Commissioner of Police v Wong

[2021] NZHC 2713

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000140

[2021] NZHC 2713

UNDER

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

SHUI TONG WONG

First Respondent

YANFANG WU
Second Respondent

YUEN CHEUNG CHAN

Third Respondent

Hearing:

On the papers

Appearances:

M Harborow and R Ching for the Applicant

M Ryan for the Second Respondent and Ms YX Wu (interested party)

Judgment:

11 October 2021

JUDGMENT OF WALKER J

[redacted version]

This judgment was delivered by me on 11 October 2021 at 3 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

COMMISSIONER OF POLICE v WONG [2021] NZHC 2713 [11 October 2021]

Introduction

[1]    Before the Court is a joint memorandum from counsel  for  the  Commissioner of Police (the Commissioner) and counsel for Yanfang Wu (Ms Wu) and Yanxian Wu (Ms YX Wu), an interested party. The memorandum invites the Court to approve a proposed settlement reached between the Commissioner and those parties under s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).

[2]    Any settlement made in relation to proceedings brought under the provisions of the Act is required to be approved by this Court.1

Background

[3]    These proceedings arose following an investigation by Police into a criminal syndicate that imported 160 litres of N-tert-butoxycarbonyl-methamphetamine (t-boc methamphetamine) disguised as dishwashing liquid into New Zealand in January 2017. The first respondent, Shui Tong Wong (Mr Wong), received the consignment and conspired with others to use it to manufacture methamphetamine.

[4]    On 14 March 2017, Police searched the home address of Mr Wong and his partner, Ms Wu. They located 23 grams of methamphetamine and $251,280 cash.

[5]On 6 July 2018, Mr Wong was convicted of:

(a)Conspiring to manufacture methamphetamine;

(b)Possessing material with intention to manufacture methamphetamine;

(c)Possessing      equipment      with      intention      to      manufacture methamphetamine; and

(d)Possessing methamphetamine.

1      Criminal Proceeds (Recovery) Act 2009, s 95(2).

[6]    On 2 August 2018, Mr Wong was sentenced to nine years and nine months’ imprisonment, with a minimum period of imprisonment of four years and ten months.

[7]    It is the Commissioner’s case that Mr Wong and Ms Wu unlawfully benefited from Mr Wong’s drug offending. Mr Wong also admitted to profiting over an extended period of time from unlawful lending to “retail loan sharks”.

[8]    Further, the Commissioner considers that Ms Wu committed benefit fraud between 2012 and 2018. He identified that Ms Wu received benefits by filing applications with the Ministry of Social Development that declared that she was separated from her partner, was not receiving any income and had no cash assets: statements which the Commissioner says were false.

These proceedings

[9]    On 28 March 2018, restraining orders were made under the Act over funds from bank accounts held in the names of Mr Wong, Ms Wu and Ms YX Wu, and the cash found at Mr Wong and Ms Wu’s address and on Mr Wong’s person.

[10]   Ms YX Wu is Ms Wu’s sister. She resides in China and travelled to New Zealand in 2003, 2012 and 2015, spending a total of 36 days in the country.

[11]   At the commencement of the Commissioner’s proceedings, Ms YX Wu held four New Zealand bank accounts in her name, all of which Ms Wu had authority to operate. The Commissioner says that Mr Wong and Ms Wu had effective control over these accounts and used them to launder their proceeds of crime.

[12]   On 23 August 2019, the Commissioner applied for civil forfeiture orders in respect  of  the  restrained  funds.  That  application  is  for  hearing,  commencing  18 October 2021.

Terms of the proposed settlement

[13]   The Commissioner, Ms Wu and Ms YX Wu have now agreed to settle Ms Wu and Ms YX Wu’s interests in the proceeding between themselves on the terms set out

in the joint memorandum provided to the Court. This is subject to the Court’s approval under s 95 of the Act.

[14]The proposed terms of settlement are:

(a)$55,000 NZD of the restrained funds, previously held in bank accounts in Ms YX Wu’s name, be released from restraint and deposited into a bank account nominated by Ms YX Wu;

(b)Assets forfeiture orders under s 50 of the Act be made by consent over all remaining funds previously held in the following bank accounts in the name of Ms YX Wu (excluding the sum of $55,000 NZD referred to in paragraph (a) above) and any accrued interest:

(i)ASB Bank Limited account number: [REDACTED];

(ii)ASB Bank Limited account number: [REDACTED];

(iii)ASB Bank Limited account number: [REDACTED];

(iv)ASB Bank Limited account number: [REDACTED];

(c)Assets forfeiture orders under s 50 of the Act be made by consent over all funds previously held in the following bank accounts in the name of Ms Wu and any accrued interest:

(i)ASB Bank Limited account number: [REDACTED];

(ii)Australia and New Zealand Banking Group Limited (ANZ) account number: [REDACTED];

(d)The Commissioner will abandon his application for a profit forfeiture order against Ms Wu;

(e)Ms Wu and Ms YX Wu will abandon all claims they may have, under the Act or otherwise, to any of the property to be forfeited or to any of the other restrained property in this proceeding;

(f)The settlement is in full and final settlement of the civil forfeiture application brought by the Commissioner against Ms Wu and Ms YX Wu under the Act; and

(g)Costs will lie where they fall.

[15]   The approximate value of the funds held in Ms YX Wu’s name to be forfeited is $71,000. The approximate value of the funds held in Ms Wu’s name to be forfeited is $1,500.

Legal principles

[1]                 Section 95 of the Act governs court-approved settlements and provides as follows:

95       High Court must approve settlement between Commissioner and other party

(1)The Commissioner may enter into a settlement with any person as to the property or any sum of money to be forfeited to the Crown.

(2)A settlement does not bind the parties unless the High Court approves it.

(3)The High Court must approve the settlement if it is satisfied that it is consistent with—

(a)the purposes of this Act; and

(b)the overall interests of justice.

[2]                 Section 95 had no predecessor under the former legislation (Proceeds of Crime Act 1991). In enacting s 95, Parliament expressly empowered the Commissioner to enter into settlement discussions with respondents and interested parties regarding the forfeiture of assets. I accept the proposition in the parties’ joint memorandum that, in doing so, Parliament is likely to have had in mind the significant cost associated with

civil litigation and the benefits to all parties if proceedings can be settled and resolved by consent.

[3]                 As has been previously observed, Parliament has entrusted the High Court with a supervisory jurisdiction to ensure that settlements are consistent with the parliamentary intention.2

[4]                 The primary purpose of the Act is contained in s 3(1). It is the establishment of a regime for the forfeiture of property which has been derived directly or indirectly from significant criminal activity or that represents the value of a person’s unlawfully derived income. Ancillary statutory purposes are to “eliminate the chance” for persons to profit  from  undertaking or being associated  with significant criminal activity     (s 3(2)(a)) and to “deter” significant criminal activity (s 3(2)(b)). The Court of Appeal in Hayward v Commissioner of Police recently affirmed the Act has a “strongly expressed statutory purpose”.3

[5]                 The overall interests of justice requirement calls for a broad inquiry. In considering whether a settlement is in the interests of justice, relevant factors will include the savings of time and cost and the litigation risk of a hearing to both the Commissioner and a respondent.4 The Court has recognised the decision to settle proceedings under the Act may be made on economic and pragmatic grounds and reflect a “common sense compromise” between the parties.5

The result

[6]                 The Commissioner, Ms Wu and Ms YX Wu submit that the proposed settlement is consistent with the purposes of the Act and the overall interests of justice.

[7]                 Having considered the matters in the joint memorandum dated 6 October 2021, I agree. My reasons are:

2      Commissioner of Police v Know-All Group Ltd HC Auckland CRI-2010-404-403, 7 November 2011 at [11].

3      Hayward v Commissioner of Police [2014] NZCA 625 at [29].

4      Commissioner of Police v Kree [2013] NZHC 2972 at [11].

5      Commissioner of Police v Douglas [2015] NZHC 1293 at [6]; and Commissioner of Police v Venn

[2014] NZHC 361.

(a)there will be a saving of time and cost if the matter as between the Commissioner, Ms Wu and Ms YX Wu can be resolved by consent;

(b)an agreed settlement will allow the parties to have certainty and control as to the outcome;

(c)the Commissioner considers he has a strong case to show that Mr Wong and Ms Wu unlawfully benefited from drug offending, unlawful lending and benefit fraud. He also considers he has a strong case to show that their cash assets are tainted by this criminal activity;

(d)for Ms Wu’s part, she recognises the risk that the funds from the bank accounts held in her name are determined to be the proceeds of crime;

(e)there is strong evidence that Ms Wu was in regular use of Ms YX Wu’s bank account number [REDACTED], including while Ms YX Wu was not in New Zealand. This account held approximately $70,000 upon restraining orders being granted. The Commissioner does, however, acknowledge that there was little activity in the remaining three of Ms YX Wu’s bank accounts and that there is litigation risk in respect of the funds from these accounts; and

(f)a sum proportionate to the funds held in Ms YX Wu’s three accounts for which there was little activity will be returned to her. Funds proportionate to those in the account used by Ms Wu will be forfeited to the Crown. That is appropriate given the serious criminal offending which the Commissioner alleges Mr Wong and Ms Wu committed. The settlement also seeks to suitably recognise Ms YX Wu’s lack of involvement in Mr Wong and Ms Wu’s alleged criminal activity.

[8]I make the following orders to give effect to the settlement:

(a)Further orders under s 34 of the Act: $55,000 NZD of the restrained funds previously held in the following bank accounts in Ms YX Wu’s

name (Ms YX Wu’s Bank Accounts) is released from restraint and the Official Assignee is directed to pay this sum into a bank account nominated by Ms YX Wu:

(i)ASB Bank Limited (ASB) account number: [REDACTED];

(ii)ASB account number: [REDACTED];

(iii)ASB term deposit: [REDACTED]; and

(iv)ASB term deposit: [REDACTED].

(b)Assets forfeiture orders under s 50(1) of the Act: all remaining funds previously held in Ms YX Wu’s Bank Accounts (excluding the sum of

$55,000 NZD referred to at paragraph (a) above), and any accrued interest, vests in the Crown absolutely and is in the Official Assignee’s custody and control.

(c)Assets forfeiture orders under s 50(1) of the Act: all funds previously held in the following bank accounts in the name of Ms Wu, and any accrued interest, vests in the Crown absolutely and is in the Official Assignee’s custody and control:

(i)ASB account number: [REDACTED];

(ii)Australia and New Zealand Banking Group Limited (ANZ) account number: [REDACTED].

(d)Costs: costs lie where they fall in relation to all matters between the Commissioner, Ms Wu and Ms YX Wu.

[9]I record further terms of the agreed settlement at the request of these parties:

(a)The Commissioner abandons his application for a profit forfeiture order against Ms Wu;

(b)Ms Wu and Ms YX Wu abandon all claims they may have, under the Act or otherwise, to any of the property to be forfeited or any of the other restrained property in this proceeding; and

(c)The settlement is in full and final settlement of the civil forfeiture application brought by the Commissioner against Ms Wu and Ms YX Wu under the Act.

[10]Orders accordingly.

............................................................

Walker J