Official Assignee v Keen aka Chen - [2025] NZHC 539

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2013-404-1779

[2025] NZHC 539

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

BETWEEN

OFFICIAL ASSIGNEE

Applicant

AND

CHEN KEEN also known as JACK CHEN First Defendant

MAY HAO also known as MAY WANG Second Respondent

YE FANG

Third Respondent

continued overleaf

Hearing: 11 February 2025

Appearances:

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 Limited

Judgment:

17 March 2025

JUDGMENT OF O’GORMAN J

This judgment was delivered by me on 17 March 2025 at 4 pm 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 539 [17 March 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

Introduction

[1] The Official Assignee (OA) applies for a sale order under the Criminal Proceeds (Recovery) Act 2009 (Act) to sell a property in Lammermoor Drive, St Heliers, Auckland (Property).1 The Property is currently restrained pursuant to foreign restraining orders, first registered in New Zealand in 2013, and since extended. In accordance with those orders, the Property has been and remains in the OA’s custody and control.

[2] Anfatex Global Financial Investment Holdings Ltd (Anfatex) took title to the Property in February 2010 and has owned it ever since. The first respondent, Mr Chen, is that company’s sole director and shareholder.

[3] By order of the Court, the OA is responsible for meeting the rates for the Property from the restrained estate. In addition, the OA has incurred costs of $379,916 on maintenance, including security and other costs of the Property while it is under the OA’s custody and control. Those costs escalated after the Property was left permanently abandoned in January 2017. Since then, the Property has been broken into multiple times, and the state of the building has deteriorated, thereby detrimentally impacting overall value.

[4] The OA applies for the sale orders on the grounds that selling the Property will best preserve its value in the form of proceeds of sale, and this will enable the OA to stop incurring ongoing expenses on the Property. Such a sale would also mitigate the risk that those future expenses will not be reimbursed.

[5] The ultimate issue for the Court is whether a sale of the Property is “appropriate” in terms of s 34(1) of the Act.

1 The Official Assignee also applied…

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 539
Decision Date: 17 March 2025

CaseChat Overview and Summary

The Official Assignee sought a sale order for a property in Lammermoor Drive, St Heliers, Auckland under the Criminal Proceeds (Recovery) Act 2009. The property has been under restraint since 2013, and is currently in the custody and control of the Official Assignee. The primary issue before the court was whether a sale order was appropriate under section 34 of the Act. The Official Assignee argued that the sale of the property would best preserve its value and mitigate the risk of unrecoverable expenses incurred by maintaining the property. The first respondent, Mr Chen, opposed the application, contending that the purpose of the restraining order was to preserve the value of the property at the time the order was granted, and not to account for any future appreciation in value. The court considered the factors outlined in Commissioner of Police v Parker, including the nature and value of the asset, the length of time before the substantive proceedings will be determined, the extent to which the asset may depreciate during that period, and the wishes of the owner of the assets and/or those who may have an interest in them. The court rejected the notion that there was a notional cap on the restraining order over the property to a value of $6,970,000. The court also noted that the purpose of the restraining order was to preserve the value of the property in its existing form, with the ability to make further orders under sections 34 and 35 in appropriate circumstances. The court found that a sale order was not appropriate in the current circumstances, given the short duration before the outcome of the current appeal in Hong Kong will be known, and the likelihood that the Official Assignee will be entitled to recover holding costs if forfeiture orders are later made. The court declined the Official Assignee's application for a sale order.

Orders