent

Hearing: 20 March 2014

(HEARD AT HAMILTON)

Appearances: C Macklin for applicant

P Winter for first respondent

A Simperingham and M Pinsloo for second respondent

No appearance for third respondent

Judgment: 20 March 2014

JUDGMENT OF LANG J

_{[on application for approval of settlement]}

This judgment was delivered by me on 20 March 2014 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

_{Date...............}

THE COMMISSIONER OF POLICE v KEENAN [2014] NZHC 527 [20 March 2014]

[1] In this proceeding the Commissioner of Police (“the Commissioner”) seeks asset forfeiture orders under the Criminal Proceeds (Recovery) Act 2009 (“the Act”). The Commissioner’s application was due to be heard today, but at the commencement of the hearing I was advised that the parties have reached a settlement. They have now sought the approval of the Court to the proposed settlement under s 95 of the Act.

[2] The Commissioner of Police sought asset forfeiture orders in respect of two properties. They are situated at 73 Gallony Avenue, Waitakere City and at 6691

Western Bay Road, Kuratau respectively. The Waitakere property was owned solely by the second respondent, whilst the Kuratau property is owned jointly by the first respondent and the third respondent. Both properties have been the subject of restraining orders made under the Act since late October 2011. The Commissioner has always accepted that the interest of the fourth respondent as mortgagee of both properties should be excluded from any order that the Court might make.

[3] On 25 June 2013, the Court made an order under s 35 of the Act that both properties be sold. The Gallony Avenue property has now been sold. The proceeds of sale were applied in their entirety to partially repay the debt secured by the mortgages registered against the title to both properties. Efforts to sell the Kuratau property have thus far been unsuccessful. The latest valuation of that property estimates that it is worth approximately $270,000. The sum of $80,000 remains owing under the mortgage, which means that the property has an equity of approximately $190,000 less the costs of any sale.

The proposed settlement

[4] The parties accept that the existing orders for the restraint and sale of the property should remain in place. When the Official Assignee achieves a sale, the manner in which the proceeds of sale are to be distributed will depend upon whether or not the sale price is at, or over, $270,000. If the sale price is at or over that sum, the mortgage will be repaid and the sum of $100,000 will be forfeited to the Crown. Thereafter, any debt owing by the first and second respondents to the Legal Services Agency is to be repaid. The balance thereafter remaining will be held on trust by the

second respondent’s solicitors pending settlement of all outstanding claims and counterclaims between all three respondents.

[5] In the event that the sale price is less than $270,000, a different scheme of distribution will apply. Once the mortgage has been repaid, the sum of $90,000 will be set aside. From that sum, any debt owing by the first and second respondents to the Legal Services Agency will be repaid. The balance thereafter remaining will be held on trust by the second respondent’s solicitors pending settlement of all outstanding claims and counterclaims between all three respondents. The remainder of the sale proceeds will be forfeited to the Crown.

Decision

[6] Section 95 of the Act provides as follows:

95. High Court must approve settlement between Commissioner and other party

(1) The Commissioner may enter into a settlement with any person as to the property or any sum of money to be forfeited to the Crown.

(2) A settlement does not bind the parties unless the High Court approves it.

(3) The High Court must approve the settlement if it is satisfied that it is consistent with—

(a) the purposes of this Act; and

(b) the overall interests of justice.

[7] In the present case, I am satisfied that the proposed settlement is consistent with the purposes of the Act because it recognises that, to some extent at least, the proceeds of significant criminal activity are likely to have been expended on the maintenance and improvement of earlier properties that the respondents owned. When those properties were sold, the proceeds of sale were used to acquire the Waitakere and Kuratau properties.

[8] I am also satisfied that the overall interests of justice favour the settlement. All parties were at some risk if this case had proceeded to trial. Even if the Commissioner had succeeded, aspects of his case were novel in this field. As a

result, there was a distinct possibility that one or more parties to the proceeding would appeal against any decision that the Court might make. The value of the Kuratau property is also a relevant factor. Continued litigation may well erode any equity that the property may have. In those circumstances the parties understandably seek the certainty and closure that the proposed settlement undoubtedly provides. All of those factors are relevant to the interests of justice in this case. It follows that the Court approves the proposed settlement set out in the joint memorandum of counsel tendered at the hearing today.

[9] I now invite counsel to file a further joint memorandum attaching a draft order for sealing.

Costs

_{[10] I make no order as to costs.}

Lang J

Solicitors:

Crown Solicitor, Rotorua