Official Assignee v Keen aka Chen - [2025] NZHC 873

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2013-404-1779 [2025] NZHC 873

IN THE MATTER OF an application for a sale order pursuant to the
Criminal Proceeds (Recovery) Act 2009

BETWEEN OFFICIAL ASSIGNEE
Applicant

ANDCHEN KEEN also known as JACK CHEN First Respondent
MAY HAO also known as MAY WANG Second Respondent
YE FANG
Third Respondent continued overleaf

Hearing: On the papers

Counsel: M R Harborow and C F Hodgson for Applicant
J D Turner and D W Wang for First Respondent E J James for Natural Dairy (NZ) Holdings Ltd

Judgment: 11 April 2025

JUDGMENT OF O’GORMAN J

[as to costs]

This judgment was delivered by me on 11 April 2025 at 10 am pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

…………………………………

Solicitors/Counsel:
Meredith Connell, Auckland McVeagh Fleming, Auckland Chapman Tripp, Auckland

OFFICIAL ASSIGNEE v KEEN [2025] NZHC 873 [11 April 2025]

(…cont’d)

AND WU RONG

ANFATEX GLOBAL FINANCIAL INVESTMENT HOLDINGS LIMITED
KING’S HOUSE NZ LIMITED
CHINESE BUSINESS ROUNDTABLE COUNCIL INVESTMENTS LIMITED
SUN RENTALS LIMITED
DAIRY ASSETS HOLDINGS LIMITED DYNASTY CORPORATE TRUSTEE
LIMITED (in liquidation)
UBNZ TRUSTEE LIMITED
UBNZ ASSETS HOLDINGS LIMITED
NATURAL DAIRY (NZ) HOLDINGS LIMITED
NZ DAIRY TRUSTEE LIMITED ASB BANK LIMITED KIWIBANK LIMITED
BANK OF NEW ZEALAND
THE HONG KONG AND SHANGHAI BANKING CORPORATION LIMITED
THE OFFICIAL ASSIGNEE
Interested Parties

Overview

[1] In a judgment issued on 17 March 2025, I declined an application by the Official Assignee (OA) for an early sale order in respect of a property in St Heliers (Property) that is currently restrained pursuant to foreign restraining orders first registered in New Zealand in 2013 and since extended.¹

[2] As the successful party in the application, the first respondent seeks an order for costs in the sum of $12,906 (calculated on a 2B basis), plus disbursements of
$2,443.75 for attendances by his expert witness, making a total of $15,349.75.

[3] The OA accepts that an award of costs is, in principle, available to Mr Chen. However, if any costs are to be awarded, then the OA contends that these should be reduced by 50 per cent, given that the application was made by the OA as a public body seeking to exercise its powers in the public interest.

Legal principles

[4] Proceedings relating to a restraining order under the Criminal Proceeds (Recovery) Act 2009 are civil proceedings.²

[5] The award of costs and disbursements in civil proceedings is governed by pt 14 of the High Court Rules 2016 (HCR). The Court has a broad discretion to award costs.³

[6] Subject to that discretion, r 14.2 provides the principles to be applied in most cases:

(a)Under r 14.2(1)(a), the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds.

¹      Official Assignee v Keen [2025] NZHC 539.
²      Criminal Proceeds (Recovery) Act 2009, s 10(1).
³      High Court Rules 2016, r 14.1.

(b)Under r…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] NZHC 873
Decision Date: 11 April 2025

CaseChat Overview and Summary

The High Court of New Zealand considered an application for a sale order in relation to a property restrained under the Criminal Proceeds (Recovery) Act 2009. The Official Assignee sought the order, but the first respondent, Chen, opposed it. Chen, also known as Jack Chen, requested an order for costs following his successful opposition to the application. The Official Assignee conceded that costs might be awarded but argued for a 50% reduction due to the public interest nature of the application. The court had to decide on the principles governing the award of costs in civil proceedings and whether the case involved a matter of public interest that could affect the usual presumptions about costs.

The court examined the principles governing the award of costs in civil proceedings, as outlined in the High Court Rules 2016. It noted that while the Official Assignee's application was made as a public body exercising powers in the public interest, there was no general principle that public bodies should be protected from litigation costs. The court acknowledged that the presumption about costs following the event could be displaced if the proceeding concerned a matter of public interest, in which case the court had a broad discretion to refuse or reduce costs. The court considered whether the present proceeding involved a matter of public interest and explored various scenarios where public interest was previously found.

The court concluded that the Official Assignee was acting in the public interest in seeking to ensure that New Zealand did not become a safe harbour for assets derived from criminal activity. However, it found this to be an exceptional case where no award of costs was warranted. The court considered that Chen and his company had effectively brought about escalating security expenses and had not sufficiently engaged in efforts to mitigate the situation. The court also noted that Chen had a chance of benefiting from potential increases in property value while avoiding associated holding costs, which undermined the appropriateness of awarding costs. The court decided that awarding costs would overcompensate Chen and be inconsistent with the policy objectives of the relevant legislation.

The court ordered that costs lie where they fall, including in respect of the costs memoranda. This decision reflects the court's exercise of its discretion to consider the public interest aspects of the case and the particular circumstances leading up to the application.

Orders