Commissioner of Police v Liu
[2023] NZHC 1544
•20 June 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-2017
[2023] NZHC 1544
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
COMMISSIONER OF POLICE
Applicant
AND
SHUCHEN LIU
First Respondent
AND
XIUXIU HAO
Second Respondent
AND
JAEMAL HONEYCOMBE
Third Respondent
On the papers Counsel:
R Gibbs for the Applicant
S Wimsett for the First Respondent
R Mansfield KC for the Second and Eighth Respondents JA Tulloch for the Third Respondent
M Kan for the Fourth Respondent
S McColgan for the Fifth Respondent
T Cooper for the Ninth and Tenth RespondentsJudgment:
20 June 2023
JUDGMENT OF GRICE J
Solicitors:
Meredith Connell, Auckland
S Wimsett, Barrister, Auckland
R Mandfield KC, Barrister, Auckland Mark Ryan Barrister, Auckland Michael Kan Law Limited, Auckland S L McColgan, Barrister, Auckland
COMMISSIONER OF POLICE v LIU [2023] NZHC 1544 [20 June 2023]
AND YAN LI
Fourth Respondent
AND TAINUI KARAKA
Fifth Respondent
AND ANTON KAHOTEA
Sixth Respondent
AND XINYU CHEN
Seventh Respondent
AND LOUIS HALL
Eighth Respondent
AND SOKEVIN MEAK
Ninth Respondent
AND SHING WONG
Tenth Respondent
Introduction
[1] The sixth respondent, Anton Kahotea, and the Commissioner have reached agreement as to settlement of the claim by the Commissioner. They seek approval of the Court under s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act). The settlement and the orders made in this judgment only affect and determine the claim made by the Commissioner against the sixth respondent. The Commissioner and the fourth respondent have settled previously. The action is still proceeding against the other respondents.
[2] Mr Kahotea is self-represented in the proceedings. He has had the opportunity to seek legal advice in respect of settlement but has elected not to engage the services of a lawyer but has indicated he wishes to conclude matters in terms of his written agreement to settle dated 15 June 2023.
Background
[3] The claim arises out of a July 2020 investigation codenamed Operation Escondido. It focused on the activities of an organised criminal group believed to be involved in the importation, production, supply and distribution of MDMA and methamphetamine throughout Auckland. The police investigation established that Mr Kahotea was involved in the large-scale possession and supply of commercial quantities of the MDMA pills received from the first respondent. A search warrant was executed at Mr Kahotea’s residential address on 28 October 2020 when $49,950 in cash and 42 rounds of 9 millimetre ammunition was found. As a result Mr Kahotea was charged with and subsequently pleaded guilty to and was convicted of representative charges of supplying MDMA and possession of MDMA for supply as well as one charge of unlawful possession of ammunition. On 12 June 2023 Mr Kahotea was sentenced to nine months’ home detention.
[4] On 23 October 2020 the Commissioner filed a without notice application for restraining and further orders in respect of a 2011 Audi Q7 and 2015 Hyundai vehicle. Both vehicles were owned by Mr Kahotea. Following that the Commissioner filed an on notice application for restraining and further orders in respect of the cash and the vehicles. Orders were made, including for the sale of the Audi. The other vehicle has
been released from restraint. No applications for civil forfeiture orders have been filed by the Commissioner to date.
[5] The Commissioner’s case against Mr Kahotea is that on the balance of probability the property is tainted property and liable for forfeiture under an assets forfeiture order because it has been wholly (or in part) acquired as a result of significant criminal activity, namely the supply (including sale) of MDMA. In addition the Commissioner says Mr Kahotea has, in the relevant period of criminal activity, unlawfully benefited from significant criminal activity, and the properties may be claimed under a profit forfeiture order.
[6] When Mr Kahotea pleaded guilty in the parallel criminal proceedings, he also accepted involvement in the large-scale supply of commercial quantities of MDMA. A financial investigation by the Commissioner revealed that Mr Kahotea declared minimal income in the tax years from 2015 to 2021, including no income at all in the 2018 tax year. Accordingly the quantum of his unlawful benefit from this criminal activity is likely to significantly exceed the value of the restraint property.
[7] The proposed settlement has been agreed to between the Commissioner and Mr Kahotea. Mr Kahotea has indicated in writing that he has been offered the opportunity to seek legal advice and declined that.
[8]The terms of the settlement are as follows:
(a)the assets forfeiture order is made under s 50(1) of the Act by consent over the property;
(b)the Commissioner will not pursue an application for profit forfeiture orders against Mr Kahotea in relation to the significant criminal activity evidenced in this proceeding to date;
(c)Mr Kahotea abandons all claims under the Act otherwise to the property and any other restrained property in the proceeding;
(d)the settlement is in full and final settlement of the question of civil forfeiture of the property in this proceeding;
(e)costs in relation to the matter between the Commissioner and Mr Kahotea lie where they fall.
[9]The approximate value of the property to be forfeited is $64,197.76.
Legal position
[10]Section 95 of the Act governs settlements and provides as follows:
95High Court must approve settlement between Commissioner and other party
(1)The Commissioner may enter into a settlement with any person as to the property or any sum of money to be forfeited to the Crown.
(2)A settlement does not bind the parties unless the High Court approves it.
(3)The High Court must approve the settlement if it is satisfied that it is consistent with—
(a)the purposes of this Act; and
(b)the overall interests of justice.
[11] The legislation recognises that the Commissioner is entitled to enter into settlement negotiations with respondents regarding the forfeiture of assets. This reflects policy considerations as to the efficacy of such settlements, bearing in mind the significant costs associated with civil litigation and the benefits to all parties if such proceedings can be resolved by consent. Bringing an end to proceedings of this nature is in the public interest as the matters are brought to a risk-free and prompt conclusion.
[12] However, the settlement must reflect the likely costs and risks inherent in the determination of a contested application. That is the reason the Court has been entrusted with a supervisory jurisdiction aimed at ensuring any settlements reached
are consistent with Parliament’s intention and with the overall interests of justice. The approval, as this Court has often said, is not a rubber-stamping exercise.1
[13] The statutory language “overall interests of justice” indicates a broad enquiry is required.2 In exercising the supervisory jurisdiction the Court has, it is “equally important that the Court carry out a broad inquiry and acknowledge, where appropriate, that settlements can be in the interests of justice, bearing in mind the savings of time and cost in the litigation risk to the parties.”3 The Court has recognised that the decision to settle proceedings under the Act may be made on economic and pragmatic grounds and often reflects a “common sense compromise” between the parties.4
This case
[14] I accept that the settlement proposed here is consistent with the purposes of the Act and the overall interests of justice. There will be a saving of time and cost if the matter can be resolved by consent. That extends to both court time and resource as well as those of the parties in determining the matter. The Commissioner’s case is supported by the evidence showing that the property is tainted property, so as to support an assets forfeiture order, as well as that Mr Kahotea has unlawfully benefited from significant criminal activity, so as to support a profit forfeiture order.
[15] In addition, the Commissioner says it is unaware of any additional substantial assets belonging to Mr Kahotea that could be realised to satisfy a profit forfeiture order over and above the value of the property that will be forfeited by way of an assets forfeiture order. The form of the proposed settlement is such that Mr Kahotea will avoid the risk of incurring a residual debt on the Crown by way of an unsatisfied profit forfeiture order. He has also signed a written acknowledgement recording his consent
1 Commissioner of Police v Know-All Group Ltd HC Auckland CIV-2010-404-403, 7 November 2011 at [11]; and see Commissioner of Police v Veveers [2017] NZHC 80 at [10]; Marwood v Commissioner of Police [2016] NZSC 139, [2017] 1 NZLR 260 at [12]; Commissioner of Police v Taniora [2019] NZHC 2580 at [22]; Commissioner of Police v Leone [2018] NZHC 590 at [5]; and Commissioner of Police v Wilk [2020] NZHC 2978 at [16].
2 Wilk, above n 1, at [19]; and Commissioner of Police v Li [2018] NZHC 1566 at [32].
3 Commissioner of Police v Zhang [2016] NZHC 930 at [8].
4 Commissioner of Police v Douglas [2015] NZHC 1293 at [6].
and that he has declined legal advice. Finally, an agreed settlement will allow the parties to have certainty and control over the outcome.
[16] I am therefore satisfied that the following orders should be made in terms of the settlement effected between the parties:
(a)Assets forfeiture order, under s 50(1) of the Act: the following property is vested in the Crown absolutely and is in the Official Assignee’s custody and control:
(i)$49,950 cash located on 28 October 2020 at 76 Popes Road,
Takinini, Auckland, and any interest accrued; and
(ii)the sale proceeds of the 2011 Audi Q7, registration number NBF274, formerly registered in the name of Anton Kahotea, and any interest accrued.
(b)Costs lie where they fall in relation to all matters between the Commissioner and Mr Kahotea in this proceeding.
[17]The Court also notes that the further terms of the agreed settlement are:
(a)Mr Kahotea agrees to abandon any and all claims he has (under the Act or otherwise) to the property or any of the other property that has been restrained in this proceeding;
(b)the Commissioner will not pursue an application for a profit forfeiture order against Mr Kahotea in relation to the significant criminal activity alleged in this proceeding to date; and
(c)the settlement is in full and final settlement of the question of civil forfeiture of the property of this proceeding.
Result and orders
[18] Accordingly, the settlement is approved as set out above under s 95(3) of the Act. Orders are made giving effect to the settlement as well as noting the further terms of the agreement.
Grice J
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