Commissioner of Police v Al-Ali

[2024] NZHC 2568

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-1024

[2024] NZHC 2568

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

AYMEN ALAUDDIN ABDULSUBHAN AL-ALI

First Respondent

AND

AVENSIS LIMITED

Second Respondent

Hearing:

6 September 2024

Counsel:

R M Gibbs for applicant

No appearance by or on behalf of respondents

Judgment:

6 September 2024

JUDGMENT OF JOHNSTONE J

(forfeiture orders)

This judgment was delivered by me on 6 September 2024 at 4pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors: MC, Auckland

COMMISSIONER OF POLICE v AL-ALI [2024] NZHC 2568 [6 September 2024]

[1]    The Commissioner of Police alleges that the first respondent, Aymen Alauddin Abdulsubhan Al-Ali, defrauded Customs revenue by fraudulently under-declaring molasses tobacco importations. By application dated 3 May 2024, the Commissioner seeks profit forfeiture and effective control orders against him under the Criminal Proceeds (Recovery) Act 2009 (Act).

[2]    Mr Al-Ali left New Zealand in October 2021, soon after the New Zealand Customs Service (Customs) executed a search warrant at his home in Flat Bush, Auckland. He and the second respondent, Avensis Ltd, a company of which Mr Al-Ali is the sole director and shareholder, have been served in accordance with an order for substituted service at his only known email address. But neither has filed papers in opposition to the Commissioner’s application, nor have they appeared at mentions in the Criminal Proceeds list.

[3]I must determine:

(a)whether the Commissioner has proved, on the balance of probabilities, that Mr Al-Ali “unlawfully benefited from significant criminal activity” in the period of seven years prior to 3 May 2024;1

(b)if so, the maximum recoverable amount;2 and

(c)whether Mr Al-Ali has effective control over the sum of $52,485 cash which Customs seized from Mr Al-Ali’s home when executing the search warrant described above.3

Unlawful benefit?

[4]    Both duty and GST is owed and payable to Customs, under the Customs and Excise Act 2018, on imports of tobacco products, including molasses tobacco. The amount of duty owed is calculated using the ‘Kilo Tobacco Content’ (KTC) of the tobacco product. The higher the KTC, the greater the duty owed. The KTC of a

1      Criminal Proceeds (Recovery) Act 2009, s 53(1).

2      Section 54(1).

3      Section 17A.

tobacco product is usually ascertained using a tobacco certificate produced by the product’s primary manufacturer.

[5]    Between 3 November  2018  and  6  October  2021,  Avensis  Ltd  imported 11 brands of molasses tobacco, in 31 shipments  weighing  a  total  of  around  28,000 kilograms. Avensis declared KCT levels ranging between 0 and 3 per cent, providing tobacco certificates to that effect. Customs duty was calculated and paid at those rates. The declared imported brands included “Al Fakher”.

[6]    Customs undertook enquiries with the manufacturers. The manufacturer of the “Al Fakher” brand advised that its molasses tobacco is manufactured to a KTC of

14.28 per cent.

[7]    Customs executed two search warrants on 14 October 2021: the warrant executed at Mr Al-Ali’s home, described above, and a warrant executed at a transitional facility in East Tamaki, operated by a company run by a person with whom Mr Al-Ali had been in contact by telephone.

[8]    At Mr Al-Ali’s  home,  in  addition  to  the  Cash,  Customs  found  around  42 kilograms of molasses tobacco and electronic devices storing copies of what appear to be original tobacco certificates for brands with KTC levels ranging from 6 to 30 per cent. They bear similarities with the certificates submitted to Customs by Avensis which suggest that the latter had been forged.

[9]    At the East Tamaki facility, Customs found around 4,591 kilograms of molasses tobacco, documents associated with Mr Al-Ali, and packaging indicating that tobacco was being repackaged for onwards distribution.

[10]   Mr Al-Ali provided a statement asserting that Avensis imported molasses tobacco but not the Al-Fakher brand, that he leased the East Tamaki facility, and that he derived the Cash from his work over the previous 11 years and from cash sales of molasses tobacco.

[11]   In light of the above, I am satisfied it is more likely than not that Mr Al-Ali “unlawfully benefited from significant criminal activity” in the period of seven years prior to 3 May 2024. The term is defined, in s 7 of the Act, to include a benefit that the person has “knowingly, directly or indirectly, derived”. A broad and robust approach to the term’s application is required.4 Mr Al-Ali appears to have engaged at considerable scale in importing molasses tobacco with KTC levels ranging from 6 to 30 per cent, declaring falsely in reliance on forged tobacco certificates that the levels were lower, and in that way arranging for Avensis to pay less duty and GST than it should have. I am satisfied that the reduction in duty and GST payable by Avensis was of at least indirect benefit to Mr Al-Ali.5

Maximum recoverable amount

[12]   Under s 53(2) of the Act, the value of Mr Al-Ali’s unlawful benefit is presumed to be the value stated in the Commissioner’s application; that is, $1,287,964.67.

[13]   Mr Al-Ali not having sought to rebut that presumption, and no property having been forfeited as a result of any related type 1 assets forfeiture order,6 I determine that that is the maximum recoverable amount.

Effective control

[14]   Mr Al-Ali having claimed the cash found at his home, and no other person having since claimed it, I am satisfied that it is in his effective control.

Result

[15]   Pursuant to s 17A of the Act, I order that the sum of $52,485 cash, seized by the New Zealand Customs Service from Mr Al-Ali’s home — the residence described at para 1(a)(iii)(A) of the Commissioner’s application dated 3 May 2024 — plus any interest accrued following that cash being banked (Cash) is to be treated as though Mr Al-Ali had an interest in it.

4      Rodriguez v Commissioner of Police [2020] NZCA 589.

5      Commissioner of Police v Nabawi [2021] NZHC 2413 at [34]–[38].

6      See s 54(1)(b).

[16]   Pursuant to s 55(1) of the Act, I make a profit forfeiture order in respect of Mr Al-Ali. The value of the benefit determined in accordance with s 53 of the Act is

$1,287,964.67. The maximum recoverable amount determined in accordance with s 54 is $1,287,964.67. The property that is to be disposed of in accordance with s 83(1), being property in which Mr Al-Ali has, or is treated as having, interests, is the Cash described at [15] above.

Johnstone J