Despite this, High Court Justice Michele Wilkinson-Smith ordered the money be handed over to the Crown in the “interests of justice”.
The case began when Hamilton man Royce Khan was the subject of a vehicle stop outside his home in April 2020.
Strong odour of cannabis
Police noticed a “strong odour” of cannabis, according to court documents, and carried out a warrantless search of his Mazda.
Officers may conduct a vehicle search without a warrant if they have “reasonable cause” to believe they will find controlled drugs.
In Khan’s case, they found 1.46kg of cannabis and $43,329 in cash.
Police then searched Royce’s residence and found, among other things, a further 600g of cannabis and $9463 in cash.
Less than two weeks later, police searched Khan’s home again – this time with a warrant – and found another 323g of cannabis and $4780 in cash.
In December 2020, he was sentenced to nine months’ home detention after admitting three charges of possessing cannabis for supply.
Having gained criminal convictions against Khan, police then took civil court action to confiscate the money under the Criminal Proceeds (Recovery) Act 2009, and have it forfeited to the Crown.
One of the act’s aims is to deter criminal activity by confiscating any profits.
Khan signs notebook statement
In March 2022, an investigator spoke to Khan and obtained a notebook statement from him.
Khan signed his name against a statement in the notebook that said the money found in his car and the two searches of his home were proceeds from the sale of cannabis.
However, he did not admit the money belonged to him.
A restraining order was issued against the money in March 2024 – nearly four years after the cash had been taken from Khan.
This raised a legal issue because the criminal proceedings against Khan ended with his sentencing in December 2020.
Justice Wilkinson-Smith said in a recent judgment police should not have held on to the cash beyond Khan’s sentencing date without a court-issued restraining order “or legal basis to hold it”.
“There is no proper basis for police to simply hold cash seized as part of a criminal investigation after the proceedings are at an end,” she said.
“Forfeiture orders should have been sought much earlier.”
However, she said that even though the proper procedure for dealing with the money was not followed initially, she was satisfied it was in the interests of justice to order its forfeiture to the Crown.
The total amount forfeited was $57,572, made up of the money found in the Mazda, and the two amounts found during the searches of Khan’s home.
The act allows the forfeiture of money and assets that are “tainted” by being acquired from significant criminal activity.
Justice Wilkinson-Smith said each of the three amounts had been found in searches conducted either under statutory powers, or a search warrant.
Each was found with a “commercial quantity” of cannabis.
The judge said Khan, although denying any interest in the money, had told police it was proceeds from the sale of cannabis.
“Mr Khan does not claim any ownership of, or interest in, the cash,” she said.
“He acknowledged that it came from the proceeds of cannabis dealing but did not claim that it was his money.
“This is not necessarily an illogical position.
“Those who deal in illicit drugs may do so on behalf of others and may quite genuinely not claim an interest in the entire amount seized.
“They may also decline to claim an interest because they realise the implications of doing so when the money is clearly tainted.”
Ric Stevens spent many years working for the former New Zealand Press Association news agency, including as a political reporter at Parliament, before holding senior positions at various daily newspapers. He joined NZME’s Open Justice team in 2022 and is based in Hawke’s Bay. His writing in the crime and justice sphere is informed by four years of frontline experience as a probation officer.
