Commissioner of Police v Dotcom
[2014] NZHC 821
•16 April 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2012-404-33 [2014] NZHC 821
IN THE MATTER of an application pursuant to the Mutual
Assistance in Criminal Matters Act 1992
BETWEEN
THE COMMISSIONER OF POLICE Applicant
AND
KIM DOTCOM First Respondent
AND
BRAM VAN DER KOLK Second Repsondent
AND
MEGASTUFF LIMITED Third Respondent
AND
MONA DOTCOM Interested Party
Hearing: 15 April 2014 Appearances:
M D Downs and B F Fenton for the Applicant
R M Gapes and S Devoy for Mr Dotcom
A J Lloyd and R W Harris for Mrs DotcomJudgment:
16 April 2014
JUDGMENT OF THOMAS J
This judgment was delivered by me on 16 April 2014 at 5.30 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date:………………………….
Solicitors: Downs/B F Fenton Crown Law, Wellington
R Gapes/S Devoy, Simpson Grierson, Auckland
A J Lloyd/R W Harris, Minter Ellison Rudd Watts, Auckland
THE COMMISSIONER OF POLICE v KIM DOTCOM [2014] NZHC 821 [16 April 2014]
[1] The Commissioner of Police has applied for an order that the registration of two foreign restraining orders issued in the United States on 10 and 25 January 2012 respectively, and registered in New Zealand on 18 April 2012, be extended for a further year.
[2] The first respondent, Mr Dotcom, and the interested party, his wife Mrs Dotcom, oppose the application. The second and third respondents have taken no steps in respect of the application.
Background
[3] On 10 January 2012, Judge Liam O’Grady of the United States District Court for the Eastern District of Virginia issued a post-indictment restraining order against bank accounts, vehicles and personal property associated with the respondents located in New Zealand (the first foreign restraining order).
[4] On 25 January 2012, Judge O’Grady issued a second post-indictment restraining order against further real and personal property associated with the respondents and located in New Zealand (the second foreign restraining order).
[5] By order dated 18 April 2012, Justice Potter ordered that the first and second foreign restraining orders be registered in New Zealand, subject to conditions previously imposed by the Court in orders dated 29 February 2012 and 21 March
2012 (the registration order).
[6] The first and second foreign restraining orders remain in force.
[7] The registration order, as varied from time to time by the Court since 18 April
2012, remains in force but will expire on 18 April 2014 unless extended.
Jurisdiction to extend registration of the foreign restraining orders
[8] Pursuant to s 136 of the Criminal Proceeds Recovery Act 2009 (CPRA), the registration order will expire on 18 April 2014, unless extended by an order of the Court under s 137.
[9] Under s 137(1), an applicant may, before the registration order expires, apply for an extension of the duration of the registration order in New Zealand. Subsection (2) provides that the Court may order that the registration be extended for a further period not exceeding 1 year.
Grounds on which the extension is sought
[10] The application to extend the duration of the registration order is primarily made on the following grounds:
(a) The United States is preparing to file an action for civil forfeiture in the US, which will encompass the property currently restrained by the two foreign restraining orders registered in New Zealand; and
(b) The United States believes the civil forfeiture action it is preparing to file is likely to be concluded before 1 April 2015.
[11] The applicant does not seek the order to preserve the assets pending the conclusion of conviction-based forfeiture proceedings. Mr Downs for the applicant confirmed that the applicant was not relying on the continued criminal prosecution to justify an extension of the duration of the registration order. Mr Downs said the criminal proceedings were relevant as context.
Applicant’s submissions
[12] The applicant submitted that the Court’s exercise of discretion should be guided by the purpose of the Mutual Assistance in Criminal Matters Act 1992 (MACMA), pursuant to which the foreign restraining orders were registered.
[13] The applicant relies on the affidavit of G Wingate Grant, Assistant United States Attorney, dated 7 March 2014. Mr Wingate Grant deposes that the first and second foreign restraining orders remain in force and are expected to remain in force until the resolution of the United States’ criminal case against those indicted in United States v Kim Dotcom et al, Criminal Case No 1:12CR3 (ED Va). However, given the delays in the extradition process in New Zealand, the United States is preparing to file a civil forfeiture action in respect of the property in New Zealand. Such an action will not be conditional on the extradition or the completion of the United States’ criminal proceedings. He believes the civil forfeiture proceedings are likely to be completed before 1 April 2015.
[14] The applicant’s case is that, in circumstances where the United States intends to initiate and expects within one year to complete a forfeiture process in respect of property currently restrained in New Zealand, it is appropriate that this Court exercise its discretion to extend registration of the foreign restraining orders for a further year. The main requirements for an extension are, in the applicant’s submission, that the restraining order continues in force in the requesting jurisdiction and that the requesting jurisdiction still intends to progress its application for forfeiture.
[15] Mr Downs said that New Zealand’s MACMA and CPRA legislative framework is “agnostic” as to whether forfeiture is civil or criminal just as it is in the New Zealand domestic context. He disputed that there has been a “change of course” that is relevant. The decision to pursue civil forfeiture does not affect, in his submission, the appropriateness of extending the registration. Mr Downs pointed out that the CPRA expressly contemplates in s 14 that circumstances may change while property is restrained and forfeiture may be sought on grounds different from those on which it was restrained. He said ss 11, 14 and 15 of the CPRA give support to what he terms the regime’s “indifference to methodology”.
[16] In Mr Downs’ submission the fact that, at the time of the registration order, the United States contemplated a conviction based forfeiture process does not mean there is any impropriety in the Commissioner’s reliance on the change of approach which is simply intended to avoid further delay.
[17] Mr Downs submitted that this Court has a limited role in deciding whether or not to extend the duration of the registration order. In his submission the jurisdiction needs to be considered in the context of the very limited role of the Court in registering the foreign restraining orders in the first place. Mr Downs did not accept that the Court should consider the reasonableness of the extension order to the same extent as it might when considering an extension to a restraining order made in New Zealand pursuant to the CPRA.
[18] The applicant’s case is that it is the methodology only which has changed, that is, forfeiture is now being pursued in the civil rather than the criminal jurisdiction. Because of the wide definition of “foreign restraining order” under MACMA, the methodology adopted in the foreign requesting state is immaterial. Mr Downs emphasised that whether or not forfeiture orders are eventually made depends upon what happens in the United States.
[19] Mr Downs accepted that registration of the restraining order was sought on the basis of a conviction-based forfeiture proceeding, but said that also was immaterial. He referred to the terms in which authorisation on behalf of the Attorney-General was given to Commissioner. He noted that the authorisation itself was not given on the basis of a conviction based forfeiture regime.
[20] Mr Downs rejected any suggestion that the proceedings were a misuse or abuse of the Court, saying that any errors in 2012 had already been dealt with and were of limited relevance.
[21] In summary, the applicant’s position is that there is a valid registration order and it is broad enough to incorporate both a criminal and a conviction based forfeiture procedure.
[22] Mr Downs dealt with the position of the interested party, Mrs Dotcom, briefly. He referred to the ability under ss 30 and 139 of the CPRA for any person with a severable interest in property restrained under a foreign restraining order to apply to the High Court. He noted however that the Court needed to be satisfied that such a party had not unlawfully benefited from the significant foreign criminal
activity to which the restraining order relates. The appropriate course is for Mrs
Dotcom to make an application under s 139, he said.
First respondent’s submissions
[23] Mr Dotcom opposes the application on the grounds that:
(a) The applicant has not demonstrated proper grounds for an extension. The grounds in the application relate to an intended civil forfeiture action in the United States and demonstrate a change of course inconsistent with MACMA and the CPRA and the basis of the orders made on 18 April
2012.
(b) The application and the orders requested are contrary to the scheme, text, purpose and intention, and meaning of the relevant provisions of MACMA, the CPRA and the New Zealand Bill of Rights Act 1990 (NZBORA).
[24] If the Court has the power to make the orders sought, the position of the first respondent is that the Court should decline to exercise its discretion to make the orders as the application is being used for an unauthorised and/or ulterior purpose and to make the orders would be unfair, oppressive, inconsistent with the purposes of justice, prejudicial to the first respondent and an inappropriate use and/or an abuse or misuse of the Court’s process and inconsistent with the relevant legislation. Furthermore if the Court extends the duration of the registration, such an order should be made subject to conditions.
[25] Mr Gapes, for the first respondent, reminded the Court that whenever an enactment can be given a meaning consistent with the rights and freedoms in NZBORA that meaning should be preferred to any other meaning (s 6). He then referred to s 21 of NZBORA, which provides that everyone has the right to be secure against unreasonable seizure of property.
[26] Mr Gapes referred to the history of the making of the registration order, the first applications being made ex parte and the resulting orders being declared null
and void and of no legal effect. In his submission the history showed that the Crown had failed to meet the standard of a model litigant expected of it. He described this application as a continuation of that approach.
[27] In Mr Gapes’ submission, s 137 of the CPRA is directed only at extending the duration of the registration order and does not allow a restraint be exercised for a different purpose from the original registration order. He submitted that there is in fact no jurisdiction for the application to be granted, as it is sought on a different basis from that for which the restraining order was registered. He said that the number of steps that must be taken under MACMA and the CPRA before a foreign restraining order is registered demonstrated Parliament’s recognition that such draconian orders must be subject to safeguards. Essentially, Mr Gapes’ argument was that, given the intense attention paid to the circumstances in which foreign restraining orders can be registered, the Court should exercise its discretion to extend an order with a similar sense of caution.
[28] Mr Gapes emphasised that the application under s 137 of the CPRA relates simply to the duration of the registration order and it would be quite wrong, in his submission, for an order granted for one purpose to be extended for a completely different purpose.1
Interested party’s submissions
[29] Mrs Dotcom opposes the application on the following grounds:
(a) She is not a party in the underlying criminal proceedings which have commenced in the United States;
(b) The applicant has not proffered any evidence connecting her to the underlying alleged offending;
(c) The applicant has failed to take substantive steps in relation to her property during the two years the current orders have been in place;
(d) Mrs Dotcom is prima facie entitled to the return of her restrained property on the expiry of the current registration;
(e) It would be unjust and unreasonable for the Court to grant an extension, thereby further depriving Mrs Dotcom of her interest in the restrained property and/or forcing her to incur the burden of obtaining relief from any ongoing order.
[30] Mr Lloyd for Mrs Dotcom submitted that the Court must specifically consider:
(a) Whether there remains (or ever existed) reasonable grounds to believe that the interested party has unlawfully benefited from significant criminal activity; and
(b) Whether it is just and reasonable in the circumstances for the extension to be granted.
[31] Relying on the decision of the Commissioner of Police v Reed2 Mr Lloyd submitted that the clear intent of the restraining order regime is temporarily to deprive a person of legitimately held property on suspicion that it may be the proceeds of crime. If such a suspicion is absent then, in his submission, justification for continued restraint must vanish. Mr Lloyd submitted the Commissioner has failed to provide any meaningful evidence tying the interested party to the alleged underlying criminal activity. She is not a respondent or a defendant in the extradition proceeding.
[32] The interested party’s property comprises: (a) Separately held property; and
(b) Other severable property interests including property in which Mrs
Dotcom has an interest pursuant to the Property (Relationships) Act 1976.
[33] Mr Lloyd told the Court that now was the opportunity properly to consider the registration order and the Court should not blindly rubber stamp the application. In his submission, Mrs Dotcom was entitled to oppose the application rather than have to make an application pursuant to s 30 of the CPRA.
[34] Mr Lloyd characterised the application as disingenuous. Commenting on Mr Downs’ reliance on ss 14 and 15 CPRA, he observed that, had Parliament wanted to make specific provision for the situation currently before the Court, it could have done so explicitly.
Analysis
Purposes of the MACMA and CPRA
[35] Section 4 of the MACMA sets out the object of the Act as follows:
4 Object of Act
The object of this Act is to facilitate the provision and obtaining, by New
Zealand, of international assistance in criminal matters, including—
(a) The identification and location of persons:
(b) The obtaining of evidence, documents, or other articles: (c) The production of documents and other articles:
(d) The making of arrangements for persons to give evidence or assist investigations:
(e) The service of documents:
(f) The execution of requests for search and seizure: (g) the forfeiture of—
(i) tainted property; and
(ii) property of persons who have unlawfully benefited from significant criminal activity or significant foreign criminal activity; and
(iii) instruments of crime; and
(iv) property that will satisfy all or part of a foreign pecuniary penalty order;
(h) the location of property that may be forfeited:
(i) the recovery of property to satisfy foreign pecuniary penalty orders: (j) the restraining of dealings with property, or the freezing of assets,
that may be forfeited.
[36] The purposes of the CPRA are set out in section 3:
(1) The primary purpose of this Act is to establish a regime for the forfeiture of property—
(a) that has been derived directly or indirectly from significant criminal activity; or
(b) that represents the value of a person's unlawfully derived income.
(2) The criminal proceeds and instruments forfeiture regime established under this Act proposes to—
(a) eliminate the chance for persons to profit from undertaking or being associated with significant criminal activity; and
(b) deter significant criminal activity; and
(c) reduce the ability of criminals and persons associated with crime or significant criminal activity to continue or expand criminal enterprise; and
(d) deal with matters associated with foreign restraining orders and foreign forfeiture orders that arise in New Zealand.
Context: process of registration of the foreign restraining orders
[37] Under s 54(1) of MACMA a foreign country may request the Attorney- General to assist in enforcing a foreign restraining order that relates to property believed to be located in New Zealand.
[38] If satisfied of the matters set out in s 54(2), the Attorney-General may authorise the Commissioner to apply to the High Court to register a foreign restraining order in New Zealand.
[39] The Court’s power to register the foreign restraining order comes from s 56 of the MACMA:
If the High Court is satisfied that a foreign order that the Commissioner has applied to register under section 54 or 55 is in force in a foreign country, the High Court must make an order that it be registered in New Zealand.
[40] The two foreign restraining orders were registered on 18 April 2012 by Potter
J.3 She found that:4
There is no requirement in s 54 that the Attorney-General give reasons for being satisfied as to the matters specified in s 54(2)… [t]here is no jurisdiction in s 56 for the Court to require such reasons to be given, or even to look beyond the face of the Attorney-General's authorisation and the Commissioner's application. Once the Commissioner has made the application, the Court must register the restraining order if it is satisfied that the order is in force in a foreign country.
The mandatory provision [in s 56(1)] provides both the source and the sole guidance for the exercise of the Court's power in registering the foreign order.
Extension of duration of registration of foreign restraining order
[41] The CPRA does not prescribe any particular matters for the Court to take into account when considering an application to extend registration of a foreign restraining order. Section 137 provides:
137 Extension of duration of registration of foreign restraining order
(1) If the High Court has registered a foreign restraining order in New Zealand, the applicant for that order may, before the registration of the restraining order expires, apply to the High Court for an extension of the duration of the registration of the foreign restraining order in New Zealand.
(2) If an application is made under subsection (1), the High Court may order that the registration of a foreign restraining order be extended for a further period not exceeding 1 year.
(3) If an application is granted under this section, the registration of the foreign restraining order in New Zealand ceases at the time specified in the Court’s order.”
[42] Restraining orders made under the CPRA can be extended under that Act pursuant to s 41. As with s 137, s 41 gives the Court a discretion to extend the order but does not provide any guidance as to how to exercise that discretion.
[43] Section 41 was considered by Woolford J in Commissioner of Police v Reed.5
Relevantly, he stated:6
It is evident from the wording of ss 41 and 42 that the Court has a wide discretion to extend restraining orders. However, I am of the view that the discretion must be exercised in a reasonable manner having regard to the purpose of the Act and the nature and purpose of the restraining orders.
[44] I agree with that analysis. I am not persuaded by Mr Downs’ submission that the discretion is somehow restricted when dealing with a foreign restraining order. There is nothing in the CPRA to suggest that is the case.
Application for extension
[45] Assistant United States Attorney G. Wingate Grant filed the only affidavit in support of the application. It was succinctly expressed as follows:
1. Since March 1980, I have been employed by the United States Attorney’s Office for the Eastern District of Virginia as an Assistant United States Attorney, and I currently also lead the Monetary Penalties Unit in the office which has responsibility for asset forfeiture matters. Currently, my primary duty is to provide guidance and support in forfeiture matters, both criminal and civil, and I am involved in, and familiar with, the case of United States v Kim Dotcom, et al., Criminal Case No. 1:12CR3 (E.D. Va).
2. The trial court in the United States has issued three post-indictment restraining orders associated with Criminal Case 1:12CR3, which remain in force and are expected to remain so until resolution of the case. On January
10, 2012, Judge Liam O’Gardy issued a port-indictment restraining order as to assets located in Germany, Hong Kong, the Netherlands, New Zealand,
the Philippines, and the United Kingdom. On January 20, 2012, he issued an additional post-indictment restraining order for two bank accounts located in
Australia. On January 25, 2012, the government obtained a supplemental post-indictment restraining order against additional property in New Zealand. All of these restraining orders remain in effect and are expected to
be so beyond April 2015.
3. Given the delays in the extradition process in New Zealand, the
United States is preparing to file a civil (non-conviction based) forfeiture
action involving, at a minimum, the restrained property in New Zealand. Such an action would be legally independent of the criminal case, and such, as would not be conditional on the successful extradition or criminal conviction of any individual, including those currently involved in the extradition process in New Zealand.
4. Given our analysis of the legal regime, the United States believes that the civil forfeiture process is likely to be completed before April 1,
2014.
[46] Mr Wingate Grant says that the forfeiture proceedings would be “legally independent of the criminal case”. He provides no evidence of when those proceedings might be filed or how and the extent to which they would relate to the criminal proceedings.
[47] It is apparent that the civil forfeiture action proposed by the United States recognises the reality that any extension of the restraining order can be for the maximum of one year.
[48] The criminal proceedings, which lay behind the making of the foreign restraining orders and the registration order, are ongoing. Therefore this purpose is still live. However, the application to extend the duration of the registration order is, somewhat surprisingly, not made on this basis. As I have noted above at [11], the application is made on the basis of the future civil forfeiture proceedings.7
[49] The first respondent’s primary objection is that the extension is sought on a different basis from that which existed at the time the order was made. The question is whether, given these circumstances, I should exercise my discretion to extend the registration for a further 12 months, as requested by the applicant.
Foreign restraining orders and the application to extend the registration order
[50] The foreign restraining orders were made in relation to the criminal proceedings against the respondents. The headings to both refer to “Post-Indictment Restraining Order”. They both recite that on January 5 2012 a criminal indictment
7 When I questioned Mr Downs as to why the ongoing criminal proceedings were not relied upon, he stated that this was because the United States’ request for an extension was made solely on the ground of the future civil forfeiture proceedings.
was returned against the respondents for the listed offences including conspiracy to commit racketeering. Both record that the criminal offences charged in the indictment are punishable by a maximum term of imprisonment of at least five years and carry a penalty of forfeiture. The terms of the restraining orders include authorisation for the United States to file any documents to ensure that property is preserved for forfeiture. The orders remain in effect until further order of the Court.
[51] The foreign restraining orders were registered because the Attorney-General was satisfied they related to property which was “tainted property” or belonged to a person who had unlawfully benefitted from significant foreign criminal activity and that the property was located in New Zealand. This continues to be the case.
[52] Section 54 of MACMA provides that:
54 Request to enforce foreign restraining order
(1) A foreign country may request the Attorney-General to assist in enforcing a foreign restraining order that relates to property that is believed to be located in New Zealand.
(2) The Attorney-General may authorise the Commissioner to apply to the High Court to register a foreign restraining order in New Zealand if satisfied—
(a) that the request from the foreign country relates to—
(i) tainted property (as defined in relation to Part 3); or
(ii) property of a person who has unlawfully benefited from significant foreign criminal activity; or
(iii) an instrument of crime (as defined in relation to Part
3); or
(iv) property that will satisfy some or all of a foreign pecuniary penalty order; and
(b) that there are reasonable grounds to believe some or all of the property that is able to be restrained under the foreign restraining order is located in New Zealand.
(3) An authority issued under subsection (2) must be in writing.
[53] Therefore, if the Attorney-General is satisfied that the requirements of s
54(2)(a) and (b) are met, he then has a discretion as to whether or not to authorise the
Commissioner to apply to the High Court for registration in New Zealand of the foreign restraining orders.
[54] Mr Mander, exercising the powers of the Attorney-General, authorised the
Commissioner to apply for the registration order on 16 March 2012. He said:
I am satisfied—
(a) that the requests from the foreign country relate to -
(i) tainted property (as defined in relation to Part 3 of the Mutual Assistance in Criminal Matters Act 1992); and/or
(ii) property of a person who has unlawfully benefited from significant foreign criminal activity; and
(b) that there are reasonable grounds to believe that some or all of the property that is able to be restrained under the foreign restraining orders is located in New Zealand,
and in my opinion nothing in the Mutual Assistance in Criminal Matters Act
1992 precludes the granting of this request.
[55] Tainted property, as defined in relation to Part 3 of MACMA:8
(i) means any property that has, wholly or in part, been—
(A) acquired as a result of significant foreign criminal activity;
or
(B) directly or indirectly derived from significant foreign criminal activity; and
(ii) includes any property that has been—
(A) acquired as a result of more than 1 activity if at least 1 of those activities is a significant foreign criminal activity; or
(B) directly or indirectly derived from more than 1 activity if at least 1 of those activities is a significant foreign criminal activity
[56] “Significant foreign criminal activity” is defined in s 2 of MACMA. Relevantly, it:
(a) means an activity engaged in by a person in a foreign country that if proceeded against as a criminal offence in that country—
8 Mutual Assistance in Criminal Matters Act 1992, s 2.
(i) would amount to offending—
(A) that consists of, or includes, 1 or more offences punishable by a maximum term of imprisonment of
5 years or more; or
(B) from which property, proceeds, or benefits of a value of $30,000 or more have, directly or indirectly, been acquired or derived; and
(ii) whether or not—
(A) the person has been charged with or convicted of the offending; or
(B) the person has been acquitted of the offending; or
(C) the person’s conviction for the offending has been quashed or set aside...
[57] While I accept that the authorisation on behalf of the Attorney-General to the Commissioner to apply to register the foreign restraining orders did not refer to the conviction based forfeiture process, it did refer to the request from the United States under s 54 of MACMA. The affidavit of J Prabhu, Assistant United States Attorney, dated 10 January 2012 in support of the United States’ first request records that the United States has both a conviction based forfeiture regime as well as an in rem non- conviction based system. He notes that the in rem forfeiture regime, unlike the criminal forfeiture system, does not require the Government to obtain a criminal
conviction before forfeiting property. Mr Prabhu said:9
Although both the conviction and non-conviction systems are available to the United States in this case, at this time, the government is only asking New Zealand to temporarily restrain assets in connection with the government’s conviction-based forfeiture case, that is, the criminal forfeiture case. The United States anticipates that such assets will be forfeited in the event of a conviction in the criminal case.
[58] In his affidavit of 12 April 2012 Mr Mander confirmed that:
When deciding whether to issue an authority under s54 (2) I considered all of the documents listed in paragraph 3 of Mr Marshall’s affidavit… This was the only primary material I had before me.
9 At [4] of his affidavit.
[59] In exercising the powers of the Attorney-General Mr Mander did not have to accede to the United States’ request. Whether he would have done so had the application been on the basis of civil forfeiture action I do not know.
[60] I agree with Potter J that, when making a registration order under s 56, the Court has no ability to look beyond the face of the Attorney-General's authorisation and the Commissioner's application. The Court is required by the mandatory language of s 56 to make the registration order. However, that is not the case in s
137, where the Court has a discretion whether or not to grant an extension. I can see no reason why the Court, in exercising this discretion, cannot take into account the basis on which the authorisation was made in circumstances where this basis differs from that on which the application for extension is made. I also see nothing in the CPRA which would preclude the Court from doing so.
[61] Had the request to enforce the foreign restraining order under s 54 been on the basis that the United States was intending to take forfeiture proceedings in either the civil or the criminal jurisdiction, then extending the order’s duration would have been straightforward. But I agree with the submissions of the first respondent and Mrs Dotcom that it would not be right for the Court to extend the duration of registration of foreign restraining orders on a different basis from that which was in material before the person exercising the Attorney-General’s powers when he authorised the Commissioner to make the application for registration.
[62] Having requested assistance from the New Zealand Government solely on the basis of conviction-based forfeiture proceedings, a requesting state cannot effectively short circuit the registration process by applying to the Court for an extension of the registration order, rather than making a new request under s 54 of MACMA, when the basis for it has changed.
[63] I am not persuaded that reference to ss 11, 14 and 15 of the CPRA assists the applicant. There is no dispute that, if civil forfeiture orders were obtained in the United States, their registration in NZ would not be precluded simply because registration of the restraining orders had been obtained on the basis of criminal proceedings.
[64] The affidavit of Mr Wingate Grant in support of the application for extension was sworn on 7 March 2014. As at 15 April 2014 there is nothing before the Court to indicate that any civil forfeiture action has been filed, much less how and to what extent it might be relevant to the conviction based forfeiture proceedings. No detail about the civil process was included in the application or supporting affidavit. The only information on the civil forfeiture process was that included in the material provided to the Government as part of the request pursuant to s 54 of MACMA, which stated categorically that the civil process was not being relied on for registration of the order in New Zealand.
[65] Mr Mander in exercising the powers of the Attorney-General authorised the Commissioner to apply to the High Court to register the foreign restraining orders in New Zealand. The material before him at the time of the decision related to the defendants facing a criminal forfeiture case rather than a civil one. The current application is made exclusively on the ground that the United States intends at some time in the future to pursue forfeiture in the civil jurisdiction. I am not satisfied that the Court can properly extend the duration of the registration order on a basis different from that which was before Mr Mander exercising the powers of the Attorney-General when he decided to seek registration of the restraining orders in New Zealand.
[66] For the reasons given, I decline to extend the registration of the foreign restraining orders for a further 12 months.
Extension of registration of foreign restraining orders for the purpose of preserving the applicant’s right to an effective appeal
[67] In the applicant’s written submissions, he requested that, in the event that I decline to extend the registration by 12 months, I nevertheless extend it for an appropriate period to allow the applicant to exercise his right of appeal. The first respondent opposed that course.
[68] I am satisfied it is necessary for me to do this in order to preserve the applicant’s right of appeal. If the registration is allowed to expire on 18 April 2014,
there is a risk that the assets covered by the foreign restraining orders will be dealt with or disposed of in a way which renders nugatory the applicant’s appeal rights.
[69] Therefore, in these circumstances, and given that:
(a) the foreign restraining orders remain in force; and
(b) the United States intends to continue to pursue forfeiture proceedings;
I have decided to exercise my discretion under s 137 to extend the registration of the orders for a short period, to allow the applicant time to bring an appeal and for that appeal to be determined.
[70] In determining how long an extension is necessary, I have had regard to the provisions in the CPRA concerning the expiration of a domestic restraining order when an application for forfeiture has been declined.
[71] Section 38 provides the following:
38Duration of restraining order when application for forfeiture order declined
A restraining order that is in force at the time that a court declines to make a forfeiture order that is associated with the same property does not expire, if section 37(2)(a) applies, until—
(i) the date that is the end of a period of 7 working days from the date of that decision, if an appeal has not been lodged in the court by that date; or
(ii) if an appeal has been lodged in the court by that date, on the date of the withdrawal or determination of that appeal, or, if a further appeal is lodged, on the date of the withdrawal or determination of that further appeal.
[72] I am aware that, because of Good Friday, Easter Monday and Anzac Day, the Court of Appeal will be closed for three of the next seven working days. I am also aware that the applicant will need to be in correspondence with the authorities in the United States before lodging an appeal.
[73] I therefore order that the registration of the foreign restraining orders be extended and will expire:
(a) After 14 working days from the date of this judgment (16 April 2014)
if an appeal has not been lodged in the Court of Appeal by that date;
or
(b) If an appeal has been lodged by that date, on the date of the withdrawal or determination of that appeal.
Costs
[74] As a preliminary view, I see no reason why in relation to the first respondent, the applicant as the unsuccessful party should not be required to pay costs on a scale
2B basis. However, the position may be different with respect to the costs of the interested party. I reserve leave for the parties to file memoranda as to costs. Any memorandum from the respondents is to be filed within 15 working days of the date of this judgment, with any response from the applicant to be filed within 10 days thereafter.
Summary
[75] In summary, I have found that:
(a) When exercising its discretion under s 137 to extend the duration of the registration of foreign restraining orders, the Court is able to have regard to the materials provided by the requesting state to the Attorney-General when he authorised the application for registration to be made.
(b) The Attorney-General’s authorisation was made after considering the foreign restraining orders, the United States’ requests and the supporting affidavit of Mr Prabhu.
(c) The foreign restraining orders are based on the conviction-based forfeiture regime in the United States. The United States’ requests and Mr Prabhu’s affidavit make it clear that the United States sought the orders’ registration for the purpose of criminal forfeiture proceedings.
(d) The current application for an extension of the registration order is made exclusively on the basis that the United States intends in the future to commence civil forfeiture proceedings.
(e) In these circumstances, it is not appropriate for the Court to exercise its discretion to extend the registration order by a further 1 year. The Court declines to do so.
(f) However, if the registration is allowed to expire on 18 April 2014, there is a risk that the applicant’s right to appeal this decision will be rendered nugatory. Therefore the registration order is extended and will expire after 14 working days if no appeal is brought or on the date that any appeal brought by the applicant is withdrawn or
determined.
Thomas J
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