Commissioner of Police v Geddes

[2013] NZHC 1199

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2012-470-000752 [2013] NZHC 1199

UNDER  the Criminal Proceeds (Recovery) Act 2009

BETWEEN  THE COMMISSIONER OF POLICE Applicant

ANDLORNA MARY GEDDES Respondent

Hearing:         18 April 2013

Appearances: JM Holmes for Applicant (Ms Geddes)

RW Jenson for Respondent (Commissioner of Police) Judgment:      24 May 2013

RESERVED JUDGMENT OF ANDREWS J [Application to Dismiss Proceeding]

This judgment is delivered by me on 24 May 2013 at 12:30pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Counsel/Solicitors:

Ronayne Hollister-Jones Lellman:               PO Box 13063, Tauranga 3141 (RW Jenson) JM Holmes, Barrister:  PO Box 13455, Tauranga 3141

Bush Forbes (Alexander Bush), Solicitors:   PO Box 526, Tauranga 3140

COMMISSIONER OF POLICE V GEDDES HC TAU CIV-2012-470-000752 [24 May 2013]

Introduction

[1]      The Commissioner of Police (“the Commissioner”) has applied under the Criminal Proceeds (Recovery) Act 2009 (“the Act”) for an assets forfeiture order in respect of the property at 49 Coppelia Ave, Omokoroa (“the property”) (“the Commissioner’s   application”).      The   property   is   owned   by   the   respondent, Ms Geddes.  The Commissioner’s application is on the grounds that the property is “tainted” as defined in the Act.

[2]      Ms Geddes opposes the Commissioner’s application, on the grounds that the Commissioner’s application is outside the purposive intent of the Act, and that the property is  not  tainted,  as  defined  in  the Act.    In  particular,  it  is  claimed  that Ms Geddes has not unlawfully benefited from significant criminal activity.

[3]      On   10 April 2013,   Ms Geddes   applied   for   an   order   dismissing   the Commissioner’s application for an assets forfeiture order.   In essence, Ms Geddes’ application is on the grounds that the Commissioner’s application is an abuse of process. The Commissioner opposes Ms Geddes’ application.

[4]      The Commissioner’s application for an assets forfeiture order was set down for hearing on Tuesday 14 May 2013.   However, at the end of the hearing of Ms Geddes’ application to dismiss the Commissioner’s application, counsel agreed that whatever the outcome, the fixture could not proceed.  If Ms Geddes’ application did not succeed, there would not have been insufficient time for the Commissioner to complete preparation of his affidavit evidence, or for Ms Geddes to file any evidence in response.

Factual background

[5]      On 30 October 1991, Ms Geddes applied for and was granted a domestic purposes – sole parent benefit.  On 12 May 2004, she applied for and was granted a domestic   purposes   –   woman   alone   benefit.      On   various   dates   between September 2002 and March 2007, Ms Geddes completed applications to review her

entitlement to a benefit, and stated that she was not living with anyone in a relationship in the nature of marriage.   From July 2002 up to  December 2007, Ms Geddes received a total of $67,036.28 in benefits.

[6]      Between about July 2002 and October 2008, Ms Geddes and a Mr Johnson were the joint owners and occupiers of the property.   They ceased to occupy the property together on or about 10 October 2008.  In 2010, Ms Geddes applied for an order under the Property Law Act 2007 for sale of the property and other assets (“the Property Law Act proceeding”).  That application was opposed by Mr Johnson on the grounds that he and Ms Geddes had been in a de facto relationship and that, therefore, the provisions of the Property (Relationships) Act 1976 applied.

[7]      In early 2007, Work and Income New Zealand (“WINZ”) began investigating Ms Geddes’ entitlement to benefit.   By a letter from the Ministry of Social Development (“MSD”) dated 8 February 2008, Ms Geddes was advised that as a result of other income earned during the year ended 25 February 2007 (totalling

$13,408.69), she had received $2,138.86 in benefits to which she was not entitled.

[8]      In early 2011, MSD re-opened its investigation into Ms Geddes’ entitlement to a benefit.   She was interviewed on 18 May 2011, and denied having been in a relationship in the nature of marriage with Mr Johnson.  By a letter dated 15 June

2011 MSD advised Ms Geddes that the investigation had established that Ms Geddes had entered into a relationship in the nature of marriage with Mr Johnson.   As a result, Ms Geddes had been overpaid benefits in the sum of $67,036.28, and the MSD  required  that  to  be  repaid.    However,  the  MSD  also  said  that  “[on]  this occasion, the Ministry has decided not to proceed with a penalty or prosecution”.

[9]      Ms Geddes’ application for orders under the Property Law Act 2007 came on for hearing before Chisholm J on 13 July 2011.  Ms Geddes gave evidence and was cross-examined  by counsel  for Mr Johnson,  but  Mr Johnson  elected not  to  give evidence.  The Judge delivered an oral judgment on 15 July 2011 (“the Property Law

Act judgment”).1

1      Geddes v Johnson HC Tauranga CIV-2010-47-747, 15 July 2011.

[10]     Chisholm J  noted  that  whether  there  was  a  defacto  relationship  between Ms Geddes and Mr Johnson was a “critical issue”.2   He noted that the only evidence before him was from Ms Geddes, and she had denied that there had ever been a sexual or defacto relationship, and said that she and Mr Johnson had always slept in separate bedrooms, and had kept their financial affairs apart as far as possible.3

[11]     His Honour referred to the 2007 WINZ investigation into Ms Geddes’ benefit situation, and its advice on 8 February 2008 that she had been overpaid $2,138.86. His Honour observed that it “was implicit in the letter that the Department was satisfied that no defacto relationship existed”.4    While his Honour referred to the

2011  investigation,  noting  that  it  appeared  to  have  been  “directly  or  indirectly

prompted by Mr Johnson”,5  he did not refer to the MSD letter of 15 June 2011.  It was accepted by counsel at the present hearing that that letter was not put before his Honour.

[12]     Chisholm J accepted Ms Geddes’ evidence, which he noted was consistent with the MSD letter of 8 February 2008.  He found that “there was not at any stage a defacto relationship between Ms Geddes and Mr Johnson.”6    After referring to the

2011 investigation, his Honour expressed the “hope [that] this decision will put an

end to that matter”.7

[13]     In October 2011, MSD referred the matter of Ms Geddes’ benefit payments to the Police Assets Recovery Unit.

[14]     On 8 November 2011, the MSD charged Ms Geddes with four offences under s 228(b) of the Crimes Act 1961 (using a document with intent to obtain a pecuniary advantage), two offences under s 229A of the Crimes Act (as it applied before the

2003 amendment) (using a document with intent to defraud), one offence under s 240 of the Crimes Act (obtaining a pecuniary advantage by deception), and one

charge under s 127 of the Social Security Act 1964 (misleading a Social Welfare

2 At [22].

3 At [23].

4 At [15].

5 At [27].

6      At [25]–[26].

officer).   The essence of the MSD's allegations was that Ms Geddes dishonestly received benefit payments, because she was living in a defacto relationship in the nature of marriage with Mr Johnson.

[15]     Between November 2011 and February 2013, Ms Geddes’ Property Law Act proceeding came before the Court from time to time.   On 29 May 2012, Lang J ordered that Ms Geddes purchase Mr Johnson’s interest in the property, based on a valuation  of  $500,000.8    On  13  February 2013,  Lang J  delivered  a  judgment declining an application by Mr Johnson for stay of the Property Law Act judgment, insofar as it related to the sale of a yacht owned by Mr Johnson.9    In the course of that judgment, Lang J observed that the “principal issue” for Chisholm J had been “whether or not the parties were in a defacto relationship” while living in the property.10      His  Honour  observed  that,  having  heard  Ms Geddes’ evidence,  and cross-examination by counsel for Mr Johnson, Chisholm J had found in the Property Law Act judgment that they had never lived in a defacto relationship.11

[16]     On 5 March 2013, Judge Everitt gave an oral judgment in the District Court at Tauranga on an application by Ms Geddes to stay the prosecution brought by the MSD (“the stay judgment”).12    The application had been brought on the grounds (stated  generally)  that  the  prosecution  was  an  abuse  of  process.    The  Judge concluded that the issue in the Property Law Act judgment (essentially, whether Ms Geddes  and  Mr  Johnson  were  living  in  a  defacto  relationship)  was  “very [similar], indeed almost indistinguishable from” the issue as to whether they were in a relationship in the nature of marriage (the issue in the MSD prosecution).13   Judge

Everitt concluded that:14

... to now embark upon an examination of the same material and be expected to come to a different conclusion, in my view, is an affront to my sense of justice.  It is an abuse of this Court’s process to instigate and bring criminal prosecutions on the very same matter that was before Chisholm J, to try and hang it on the hook of “there is new evidence”.  I reject that.  There is no

8      Geddes v Johnson HC Tauranga CIV-2010-470-747, 29 May 2012.

9      Geddes v Johnson HC Tauranga [2013] NZHC 196.

10 At [10].

11 At [12].

12     Ministry of Social Development v Geddes DC Tauranga CRI-2011-070-6879, 5 March 2013.

new evidence.  The evidence was available at the time of Justice Chisholm’s

decision.

[17]     Judge Everitt also considered that it would be an abuse of process for the MSD to present evidence from Mr Johnson, who had decided not to give evidence before Chisholm J, and from certain people who had given statements to the MSD previously, but were now to come to the Court and say that they had previously lied to the Ministry.   Further, Judge Everitt regarded it as an abuse of process for the MSD to have told Ms Geddes that no prosecution would be brought but then to

change its mind “in the spurious belief there is new evidence and reassessment”.15

[18]     Finally, Judge Everitt expressed the view that the MSD had been pressured by Mr Johnson “who lost heavily before Chisholm J” and that the District Court “is not going to be a tool for Mr Johnson to attempt to overturn the decision already made by the High Court.”16  The Judge made an order staying all eight charges.17

Relevant statutory provisions

[19]     Before turning to the application to dismiss the Commissioner’s application, I refer briefly to provisions of the Act relating to assets forfeiture orders.  Section 3(1) sets out the purpose of the Act:

3        Purpose

(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 instrument 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

15 At [94].

(d)      deal with matters associated with foreign restraining orders that arise in New Zealand.

[20]     “Significant criminal activity” is defined in s 6(1) as follows

... significant criminal activity means an activity that if proceeded against as a criminal offence 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 derived.

[21]     Section 6(2) of the Act provides:

A person is undertaking an activity of the kind described in subsection (1)

whether or not–

(a)       the person has been charged with or convicted of an offence in connection with the activity; or

(b)       the person has been acquitted of an offence in connection with the activity; or

(c)       the person’s conviction for an offence in connection with the activity

has been quashed or set aside.

[22]     Section 16 provides:

16Quashing   criminal   proceedings   does   not   impact   on   civil forfeiture

(1)      Subsection (2) applies if criminal proceedings are commenced or

pending or have been withdrawn or determined in respect of any significant criminal activity that is the basis for–

(a)      an assets forfeiture order or a profit forfeiture order; or

(b)      an application for an order of that kind.

(2)       If this subsection applies, the order or application is not affected by the criminal proceedings, even if any conviction entered in those proceedings is or has been quashed or set aside.

[23]     Section 50(1) of the Act provides that if the High Court is satisfied on the balance of probabilities that specific property is “tainted property”, “the Court must make an assets forfeiture order in respect of that specific property”.   “Tainted property” is defined in s 5 of the Act as any property that has, wholly or in part, been “acquired  as  a  result  of  significant  criminal  activity”,  or  “directly or  indirectly derived from significant criminal activity”.   Section 50(3) provides that the Court must specify in an assets forfeiture order that the property to which the order applies “vests in the Crown absolutely”, and “is in the custody and control of the Official Assignee”.

[24]     If it is established that Ms Geddes was in a relationship in the nature of marriage while she was receiving the benefits, and thus unlawfully received the benefits, her conduct would amount to an offence under s 228(b) of the Crimes Act, which carries a maximum penalty of seven years imprisonment, and therefore comes within the definition of “significant criminal activity”.  Mr Holmes submitted for Ms Geddes that even if it were established that she had unlawfully obtained the benefits, her use of the benefit income to meet mortgage payments on the property did not lead  to  the  conclusion  that  the  property  had  been  “acquired”.     I  reject  that submission.  I am satisfied that the use of money obtained from significant criminal activity to  meet  mortgage payments  on  a property can  amount  to  that property having  been  “acquired”,  or  “directly  or  indirectly  acquired”  as  a  result  of  that activity.

[25]     Accordingly,  I  conclude  that  if  the  Commissioner  can  establish  on  the balance of probabilities that Ms Geddes unlawfully received the benefits, and used that money to make mortgage payments on the property, the Court could be satisfied that the property is “tainted property”, and an assets forfeiture order would have to be made.

[26]     It is clear from s 6(2) of the Act, set out at [21], above, that neither a criminal conviction, nor criminal charges, is required for an assets forfeiture order to be made. It is also clear from s 16, set out at [22], above, that an assets forfeiture order, or an application for an assets forfeiture order, is not affected if criminal proceedings are commenced or pending, or have been withdrawn or determined in respect of any significant criminal activity that is the basis for the order, or application.

Issue for determination

[27]     As noted earlier, the ground on which Ms Geddes sought an order to dismiss the Commissioner’s application for an assets forfeiture order was that the application was an abuse of process.  Mr Holmes’ submissions on behalf of Ms Geddes raised two broad issues: first, that the Act was not intended to be used in the present circumstances (that is, to recover benefit payments) and, secondly, that the issue of whether she and Mr Johnson had been in a relationship in the nature of marriage,

(and she had therefore unlawfully obtained a benefit) had been determined in the

Property Law Act judgment and in the stay judgment.

Is the Commissioner’s application outside the purposes of the Act?

[28]     Mr Holmes submitted that, in any event,  the Act should not be used to recover benefit payments.   In support of this submission, he referred to Hansard reports of the Parliamentary debate during the passage of the Bill,18  and submitted that the purpose of the Act focused on organised criminal groups and major criminal activity, in particular serious drugs offending.   Mr Holmes submitted that the Act was intended to address cases where assets that represented the proceeds of major criminal activity could be recovered when they could not otherwise be identified and recovered.

[29]     Mr Holmes further submitted that he was not aware of any other case where forfeiture had been sought in the context of an allegation that a person had obtained benefits when not entitled to do so.  He submitted that the MSD can recover benefits pursuant to its powers under the Social Security Act 1964.  He also submitted that the MSD had not appealed the stay judgment, or taken steps itself to recover the benefits paid to Ms Geddes.

[30]     In the light of all of the above matters, and the sum involved, Mr Holmes submitted that considerations of proportionality should lead to the conclusion that the Commissioner’s application should be dismissed.

[31]     Mr Jenson submitted that the Commissioner’s application is well within the purposes of the Act, and that the alleged offending by Ms Geddes falls within the definition of “significant criminal activity”, so is able to be the foundation for the Commissioner’s application.  Mr Jenson submitted that the Parliamentary speeches are of assistance only where there is ambiguity in the wording of a statute.   He submitted that the terms of the Act are absolutely clear, and its purpose is not limited

to gang activity or serious drugs offending, or indeed any particular offending.

18     Mark Burton (20 March 2007) 638 NZPO 8120.

[32]     Mr Jenson further submitted that in this case the Commissioner was not instructed to recover the benefit payments on behalf of the MSD, with any recovery flowing back to the Commissioner.  He submitted that the Commissioner had acted independently in deciding whether to make an application, and any recovery would go to the Crown, not the Ministry.   Accordingly, he submitted, Mr Holmes’ submission, that it would be inappropriate to allow the Commissioner’s application to proceed, should be rejected.

[33]     I accept that there is no ambiguity in the Act.  The purposes of the Act are clearly stated in s 3.  There is patently no limitation of the Act so as to apply only to certain types of significant criminal activity, and not to others.

[34]    Further, I do not accept Mr Holmes’ submission that in this case the Commissioner is seeking to recover benefit payments for the MSD – essentially, acting as the Ministry’s agent.  First, pursuant to s 92 of the Act, the Commissioner has a duty to act independently, and is not responsible to any Minister of the Crown. Secondly, if an assets forfeiture order is made, the property affected vests in the Crown, it cannot vest in the MSD.   By virtue of these two provisions, the Commissioner cannot be characterised as the agent of the MSD, or identified with the MSD.

[35]     I   therefore   reject   Mr   Holmes’   submission   that   the   Commissioner’s

application is outside the terms of the Act.

Is  the  Commissioner’s  application  an  attempt  to  relitigate  issues  already

determined?

[36]     As noted earlier, Mr Holmes submitted that the question whether Ms Geddes and Mr Johnson had been in a relationship in the nature of marriage had been heard and determined in the Property Law Act judgment, and that it would be an abuse of process for the Commissioner to seek to have the issue determined again.

[37]     In  his  written  submissions  on  behalf  of  the  Commissioner,  Mr  Jenson

submitted that Ms Geddes’ application to dismiss could only succeed if she could

establish that the matters raised in the Commissioner’s application are res judicata, or subject to an issue estoppel.  He submitted that Ms Geddes could not succeed on either ground, as the parties to the Commissioner’s application are not the same parties (or their privies) as in the proceeding before Chisholm J.  He also submitted that the stay judgment was not relevant to the Commissioner’s application, as it is not necessary for there to be an active charge, or a conviction, before an assets forfeiture order may be made.

[38]     In the course of the hearing, I raised with counsel whether Ms Geddes’ claim that  it  would  be an  abuse of process  for  the  Commissioner’s  application  to  be allowed to proceed should in fact be determined by considering whether the Commissioner’s application amounts to a “collateral attack” on the judgment of Chisholm J, and thus an abuse of process.

[39]     In  order to  decide whether the Commissioner’s  application  for an  assets forfeiture order should be dismissed it is necessary to consider:

(a)       whether res judicata or issue estoppel apply in this case;

(b)      whether the Commissioner’s application is a collateral attack on the

Property Law Act judgment; and

(c)       whether  justice  requires  that  the  Commissioner  is  prevented  from pursuing the application for an assets forfeiture order.

Res judicata and issue estoppel

[40]     Under the doctrine of res judicata (“the decision stands”) a Court can prevent relitigation of questions which have already been determined.  Thus, if a Court of competent jurisdiction has made a final decision over the parties to, and the subject matter of, a cause of action in litigation, then any party or privy to that litigation can be  stopped  from  disputing  or  questioning  that  decision  in  subsequent  litigation against the other party or privy to the decision.  Issue estoppel is under the umbrella

of res judicata, and may be raised as to a particular fact or issue in a cause of action, rather than the cause of action as a whole.19

[41]     The purposes of the doctrine lie in public policy (that there should be an end to litigation) and hardship to the individual (“being vexed twice for the same cause”).20

[42]     For a proceeding to be dismissed on the grounds of res judicata or issue estoppel, there must be:

(a)      a final decision in an earlier proceeding by a Court of competent jurisdiction;

(b)the decision is between the same parties (or their privies) as in the later proceeding; and

(c)      the decision is in relation to a cause of action, or a particular fact or issue, that is identical to a cause of action or fact or issue pleaded in the later proceeding.

[43]     It  is  convenient  to  deal  first  with  Mr  Jenson’s  submission  that  the  stay judgment cannot be the foundation for a submission of issue estoppel.  I accept Mr Jenson’s submission. As noted earlier, at [21], s 6(2) of the Act provides that neither a criminal conviction, nor a criminal charge, is required before an assets forfeiture order can be made.  Further, and of particular relevance in this case, s 16 of the Act provides that the fact that criminal proceedings are commenced, or pending, or have been withdrawn or determined, does not affect an application for an assets forfeiture order.  Accordingly, the stay judgment does not provide grounds for dismissing the Commissioner’s application.

[44]     Regarding the Property Law Act judgment, there can be no question as to it being a decision of a Court of competent jurisdiction.  Mr Jenson accepted that a key

issue  in  that  judgment  was  whether  Ms  Geddes  and  Mr  Johnson  were  in  a relationship in the nature of marriage while she was receiving the benefits.  He also accepted that the same issue will be required to be determined in the Commissioner’s application.

[45]     However, Mr Jenson submitted that issue estoppel cannot arise, because the parties in the Commissioner’s application are not the same as the parties to the Property Law Act proceeding.  The parties to the Property Law Act proceeding were Ms Geddes and Mr Johnson.  Plainly, the Commissioner and Mr Johnson are not the same person.

[46]     Regarding privies, the Court of Appeal observed in Shiels v Blakeley that privity requires:21

... such a union or nexus, such a community or mutuality of interest, such an identity between a party to the first proceeding and the person claimed to be estopped in the subsequent proceeding, that to estop the latter will be to produce a fair and just result having regard to the purposes of the doctrine of estoppel and its effect on the party estopped.

[47]     I am satisfied that there is no “community or mutuality of interest” between the Commissioner and Mr Johnson.   Mr Johnson will not benefit from the Commissioner’s application.  Subject to any application for relief, the effect of the assets forfeiture order (if the Commissioner succeeds) will be that the property vests

absolutely in the Crown, and is in the custody and control of the Official Assignee.22

I therefore accept Mr Johnson’s submission that the Commissioner is not a party, or

privy, to the Property Law Act judgment.

[48]     Accordingly, I accept Mr Jenson’s submission that the Property Law Act judgment does not provide grounds for dismissing the Commissioner’s application on the basis of res judicata or issue estoppel.

Collateral attack

[49]     It has been held that a proceeding is frivolous or vexatious, and an abuse of process, if it is an attempt to relitigate matters that have already been determined, or is a duplication of other proceedings.   In Hunter v Chief Constable of the West Midlands Police, Lord Diplock said:23

The abuse of process which the instant case exemplifies is the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made.

[50]     In  its  judgment  in  McLachlan  v  Vector  Ltd,  the  Court  of  Appeal  said regarding the evolution of the principle against collateral attack (as distinct from res judicata):24

[27]     New  Zealand  law  recognises  a  doctrine  of  res  judicata,  which applies only between the parties to the particular proceedings. The doctrine cannot be invoked by, or against, a person who was not a party to the proceedings  in  which  the  judgment  relied  upon  was  given.  There  are perfectly good reasons for limiting the res judicata rules to the parties, but the results of such a limitation are not always satisfactory. There can be situations  where  allowing  a  party  to  raise  arguments  against  a  stranger, which had been decided against that party in earlier proceedings, could result in unjustified inconsistencies between the findings of different courts or undermine public confidence in the general administration of justice. This has led to the evolution of a principle against collateral attack on the correctness of a subsisting judgment of the trial court on a contested issue by what in substance would be a re-trial of the same issue.

[28]      That   public   policy   finds   expression   in   the   exercise   of   the discretionary jurisdiction to prevent an abuse of process. The Court may exercise its discretion to restrain a party from advancing against a stranger an argument that is inconsistent with an earlier judgment, but if, and only if, the Court concludes that in the circumstances of the particular case it would be unjust to allow the party to do so. The jurisdiction is exercised in order to prevent  parties  from  functionally  challenging  court  decisions  that  went against them in earlier proceedings. First, however, it must be established that a collateral attack is involved; the second question is then whether justice  requires  that  the  party  in  question  should  be  prevented  from advancing an inconsistent case.

[29]     The discretion to prevent collateral attacks on a court decision also provides a trial court with a useful case management tool, particularly in the context of the control of multi-party litigation. The concern here is to get determination of a common issue, and the object of such court management is to decide the common issue in one set of proceedings for the benefit of all actions.

[30]      The speech of Lord Diplock in Hunter v Chief Constable of the West Midlands Police [1982] AC 529 shows that the courts primarily resort to principles of abuse of process in circumstances where the impugned proceedings are not in obvious breach of relevant procedural rules and that, necessarily, the circumstances in which abuse of process will be found are not confined to “fixed categories”. It follows that the underlying principles are open-textured. They nonetheless fall to be determined and applied in a context which includes existing rules as to limitation and procedure, customary litigation practice (and associated legitimate expectations) and a respect for the right of access to the courts.

[51]     Proceedings which can be regarded as being a collateral attack on earlier proceedings are those where in the later proceeding a plaintiff squarely calls into question a matter that has already been litigated and decided upon in earlier proceedings, and where the intending plaintiff had a full opportunity to contest the matter in the Court in which the matter was decided.

[52]     As  the  Court  of Appeal  held  in  McLachlan  v Vector  Ltd,  there  are  two questions to be determined:25

(a)      Is the Commissioner’s application a collateral attack against an earlier

judgment? And

(b)Does  justice  require  that  the  Commissioner  be  prevented  from pursuing his application for an assets forfeiture order?

Is the Commissioner’s application a collateral attack?

[53]     In  McLachlan  v  Vector  Ltd,  the  Court  of Appeal,  while  noting  that  res judicata  applies  only  as  between  the  parties  to  the  proceedings,  discussed  the

evolution of a principle whereby the courts may restrain a party to a proceeding from

25     McLachlan v Vector Ltd, above n 24, at [28].

raising arguments against a “stranger” where those arguments have been decided

against the party in earlier proceedings.

[54] I have found, at [45]–[47] above, that the Commissioner was neither a party nor privy to a party to the Property Law Act proceedings. For the reasons set out at [34], above, I find that the Commissioner was neither a party nor privy to a party to the MSD prosecution. For the purposes of determining the “collateral attack” issue, this is not a case of a “party” (to earlier proceedings) attempting to relitigate against a “stranger”, issues which have earlier been decided against the party. Rather, this might be described as a “stranger’ attempting to relitigate against a party an issue which has been determined in earlier proceedings in favour of that party.

[55]     Is that within the “relitigation” which the principle of collateral attack is intended  to  prevent?    While  it  is  the  case  that  applications  of  the  principle  of collateral attack customarily seen in New Zealand courts have been concerned with proceedings which were held to be attempts by a party to earlier proceedings to relitigate decided issues against strangers in later proceedings,26 I would not exclude the possibility that it may be held to be a collateral attack for a stranger to attempt to relitigate an issue against a party to earlier proceedings, where the issue has been decided in favour of that party.

In all the circumstances, should the Commissioner be allowed to pursue the application for an assets forfeiture order?

[56]     The first matter that is relevant to this consideration is that the Commissioner was not a party to the Property Law Act proceeding, nor did he have any role in the evidence that was adduced at that hearing before Chisholm J, and relied on for the purposes of the Property Law Act judgment.  Nor was the Commissioner a party to

the MSD prosecution.

26     See, for example, Siemer v Chief Justice HC Auckland CIV-2009-404-8435, 22 August 2011;

Siemer v Stiassny [2011] NZCA 1; Slavich v Judicial Conduct Commissioner HC Hamlton CIV-
2010-419-975, 14 July 2011; and Slavich v R [2012] NZCA 432.

[57]     The second relevant matter is that the Commissioner intends to call evidence that was not put before Chisholm J.  The question arises as to whether this is “new” evidence, or whether it should be excluded on the grounds that it was available and could have been adduced at the hearing before Chisholm J.   In Hunter v Chief Constable of the West Midlands, Lord Diplock discussed whether new evidence could justify an exception to the general public policy against proceedings which are collateral attacks on earlier decisions.  He observed that the new evidence must be

such as “entirely changes the aspect of the case”.27

[58]     Ms Geddes was the only witness to give evidence at the hearing before Chisholm J.   The Commissioner intends to call Mr Johnson, and other witnesses including Detective Watt, who has carried out an analysis of financial documents. Mr Jenson accepted that Mr Johnson could have given evidence before his Honour, but elected not to, that other factual witnesses could also have been called to give evidence, and that the financial documents analysed by Detective Watt were before his Honour.   However, he submitted that it would be unfair to hold that the Commissioner should be prevented from adducing evidence considered not to be new, when he had no party in, or knowledge of, the earlier hearing.

[59]     I have concluded that the issue of whether the evidence is new should be assessed from the perspective of the Commissioner.  Because he had no involvement in the Property Law Act proceedings the Commissioner had no ability to determine what evidence should be adduced, or to compel any person to give evidence.  The present situation is therefore analogous to that where evidence which was not previously available to a party may be adduced.  By that analogy, the evidence the Commissioner seeks to adduce was not available to him earlier, and is new.  It is also evidence that may entirely change the aspect of the case.   I accept Mr Jenson’s submission that the evidence the Commissioner seeks to adduce should not be excluded on the grounds of it not being new.

[60]     The final issue is whether the risk of there being inconsistency between judgments  of  the  Court  is  such  as  to  undermine  public  confidence  in  the

27     Hunter v Chief Constable of the West Midlands, above n 23, at 545.

administration of justice.  I have concluded that there is no real risk of inconsistent judgments (if that is the outcome) undermining public confidence in the administration  of  justice.    I am  satisfied  that  the  public  would  understand  that different conclusions could well be reached in a case where only one witness is heard, and one where there are several witnesses who have contrary views of the facts, particularly in this case where the Commissioner had no part in the earlier proceedings.

Conclusion

[61]     The  application  to  dismiss  the  Commissioner’s  application  for  an  assets

forfeiture order is dismissed.

Andrews  J