Commissioner of Police v Gan

[2017] NZHC 583

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-5037 [2017] NZHC 583

BETWEEN

THE COMMISSIONER OF POLICE

Applicant

AND

YIXIN GAN First Respondent

AND

FEI LIN

Second Respondent

Hearing:	On the papers
Counsel:	M R Harborow & K Eastwood for Applicant G J Newell for Respondents
Judgment:	28 March 2017

JUDGMENT OF PAUL DAVISON J

This judgment was delivered by me on 28 March 2017 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Meredith Connell, Auckland

Introduction

[1]      The Commissioner and the first and second respondents, with the consent of three interested parties to the proceeding: Kai Lin, Hui Zhen Qui, and Lina Xu, seek the Court’s approval pursuant to s 95 of the Criminal Proceeds (Recovery) Act 2009 of a settlement they have reached.

[2]      The Court must approve a settlement if it is satisfied that the settlement is consistent with the purposes of the Act and the overall interests of justice.1  The purposes of the Act include eliminating the opportunity for persons to profit from significant criminal activity, deterring significant criminal activity, and reducing the ability of criminals to continue and expand criminal enterprises.2

Background

[3]      These proceedings arise from Operation Ghost, an investigation into the importation and supply of controlled drugs. Operation Ghost terminated in 2013. Ms Gan and some associates were arrested and charged with various offences, including the importation and supply of pseudoephedrine.  Mr Lin is Ms Gan’s husband. He left New Zealand for Shanghai in 2013 and has not returned since.

[4]      Ms   Gan   has   now   been   convicted   of   two   charges   of   importing pseudoephedrine and one charge of possession of pseudoephedrine for supply. She was sentenced to an effective term of 14 years’ imprisonment.3

Proposed settlement

[5]      The proposed settlement is as follows:

(a)       $168,361.54 of the restrained funds shall be paid into a bank account to be nominated by Mr K Lin and advised in writing to the Official

Assignee;

1      Criminal Proceeds (Recovery) Act 2009, s 95(3).

2      Section 3(2).

3      R v Gan [2016] NZHC 2349 at [32].

(b)orders lifting the restraining orders in respect of a diamond ring seized by police from 62 Boundary Road, Blockhouse Bay, Auckland, as shown in the photograph at Schedule A to the joint memorandum, and directing the Official Assignee to return that item to Ms Gan;

(c)      asset forfeiture orders will be made under s 50(1) of the Act in respect of the following property, so that it vests in the Crown absolutely and is to be in the Official Assignee’s custody and control:

(i)all interests in the property located at 62 Boundary Road, described in certificate of title 499254 as Lot 2 Deposited Plan

425141, registered to Ms Gan and Mr Lin, excluding the registered mortgage in favour of ANZ Bank New Zealand;

(ii)      the restrained proceeds of sale of the property at Unit 1305, 20

McRae Way, New Lynn, Auckland, described in certificate of title 644796 as Principal Unit 1305 DP 472616;

(iii)     the restrained proceeds of sale of the property at Unit 1406, 20

McRae Way, New Lynn, Auckland, described in certificate of title 644808 as Principal Unit 1406 DP 472616 and Accessory Unit 3C DP 455529;

(iv)the restrained proceeds of sale of carpark 14, 28 McRae Way, New Lynn, Auckland, described in certificate of title 586369 as Principal Unit 14 DP Plan 455529;

(v)      the 2012 Audi Q7 3.0 TDI Quattro station wagon, registration

J00000, registered to Ms Gan;

(vi)all funds restrained from the bank accounts set out in Schedule B to the joint memorandum (also annexed to this judgment), entitled “Bank funds”, excluding the amount of $168,361.54 referred to in paragraph 3.2(a) above;

(vii)all  funds  formerly  held  in  the Auckland  Sky  City  deposit account 106235331 in the name of Ms Gan; and

(viii)the electronic goods, bottles of alcohol and other luxury items as set out in Schedule C to the joint memorandum (also annexed  to  this  judgment),  entitled  “Property  seized  on  4

December 2013”.

(d)the Commissioner will not bring an application for profit forfeiture orders against Ms Gan, Mr Lin, Mr K Lin, Ms Qui, or Ms Xu;

(e)      costs will lie where they fall in relation to all matters and no orders as to costs will be made.

[6]      The approximate monetary value of the property to be forfeited is $2.35M.

Should the settlement be approved?

[7]      Settlement is subject to the Court’s approval pursuant to s 95 of the Act. This approval is not a mere rubber stamping exercise. Parliament has entrusted the Court with a supervising jurisdiction to ensure that settlements are consistent with Parliament’s intentions.4 The parties submit that the settlement is consistent with the purposes of the Act and the overall interests of justice as:

(a)      There would be a very considerable saving of time, resource and cost to all parties if the proceeding can be resolved by consent.

(b)The Commissioner considers he has a good case to show that all of the presently restrained property is tainted property and that the respondents have unlawfully benefited from significant criminal activity. He recognises that the Court might be inclined to grant relief against  forfeiture  in  respect  of  the  proceeds  of  sale  of  Owairaka

Avenue, which was formerly registered to Mr K Lin and Ms Qui.

4      Commissioner of Police v Know-All Group Ltd HC Auckland CIV-2010-505-403, 7 November

2011 at [11].

Other than the property restrained in this matter, the Commissioner is not  aware  of  any other  significant  assets  which  could  be  applied towards a profit forfeiture order.

(c)       Ms Gan and Mr Lin dispute the strength of the Commissioner’s case.

They do, however, acknowledge that a contested hearing carries with it some risk, and that a contested hearing (and potential appeals) will take some time to complete. They also recognise the mandatory nature of civil forfeiture orders, the statutory presumption in favour of the Commissioner’s nominated profit forfeiture figure under s 53 of the Act, and the civil standard of proof.

(d)Finally,  all  parties  wish  to  have  certainty  and  control  as  to  the outcome of these matters.

[8]      I consider that the overall interests of justice and the purposes of the Act are met by the proposed settlement. The value of the assets to be returned to the first respondent, being the sum of $168,361.54 and the diamond ring seized by the Police from the property at 62 Boundary Road, when compared to the value of the assets to be  forfeited  of  approximately  $2.35  million,  informs  my  conclusion  that  the proposed  settlement  is  consistent  with  the  objectives  and  purposes  of  the Act. Furthermore, the respondents and the Commissioner recognise a litigation risk based on the possibility that the Court might  grant relief against the forfeiture of the proceeds of sale of the Owairaka Avenue property which was formerly registered in the names of Mr Kai Lin and Hui Zhen Qui.

[9]      I also note that the Joint Memorandun regarding the proposed settlement, has been signed by the three interested parties to the proceeding, including Kai Lin and Hui Zhen Qui.

[10]     A settlement of the proceedings will result in substantial savings of time and legal costs for both the Commissioner and the respondents.

[11]     Accordingly,  I  consider  that  it  is  appropriate  to  approve  the  proposed settlement and to make the orders jointly sought by the parties.

Result

[12]     I make an order in terms of s 95(3) of the Act approving the settlement, and also make orders as set out in [5] above.

Paul Davison  J