Commissioner of Police v Rodriguez
[2021] NZHC 425
•8 March 2021
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2019-419-150
[2021] NZHC 425
BETWEEN COMMISSIONER OF POLICE
Applicant
AND
ANDREINA GAMEZ RODRIGUEZ
First Respondent
AND
MAP AND ASSOCIATES TRUSTEE COMPANY
Second Respondent
AND
BANK OF NEW ZEALAND
Interested Party
Hearing: 15 February 2021 Appearances:
J N Hamilton for Applicant
K E Cornegé & C S Frost for First Respondent
Judgment:
8 March 2021
JUDGMENT OF PAUL DAVISON J
This judgment was delivered by me on 8 March 2021 at 4:30 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Crown Solicitor, Hamilton Tompkins Wake, Hamilton
COMMISSIONER OF POLICE v RODRIGUEZ [2021] NZHC 425 [8 March 2021]
Introduction
[1] This is an application by the Commissioner of Police for an order to extend the term of a restraining order made pursuant to the Criminal Proceeds (Recovery) Act 2009 (the Act) made by Moore J on 12 December 2019.1 The Commissioner seeks an extension of the restraining order for a further 12 months from expiry of the order on 12 December 2020. On 9 December 2020 this Court made an interim order to extend the term of the initial restraining order pending determination of this present application.
[2] The detailed background to this matter is set out in Moore J’s 12 December 2019 judgment.
[3]The essential facts are:
(a)Ms Andreina Gamez Rodriguez (the first respondent) is married to Louis Carlos De’Leon Perez (Mr De’Leon).
(b)On 29 March 2019, USD$11,850,000 (the funds) was transferred into a BNZ bank account registered to Map and Associates Trustee Company Limited (the second respondent).
(c)The funds were wired following the realisation of a portfolio account held in Ms Rodriguez’s name with the Lombard Odier and CIE (Bahamas) Limited Bank (the Lombard Portfolio).
(d)The Commissioner alleges that the funds transferred to the BNZ bank account are derived from Mr De’Leon’s dishonest and fraudulent conduct, and that they were transferred to New Zealand by Ms Rodriguez for the purpose of concealing or disguising their source. The Commissioner further alleges that Ms Rodriguez has unlawfully benefitted from significant criminal activity, and seeks restraining orders in respect of the funds pursuant to ss 21 and 25 of the Criminal
1 Commissioner of Police v Rodriguez [2019] NZHC 3265 at [1]–[25].
Proceeds (Recovery) Act 2009 (the Act) pending the commencement of proceedings seeking a civil forfeiture order.
(e)Mr De’Leon is a dual citizen of Venuzuela and the USA. He faces charges in the United States of corruption and money laundering arising from his actions as an attorney for a subsidiary of a Venuzuelan state owned and controlled oil company. It is alleged that between 2011 and 2013, he received bribes totalling USD$16,000,000.
(f)The Commissioner alleges that Ms Rodriguez has committed money laundering under s 243(2) of the Crimes Act 1961.
(g)On 12 June 2019, the Commissioner filed a without notice application for a restraining order against Ms Rodriguez. The next day on 13 June 2019, Woolford J granted the restraining order.
(h)On 14 June 2019, the Commissioner filed an on notice application for a restraining order against Ms Rodriguez.
(i)In his judgment of 12 December 2019, Moore J held there were reasonable grounds to find that Ms Rodriguez has benefitted from significant criminal activity and granted the Commissioner’s on notice application for a restraining order. The restraining order stated:2
…pursuant to s 25 of the Act the following property is not to be disposed of, or dealt with, other than is provided in this restraining order and is to be in the Official Assignee’s custody and control:
(a) The balance of the funds attributable to the first respondent, Andreina Gamez Rodriguez, in the following Bank of New Zealand account: [number] in the name of MAP and Associates Trustee Company Ltd.
[4] On 14 February 2020 the New Zealand Police wrote to the first respondent at her address in Texas, USA to advise her that the Commissioner had obtained an Examination Order against her and that it required her attendance at a time and date
2 Commissioner of Police v Rodriguez, above n 1, at [63].
prior to 31 March 2020 to be settled for her examination at the Hamilton Central Police Station. The letter said: 3
…
The order of course has no application outside of New Zealand and it does not bind you in any way. However you might see the order as a means of progressing the matter concerning the restraint of your funds in New Zealand and as an opportunity to reinforce the position asserted to the Bank of New Zealand that the restrained funds are the proceeds of your work as an architect in Venezuela.
I would like to take this opportunity of extending to you an invitation to engage with the New Zealand authorities by travelling to New Zealand for the purpose of an interview upon a date and time that is convenient to you and by providing the documents the order seeks.
As the representative of the Commissioner of Police I can say we are able to offer significant flexibility in terms of any dates/times or place/s an interview can take place.
I take this opportunity to record that the Commissioner of Police is keen to resolve the matter of the restrained funds and that this invitation provides you with the opportunity to persuade us the restrained funds are not tainted and therefore ought to be returned to you.
[5] Following the first respondent’s receipt of the 14 February 2020 letter, Ms Cornegé, acting for the first respondent, wrote to the Police by letter dated 27 March 2020. As a result of negotiations that followed it was agreed between the Commissioner and the first respondent that issues relating to the examination order and its validity would be deferred until after the Court of Appeal had delivered its judgment on the first respondent’s appeal against the judgment of Moore J of 12 December 2019.4
[6] On 1 October 2020 the Court of Appeal heard an appeal by the first and second respondents from the judgment of Moore J of 12 December 2019. On 26 November 2020 the Court of Appeal delivered its judgment in which it dismissed both appeals.5
3 Affidavit of Katie Aleisha Findley, sworn 12 February 2021, “KAF 3-2”.
4 Affidavit of Katie Aleisha Findley, sworn 12 February 2021, “KAF 3-1”.
5 Rodriguez v Commissioner of Police [2020] NZCA 589.
[7] On 4 December 2020 the Commissioner filed an application to extend the duration of the restraining order made by Moore J on 12 December 2019, for a period of one year to expire on 12 December 2021.
[8] On 9 December 2020, the Commissioner filed an application to extend the restraining order that Moore J ordered for one year against Ms Rodriguez under s 41 of the Act. Also on 9 December 2020 Gordon J made an interim order extending the restraining order made by Moore J on 12 December 2019 until the Commissioner’s application to extend that order is heard and determined.
[9] The Commissioner seeks an extension of the restraining order for one year on the grounds that:
(a)there are reasonable grounds to believe that the first respondent has benefitted from significant criminal activity;
(b)the police investigation is on-going; and
(c)aspects of the police investigation have not been advanced, by agreement with counsel for the first respondent, pending the determination of appeals brought by the first and second respondent against the on-notice order granting restraint. Those appeals were determined, in favour of the Commissioner, on 26 November 2020.
[10] The first respondent has filed a Notice of Opposition stating that she opposes the making on an order extending the restraining order for a year, but does not oppose an order being made extending the existing restraining order provided:
(a)any extended restraining order is made for no more than a period of six months; and
(b)the Commissioner is ordered to provide an undertaking as to damages.
[11] The second respondent has filed an appearance reserving its rights. It does not oppose the Commissioner’s application to extend the restraining order, and has not appeared by counsel at the hearing of the application.
[12] As at 11 February 2021, the total amount of interest accrued on the restrained funds is NZD$420,233.45. The total sum including interest held by the Official Assignee as at 11 February 2021 was NZ$18,361,613.81.6
Law
[13]Section 41 of the Act provides:
41 Extending duration of restraining order
(1)If a court has made a restraining order, the applicant for that order may, before the restraining order expires, apply to that court to extend its duration.
(2)If an application is made under subsection (1), the court may order that the operation of the restraining order be extended for a period not exceeding 1 year.
(3)The duration of a restraining order may be extended more than once under this section.
(4)If, before a restraining order would otherwise expire under section 37(1), an application is made to a court under this section and the application is granted, the restraining order ceases to be in force on the date specified in the court’s order.
[14] Section 42 applies to situations where the applicant applies to vary or add conditions to the restraining order:
42 Additional matters relating to extending duration of restraining order
(1)On making any order under section 41(2), the court may vary the restraining order in any way it considers fit, including, without limitation, by specifying whether all or part of the restrained property is to remain subject to the restraining order during the extended period of operation.
6 Letter 11 February 2021 from Ministry of Business, Innovation and Employment. Affidavit of Katie Aleisha Findley, 11 February 2021, Exhibit KAF-2.
(2)An applicant for an order under section 41(1) must serve a copy of the application on any person who, to the knowledge of the applicant, has an interest in the property that is the subject of the application.
[15]Section 29 of the Act provides for undertakings as to damages:
29 Undertakings 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.
[16] Sections 41 and 42 of the Act vest a wide discretion in the court to extend a restraining order.7 Restraining orders are essentially interim orders for a restricted period, which are made to preserve property while the Crown collects evidence to support an application for forfeiture.8 Where the circumstances that warranted the making of the restraining order remain, and the Commissioner has not delayed pursuing an application for a profit forfeiture order, it is unlikely a court will decline an extension.9
The Court of Appeal in Yan v Commissioner of Police observed that:10
There is a strong public interest in preventing criminals from benefitting as a result of significant criminal activity and, accordingly, a strong public interest in preserving tainted property prior to forfeiture being reasonably obtainable and preventing dissipation of those assets. On the other hand, a restraining order represents a significant infringement of property rights and has the potential to cause considerable injustice should it transpire the order was not justified. Section 29 provides a potential safeguard against the latter injustice.
[18] The Court set out a non-exhaustive list of factors that a court should take into account when assessing whether to order the giving of an undertaking. They are:11
7 Simon France (ed) Adams on Criminal Law - Sentencing (online ed, Thomson Reuters) at [CP41.02].
8 Vincent v Commissioner of Police [2013] NZCA 412 at [45(a)].
9 Commissioner of Police v Jiang [2019] NZHC 3318 at [21].
10 Yan v Commissioner of Police [2015] NZCA 576, 2 NZLR 593 at [39]
11 At [41].
(a)the personal circumstances of the respondent or respondents;
(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 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.
[19] The Court of Appeal said that the issue of whether an undertaking should be ordered is essentially fact-dependent and the weight to be afforded to any particular factor will necessarily vary for case to case with no presumptions either way. The Court’s discretion “should be exercised according to considerations of justice and fairness and to diminish the possibility of oppression and injustice.”
[20] The Court of Appeal also observed that a significant period without progress being made towards a forfeiture hearing may of itself afford grounds for requiring an undertaking to be given.12 Further, the Court held that the applicant for undertakings does not have to prove actual loss.
Applicant’s submissions
[21] Ms Hamilton for the Commissioner submits there are reasonable grounds to believe Ms Rodriguez has benefitted from significant criminal activity, and says that despite the extensive investigative work already undertaken by members of the Police Asset Recovery Unit (ARU) responsible for carrying out the investigation, the Commissioner states they need more time to investigate these claims.
12 At [60].
[22] The Commissioner submits that an extension to the restraining order for one year commencing from 12 December 2020 is necessary to enable the Police to carry out and complete their investigation and obtain information from foreign jurisdictions.
[23] In regards to the issue of delay to date, Ms Hamilton relies on the contents of the several affidavits of Bruce Russell who is the Police investigator with responsibility for conducting the investigation into the funds and their source. In his most recent affidavit,13 Mr Russell provides a detailed account of the investigative work undertaken since the restraining order was made in December 2019. The work has involved making requests through Financial Intelligence Units (FIU’s) located in a number of overseas countries and jurisdictions including: The USA; France; Germany; The Bahamas; Panama; Colombia; Dominican Republic; St Vincent and the Grenadines; Turks and Caicos; United Arab Emirates; Venezuela; Andorra; and Aruba. Requests via Interpol have been made of Spain and Andorra. The investigations have included making requests pursuant to the Mutual Assistance in Criminal Matters Act 1992 and the Mutual Legal Assistance Treaty (MLAT) to the jurisdictions of Switzerland; The Bahamas; Panama; and Venezuela.
[24] Mr Russell explains in his affidavit that response times to the requests vary from country to country and in some cases a jurisdiction may not provide any response at all. He has set out a table detailing the dates on which requests of foreign countries were made during 2019 and the dates of their responses. It is clear from the detailed information contained in Mr Russell’s affidavit that he and the ARU have actively and efficiently undertaken their inquiries in the various countries using the network of FIU’s and the legal mechanisms, including MLAT and Interpol requests, available to them.
[25] Mr Russell says that progressing the Commissioner’s case is now substantially reliant on the receipt of responses to the MLAT requests that have been made and in particular those made to The Bahamas and Venezuela. With these requests and others presently outstanding, and based on his experience of making these requests, Mr Russell says that he is not in a position to provide an accurate indication of how
13 Affidavit of Bruce Russell, sworn 20 January 2021.
long the process will take. He says however that because of the responses he has already received to earlier requests made to overseas FIU’s he is generally aware of the evidence that is available from The Bahamas and Venezuela, and if that evidence is provided pursuant to the MLAT requests the Commissioner will be better positioned to file applications under the Act.
[26] Mr Russell further explains that the investigation has determined that relevant evidence is likely to be available from a witness located in the United States who is a co-accused of the respondent’s husband. The prospective witness (the witness) has entered into a plea agreement with the US authorities and it is expected that once he has been sentenced in the US he will provide evidence relevant to the Commissioner’s investigation. Mr Russell says that it is his expectation that an interview with the witness will establish that he paid money which was said to be bribe funds, at the direction of the respondent’s husband, Mr De Leon, into the account at Societe Generale Private Banking in The Bahamas, which account is the subject of New Zealand’s second and outstanding MLAT request of The Bahamas.
[27] The Commissioner notes that Ms Rodriguez has not been examined, which has delayed the process because she most likely has access to documents for discovery that will aid in the investigation. Ms Hamilton says that as the respondent does not reside in New Zealand the Commissioner is unable to utilise the examination procedure under s 106 of the Act which requires a person in respect of whom an examination order has been made to answer questions, supply information and documents to the Commissioner.
[28] Ms Hamilton also notes that the Commissioner has sought to conduct an examination of the first respondent in order to obtain information regarding the source of the funds, however she has declined to be interviewed or to provide any of the requested information.
[29] Ms Hamilton submits that the time spent by the Commissioner conducting the international inquiries into the source of the funds, could have been avoided by the respondent voluntarily agreeing to be interviewed and by providing the information sought by the Commissioner. Ms Hamilton submits that Ms Rodriguez is “holding all
the cards” and can be reasonably assumed to know the source of the funds and to have the ability to provide documentation to explain and confirm the source of the funds, should she choose to do so. Ms Hamilton submits that as the respondent is residing overseas and not required to comply with an order for examination, having declined to be interviewed or provide the requested information voluntarily, she cannot complain about the time being taken by the Commissioner in carrying out his international investigations in order to obtain information regarding the source of the funds in New Zealand.
[30] The Commissioner therefore submits an extension of the restraining order against Ms Rodriguez as first respondent is necessary, and that a further year from 12 December 2020 is necessary and reasonable to enable the Commissioner to complete his investigation.
[31] As regards the respondent’s submission that the Court should order the Commissioner to give an undertaking as to damages, the Commissioner relies on Yan v Commissioner of Police for the principle that the Court’s discretion to require an undertaking “should be exercised according to considerations of justice and fairness and to diminish the possibility of oppression and injustice”.14
[32] Ms Hamilton notes that the Commissioner has voluntarily provided an undertaking on one previous occasion in circumstances where he had applied for and obtained registration of foreign restraining orders under the wrong statutory provision and later accepted that the order he obtained was made without jurisdiction and was a nullity.15 Counsel submits that the Dotcom case is clearly distinguishable on its facts and does not assist the first respondent in the circumstances here.
[33] The Commissioner notes that because of the duties imposed under the Anti- Money Laundering and Countering Financing of Terrorism Act 2009, the second respondent and its director Mr Martin Fine, having regard to the inconsistent information now known, would not be able to deal with the funds in the manner
14 Yan v Commissioner of Police, above n 10, at [23].
15 Commissioner of Police v Dotcom [2012] NZHC 634 at [25] and [99], and Commissioner of Police v Dotcom HC Auckland, CIV-2012-404-33, 16 March 2012, at [2] and [3].
outlined in Mr Fine’s affidavit of 29 January 2021 in which he describes the way in which he would have managed and invested the funds had they not been restrained.16 Ms Hamilton refers to the observations of the Court of Appeal which noted that the information provided by Mr Fine to the BNZ regarding his instructions that the funds were derived from the first respondent’s work as an internationally recognised architect and transferred from a managed investment portfolio at the Lombard Odier bank, was contradicted by information obtained by the Police ARU which suggested that the first respondent has misled the second respondent as to living status, marital status, and place of residence. The Court of Appeal observing:17
[43] Ms Rodriguez has not filed any evidence herself which provides an explanation for the contradictions. In such circumstances where a party who is likely to have direct knowledge of matters of significance and elects to remain silent it is legitimate for a court to draw inferences that the evidence of the silent party would not be helpful to that party. The Judge was justified in taking into account that, in the face of evidence contradicting the representations made to the BNZ on her behalf, Ms Rodriguez had offered no plausible explanation.
[34] Ms Hamilton submits that in the present case there is no real risk of significant injustice being caused to the first respondent as a result of the restraining order, and says that the first respondent has failed to show that she will suffer any significant loss as a result of the restraining orders.
Respondent’s submissions
First respondent
[35] As I have noted, the first respondent does not entirely oppose the Commissioner’s application to extend the duration of the restraining order. Ms Cornegé for the first respondent says however, that the restraining order should only be extended for a period of six months and on the basis that the Commissioner is ordered to provide an undertaking as to damages. This would strike a fair balance between the parties’ respective interests. Ms Cornegé says that the first respondent accepts that the Commissioner’s delay to date is not itself unreasonable, but when coupled with the financial prejudice that has and will be suffered by the first
16 Affidavit of Martin Fine, sworn 29 January 2021, at [12] and [17].
17 Rodriguez v Commissioner of Police [2020] NZCA 589 at [43].
respondent, the Court order to extend the current restraining order should be made on terms that require the Commissioner to progress any forfeiture application he may make promptly.
[36] Ms Cornegé submits that an extension of the restraining order for a period of six months would provide the Commissioner with a reasonable period of time within which to complete his investigation and commence proceedings seeking civil forfeiture orders under the Act.
[37] Counsel notes that should the Court grant the Commissioner’s application for a twelve month extension, by the end of the extended period, a restraining order will have been in place for two and a half years, without any certainty that proceedings seeking civil forfeiture orders will even be commenced.
[38] Ms Cornegé further notes that the funds are presently held by the Official Assignee on term deposit at interest rates ranging between 0.25 per cent and 1.4 per cent, which she submits are significantly lower than recent conservative investment returns. Counsel says that as a result of not having access to her funds and not being able to stipulate how they are to be invested, Ms Rodriguez has to date lost hundreds of thousands of dollars as a result of the restraining order.
[39] The first respondent submits that if the extension is granted for one year, Ms Rodriguez will continue to be deprived of an opportunity to invest her funds and make more significant returns on them.
[40] The first respondent accepts that the Commissioner currently needs further time to investigate the matter before filing a forfeiture application. Ms Cornegé submits that the Commissioner has failed to produce evidence to justify the one-year extension he is seeking.
[41] The first respondent submits that extending the restraining order will continue to cause prejudice to Ms Rodriguez. In particular, the first respondent points to the fact the restraining order has already been in place for around 18 months and prevents Ms Rodriguez from investing the funds. Ms Cornegé notes that Ms Rodriguez is only
required to show the risk of loss and not the precise form or quantum of loss that she may suffer as a result of the restraining order. She submits that the likelihood of loss and the extent of such loss are also relevant factors to be taken into account here, and she refers to the contents of Mr Fine’s affidavit of 29 January 2021 in which he says that over the period of the restraint to date the difference between holding USD$11 million in a bank account at three per cent rather than being held in managed funds at a conservative return of 6.5 per cent is $629,712.18 Counsel submits that the prejudice and ongoing loss being suffered by the first respondent is due to the inconsistency between the Official Assignee’s duty to preserve the funds, and the first respondent’s wish to increase the value of the funds by active investment.
[42] Ms Cornegé says that factors present here which point towards an undertaking being appropriate include: the nature of the asset, being funds intended for investment; the significant delay to date coupled with the further delay due to the proposed extension of the restraining order; the substantial loss already incurred and which is continuing; and the fact that the Commissioner’s case cannot be said to be strong. Counsel submits that it is also relevant that there is no alternative avenue of redress for any losses suffered by the first respondent, and having regard to the combination of those factors, the Court should order the Commissioner to provide an undertaking as to damages to enable her to recover her losses should the Commissioner not proceed to commence civil forfeiture proceedings or should his claim not succeed.
[43] The first respondent accordingly submits that the Court should require the Commissioner to provide Ms Rodriguez with an undertaking as to damages for such sum that the Court decides. The first respondent further submits that if the Court grants an extension, it should expire on 12 June 2021 if the Commissioner has not filed a civil forfeiture order on that same date.
Discussion
[44] As previously determined by Moore J and confirmed by the Court of Appeal, the background to the funds being transferred to New Zealand and the first respondent’s inability to provide a credible explanation of their source, were
18 At [21].
reasonable grounds for believing that Ms Rodriguez had engaged in money laundering. The time taken by the Commissioner investigating the source of the funds is not at all unreasonable having regard to the need for the Police investigators to make a wide range of international inquiries through Interpol and MLAT requests.
[45] It is clear from Mr Russell’s affidavit of 20 January 2021 that the Police investigation has involved requests and communications with a large number of Financial Intelligence Units in other countries and that the process is inherently time consuming. The rate of progress is not solely determined by the investigators’ actions, and it also depends on the time taken by the overseas authorities responding to requests. As Mr Russell has explained that process can result in delays, notwithstanding the efforts and efficiency of the New Zealand investigators. I am accordingly satisfied that the Commissioner has diligently progressed his investigation into the source of the funds. The time taken reflects the complexity of the task and the inherent delays caused by the international scope of the investigation rather than any failure on the part of the Commissioner and his staff to proceed as efficiently as possible.
[46] It is also relevant in this context to note that those involved in the process of international money laundering are likely to employ a range of strategies designed to conceal the source of the funds and to obfuscate the movements of funds so as to make any investigation seeking to trace the source of funds and follow their movement internationally and across jurisdictions inherently complex and difficult. Such investigations can necessarily take considerable time, and having regard to that context the 18 months taken by the Commissioner’s investigation to date, and the need for further time, is not at all unreasonable in the circumstances.
[47] While the investigative process is time consuming and has involved delay during which Ms Rodriguez has been unable to access or control the funds, it does not avail her to credibly complain that the time being taken up by the ongoing investigation is causing her prejudice. I agree with the submission made for the Commissioner that although Ms Rodriguez is not in New Zealand and therefore not legally obliged to provide the information and documents that the Police investigators are looking for, it is reasonable to assume that she herself knows the source of the
funds and would be able to provide requested documentary evidence to show and confirm the source and movement of the funds prior to them being deposited into the Bank of New Zealand account. For that reason I do not consider that Ms Rodriguez’s claim to be prejudiced by the delay and time being taken by the Commissioner’s investigation, is in the circumstances here a compelling factor to be considered when deciding whether further extension of the restraining order is justified having regard to the public interest in the funds being held while the Commissioner’s investigation is continued, set against the claimed prejudice being caused to Ms Rodriguez by her being unable to access the funds.
[48] As observed by the Court of Appeal in Yan, while a restraining order is a significant infringement of property rights with the potential to cause considerable injustice where it transpires that it was not justified, there is a strong public interest in preserving tainted property prior to forfeiture being obtained in order to prevent dissipation of assets identified as being derived from criminal activities. In my view the Commissioner’s investigation to date has gathered evidence which appears to support the allegation that the funds were derived from the criminal activities of Ms Rodriguez’s husband and his associates. The inconsistent explanations of the source of the funds provided by the first respondent and her unwillingness to provide the Commissioner’s investigators with documentation confirming the source of the funds adds to the strength of the proposition that the Commissioner’s allegations are at least on a prima facie basis, well founded.
[49] However, while I am satisfied that further extension of the restraining order is both necessary and justified, I do not consider an extension for a further year is appropriate. A period of nine months from 12 December 2020 should enable the Commissioner to gather further information from the overseas jurisdictions and progress the investigation to the point where a decision can be made to commence proceedings seeking civil forfeiture orders. This further period also takes account of Ms Rodriguez’s interests and the objective of limiting the further time during which she will be unable to access or utilise the funds by reason of the restraining order.
Undertaking
[50] Pursuant to s 29 of the Criminal Proceeds (Recovery) Act the Court has the power to require an applicant to provide an undertaking as to damages. Some of the relevant considerations were identified in the non-exhaustive list given by the Court of Appeal in Yan.19 These factors are also relevant to and inform the Court’s assessment of whether an extension of the restraining order is justified and are factors I have also considered in that context.
[51] Having regard to the Yan factors, I do not consider that considerations of justice and fairness and the diminishing the possibility of oppression and injustice require the Court to order the Commissioner to give an undertaking as to damages. The delays experienced by the Commissioner in progressing his investigation are due to the international scope of the inquiries necessary to investigate the source of the funds and there is no evidence to suggest that the Commissioner has been dilatory in progressing the investigation. Moreover there is no evidence of any want of good faith on the part of the Commissioner and the investigators, or of any conduct by the investigators which would support the need for an undertaking. I have already said, I consider the Commissioner’s investigations to date show that, at least on a prima facie basis, he has a strong case to support the allegation that the first respondent has engaged in money laundering and has benefited from funds derived from significant criminal activities.
[52] The restrained funds are being held and preserved while under the control of the Official Assignee, and the first respondent says that she is suffering loss by reason of being unable to actively invest the funds in more profitable forms of investment. While it appears that if invested in the manner proposed by Mr Fine, the funds could obtain a higher rate of return than that being currently obtained by the Official Assignee, the maintenance and security of the funds is the responsibility of the Official Assignee who is holding the funds in interest bearing accounts. I do not consider that the fact that funds could be invested to yield greater returns than they are currently, or the fact that Ms Rodriguez is currently unable to actively invest the funds, is a significant factor supporting the need for an undertaking here. Should it transpire that the restraining order was not justified and the first respondent has suffered loss as a
19 At [41].
result, she will be able to take civil proceedings to claim damages. That is a meaningful alternative means by which the first respondent could prove and recover her losses should it subsequently transpire that the restraining order obtained by the Commissioner and extended by the order I shall make is not justified.
[53] I also note that apart from the prejudice due to her present inability to access and invest the funds, the first respondent has not provided any evidence of suffering any other personal prejudice as a result of the restraining order.
[54] Taking all those matters into account, I am not persuaded that the interests of justice and fairness, including the interests of the first respondent and the need to ensure that continuation of the restraining order will not be oppressive or cause her an injustice, are such as to warrant the Court to order the Commissioner to provide an undertaking as to damages, and I accordingly decline to grant her application for such an undertaking.
Result
[55] I make an order to extend the restraining order made on 12 December 2019, which is presently extended by interim order of Gordon J dated 9 December 2020, by a further period of nine months commencing from 12 December 2020 to expire at 5:00pm on Friday 10 September 2021.
Costs
[56] The Commissioner having succeeded in obtaining an order extending the supervision order is entitled to costs, and unless the parties agree on costs and file a joint memorandum to confirm such an agreement within 10 working days of the date of delivery of this judgment, the following directions regarding the filing of costs memoranda shall apply:
(a)The applicant is to file and serve a memorandum as to costs not exceeding three pages in length apart from annexures within 10 working days following delivery of this judgment.
(b)The first respondent is to file and serve her costs memorandum in reply to the applicant’s memorandum within 5 working days following service of the applicant’s costs memorandum.
[57] Upon the filing of the costs memoranda I shall determine an order for costs on the papers.
Paul Davison J
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