Fong v Solicitor-General of New Zealand

[2008] NZCA 472

IN THE COURT OF APPEAL OF NEW ZEALAND

CA580/2008
[2008] NZCA 472

KIMBERLY SZE YING FONG

v

SOLICITOR-GENERAL OF NEW ZEALAND

Hearing:4 November 2008

Court:Glazebrook, Robertson and Baragwanath JJ

Counsel:S Tait and J M Hudson for Appellant

N P Chisnall for Crown

Judgment:7 November 2008 at 10 am

JUDGMENT OF THE COURT

THE APPEAL IS ALLOWED AND THE CASE IS REMITTED TO THE HIGH COURT.

____________________________________________________________________

REASONS OF THE COURT

(Given by Robertson J)

[1]       Ms Fong appeals against an order made by Harrison J under s 42(2) of the Proceeds of Crimes Act 1991 (“the Act”) on 18 July 2008, on the basis that the allowances made by the Judge were, in all the circumstances, not reasonable or adequate to permit Ms Fong to respond to the criminal charges laid against her or to fund her ongoing application for relief under the Act.

The Court proceedings

[2]       On 20 May 2008, Ms Fong was sentenced to an effective term of seven years’ imprisonment after she had pleaded guilty to four representative counts of supply of methamphetamine (a class A drug) and two representative counts of possession of methamphetamine for supply.

[3]       The Solicitor-General has made an application for forfeiture and confiscation of items of Ms Fong’s property, namely:

(a)       two residential properties with a value of approximately $640,000;

(b)jewellery valued at $200,000 located in a safety deposit box;

(c)approximately $225,000 in cash; and

(d)the sum of $106,000, being proceeds of sale of a massage parlour.

[4]       In the alternative, a pecuniary penalty of $1,150,000 is sought.

[5]       These proceedings are due to be heard in February 2009.

[6]       On 20 December 2006, Winklemann J made a restraining order under s 42 of the Act which remains in force pending a substantive hearing.

[7]       Ms Fong made this application for an order to authorise the Official Assignee to pay accountant’s fees totalling $3,153.39, defence counsel fees for the criminal proceedings of $17,966.81, defence counsel fees for the Proceeds of Crimes Act proceedings of $34,681.31, and a weekly allowance of $50.

[8]       Harrison J approved the payment of the accountant’s fees, but he dismissed the application for a weekly allowance.  In respect of the claim for legal fees, he allowed ten hours’ payment for sentencing work and thirty hours’ payment in respect of work undertaken for the forfeiture application.  Both allowances were to be paid at $297 plus GST per hour.

[9]       In general terms, Ms Fong’s counsel’s fee claim was for in excess of $52,500 and the amount the Judge approved was about $13,300.

[10]     The Minutes of Harrison J do indicate the hours for which he was prepared to authorise allowances and the hourly rate of payment.  However the Judge did not provide reasons for the figures he arrived at.

[11]     It is therefore necessary for this Court to determine afresh whether Harrison J’s determinations were proper, as his Minutes provide no reasons from which we could infer that the discretion was or was not properly exercised.

[12]     In Solicitor-Generalv Panzer [2001] 1 NZLR 224 (HC), a full Court considered and, taking into account the Crown Solicitors Regulations 1994, provided a framework for how courts should determine reasonable expenses under s 42(2)(c) of the Act.

[13]     There was no argument before us as to whether this framework is in fact appropriate, and without the benefit of argument on the point, we do not make a definitive ruling as to its general applicability.

[14]     We observe, however, that the rates of remuneration allowed for by the Panzer framework are very generous and if the framework is applied in any particular case, it is essential that the terms of the Crown Solicitors Regulations be scrupulously adhered to.  That requires a considered assessment of the level of counsel’s seniority, and strict adherence to the maximum preparation time for which allowance is available (taking into account the possibility of exceptional circumstances).

[15]     The Panzer approach gives an hourly rate which is greatly in excess of that which a practitioner on legal aid would receive.  As a matter of principle, because the funds paid to counsel may not in fact be the property of the accused person, it is difficult to discern why there should be such a discrepancy.

[16]     Although there was reference to Panzer in a memorandum filed in the High Court, there was no discussion or consideration of the proper approach to the application of either the Panzer framework or the Crown Solicitors Regulations.

The total picture

[17]     It was only when the Crown filed its submissions on the appeal that we became aware of the essential background.

[18]     On 29 November 2007, Duffy J considered a previous application under s 42 of the Act in which she had approved the release of funds of $62,361.07 relating to the criminal charges against Ms Fong and a further figure of $12,553.88 in respect of the application under the Act.

[19]     It is revealing to note that Duffy J said:

[11]     If there had been active opposition by the Crown and I had before me evidence which challenged the reasonableness of the actual fees, I may well have been persuaded to reduce the amount for approval.  However, when I offered the Crown the opportunity to have this matter treated as fully opposed and to have it adjourned to a date for a fully argued hearing following the filing of evidence and submissions from both parties, I was met with the response that the Crown was neutral.

[20]     Earlier Duffy J appears to have accepted that a senior counsel’s rate was appropriate, although there is no indication as to why that was the case.

[21]     We do not know whether all this information was before Harrison J or whether it had any bearing on his final decision to substantially reduce the sum of the claim before him.

[22]     Clearly it all has to be taken into account in determining the entitlements especially because of the ceiling which will generally apply to hours of preparation.

Assessment

[23]     Mr Tait placed particular emphasis on the decision of Asher J in Legal Services Agency v Haslam (2007) 18 PRNZ 469.  It is not necessary for us to comment specifically on that decision, but we note that in order for counsel to be able properly to discern and consider the Crown’s allegations and evidence, it is crucial that there be payment proportionate to the gravity and complexity of the case and thus of counsel’s task.

[24]     In this case Ms Fong made full and frank admissions of her involvement with methamphetamine and, in terms of evidence, there were intercepted telephone conversations.  With such an overwhelming Crown case, it is not immediately apparent why an extraordinary preparation period was required.

[25]     We do not overlook the fact that there was an issue of Ms Fong’s co-operation with the authorities still to be investigated.  That was eventually reflected in the 50 per cent reduction from the starting point of the sentence, and allowance was also made for Ms Fong’s guilty plea and personal circumstances.

[26]     Since Mr Tait wanted the Court to make an allowance beyond the guidelines provided by the applicable regime, the onus was on him to provide comprehensive, clear and detailed submissions in support of that position.  And, if there is confidential material that was taken into account in sentencing, it can simply be treated in the same confidential manner as for any proceeds of crime matter.

[27]     Because allowances made under s 42 of the Act involve what may well prove to be public funds, judges are particularly aware of the need to provide full and reasoned decisions.  This can only be achieved when full and accurate information is provided by counsel, and that responsibility falls to the Crown.  Harrison J does not appear to have had the benefit of such assistance in this case.

[28]     Section 42 applications involve the making available of money to which the Crown claims it is entitled so as to ensure that a person has the ability to mount a proper defence and to advance their position in a proceeding for forfeiture and confiscation of property.

[29]     The assessment of reasonableness involves a consideration of all circumstances.  If the Panzer approach is to be used as a guideline, then all aspects of that framework must be taken into account.

[30]     In the absence of any reasons for Harrison J’s decision, and without adequate material in support of Ms Fong’s claim, we have no option but to remit this matter for reconsideration in the High Court.

[31]     In making an assessment, it will be incumbent on the Judge to consider the payments which have already been made, and the extent to which there can be a justification for exceeding guideline allowance limits.

[32]     In the High Court, different Judges have at different times considered matters pertaining to this case.  Without a total overview it is almost impossible to get a clear picture and arrive at appropriate allowances.  There remain questions as to whether some of the matters claimed for in the present application have in fact been covered in the earlier orders made by Duffy J.  All of those issues will need to be carefully scrutinised, analysed and articulated before a High Court Judge.

Result

[33]     The appeal is allowed and the case is remitted to the High Court.

Solicitors:
P Singh, Manukau City, for Appellant
Crown Law Office, Wellington