Commissioner of Police v Cheah

[2019] NZHC 455

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-1926

[2019] NZHC 455

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

BOON HOOI CHEAH

Respondent

Hearing:

On the papers

Counsel:

D M A Wiseman and L Fraser for Applicant

W M McKean and N J Hartwell for Respondent

Judgment:

14 March 2019

JUDGMENT OF GRICE J

(Costs)

[1]                 Following my judgment granting the Commissioner orders for civil forfeiture and dismissing Mr Cheah’s application for relief, the Commissioner has sought costs.1

[2]                 Mr Cheah opposes the making of a costs order. He says, first, he is legally aided and therefore is not required to pay costs. Secondly, he has filed an appeal in this matter and says the costs application should be deferred until after it has been dealt with.

[3]                 I am of the view that the costs application should be dealt with now. There is no reason to defer it pending the outcome of a decision by the Court of Appeal.

1      Commissioner of Police v Cheah [2018] NZHC 2825.

COMMISSIONER OF POLICE v CHEAH [2019] NZHC 455 [14 March 2019]

The application

[4]                 The Commissioner argues that he would have been entitled to an uplift or indemnity costs due to a number of factors. However, the Commissioner does not pursue a higher award of costs and instead proposes an award of costs based on the 2B scale. He arrives at a total sum of $18,397.50 on that basis. Mr Cheah has not contested the arithmetic in reaching that sum.

[5]                 The Commissioner also says that Mr Cheah should pay costs personally because he has money outside the jurisdiction in Malaysia. His New Zealand assets have been forfeited to the Commissioner.

The money in Malaysia

[6]                 Mr Cheah said in his evidence that he had put approximately $40,000 into a Malaysian account.

[7]                 In my judgment I considered Mr Cheah’s explanation as to why he had received otherwise unexplained funds into his bank account. He said they were a return or payment for the funds that he had deposited with his father in Malaysia.2 The terms of that remittance were not explored before me in any depth. The focus in the proceedings was on the explanation Mr Cheah had given for various deposits in his accounts. I accepted his explanation that some deposits came from Malaysia as a return for some monies that he had earlier sent over there.

[8]                 In submissions on costs, the Commissioner pointed out that in his evidence Mr Cheah had said the money was a gift and there was an arrangement that he received something back. It is not clear whether this was enforceable in the circumstances. I am not prepared to go behind Mr Cheah’s evidence on this point. Accordingly, I do not consider the money that Mr Cheah sent to Malaysia can be taken as evidence of his having a present entitlement to funds over there.

2 At [96].

The legal position

[9]                 As Mr Cheah was legally aided throughout the litigation, s 45 of the Legal Services Act 2011 (the Act) applies to an application for costs against him personally. An order may not be made against a legally aided person in a civil proceeding unless the Court is satisfied that there are exceptional circumstances.3 A non-exhaustive list of exceptional circumstances is set out in s 45(3) of the Act. Once the exceptional circumstances threshold has been met, the Court may make a legally aided person liable only for an amount that is reasonable to pay having regard to all of the circumstances. This includes the means of all parties and their conduct in connection with the dispute.4 If no costs order is made because of s 45 of the Act, the amount that Mr Cheah would have otherwise been ordered to pay must be specified.5

[10]              In this case a number of grounds are put forward as establishing exceptional circumstances justifying an order against Mr Cheah personally. The Commissioner alleges that exceptional circumstances exist as follows:

(a)Mr Cheah unreasonably pursued not only his opposition to the Commissioner’s application for civil forfeiture orders, but also his application for relief from forfeiture and an out of time challenge to the admissibility of some of the Commissioner’s evidence.

(b)Mr Cheah engaged in deceptive and misleading conduct in the litigation. The Commissioner says this is demonstrated by my adverse credibility findings against Mr Cheah noting he was “not generally” a credible witness and that he was not “slow to lie about matters when they did not suit him”.6

(c)The Commissioner had informed Mr Cheah of the strength of the application in a letter proposing settlement. The settlement would have

3      Legal Services Act 2011, s 45(2).

4      Section 45(1).

5      Section 45(4).

6      Commissioner of Police v Cheah, above n 1, at [74]–[75].

placed Mr Cheah in a far more favourable situation than he finds himself in following my judgment.

[11]              In summary the Commissioner says Mr Cheah’s approach to the litigation caused unnecessary cost to the Commissioner and was unreasonable in that he refused to negotiate a settlement and disputed issues on meritless grounds.

[12]              In the circumstances I am of the view that Mr Cheah was not unreasonable in pursuing his defences. He was entitled to do so and they were not hopeless. His defence was conducted in an appropriate manner and there were no factors which would point to him acting as a unreasonable litigant in the circumstances.

[13]              The application was not straightforward. The Commissioner was not successful in all his arguments. For instance, his claim for recovery based on a deposit being indirectly derived from the relevant significant criminal activity and so indirectly tainting the term deposit, was rejected by me.7

[14]              It appears that Mr Cheah did refuse to settle. However, given the complex nature of these proceedings, I do not consider this action supports making Mr Cheah personally liable for costs. This was not a situation such as Simpson v Sax.8 In that case, the legally aided person was said to have conducted the proceedings in the same manner as their submissions on costs, that is in a “prolix and repetitive” manner.9 The proceedings were for a relatively small sum of money compared to the substantial amounts involved here.

[15]              I am of the view that the matters raised by the Commissioner in this case do not constitute exceptional circumstances for the purposes of s 45(2) of the Act.

Conclusion

[16]              In the light of Mr Cheah’s financial position, it is not appropriate he be liable for costs and disbursements in the amount claimed by the Commissioner. I am not

7      At [29] and [36].

8      Simpson v Sax [2015] NZHC 2686.

9 At [6].

satisfied that he has any entitlement to any overseas funds. Accordingly, Mr Cheah is not liable personally to pay costs to the Commissioner.

[17]              Had it not been for the operation of s 45 of Act, Mr Cheah would have been liable for the amount claimed by way of costs of $18,397.50.

Grice J

Solicitors:

Meredith Connell, Auckland for Applicant

Webb Ross McNab Kilpatrick Ltd, Whangarei for Respondent