R v Bujak
[2007] NZCA 347
•15 August 2007
IN THE COURT OF APPEAL OF NEW ZEALAND
CA185/07
[2007] NZCA 347THE QUEEN
v
SLAWOMIR RYSZARD BUJAK
Hearing:1 August 2007
Court:William Young P, Hammond and Robertson JJ
Counsel:G M Illingworth QC for Appellant
M F Laracy and K E Salmond for Crown
Judgment:15 August 2007 at 3 pm
JUDGMENT OF THE COURT
A The appeal is allowed and the proceeding is remitted to the High Court.
BThe orders made in the High Court are varied as follows:
· The order for registration made in the High Court will stand.
· The appellant will have seven days from the date of delivery of this judgment to apply to set that order aside.
· The High Court is to give timetable directions for the hearing of that application, if one is made, but in the circumstances of this case, urgency should be accorded to the setting aside application.
· It will be open to the parties to address whether the particular Polish foreign order is or is not within the definition in the New Zealand Mutual Assistance in Criminal Matters Act 1992. Nothing we have said in this judgment is intended to preclude any other relevant authorities or affidavit material being placed before the High Court.
CIn this Court the appellant will have costs of $6,000 and usual disbursements.
REASONS OF THE COURT
(Given by Hammond J)
Table of Contents
Para No
INTRODUCTION [2]
BACKGROUND [4]
New Zealand’s mutual assistance regime [11]
The issues on the appeal [25]
The due process concerns [26]
A registrable order? [37]
Conclusion [51]Introduction
[1] The broad issue on this appeal is whether a Polish restraining order was properly registered in New Zealand under the Mutual Assistance in Criminal Matters Act 1992 (the Mutual Assistance Act).
[2] Mr Bujak appeals against the following order of the High Court at Wellington, made ex parte after a hearing before Clifford J (CIV-2007-485-522 2 April 2007):
UPON READING the application for an order for registration of a foreign restraining order, and the affidavit of Kate Elizabeth Salmond filed in support, THIS COURT ORDERS THAT the foreign restraining order issued by the Regional Court in Wloszczowa, 2nd Penal Department, Kiecle, Republic of Poland against the respondent on 26 June 2006, be registered in New Zealand.
[3] There is no reasoned decision; the Court Registrar completed the order after the hearing.
Background
[4] The relevant Polish authorities have brought various charges against Mr Bujak for the misappropriation of funds, vehicles, and other property, in relation to a company called BUPOL. According to the Polish District Prosecutor, the most serious offence Mr Bujak faces carries a maximum penalty of 10 years imprisonment. Apparently, he also faces a potential fine of up to 720,000 PLN in punitive damages and 3,877,272.77 PLN in “repair of damages”. The latter appears to refer to compensatory damages for victims.
[5] Articles 291 to 295 of the Polish Code of Penal Procedure authorise the freezing of any property of a person charged with an offence for which a fine, forfeiture, or obligation to pay compensation or punitive damages may be imposed. As we understand the process, an order is proposed by the prosecution and confirmed by a Court and that was the course which was followed in this instance.
[6] The 26 June 2006 order of the Regional Court in Wloszczowa indicates that the Judge ordered enforcement of the prosecution’s decision to secure the fines likely to form part of Mr Bujak’s sentence, and claims for “reparation” damages (the order itself is set out at [40] below).
[7] The Polish prosecution authority has stated that the order “becomes invalid when a fine or obligation to compensate for damages are not decreed with a final judgment”. This cannot occur until the appellant is extradited to the Republic of Poland. Extradition proceedings have been commenced in New Zealand, and are presently the subject of an appeal to this Court.
[8] The Attorney-General of New Zealand received a request from Poland to assist in the registering of a restraining order in respect of property believed to be in New Zealand. Because New Zealand does not have any formal mutual legal assistance arrangement with Poland, the request was received on an “ad hoc” basis.
[9] Section 55 of the Mutual Assistance Act, which we will set out later in this judgment, provides for requests for enforcement of foreign restraining orders. The Attorney-General, in a letter to the Deputy Solicitor-General dated 29 January 2007, expressed his view that the request which had been made to his office related to serious foreign offending, that there was property in New Zealand related to the order, and that there was nothing in the Mutual Assistance Act to preclude the registering of the order. The Solicitor-General put the necessary steps for registration in train.
[10] Six New Zealand bank accounts (which apparently do not have substantial sums in them) and one property in Christchurch (which we were told from the bar is freehold and may have a value in the order of $400,000) have been identified as affected by the registered order. The restraining order has since been served on these banks and Land Information New Zealand.
New Zealand’s mutual assistance regime
[11] In the last few years there has been a proliferation worldwide of conventions, bilateral treaties, and other arrangements providing for co-operation and assistance between states with respect to the investigation and prosecution of suspected criminal offending. Transnational crime has increased, as has the ease with which it can be committed due to continuing advances in technology.
[12] The New Zealand Mutual Assistance Act provides a formal framework and, in respect of some types of assistance, the necessary legal authority for New Zealand to make and act on mutual assistance requests involving foreign states.
[13] The Mutual Assistance Act is not prescriptive. It is largely facilitative. It is designed to accommodate the distinctly varying legal regimes of foreign states, including civil law jurisdictions.
[14] New Zealand can make and receive requests either pursuant to a multilateral convention (such as the United Nations Convention Against Transnational Organised Crime), on the basis of a state’s status as a “prescribed foreign country”, or on an ad hoc basis.
[15] Where a request is made on an ad hoc basis – that is, it does not involve a state with whom New Zealand has a prescription or convention arrangement – it rests largely on an expectation of reciprocity.
[16] The Mutual Assistance Act specifies forms of assistance which may be provided under the Act, but the range of co-operative assistance is not limited to those forms of assistance identified in the Act.
[17] The types of overseas offending most commonly encountered include fraud, drug dealing, money laundering, and “organised crime”. The ability to provide assistance to another state with respect to the proceeds of crime is increasingly seen internationally as a critical form of assistance to be provided. In introducing the Mutual Assistance Act, the then Minister of Justice noted that, “crime has assumed new dimensions in recent decades. People can travel more easily; technology has changed; assets can be transferred and hidden, sometimes in a number of different countries. New initiatives are now needed” ((22 April 1992) 524 NZPD 7854).
[18] In New Zealand the Central Authority for mutual assistance in criminal matters is the Attorney-General.
The statutory framework relevant to this case
[19] Section 55 of the Mutual Assistance Act states:
55 Request for enforcement of foreign restraining order
(1)A foreign country may request the Attorney-General to assist with the enforcement of a foreign restraining order in respect of property that is believed to be located in New Zealand.
(2)Where, on receipt of a request made under subsection (1) of this section, the Attorney-General is satisfied—
(a)That the request relates to a criminal investigation, or criminal proceedings, in respect of a foreign serious offence; and
(b)That there are reasonable grounds for believing that some or all of the property to which the order relates is located in New Zealand,—
the Attorney-General may authorise the Solicitor-General, in writing, to apply to the High Court for the registration of the order.
[20] A “foreign serious offence” in s 55(2) means, relevantly, an offence punishable by a term of five years or more imprisonment (see s 2(1) of the Mutual Assistance Act).
[21] A “foreign restraining order” means, according to s 2(1), an order:
(a) That is made under the law of a foreign country by any court or other judicial authority in respect of—
(i)Property that is or may be tainted property in respect of an offence against the law of that country; or
(ii)Benefits that have been derived, or may have been derived, by a person from the commission of such an offence; and
(b)That restrains a particular person, or all persons, from dealing with property.
[22] Section 56 of the Mutual Assistance Act provides:
56 Method of registration of foreign orders
(1)Where the Solicitor-General applies to the High Court for the registration of a foreign order in accordance with an authorisation given under section 54 or section 55 of this Act, the Court shall, subject to subsections (3) to (5) of this section, if it is satisfied that the order is in force, order that the order be registered.
…
(3)An order, or an amendment of an order, shall be registered in the Court by the registration, in accordance with the prescribed procedure, of—
(a)A copy of the appropriate order or amendment sealed by the Court or other authority making that order or amendment; or
(b)A copy of that order or amendment duly authenticated in accordance with section 63 of this Act.
…
(5)A facsimile copy of a sealed or authenticated copy of an order or an amendment of an order shall be regarded for the purposes of this Act as the same as the sealed or authenticated copy, but registration effected by means of the facsimile copy shall cease to have effect on the expiry of the period of 21 days commencing on the date of registration unless, before the expiry of that period, the sealed or authenticated copy is registered.
[23] Section 57(3) explains the effect of the registration of a foreign restraining order:
57 Effect of registration of foreign orders
…
(3)Subject to section 66B of the Proceeds of Crime Act, a foreign restraining order registered in accordance with section 56 of this Act has effect, and may be enforced, as if it were a restraining order entered on the date of registration.
[24] Section 66B of the Proceeds of Crime Act 1991 in turn provides:
66B Registered Foreign Restraining orders
(1)Where a foreign restraining order is registered in New Zealand in accordance with section 56 of the Mutual Assistance Act, … this Part of this Act (other than sections 47 to 55, 64, 65, and 66), so far as applicable, shall apply in relation to the restraining order with all necessary modifications, and with the following specific modifications, namely,–
(a)A reference in this Part of this Act to a restraining order directing the Official Assignee to take custody and control of property shall be read as a reference to an order under section 66C of this Act:
(b)A reference in this Part of this Act to an order under section 51(1) of this Act shall be read as a reference to an order under section 66E of this Act:
(c)The reference in section 63 of this Act to a restraining order shall be read as a reference to an order under section 66C of this Act.
(2)A foreign restraining order registered in New Zealand under the Mutual Assistance Act ceases to be in force when the registration is cancelled in accordance with that Act.
The issues on the appeal
[25] The first issue on this appeal is a process one: was the Judge correct to proceed by way of an ex parte hearing in this particular instance in such a way that Mr Bujak was never heard as to the making of the order for registration? The second issue concerns a matter of substance: is the Polish foreign restraining order within the definition of a “foreign restraining order” in s 2(1) of the New Zealand statute?
The due process concerns
[26] Mr Illingworth QC submitted that Clifford J was in error in accepting Crown counsel’s argument (apparently made before Clifford J) that the application hearing could proceed without Mr Bujak being heard from at all. He said that in the context of an order having the effect of freezing most of Mr Bujak’s assets, natural justice has not been observed, thereby breaching s 27(1) of the New Zealand Bill of Rights Act 1990 (the Bill of Rights), and the principle of audi alteram partem.
[27] Mr Illingworth submitted that r 256 of the High Court Rules should have been drawn to the Judge’s attention. That rule provides that the court, on receiving an ex parte application, must determine whether the application can properly be dealt with on an ex parte basis.
[28] Further, Mr Illingworth argued that Crown counsel did not certify the proceedings correct (as required by the High Court Rules); that the order amounts to an unreasonable seizure under s 21 of the Bill of Rights; and that it was misleading to state that there was no scope under the Mutual Assistance Act for Mr Bujak to make submissions. Mr Illingworth contrasted the Proceeds of Crime Act, which expressly permits ex parte applications in certain circumstances.
[29] Ms Laracy submitted that s 55 of the Mutual Assistance Act makes no reference to notice. She also drew attention to s 60 of the Act (a request for a restraining order), which includes a duty to notify interested persons of the application (because it incorporates s 40 of the Proceeds of Crimes Act). Section 56, in the Crown’s view, only includes a notice requirement on the registration of foreign forfeiture orders (through incorporation of ss 66B and 46 of the Proceeds of Crimes Act).
[30] Ms Laracy submitted that in the context of international movement of money and assets, the nature of the hearing was appropriate: it was to facilitate a restraining order and thereby prevent the rapid dissipation of assets.
[31] Ms Laracy further submitted that the lack of notice to an affected party in these registration cases is in keeping with what she suggested to be the very limited role of the High Court. That is, the High Court does not “make” the order, but is rather required to give effect to the foreign order. And it is argued that the application was not “ex parte” because the appellant was not a party to the application, and his non-attendance was mandated by the Mutual Assistance Act.
[32] In our view the process adopted in this case by the High Court Judge was inappropriate. The application was made by the Solicitor-General of New Zealand. It expressly named Mr Bujak as the respondent. The application was made under Part 4A of the High Court Rules. Those rules cover a miscellany of situations for which provision is not otherwise made in the High Court Rules.
[33] Such applications are subject to r 256 of the High Court Rules, which provides:
(1)The Court, on receiving an ex parte application, must determine whether the application can properly be dealt with on an ex parte basis.
(2)The Court may determine that an application can properly be dealt with on an ex parte basis only if the Court is satisfied that—
(a)requiring the applicant to proceed on notice would cause undue delay or prejudice to the applicant; or
(b) the application affects only the applicant; or
(c) the application relates to a routine matter; or
(d)an enactment expressly permits the application to be made without serving notice of the application; or
(e)the interests of justice require the application to be determined without serving notice of the application.
[34] The application – which obviously could initially be made ex parte – required the Judge (under r 256) to consider whether it could properly be dealt with on an ex parte basis. There would be an obvious danger in relation to dissipation of assets which might have led the Judge to the view that an order should be made ex parte. But there are procedural devices which can be resorted to by a judge in a situation such as the present to adequately protect the rights of a respondent. The most obvious analogy is with the now familiar Mareva proceedings. The Judge could, for instance, have made an order ex parte, but on the terms that the respondent was to have (say) seven days to apply to have the order set aside, if it had been inappropriately made.
[35] The far-reaching nature of legislation of the character we are presently considering has to be recognised. And as with Mareva injunctions, courts have had to employ common-sense strategies to see that on the one hand the effectiveness of these necessarily intrusive mechanisms is maintained, but that on the other hand the rights of accused persons are not inappropriately infringed.
[36] However the order might have been framed in this instance – and we are of course concerned only with the resolution of this particular case – it was important to ensure that the respondent could come into court and challenge the making of the order. The argument for the Solicitor-General that the only role for the High Court was to ensure that the overseas order was still in force at the time of the making of the registration order was a very long bow. And it left open the possibility – to which we will next turn – that the order made in Poland was, on its terms, not in law registrable in the High Court in New Zealand.
A registrable order?
[37] If the sort of procedure we have suggested above had been followed, it was quite likely that the difficulties rightly raised by Mr Illingworth’s second broad proposition would have at once become apparent.
[38] The difficulty is this. A “foreign restraining order” can only be made in respect of “tainted property” or “benefits” that have arisen from the commission of an offence. “Tainted property” is defined with reference to s 2(1) of the Proceeds of Crimes Act. The central component for the purpose of this case provides:
tainted property,–
(a) in relation to a serious offence, means–
(i)property used to commit, or to facilitate the commission of, the offence; or
(ii)proceeds of the offence … .
[39] Article 291 of the Polish Code of Penal Procedure reads as follows, in the translation which has been provided to us:
Article 291 paragraph 1 In case of perpetration of a offense [sic], for which a fine, forfeiture, payment to the injured or a public cause, or financial performance may be adjudicated, or an obligation to rectify damage or compensate harm may be imposed, securing of execution of the verdict may ex officio be effected on the property of the accused.
§ 2. In case of perpetration of a offense [sic] against property or causing damage to property through an offense [sic], securing of claims for rectification of damage may take place ex officio.
[40] The Polish Regional Court, by its decision, determined to:
I. grant the enforcement clause to the decision by the District Police Prosecutor in Kielce as of 23rd June 2006 (file reference number V Ds. 23/99/S) to secure the fine which suspect Slawomir Bujak is likely to be sentenced to and claims for repairing property damages by:
1)seizure of funds on domestic and foreign bank accounts of Slawomir Bujak;
2) seizure of property rights, shares in domestic and foreign companies;
3)seizure of funds on bank accounts of domestic and foreign companies in which Slawomir Bujak is a shareholder;
4)imposing compulsory mortgage on real estate properties located outside the Republic of Poland owned by Slawomir Bujak.
II. award payment by Slawomir Bujak of a fee of 50 zlotys for granting the enforcement clause.
[41] Mr Illingworth submitted, we think correctly, that on their face the Polish statutory provisions are significantly different from the position under the New Zealand proceeds of crime legislation. They appear to indicate that, under Polish law, where an accused person faces even the possibility of being fined or required to pay damages, the courts have authority to impose a charge on the property of the accused, in advance, to ensure that the accused does not avoid the potential obligations by disposing of property.
[42] As Mr Illingworth said, the crucial distinction is that, under Polish law, at least under this provision, there appears to be no requirement for the prosecution to establish any connection whatsoever between the offences alleged against the accused and the property to be secured by the restraining order.
[43] On this line of argument, a necessary precondition for registration under the Mutual Assistance Act – that the foreign order be a “foreign restraining order” within the terms of s 2(1) – has not been met.
[44] Mr Illingworth submitted that this line of argument had been accepted by the Supreme Court of Victoria in DPP (Cth) v Carlos Cabal Peniche [1999] VSC 288 per Mandie J. That decision was then upheld on appeal by the Court of Appeal of Victoria ([2000] VSCA 40). In that case an application for registration of a Mexican order was held to be not within s 34(4) of the Mutual Assistance in Criminal Matters Act 1987 (Cth) (as that Act then stood) because the foreign order did not fall within the Australian statutory definition. There the Supreme Court Judge had correctly held that the order was one for the seizure of property, not one “restraining a particular person, or all persons, from dealing with property”.
[45] Faced with the obvious force in the argument which Mr Illingworth ran – and the support for that argument garnered from Australian appellate authority – Ms Laracy stoutly attempted to maintain what can be reduced to two arguments.
[46] First, she advanced what in simple terms amounts to an “ouster” argument. That is, she suggested that the determination of the character of the foreign order is entirely a matter for the Attorney-General and that that view is not subject to appeal. The argument is inherently unattractive, and in any event is wrong in principle. What kinds of foreign restraining orders may be registered have been specified by Parliament. The view reached by Parliament is set out in the statutory definition, which must be met.
[47] Significantly, the view reached by the New Zealand Parliament as to the reach of restraining orders bears a real degree of conformity to the New Zealand domestic proceeds of crime legislation. In short, in a general way the New Zealand Parliament elected to give as much assistance in New Zealand to overseas law enforcement authorities as it would to New Zealand authorities, but no more. For it would be a rather odd result if a foreign law enforcement agency could get more by way of pre-conviction relief here than could be had by a New Zealand agency.
[48] The second broad argument run by Ms Laracy was that, properly understood, the relief being sought is within the sort of thing contemplated by the New Zealand definition. This rests, it seems, on enquiries made by Crown counsel of the Polish authorities. These were understandably characterised by Mr Illingworth as “unverified hearsay allegations” as to the scope of the Polish legislation. It also seemed to be suggested that in fact Mr Bujak has assets in New Zealand that can be linked back to what he had done in Poland. But in the absence of proper evidence, these matters cannot be presently resolved.
[49] We consider that, as matters presently stand, the appellant’s submission as to the substance of the application is entirely correct: the Court cannot give effect to an application for an order made by the Attorney-General that is, on its face, outside the statutory definition in New Zealand of a “foreign restraining order”. Whether further clarification can be had is a matter for proper evidence, and Mr Bujak may well wish to contest the Crown view.
Conclusion
[50] The disposition of this application has gone awry, both as a matter of process and because an incorrect view was taken of what had to be established by the Attorney-General.
[51] In the result, the appeal must be allowed. But it is not, we think, a case for presently simply setting aside, in its entirety, the order made in the High Court.
[52] The proceeding will be remitted to the High Court.
[53] The orders made in the High Court are varied as follows:
· The order for registration made in the High Court will stand.
· Mr Bujak will have seven days from the date of delivery of this judgment to apply to set aside the order made in the High Court.
· The High Court is to give timetable directions for the hearing of that application, if one is made, but in the circumstances of this case, urgency should be accorded to the setting aside application.
· As a matter of caution, it will of course be open to the parties to address whether the particular Polish foreign order is or is not within the definition in the New Zealand Mutual Assistance Act, and the High Court will determine that point. Nothing we have said in this judgment is intended to preclude any other relevant authorities or affidavit material being placed before the High Court.
[54] In this Court the appellant will have costs of $6,000 and usual disbursements.
Solicitors:
Cousins & Associates, Christchurch for Appellant
Crown Law Office, Wellington
7