Commissioner of Police v Tang
[2013] NZHC 1750
•11 July 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2009-404-008478 [2013] NZHC 1750
UNDER Criminal Proceeds (Recovery) Act 2009
BETWEEN THE COMMISSIONER OF POLICE Applicant
ANDZHONG JIE TANG Respondent
Hearing: 19 April 2013
Appearances: D Johnstone for Applicant
P Kaye for Respondent
Judgment: 11 July 2013
JUDGMENT OF KATZ J
This judgment was delivered by me on 11 July 2013 at 3:30 pm
Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors:
Meredith Connell, Auckland
Stephen Rodney Anderson, Auckland
Counsel:
Peter Kaye, Barrister, Auckland
THE COMMISSIONER OF POLICE v ZHONG JIE TANG [2013] NZHC 1750 [11 July 2013]
Introduction
[1] Zhong Jie Tang was found guilty by jury of a number of offences relating to the supply and manufacture of methamphetamine. He is currently serving a term of
11 years 6 months’ imprisonment.
[2] The Commissioner of Police (“Commissioner”) now seeks a profit forfeiture order against Mr Tang in the sum of $360,000, pursuant to s 55 of the Criminal Proceeds (Recovery) Act 2009 (“CPRA”). Unless undue hardship would result, I must make a profit forfeiture order if I am satisfied that:1
(a) Mr Tang has unlawfully benefitted from significant criminal activity during the period 29 October 2005 to 29 October 2012;2 and
(b) Mr Tang has interests in property.
[3] It is for the Commissioner to prove, on the balance of probabilities, that Mr Tang has unlawfully benefited from significant criminal activity. If he does so, then the value of the “benefit” Mr Tang must forfeit is presumed to be the value stated in the Commissioner’s application ($360,000).3 This statutory presumption may be rebutted by Mr Tang, on the balance of probabilities.
[4] Given his convictions for manufacturing and dealing methamphetamine, Mr Tang has clearly been involved in significant criminal activity, as defined in s 6 of the CPRA. Mr Tang did not suggest otherwise. Nor did he oppose the making of a profit forfeiture order on the grounds that undue hardship would result. Mr Tang’s sole focus was on rebutting the statutory presumption that the amount of benefit he received from his criminal activities was $360,000. Mr Tang’s evidence was that the amount of benefit he received was actually less than $20,000.
[5] The significant difference between the two figures is attributable to a number of factors. For example, Mr Tang says that the proceeds of methamphetamine sales
1 CPRA, ss 55(1), 55(3), and 56.
2 This is the “relevant period of criminal activity” in this case in accordance with the definition in
s 6 of the CPRA.
3 CPRA, s 53.
were apportioned equally between various persons involved in aspects of its manufacture and supply. Accordingly, he should only have to account for the profits he received personally. The Commissioner’s calculations, however, attributed the full proceeds of sales to Mr Tang. Mr Tang also says that the price he obtained for the drugs is significantly below that assumed by the Commissioner.
[6] Against this background, the key issues I must consider are:
(a) What is the correct approach to assessing the benefit derived from significant criminal activity in cases where a respondent seeks to rebut the statutory presumption? In particular, does “benefit” equate to gross profit, net profit, proceeds/receipts or something else?
(b)Should any benefit that was received as a result of the significant criminal activity be apportioned between Mr Tang and his co- offenders and, if so, in what proportions?
(c) On the basis of all the evidence before the Court, has Mr Tang
rebutted the statutory presumption that the “benefit” he received was
$360,000?
How should the “benefit” derived from significant criminal activity be calculated?
[7] The value of the benefit Mr Tang received is presumed to be the sum of
$360,000 stated in the Commissioner’s application, unless and until Mr Tang rebuts that presumption. The rationale for such a statutory presumption is obvious. People who have profited from criminal activity will be the ones best placed to prove the amount of any “benefit” they have received. The police will seldom have access to the information necessary to undertake such an exercise.
[8] The predecessor legislation, the Proceeds of Crime Act 1991 (“POCA 1991”), provided for pecuniary penalty orders to be made, post conviction, in relation to the “benefits derived by a person from the commission of a serious offence”. POCA
1991 set out specific criteria for the Court to take into account when assessing the
amount of a benefit received. These included the money or the value of any other property that came into the defendant’s possession, the value of any other benefit provided to the defendant, and the value of the defendant’s property before and after the commission of the offence.
[9] The CPRA took a radically different, and simpler, approach to assessment of the benefit derived from criminal activity. The CPRA does not include any specific criteria a Court must consider in assessing the amount of any benefit received. Rather, such criteria have been replaced with the statutory presumption in s 53, which provides that:
53 Value of benefit presumed to be value in application
(1) If the Commissioner proves, on the balance of probabilities, that the respondent has, in the relevant period of criminal activity, unlawfully benefited from significant criminal activity, the value of that benefit is presumed to be the value stated in—
(a) the application under section 52(c); or
(b) if the case requires, the amended application.
(2) The presumption stated in subsection (1) may be rebutted by the respondent on the balance of probabilities.
[10] The statutory presumption is straightforward to apply when a profit forfeiture application is not opposed. However, there is now almost no statutory guidance as to how the relevant benefit is to be assessed when a respondent does seek to rebut the statutory presumption. What approach should be taken to the assessment of benefit in such circumstances? In particular, is the term benefit intended to equate to gross profit, net profit, proceeds/receipts or something else?
[11] The CPRA states that a person has “unlawfully benefitted from significant criminal activity” if they have knowingly, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person undertook or was involved in such activity).4 “Benefit” is simply defined as including proceeds and property.5 “Significant criminal activity” is defined as activity that would amount to
either an offence punishable by a term of imprisonment of five years or more, or
4 CPRA, s 7.
5 Ibid, s 5.
from which property or proceeds of NZ$30,000 or more have been directly or indirectly obtained.6 In determining whether the $30,000 threshold has been met any expenses or outgoings in connection with the criminal activity must be disregarded.
[12] Case law under the POCA 1991 and the United Kingdom Proceeds of Crime Act 2002 (“POCA UK”) provides some guidance as to how the assessment of benefit under the CPRA might be approached.
POCA 1991 - R v Pedersen7
[13] The leading case on the assessment of benefit under POCA 1991 is the Court of Appeal decision in R v Pedersen. The majority (McKay J dissenting) held that Mr Pederson’s benefits from his cannabis dealing were his gross receipts rather than his profits. Cooke P and Richardson J observed that POCA 1991 was not an income tax statute, nor was it one concerned with lawful commercial operations. There was therefore no reason to suppose that it was limited to assessing net gains or trading
profits.8 The benefit from a sale was what the seller received in return.9 Any potential
harshness of this interpretation could be addressed by the Court exercising its discretion to impose less than the “penalty amount”.10
[14] Hardie Boys and Casey JJ agreed that benefit equated, in effect, to proceeds or receipts rather than profits:11
Accounting practices adopted in legitimate transactions have no place in the assessment of the pecuniary penalties, as is made very clear by the exclusion of expenses and outgoings from the calculation”.
[15] Concern was expressed that the alternative approach (interpreting benefit as
profits) would involve the Court in what would “at best be a most unsatisfactory inquiry into an offender’s criminal business transactions”.12
6 Ibid, s 6.
7 R v Pedersen [1995] 2 NZLR 386 (CA).
8 At 390.
9 At 391.
10 A similar discretion is not included in the CPRA.
11 At 391.
12 At 392.
[16] McKay J dissented. He noted that the ordinary meaning of the word benefits in a trading transaction is the profit made:13
A person who buys and resells will derive benefits to the extent of the
profit”.
[17] McKay J noted that the Legislature could have used words such as “receipts” or “payments” if that was what was intended, but it did not. The word “benefits” was used instead.14
[18] The majority approach in Pedersen was followed, in a CPRA context, by Lang J in Pulman v Commissioner of Police.15 The Judge’s view was that the more expansive definition of benefit advocated by the Commissioner (equating to receipts rather than profits) accorded with both the literal wording of s 7 and the purpose and objects of the CPRA. Equating benefit with profit would lead to significant practical difficulties. It would require the Court to engage in a complex accounting exercise in order to determine the ultimate benefit that a respondent retained from his criminal activity. His Honour did not consider that Parliament intended the new
regime to produce that consequence. Rather, the purpose and objects of the CPRA
suggest that Parliament endorsed the approach taken in this area under POCA 1991.
Authorities under the Proceeds of Crime Act 2012 (UK)
[19] The Proceeds of Crime Act 2002 (“POCA UK”) includes both a post conviction forfeiture regime and also a civil forfeiture regime that applies where a defendant has been proven to have a “criminal lifestyle”. In the House of Lords decision of R v May,16 Lord Bingham set out, in an Endnote, their Lordships guidance as to the correct approach to assessing the quantum of confiscation orders, including that:17
(a) The legislation is intended to deprive defendants of the benefit they have gained from relevant criminal conduct, whether or not they have
13 At 394.
14 At 396.
15 Pulman v Commissioner of Police HC Auckland CIV-2010-404-5666, 27 May 2011.
16 R v May [2008] 1 AC 1028 (HL).
17 At [48].
retained such benefit, within the limits of their available means.18 The benefit gained by a defendant is the total value of the property or advantage obtained, not the defendant’s net profit after deduction of expenses or any amount paid to co-conspirators.
(b)In determining whether a defendant has obtained property or a pecuniary advantage and, if so, the value of any property or advantage so obtained, the Court should (subject to any relevant statutory definition) apply ordinary common law principles to the facts as found.
(c) The exercise of this jurisdiction involves no departure from familiar rules governing entitlement and ownership. A defendant ordinarily obtains property in law if he owns it, whether alone or jointly, which will ordinarily connote a power of disposition or control, as where a person directs a payment or conveyance of property to someone else. But mere couriers or custodians or other very minor contributors to any offence, rewarded by a specific fee and having no interest in the property or the proceeds of sale, are unlikely to be found to have obtained that property.
[20] This approach is broadly similar to the Pedersen approach. In particular, in both Pedersen and May, benefit is assessed with reference to the totality of money or property obtained or received (proceeds or receipts) rather than the profits generated by the criminal activity. May has a somewhat stronger focus on “ownership” of the proceeds rather than mere “receipt” of them. Couriers, custodians or other minor contributors are not liable for a confiscation order on the May approach but could be liable under the Pedersen approach. The distinction is not, however, significant in
this case.
18 Under POCA UK a confiscation order cannot be made for a sum greater than the defendant’s
known assets. A similar restriction does not appear in the CPRA.
Discussion
[21] The Explanatory Note to the Criminal Proceeds Recovery Bill noted that civil forfeiture regimes in overseas jurisdictions were proving considerably more effective than previous laws “in terms of the value of the criminal proceeds confiscated”. The Note recorded that “this Bill will introduce a similar approach in New Zealand”. The new legislation was clearly intended to make proceeds of crime recovery more effective, rather than less so. A narrower interpretation of benefit under CPRA would, however, make the legislation less effective than POCA 1991. As Lang J noted in Pulman, the purpose and objects of the CPRA suggest that Parliament endorsed the approach taken in this area under POCA 1991. As observed in both Pedersen and Pulman, interpreting benefit as profits rather than proceeds/receipts would require the Court to engage in a complex accounting exercise, in order to determine the profits of a criminal enterprise. It seems unlikely that this was intended by Parliament.
[22] I note the observations of Cooke P in Pedersen that POCA 1991 was intended to deter serious crime by demonstrating emphatically that it does not pay. “It should therefore be judicially administered in that spirit”.19 The general tenor of the Explanatory Note and the Parliamentary debates which preceded the passage of the CPRA suggests that Cooke P’s observations apply equally to the interpretation of the CPRA, arguably even more so.
[23] Under POCA 1991 any expenses or outgoings in connection with the offending had to be disregarded in determining the quantum of any benefit.20 The majority in Pedersen identified this as a factor that supported their view that benefit must be intended to mean gross receipts rather than profits. The CPRA includes a similar provision, albeit in a more limited context. Significant criminal activity is defined (in part) as offending from which property, proceeds or benefits of a value of
$30,000 or more have been acquired or derived. In determining whether the $30,000
threshold is met “any expenses or outgoings” are to be disregarded.21
19 At 391.
20 POCA 1991, s 27(3).
21 CPRA, s 6(3).
[24] In this case the $30,000 threshold has no direct relevance, as it is not in dispute that significant criminal activity has occurred (given that Mr Tang was convicted of offences that were punishable by more than 5 years’ imprisonment). However, the fact that the CPRA requires expenses or outgoings to be disregarded in determining whether criminal activity reaches the $30,000 threshold leads, in my view, to the inevitable inference that Parliament must have also have intended that such expenses or outgoings be disregarded when a respondent seeks to rebut the statutory presumption in s 53.
[25] Taking all of these considerations into account, in my view the benefit to be forfeited by Mr Tang must be assessed with reference to the gross proceeds/receipts of his methamphetamine manufacturing and dealing activities, rather than any profits he made from such activities. This is consistent with the approach previously taken by the Courts to the assessment of benefit under POCA 1991.
How (if at all) is the assessment of the quantum of benefit impacted in a multiple offender situation?
[26] I now turn to consider how benefits are to be assessed where, as in this case, multiple offenders were involved in the relevant criminal activity. In such cases are benefits to be assessed on a joint and several basis, on the basis of individual apportionment, or otherwise?
[27] Under POCA 1991 a pecuniary penalty order could be imposed upon any co-offender in respect of the full value of the benefit derived by all of the co-offenders collectively: Solicitor-General v De Bruin22 and Solicitor-General v
Rhodes.23 In Rhodes Winkelmann J found that the offenders were not joint
venturers. Rather, Mr Rhodes was the principal offender who used others to assist him with the offending. Accordingly, any payments to his co-offenders were expenses or outgoings, the deduction of which was prohibited under POCA 1991.
[28] Her Honour went on to observe, however, that if (contrary to her findings)
the offenders were indeed joint venturers, Mr Rhodes received the benefit of the full
proceeds of sale by reason of his joint ownership of those proceeds. Her Honour referred with approval to the approach of the House of Lords in R v May. In May the House of Lords held that where a number of individuals have jointly obtained the proceeds of their crime, they should each be considered to have obtained the full value of those proceeds. This was so even though the consequence of such an approach was that the Crown could obtain orders for confiscation of benefits that exceeded the total benefits derived by the offenders from the crime they jointly committed.
[29] In R v Rooney,24 the English Court of Appeal reviewed a number of authorities that had considered this issue (including May). Lord Justice Aikens summarised the current English position as follows:25
In short, the position is, as we understand it:
(a) If a benefit is shown to be obtained jointly by conspirators, then all are liable for the whole of the benefit jointly obtained.
(b) If, however, it is not established that the total benefit was jointly received, but it is established that there was a certain sum by way of benefit which was divided between conspirators, yet there is no evidence on how it was divided, then the court making the confiscation order is entitled to make an equal division as to benefit obtained between all conspirators.
(c) However, if the court is satisfied on the evidence that a particular conspirator did not benefit at all or only to a specific amount, then it should find that is the benefit that he has obtained.
[30] While this summary provides helpful guidance, some adjustments need to be made in the New Zealand context to reflect the statutory presumption and reverse onus in s 53 (which does not feature in POCA UK). Taking this into account, in a CPRA context, a respondent who seeks to establish that they should only be liable for a specific portion of the overall proceeds of a criminal enterprise should prove (on the balance of probabilities):
(a) that the overall benefits derived from the significant criminal activity were not received either solely by him or jointly by him and one or
more co-offenders (if they were, each co-offender will be liable for the full amount of such benefit); and
(b) that he did not benefit at all or only benefitted to a specific amount
(in which case he will only be liable for that amount).
[31] In contrast to the position under POCA UK, under CPRA if there is no evidence on the issue, or it does not meet the required threshold, then a Court would not be entitled to simply divide the benefit equally between the conspirators. That is because, in the absence of credible evidence from a respondent rebutting the statutory presumption, the benefit amount to be included in the profit forfeiture order must be that stated in the Commissioner’s application.
[32] In my view application of such principles will not give rise to an unduly harsh outcome on the facts of this case, given Mr Tang’s lead role in the offending. However, the absence in the CPRA of any judicial discretion to reduce the benefit amount (such as previously existed under POCA 1991) could potentially lead to harsh outcomes in some cases where proceeds are received jointly by multiple offenders.
The Commissioner’s approach to assessment of the benefit Mr Tang received
[33] The Commissioner is not required to prove the extent to which Mr Tang has benefited from significant criminal activity. It is for Mr Tang to rebut the statutory presumption that the amount of benefit he received was $360,000, by providing evidence as to what he says the actual amount of benefit he received was. However, to put Mr Tang’s evidence in context, it is helpful to first consider how the Commissioner calculated his estimated benefit figure of $360,000.
[34] Following Mr Tang’s conviction there was a disputed facts hearing for sentencing purposes. The Commissioner relied in particular on the following findings:
(a) Mr Tang was the leader and organiser of the criminal group. He was the lessee of the motel in Epsom that was the hub of the operation.
(b)A total of at least 280 litres of toluene was obtained by Mr Tang over the relevant period. Assuming a total of 280 litres of toluene had been used in manufacture, the conversion rate established by the Crown’s expert witness would result in manufacture of a total of between 2.3 to
2.7 kilograms of methamphetamine.
(c) Methamphetamine was manufactured on four occasions from
April 2009.
(d)After the first occasion of manufacturing and supply, Mr Baird (a co-accused) sold methamphetamine and then accounted to Mr Tang for sales by delivering $75,000 to Mr Tang.
(e) The total amount of methamphetamine manufactured was “materially more than 300 grams, a total based solely on the amount that was found at the motel”. This was based on the quantity of 75.4 grams found on 11 June 2009 (the fourth occasion of manufacture) coupled with the finding that “at least” similar quantities were manufactured on three earlier occasions.
(f) The weight of the evidence indicated that the total methamphetamine manufactured on the four occasions may have put the offending well into band 4 of Fatu, namely very large commercial quantities of 500 grams or more. However, Woodhouse J was unable to come to that conclusion beyond reasonable doubt.
(g)The Judge’s overall conclusion was that the offending, in respect of the four occasions of methamphetamine manufacture, was between the middle and top of band 3 of Fatu; that is to say, 375 grams or more in total.
[35] In addition to Woodhouse J’s findings, the Commissioner also relied on evidence of significant criminal activity set out in an affidavit sworn by Constable Robin Jane Daniels, a Police Officer attached to the police’s Auckland Asset
Recovery Unit, Financial Crime Group. Constable Daniels referred to intercepted conversations that showed a co-offender, Mr Baird, delivered $159,000 to Mr Tang in connection with drug sales. Further, Mr Tang was located with $30,000 in his possession. No legitimate explanations have been offered for these large sums of money.
[36] Given that Mr Tang was the leader of the criminal group, the Commissioner inferred that he received all sales proceeds and then made payments to his “underlings”. Various factual findings of Woodhouse J regarding transactions between Mr Baird and Mr Tang were said to support this inference. In reliance on
Solicitor-General v Rhodes,26 the Commissioner submitted that any arrangements
between the co-offenders as to how they would ultimately share the profits from the joint venture is irrelevant to the assessment of the benefits received.
[37] The Commissioner ultimately used the figure of 300 grams of methamphetamine in his benefit calculations. Constable Daniels annexed to her affidavit a schedule of drug prices as reported by the Police’s National Drug Intelligence Bureau in its quarterly “New Zealand Illicit Drug Prices Report” dated April 2009. A price of $1200 per gram was used in the Commissioner’s calculations, which was at the upper end of the reported prices.
[38] Accordingly, the Commissioner’s calculations used a quantity of drugs (300g) which was at the lower end of Woodhouse J’s factual findings. As those findings were to the criminal standard, rather than the civil standard required in these proceedings, they are likely to be conservative. In terms of price, the Commissioner used a price at the higher end of the range of reported drug prices. The Commissioner’s total benefit figure of $360,000 was based on these assumptions
(300g x $1200).
26 At [38]–[40].
Mr Tang’s approach to rebutting the statutory presumption that his benefit was
$360,000
[39] How the Commissioner calculated the $360,000 figure is strictly irrelevant. It is the figure itself that is important. It is not for the Commissioner to prove, on the balance of probabilities or otherwise, the amount of benefit Mr Tang received or to justify how the benefit amount he relied on was calculated. The figure of $360,000 is presumed to be the correct benefit amount unless and until Mr Tang proves otherwise. Mr Tang cannot do this by simply “critiquing” aspects of the Commissioner’s methodology as, ultimately, precisely how the Commissioner calculated his benefit figure is irrelevant. Mr Tang must adduce his own evidence to establish, on the balance of probabilities, that the true benefit figure was less than
$360,000.
[40] The evidence provided by Mr Tang was limited to a brief affidavit sworn by Mr Tang himself. He relied heavily on the factual findings of Woodhouse J. Mr Tang’s “analysis” (parts of his affidavit were more in the nature of submission than evidence) was as follows. The police found 75.4 grams of methamphetamine on the fourth occasion of manufacture. It should therefore be assumed that the same amount was manufactured on each of the three earlier occasions. Woodhouse J found that only two of the co-offenders were involved in the first manufacture. However, by the time of the second manufacture, all six of the offenders were involved.
[41] Mr Tang deposed that the proceeds of the first methamphetamine manufacture (75.4 grams) were divided equally between him and Mr Sims (the only other person convicted in relation to the first manufacture) being approximately
38 grams each. Mr Tang further deposed that the methamphetamine produced from the next two manufactures (also of 75.4 grams each) belonged to all six of the convicted offenders and should therefore be apportioned equally between them. The final manufacture of 75.4 grams of methamphetamine was seized on 11 June 2009 and therefore never sold. Mr Tang therefore submitted that no profit was derived from this manufacture (although I note that profit is defined as including “property” as well as “proceeds”).
[42] On the basis of this evidence, Mr Tang contended that he profited from only
59 to 60 grams of methamphetamine at most. He further deposed that he sold his ounces of methamphetamine for only $9,000 ($321 per gram).
[43] In his affidavit and in his written submissions Mr Tang sought to deduct his manufacturing costs from the amount of any benefit. However this submission was abandoned at the hearing. As a result, Mr Tang’s evidence results in a benefit figure of approximately $19,260 (60 grams x $321).
Has Mr Tang rebutted the presumption that the amount of benefit is $360,000?
[44] There is considerable force in the Crown’s submission that Mr Tang simply chose to refer to Woodhouse J’s factual findings (as to what had been proven at the criminal trial beyond reasonable doubt) and fabricate an account tailored to those particular findings.
[45] On Mr Tang’s evidence, the amount of methamphetamine manufactured was
75g on each of four separate occasions. This is consistent with the amount seized by the police on the fourth (and final) occasion of manufacture. However, such evidence overlooks Woodhouse J’s finding that an “unknown quantity” of methamphetamine had been flushed down the toilet by one of the offenders when the police had entered the premises.
[46] It is inherently improbable that precisely the same amount of methamphetamine was manufactured on each of the four occasions. It is equally implausible that the amount Mr Tang claims was manufactured on each occasion exactly matches the “residual” amount of methamphetamine (that not flushed down the toilet) found by the police on the fourth and final occasion.
[47] Further, on Mr Tang’s evidence, he had the grave misfortune of commencing his drug manufacturing activities at precisely the same time as the police surveillance operation commenced. Again, this seems inherently implausible.
[48] In addition, Mr Tang claimed that the proceeds of the methamphetamine sales were divided evenly between those persons who were convicted at the criminal trial in relation to each particular occasion of manufacture (and only those persons). This is despite the fact that Mr Tang was found to be the leader and organiser of the criminal group and the other offenders all had lesser roles, including one who was the supplier of toluene and another who was a low level employee of Mr Tang’s who the Judge found to be “essentially subservient” to him and a general “dog’s body” around Mr Tang’s motel.
[49] The claim that Mr Tang shared the proceeds of the methamphetamine manufacturing operation which he organised and led (and which took place at his motel) in equal proportions with such persons is simply not credible.
[50] Under cross-examination, Mr Tang said he couldn’t remember how much money he actually received in respect of the first, second and third instances of manufacture. Given his claimed recall of how much methamphetamine was manufactured on each occasion (75g) and how the proceeds were apportioned (evenly between all of those who were convicted) it is surprising that he cannot recall roughly how much the sale proceeds actually were. In any event, the difficulties with credibly establishing an alternative benefit figure to that asserted by the Commissioner in circumstances where Mr Tang cannot actually recall how much the proceeds were, are obvious.
[51] Mr Tang has failed to prove, on the balance of probabilities, that he did not receive the full proceeds (in either a sole or joint capacity) but only received a specified amount (for example from someone else who was the principal offender and who paid Mr Tang for his services). Any suggestion that the total benefit (proceeds, not profits) Mr Tang received was less than $20,000 is further contradicted by the fact that Mr Tang was found with significantly more cash than that in his possession ($30,000). Mr Tang has not offered any legitimate explanation for that sum.
[52] It seems much more likely in this case that, as Mr Tang was the principal offender, he used others to assist him, for which they were remunerated. In such
circumstances Mr Tang’s benefit would be the full proceeds of the criminal enterprise, in accordance with the principles summarised at [19] – [23] above. Mr Tang’s evidence does not, however, credibly establish what the total benefit received was. Accordingly, it is not possible to determine whether it was $360,000 or a greater or lesser sum.
[53] Alternatively, it is possible that Mr Tang and one or two of the other more “high level” offenders were joint venturers. In that case each of them would have received a benefit of the full amount of the proceeds in accordance with the principles summarised at [24] – [30] above. The full amount of any joint benefit received by Mr Tang would be subject to a profit forfeiture order. Again, however, there is no credible evidence to establish what that figure was.
[54] The statutory presumption that the benefit Mr Tang received was $360,000 has accordingly not been rebutted by Mr Tang.
Conclusion
[55] Subject to considerations of undue hardship, I must make a profit forfeiture order if I am satisfied, on the balance of probabilities, that:
(a) Mr Tang has unlawfully benefitted from significant criminal activity within the period 29 October 2005 to 29 October 2012; and
(b) Mr Tang has interests in property.
[56] Neither of these elements was in dispute. Nor was undue hardship pursued at the hearing. The sole issue before me related to the value of the unlawful benefit Mr Tang received. For the reasons I have outlined, Mr Tang has failed to rebut the statutory presumption that the amount of that benefit is the sum of $360,000 specified in the Commissioner’s application.
Result
[57] The application for a profit forfeiture order is granted. The value of the unlawful benefit is $360,000. The maximum recoverable amount pursuant to s 54 is also $360,000 (given that no asset forfeiture orders have been made in this case). The property to be disposed of under s 83(1) is:
(a) the proceeds of the sale of all interests in a residential dwelling and land in Albany, other than the interest of ASB Bank Ltd as mortgagee; and
(b) the sum of $30,000 located by Police at the Albany property on
11 June 2009.
Costs
[58] The Commissioner is entitled to costs, together with disbursements as fixed by the Registrar. In my view, costs should be fixed on a category 2B basis.
[59] I encourage counsel to reach agreement on costs. If costs cannot be agreed, and the Commissioner wishes to pursue recovery of costs, then any memorandum from the Commissioner is to be filed and served within 15 working days of this judgment. Any memorandum that Mr Tang wishes to file is to be filed within a further 10 working days. I then propose to deal with the issue of costs on the papers.
Order
[60] Orders accordingly.
Katz J
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