Commissioner of Police v Rowan

[2023] NZHC 2939

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2023-463-000012

[2023] NZHC 2939

IN THE MATTER

Of an application pursuant to ss 18, 21, 24 and 25 of the Criminal Proceeds (Recovery) Act 2009

BETWEEN

THE COMMISSIONER OF POLICE

Applicant

AND

SHANE WARREN ROWAN

First Respondent

NIKI GLENN FERGUSON
Second Respondent

TOMMY RATANA WINEERA

Third Respondent

/Continued over

Hearing:

19 October 2023

Appearances:

T Afoa for Applicant

E Reilly for First Respondent

Judgment:

19 October 2023

JUDGMENT OF LANG J

[on application for sale of restrained asset]

This judgment was delivered by Justice Lang

On 19 October 2023 at 2.00 pm Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel: Gordon Pilditch, Rotorua Lance Lawson, Rotorua A Hill, Rotorua

A Cresswell, Barrister, Auckland

THE COMMISSIONER OF POLICE v ROWAN [2023] NZHC 2939 [19 October 2023]

ERU LUKE PENE

Fourth Respondent

TEREREATAPATIU EDWARD TAUTE
Fifth Respondent

DESMOND MARKSHALL GALVIIN- TAIKATO
Sixth Respondent

KRYSTLE JOY BENNETT

Seventh Respondent

ADONNA JENNINE MOANA MIHAERE

Interested Party

[1]        Mr Rowan is awaiting trial in the District Court on a variety of drug-related charges.

[2]        The Commissioner of Police (the Commissioner) has obtained restraining orders over several assets owned by Mr Rowan. These include a 1993 Ducati motorcycle. The Commissioner now seeks an order permitting him to sell the motorcycle, with the proceeds of sale to be retained by the Official Assignee. These would be held on interest earning deposit to await the outcome of any application the Commissioner might make for forfeiture orders. Any such application would not be made until after the criminal proceedings have concluded.

[3]        Mr Rowan opposes the application for sale of the motorcycle. He contends the Commissioner should be required to preserve the motorcycle pending the determination of any application for forfeiture orders.

Relevant principles

[4]        Section 35(e)(v) of the Criminal Proceeds (Recovery) Act 2009 provides as follows:

35       Types of further order

Without limiting the generality of section 34(1), a court may, on an application under section 33(1), make 1 or more of the following further orders in relation to restrained property

…

(e)       an order relating to the Official Assignee that—

…

(v) directs the Official Assignee to sell restrained property (including, without limitation, a business) in order to preserve the value of the restrained property:

[5]In Commissioner of Police v Cavanagh, Venning J observed:1

[7]A sale order may be made at any time. Typically  sale orders are   pursued by the Commissioner where the restrained assets in relation to which the sale orders are sought have high depreciation rates

1      Commissioner of Police v Cavanagh [2014] NZHC 2978.

combined with additional costs of storage and insurance which ultimately decrease the potential return to the Commissioner and/or the parties who claim an interest in the assets. There is a further additional benefit in the sale in that, once the assets are sold, the Official Assignee is able to hold the funds in an interest bearing account.

[6]        Factors that are generally considered when determining whether a restrained asset should be sold will include the nature and value of the asset, the length of time before the substantive proceeding will be determined, the extent to which the asset may depreciate during that period and the wishes of the owner of the asset and/or any other person who may have an interest in it.2

The evidence

[7]        Mr Rowan filed an unsigned affidavit setting out the grounds on which he opposes the sale of the motorcycle. He confirmed the contents of the affidavit at the hearing before me.

[8]Mr Rowan says he bought the motorcycle from a friend in 2017 for the sum of

$2,000. He paid the purchase price by weekly instalments of $100. He then it to an associate in June 2018 for the sum of $1,000. This occurred at a time when he needed money. This person took possession of the motorcycle but failed to pay the whole of the purchase price. This prompted Mr Rowan to register the motorcycle back into his name, even though he did not have possession of it at the time. By this stage the motorcycle had been stolen from the person to whom Mr Rowan had sold it. However, that person subsequently regained possession of the motorcycle and sold it back to Mr Rowan in December 2021 for the sum of $1,000. Mr Rowan paid the purchase price through an intermediary, who then returned the motorcycle to Mr Rowan.

[9]        Mr Rowan says he re-purchased the Ducati from the person to whom he had sold it because he regretted selling it in the first place. He only took that step because he was in a difficult financial position at the time.

2      Commissioner of Police v Drummond [2018] NZHC 1730 at [15].

[10]      Mr Rowan says that when he originally purchased the motorcycle it was in a poor condition. He therefore carried out extensive work on the motorcycle to make it roadworthy. It is now operable but currently has no warrant of fitness. Mr Rowan nevertheless considers the motorcycle will appreciate in value because of its age and rarity. He says that Ducati motorcycles of this vintage are uncommon and are becoming harder to find.

[11]Mr Rowan then deposes:

18.The Ducati has great sentimental value to me as:

(a)I’ve always wanted a Ducati from when I was very little.

(b)I’ve always liked Ducati motorbikes.

(c)I’ve always wanted a Ducati motorbike and particularly like the model of the Ducati in question.

(d)The Ducati in question is the first and only Ducati that I’ve owned.

(e)I spent time and effort working on the Ducati to put it into roadworthy condition.

(f)I feel I’ve developed a relationship with the bike because of that effort.

(g)If I bought another Ducati I would not have the same sentimental attachment to it.

[12]Mr Rowan goes on to say:

27.I have worked on a very large number of cars and motorbikes over my life. I consider that working on motorcars and motorbikes is a significant part of my life and is something I enjoy doing very much. The Ducati has special significance to me because of the effort I went through to get it, to get it back and the work I have completed on it. I intend keeping the Ducati forever. I have always wanted a Ducati and this particular Ducati is special to me because of the love and attention I have spent on it. All the other vehicles I have worked on have been with the intention of selling them. The Ducati was the only one that was special to me and that I wanted to keep.

Analysis

[13]      The police uplifted the motorcycle in September 2023. The criminal charges have been allocated a reserve fixture commencing on 18 March 2024. However, there is no guarantee the trial will proceed on that date. If it does not, the trial may not proceed until late 2024 notwithstanding the fact that Mr Rowan is currently remanded in custody. Any forfeiture proceedings will also then take some time to resolve. It is therefore possible that the Commissioner will need to meet the cost of storing and insuring the motorcycle for up to two years. The costs of storing and insuring the vehicle amount to approximately $3000 per annum. This means the Commissioner may well incur total storage and insurance costs totalling approximately $6,000.

[14]      In the affidavit filed in support of the application for restraining orders a police officer deposed that the motorcycle has an estimated value of $10,000. Mr Rowan believes it is unlikely to depreciate in value given the fact that is already 20 years old. The fact that it has a current value of around $10,000 even though it is now 20 years old provides some support for Mr Rowan’s belief. Further, the Commissioner has not sought to rebut Mr Rowan’s evidence that the motorcycle is unlikely to depreciate in value within the foreseeable future.

[15]      On the other hand, Mr Rowan’s attachment to the asset is not particularly strong. It is not as strong, for example, as that of the respondent in Commissioner of Police v Drummond.3 In that case the respondent opposed a vehicle being sold because it had formerly belonged to his deceased wife and had great sentimental value for him for that reason. This did not prevent an order being made for the sale of the vehicle because, although the vehicle had only recently been restrained, there was going to be a delay of approximately 17 months before associated criminal proceedings would be resolved.

[16]      A different approach was taken in Commissioner of Police v Blance.4 In that case Dobson J declined to make an order for the sale of two motor vehicles where the

3      Commissioner of Police v Drummond [2018] NZHC 1730.

4      Commissioner of Police v Blance [2018] NZHC 108.

respondents attributed sentimental or non-monetary value to them and associated criminal proceedings would be determined in the near future.5

[17]      I propose to take the same approach in the present case. The motorcycle has only recently been restrained and the evidence currently suggests that it is unlikely to depreciate greatly in value in the near future. Further, Mr Rowan attributes a sentimental value to it and there is a prospect of the criminal proceedings resolving in March 2024. If that does not occur and the trial is adjourned, the Commissioner will have leave to make a further application.

Result

[18]The application for an order that the motorcycle be sold is declined.

Lang J

5 At [56].