Rodriguez v Commissioner of Police
[2020] NZCA 589
•26 November 2020
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA680/2019 [2020] NZCA 589 |
| BETWEEN | ANDREINA GAMEZ RODRIGUEZ |
| AND | COMMISSIONER OF POLICE |
| CA35/2020 | ||
| BETWEEN | MAP AND ASSOCIATES TRUSTEE COMPANY LIMITED | |
| AND | COMMISSIONER OF POLICE | |
| Hearing: | 1 October 2020 |
Court: | Brown, Venning and Katz JJ |
Counsel: | R A Kirkness for Appellant in CA680/2019 and Second Respondent in CA35/2020 |
Judgment: | 26 November 2020 at 11.00 am |
JUDGMENT OF THE COURT
A The appeal in CA680/2019 is dismissed.
B The appeal in CA35/2020 is dismissed.
CThe appellants must pay one set of costs to the first respondent for a standard appeal on a band A basis and usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Brown J)
Introduction
On 27 March 2019 USD 11,850,000 was transferred into a Bank of New Zealand (BNZ) account registered to MAP and Associates Trustee Company Ltd (the Trustee company) for the benefit of Ms Rodriguez. The Commissioner of Police (the Commissioner) claimed that the funds were derived from the dishonest conduct of Mr De Leon, the husband of Ms Rodriguez, and that she transferred the funds to New Zealand for the purpose of concealing or disguising their source.
On the Commissioner’s application Moore J made a domestic restraining order under s 25 of the Criminal Proceeds (Recovery) Act 2009 (the Act) that the funds attributable to Ms Rodriguez in the Trustee company’s BNZ account were not to be disposed of or dealt with but were to be in the Official Assignee’s custody and control.[1]
[1]Commissioner of Police v Rodriguez [2019] NZHC 3265 [High Court judgment].
Ms Rodriguez (in CA680/2019) and the Trustee company (in CA35/2020) appeal from that judgment.
The agreed issues on appeal are:
(a)whether, in the circumstances of this case, the Commissioner was entitled to seek a domestic restraining order rather than an interim foreign restraining order;
(b)whether, on the basis of the evidence in the record, there were reasonable grounds for a Court to believe that Ms Rodriguez has engaged in significant criminal activity for the purposes of the Act (specifically money laundering); and
(c)if such grounds exist, whether the Commissioner could establish Ms Rodriguez derived a benefit for the purposes of the Act.
Statutory framework
The Act provides for the restraint and forfeiture of property derived as a result of significant criminal activity without the need of a conviction.[2] Significant criminal activity is defined in s 6:
[2]Section 4(1)(a).
6 Meaning of significant criminal activity
(1) In this Act, unless the context otherwise requires, significant criminal activity means an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending—
(a) that consists of, or includes, 1 or more offences punishable by a maximum term of imprisonment of 5 years or more; or
(b) from which property, proceeds, or benefits of a value of $30,000 or more have, directly or indirectly, been acquired or derived.
(2) A person is undertaking an activity of the kind described in subsection (1) whether or not—
(a) the person has been charged with or convicted of an offence in connection with the activity; or
(b) the person has been acquitted of an offence in connection with the activity; or
(c) the person’s conviction for an offence in connection with the activity has been quashed or set aside.
(3) Any expenses or outgoings used in connection with an activity of the kind described in subsection (1) must be disregarded for the purposes of calculating the value of any property, proceeds, or benefits under subsection (1)(b).
The Act provides for domestic restraining orders in sub-pt 2 of pt 2. The Commissioner may apply for a restraining order under s 25 which provides:
25 Making restraining order relating to all or part of respondent’s property
(1) A court hearing an application for a restraining order relating to all or part of a respondent’s property may, if the court is satisfied it has reasonable grounds to believe that the respondent has unlawfully benefited from significant criminal activity, make an order that the property it specifies in the order restrained property—
(a) is not to be disposed of, or dealt with, other than is provided for in the restraining order; and
(b) is to be under the Official Assignee’s custody and control.
…
A person will have unlawfully benefited from significant criminal activity if the person has knowingly, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person understood or was involved in the significant criminal activity).[3]
[3]Section 7.
The Act also makes provision in sub-pt 8 of pt 2 for interim foreign restraining orders. The Commissioner may apply for an interim foreign restraining order if authorised by the Attorney-General under s 60 of the Mutual Assistance in Criminal Matters Act 1992 (Mutual Assistance Act).[4] Section 25 applies to such an application, save that the reference to significant criminal activity must be read as a reference to significant foreign criminal activity.[5]
Factual background
[4]Section 128(1).
[5]Section 128(3)(b)(i). The definition of “significant foreign criminal activity” in s 2(1) of the Mutual Assistance in Criminal Matters Act 1992 applies.
Mr De Leon is a dual citizen of Venezuela and the United States. He faced charges in the United States arising out of his actions as an attorney for a subsidiary of a Venezuelan state‑owned and state-controlled oil company. It is said that he pleaded guilty to the charges on 16 July 2018 under a plea agreement which is sealed. The following information is sourced from the High Court judgment:[6]
[15] It is alleged [by the United States Department of Homeland Security (Homeland Security)] that between 2011 and 2013 Mr De’Leon and others received approximately US$119,000,000 in bribes. The amount of US$16,100,000 went to Mr De’Leon.
[16] The allegation is that he and his associates established a number of Swiss bank accounts into which the bribes were paid. The money was then funnelled into other accounts and disguised in an attempt to legitimise their receipt. This involved various complex financial transactions. Payments were sent to companies, intermediaries, relatives, friends, creditors and close associates.
[17] As a result of investigations into Mr De’Leon’s offending, Homeland Security successfully froze US$17,000,000 in an account held by Credit Suisse and registered to Magnolia Products Limited (“the Magnolia account”). Ms Rodriguez is the sole beneficial owner of the Magnolia account.
…
[19] Mr De’Leon was arrested in Madrid on 26 October 2017. He was extradited to the United States.
[20] Ms Rodriguez established the Lombard Porfolio sometime in 2015, approximately two years after Mr De’Leon’s offending. In early 2019 she contacted the Trustee Company with a view to transferring the Lombard Porfolio to a different jurisdiction. After some correspondence, the Lombard Porfolio was realised. On 29 March 2019 the funds so released were transferred to the Trustee Company’s BNZ account. …
[6]High Court judgment, above n 1.
On receipt of the funds the BNZ made inquiries of the Trustee company in compliance with its obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. Details of the communications between the BNZ and the Trustee company are traversed in the context of our consideration of the second issue.
Although the Commissioner does not suggest that the funds held in the Magnolia account were transferred to the BNZ account, he contends that the receipt of those funds provides a strong basis to infer that Ms Rodriguez received other proceeds from Mr De Leon’s criminal activity.
High Court judgment
After reciting the factual background, addressing the legal principles and recording the submissions for the Commissioner, Ms Rodriguez and the Trustee company, the Judge turned to address the three matters which comprise the agreed issues on appeal.
The Judge observed that the Commissioner could have applied for a foreign restraining order rather than a domestic restraining order, noting that there was nothing in the Act which compelled him to do so as the language of s 132 was permissive. The Judge viewed as irrelevant the fact that the significant criminal activity in question might have a foreign aspect to it, noting that s 25 does not exclude property originating from overseas.[7]
[7]High Court judgment, above n 1, at [48]–[50].
Referring to the decision in Commissioner of Police v Gong[8] where a domestic restraining order was made in respect of assets purchased with funds dishonestly obtained abroad, the Judge considered that that approach reflected the reality of the statutory scheme. He viewed Ms Rodriguez’s argument as an attempt to read in an unjustified restriction.[9]
[8]Commissioner of Police v Gong [2017] NZHC 603.
[9]High Court judgment, above n 1, at [53].
The Judge considered that there were reasonable grounds to believe that the money transferred to the Trustee company was the proceeds of criminal activity carried out by Mr De Leon. The central role Ms Rodriguez played in the transfer of the money to the Trustee company, her close relationship with her husband and his well-publicised legal troubles served to satisfy the Judge that she must have been at least reckless to, if not entirely cognisant of, the possibility that the funds she transferred were the proceeds of unlawful activity.[10] The Judge further noted Ms Rodriguez’s initial patently false representations as to how she came by the money and the absence of any plausible explanation as to its origin once confronted with evidence contradicting her misrepresentation.[11]
[10]At [56].
[11]At [55(a)–(b)].
On the issue of benefit to Ms Rodriguez the Judge found the reasoning of Toogood J in Solicitor-General v Beckham compelling:[12]
When an offender launders the proceeds of his or her crime, he or she receives a benefit through the concealment of the source of the proceeds in order to make it seem that those proceeds were derived from a legitimate source. Such a benefit accrues each time that money is laundered, even if the same sum is processed a number of times. That benefit can be quantified as the value of the proceeds laundered at each stage; the laundering enables the offender to use those proceeds freely without arousing suspicion, which would not otherwise have been possible.
[12]At [59]–[60], quoting Solicitor-General v Beckham [2015] NZHC 2816 at [61].
The Judge considered that the benefit to be gained by money laundering was obvious even if no material increase in wealth occurred.[13] He considered that the Trustee company’s concerns about the harshness of the approach adopted by Toogood J as to the quantification of benefit when the same money is laundered a number of times was inapt for two reasons:[14]
(a)first the money was laundered but once and there was therefore no need to multiply the benefit accrued by doing so; and
(b)secondly, on an application for restraint rather than forfeiture it is unnecessary to calculate to a nicety the value of the benefit gained from the unlawful activity.
Was the Commissioner entitled to seek a domestic restraining order rather than an interim foreign restraining order?
[13]At [60].
[14]At [61].
This ground pursued by both appellants raises two distinct challenges to the judgment:
(a)the suggestion that the Commissioner could have applied for a foreign restraining order in this case; and
(b)the propriety of entertaining an application for a domestic restraining order in relation to what on allegedly the correct analysis is significant foreign criminal activity.
In order to apply for registration of a foreign restraining order, the Commissioner must be authorised to do so by the Attorney-General.[15] The Attorney‑General can only provide authorisation if a request has been made from a foreign jurisdiction to assist in enforcing a foreign restraining order.[16] In this case no such order had been granted abroad and no request for assistance had been made. Consequently Ms Guthrie for the Commissioner properly accepted that the Judge’s suggestion that the Commissioner could have applied for a foreign restraining order in this case was an error.
[15]Criminal Proceeds (Recovery) Act 2009, s 132.
[16]Mutual Assistance in Criminal Matters Act , s 54.
The second challenge was to the conclusion that the definition of significant criminal activity does not specify that the activity must take place wholly within New Zealand, together with the Judge’s observation that there is no suggestion that significant foreign activity and significant criminal activity are mutually exclusive.
Mr Cornegé on behalf of the Trustee company submitted that sub-pt 8 of the Act must be read together with the Mutual Assistance Act, the scheme of which was said to make plain that, where assets in New Zealand were generated by significant foreign criminal activity, those assets should not be available for forfeiture in New Zealand. The proper course in this case, in Mr Cornegé’s submission, was for the Commissioner to bring the existence of the relevant funds in the BNZ account to the attention of the United States Federal authorities. If those authorities had an interest in preserving the funds pending a possible forfeiture application, then a request could have been made to the Attorney‑General to obtain an interim foreign restraining order under s 60 of the Mutual Assistance Act.
Mr Kirkness for Ms Rodriguez submitted that the Commissioner’s application subverted the distinction between serious criminal activity and serious foreign criminal activity. It was the fact of the Commissioner’s inability to make an application in respect of the latter which was said to have prompted the allegation Ms Rodriguez had engaged in a money laundering transaction under s 243 of the Crimes Act 1961. He contended that any attempt by the Commissioner to rely on the offence of money laundering to seek orders in respect of significant criminal activity should be rejected if on the evidence the Court determines that the application is in substance an attempt to obtain orders in respect of significant foreign criminal activity.
Translating the proposition to the present case Mr Kirkness submitted that money laundering transactions by definition involved the proceeds of offending. The predicate offending of the particular alleged money laundering transaction in this case is Mr De Leon’s offending in a foreign jurisdiction, reflected in the fact that the focus of the Commissioner’s investigation had at all times been the proceeds of that offending, not the alleged money laundering transaction by Ms Rodriguez.
A person engages in a money laundering transaction if, in concealing any property or by enabling any person to conceal any property, that person deals with the property or assists any other person to do so.[17] It is an offence to engage in a money laundering transaction in respect of property if the person knows or believes that all or part of the property is the proceeds of an offence or is reckless as to whether or not the property is the proceeds of an offence.[18] It is also an offence for a person to have in his or her possession any property (being property that is the proceeds of an offence committed by another person) with intent to engage in a money laundering transaction in respect of the property either knowing or believing that all or part of the property is the proceeds of an offence or being reckless as to that fact.[19] A relevant offence is one punishable under New Zealand law and includes any act, wherever committed, that would be an offence in New Zealand if committed in New Zealand.[20] Property means real or personal property of any description, whether situated in New Zealand or elsewhere.
[17]Crimes Act 1961, s 243(4).
[18]Section 243(2). The maximum penalty is imprisonment for a term not exceeding seven years.
[19]Section 243(3). The maximum penalty is imprisonment for a term not exceeding five years.
[20]Section 243(1).
Mr Cornegé acknowledged that in most cases where assets generated by significant foreign criminal activity are brought into New Zealand there is likely to be an arguable case that the owner of those funds has committed money laundering in New Zealand. He then advanced the proposition that it would be in conflict with a regime that seeks to preserve those funds for the benefit of a foreign country if the Commissioner could seek to forfeit them in New Zealand and rely on money laundering for that purpose. For the following reasons we do not agree.
Ms Guthrie made the point that money laundering can involve the commission of an offence in multiple jurisdictions and that the courts have regularly recognised the Act must respond in situations involving multi-jurisdictional crime.[21] We agree with her submission that the purpose of deterrence must include deterring foreign criminals from using New Zealand as a haven to deposit the proceeds of crime, regardless of whether there has been a request to act by a foreign state.
[21]Commissioner of Police v Vincent [2012] NZHC 2581 at [29]; and Yan v Commissioner of Police [2015] NZCA 576, [2016] 2 NZLR 593 at [33].
It cannot be the case that unless there is a request by a foreign country the Commissioner is powerless to act where there is a foreign element to alleged significant criminal activity. Such would amount to granting a licence to launder money into New Zealand from any country unlikely or unwilling to make a request to restrain. We do not accept Mr Cornegé’s proposition that such a course would create potentially significant conflict of law issues on account of parallel applications by the Commissioner and a foreign state.
As Ms Guthrie noted the purposes of the criminal proceeds regime is described in strong terms as being to “eliminate the chance for persons to profit from undertaking or being associated with significant criminal activity” and to “deter significant criminal activity”.[22] She also drew attention to the Supreme Court’s observations in Marwood v Commissioner of Police that the language in s 3(2)(a) is “aspirational” and gives a clear and emphatic signal as to the legislative purpose.[23]
[22]Criminal Proceeds (Recovery) Act, s 3(2)(a) and (b).
[23]Marwood v Commissioner of Police [2016] NZSC 139, [2017] 1 NZLR 260 at [12]. Similarly see Hayward v Commissioner of Police [2014] NZCA 625 at [29(c)].
We therefore agree that where money laundering is alleged in respect of funds located in New Zealand the Commissioner is at liberty to apply for a domestic restraining order under s 25 irrespective of where the so-called predicate offending may have occurred. Like the Judge we consider that the appellants’ argument attempts to read in a restriction which the statute does not impose.
Were there reasonable grounds to believe that Ms Rodriguez had engaged in significant criminal activity?
This issue was advanced by Ms Rodriguez alone.[24]
[24]While not conceding the point the Trustee company advanced its argument on the assumption that the Commissioner could establish there were reasonable grounds to believe that Ms Rodriguez had committed money laundering.
It was the Commissioner’s contention that there were reasonable grounds to believe that Ms Rodriguez had been involved in significant criminal activity in the form of money laundering on the basis of the following collective factors:
(a)The relationship between Mr De’Leon and Ms Rodriguez;
(b)The features of the criminal activity undertaken by Mr De’Leon and his co-conspirators, including the use of bank accounts associated with third parties such as family members;
(c)The Swiss bank source of the funds transferred to New Zealand and the use by Mr De Leon of Swiss banking facilities in the conduct of his offending;
(d)The receipt by Ms Rodriguez of funds associated with that offending into a Swiss bank account operated by her previously;
(e)The timing of the establishment of the Swiss bank account post Mr De’Leon’s offending;
(f)The false representations made to the BNZ;
(g)The lack of any reliable information as to the source of the funds ultimately transferred to New Zealand; and
(h)The failure of Ms Rodriguez to provide any sworn evidence as to the source of the funds or the reason why the funds were transferred to New Zealand.
Mr Kirkness submitted that the evidence fell short of demonstrating reasonable grounds for belief, emphasising that mere suspicion short of belief will not suffice. He placed reliance on the analysis of the phrase by this Court in R v Williams[25] in the context of search warrant applications under the former s 198 of the Summary Proceedings Act 1957:
[213] Having “reasonable grounds to believe”, the test under s 198 of the Summary Proceedings Act, is a higher standard to meet than “reasonable ground to suspect”, the test under s 60(1) of the Arms Act … Belief means that there has to be an objective and credible basis for thinking that a search will turn up item(s) named in the warrant … while suspicion means thinking that it is likely that a situation exists. The issuing officer must hold the view that the state of affairs the applicant officer is suggesting actually exists …
[25]R v Williams [2007] NZCA 52, [2007] 3 NZLR 207.
Mr Kirkness undertook a close analysis of the factors on which the Judge relied in concluding he was satisfied on reasonable grounds that Ms Rodriguez had committed the offence of money laundering.[26] In particular Mr Kirkness submitted:
(a)The fact that Ms Rodriguez and her husband maintain a close relationship does not provide grounds for belief that the money transferred to the Trustee company was the proceeds of Mr De Leon’s offending;
(b)Ms Rodriguez has never been charged with an offence in relation to her role as a beneficial owner of the Credit Suisse account in the name of Magnolia Products Ltd to which it is said that the bribe payments to Mr De Leon were channelled;
(c)There is no evidence of any offending by Mr De Leon other than the bribe payments he received contrary to the suggestion in the judgment that he remains under a cloud of suspicion.
(d)The Magnolia account was at a different Swiss bank (Credit Suisse) from the account at Lombard Odier & CIE (Bahamas) Ltd from which the restrained funds at issue were transferred.
(e)The basis for the characterisation of the transferred funds as “vast” is unclear and it is unexplained why the fact that a large amount of money was transferred should make it more likely that the funds were obtained through criminal activity.
(f)The judgment ignores the documentary evidence in making the assertion that Ms Rodriguez made “patently false representations as to how she came by the money”.
[26]High Court judgment, above n 1, at [55]; and see [15] above.
Had the Commissioner’s case been based solely on factors (a) to (e) at [31] above then Mr Kirkness’s argument that the case was one of mere suspicion may have had some traction. However the course of communications between the BNZ and those representing Ms Rodriguez advanced the case well beyond suspicion.
On receipt of the funds on 27 March 2019 the payment was held by the BNZ Sanctions and Compliance section because additional information was required “[d]ue to the large amount”. Information was sought from the remitting bank. On 3 April an email was forwarded to the Trustee company recording that BNZ had been unable to clarify the source of the funds in the telegraphic transfer and outlining information required to comply with the statutory requirements.
Mr Fine of the Trustee company replied on 3 April advising that Ms Rodriguez was a new client for whom the Trustee company was setting up a new investment structure. He advised that she was a Venezuelan national and an internationally recognised architect. The source of the transferred funds was described as a managed investment portfolio at the Lombard Odier bank which had been liquidated to enable the funds to be transferred to New Zealand for investment purposes. Mr Fine advised he would send a copy of the realisation report which would match with the funds transferred.
However that portfolio report did not provide the explanation for the source of funds which the BNZ required and it pressed for that information. The further information sought included website links to architectural work that Ms Rodriguez had completed and the name of the company she worked for.
In his reply of 16 April 2019 providing website information Mr Fine said:
As previously advised [Ms Rodriguez] currently lives in Spain, but intends to move to the US later this year. At that point she will become subject to FATCA, which we are preparing for.
She has assets in Spain which include an Apartment in Madrid and investment property also in Madrid and a residential housing development in Barcelona.
Her significant wealth was earned while she has been married.
Mr Fine stated that he was satisfied that the source of the funds was as advised and, given that the funds had been invested in portfolio accounts for a number of years in various reputable banking organisations in Ms Rodriguez’s own name, the risk profile was minimal.
On 3 May 2019 BNZ asked further questions. Noting the advice that Ms Rodriguez’s significant wealth had been earned while she had been married, it sought the name and date of birth of her husband and a marriage certificate.
Mr Fine’s response the same day included the following statement:
Another point I need to clarify is a mistake in my email which I sent with the information. I said her wealth was largely earned while she was married, I meant to say “not” while she was married. She has been married for 10 years but separated from her husband for the last 3 years of that time. So in fact the funds on deposit were earned before she was married. Her husband lives in the US and she has sole custody of her children in Spain.
On 23 May 2019 Mr Fine sent to BNZ a copy of the requested marriage certificate stating:
As I have already covered off with you, he (the husband) is not my client I have no reason to believe the funds that I have been sent are other than my clients own funds held in her name.
Husband and wife are separated and I am advised that there is no possibility of reconciliation. However his status as a US citizen may still be relevant to her citizenship application.
There is an issue with the husband in the US which, I understand has now been settled.
I have followed this up and received confirmation from lawyers acting for him that none of this has any impact on the wife and that she is not subject to any investigation in relation to these matters.
If she was then I believe the funds which we received, transferred in her own name, would have triggered some reaction.
However an affidavit filed by the Commissioner of a police investigator in the Asset Recovery Unit suggested among other things that Ms Rodriguez had misled the Trustee company as to her living status, her marital status and her place of residence. The information annexed to that affidavit, much of which was sourced from Homeland Security, indicated that:
(a)Mr De Leon’s arrest in Madrid was at an address where he and Ms Rodriguez were living together.
(b)Ms Rodriguez flew to the United States on 9 March 2018 which coincided with Mr De Leon’s extradition the same day.
(c)Ms Rodriguez lives at an address in Houston, Texas with Mr De Leon and their two children. It was at that address that Ms Rodriguez was served with the ex parte restraining order in this proceeding.
That information contradicts the advice provided by the Trustee company to the BNZ.
Ms Rodriguez has not filed any evidence herself which provides an explanation for the contradictions. In such circumstances where a party who is likely to have direct knowledge of matters of significance and elects to remain silent it is legitimate for a court to draw inferences that the evidence of the silent party would not be helpful to that party.[27] The Judge was justified in taking into account that, in the face of evidence contradicting the representations made to the BNZ on her behalf, Ms Rodriguez had offered no plausible explanation.
[27]See Ithaca (Custodians) Ltd v Perry Corporation [2004] 1 NZLR 731 (CA) at [153]–[154].
We conclude that there was no error in the Judge’s conclusion that he was satisfied that there were reasonable grounds to believe that Ms Rodriguez had engaged in money laundering.
Could the Commissioner establish that Ms Rodriguez derived a benefit for the purposes of the Act?
Both appellants presented detailed submissions on this issue. Echoing his argument on the first issue, Mr Kirkness submitted that, before a court can be satisfied that the statutory requirements for granting a restraining order had been made out, the court must necessarily identify both the proceeds (that is, the subject of an order) and the predicate offending from which those proceeds are said to be derived. He argued that the judgment failed to identify any proceeds or property derived from the money laundering transaction allegedly engaged in by Ms Rodriguez. Rather the Commissioner’s claim is premised on the fact that the “proceeds” in respect of which the order was sought were the same funds that were transferred into a New Zealand bank account which the Commissioner alleges is said to give rise to the money laundering transaction. In those circumstances Mr Kirkness contended that the statutory requirements were not established.
Mr Cornegé focused on the alleged benefit identified in the judgment:[28]
[37] As for the benefit to Ms Rodriguez, the Commissioner says this is obvious. Ms Rodriguez has had use of the funds held in the Lombard Portfolio. She subsequently transferred them to New Zealand in an effort to continue their availability.
[28]High Court judgment, above n 1.
As to that Mr Cornegé submitted:
3.3Neither … is a benefit derived by Ms Rodriguez from money laundering allegedly committed in New Zealand:
3.3.1as to the first, this is a benefit derived from Mr De Leon’s significant foreign criminal activity. It predates any alleged offending in New Zealand. This demonstrates the artificiality of the approach adopted by the Commissioner; and
3.3.2the second is not a benefit at all. The funds were available to Ms Rodriguez before their transfer to New Zealand. She is not in a materially better position in that respect simply because the funds are in a different jurisdiction. In fact, because of the BNZ’s refusal to release the funds and their subsequent restraint, she is arguably much worse off.
(Footnote omitted.)
So far as the latter point is concerned, we agree with Ms Guthrie that the issue of whether a person the subject of an application has derived an unlawful benefit should be assessed without reference to the fact of a restraining order having been made. She submitted that prior to the intervention of the BNZ and the Commissioner, Ms Rodriguez had clearly benefited, directly or indirectly, as a result of her money laundering by way of having the funds available to her in a new jurisdiction.
We agree that the words “directly or indirectly” which precede the phrase “derived a benefit” in the definition in s 7[29] are indicative of the need to take a broad and robust approach and one which furthers the statutory purpose when interpreting the phrase. As Cooke P recognised in R v Pedersen in the context of the former Proceeds of Crime Act 1991, the wide and residual meaning of “benefit” has long been recognised in the common law and in ordinary usage.[30] The Judge referred both to that dictum and to the reasoning of Toogood J in Beckham[31] in concluding that the benefit to be gained by money laundering is obvious even if no material increase in wealth occurs. We agree with that approach, meaning that the availability of funds without any increase could be classified as a benefit.
[29]At [7] above.
[30]R v Pedersen [1995] 2 NZLR 386 (CA) at 390.
[31]Solicitor-General v Beckham, above n 11, at [61].See [16] above.
We also endorse the observation of the Judge that it is unnecessary at this point, with an application for restraint rather than forfeiture, to calculate to a nicety the value of the benefit gained from the unlawful activity.[32] As this Court observed in Vincent v Commissioner of Police restraining orders are effectively interim orders of limited duration.[33] They are issued on the basis of reasonable grounds to believe rather than proof that the target has unlawfully benefitted from significant commercial activity.[34] The various arguments which the appellants advance can be considered in depth in due course on the determination of the application for a civil forfeiture order.
Result
[32]High Court judgment, above n 1, at [61(b)].
[33]Vincent v Commissioner of Police [2013] NZCA 412 at [45(a)].
[34]At [47].
The appeal in CA680/2019 is dismissed.
The appeal in CA35/2020 is dismissed.
The appellants must pay one set of costs to the first respondent for a standard appeal on band A basis and usual disbursements.
Solicitors:
Tompkins Wake, Hamilton for Appellant in CA680/2019
Martin Fine Business Law, Hamilton for Appellant in CA35/2020
Crown Solicitor, Hamilton for Respondent
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