Commissioner of Police v Ngakuru
[2023] NZHC 2119
•9 August 2023
INTERIM ORDER SUPPRESSING NAME AND ANY IDENTIFYING PARTICULARS OF FIFTEENTH RESPONDENT PENDING FINAL DISPOSITION OF ANY APPLICATION FOR FORFEITURE ORDERS OVER THE PROPERTY OR FURTHER ORDER OF THE COURT. IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-000968
[2023] NZHC 2119
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
COMMISSIONER OF POLICE
Applicant
AND
DAUX NGAKURU
First Respondent (Discontinued)
SHANE NGAKURU
Second Respondent (Discontinued)DWIGHT PERCIVAL FATU
Third Respondentrespondents continued over
Hearing: 17 July 2023 Appearances:
M R Harborow and K O’Halloran for Applicant K E Hogan for Fifteenth Respondent
Judgment:
9 August 2023
JUDGMENT OF EDWARDS J
[redacted version]
This judgment was delivered by me on 9 August 2023 at 2.00 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
COMMISSIONER OF POLICE v NGAKURU [2023] NZHC 2119 [9 August 2023]
JUNIOR HEART
Fourth Respondent
JOSEF ARMANI HEART
Fifth Respondent
WIREMU DIAMOND
Sixth Respondent
IORITANA TUAU
Eighth Respondent
JOHNSTONE MISITANA KALONIHEA
Ninth Respondent
TYSON JOSEPH PARI KOHATU ROBERTS
Tenth Respondent
TEANCUM EDMONDS
Eleventh Respondent
DYLAN REID FRASER
Twelfth Respondent
HARLIZ TIARE WHARERAU
Thirteenth Respondent (Discontinued)
CHASE SHANKITA LEE MANIAPOTO
Fourteenth Respondent
“P”
Fifteenth Respondent
[1] The applicant is the fifteenth respondent, Ms P. She is the registered owner of a property at [redacted] (Property). That Property is subject to a restraining order which was granted pursuant to an on notice application which was not opposed.
[2]Ms P applies for:
(a)continued interim name suppression;
(b)an order that the Commissioner of Police (Commissioner) discover all information relevant to his 17 March 2023 decision to proceed with his application to restrain the Property; and
(c)an undertaking that the Commissioner will pay any damages and costs consequential upon the restraint of her Property.
[3] The Commissioner abides the order of the Court in relation to the continuation of interim name suppression but opposes the remaining applications.
Background
[4] This proceeding was filed following the termination of a police investigation known as Operation Equinox. That investigation concerned the importation of methamphetamine, cocaine and MDMA into New Zealand, and its subsequent distribution and supply.
[5] In June 2021, the Court granted global restraining orders in relation to property held by the fourth respondent, Junior Heart. On 21 November 2022, Gordon J granted the Commissioner’s without notice application for restraining orders over the Property.
[6] Ms P was subsequently served with a police examination order and a copy of the without notice restraining order in relation to the Property. She applied for interim name suppression, which was granted by Gordon J on 15 December 2022.
[7]The Commissioner’s on notice application was filed on 25 November 2022.
[8] On 16 December 2022, Ms P was compulsorily examined by police for approximately three and a half hours. She provided documents to police and contact details for friends and family members.
[9] Ms P was hopeful that, following her interview, the on notice application for restraining orders would not proceed. However, on 17 March 2023, the Commissioner advised that he would be proceeding with the application.
[10] Although Ms P initially opposed the application for restraining orders she subsequently informed the Court that there was no opposition to the Commissioner’s application. The withdrawal of her opposition was made without concession regarding the contents or admissibility of the evidence then filed in support of the application.
[11] Ms P’s counsel explains that the opposition was withdrawn due to the low threshold for restraining orders, the state of New Zealand law, the costs of opposition, and because Ms P did not understand why the Commissioner was pursuing the application in the face of the answers she had given during the examination process.
[12]Orders restraining the Property were made on 27 March 2023.
[13] As described in the affidavits in support of the application, the Commissioner’s case is that Ms P was instructed to purchase the Property in her name and hold it on behalf of Mr Heart. The Commissioner contends that Mr Heart provided cash to Ms P via third parties which was derived from his significant criminal activities.
[14]The Commissioner relies on several strands of evidence to support its case:
(a)Ms P and Mr Heart are connected [redacted].
(b)Prior to his arrest in June 2021, Mr Heart lived at [redacted] with his family. His partner and their two sons still live at the Property. Ms P receives rental payments from Mr Heart’s partner. The Commissioner says that this arrangement is designed to disguise Mr Heart’s interest in the Property.
(c)Ms P has never lived at the Property and she pays rent to live elsewhere.
(d)Ms P did not have sufficient funds to purchase the Property when she acquired it in 2017. The Commissioner says that transfers of approximately $85,000 in cash were made from Mr Heart, through Ms P’s brothers. These funds were then used by Ms P to purchase the Property and service loan repayments.
(e)There are unexplained cash deposits and bank transfers in the bank accounts of Ms P, and her two brothers.
(f)Mr Heart funded significant improvements to the Property including the installation of fencing, an electronic gate, a sheltered deck area and a spa pool. These improvements appear to have been paid for in cash, which the Commissioner says is derived from Mr Heart’s significant criminal activity.
(g)Mr Heart was present with Ms P when they met with a builder in 2017 at the Property. Mr Heart asked repeatedly whether the building work could be paid for in cash.
Legal framework
[15] The primary purpose of the Criminal Proceeds (Recovery) Act 2009 (Act) is to establish a regime for the forfeiture of property that has either been derived directly or indirectly from significant criminal activity or that represents the value of a person’s unlawfully derived income.1
[16] Orders restraining property will be made if the Court is satisfied it has reasonable grounds to believe that specific property is tainted property or that the respondents have unlawfully benefited from significant criminal activity.2
1 Criminal Proceeds (Recovery) Act 2009, s 3(1).
2 Sections 24 and 25.
[17] An application may be made on a without notice basis in the first instance, and then followed by an on notice application. The effect of a restraining order is that the property is not to be disposed of or dealt with other than as provided in the restraining order. Restrained property remains under the Official Assignee’s custody and control.
[18] The Commissioner may make an application for a forfeiture order of the restrained property. There are three types of forfeiture orders: instruments of crime forfeiture orders; asset forfeiture orders; and profit forfeiture orders. Restraining orders have been described as temporary orders that give the police time to gather further evidence in anticipation of potential forfeiture orders.3
[19] As Brewer J said in Commissioner of Police v G, “[b]y any measure the Act grants significant coercive powers to the State to take control of all or part of a respondent’s property”.4 The Court of Appeal has said that the courts will be particularly vigilant of the interests of ordinary citizens in the field of compulsory acquisition of private property.5
[20] Restraining orders are in force for a period of one year, but they can be extended on application of the Commissioner.6 An application to vary the restraining orders and exclude property from restraint may be made under ss 33–35 of the Act. Ms P says her discovery application is necessary so that she may evaluate whether to make such an application.
[21] Section 29 of the Act also empowers the Court to require an applicant for a restraining order to give a satisfactory undertaking with respect to the payment of damages or costs or both in relation to the restraining order. Ms P seeks an undertaking pursuant to this section. The principles relevant to the exercise of the Court’s power under s 29 are canvassed later in this judgment.
3 Vincent v Commissioner of Police [2013] NZCA 412 at [47].
4 The Commissioner of Police v G [2012] NZHC 465 at [6].
5 Nicholas v Commissioner of Police [2017] NZCA 473, [2018] NZAR 172 at [40].
6 Criminal Proceeds (Recovery) Act, s 41.
Name suppression application
[22] Ms P seeks an interim order suppressing her name and other identifying details because she says publication is likely to cause her significant prejudice, undue or extreme hardship.
[23] The Court has an inherent discretionary jurisdiction to suppress names and other identifying details in civil cases. The Court must strike a balance between open justice considerations and the interests of the party who seeks suppression.7
[24] The starting point is the principle of open justice and the related right to freedom of expression guaranteed by s 14 of the New Zealand Bill of Rights Act 1990. There is a presumption of disclosure of all aspects of civil court proceedings. That presumption enables public scrutiny and ensures public confidence in the administration of justice.8 The question for the Court is whether the circumstances justify an exception to the fundamental principle of open justice.9
[25] The application in this case is supported by affidavit evidence. [Redacted]. Ms P also outlines the likely impact on her employment if her name was to be published in the context of an alleged association with serious offending. Ms P denies any involvement with criminal offending and has not been charged.
[26] In the specific circumstances of Ms P’s case, I am satisfied that publication will cause her significant prejudice.
[27] Against that, the intrusion into the principle of open justice is relatively minor at this stage. That principle will carry more weight at the forfeiture stage, assuming the Commissioner pursues such an application in relation to the Property.
7 Y v The Attorney-General [2016] NZCA 474, [2016] NZAR 1512 at [31].
8 At [26].
9 At [29].
[28] An order extending name suppression until disposition of any application for forfeiture in relation to the Property strikes the right balance between the interests of Ms P and her family at this early stage, and open justice principles. An order in those terms is set out at the end of this judgment.
Discovery
[29] Ms P seeks an order that the Commissioner discover all information relevant to his decision to proceed with his application to restrain the Property. The order is sought to ensure Ms P is fully informed of the strength of the case against her and can seek advice regarding the restraint of her Property.
[30] Despite the criminal context, proceedings under the Act are civil in nature.10 Proceedings are commenced by way of originating application.11 The originating application procedure is designed to be relatively speedy and inexpensive. That means discovery is not available as of right, but the Court retains the discretion to order discovery in certain circumstances.12
[31] A party seeking discovery must show that it is necessary and proportionate. The objective of securing the just, speedy and inexpensive determination of the proceedings guides the exercise of the discretion.13 Counsel referred me to three cases where discovery orders have been made in proceedings brought under the Act.14
[32] The application is opposed by the Commissioner on a variety of grounds. Each are taken in turn.
[33] First, the Commissioner says the application is overly broad. Mr Harborow, for the Commissioner, submits that the discovery application lacks the necessary specificity to allow the Commissioner to identify which documents are sought. He
10 Criminal Proceeds (Recovery) Act, s 10(1).
11 High Court Rules 2016, r 19.2(r).
12 McCullagh v Robt Jones Holdings Ltd [2015] NZHC 1462 at [3]. See also High Court Rules 2016, rr 19.11 and 7.43A.
13 McCullagh v Robt Jones Holdings Ltd, above n 12, at [6].
14 The Commissioner of Police v Marwood [2019] NZHC 837; The Commissioner of Police v Yan [2015] NZHC 3315; and Commissioner of Police v Gong [2019] NZHC 2735 and Commissioner of Police v Gong [2019] NZHC 3441.
submits that it would be unnecessarily expensive, time consuming, and disproportionate to require the Commissioner to provide discovery on this basis.
[34] I accept that the application is framed in very broad terms. Ms P seeks “all information relevant to [the Commissioner’s] … decision to proceed with his application to restrain the [Property]”. Specific categories of documents sought are not identified, nor is a date range specified.
[35] However, the documents relied on by the Commissioner in deciding to proceed with the application contain information within the sole knowledge of those who made the decision to proceed with the application on the Commissioner’s behalf. Ms P does not know what she does not know, and so it is difficult to be more precise in the identification of the documents.
[36] The nature of the application and the evidence filed to date provide some parameters. The documentation sought:
(a)relates to the Property;
(b)relates to the Commissioner’s decision made on or about 17 March 2023 to proceed with the application; and
(c)does not include documentation already disclosed in the affidavit evidence.
[37] Other documentation not relevant to the restraint of the Property will fall outside the scope of any discovery order. There is nothing to suggest that identification of the documentation sought by Ms P will be time-consuming or costly. The scope of the request does not preclude the granting of the application.
[38] Next, the Commissioner says it is premature to seek a discovery order given that an application for civil forfeiture orders in relation to the Property has yet to be filed. At the time that application is filed, Ms P will receive further affidavit evidence which is likely to provide the further information she seeks.
[39] There is merit in this submission. The timing of the application raises some hurdles for Ms P. The fact that restraining orders were made unopposed diminishes Ms P’s claim that the discovery is necessary in the circumstances of this case.
[40] Nevertheless, I accept that Ms P acted pragmatically in deciding to withdraw her opposition to the application for restraint. I also accept that the discovery sought is necessary to allow Ms P to properly assess the merits of any application she may potentially make to vary the restraining order to exclude the Property.
[41] In addition, discovery will allow Ms P to consider and prepare any opposition to the anticipated civil forfeiture application. Addressing discovery issues at this stage will allow the parties to focus on their litigation risk in relation to that application. It may also avoid delays in the disposition of that application.
[42] In Commissioner of Police v Gong, Jagose J granted the Commissioner’s application for discovery from the respondent.15 That application was brought after restraining orders were made, but prior to an application for civil forfeiture being filed. Jagose J likened the application in that case to an application for pre-commencement discovery. If the Commissioner may seek a discovery order prior to the filing of an application for forfeiture, there is no reason why Ms P cannot do the same.
[43] While Ms P will receive affidavit evidence in support of an application for forfeiture, it will not include discovery which may be relevant to her opposition to that application. On balance, I am satisfied that discovery at this stage is necessary to either formulate an application to vary the restraining order, or to oppose the forfeiture application which has yet to be made.
[44] The Commissioner also opposes the application on the ground that some of the information sought by Ms P is privileged. This ground may be dealt with succinctly. Discovery orders do not require the disclosure of privileged documents. The existence of some privileged documents does not mean discovery should not be provided at all.
15 Commissioner of Police v Gong [2019] NZHC 2735.
[45] Mr Harborow further submits that the Commissioner’s investigation is active and ongoing and that disclosure would unduly prejudice it, and any subsequent application for civil forfeiture. In this respect he relies on s 153 of the Act which forbids persons subject to examination or production orders from disclosing the existence or operation of those orders.
[46] The Commissioner says that Ms P has already demonstrated an apparent willingness to interfere with, or influence evidence of, third parties who were contacted by the Commissioner in relation to claims she made during her examination. Specifically, Ms P spoke to her ex-husband, after police had spoken to him, about the cash she had received from the sale of her jewellery. It appears that changes made to her ex-husband’s statement came shortly after three calls between him and Ms P.
[47] Ms P places a different gloss on this incident. In an affidavit filed in this proceeding, Ms P says:
4.1On 28 April 2023 my ex-husband contacted me, told me Police had been to see him that morning making enquiries about me and then had sent him a draft statement which left out a lot of the information he had given them.
4.2I had not previously spoken to [redacted] about this case. He forwarded the statement as drafted by Police to me. We spoke about it.
4.3My ex-husband and I remain friends. We have a child together – [redacted]. We are in constant communication.
4.4We married about [redacted] years ago. I was working at [redacted] at that time.
4.5Our conversations revolved around me talking to him about this proceeding and my distress and he and I discussing and endeavouring to recall the events Police were making enquiries about. Some of those events were up to 20 years ago.
4.6There was nothing nefarious about our conversation and we did not discuss doing anything false or making any false changes to [redacted] statement.
[48] It is not clear from the evidence that Ms P was told not to contact any of her family or friends. Nor is it clear that there was any breach of s 153 of the Act. Some of the changes made to the statement are contextual in nature or provide further information. Ms P’s ex-husband says the changes are all true.
[49] In any event, to the extent there are differences between the parties regarding the significance of this incident, it is not possible to resolve them on the affidavit evidence alone. For the purposes of the discovery application, I am satisfied that any risk of interference to the ongoing police investigation may be mitigated by conditions prohibiting Ms P from disclosing the information to any other person (except her legal counsel) without the prior written consent of the Commissioner.
[50] On balance, I consider the discovery sought by Ms P is both necessary and proportionate in the circumstances. Orders accordingly are set out at the end of this judgment.
Undertaking application
[51] Ms P applies under s 29 of the Act for the Commissioner to provide an undertaking as to damages. That section provides:
29Undertakings as to damages or costs in relation to restraining orders
(1)A court may require an applicant for a restraining order, or an applicant for an extension of the duration of a restraining order under section 41, to give satisfactory undertakings with respect to the payment of damages or costs, or both, in relation to the making, operation, or extension of the duration of the restraining order.
(2)A court may decline to make a restraining order or extend the duration of a restraining order if the applicant for the order or extension fails to give the court the undertakings with respect to the payment of damages or costs, or both, that the court requires.
(3)Any expense incurred by the Crown in satisfaction of an undertaking given on behalf of the Crown under subsection (1) may be incurred without further appropriation than this section.
[52] The Court of Appeal set out the principles relevant to the exercise of the Court’s power under s 29 in Yan v Commissioner of Police.16 The Court confirmed that the discretion should be exercised according to considerations of justice and fairness and to diminish the possibility of oppression and injustice.17 The inquiry is essentially fact-dependent and will necessarily vary from case to case; there is no presumption either way.18 Relevant factors to be taken into account include:19
(a)the personal circumstances of the respondent;
(b)delay;
(c)the nature of the asset;
(d)the likelihood of loss being suffered as a result of the restraint;
(e)the extent of any likely loss;
(f)the conduct of the Commissioner;
(g)the strength of the Commissioner’s case; and
(h)the existence of a meaningful alternative avenue of redress.
[53] The focus of the hearing in this case was the likelihood of loss being suffered, and the extent of any likely loss. I start with those factors.
[54] Ms P says the Commissioner’s application and related enquiries have had (and will continue to have) a negative impact on her planned development of the Property, her career advancement, her finances and her mental health.
16 Yan v Commissioner of Police [2015] NZCA 576, [2016] 2 NZLR 593 at [39]–[44].
17 At [40], citing Lang ’s endorsement of the principle in Commissioner of Police v Yan [2014] NZHC 2688 at [5].
18 Yan v Commissioner of Police, above n 16, at [40].
19 At [41].
[55] The planned development of the Property involves a subdivision with the intention that Ms P’s brother occupy the subdivided rear section. Ms P states that the surveyor no longer wants to be involved in the subdivision and the construction company has suggested she engage another builder. Ms P says that going elsewhere will cost her time and money.
[56] Despite that evidence, I am not satisfied that the restraint of the property is the cause of any delays in progressing the development. The Commissioner has adduced evidence which suggests that the development was placed on hold prior to the application for restraint being made. This suggests that any delay in the development of the Property may be due to factors unrelated to the restraint.
[57] The other alleged impacts, such as the impact on career advancement and mental health, are mitigated to some extent by the continuation of name suppression. Similarly, costs orders (if Ms P is successful) will go some way to meeting the financial burden occasioned by the proceeding. I note that the Property remains rented while subject to restraint and the Commissioner states that Ms P continues to receive rental payments.
[58] On the basis of the evidence before me, I am not satisfied that continued restraint of the Property will lead to the losses identified by Ms P such that the Commissioner should be directed to provide an undertaking as to damages.
[59] Turning to the other relevant factors, there is no issue of delay in this case. There is also no issue concerning the conduct of the Commissioner. The fact that restraining orders were granted unopposed says something about the strength of the Commissioner’s case. However, Ms P refutes many of the allegations made by the Commissioner, and accordingly, it is not possible to determine the strength of the case in relation to the Property with any confidence at this stage.
[60] As for alternatives for redress, it is relevant that Ms P has signalled she is contemplating an application to vary the restraining orders so as to exclude the Property. The discovery order made will aid consideration of that application. If such
application is made, and granted, then it will obviate the need for an undertaking to be given. This provides an alternative route by which to mitigate any prejudice to Ms P.
[61] Ms Hogan referred me to Commissioner of Police v Salter, in which Palmer J ordered the Commissioner to provide an undertaking as to damages.20 That case involved circumstances markedly different to this one, and ultimately it does not assist the determination of the current application. As the Court of Appeal said in Yan, the evaluation of an application under s 29 is entirely fact-dependent.21
[62] When the facts of Ms P’s case are weighed in the balance, I am not satisfied that justice and fairness considerations require the Commissioner to provide an undertaking in this case.
Result
[63] The application for continued name suppression is granted. I make an interim order suppressing the name of the fifteenth respondent and any identifying particulars pending the final disposition of any application for forfeiture orders over the Property or further order of the Court.
[64]The application for discovery is granted. I make the following orders:
(a)By Friday, 22 September 2023 the Commissioner shall serve an affidavit of documents in accordance with r 8.15 of the High Court Rules 2016 in respect of all documents relating to the Commissioner’s decision on or about 17 March 2023 to proceed with the application to restrain the Property.
(b)The Commissioner shall not be obliged to discover documents already disclosed in affidavits filed in support of the applications (without notice and on notice) for restraining orders or the affidavits filed in relation to this application.
20 Commissioner of Police v Salter [2021] NZHC 1531.
21 Yan v Commissioner of Police, above n 16.
(c)Any documents or contents of documents discovered by the Commissioner shall not be disclosed by Ms P to any party (other than her legal adviser) unless the Commissioner gives his prior consent in writing to such disclosure or the Court orders otherwise.
[65]The application for an undertaking as to damages is dismissed.
[66] The parties have had mixed success in relation to the three applications. Given the application for name suppression was not opposed, my preliminary view is to allow costs to lie where they fall. However, if any party seeks an order of costs against the other, then a memorandum of counsel may be filed 10 working days after delivery of this judgment, with a memorandum in response filed five working days thereafter. Memoranda shall be no longer than five pages. Costs shall be determined on the papers.
Edwards J
Solicitors/Counsel:
Meredith Connell (Office of the Crown Solicitor), Auckland K E Hogan, Auckland
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