Commissioner of the New Zealand Police v Harrison

[2020] NZHC 1785

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV 2016-485-000543

[2020] NZHC 1785

UNDER

the Criminal Proceeds (Recovery) Act 2009

IN THE MATTER OF

an application under sections 22 and 25

BETWEEN

THE COMMISSIONER OF THE NEW ZEALAND POLICE

Applicant

AND

JOANNE HARRISON

First Respondent

AND

PATRICK FREDERICK SHARP

Second Respondent

AND

THE OFFICIAL ASSIGNEE

Interested Party

Hearing:

In Chambers (on the papers)

Counsel:

A W M Britton for the Applicant N Bourke for the Applicant

E J Watt counsel assisting the Court

Judgment:

22 July 2020

JUDGMENT OF GWYN J

[as to status of without notice restraining order]

This judgment was delivered by me on 22 July 2020 at 3.00pm Pursuant to Rule 11.5 of the High Court Rules

………………………… Registrar/Deputy Registrar

THE COMMISSIONER OF THE NEW ZEALAND POLICE v HARRISON [as to status of without notice restraining order] [2020] NZHC 1785 [22 July 2020]

Introduction

[1]                 On 18 June 2020 this Court issued a judgment (the judgment) declining the Commissioner of Police’s application under the Criminal Proceeds (Recovery) Act 2009 (the Act) for  an  on  notice  restraining  order  over  $23,000  realised  from  Ms Harrison’s KiwiSaver account (the $23,000).1 On 16 July 2020 the Commissioner filed a notice of appeal in the Court of Appeal and served a copy on Ms Harrison.

[2]                 Prior to the judgment a without notice restraining order over the $23,000 had been granted by Ellis J on 29 May 2019 (the without notice order).2 The Commissioner and the Official Assignee now seek a direction that the without notice order continues to have force until the appeal is finally disposed of, in order to preserve the position should the appeal succeed.

[3]                 Ms Harrison opposes such a direction on the basis that allowing her assets to remain restrained, despite the judgment effectively deciding that a restraining order is not legally supportable, runs counter to Parliament’s intent underpinning the criminal proceeds recovery regime.

The Commissioner’s proposed approach

[4]                 The Commissioner submits that r 29(1)(a) of the Court of Appeal (Civil) Rules 2005 (the Rules) allows for an appeal to be filed within 20 working days after the date of the decision being appealed. The notice of appeal was filed on 16 July 2020, which falls within 20 working days.

[5]                 Counsel notes that under s 39(2) of the Act a without notice restraining order continues in force until an application for a restraining order on notice in relation to the same property is “finally disposed of”. Given an appeal proceeding is impending, counsel says it is appropriate and in the interests of justice for the Court to order that the without notice order continues, in order to preserve the restraint position. That is for the following reasons:

1      Commissioner of Police v Harrison [2020] NZHC 1380

2      Commissioner of Police v Harrison [2019] NZHC 1199 at [6].

(a)the Court earlier determined there was a sufficient basis to determine the without notice order;

(b)the Commissioner and the Official Assignee have not exhausted their right to appeal the judgment declining the on notice restraining order;

(c)the Commissioner has a duty to prosecute the on notice application for a restraining order “with all due diligence” under s 39(3) of the Act, which counsel says must extend to the exercise of the appeal right;

(d)there appears to be no appellate mechanism to reinstate the without notice order pending the appeal;

(e)rule 12(3) of the Rules allows either the Court of Appeal or this Court (as the court being appealed from) to, on an interlocutory application, order a stay of the proceeding in which the decision was given or a stay of the execution of the decision, or grant any interim relief; and

(f)if the $23,000 does not remain under restraint until the appeal is finally disposed of the relief sought on appeal will be rendered nugatory.

The response for Ms Harrison

[6]                 Counsel for Ms Harrison contends that an appeal regarding a restraining order is not governed solely by the Rules but must be viewed in the context of the Act.

[7]                 Section 38 of the Act provides that a restraining order in force at the time that a court declines to make a forfeiture order that is associated with the same property will not expire until:

(a)the date that is the end of a period of 7 working days from the date of that decision, if an appeal has not been lodged in the court by that date; or

(b)if an appeal has been lodged in the court by that date, on the date of the withdrawal or determination of that appeal, or, if a further appeal is lodged, on the date of the withdrawal or determination of that further appeal.

[8]                 While the judgment being appealed did not involve declining a forfeiture order counsel says s 38 demonstrates a legislative intent that the Commissioner can only preserve his effective appeal right if an appeal is filed within seven working days – in order to prevent respondents being deprived of their assets or property unnecessarily. While the Commissioner is still able to file an appeal under the Rules, counsel says he is not entitled to further restrain the $23,000.

[9]                 Finally, counsel submits that this Court has already determined the restraining order was unlawful and therefore there is no valid restraining order existing to be extended.

Decision

[10]              There is no provision in the Act specifically dealing with an appeal against a decision of this sort.

[11]              Counsel for Ms Harrison appropriately recognises that the seven working day expiry period of a restraining order following a decision declining a forfeiture order imposed by s 38 does not directly apply in this case. That is to do with the unusual nature of the application decided in the judgment – which sought a fresh restraining order after asset and profit forfeiture orders in respect of the same period of criminal activity had already been determined. I deemed that application legally untenable for reasons including that the scheme of the Act indicated that restraining orders were only available prior to, and not after, the determination of forfeiture orders.

[12]              This appeal appears to fall into something of a lacuna not anticipated in the drafting of the Act. That being the case, I consider the language in s 39(2) is applicable as written. A without notice order will continue in force until an on notice restraining order is finally disposed of. I consider it plain that this includes a right to appeal.

[13]              I recognise that this is a somewhat unusual position, arising from the novel character of the restraining order being sought. It does not sit easily with the s 38 requirement for an appeal against a decision under the Act to be brought within seven working days if a restraining order is to remain in force. However, nothing in the Act explicitly extends s 38 to this particular situation. I do not consider the policy

indicated in that section, of restoring individuals’ access to their assets or property within seven days of a restraining order being declined if no notice of appeal is filed within that time, is clearly intended to override the language in s 39(2) in a novel situation such as this. I consider the without notice order remains on foot pending the conclusion of the appeal.

[14]              I am not required to address r 12(3) of the Rules. However, for the sake of completeness I note that an application under r 12(3) generally requires the Court to balance the need to preserve an appellant’s position (in case the appeal succeeds) and the rights of a respondent to receive the benefit of the judgment.3 I accept that the points of law to be determined on appeal in this case are novel and of some legal significance. I also accept that although a successful appeal on the issues of law may still be useful to the Commissioner and the Official Assignee in future cases, denying a stay in this particular case would render the appeal nugatory in practice. While Ms Harrison will be meaningfully inconvenienced by further delay, I consider that a stay of execution would likely have been appropriate if required.

Result

[15]              I direct that the $23,000 remains subject to the without notice restraining order determined by Ellis J on 29 May 2019,4 pending a final determination of the on notice application for a restraining order through the appeals process.

Gwyn J

Solicitors/Counsel:

A W M Britton, Barrister, Wellington Crown Solicitor, Wellington

Nathan Bourke, Barrister, New Plymouth

3      Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA) at 87.

4      Commissioner of Police v Harrison, above n 2, at [6].