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Tug-of-war over vehicles restrained under Criminal Proceeds (Recovery) Act

5 May 2023

| Author: Fiona Wu

Criminal Proceeds (Recovery) Act 2009 – application for sale orders – motor vehicles – depreciating assets – sentimental value of vehicle to respondents – delay in bringing application – innocent third party – Commissioner of Police v Drummond upheld – storage costs to Official Assignee – application granted  

Commissioner of Police v Mcquade [2023] NZHC 798 per Woolford J 

On 30 September 2020, the Commissioner of Police obtained restraining orders in respect of, inter alia, nine motor vehicles following an investigation into the manufacture, sale, and supply of methamphetamine by the respondents.  On 30 August 2022, the commissioner applies to sell the nine restrained vehicles to preserve their value due to ongoing storage costs and depreciation.

The respondents oppose sale orders in respect of five vehicles, on four separate grounds – first, that some of the restrained vehicles are actually appreciating in value; second, the respondent had a sentimental attachment to one of the vehicles; there had been no sale application in the proceeding two years of restraint; and finally that an innocent party holds an ownership interest in one of the vehicles.

None of these grounds was successful. The respondents’ own valuation was eschewed in favour of expert opinion that any appreciation was temporary. With respect to sentimental attachment, Commissioner of Police v Drummond [2018] NZHC 1730 was cited as authority for the ability to make sale orders notwithstanding. Interests of innocent third parties can be recognised by making the third party a party to the proceedings. Finally, delay in applying for sale orders is a neutral factor – a sale order can be made at any time.

The length of time until the commissioner’s civil forfeiture application can be heard favours the making of sale orders to preserve their value and minimise costs to the Official Assignee, especially when three of the motor vehicles have already incurred storage costs which exceed their value.

Applicable principles – passage of time for motor vehicles generally erodes market value – trend in value warrants expert evidence – sentimental attachment to property does not preclude sale orders – principles in Commissioner of Police v Drummond adopted – delay in bringing application is a neutral factor

Held:  Commissioner’s application for early sale orders granted.  Official Assignee to sell the restrained property to preserve value and hold funds from sale until resolution of proceedings.


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