Commissioner of Police v Gong

[2019] NZHC 3441

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2017-404-454

[2019] NZHC 3441

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

XIAO HUA GONG

Respondent

Hearing:	On the papers
Appearances:	M E Harborow and H E Macdonald for the applicant A J Ellis for the respondent
Date of judgment:	19 December 2019

JUDGMENT OF JAGOSE J

The judgment was delivered by me on 19 December 2019 at 3.00pm.

Pursuant to Rule 11.5 of the High Court Rules

……………………………… Registrar/Deputy Registrar

Solicitors/Counsel:

Meredith Connell, Auckland Anthony Ellis Barrister, Wellington Fee Langstone, Auckland

COMMISSIONER OF POLICE v GONG [2019] NZHC 3441 [19 December 2019]

[1]                 My interim judgment noted I was satisfied of the Commissioner’s entitlement to particular discovery under r 8.20 of the High Court Rules 2016 (“HCR”), but lacked “the specificity to identify what particular documents or groups of documents may be necessary to enable formulation of the Commissioner’s claim”.1 I then said:2

Rather than dismiss the Commissioner’s application for its present lack of specificity, I invite counsel (desirably jointly) to submit a timetable within which the Commissioner will file and serve an originating application for forfeiture orders and supporting affidavit, both in draft, to illustrate the particular documents or groups of documents necessary to enable their formulation. I anticipate the timetable should provide also for an exchange of memoranda as to such necessity in the particular circumstances, and possibly for a further hearing if final determination on those papers is not desired.

[2]                 In the event, separate memoranda were filed on the timetable, the Commissioner proposing to file his draft application, affidavit, and memorandum on 6 December 2019, for Mr Gong’s response on 13 December 2019. The Commissioner proposed any decision for further hearing await that exchange. Mr Gong responded timetable orders were premature. I disagreed, adopting the Commissioner’s proposal,3 with which the parties have complied, the Commissioner replying on 18 December 2019 I should make my final determination on the papers.

[3]                 My interim judgment explained “[p]articular discovery anticipates a bottom- up analysis, rather than the standard discovery approach adopted by the Commissioner”.4 I summarised the Commissioner’s approach:5

The Commissioner seeks details of all Mr Gong’s and related entities’ bank accounts, or over which Mr Gong has any signing authority; of all entities, property, and assets in which he has any interest; and all business, conveyancing, financial, meeting, and tax records, including accounting electronic backups and passwords; as well as details of all business connections, accountants and lawyers. He also seeks information produced for the purposes of the health supplements scheme, and of the supplier factory.

[4]                 That ‘bottom-up’ approach is “to illustrate the materiality of the sought particular documents or groups of documents in formulation of the intended claim”.6

1      Commissioner of Police v Gong [2019] NZHC 2735 at [31].

2 At [32].

3      Minute (no 2) dated 18 November 2019.

4      Commissioner of Police v Gong, above n 1, at [25].

5 At [24].

6 At [25].

I identified what was required for that formulation on the present application for assets and profit forfeiture orders: on the former, “the property’s acquisition as a result of or derivation from significant criminal activity”; and on the latter, “the value of the benefit and its derivation from significant criminal activity, as well as the respondent’s interests in property”.7 The Commissioner correctly adds he also is required on the former to specify what property is alleged to be ‘tainted’, and the grounds for that belief, as well as any other interests in the property.8

[5]                 The Commissioner’s draft originating application permits focus on specified information in respect of Mr Gong and four identified related entities for the period from 10 April 2009 to 31 December 2017. In reliance on the further affidavit of Richard Benjamin Trushell sworn 6 December 2019, the Commissioner asserts those documents’ pertinence respectively in terms of significant criminal activity, property and benefit derived therefrom, and identification of the extent property is ‘tainted’. Their pertinence is, of course, “it is impossible or impracticable” for the Commissioner to   formulate   his   originating    application    without    reference    to    them.9    The Commissioner’s counsel submit accordingly.

[6]                 Mr Gong’s counsel, Tony Ellis, does not directly address the contended ‘impossibility or impracticability’. Instead he raises a raft of collateral matters, preferring the Commissioner respond to various “queries and concerns raised” about the parties’ respective theory of their case, with unspecified timetable orders to follow. Those matters’ only relevance to the matter I am left to decide is if an order under HCR 8.20 presently is necessary.10

[7]                 I am given no basis to doubt the impossibility or impracticability claimed by the Commissioner. From my own consideration of the draft originating application and Mr Trushell’s affidavit, the documents sought each appear responsive to the specific requirements set out at ss 49 and 52 of the Criminal Proceeds (Recovery) Act 2009 (the “Act”) in the context of the Commissioner’s intended claim for asset and profit forfeiture orders against Mr Gong. I accept it is impossible or impracticable for

7      At [19] and [20].

8      Criminal Proceeds (Recovery) Act 2009, s 49.

9      High Court Rules 2016, r 8.20.

10     Rule 8.20(4).

the Commissioner to formulate the claim in compliance with the Act without reference to the documents he seeks.

[8]                 I also am satisfied the order is necessary now to be made. The matters raised by Mr Ellis are as insubstantial to determination of the present application as led me previously to disagree timetable orders for that determination were premature. This proceeding was initiated nearly three years ago, on 21 March 2017. Restraining orders having been made, it is incumbent on the Commissioner to pursue forfeiture with some expedition. Such an inference is open from at least the Act’s requirements for on notice restraint to be prosecuted “with all due diligence” on pain of strike out, such applications to be “dealt with speedily”,11 and for forfeiture orders to be discharged “as soon as practicable after the expiry of the specified period”.12

[9]                 No date is proposed for Mr Gong’s provision of the particular discovery sought. I am not prepared to allow Mr Gong’s application for leave to appeal, or any of the other matters Mr Ellis raises, to operate informally as a stay of my judgment.  I therefore will require return by the end of February 2020. Any application for extension of that timetable is to be substantiated by evidence of the timing of such steps as have been, and the time required for such steps remaining to be, taken in compliance with my order.

[10]              In respect of the documents listed at Tab B to Mr Trushell’s 6 December 2019 affidavit (the “documents”), I therefore order Mr Gong, by Friday, 28 February 2020:

(a)to file an affidavit stating—

(i)whether the documents are or have been in his control; and

(ii)if they have been but are no longer in his control, his best knowledge and belief as to when the documents ceased to be in his control and who now has control of them;

11     Criminal Proceeds (Recovery) Act 2009, s 39.

12     Sections 82 and 83.

(b)to serve the affidavit on the Commissioner; and

(c)if the documents are in his control, to make those documents available for inspection, in accordance with HCR 8.27, to the Commissioner.

—Jagose J