Commissioner of Police v Shakib
[2024] NZHC 1667
•24 June 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-1331
[2024] NZHC 1667
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
COMMISSIONER OF POLICE
Applicant
AND
AMAR RAOUF SHAKIB
Respondent
Hearing: 14 June 2024 Counsel:
M R Harborow and K T O’Halloran for appplicant K E Hogan for respondent, abiding
S Lowery (counsel assisting)
Judgment:
24 June 2024
JUDGMENT OF JOHNSTONE J
(application for disclosure of source order)
This judgment was delivered by me on 24 June 2024 at 12 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors: MC, Auckland
COMMISSIONER OF POLICE v SHAKIB [2024] NZHC 1667 [24 June 2024]
[1] The Commissioner of Police applies under s 109A of the Criminal Proceeds (Recovery) Act 2009 for a “disclosure of source order”, addressed to the respondent, Amar Raouf Shakib. The following questions have arisen:
(a)Should applications for disclosure of source orders be made on notice or without notice to prospective respondents?
(b)What limits apply to the scope of the information properly required by disclosure of source orders?
(c)In what terms should the Commissioner’s application be granted?
Introduction to disclosure of source orders
[2] If this Court is satisfied it has reasonable grounds to believe that property has been acquired or derived from significant criminal activity, it may order under s 24 of the Act that the property is not to be disposed of or otherwise dealt with.1 As with restraining orders made under other provisions of the Act,2 restraining orders under s 24 are made for the purpose of preserving property in contemplation of an application for its forfeiture.
[3] Disclosure of source orders under s 109A require a “respondent to whom a section 24 restraining order relates” to give the Commissioner “source information” in a prescribed form within a stated period.
[4] Source information is described in detail in s 109A(4). It includes the name of persons the respondent knows or believes to hold interests in the property, the circumstances in which the respondent acquired the property, and any other information or documents of kinds specified in the disclosure of source order.
1 Criminal Proceeds (Recovery) Act 2009, s 24 [the Act]. Section 20 requires applications for restraining orders under s 24 to be made to this Court.
2 The others are restraining orders relating to property of associates of persons connected to organised crime, to respondents’ property where the respondent is believed to have benefited from significant criminal activity, and to instruments of crime: ss 24A, 25 and 26 of the Act.
[5] Beyond imposing an obligation to respond, disclosure of source orders may give rise to significant additional consequences:
(a)Under s 152 of the Act, it is an offence to fail, without reasonable excuse, to comply with them.
(b)Evidence provided in response to a disclosure of source order is admissible, other than self-incriminating statements which are not admissible except in proceedings expressly defined under the Act as civil proceedings or in the prosecution of the offence under s 152.3
(c)Under s 50(2A), a rebuttable presumption arises if it can be shown that a respondent served with a disclosure of source order has failed to comply, or in purported compliance has made a materially false or misleading statement. The presumption is that the property the subject of the order is tainted property. The presumption is significant because, where it applies, the Court must, subject only to limited exception,4 order the property’s forfeiture.5
The circumstances of the present application
[6] On 11 August 2022, Jagose J made without notice restraining orders under ss 22, 24 and 25 of the Act in respect of:6
(a)a property at Pyatt Crescent, St Johns (excluding the interests of ANZ Bank New Zealand Ltd as mortgagee), held in the registered ownership of the respondent, Amar Shakib;
(b)a 2014 Mercedes-Benz motor vehicle, registered in the name of Ormat Ltd; and
3 Sections 164 and 165A.
4 Section 51 (Exclusion of respondent’s property from assets forfeiture order because of undue hardship).
5 Section 50(1) (Making type 1 assets forfeiture order).
6 Commissioner of Police v Shakib [2022] NZHC 1983.
(c)the credit balances of four specified bank accounts.
[7] Mr Shakib had left New Zealand on 21 March 2021 and not returned. He has not returned since.
[8] Justice Jagose was satisfied that the circumstances in which the New Zealand Customs Service had commenced a criminal prosecution of Mr Shakib and Ormat Ltd, together with evidence generated by a preliminary financial investigation by police, established reasonable grounds to believe the property at [6] was acquired or derived from the importation into, and sale in, New Zealand of uncustomed shisha tobacco.
[9] On 11 November 2022, Gordon J made with notice restraining orders over the same property, on the same substantive basis. Mr Shakib had instructed counsel, Ms Hogan, and had been served by email. Ms Hogan had advised, without making any concession regarding the contents or admissibility of the Commissioner’s evidence, that on notice orders were not opposed.
[10] Section 109A was inserted into the Act on 27 July 2023. Counsel and I are aware of only one application for a disclosure of source order having been made, prior to the application now made in this proceeding. Initially, Lang J directed that that prior application be heard on notice. However, the Judge recalled that direction when counsel for the Commissioner made submissions consistently with those now advanced and outlined below.7
[11] The Commissioner’s present application is for a disclosure of source order requiring that, as a respondent to whom the s 24 restraining orders over the St Johns property and the bank account credit balances relate, Mr Shakib must provide a range of source information within two months of the order being made. The Commissioner seeks that some of the source information, in the form of certain documents, be “authenticated”.
7 The Commissioner of Police v Rodriguez HC Hamilton CIV-2019-419-150, 3 August 2023, supplementary minute of Lang J.
[12] As with the prior application determined by Lang J, the Commissioner initially brought the present application without notice. Without deciding upon the general merit of bringing applications for disclosure of source orders without notice, I directed that this application be served and listed for mention so that Mr Shakib might have an opportunity, through Ms Hogan, to advance submissions on the point.
[13] In response, Mr Shakib asserted via Ms Hogan that some of the information proposed for compulsory disclosure went beyond the scope of what might properly be required. He also sought clarification of what was needed by “authentication”. But that aside, and without conceding the point whether disclosure of source order applications should be brought without notice, he did not instruct Ms Hogan to oppose the Commissioner’s application.
[14] I considered it appropriate to appoint counsel to assist the Court. Mr Lowery was appointed to file written submissions and to appear at the hearing of the application, advancing such arguments as may responsibly be made, that:
(a)applications for disclosure of source orders should be made on notice;
(b)the scope of information that may properly be required by way of such orders is circumscribed in some way; and
(c)as to whether the Commissioner’s application seeks appropriately circumscribed information.8
[15] I record that I am grateful for, and have been assisted, by Mr Lowery’s submissions.
Should disclosure of source orders be made on notice or without notice?
[16] The Act’s provisions relating to disclosure of source orders were introduced by the Criminal Proceeds (Recovery) Amendment Act 2023. When introducing the bill
8 By memorandum filed following the initial on notice mention of the application, the Commissioner confined the scope of information sought. Mr Lowery was instructed to address the application as amended.
that gave rise to that amendment to Parliament, the Minister of Justice described disclosure of source orders as responding to difficulties arising when seeking to obtain information from persons overseas. Respondents to proceedings under the Act might be made the subject of production and examination orders. But these are not practically enforceable against residents outside New Zealand.9
[17]For the Commissioner, Mr Harborow submitted that:
(a)Applications under s 104 of the Act for production orders, and under s 106 of the Act for examination orders, are criminal proceedings, made without notice. The authorities which gave rise to these established propositions apply equally to disclosure of source orders.
(b)The wording of the Ministry of Justice departmental report on the Bill demonstrates that Parliament intended applications for disclosure of source orders, like production and examination orders, to be made without notice.10
(c)The legislative form in which the provisions relating to disclosure of source appear within the Act confirms that applications for such orders should be made without notice.
(d)Ultimately, disclosure of source orders, examination orders and production orders form part of a suite of investigative tools, for use during the information-gathering stage of proceedings under the Act. Respondents are protected by various safeguards. They have ample opportunity to address issues raised when responding to production orders, and in the course of substantive proceedings which are subject to rights of appeal. On that basis, the public interest does not favour requiring those responsible for investigations to be put to the time and effort of contested disclosure of source order applications as a matter of usual practice.
9 (27 September 2022) 763 NZPD 12457.
10 Ministry of Justice Departmental Report: Criminal Proceeds (Recovery) Amendment Bill
(November 2022) [Departmental report].
[18]Mr Lowery submitted that:
(a)The fact that applications for production and examination orders are regarded as criminal proceedings, and are made without notice, should not be assumed to determine the proper mode of application for disclosure of source orders.
(b)The Court must instead determine the question whether applications for disclosure of source orders are criminal, or civil, proceedings. When doing so, it is required on the authority of Commissioner of Police v Burgess and Mafart v Television New Zealand Ltd to analyse the substance of the application and resulting order.11
(c)The legislative history sheds little light on the issue. In particular, the Departmental Report upon which the Commissioner relies is flawed, and in any event, authority suggests that such reports should not be relied upon when interpreting legislation.12
(d)Analysis of the characteristics of examination applications and orders, against the characteristics of disclosure of source applications and orders, discloses numerous differences. The differences reflect that the latter are civil proceedings:
(i)Examination orders are an investigative measure, tied to the operation of the Search and Surveillance Act 2012.
(ii)Disclosure of source orders exist to obtain better information about the property already restrained. The purpose is to facilitate a forfeiture application. Accordingly, they are most akin to a civil interlocutory application, such as an application
11 Commissioner of Police v Burgess [2012] NZCA 436; Mafart v Television New Zealand Ltd [2006] NZSC 33, [2006] 3 NZLR 18.
12 Marlborough District Council v Altimarloch Joint Venture Ltd [2010] NZSC 126, (2010) 11 NZCPR 915; and Lawyers for Climate Action NZ Inc v Climate Commission [2022] NZHC 3064, (2022) 24 ELRNZ 358 at n 249, citing SkyCity Auckland Ltd v Gambling Commission [2007] NZCA 407, [2008] 2 NZLR 182 at [39]–[42].
for an order under r 8.38 of the High Court Rules 2016 to answer interrogatories.
(e)Accordingly, applications for disclosure of source orders:
(i)are best viewed as civil proceedings, to which the High Court Rules apply; and
(ii)should be made on notice, unless one of the exceptions in r 7.23(2)(a) applies.
Production and examination orders
[19] Applications for production orders and for examination orders are indeed, as a matter of standard practice, sought without notice. The practice arose initially as a matter of judicial direction.
[20] First, in Chanwai v The Commissioner of Police, the subject of an examination order sought to vary its terms under s 35 of the Act, which provides for variation of restraining orders.13 Justice Joseph Williams found that the examination order procedure set out at ss 106 and 107 of the Act, in sub-pt 7 of pt 2, headed “Investigative powers”, was distinct from the restraining order procedure under sub-pt 2.14 And since the list of proceedings, such as proceedings seeking a restraining order, described in s 10(1) of the Act as civil proceedings, did not include proceedings involving examination orders, the general power to vary interlocutory orders under r 7.49 of the High Court Rules did not apply.15
[21] Then, in The Commissioner of New Zealand Police v Green, the Commissioner had applied without notice for, and had been granted, an examination order addressed to the respondent in proceedings which had previously given rise to the restraint of some of her assets.16 Upon the respondent being served with the order, her counsel
13 Chanwai v The Commissioner of Police HC Rotorua CIV-2010-463-544, 31 March 2011.
14 At [15].
15 At [18].
16 The Commissioner of New Zealand Police v Green HC Wellington CIV-2010-485-964, 1 August 2011.
obtained a copy of the Commissioner’s application, relying on the High Court Rules. Again, Williams J found that although the Rules applied to the restraint proceedings, they did not apply to the examination order proceedings. The Judge observed that the bill which gave rise to the original Criminal Proceeds (Recovery) Act initially contemplated production and examination orders being issued by the relevant enforcement agency, with very limited, if any, judicial oversight. On that matter, Williams J wrote:
[20] It is clear in my mind that both the Commission’s and the Select Committee’s preference for orders over notices was intended to ensure that examination and production powers were properly and neutrally authorised. The concern was not as to whether the respondent was given an opportunity to be heard in a more adversarial process.
[22]And:17
The fact that these provisions were changed in Select Committee to introduce judicial oversight to what would otherwise have been a police notice procedure is a strong indication in my view that the legislature never intended the notice and access rights or procedures of the High Court Rules to be bolted on the examination order process.
[23] Accordingly, Williams J found that a proposed examinee had no right to notice of the application for examination, nor any right to be heard before the Judge considers whether orders should be made. That said, the Judge further found that judicial discretion was available to require notice and to provide an opportunity to the proposed examinee to be heard.18 Citing the judgment of Asher J at first instance in Commissioner of Police v Burgess, Williams J observed that the discretion would require consideration on a case-by-case basis.19 Its exercise would be the exception rather than the rule.
[24] The question of notice was touched upon by the Court of Appeal, in Commissioner of Police v Burgess.20 In that case, the Commissioner sought to appeal Asher J’s judgment in the High Court dismissing an application for an examination order. The question arose whether there was jurisdiction for the appeal. This turned
17 At [16].
18 At [6(b)].
19 At [25], citing Commissioner of Police v Burgess [2011] 2 NZLR 703 (HC).
20 Commissioner of Police v Burgess, above n 11.
on whether examination order proceedings under s 107 of the Act are civil, or criminal, proceedings. If civil, there would have been jurisdiction under s 66 of the Judicature Act 1908. If criminal, there was no provision for appeal.21
[25] On that issue, the Court referred to the Supreme Court’s decision in Mafart v Television New Zealand Ltd as providing guidance on the approach to be taken in determining whether proceedings are civil or criminal. That approach is to look at the substance of the application before the Court and the order sought.22
[26] The Court of Appeal in Burgess recognised that applying the substantive approach of Mafart to examination order proceedings was difficult, because of the possibility that an examination order might be made in different contexts having clearly civil or criminal character. However, by looking at the nature of the examination order, the Court saw matters supporting the proposition that examination orders are by nature, orders under the criminal rather than civil jurisdiction of the Court. These matters included that examination orders are investigative measures available to a law enforcement agency allowing intrusion by the State into the privacy of the person subject to it.23
[27] Also, the Court of Appeal referred to the judgments in Chanwai and Green, noting Williams J’s view that the change, from a police power to give an examination notice to a requirement that a judge issue an examination order, did not indicate Parliament intended the notice and access rights or procedures of the High Court Rules to be bolted onto the examination order process. And it agreed.24 The Court of Appeal accordingly proceeded to accept the submissions of counsel, that examination orders would usually be made without notice, with the Court’s process being “more akin to an authorisation than a decision”,25 and therefore that “it would be odd if there was a procedure for an inter partes merits appeal from a process that will normally be undertaken on an ex parte basis, and done without the knowledge of the person against whom the order is sought”.26
21 At [16].
22 At [27], citing Mafart v Television New Zealand Ltd, above n 11, at [31].
23 At [28].
24 At [23].
25 At [30].
26 At [31].
[28] On this basis, the Court of Appeal found “the better view” to be that examination order proceedings are criminal proceedings, and that there was no jurisdiction for the appeal.27 The Court observed that the matter required legislative clarification.28
[29] Clarification came within days of the judgment in Burgess, issued on 25 September 2012. Section 215 of the Search and Surveillance Act came into force on 1 October 2012. It amended ss 104 and 106 of the Act, requiring applications for production and examination orders to be made in the manner provided for search warrant applications under the Search and Surveillance Act.29
Substantive assessment of nature
[30] In my view, the key finding of the Court of Appeal in Burgess, made by way of substantive assessment of the nature of production and examination orders in line with Mafart, was that they are investigative measures available to a law enforcement agency allowing intrusion by the State into the privacy of the person subject to it. Disclosure of source orders are of a closely related nature. Beyond giving rise to an evidential presumption, they do not affect rights of property, for determination separately in the course of proceedings under the Act.
[31] I cannot accept Mr Lowery’s submission that the purpose of disclosure of source orders, of obtaining better information about property already restrained so as to facilitate forfeiture applications, involves a meaningful distinction drawn against the purposes of production and examination orders. Production orders necessary to establish grounds for restraint are unlikely to be addressed to respondents who own unrestrained property. And respondents are unlikely to be examined unless property that may be disposed of has been restrained.
[32] The purpose of disclosure of source orders, as outlined at [16] above, confirms their essential nature as the same as that of production and examination orders.
27 At [34].
28 At [35].
29 Search and Surveillance Act 2012, sub-pt 3 of pt 4, and s 215; and the Act, ss 104(2)–(4) and 106(2)–(4).
The Departmental Report
[33] The Ministry of Justice Departmental Report on the bill which gave rise to disclosure of source orders, called in aid by the Commissioner, summarised submissions made to the Justice Select Committee on a clause-by-clause basis, and provided the committee with advice on whether any further amendments were recommended.
[34] Under the heading “Submission on whether applications are to be determined without notice”, the Report recorded a submission that the Bill should be explicit as to whether applications for a disclosure of source order can be made and determined without notice to the respondent.30 The submission pointed out that applications for production and examination orders are made and determined without notice, with the respondent becoming notified when they are served with the order.
[35] In response, the Report stated “No changes recommended” having commented as follows:
154. Disclosure of source orders are intended to be determined in the same manner as production and examination orders. Officials do not consider this needs to be made explicit, as this new order is drafted consistent with production and examination orders.
[36] As indicated above, Mr Lowery was critical of the Commissioner’s reliance on the Report, submitting that the legislative history of disclosure of source orders sheds little light on the question in issue. If, in doing so, Mr Lowery intended to submit that departmental reports should never be used to assist the interpretation of legislation, I disagree.
[37] The Supreme Court in Marlborough District Council v Altimarloch Joint Venture Ltd observed only that such material is not “conventionally regarded as available for that purpose”.31 Notably, the Supreme Court added that in that case, the report was not referred to by the Select Committee, nor mentioned in parliamentary debate, and it went on to observe that the report in question did not provide sufficient
30 Departmental report, above n 10, at [153].
31 Marlborough District Council v Altimarloch Joint Venture Ltd, above n 12, at [1].
support for the argument of an appellant seeking leave to appeal to justify leave being granted.32 As the other appellate authority to which Mr Lowery referred indicates, it may be necessary to consider non-parliamentary materials such as Cabinet papers and reports as providing some indication of the overall purpose of legislation, although extensive reference to such materials should be discouraged because that will normally be apparent from the legislation or from parliamentary material, and the Executive’s intention may differ from Parliament’s intention when a bill is passed.33
[38] Overall, the authorities are cautious about, but do not rule out, consideration of departmental reports as a guide to legislative intent. For example, such consideration is likely to be justified where a report is expressly adopted in the course of parliamentary reporting or debate. The Commissioner submits that the Report in the present case was indeed adopted, and can accordingly be considered.
[39] Be that as it may, I accept Mr Lowery’s further submission, that the Ministry’s comment, quoted at [35] above, was in error. Since 1 October 2012, the Search and Surveillance Act has required production and examination orders to be sought from “issuing officers”, including District Court or High Court judges, in accordance with the procedure for search warrants under that Act. The Bill introducing disclosure of source orders was not “consistent” with this mode of determination. It provided that such orders might only be sought from High Court judges, and stated no particular procedure, whether civil or criminal. Plainly, the manner of determination of disclosure of source orders was not “drafted consistent with production and examination orders”.
[40] And in light of that error, little indeed can be drawn from the Report’s response to a request for clarification as to manner of determination. When they wrote that “[d]isclosure of source orders are intended to be determined in the same manner as production and examination orders”, the Report writers appear to have been unaware of just what that manner of determination was.
32 At [1].
33 SkyCity Auckland Ltd v Gambling Commission, above n 12, at [39]–[42].
Legislative form
[41] The Commissioner is on stronger ground when relying on the form and effect of the disclosure of source order provisions, and their location within the Act, compared to other provisions relating to other types of proceedings.
[42] First, the primary provision establishing their form — s 109A — is located immediately after the provisions for production and examination orders — ss 104 to 109 — within “Subpart 7—Investigative powers”. And as to effect, just as with production and examination orders, it is an offence to fail to comply,34 the privilege against self-incrimination does not apply,35 and self-incriminating material offered in response is admissible albeit to a limited degree.36 These factors align the substantive nature of disclosure of source orders with production and examination orders, and suggest, consistently with the analysis in Chanwai, Green and Burgess, that they are generally to be brought without notice, and are criminal proceedings to which the High Court Rules do not apply.
[43] Second, s 109A(7) provides that disclosure of source orders must inform respondents to whom they are addressed of the rebuttable presumption under s 50(2A) to (2D), and of the offence of failing to comply, the absence of privilege against self-incrimination, and the limited admissibility of self-incriminating statements made in response. If respondents were to be served with, and entitled to appear in opposition to applications for such orders, the value of the order when made offering advice of its consequences would seem modest, at best. The more rational explanation for this informational requirement is that when enacting s 109A, Parliament intended disclosure of source applications to be made without notice.
[44] Third, as Mr Harborow submitted, it is noticeable that the Act provides specifically for particular types of applications to be made on notice to affected
34 The Act, s 152.
35 Section 163.
36 Section 165A.
persons, and for such persons to have an entitlement to appear and be heard. For example:
(a)Under s 21, applications for restraining orders must be served on persons known to have an interest in the proposed restrained property, and on the Official Assignee. And s 22 provides exceptionally for applications without notice to interested persons (but not without notice to the Official Assignee), where the Court is satisfied of a risk of destruction, disposition, alteration or concealment.
(b)And under s 23, the applicant, persons holding an interest in the property, and the Official Assignee are all entitled to be heard.
[45] Specific provision for notice and appearance rights is also made, without exception for without notice applications:
(a)at s 17A(5), in respect of applications for effective control orders;
(b)at s 33(2) and (3), in respect of applications for further orders under s 35 relating to restrained property;
(c)at ss 45 and 46, in respect of applications for civil forfeiture orders; and
(d)at ss 64 and 65, in respect of applications for relief from civil forfeiture orders.
[46] And specific provision, albeit for notice only, is made at s 42(2), in respect of applications to extend restraining orders.
[47] I accept Mr Harborow’s point, made in this connection. In light of the apparent attention paid by Parliament to the questions of notice and appearance in respect of particular types of applications, the lack of provision for notice and appearance rights in respect of “investigative powers” such as production, examination, and disclosure of source orders, provides a clear indication of parliamentary intent; that is, it indicates
production, examination and now disclosure of source orders were not intended to carry notice and appearance rights.
[48] And fourth, the Criminal Proceeds (Recovery) Regulations 2009 support treating these aspects of the structure and wording of the Act as an indication of intent. The Regulations prescribe forms in which various types of applications under the Act must be made. In line with the distinct on notice and without notice modes of restraining order applications specifically contemplated under ss 21 and 22 of the Act, the prescribed forms for restraining order applications are twofold:
(a)forms 1, 1A and 3, for on notice restraining order applications in anticipation of civil forfeiture or type 2 forfeiture; and
(b)forms 2, 2A, and 4, for without notice restraining order applications anticipating civil or type 2 forfeiture.
[49] Only one prescribed form is provided for each of the other applications addressed by the Regulations.
[50] In the case of forms 2, 2A, and 4, for without notice restraining order applications, the address block reads, consistently with the dispensing of service upon interested parties but not the Official Assignee under s 22:
To the Registrar and
To the Official Assignee
This document notifies you that—
[51] In the case of form 31, the prescribed form for disclosure of source order applications, the address block reads:
To the Registrar
This document notifies you that–
[52] This form was added pursuant to the Criminal Proceeds (Recovery) Amendment Regulations 2023, which was promulgated by Order in Council on 26 June 2023.
[53] The prescribed forms of application for production or examination orders were removed when s 215 of the Search and Surveillance Act amended the manner of such applications so that they are now brought as prescribed by that Act.
[54] And in the case of all other forms of application prescribed by the Regulations, the address blocks read consistently with the provisions of the Act for notice and appearance rights; for example, in the case of on notice restraining order applications:
To the Registrar and
*To the respondent and
*To [full name of any other person who, to the applicant’s knowledge, has an interest in the proposed restrained property]
*Omit if no respondent or, as the case may be, other person who, to the applicant’s knowledge, has an interest in the proposed restrained property.
And
To the Official Assignee
This document notifies you that—
[55] Thus, it is clear that on 26 June 2023, it was the intention of the Executive that disclosure of source order applications would be brought, at least in the first instance, without notice.
[56] I consider that this is one of those cases where evidence of Executive intent may cautiously be taken as an indication of Parliamentary intent. The Amendment Act which gave rise to the disclosure of source orders provisions had been given assent on 31 March 2023. Given its procedural, rather than political character, the introduction of form 31 by the Executive on 26 June 2023 offers at least some insight
into intent held by its parliamentary members when the Amendment Act was enacted only three months before.
Public interest
[57] I also accept Mr Harborow’s submission that respondents to disclosure of source orders are protected by various safeguards. And that on that basis, the public interest does not require contested disclosure of source applications as a matter of standard practice. The policy considerations in play are comparable to those where judicial review is sought at a preliminary stage of a process of decision-making, and the powers exercised are unlikely to be influential in the final decision. In that context, the Court of Appeal has observed that it is not in the public interest that those responsible for conducting preliminary investigations should be put to the time and trouble of responding to applications for review, nor that the courts should generally be troubled with judicial review applications.37
[58] First, this Court (only) may make a disclosure of source order only in respect of respondents “to whom a section 24 restraining order relates”. Such orders may only be made by this Court,38 upon being satisfied there are reasonable grounds to believe the affected property is tainted property.39 Where such orders have been made without notice, they expire seven days later, unless an on notice application for restraint is made, which much be prosecuted with all due diligence.40 A defended on notice application would likely require the respondent to offer an evidential basis undermining the case for the property being tainted. Thus, it is unlikely disclosure of source order applications will be brought, or granted, prior to the predicate restraining order having been confirmed in the course of on notice proceedings. And disclosure of source orders may only be made if there are reasonable grounds to believe the respondent is a resident outside or absent from, or in the case of corporations incorporated outside, New Zealand.41 On these bases, it can be said that disclosure of source orders require a considerable measure of justification before they are granted.
37 Singh v Chief Executive Ministry of Business, Innovation and Employment [2014] NZCA 220, [2014] 3 NZLR 23 at [39].
38 The Act, s 20(a).
39 Section 24(1).
40 Section 39.
41 Section 109A(3).
[59] Second, while disclosure of source orders usually require a response within two months, this period may be extended, including upon application by the respondent.42
[60] Third, the presumption that the subject property is tainted property, arising under s 50(2A) if a respondent fails to comply or makes a materially false or misleading statement in response, and of relevance only in the event of an application for the forfeiture of the property, may be rebutted. Indeed, it may be rebutted not merely upon the respondent establishing a reasonable excuse for non-compliance,43 but where the Court is satisfied that application of the presumption would not be in the interests of justice.44
[61] Finally, if disclosure of source order applications are to be brought without notice, they will nevertheless require the Commissioner as applicant to observe the duty of candour that arises in the case of without notice applications, whether such applications are criminal in nature, as in the case of search warrant applications,45 or civil, where r 7.23(2)(b) of the High Court Rules confirms it.46 In each case, a Judge may decline the application, or rescind orders previously made, if not satisfied the duty has been discharged.47
Conclusion
[62] I find that disclosure of source order applications made under s 109A of the Act:
(a)are of their nature, criminal proceedings, to which the High Court Rules do not apply; and
(b)which generally should be brought without notice.
42 Section 109A(5).
43 Section 50(2B).
44 Section 50(2D).
45 Beckham v R [2015] NZSC 98, [2016] 1 NZLR 505 at [127], citing Tranz Rail Ltd v Wellington District Court [2002] 3 NZLR 780 (CA) at [21]–[22].
46 Rae v Commissioner of Police [2023] NZCA 4, [2023] NZAR 17 — a case involving a without notice application for restraining order: a civil proceeding.
47 At [25].
[63] Further, I echo the observation of Williams J in Green, made in respect of examination orders, that while the Court retains a discretion when dealing with disclosure of source applications to require that they be heard on notice to the respondent thought to own the restrained property to which the proposed order relates, exercise of that discretion will be the exception rather than the rule.48
[64] Indeed, unlike examination orders, disclosure of source orders will be made only against respondents who are apparently overseas and therefore unlikely to be facing imminent criminal proceedings in New Zealand courts. Thus, the most obvious justification for exceptional exercise of the discretion, requiring that notice be given to proposed examinees, is unlikely to apply. Appropriate cases for on notice hearing of applications for disclosure of source orders may be vanishingly rare.
What information may properly be sought by disclosure of source orders?
[65]Mr Lowery submitted that:
(a)The power to obtain information under s 109A is broad, but not unlimited.
(b)Authority arising in the context of the Commerce Act 1986 confirms that regulatory information gathering powers may be subject to both express and implied limits.
(c)The scope of the information that may be required by way of disclosure of source order is expressly limited by the terms of s 109A: it must be information relating to the respondent’s property the subject of the restraining order.
[66] For the Commissioner, Ms O’Halloran accepted that the scope of the information that may properly be sought is limited. Indeed, Ms O’Halloran went
48 The Commissioner of New Zealand Police v Green, above n 16, at [25].
further than Mr Lowery, submitting that there must be some logical and reasonable nexus between:
(a)the property to which the restraining order applies;
(b)the issue(s) that need to be proved to demonstrate the restrained property is liable to a civil forfeiture order; and
(c)the source information the subject of the order.
[67] However, Ms O’Halloran submitted that it would be wrong to require the Commissioner to be overly prescriptive about the information sought by disclosure of source orders, given their purpose.
[68]I accept the submissions of counsel.
[69] The definition of the “source information” to be provided under a disclosure of source order, set out in s 109A(4), is extremely broad. It reads:
(4)The source information is the following information relating to the respondent’s property to which the restraining order applies:
(a)the name of each person who the respondent knows holds, or believes may hold, an interest in the property and the nature of that interest:
(b)the circumstances in which the respondent acquired the property, including—
(i)how they acquired it; and
(ii)the source of any funds or other property used for that acquisition:
(c)if the property is tangible and movable property that the respondent acquired outside New Zealand and, after that acquisition, was brought into New Zealand,—
(i)the country or place in which they acquired the property; and
(ii)any countries or places through which the property transited before being moved into New Zealand:
(d)any other information of a kind specified in the disclosure of source order:
(e)any documents of a kind specified in the order to substantiate the information referred to in any of paragraphs (a) to (d).
[70] It cannot be the case that under s 109A(4)(d) and (e), the Commissioner is provided an unlimited discretion to nominate any information, or any documents, for the respondent to provide. However, significant constraint upon the scope of information potentially relevant to questions likely to arise in the event of a civil forfeiture application might undermine the purpose of any disclosure of source order. I note that unreasonably broad orders would likely be ineffective: the s 50(2A) presumption would be rebutted easily, and there would be an obvious defence to any prosecution for the offence under s 152.
[71] I consider that the existence of a logical and reasonable nexus as set out at [66] above provides a useful and workable test for the scope of information that may be required by way of disclosure of source order.
What order should be made in this case?
[72] As noted above, the Commissioner filed a memorandum following the initial on notice mention of his application, narrowing the scope of information being sought. Mr Lowery was instructed to address the amended application.
[73] In his written submissions, Mr Lowery offered a detailed response to whether each item of information stated in the Commissioner’s amended application was permissibly sought. The Commissioner responded by memorandum, identifying except in respect of one item, the basis on which he submitted the nexus outlined above was met. In particular, the Commissioner accepted that income records, not only of Mr Shakib but also of other persons he knows to hold, or believes may hold, an interest in the restrained St Johns property and credit balances, might be difficult for him to obtain.
[74] Having reflected on the Commissioner’s response, Mr Lowery accepted the information now sought by disclosure of source order appeared to come within permissible limits.
[75] I agree. In the case of each item, there is a logical and reasonable nexus between the source information sought, the restrained property, and issues that need to be proved to demonstrate that property is liable to a civil forfeiture order.
Result
[76] The Commissioner’s amended application for disclosure of source order dated 13 March 2024 is granted, in terms of [1] of that application, except that the source information, further described in [5(d)(i)], shall be confined to “authenticated records of Mr Shakib between 1 September 2014 and 1 December 2023”.
Johnstone J
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