Commissioner of Police v Cheng

[2025] NZHC 217

IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY

I TE KŌTI MATUA O AOTEAROA TŪRANGANUI-A-KIWA ROHE

CIV-2016-416-12 CIV-2016-416-46 CIV-2019-416-4

[2025] NZHC 217

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER, NEW ZEALAND POLICE

Applicant

AND

THOMAS CHENG

First Respondent

MASONIC LIMITED
Second Respondent

REDOUBT HOUSE LIMITED
Third Respondent

ACTION INVESTMENTS LIMITED
Fourth Respondent

ACTION INVESTMENT LLP
Fifth Respondent

continued …

On the papers
Counsel:	H W Ebersohn and H C J Salisbury for Second Interested Party M F Nelson for Respondents
Judgment:	19 February 2025

JUDGMENT OF RADICH J

[Costs]

COMMISSIONER, NZ POLICE v CHENG [2025] NZHC 217 [19 February 2025]

HARVEST PROPERTY LLP

Sixth Respondent

MORTGAGE INTERNATIONAL LLP
Seventh Respondent

EXPRESS FACTORING LLP
Eighth Respondent

WORLDWIDE MODELS LIMITED
Ninth Respondent

CML BUILDING LIMITED
Tenth Respondent

STARDUST BUILDING LIMITED
Eleventh Respondent

BAYWIDE CREDIT LIMITED
Twelfth Respondent

ANDERSONS BUILDING LIMITED
Thirteenth Respondent

UNITEC INVESTMENT LIMITED
Fourteenth Respondent

KFC LIMITED
Fifteenth Respondent

WILLIAM CHENG LIMITED

Sixteenth Respondent

QUEENS HOTEL LIMITED
Seventeenth Respondent

WILLIAM CHENG
Eighteenth Respondent

NYIOH CHEW HONG
Nineteenth Respondent

EMILY CHENG aka JOANNE McKAY

Twentieth Respondent

continued …

WINSTON GEORGE MAURICE RAYMOND FRANKLIN

Twenty-first Respondent

UNITEC INVESTMENTS LLP
Twenty-second Respondent

HARVEST FACTORING LLP
Twenty-third Respondent

AND  WARREN JAMES BORRIE

First Interested Party

COMMISSIONER OF INLAND REVENUE

Second Interested Party

[1]    Restraining orders have been made in this proceeding, under the Criminal Proceeds (Recovery) Act 2009, over funds in the bank accounts of the ninth respondent, Worldwide Models Ltd, and the 18th respondent, William Cheng. The funds in the accounts are rental payments made to 11 of the other respondents by tenants of buildings owned by those respondents.1

[2]    The 11 respondents have not paid tax on the rental payments they have received. Accordingly, the Commissioner of Inland Revenue — the second interested party in these proceedings — has issued a deduction notice to the Official Assignee under s 157 of the Tax Administration Act 1994 and s 43 of the Goods and Services Tax Act 1985.

1      The 11 respondents are Redoubt House Ltd (the third respondent), Action Investment LLP (the fifth respondent), Harvest Property LLP (the sixth respondent), CML Building Ltd (the 10th respondent), Stardust Building Ltd (the 11th respondent), Baywide Credit Ltd (the 12th respondent), Andersons Building Ltd (the 13th respondent), Unitec Investment Ltd (the 14th respondent), KFC Ltd (the 15th respondent), William Cheng Ltd (the 16th respondent) and Queens Hotel Ltd (the 17th respondent).

[3]    In my decision of 4 November 2024, I made an order that the Official Assignee should ensure that a portion of the restrained funds are paid to the Commissioner of Inland Revenue to meet the taxation liabilities of the respondents referred to in [63] of the decision in the event forfeiture orders are not made and the restraint is lifted.2 The Commissioner’s  application  for  the   order   was   opposed   by   the   18th   and   19th respondents, Mr Cheng and Ms Hong respectively. I said that the Commissioner was accordingly entitled to the payment of costs on a 2B basis but that, if the parties could not agree on costs, then the Commissioner should file a memorandum within 15 working days and the respondents should file a memorandum within a further five working days.3

[4]    On 20 November 2024, the Commissioner filed a memorandum in which it was said that the Commissioner had provided to the respondents a schedule which set out the costs to which it was entitled on a 2B basis. The costs totalled $12,083.73. In the  memorandum,  a  costs  order  in  that  sum  was  sought.  On  the  same  day,  20 November, counsel for the respondents sent an email to the Court in which it was said that the costs schedule had been sent to the respondents on the day she had received it but that she was yet to receive instructions.

[5]    On 13 February 2025, counsel for the Commissioner sent an email to the Court asking if costs could now be determined, given nothing had been filed for the respondents since November 2024.

[6]    I agree that that is in order. In accordance with my decision, the respondents were to file any memoranda on costs within five working days of the Commissioner filing a memorandum. Several months have passed. The respondents have had sufficient time to raise any issues with the Commissioner’s schedule.

2      Commissioner of New Zealand Police v Cheng [2024] NZHC 3242.

3 At [64].

[7]    The costs sought by the Commissioner of $12,083.73 are in accordance with Part 14 of the High Court Rules 2016 and the costs calculations are in accordance with the terms  of Schs 3 and 4 of the Rules.   Accordingly, I order that the 18th  and     19th respondents, who opposed the Commissioner’s application for orders, pay the Commissioner’s costs of $12,083.73.

Radich J

Solicitors:

Crown Law Office, Wellington for Second Interested Party Crawford Nelson, Auckland for Respondents