Northland couple may lose house to the Crown over son's alleged drug involvement

A Northland couple is trying to save their home after paying its mortgage from the proceeds police believe were from their son's drug dealing.

The Commissioner of Police has succeeded in obtaining a restraining order from the High Court on the property along State Highway 1, just north of Whangārei.

The house is owned by William and Sheryl Johnson and the matter was heard in the High Court at Whangārei.

Police found $110,000 in cash hidden inside an LPG canister on the rear tray of a vehicle at an Auckland address where their son Shane Johnson was in November 2018.

An investigation revealed he had withdrawn about $160,000 from an online gambling facility called Spin Place and given it to his parents who used the money to pay a loan secured by a mortgage over their property in Whangārei.

The police commissioner believed Shane Johnson acquired the cash from dealing in methamphetamine and that he evaded taxes through earning undeclared income, despite him not being convicted of selling the Class A drug for supply.

A restraining order is also in place over the cash.

Johnson's parents opposed any restraining order on their property and unsuccessfully sought to exclude their interest in the house from any orders the court may make.

The police commissioner referred to Johnson's multiple convictions for possession of meth and possession of meth utensils which demonstrated a long-standing and persistent association with the drug.

Justice Graham Lang accepted the argument but noted Johnson had never been convicted for supplying meth or being in possession of meth for supply.

On each occasion, he said Johnson was sentenced to community work which meant the offending was towards the lower end of the scale in terms of culpability.

However, the judge said financial analysis of how Johnson funded his living costs in the latter part of 2018 when he did not operate any bank account was the most important aspect of the police's case.

Prior to 2018, Justice Lang said there were reasonable grounds to believe Johnson was involved in selling drugs between June 2015 and March 2017 as he appeared to have derived no income from legitimate sources.

Also, he said numerous deposits into the Spin Palace accounts bore the hallmarks of regular payments for small quantities of drugs.

"It is difficult to see how he could have accumulated the sum of approximately $110,000 in cash from any legitimate means. There is no dispute that winnings derived from gambling using money derived from criminal activity will be tainted property," Justice Lang said.

The restraining order will remain in place for 12 months.

Justice Lang ordered that any claim for relief by Johnson's parents must be determined when the police applied for a forfeiture order for their house.