Official Assignee v Keen aka Chen
[2025] NZHC 873
•11 April 2025
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 14.2(1)(b), an award of costs should reflect the complexity and significance of the proceeding. For those purposes, r 14.3 provides for three categories of proceeding (1, 2 or 3).
(c)Rule 14.2(1)(c) provides that costs should generally be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application. The reasonable determination of time is set out in r 14.5 by band (A, B or C).
(d)Rule 14.2(1)(f) provides that an award of costs should not exceed the actual costs incurred by the party.
[7] However, r 14.7(e) of the HCR provides that the court may refuse to make an order for costs or may reduce the costs otherwise payable if:
(e)the proceeding concerned a matter of public interest, and the party opposing costs acted reasonably in the conduct of the proceeding…
[8] The parties disagree on whether the present proceeding concerns a matter of public interest. Counsel have been unable to identify any New Zealand judgments on the issue of costs following the OA’s unsuccessful application for restraining orders or sale orders.4
[9]However, public interest has previously been found to exist where:
(a)A registered charity sought judicial review of advice given to, and consequent decisions made, by the Minister of Climate Change (raising questions of statutory interpretation).5
4 In Australia, see Commissioner of Australian Federal Police v HWCJ GLB Pty Ltd (No 5) [2024] NSWSC 1463.
5 Lawyers for Climate Action NZ Inc v Climate Change Commission [2025] NZCA 80 at [197]−[182].
(b)Local community groups brought proceedings on issues of general importance for the community and the region without intention of personal gain against public decision-makers, such as the local Council6 or the New Zealand Transport Agency.7
(c)A public body intervenor acted in performance of its statutory role and to vindicate rights and obligations imposed by statute.8
(d)A party acted in good faith in supporting comity between closely aligned countries such as Australia and New Zealand, honouring extradition treaties and bringing complaints in each country to trial.9
(e)A matter was novel. For example, a prisoner sought to exercise his right to self-representation and fair trial by requiring access to facilities such as legal research materials but was unable to meet the costs involved.10
[10] Where a matter of public interest was found and r 14.7(e) engaged, a wide range of outcomes from a 10 per cent reduction11 to refusal to make an order for costs12 have been considered appropriate in the circumstances.
[11] In summary, there is no generally applicable principle that public bodies should have a protected status insofar as litigation costs are concerned.13 Rather, the usual presumption about costs following the event still applies but, at the discretion of the
6 Coro Mainstreet (Inc) v Thames-Coromandel District Council [2013] NZHC 1163, [2013]
NZRMA 442 at [30]; aff’d [2013] NZCA 665, [2013] NZRMA 73; and Coro Mainstreet (Inc) v
Thames-Coromandel District Council [2013] NZHC 1527 at [7].
7 Save Kapiti Inc v New Zealand Transport Agency [2013] NZHC 3314 at [19].
8 Hotchin v KA No 4 Trustee Ltd [2014] NZHC 978 at [14].
9 Curtis v Commonwealth of Australia [2019] NZCA 126 at [9].
10 Taylor v District Court at North Shore (No 2) HC Auckland CIV-2009-404-2350, 13 October 2010 at [12].
11 Coro Mainstreet (Inc) v Thames-Coromandel District Council, above n 6, at [10].
12 Hotchin v KA No 4 Trustee Ltd, above n 8, at [33]; Taylor v District Court at North Shore (No 2), above n 10, at [12]; and Save Kapiti Inc v New Zealand Transport Agency, above n 7, at [21].
13 Competition and Markets Authority v Flynn Pharma Ltd [2022] UKSC 14, [2022] 1 WLR 2972
at [97]–[98].
Judge, the presumption can more easily be displaced than usual, on account of the public function.14
Analysis
[12] On behalf of Mr Chen, it was submitted that cases on indulgences are relevant.15 Those indulgence cases have no application to the present facts. The restraining orders were registered in New Zealand because the requirements of ss 54 and 55 of the Mutual Assistance in Criminal Matters Act were satisfied.16 While it is still possible that forfeiture orders may not ultimately be made, this is far from a situation where a neighbour seeks the indulgence of changing someone else’s indefeasible property rights under s 316 of the Property Law Act 2007.17
[13] I accept that the OA is seeking to act in the public interest in his appointed role under the restraining orders. In terms of the statutory framework:
(a)An important policy purpose for giving effect to the United Nations Model Treaty on Mutual Assistance in Criminal Matters is to ensure that New Zealand does not become a safe harbour for assets or financial benefits derived from criminal activity;18 and
(b)Likewise, the aim of the Criminal Proceeds (Recovery) Act 2009 is to “make sure that crime does not pay”,19 as reflected in the purpose in s 3.
[14] The OA has no personal interest in the assets that have been restrained, other than the proper interest of seeking reimbursement for costs and expenses. Once the restraining orders were made in New Zealand, I have already accepted that the OA’s
14 Lagolago v Judicial Conduct Commissioner [2023] NZCA 423, (2023) 26 PRNZ 296 at [21].
15 North Holdings Development Ltd v WGB Investments Ltd [2014] NZHC 1175 at [8].
16 See Commissioner of Police v Keen [2013] NZHC 2259 at [6] and [9]–[12].
17 In any event, the fact that a legal process seeks an indulgence does not necessarily disentitle a party to costs: Lowe v Brankin (2005) 6 NZCPR 607 (CA) at [62]–[63]; and Wentworth v Sayes (1994) 2 NZ ConvC 191,859 (CA) at 60.
18 Yan v Commissioner of Police [2015] NZCA 576, [2015] 2 NZLR 593 at [33]; Marwood v
Commissioner of Police [2016] NZSC 139, [2017] 1 NZLR 260 at [12]; and Hayward v
Commissioner of Police [2014] NZCA 625 at [29].19 Commissioner of Police v Harrison [2021] NZCA 540, [2022] 2 NZLR 339 at [7], cited in
McFarland v Commissioner of Police [2024] NZCA 16 at [9].
duties in managing the Property extended beyond merely seeking to preserve the value of improvements, because of public interest considerations of addressing criminal activity on the Property.
[15] In my view, this is an exceptional case where no award of costs is warranted (that is, costs should lie where they fall). I consider such a result appropriate, both to reflect the public interest considerations under r 14.7(e), and in exercise of the more general discretion as to costs under rr 14.1(1) and 14.7(g), taking into account the particular facts in this case:
(a)The first defendant and his company have effectively brought about the circumstances of escalating security expenses over the interim period (until either forfeiture orders are made or the restraining order is discharged). Mr Chen abandoned the Property, and he and his company have not sufficiently engaged in efforts to mitigate the situation, such as by tenanting it.
(b)To the extent that the legal owner of the Property and that company’s director/shareholder have been put to the cost of reviewing the evidence in this proceeding, it is appropriate that they were appraised of those facts anyway.
(c)Intentionally or through neglect, Mr Chen and his company have sought to take advantage of interim expenses being met by the OA as a current burden to New Zealand taxpayers.
(d)While the property remains unsold, he has a chance of benefiting from increases in value, but meanwhile he is seeking to avoid the associated holding costs. The free riding nature of the position taken by Mr Chen and his company undermines the appropriateness of awarding costs by way of compensation. In other words, Mr Chen is deriving a private benefit over the interim period of not incurring ongoing expenses or responsibilities that would be usual for a landowner. Those benefits far exceed his legal costs incurred in respect of this application.
(e)I accept it was reasonable for the OA to test whether a sale order was appropriate in the circumstances. While that application did not succeed, awarding scale costs (even at a reduced rate) would overcompensate the first defendant for the interim position, which would be inconsistent with the policy objectives in [13] above.
(f)In addition, a substantial part of the hearing concerned the notional cap arguments, on which Mr Chen was unsuccessful.
Result
[16] I order that costs lie where they fall, including in respect of the costs memoranda.
O’Gorman J
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