Commissioner of Police v Ru

[2022] NZHC 3150

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-2172

[2022] NZHC 3150

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

WEIJIE RU

First respondent

JIEHONG RU
Second respondent

CUIPING LI
Third respondent

MINJI LI
Fourth respondent

ZHUYING INTERNATIONAL TRADING LIMITED

Interested party

Hearing:	On the papers
Counsel:	R E Budd and J T Lowyim for applicant
Date of judgment:	29 November 2022

JUDGMENT OF JAGOSE J

This judgment was delivered by me on 29 November 2022 at 4.00pm.

Pursuant to Rule 11.5 of the High Court Rules.

…………………………

Registrar/Deputy Registrar

Solicitors:

Meredith Connell, Auckland

COMMISSIONER OF POLICE v RU [2022] NZHC 3150 [29 November 2022]

[1]                  As duty judge for the week of 14 November 2022, I had the Commissioner’s without notice application for restraining and further orders dated 8 November 2022, seeking to place real estate in Auckland’s Flat Bush and Pukekohe, two BMW and one each Lexus and Mazda vehicles and the contents of a safe deposit box into the hands of the Official Assignee.1

[2]                  The application was supported by 1, 3 and 8 November 2022 affidavits affirmed by each police and customs officers and a forensic accountant, contending the subject assets — owned directly or indirectly by the respondents — to be derived from evaded duty on prohibited tobacco imports.2

[3]                  Noting the inchoate nature of any evidence yet as to sale,3 at first sight, the contention seemed disqualifyingly circular, as evasion of duty is the relevant alleged offending. Even if the counterfactual is the respondents would have paid nearly

$4 million in duty, the factual may not establish they had obtained that sum for alternative application. I therefore sought:4

… specific submission on the point if evasion of duty alone is capable of supporting derivative acquisition of property as ‘tainted’, or constitutes an unlawful benefit from significant criminal activity, for the purposes of ss 24 [and] 25.

[4]                  The   Commissioner   responded   with   an   amended   application   dated   25 November 2022, abandoning reliance on s 24’s ‘tainted property’ but maintaining his s 25 contention evasion of duty constitutes an unlawful benefit from significant criminal activity.

Law

[5]                  I may determine an application can properly be dealt with without notice only if I am satisfied, here, requiring the Commissioner to proceed on notice would cause undue delay or prejudice to him, an enactment expressly permits the application to be made without serving notice of the application, or the interests of justice require the

1      Criminal Proceeds (Recovery) Act 2009, ss 24 and 25.

2      Customs and Excise Act 2018, ss 389 (maximum penalty, 6 months’ imprisonment) and 371 (maximum penalty, 5 years’ imprisonment).

3      Compare Commissioner of Police v Shakib [2022] NZHC 1983 at [2].

4      Commissioner of Police v Ru HC Auckland CIV-2022-404-2172, 17 November 2022 at [4].

application to be determined without serving notice of it. Otherwise I must give directions for service and adjourn the application, or dismiss it.5

[6]                  If then I am satisfied I have reasonable grounds to believe the respondents have “unlawfully benefited from significant criminal activity”, I may make a restraining order in respect of that property. By the order, the property is not to be disposed of, or dealt with, other than is provided for in the restraining order, and is under the Official Assignee’s custody and control.6

Discussion

[7]                  ‘Restraining orders’ are “a holding measure”, to preserve property if to be forfeited to the Crown as derived from significant criminal activity.7 ‘Significant criminal activity’ is offending punishable by a maximum term of imprisonment of    5 years or more, or offending obtaining property with a value exceeding $30,000.8

[8]                  The “broad and robust approach” to be taken to interpretation of ‘benefit’ does not require material increase in the recipient’s wealth.9 It is enough if it can correlatively be located in the complainant’s detriment or loss.10 Here, the duty is a debt “due to the Crown immediately on importation of the goods; and … owed by the importer or importers of the goods”,11 and if more than one importer “the debt is owed by all of them jointly and severally”.12 As unpaid, such is a qualifying ‘benefit’ for the purposes of s 25.

[9]                  Section 22 of the Criminal Proceeds (Recovery) Act 2009 entitles me to consider the application without notice if I am satisfied there is a risk of the proposed restrained property being destroyed, disposed of, altered, or concealed if notice were given.

5      High Court Rules 2016, r 7.46(3) and (5).

6      Criminal Proceeds (Recovery) Act, s 50.

7      Yan v Commissioner of Police [2015] NZCA 576, [2016] 2 NZLR 593 at [7].

8      Criminal Proceeds (Recovery) Act, s 6(1).

9      Rodriguez v Commissioner of Police [2020] NZCA 589 at [49].

10     R v Pedersen [1995] 2 NZLR 386 (CA) at 390–391.

11     Customs and Excise Act, s 100(1).

12     Section 100(3).

[10]I am satisfied:

(a)notice of the application for restraining orders would put the property at relevant risk, at least in ‘altering’ (by dissipating) the sum of equity presently available in the real estate, notwithstanding such ‘conversion’ is not effective to escape restraint,13 and the vehicles’ ready fungibility; and

(b)on the basis of the police and customs officers’ and forensic accountant’s affidavits, I have reasonable grounds to believe the respondents — by not paying their debt to the Crown — have unlawfully benefited from such significant criminal activity.

[11]               There is enough in the evidence to illustrate the respondents’ interests in the property may relevantly be derived from such significant criminal activity. At this stage of the enquiry, I need not to be further satisfied. I see no reason not to exercise my residual discretion, precisely to preserve property if to be forfeited to the Crown, to make the restraining and further orders sought.

Result

[12]               I order in terms of subparas (a)–(d) of paragraph 1 of the Commissioner’s  25 November 2022 amended application.

—Jagose J

13     Criminal Proceeds (Recovery) Act, s 12.