COMMISSIONER OF NEW ZEALAND POLICE v RAE [2021] NZHC 2766

COMMISSIONER OF NEW ZEALAND POLICE v RAE [2021] NZHC 2766 [15 October 2021]ORDER PROHIBITING PUBLICATION OF NAMES, ADDRESSES ORIDENTIFYING PARTICULARS OF SECOND AND THIRD INTERESTEDPARTIES AND PERSONS CONNECTED WITH THEM.IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2020-485-43[2021] NZHC 2766UNDER the Criminal Proceeds (Recovery) Act 2009IN THE MATTER OF an application under s 28BETWEEN COMMISSIONER OF NEW ZEALANDPOLICEApplicantAND DAVID CHARLES RAERespondentSARAH LOUISE RAEFirst Interested PartyS LTDSecond Interested PartyR LPThird Interested PartyAVA CONSULTING LTDFourth Interested PartyHearing: 4-5 October 2021Counsel: A Britton and S McCusker for ApplicantY Mortimer-Wang and R Langdana for RespondentJudgment: 15 October 2021JUDGMENT OF CHURCHMAN JTABLE OF CONTENTSFactual background [3]Position of the parties on s 28 application [16]Mr Rae [16]The Commissioner of Police [23]Relevant law and analysis [30]Evidence [38]Standard of proof [43]Alleged deliberate delays by Commissioner [75]Effective control [87]Woodlands Grove [96]Availability of other unrestrained assets [114]The Australian and Hong Kong bank accounts [122]Payments sought [134]The house at 1 Roshaw [135]Motor vehicle [145]Backdating [146]Purpose for which s 28 payments are sought [151]Business expenses [155]Other claimed debts [168]True Matrix Ltd invoices [177]R Ltd invoices [183]Outcome [190][1] Mr Rae is the respondent in substantive restraint and forfeiture proceedingsbrought by the Commissioner of Police under the Criminal Proceeds (Recovery) Act2009 (CPRA). The total value of the restrained funds is around NZ$10.074 million.[2] By an application filed on 2 February 2021, Mr Rae applies for a variation ofthe restraining order and release of funds under ss 28 and 35 of the CPRA. In short,he seeks the release of:(a) living costs plus expenses claimed to have been incurred in good faith,totalling around $529,000 (5.25 per cent of the restrained funds); and(b) an ongoing $8,955 per month to pay his monthly living costs in Preston,England.Factual background[3] The factual background to this proceeding is convoluted and it is necessary toset it out in some detail.[4] The Commissioner alleges that Mr Rae has used entities to launder inNew Zealand money obtained through fraudulent schemes in the Unites States.1 TheCommissioner asserts that the money held in New Zealand bank accounts controlledby Mr Rae are the proceeds of those frauds and is therefore tainted property.[5] In the United States District Court on 19 December 2019, Mr Rae pleadedguilty to one count of conspiracy to commit international money laundering. He wassentenced to 10 months' imprisonment on 7 February 2020 and he was released ontime served.[6] The Commissioner alleges that Mr Rae was involved in two schemes designedto exploit the United States Medicare system for medical insurance – the first being adurable medical equipment (DME) scheme, and the second being a cancer screeningscheme.[7] The DME scheme allegedly exploited Medicare insurance benefits for disabledpersons aged 65 and over. Under these benefits, cover is provided for equipment suchas arm, leg, back and neck braces. The Commissioner says that telemarketers would1 An offence against the Crimes Act 1961, s 243(2).persuade eligible patients to obtain the equipment irrespective of medical need. Thepatients would be referred to a doctor, who would then write prescriptions for thepatients for a flat fee (without proper patient interaction or assessment). Companieswould supply the equipment to the patients and then submit (fraudulent) claims toMedicare for payment. Those companies would then pay fees – "kickbacks" – to thetelemarketers. It is alleged that this scheme was set up by the beneficial owners of atleast 22 equipment supply companies.[8] The cancer screening scheme allegedly exploited Medicare insurance cover forgenetic cancer screening in a similar way. Telemarketers would persuade patients toundertake genetic cancer screening irrespective of medical need. A clinical laboratorywould screen the patients and file fraudulent claims to Medicare or to private insurers;they would then pay kickbacks to the telemarketers.[9] Not only do the allegations involve a violation of a Federal "anti-kickbackstatute",2 but they also go further because the claims were made without genuine need(and so were dishonest claims for medical services). The loss to Medicare is said tobe some USD$212 million. The alleged principals of the two United Stated schemesare Mr Aaron Williamsky and Ms Nadia Levit.[10] On 18 September 2019 in the US District Court in the State of New Jersey,Mr Williamsky pleaded guilty to one count each of:(a) conspiracy to violate the Federal anti-kickback statute;(b) conspiracy to commit healthcare fraud;(c) conspiracy to commit wire fraud; and(d) conspiracy to commit money laundering.[11] Ms Levit pleaded guilty to similar charges.2 Public Health and Welfare Act 42 USC § 1320a, s7b(b).[12] Mr Rae is involved in offering international business structures via vehiclesincorporated in various jurisdictions. Those structures are said to be then used tolaunder funds obtained from fraudulent activities, such as the two schemes referred toabove. Mr Rae performs this service for a fee. Sometimes that fee is expressed as apercentage of the money so laundered. There was evidence that, for the transactionsinvolving Mr Williamsky and Ms Levit, the fee was 21 per cent.[13] The majority of the funds held in the New Zealand bank accounts are in thename of the second interested party, S Ltd. Funds obtained from both fraudulentschemes were ultimately transferred to an S Ltd account. While the Commissioneralleges that Mr Williamsky is the true owner of the funds, Mr Rae is entitled to someof the proceeds in his capacity as a money launderer. Mr Williamsky and Ms Levithave disclaimed any interest in the restrained funds.[14] Cooke J, on 26 November 2020, heard the on-notice application for arestraining order.3 While he found that the grounds were met, he held that theCommissioner had failed to satisfy the mandatory service requirements for the on-notice application. So Cooke J dismissed Mr Rae's opposition to the on-noticerestraining order, but declined to make the order, instead adjourning the applicationuntil service was properly given. The without notice restraining orders continued ineffect, pending formal determination of the on-notice application.[15] As Mr Rae has claimed that the Commissioner has dragged these proceedingsout in order to put pressure on him, it is useful to set out the sequence of events whichoccurred from 26 November 2020:(a) 9 December 2020: Counsel for Mr Rae requests a teleconference at theearliest opportunity. Counsel notes Mr Rae's intention to appeal thejudgment of Cooke J but needs to wait to see if a s 21 issue is resolved;3 Commissioner of Police v Rae [2020] NZHC 3132. In an earlier minute, Cooke J had varied thewithout notice restraining order to allow funds of R Ltd held in a NZ dollar account totalling$50,520.70 to be released from restraint and disbursed to Mr Rae. See minute of Cooke J,CIV-2020-485-43, 23 June 2020.(b) 14 December 2020: The Commissioner responds to the 9 Decembermemorandum. Notes that service on Mr Williamsky and Ms Levit isunderway, but Mr Vaughan (another interested party) is yet to belocated;(c) 18 December 2020: Minute of Cooke J following a teleconferencenotes progress on service and deals with suppression order matter.Further teleconference scheduled for early 2021;(d) 22 January 2021: Notice of opposition from Mr Vaughan to theCommissioner's application. Mr Vaughan denies all criminal conduct;(e) 26 January 2021: Memorandum from Commissioner in advance of theteleconference. Records that service effected on all three interestedparties but awaiting confirmation of their respective positions;(f) 27 January 2021: Minute of Cooke J following the teleconference notesthat Mr Williamsky and Ms Levit claim no interest in the restrainedfunds and do not intend to participate in the proceedings. Mr Vaughanneeded time to seek legal advice. Timetable and deadlines set forrelease of funds application. Timetable and deadlines set for forfeitureapplication (the latest being the Commissioner's reply, to be served by10 September 2021);(g) 2 February 2021: Mr Rae's notice of application for variation ofrestraining order and release of funds;(h) 18 March 2021: Commissioner's notice of opposition to thatapplication;(i) 19 March 2021: Commissioner's memorandum in advance of 22 Marchteleconference;(j) 22 March 2021: Minute of Grice J with timetabling orders, includingcase management conference to be convened after 19 April 2021 inorder to set a hearing date. It notes that Mr Vaughan did not appear tobe provided with details of the conference because he was not able toappear (providing contact details for a teleconference is theresponsibility of the registry rather than the Commissioner);(k) 3 May 2021: Memorandum from counsel for Mr Rae apologising formissing deadline and explaining that Mr Rae was delayed by COVID-19 circumstances in the UK arising from COVID issues at his son'sschool;(l) 10 May 2021: Memorandum from Commissioner agreeing withMr Rae's proposed timetabling for the s 28 application; and(m) 11 May 2021: Minute of Campbell J. Records that Mr Vaughan decidednot to oppose the restraining order but wanted to seek legal advice asto whether to oppose the forfeiture order.(n) 21 May 2021: The Commissioner files a forfeiture application.(o) 16 June 2021: Counsel file a joint memorandum seeking a two-weekextension for Mr Rae to file and serve his notice of opposition andaffidavits to the Commissioner's forfeiture application.(p) 17 June 2021: Grice J issues a minute allowing the extension.(q) 28 June: 2021: Counsel for Mr Rae file a memorandum updating theCourt and seeking a final two-week extension to file his notice ofopposition. On the same day, the extension is granted by Grice J.(r) 14 July 2021: Counsel for Mr Rae file a memorandum requiring thatDetective Sergeant MacDonald be produced as a witness at theupcoming hearing.(s) 19 July 2021: Counsel for Mr Rae file his notice of opposition to the21 May 2021 forfeiture application.(t) 21 July 2021: The Commissioner files a memorandum seeking anadjournment of the s 28 hearing due to the filing of an affidavit by Hon 19 July 2021, due to the issues of fact arising from that affidavit andthe need to properly respond to it.(u) 22 July 2021: Counsel for Mr Rae file a memorandum expressing theirconsent to adjourning the s 28 hearing.(v) 23 July 2021: Cooke J adjourns the s 28 hearing and sets down newtimetable orders.(w) 23 August 2021: Counsel for the Commissioner file submissions on thes 28 application.(x) 24 August 2021: Counsel file a joint memorandum seekingadjournment due to COVID-19 alert levels and difficulties with VMR.(y) 17 September 2021: Counsel file a joint memorandum seekingadjournment of a case management conference until 27 September2021. This is granted by the registrar.(z) 27 September 2021: Following the case management conference,Cooke J issues a minute setting down the s 28 application for hearingPosition of the parties on s 28 applicationMr Rae[16] Counsel's overall position was that the well-established principles of s 28 ofthe CPRA make clear that Mr Rae's interests must be balanced against the need toavoid the dissipation of assets. Mr Rae is seeking what are said to be reasonable livingexpenses, and other expenses for debts incurred in good faith, with the amount beingsought reflecting his personal circumstances.[17] Section 28 requires that the Court have regard to the ability of a respondent tomeet their reasonable living costs, expenses, or debts out of property that is notrestrained property. Counsel submitted that Mr Rae was unable to meet any of thecosts or expenses sought out of any unrestrained property. He currently lived with hisparents, and had no savings, with a poor credit rating.[18] While he did own a house at 1 Roshaw, Preston, this property was subject to amortgage of £87,697.27 (approximately NZ$170,000), and Mr Rae's wife had asecond charge over that property.4 The Roshaw property was purchased by Mr Raeon 30 May 2007 for £249,000. No current valuation of the property was provided tothe Court. Mr Rae conceded that it would have increased in value since 2007.[19] A property at 7 Woodlands Grove is owned by R LP, a limited partnershipincorporated in New Zealand, which Mr Rae says he has no legal or beneficial interestin, and therefore no legal claim to the property at 7 Woodlands Grove or any other ofits assets. His position is that Sarah Rae and his children are the beneficiaries.[20] Counsel disputed the contention of the Commissioner that Mr Rae has effectivecontrol over the property via a trust structure, and submitted that it was wrong toequate the assessment of whether a person has lawful access to unrestrained propertywith the concept of "effective control", because the latter is a creature of statute (s 58of the CPRA). It was designed specifically to ensure that the respondents' propertiesconcealed under another's name do not escape restraint or forfeiture. In contrast, thequestion of whether an applicant "has the ability to meet" the various costs "out of"unrestrained assets should be considered under ordinary civil principles of ownershipinterests. It was submitted that R LP was set up legitimately and independently forthe benefit of Ms Rae, who was the sole beneficiary.[21] In terms of Mr Rae's mortgage accounts, counsel noted that he made twoseparate repayments each month and was currently borrowing from his parents to doso. In terms of his overseas bank accounts, Mr Rae said that he did not have access toany accounts that contained funds he could use to meet his living costs, and counseldisputed the Commissioner's assertion that he was concealing funds in a Hong Kongaccount, or in an Australian account, stating that neither appeared to have any funds,or in fact were still open. Counsel initially argued that some of the evidence of the4 This is related to a matrimonial property claim of interest.Commissioner in relation to the Australian bank account should be ruled inadmissible,because it was not limited to new matters raised in Mr Rae's affidavit, and gave himno opportunity to respond. That argument was not pursued.[22] In his affidavit of 1 February 2021, Mr Rae set out the amounts he sought andthe reasons for seeking each item:(a) Monthly living costs totalling £4,516:5 The living costs were said tobe:(i) mortgage repayment on 1 Roshaw - £700;(ii) rent payable to parents - £500;(iii) lease payments to rent a car - £350;(iv) Sky/TV/licence/broadband/phone - £150;(v) electricity/gas/water - £160;(vi) food - £600;(vii) car insurance/life insurance - £196;(viii) school expenses/bus/lunches - £105;(ix) clothing (children) - £150;(x) clothing (self) - £100;(xi) council tax - £204;(xii) child maintenance (post-divorce) - £500;(xiii) fuel/car maintenance/road tax - £150;(xiv) credit card repayments - £300;(xv) savings towards holiday - £250;(xvi) house insurance - £75;Total: £4,516.(b) Backdated living costs: $152,235. Mr Rae sought to have the aboveliving costs backdated to February 2020 to enable him to repay variousdebts he said that he had incurred since then, including to his parents,and he said that he needed a lump sum of £49,500 in order to give asignificant bond for renting an apartment or small house. Counsel5 In Mr Rae's affidavit, this was said to equate to NZ$8,200. In counsel's submission, this was saidto equate to $8,955 per month.submitted that the Court has discretion to pay these costs, as s 28 doesnot impose any temporal limit to these payments, and clearlycontemplates past business expenses and/or debts.(c) Business expenses: $17,780.65. This figure comprised airfares,accommodation, administration fees, and visa costs that Mr Raeincurred in international travel to Thailand and Hong Kong whilemaintaining his businesses there. Mr Rae says that his internationalbusiness interests have been "destabilised" by his incarceration in theUSA and proceedings in New Zealand, meaning he was presentlyunable to earn anything from these interests.(d) Thomas Ashley fees: $72,000. This is to repay what was said to be aloan to Ms Rae, who he claimed lent him funds by paying his firstattorney in the USA, Mr Thomas Ashley, on Mr Rae's behalf, and wasincurred in good faith.(e) David Trouger fees: $43,200. Mr Rae seeks the release of this moneyto enable him to repay his parents, who he says that he borrowed moneyfrom to obtain his second attorney in USA. None of that money wasused to obtain legal assistance in relation to the current proceedingsagainst him in New Zealand. This was another debt he says wasincurred in good faith.(f) True Matrix Ltd fees: $103,770.68. True Matrix Ltd is a legalconsultancy operated by Howard Young. Mr Young is shown on theUK Solicitors Regulation Authority website as having been struck offon 14 May 2013 and being prohibited from practising as a solicitor.However, notwithstanding this status, he is said to have acted as legalconsultant to Mr Rae in relation to matters relating to Mr Rae'sprosecution in the United States. Mr Rae seeks the release of thismoney to enable him to pay True Matrix Ltd for its fees anddisbursements between October 2019 and February 2020, relatingsolely to the USA proceedings and consultancy fees and disbursements.It includes travel costs incurred by True Matrix Ltd's director, MrHoward Young, who travelled to the USA several times while Mr Raewas in custody, including for Court hearings and sentencing.(g) R Ltd fees: $139,320. Mr Rae seeks the release of these funds to allowhim to repay outstanding amounts owed to R Ltd. It was submitted thatthese fees were incurred in the management by R Ltd's director (whohas obtained confidentiality orders) of entities set up by Mr Rae andwere claimed to have been properly incurred in good faith for legitimatepurposes.The Commissioner of Police[23] The Commissioner of Police opposes Mr Rae's application for variation of therestraining order and release of funds. The Commissioner's position is, in essence:(a) Mr Rae has not exhausted all avenues in relation to dealing with hisdebts via unrestrained property available to him;(b) the funds sought for release by Mr Rae are excessive; and(c) Mr Rae has brought the application for an ulterior purpose, namely toadvance his own private business interests by way of setting up anoffshore structure.[24] Firstly, in relation to assets that are still available to Mr Rae, counsel for theCommissioner submitted that as a general principle, where there are unrestrained andunencumbered assets sufficient to meet expenses, the Court will expect evidence thatthe applicant has explored all avenues to liquidate those assets before exercising itsdiscretion under s 28(1), and Mr Rae had not done so here.[25] It was submitted that two assets belonging to R Ltd ought to be realised byMr Rae before seeking recourse from the Court under s 28(1), namely the WoodlandsProperty, and the repayment of a £200,000 loan to R Ltd from a Mr Philip Holt. TheCommissioner's position was that these assets were under the effective control ofMr Rae and should be exhausted first, before Mr Rae claims for any alleged livingcosts or debts. It was also argued that Mr Rae should not be seeking relief fromfraudulently obtained funds which he has never had any legitimate claim to in the firstplace, as this would be plainly contrary to the statutory purposes of the CPRA.[26] In relation to R Ltd, counsel submitted:(a) that Mr Rae has effective control over R Ltd and while he was not thenominal owner, its assets were under his effective control in terms ofs 58 of the CPRA. Effective control arises where an offender cancontrol, use or treat the property as their own, or influence a familymember in connection with the use of the property. There was evidencefrom Detective Sergeant MacDonald indicating Mr Rae's involvementwith R Ltd, such as negotiating and making financial decisions inrelation to it;(b) that property under a respondent's effective control is an asset that canbe realised for the purpose of s 28(1). It was submitted that counsel forMr Rae's submission that it was wrong to equate lawful access tounrestrained property with the concept of effective control under s 58,was incorrect. If Mr Rae has effective control over an unrestrainedasset, then it is property which he can use to meet his reasonable livingcosts, expenses, or debts. The s 28(3) inquiry is a broad one – with theCourt being required to have regard to the ability of the respondents tomeet costs and expenses out of unrestrained property;(c) that Mr Rae has a history of using trust devices to obscure his trueownership of entities. Counsel referred to the fact that on 7 August2018, Mr Rae was fined £200,000 and made the subject of an orderbarring him from being employed by a legal practice by theUK Solicitors Disciplinary Tribunal.(d) Mr Rae was not a solicitor but had acquired an interest in a law firmwith a lawyer holding shares in the firm on trust for him with Mr Raebeing remunerated by way of consultancy fees. Axiom Fund, a CaymanIslands-based litigation financing fund had had some £29.5 millionmisappropriated from it. Mr Rae and his companies had received some£590,940.24 in Axiom derived funds. The decision of the DisciplinaryTribunal in that case6 was provided to the Court and it indicated thatMr Rae had claimed he was just a consultant with no influence orcontrol over the firm. The Tribunal rejected this claim on the basis thatwas inconsistent with the documentary records;(e) that Mr Rae's position on R Ltd is inconsistent and contradictory.While he sought to distance himself from R Ltd, the documentaryevidence indicated his close connection to the organisation – with hisevidence before the Court prior to this application being that he waspersonally reliant on R Ltd assets for his and his family's livingexpenses; and(f) that there is reason to suspect that Mr Rae has not provided fulldisclosure of his asset base. Counsel in particular pointed to the allegedfailure of Mr Rae to disclose the Woodlands property, and that he mayhave other assets under his control, referring to an email fromMr Young, advising H that the true purpose of the application was tofree up money to enable Mr Rae to spend on some tax advice in the UKand an offshore structure to replace the New Zealand structures set upfor him by R Ltd. Counsel also referred to rental income from theWoodlands Property, and a Commonwealth Bank of Australia accountas other potential sources of assets.[27] Counsel then turned to the specific expenses sought by Mr Rae under hisapplication. It was submitted that the CPRA does not allow for the provision ofbackdated living costs. The suggestion ran headlong into s 28(3) of the Act. Therewas no evidence of "personal debts" owed by Mr Rae to his parents, as he had provided6 Solicitors Regulation Authority v Emmett et al (2018) 11659-2017.no evidence as to the amount claimed to have been borrowed, any loan documentation,or any terms – no affidavit evidence had been filed referring to this type of evidence.[28] In terms of provision for ongoing expenses, counsel questioned the amount ofexpenses required by Mr Rae, particularly in relation to his allegedly ulterior motivefor making the s 28 claims. In terms of his business expenses, counsel submitted thatthere was limited evidence before the Court as to what these international "businessinterests" entailed, and that Mr Rae had not provided the Court with any evidence thatwould establish that they were legitimate.[29] Finally, in relation to Mr Rae's other specified debts, counsel submitted that itwas unclear as to how Ms Rae paying Mr Ashley amounted to a debt owed by Mr Rae,and that his claims that he needed to pay her back were incorrect, with there being noevidence of a loan agreement. There was also very little evidence for the loan relatingto Mr Touger, and that the amount claimed by Mr Young from True Matrix Ltd for theUSA criminal proceeding was questionable, given it was more than double the amountincurred by both Mr Rae's attorneys. In relation to the debts to R Ltd, theCommissioner's position was that its services were used by Mr Rae to facilitate thecommission of his money laundering activities in New Zealand, and incurred by himto allow him to profit from undertaking significant criminal activity, and to facilitatea criminal enterprise contrary to the statutory purposes of the CPRA.Relevant law and analysis[30] Section 28 of the CPRA provides:28 Conditions on restraining order(1) A court may make a restraining order subject to any conditions thecourt thinks fit including, without limitation, conditions that providefor the following to be met out of a respondent's restrained property:(a) the reasonable living costs of the respondent and any of his orher dependants:(b) the reasonable business expenses of the respondent:(c) the payment of any specified debt incurred by the respondentin good faith:(d) any other expenses allowed by the court.(2) Despite subsection (1)(d), a court may not allow any legal expensesto be met out of a respondent's restrained property.(3) In determining whether or not to make a restraining order subject to acondition, the court must have regard to the ability of a respondent tomeet the reasonable living costs, expenses, or debt concerned out ofproperty that is not restrained property.(4) In this section a dependant is a person who is dependent on therespondent and who is either or both—(a) a child of the respondent:(b) a member of the household of the respondent.[31] In Commissioner of Police v Dotcom, Courtney J summarised the followingabout reasonable living expenses:7[9] Living expenses are, however, required to be reasonable. The Actdoes not specify any mechanism for determining what are reasonable livingexpenses. Reasonableness is an objective standard but the assessment of whatis reasonable cannot be conducted in a vacuum; it requires context. In thisregard I agree with the observations that Heath J made in Solicitor-General vDarwish in relation to the predecessor of s 28(1)(a):That provision recognises the underlying reality of the situation,namely that accused are entitled to the presumption of innocence, butthat society ought not to be prejudiced by the use of restrained fundsif, ultimately, it is proved that those funds were acquired throughcriminal activity.[10] I note also that in Darwish Heath J took into account informationderived from Statistics New Zealand regarding household expenses, whichgave average weekly expenses by reference to different income brackets. TheJudge made assessment of what were reasonable living expenses taking intoaccount both that information and "the assets seized and the lifestyleexpectations" of the family.[11] Mr Boldt, for the Commissioner, relied on Venning J's decision inCommissioner v Yan, in which the Judge made an assessment of what heconsidered to be reasonable with less regard for the family's previous standardof living, including declining to allow funds to meet private school fees andhigh accommodation costs.[12] I consider that the correct approach is to make an assessment of whatis reasonable having regard to the factors referred to by Heath J and thecircumstances in which the family were living prior to the assets beingrestrained. This is not to suggest that a defendant whose assets are restrainedcan generally expect access to funds sufficient to maintain his or her previous7 Commissioner of Police v Dotcom [2015] NZHC 820 (footnotes omitted).lifestyle. However, a family's financial and other commitments must beconsidered.[32] In Dotcom, the Court held the monthly living costs, which included costsrelated to children, accommodation, security ($15,000), staff ($35,000) and generalhousehold expenses ($20,000), were not unreasonable. This totalled some$186,864.84. The Judge noted that the expenses for five children, two of whom wereautistic and required additional care, including with staff, meant that although theclaim was "very high", it was not unreasonable. The house Mr Dotcom occupied wasleased, which was a debt, and therefore in the particular circumstances, the $80,000per month was reasonable for the accommodation. The remaining costs were allowedin the "rather unusual circumstances".8 The Judge concluded a reasonable figure forliving expenses to be $170,000 per month.[33] In Commissioner of Police v Burgess, reasonable living expenses were grantedfor the first stage of a surgery as a matter of urgency. This was subject to twoconditions: first, that one of the defendants answer the allegations against her andsecondly, as the Court found some deficiencies in the information as to the costs, thatthe payment of these expenses were to be made on the basis of invoices presented tothe Court for approval.9 As to the business expenses sought, the Judge noted thatfurther analysis was required to address its viability, and that "if it is losing money onan ongoing basis, the continued funding of the business might not be a reasonablebusiness expense". That being said, Thomas J noted that the surgery would require arecovery period for Mrs Burgess, and therefore making a living expenses award toalleviate that stress "is just and will not undermine the Act".10[34] In Commissioner of Police v Zhang, Hinton J declined the defendant'sapplication for release of reasonable living expenses which included mortgagepayments, university tuition fees, purchase of a vehicle, and a lump sum to repay debts,particularly private school and tuition fees for children.11 Her Honour held that theliving costs sought were unreasonable, noting that the accommodation costs could be8 At [27].9 Commissioner of Police v Burgess [2014] NZHC 3183 at [43]–[49].10 At [51].11 Commissioner of Police v Zhang [2020] NZHC 2914.reduced, and that no reason was given as to why the children had to attend privateschools. Furthermore, it was apparent on the evidence that the defendant had theability to pay for their own reasonable living costs via unrestrained assets, and supportfrom their parents.[35] What are "reasonable" expenses should be objectively assessed in the contextof the living circumstances of the defendant prior to the restraint of assets.12 Thefinancial and other commitments of the defendant need to be taken into account, butthat does not mean that he or she can generally expect access to funds sufficient tomeet a previous lavish lifestyle. Reference points for reasonable living costs haveincluded:(a) the tables of household expenditure compiled by StatisticsNew Zealand;13 and(b) the annual rate of child support as prescribed by the Child Support Act1991 in relation to the living expenses of dependent children;14[36] Adams notes that in terms of business expenses:15There is no judicial guidance as to what may constitute a respondent's businessexpenses for the purposes of this paragraph. But it is unlikely that expensesincurred in committing a qualifying offence undertaken in the course of acriminal enterprise would be treated as "reasonable" business expenses.[37] Finally, in relation to debts incurred in good faith, the defendant must haveobtained that debt for a purpose that is not contrary to the purposes of the Act. InCommissioner of Police v Taylor, Lang J gave the following guidance on the term:16A preliminary issue arises as to the perspective from which the issue of goodfaith must be judged. On one view, the section is designed to enable the Courtto ensure that bone fide creditors who have no notice of a debtor's criminalactivity are not unfairly penalised by the legislation. Another view, however,is that the debtor should not be permitted to repay a debt where it has beenincurred for a purpose that runs counter to the purposes of the Act. On this12 Simon France (ed) Adams on Criminal Law – Criminal Proceeds (online ed, LexisNexis) atCP28.02.13 Solicitor-General v Darwish HC Auckland CIV-2004-404-1603, 24 November 2004.14 Solicitor-General v Panzer [2001] 1 NZLR 224 (HC).15 At CPA28.03.16 Commissioner of Police v Taylor [2013] NZHC 3226 at [19]-[20] (footnotes omitted).issue Parliament appears to have favoured the latter point of view. The words"incurred by the respondent in good faith" make it clear that the issue of goodfaith must be determined from the perspective of the respondent. Whether ornot the creditor advanced funds or provided services in good faith is thereforenot an issue that the Court is required to determine. In this respect thelegislation differs significantly from the approach taken in the Insolvency Act2006, in which the issue of good faith must be determined from the perspectiveof the creditor. For that reason, I do not find the cases cited by counsel inrespect of the approach taken under the insolvency legislation to be of any realassistance.It is neither necessary nor desirable for present purposes to attempt to providean all-encompassing definition of when a debt will be incurred in good faithfor the purposes of s 28(1)(c). In general terms, however, I consider that adebt will be incurred in good faith for the purposes of the section where thedebtor obtains it for a purpose that is not contrary to the purposes of the Act.This means that most debts genuinely incurred for personal or domesticpurposes will be incurred in good faith for the purposes of s 28(1)(c).Evidence[38] One of the striking features of this case is the lack of affidavit evidence onimportant issues where evidence would be expected. The first interested party to theseproceedings is Mr Rae's former wife, Ms Sarah Louise Rae. She is the beneficialowner of R Ltd and a person from whom Mr Rae says he had entered into loanagreements which he now seeks to claim monies to pay pursuant to s 28 application.Her evidence would also be relevant to the "effective control" issue regarding R Ltd'sassets, particularly the Woodlands Grove property.[39] There was also no affidavit evidence from Mr Rae's parents, Mr Charles andMrs Carol Rae. Mr Rae claims to have borrowed various sums of money from themwhich he seeks to recover as part of this application, but no confirmatorydocumentation or affidavit evidence from them has been provided. Mr Rae hasextensively referred to his living arrangements (he has been residing with his parentsfor some time), and gives his need to provide some domestic assistance to his motheras a reason why he cannot return to the now vacant former matrimonial home at 1Roshaw. One might have expected affidavit evidence from Mr Rae's parentsconfirming the various claims that he has made about them in relation to theseproceedings.[40] The other evidence that one might have expected is evidence about two bankaccounts. One with the HSBC Bank in Hong Kong in the name of a companycontrolled by Mr Rae called Fu Lei Yan Ltd, and the other with the CommonwealthBank of Australia (CBA). There is evidence of both accounts having receivedsubstantial funds at the direction of Mr Rae.[41] In relation to the CBA account, there is evidence that in five transactionsbetween 12 February 2016 and 24 April 2018, it received a total of £152,242.80 froma GB£ R Ltd account.[42] In relation to the HSBC account, there is evidence before the Court relating toan FBI undercover operation undertaken in the United States. Mr Rae has beenrecorded advising an informant of his intention to transfer the funds from thehealthcare fraud scheme to a Hong Kong HSBC bank account in the name of Fu LeiYan Ltd which he would "live off" and be "invisible ever-after".Standard of proof[43] These are civil proceedings where the standard of proof is the balance ofprobabilities rather than beyond reasonable doubt. However, Mr Rae is seeking therelease of sums in excess of NZ$500,000, and needs to establish the evidential basisjustifying his claim.[44] Where there is evidence relevant to the s 28 application that might have beenexpected to be called but has not been, the Court may draw an adverse inference ifthere is no adequate explanation for the absence of that evidence, it is thereforenecessary to examine the reasons given by Mr Rae for not calling the evidence.[45] In order to explain why there was no affidavit evidence from Sarah Rae, or hisparents, Mr Rae advanced claims that the Commissioner had embarked upon adeliberate course of harassment and intimidation of Sarah Rae and bullying of him andthat this was the reason why she and his parents had not filed affidavits. Mr Rae alsopropounded a theory that the Commissioner had deliberately delayed theseproceedings making claims such as:the Commissioner continues to make [these proceedings] as difficult anddrawn out as possible thereby making it more expensive [46] From Mr Rae's affidavit evidence and his answers to questions during cross-examination, the components of his intimidation and harassment claims seem to be:(a) that the Commissioner used the Lancashire Police Force to arrangeservice of the restraint application and the forfeiture application;(b) that the same police officer, Detective Constable Copely of theLancashire Police Force attended to both matters;(c) that Detective Constable Copely also contacted his son's school toquestion whether a letter from the school which Mr Rae had providedas evidence in those proceedings was genuine; and(d) that Detective Constable Copely had asked Sarah Rae some questionsand got her to sign a statement.[47] Mr Rae's claims are repeated in various parts of his evidence but a typicalexample is found in his affidavit of 30 September 2021, filed immediately prior thes 28 hearing.[48] After noting that, at the time of his proceedings in the USA District Court, heand Sarah were married, at [14] of the affidavit, Mr Rae deposes:That position has since changed and as I highlight below has markedlydeteriorated as a result of the way the Commissioner has instigated the actionswhich I highlight below against her. I believe those to be a deliberate attemptto destabilise her and the s 28 application and the substantive forfeitureproceedings. I explain why below.[49] In terms of the deterioration in his matrimonial relationship, it seemsunrealistic for Mr Rae to blame it on anything that the Commissioner did. Hisevidence was that the divorce took place in July 2020. Sarah Rae was served with acopy of the Commissioner's on-notice application for restraining orders on15 September 2020. By that time the parties were already divorced. The service ofthe proceedings, or the manner in which it was carried out, can therefore not have beenthe catalyst for the deterioration in their relationship.[50] The evidence of Detective Sergeant Macdonald was that the Commissioner hadrequested the assistance of the Lancashire Constabulary in serving the on-noticeapplication and subsequent documents. The evidence was that Detective ConstableCopely was the Interpol Liaison Officer at the local police station. He also carried outthe service of the forfeiture application on Sarah Rae on 23 July 2021 and madeenquiries at Mr Rae's son's school about the COVID letter.[51] There was no evidence that Detective Sergeant Macdonald had any influenceover who the Lancashire Police Force assigned to serve the documents, or how thatwas undertaken. Detective Constable Copely seems to have got the role simplybecause of his position as the local Interpol Liaison Officer.[52] When the restraining order was served on 15 September 2020, he askedSarah Rae seven questions from a list provided by Detective Sergeant Macdonald. Herresponse is summarised in a statement that was signed by her and was in the evidencebefore the Court. It was contained in 19 lines of handwriting. It recorded Sarah Rae'sstatement that she was unable to answer any of the questions and unaware of what theexact nature of R Ltd's business in New Zealand was, and that Mr Rae had dealt withall the finances and business transactions.[53] Mr Rae complains about this, saying that Sarah Rae was not given anopportunity to seek legal advice before she signed the statement, that her answers wereonly partially recorded, and the questions posed were not revealed. He claims, "sheconsiders her words were manipulated". A claim that a police officer has deliberatelymanipulated a statement taken in the course of his duties is a serious matter. It is alsothe sort of allegation that one would expect to be supported by an affidavit from theperson whose words are alleged to have been manipulated. The Court would alsoexpect to be pointed to some evidence as to why Detective Constable Copely mighthave wanted to manipulate what Sarah Rae told him. Such evidence is absent here.[54] Given that Sarah Rae was claimed by Mr Rae to be the beneficial owner ofR Ltd and the first interested party in the proceedings, it is unsurprising that theNew Zealand Police would want to ask her questions as to what she knew aboutR Ltd's business. There is no evidence that, at the time, she was unhappy about anyaspect of the statement which she signed. Mr Rae could have no first-hand knowledgeof these matters as he was not present when the statement was taken.[55] The background to the checking of the COVID letter from the school is thatMr Rae had failed to comply with a deadline in these proceedings for providinginformation. By way of excuse, he had forwarded to his New Zealand counsel, whohad forwarded it onto the Commissioner's lawyers, a copy of a letter received fromhis son's school which advised that his son was a close contact of a COVID case. Theletter recommended that his son stayed at home and self-isolated for 10 days aftercontact.[56] Mr Rae's affidavit of 30 April 2021 referred to the letter and said that itdemonstrated:that my son's school was affected by COVID-19 which in turn led to mehaving to observe a period of self-isolation. That caused an inevitable delaybecause I was not able to meet my UK legal consultants and work through theinformation being requested. Furthermore I had to look after my son who wasalso at home for that period. That was the first issue that caused some delay.[57] Mr Rae makes some extravagant claims about the Commissioner's request toverify his excuse for failing to provide the information. In his affidavit of 30 April2021 at [5], Mr Rae said:on 15 April 2021 I was made aware that a police officer had been in contactwith my son's school. This meant I had to go into school immediately. I wastold that a Detective Constable Copely from Lancashire Police had been intouch with the School to check up on the legitimacy of the letters I had sent tomy Counsel. What that did was to highlight to the school that I remainedembroiled in foreign litigation, of sufficient gravity that the New ZealandPolice would involve the UK Police especially where the officer introducedhimself as the Interpol Liaison Officer. That inquiry suggested that I might besomeone who would be prone to submitting false documentation.[58] No explanation is given as to why the fact that Mr Rae learnt that the policewere checking the genuineness of the letter necessitated him having to "go into schoolimmediately". It is also difficult to understand the claim that "That inquiry suggestedthat I might be someone who would be prone to submitting false documentation".[59] As Mr Rae acknowledged in cross-examination, the news of his conviction inthe United States and imprisonment there for money laundering had been big news inthe area where he lived, having made the front page of the local newspaper. Thepublicity about Mr Rae's conviction and imprisonment on the money launderingcharge is likely to have had a far greater impact on his reputation as someone whomight submit false documentation than a simple inquiry about whether a letter he hadproffered was genuine. As discussed above, on 2 July 2018 the Solicitors DisciplinaryTribunal had fined Mr Rae £200,000 and ordered him to pay £50,000 in costs inrelation to what it held was his dishonest involvement with the activities of a localPreston law firm. That fact is also likely to have had a significantly greater impact onany reputation Mr Rae might have had as to whether he was prone to submitting falsedocumentation than the inquiry made by Detective Constable Copely.[60] In the same paragraph of that affidavit, Mr Rae further embellishes his claimby saying:It caused distress to me but mainly to my son, as I had to explain to him whyI was having to attend his school. In addition, it caused further delay and meto divert my focus from this case, because I had to deal with the questions theschool had and the further questions it inevitably prompted from the school.[61] There is no indication that the school ever requested Mr Rae to attend there norevidence that they asked him any questions. There is no explanation as to why theycould conceivably have wanted to do so. Neither is it obvious how having to attendat the school and answer any such questions could have delayed his provision ofinformation or diverted his focus from this case. The delays in Mr Rae meeting thedirections as to the provision of information had already long since occurred.[62] In his affidavit of 30 September 2021, Mr Rae expands further on the sameincident saying:When I produced evidence of a COVID-19 issue at our son's school, theCommissioner asked Interpol to check the legitimacy of that, directly with theschool hierarchy. This is out of proportion to what was a simple request andI believe this was done to intimidate [Sarah Rae]. Both Sarah Rae and my sonwere distressed by this approach.[63] In the 30 September 2021 affidavit, Mr Rae goes on to say:The same constabulary [sic] has asked the school if my son is attending andtrying to engineer [sic] information about [Sarah Rae's] whereabouts.Neighbours had reported "burly men" in pairs constantly at 1 Roshaw onnumerous occasions, trying to establish her whereabouts.I have only recently been made aware that they attended 7 Woodlands Grove,which the tenants found intimidating.The police have followed me and my sons on our way to school.[64] After setting these matters out, Mr Rae concludes:The pressure being brought to bear upon her, forced her out of the familyhome. She has moved somewhere that cannot accommodate my sons.[65] Mr Rae's evidence under cross-examination was that Sarah Rae had"disappeared in late March [2021] leaving the sons with me". He claimed not toknow where she had gone and not to be in contact with her. At [33] of his affidavit of30 September 2021, he even went as far as claiming that Sarah Rae's claimed"disappearance" was caused by the Commissioner alleging that her "most recentdisengagement [was] because of the actions of the Commissioner and UK police".[66] Detective Sergeant Macdonald gave evidence and was questioned aboutenlisting the assistance of the UK Police to serve documents on Sarah Rae, to ask hersome questions and to verify the letter from the school. No allegations aboutattempting to "engineer information" about Sarah Rae's whereabouts, burly mentrying to establish her whereabouts, police visiting 7 Woodlands Grove, or followingMr Rae and his son to school were put to Detective Sergeant Macdonald. Neither wasit put to him that such activities were done at the request or instigation of theCommissioner. Given Mr Rae's serious claims about intimidation and bullying by theCommissioner, it would have been expected that such matters would have been put toDetective Sergeant Macdonald.[67] Mr Rae has also claimed that the reason that there is no affidavit evidence fromhis parents is because of what he says is the intimidation of Sarah Rae by theCommissioner.[68] In his affidavit of 30 April 2021 at [27(b)], he gives, as the reason why hisparents have not filed an affidavit:The reason for this is that they are very reluctant to become embroiled in theseproceedings. It is very scary for normal people to watch police officers inNew Zealand use Interpol Liaison to serve my ex-wife with papers when it isnot involvement [sic] in the alleged criminality. This is exacerbated bysending the same officer to my son's school. It appears to me and to them tobe designed to intimidate and it does.[69] There is no evidence that Mr Rae's parents "watched" Detective ConstableCopely serve the proceedings on Sarah Rae. Neither is there any evidence that theywere in any way involved in Detective Constable Copely checking with the school.Indeed, it is not clear that Detective Constable Copely ever actually visited the schoolas, at various occasions Mr Rae describes Detective Constable Copely as havingemailed the school to clarify the COVID letter, and on other occasions claims hevisited the school.[70] It is also difficult to understand what might be "scary" about Sarah Rae beingserved with copies of the proceedings or asked to make a statement. By this time,Mr Rae's parents would have been well aware that their son had been charged with,pleaded guilty to, and imprisoned in the United States for money laundering. Theywould also have known of the findings of the Solicitors Disciplinary Tribunal inrelation to the Preston law firm. These are likely to have been much "scarier" mattersthan learning that a local detective constable had served some documents on SarahRae and taken a statement from her.[71] The claims that the Commissioner somehow attempted to intimidate Sarah Raeare entirely baseless. There is nothing unusual, let alone intimidatory, about theCommissioner enlisting the assistance of the Lancashire Police Force to serve copiesof the restraining order and forfeiture application on Sarah Rae. As Mr Rae wasclaiming that Sarah Rae was the beneficial owner of R Ltd, she was an interested partywho they had to serve. Neither is there anything unusual about the Commissionerrequesting the officer who served the notice to ask some questions of Sarah Rae.[72] Equally, there is nothing inappropriate about the Commissioner requesting theLancashire Police to make inquiries as to the genuineness of a letter from the schoolwhich Mr Rae had relied on as excusing his failure to comply with timetabledirections.[73] Mr Rae also confuses the actions of the Lancashire Police with theCommissioner in relation to things such as his allegation of "two burly men" visitingthe house at 1 Roshaw. Mr Rae's evidence was that Sarah Rae had "disappeared" andhe did not know where she was. The Lancashire Police therefore would have neededto locate her to serve her. There is no evidence that they were given any instructionsby the Commissioner as to how to go about doing that.[74] Mr Rae's claims of intimidation and harassment are far-fetched. They are notcredible explanations as to why there is an absence of affidavit evidence fromSarah Rae or his parents. I therefore draw an inference that the absence of suchaffidavit evidence is because any affidavit they might file would not assist Mr Rae.Alleged deliberate delays by Commissioner[75] In his updating affidavit of 30 September 2021, Mr Rae at [26], continued hisallegations of improper activity by the Commissioner saying that the Commissionerwas making the litigation as difficult and drawn out as possible.[76] I have already set out the chronology of the restraint and forfeiture proceedingsat [15] above. It is apparent from this timeline that the Commissioner has not beenresponsible for any delays. Likewise, there is no basis for asserting that theCommissioner has delayed the s 28 application. The delays that have occurred inrespect of that application have all been of Mr Rae's making.[77] The evidence was that as early as 30 April 2020, Mr Rae's UK "legalconsultant" Howard Young, informally contacted the Commissioner about thepossibility of a release of some of the restrained funds to meet living expenses.[78] The Commissioner, through Mr McCusker, promptly and helpfully replied tothat email and, by email of 4 May 2020, Mr McCusker explained the legalrequirements for such an application and also attached a copy of a relevant case thathe thought would be of assistance to Mr Rae.[79] Nothing further was heard from Mr Rae or his advisors about an s 28application for the rest of that year.[80] The next thing that happened in relation to the s 28 application was that, somenine months later, on 2 February 2021, Mr Rae filed his s 28 application and asupporting affidavit.[81] On 17 and 23 February 2021, the Commissioner made requests for a furtherinformation.[82] On 18 March 2021, the Commissioner filed and served his notice of oppositionto the s 28 application accompanied by an extensive affidavit fromDetective Sergeant Macdonald.[83] On 22 March 2021, there was a teleconference before Grice J which settimetabling orders requiring Mr Rae to file further evidence on or before 29 March2021 and for the Commissioner to respond on or before 19 April 2021, with the nextcase management conference to be convened following 19 April 2021 for a hearingdate to be set.[84] It was these timetable directions that Mr Rae failed to comply with as discussedabove.[85] In a memorandum to the Court dated 3 May 2021, Mr Rae's counsel sought toexcuse the failure of Mr Rae by stating:the Commissioner has not been prejudiced by this delay as Mr Rae is theparty seeking a variation to the extant restraining orders.[86] There were no delays that were the fault of the Commissioner at any stage ofthe proceedings relating to the s 28 application, and the claim that the Commissionerhas delayed matters or is trying to make these proceedings as difficult as possible forMr Rae is baseless.Effective control[87] Before addressing the issue of whether or not Mr Rae has unrestrained assetsfrom which to meet his expenses, it is necessary to consider whether he has effectivecontrol over the R Ltd assets, in particular, the property at Woodlands Grove and thedebt owed by Philip Holt of £200,000.[88] Whether or not Mr Rae has effective control of these assets is a question offact. It is a different question to who may have legal title to, beneficial ownership of,or possession of, these assets.[89] The Commissioner relies on a number of pieces of evidence to establish thatalthough the legal and beneficial owner of R Ltd and its assets was Sarah Rae, theperson in effective control was Mr Rae.[90] Detective Sergeant Macdonald had analysed all the R Ltd bank transactionsbetween 2013 and 2020. His affidavit of 21 May 2021 confirms that he was unable toidentify any payments over that period generated by Sarah Rae or any withdrawal fromR Ltd accounts directly made by Sarah Rae.[91] In contrast, between 21 April 2015 and 8 January 2019, Detective SergeantMacdonald identified £313,318.89 of payments from R Ltd's bank accounts toaccounts controlled by Mr Rae. All of the payments were made by H at the directionof Mr Rae, not Sarah Rae. A striking feature of the payments is that the amount andtiming of the payments does not reflect the provision of services by Mr Rae to R Ltdbut reflects the need by Mr Rae to pay various personal debts, often credit card debts.The situation seems to have changed in February 2016 with Mr Rae and H realisingthat there needed to be some connection between the pay-outs and the consultancyservices said to have been provided by Mr Rae.[92] On 11 February 2016, Mr Rae emailed H requesting him to set up a "monthlypayment of 2K GBP to my accounts so I can keep the fires burning as per theconsultancy agreement". On 12 February 2016, H responded telling Mr Rae that hewould set up a regular payment of £2,000 and asked him to "send me an invoice for$2K with the narration monthly retainer until further notice".[93] On 17 February 2016, Mr Rae provided H with invoices for February, Marchand April and requested that all three be paid by 5 April 2016 for tax purposes.[94] On 2 October 2016, Mr Rae emailed H and requested that he pay £40,500 tothe Commonwealth Bank account. Mr Rae told H that he "had prepared the file andpaper expenses which I will get to your office" but "I need to settle some bills anddon't want to get caught short once you are on the road".[95] On 11 January 2018, Mr Rae emailed H saying that he was "fairly needy ofsome payments for various reasons". Mr Rae requested that H pay £6,900 off hisAmerican Express card, and £19,300 off his MBNA credit card. The timing and natureof these payments indicates that they had nothing to do with consultancy servicesrendered by Mr Rae but were an example of him using the funds as if they were hisown to pay his personal debts.Woodlands Grove[96] The Woodlands Grove property was purchased in October 2016 by R Ltd. Theevidence was that Mr Rae gave H all of the instructions regarding the purchase and asto the legal structure which was to purchase the property. Mr Rae directed H to makecontact with a real estate agent and a firm of solicitors advising him that R Ltd had abid of £150,000 accepted for the Woodlands property.[97] On 21 October 2016, H sought instructions from Mr Rae as to which structureshould own the property. There is no evidence that Sarah Rae gave any instructionsto H at all.[98] The Commissioner also refers to the fact that, notwithstanding Mr Rae'srepeated claims that he did not have effective control over the Woodlands property andthat Sarah Rae did, there was evidence that from late 2000, Mr Rae, and his advisors,H and Mr Young, were contemplating raising funds by selling the Woodlands property.They refer to an email of 4 November 2020 from H to Mr Young where herecommended that Woodlands:be put on the market and sold allowing the HMRC taxes & fines to be paidand freeing up some cash [99] On 10 December 2020, Mr Young email H advising them of Mr Rae and SarahRae's intention to raise finance against the property through it being sold and the fundsdistributed to the beneficiaries. On 17 December 2020, Mr Young emailed H stating:I've spoken to David and Sarah about the property and the plan is to either sellthe property or move it into an alternative structure, both accepting that the[R Ltd] and [S Ltd] trusts have been tainted and will need to be closed down.[100] Mr Young then refers to some difficulties selling the property immediatelyincluding:There is a logistical difficulty to having recently granted a new two yearassured short hold tenancy to the current tenant. That effectively guaranteesthem uninterrupted tenancy for that period.[101] Mr Young further said:That means we have to, at least for now, go back to the fallback position ofraising finance against it.[102] H responded to that email the same day and the email included statements that:I can understand the issues around the sale of the property and I am wonderingwhether a sale to an appropriate "family nominee" could be considered andthen finance raised to allow the sitting tenant to remain and the best possibletime determined to sell. The untainted funds held within [R Ltd] have beenfully disbursed to DR's benefit which I don't have any issue with as DR wasa contracted consultant to [R Ltd] at the time and meeting these expenseswould be seen as a reasonable and expected obligation of [R Ltd]. However,the property is a different matter and I have fiducial [sic] duties to both DR &sarah now complicated further by their Divorce.[103] H noted in this email, as he had in his email of 4 November 2020, thatDavid Rae could also be added as a beneficiary of the trust along with Sarah Rae andtheir children. If he was added as a beneficiary, then the trustee (H) could make adistribution to him.[104] On 15 January 2021, Mr Young emailed H again in relation to the prospect ofeither selling or raising finance against Woodlands. The relevant passages in his emailsay:We have given careful thought as to trying to sell the property now, whetherthat is done by [R Ltd] or transferred to a.n.other [sic] and then sold. Thereare two practical problems that make that nigh on impossible. The first is, isthe fact that there is now a renewed two year guaranteed tenancy and so onlya purchaser on a buy to let would be attracted to that. Secondly, you willperhaps have seen that the UK has entered into a further severely restrictedlockdown process, with every indication that it is likely to get worse in termsof restrictions before it gets better. Any potential house sale of any sort beforeApril/May this year seems on [sic] workable.The reason that the sale/refinancing was being looked at, was because thereare proceedings in New Zealand, the re-engagement required in the US, thenegligence claim against David's first attorney in the US and the potentialexpansion of these proceedings into the UK. That all comes at a cost and therealistic sole way of dealing with that is to raise finance against the propertyat 7 Woodlands Grove.I can get formal authority from Sarah that she is happy for that to take place,and then the property transferred at a later date to coincide with the closure ofthe [R Ltd] and [S Ltd] Trust. The suggestion is that because David is [sic]undertaken work for [R Ltd] for a period of six years 6+ years, that the transferof the property can be made to him in lieu of an annual consultancy fee andthereafter [R Ltd] is divested of any interest in that property and its HMRCliabilities transferred to the UK.[105] On 6 March 2021, H emailed Mr Young noting what was said to be the highcosts of a proposed loan against the Woodlands property and that the annual interestcost of the loan appears to be greater than the annual income from the property. Healso discussed the problems with paying the proceeds of the loan to David Rae andconcluded:If it's to the various advisors assisting DR through this legal quagmire thenthat needs to be made clear and direct so that [R Ltd] can show a clear link toit being a business expense and not simply a payment to DR.[106] These various passages were put to Mr Rae in cross-examination. He acceptedthat he and his advisors were actively exploring options to deal with this property andthat the reason for this was because he needed funds to pay various debts includingthose referred to in his s 28 application.[107] Under cross-examination, Mr Rae confirmed that, notwithstanding the fact thatthe tenants had only executed a new two-year lease in November 2020, the tenants hadsuddenly and mysteriously vacated the property. By way of explanation for this,Mr Rae said, "I'd understood the police had been round and they'd got scared".[108] No explanation was given as to why a claimed visit from the police could haveso scared the tenants that they would have suddenly abandoned the property withoutletting anyone know in spite of recently having signed a new two-year lease.[109] However, one consequence of the property now being unexpectedly vacant, isthat it would now be able to be sold. There is no up-to-date valuation of it but it isunmortgaged and was purchased for £150,000 in 2017. Mr Rae accepted that it wouldhave increased in value subsequently.[110] Although the rent from Woodlands Grove was being paid into a bank accountin the name of Sarah Rae, notwithstanding the family's claimed dire financial needs,it had simply been accumulating and, as at 16 September 2020, had a balance of£9,567.80.[111] A further argument advanced by the Commissioner in support of theproposition that Mr Rae had effective control over the R Ltd assets is that Sarah Raehad never asserted any ownership entitlement either to the restrained funds or anyother trust property. This was said to support an inference that Sarah Rae did not seeherself as having an interest in these assets.[112] The evidence establishes that it was David Rae, not Sarah Rae:(a) that caused the establishment of the various structures that own theWoodlands Grove property and other R Ltd assets;(b) who directed H as trustee as to where payments generated by the assetswent;(c) who received payments that were not genuinely related to the serviceshe provided but to his needs; and(d) that with his advisors, in actively making plans to sell or mortgageWoodlands Grove in order to provide him with cash to meet hisexpenses, were effectively treating it as his property.[113] These factors have led me to the conclusion that, notwithstanding the elaboratestructures which David Rae created to hold assets such as the Woodlands Groveproperty, it was he, and not Sarah Rae, who retained effective control of them.Availability of other unrestrained assets[114] Neither Woodlands Grove nor the loan from Mr Holt of £200,000 arerestrained. The findings I have made in relation to "effective control" mean that theseassets are available to Mr Rae to meet his needs. It is therefore necessary to try andascertain how much these assets might be realised for.[115] It seems that there are outstanding taxes in relation to Woodlands Grove.However, no detail as to what these might amount to was provided. Given that it isuntenanted, there is no impediment to it being sold immediately. The bank accountwhere the rental from Woodlands Grove was paid would also seem to be availableimmediately. It is less clear what value the loan from Philip Holt actually has.[116] In oral evidence, H claimed that there was "good security" for the loan but,upon being questioned, he confirmed that the only "security" was the personalguarantee of Mr Holt.[117] Mr Holt filed an affidavit in these proceedings dated 15 July 2021. In thataffidavit he confirms that he owes R Ltd £200,000. His affidavit does not addresswhether interest is accruing on that loan or at what rate that might be.[118] He also deposes to owning "a substantial villa in Portugal". The evidence wasthat he purchased the villa for €1.5 million, and as at December 2016, there wasapproximately €517,000 outstanding on the mortgage. The property therefore hasequity far greater than the £200,000 loan. He concludes by saying:I am not presently in a position to repay the loan given the above but I haveevery intention of so doing and my present expectation is to be able to do sowithin a few months' time.[119] In addition to his interest in the Portuguese villa, documents attached toMr Holt's affidavit also referred to him being owed money in excess of £1 millionwhich he said was being recovered for him by SQN Global Ltd which is anothercompany controlled by Howard Young, Mr Rae's "legal consultant".[120] If Mr Holt's affidavit is taken at face value, he is a man of substance andanticipated that he would be able to repay the £200,000 within a few months of 15 July2021. The loan would therefore seem to have some value.[121] As Mr Rae's advisors adverted to in the evidence noted above, the loan fromMr Holt could be assigned. There is no reason why the assignee need simply to be a"family nominee" as was discussed by Mr Rae's advisors. Therefore, I conclude thatvalue could be extracted from the loan either by way of assigning it for value to a thirdparty or taking action to enforce it. There is no reason why, for example, Mr Holtcould not mortgage his substantial villa in Portugal and repay the loan. I thereforeconclude that Mr Rae does have potentially substantial sources of unrestrained fundsavailable to him to meet the sort of expenses that he has claimed in his s 28 application.The Australian and Hong Kong bank accounts[122] There were two other assets of Mr Rae that the Commissioner alleged wereavailable for him to meet his debts and living expenses. These were the Fu Lei YanHSBC bank account in Hong Kong and the Commonwealth Bank of Australia account.Although Mr Rae claims that both accounts were closed and had no funds, he providedno evidence from either bank to support that. Copies of bank statements in respect ofthe two accounts would have been readily obtainable as would formal confirmationfrom the banks by way of letter.[123] Detective Sergeant Macdonald deposed that Mr Rae has failed to comply witha request that he provide the bank statements.[124] Mr Rae was cross-examined about both the CBA and HSBC accounts. He saidhe had to close the CBA account because he was not living in Australia and that he didnot have access to it for the purposes of an s 28 application. He did not explain whyhe could not produce his final bank statement or have asked the bank for a copy of it.[125] He was cross-examined about the HSBC account and, in particular, about aconversation with an undercover FBI agent in the United States. Mr Rae told theundercover agent of his intention to transfer his share of the proceeds from thehealthcare fraud scheme to the Fu Lei Yan account and offers use of the account to theundercover agent.[126] The transcript of conversation with the FBI agent contains the followingextracts each attributed to Mr Rae:What I'm saying to you is there's no reason why I can't give you, it's calledFu Lei Yan, it's a Chinese company that's been trading for 6, 7 years. I boughtit off these guys for a fee 'cause I wanted an existing account that was openthat had a history That costs me money so I literally have to go to Hong Kong to find a load ofmoney in my hole in the wall that I have in Hong Kong, pay them some cash.David's appears that he's left, I then put my KYC into the bank, so HSBC'sgot my passport not my utility bill. I am the ultimate beneficial owner of it.But then I have a nominee in place. So I've got a German guy who fronts itfor me but he does what I tell him so long as I'm doing everything legal. Right? So I'm a supplier to the New Zealand company, and the profits of theNew Zealand company, 10% of them come to Fu Lei Yan, and then I live offthat and then I'm invisible ever after. I can easily make you the 20%, so it'sDave plus Herb, 20% [127] Under cross-examination, Mr Rae did not deny that this is what he had said tothe undercover agent.[128] Mr Rae also accepted that NZ$122,000 that had been in the HSBC account hadbeen returned to S Ltd by Alex Caymar, who was the nominee director of Fu Lei Yan.He claimed that Mr Caymar had done this without his knowledge and without anyinstructions from him. However, he did not deny that he was the beneficial owner ofthe funds.[129] The evidence establishes that Mr Rae effectively controlled the HSBC accountand that the nominal owner of that account was controlled by him. Mr Rae's statementto the FBI undercover officer confirmed that he used the account to hide moneyderived from schemes that he had been involved in. Given this situation, it isunderstandable why Mr Rae would not wish to provide full details of this account toDetective Sergeant Macdonald when requested. His refusal to obtain and providedocumentary evidence which would support his claims reflects poorly on hiscredibility. However, I am not in a position to come to a conclusion that funds remainin either of the bank accounts which could be utilised by Mr Rae.[130] Detective Sergeant Macdonald also referred to a bank account of Mr Rae's atLloyds Bank. Between 26 July 2019 and 21 January 2021, S Rae deposited a total of$12,330 into that account. Detective Sergeant Macdonald deposed that on23 February 2021, the Commissioner requested an explanation from Mr Rae for thesource and nature of these funds along with supporting information but that noresponse has been received from Mr Rae.[131] The Commissioner also noted that between 20 February 2020 and27 November 2020, approximately $15,140.74 were transferred into the Lloyds Bankaccount from an account in the name of D Rae.[132] On 23 February 2021, the Commissioner requested an explanation for thesource and nature of these funds along with supporting information but no responsehas been received.[133] Mr Rae's failure to provide the information requested by the Commissionerabout this account is concerning. It would support an inference that there is somethingabout the account that he does not want the Commissioner to know. However, giventhe presently incomplete information in relation to that account, I am unable to cometo a view that it presently contains funds available to Mr Rae.Payments sought[134] Although my finding that Mr Rae effectively controls other assets not subjectto restraint from which he could meet his reasonable needs disposes of the s 28application, I will now address the sums sought as a number that are clearly notrecoverable under s 28.The house at 1 Roshaw[135] In his affidavit of 1 February 2021, Mr Rae sought payment of a number ofexpenses in relation to the former matrimonial home at 1 Roshaw. These are set outin full at [22] above, and included monthly mortgage payment of £700, houseinsurance of £75 per month, electricity/gas/water payments of £160 per month, andSky/TV/licence/broadband/phone of £150 per month. At that stage, Sarah Rae wasliving in the house with the parties' two younger children.[136] Mr Rae also sought a lump sum payment of £49,500. His explanation forseeking this was that he wished to rent an apartment or small house for himself andthis:will require 1-2 months deposit to be paid in advance. Given my adversecredit rating, I may be asked to pay the whole rental upfront; the rental wouldbe for either 6 or 12 months and that is why I need access to some form oflump sum to enable me to pay that.[137] Mr Rae also sought the sum of £500 per month being "rent payable to parents".[138] It appears that the former matrimonial home has been vacant since Sarah Rae"disappeared" in March 2021. Mr Rae's evidence was that the parties' two youngersons had been residing with him at his parents' place. Nobody has been living at1 Roshaw. The mortgage and other costs continue to be paid by, Mr Rae says, hisparents.[139] In his updating affidavit of 30 September 2021, Mr Rae acknowledges that anobvious way of reducing his expenditure would be for him to move back into1 Roshaw. He resists that suggestion saying, amongst other things, that no greatreduction in expenses would be achieved other than the potential savings of him notneeding to rent somewhere else. I do not accept that contention. Not only would hesave on the rental, he would eliminate the need to pay two sets of utility charges andavoid paying things like council tax (£204 per month), and house insurance (£75 permonth) on an empty house. He would also avoid the need to obtain the lump sumpayment of £49,500.[140] Mr Rae also said that:Sarah Rae moving out may not be a permanent state of affairs. The actionsof the Commissioner and the intimidatory tactics deployed via the local policeprecipitated that. Once these proceedings conclude, it may be that she returns.In that event, I still need to find somewhere to rent and live.[141] I have already rejected Mr Rae's claims that the Commissioner has attemptedto intimidate or bully either him or Sarah Rae. Sarah Rae has now been gone for someseven months with Mr Rae claiming not to know where she is. It would beirresponsible to leave the house sitting vacant against the possibility she might one daycome back.[142] Mr Rae also says:I cannot move, even on temporary basis to 1 Roshaw. My mother's injury andher arm being incapacitated means she needs someone around to help her athome and to drive her to appointments. My father still works full-time tosupport us all at this difficult time. It will be 10 weeks from 10 August untilshe can drive and regain the proper mobility in her arm.[143] Mr Rae's evidence was that his parents' house was "just up the road from1 Roshaw". If Mr Rae was living at 1 Roshaw, there is no reason why he could notassist his mother with whatever tasks need to be done around the house, or drive herto her appointments.[144] If Mr Rae does not wish to move back to 1 Roshaw, then there would seem tobe no reason why the house should not be sold and the substantial equity in it realised.No doubt Sarah Rae would be entitled to a share of the equity by way of a matrimonialproperty claim, but that would still leave a substantial amount to meet Mr Rae'simmediate living expenses.Motor vehicle[145] Mr Rae has claimed £350 monthly as "lease payments to rent a car". He hasalso claimed monthly payments of £196 for car insurance/life insurance (nobreakdown as between the two), and fuel/car maintenance/road tax of £150. Thereseems to be some duplication in these sums. It also seems that Mr Rae does notactually have a car lease.Backdating[146] Mr Rae has asked for a backdating of the claimed £4,516 per month livingexpenses to February 2020. His counsel's submissions quantified the backdatingamount as being £76,500 or NZ$152,235. The reason set out by Mr Rae in hisaffidavit for the backdating was that it"would enable me to pay off the personaldebts I have borrowed from family members ".[147] There are a number of problems with a claim for backdating of expenses.[148] All of the expenses that Mr Rae seeks the backdating payment for have beenmet. By way of example, the mortgage payments on the former family home weremet throughout 2020 and indeed are still being met. There is no evidence as to exactlywho met each component of Mr Rae's claimed living expenses although he generallyclaims that his parents have supported him. There is no evidence that he has actuallypaid £500 per month rent to his parents, either in the past or currently, nor any evidencethat he has paid his parents £600 per month for food.[149] There is no evidence of any demand having been made by his parents (orSarah Rae) for any sum that he may have borrowed from them. There is no evidenceof any loan agreement and critically, there is no affidavit from his parents (orSarah Rae) confirming the details of any loan. As discussed above, there is no credibleexplanation for the failure by Mr Rae to submit such affidavit evidence.[150] Some of the expenses claimed by Mr Rae are also clearly no longer expenses.For example, he refers to a child maintenance cost (post-divorce) of £500 per month.Given that he has had the children since March this year, that sum would no longer bepayable by him, and indeed it may be that Sarah Rae has an obligation to make acontribution to children maintenance. Beyond acknowledging, in his 30 September2021 affidavit, that Sarah Rae had transferred to him "the family allowance via thelocal authority" called the HMRC benefit, amounting to £140.60 per calendar month,he is silent as to any child support he might be receiving from her.Purpose for which s 28 payments are sought[151] The Commissioner claims that the ongoing payments sought by Mr Rae havenothing to do with meeting his living expenses but in reality are designed to obtainfunds that he can use to replace the structures in New Zealand through which hechannelled the funds generated by his activities because those structures had nowbecome tainted. There is a clear evidential basis for this submission.[152] In his supplementary affidavit of 23 August 2021, Detective SergeantMacdonald refers to an email exchange between Mr Rae's advisors, Mr Young and H,on 21 April 2021 where Mr Young said to H:We also took on board your comments about the collapsing of the NZstructures as soon as circumstances in NZ resolve. David needs to have analternative offshore structure in place and we are in the process of looking atthat. It requires expenditure and travel in order to be able to achieve that andhence the desire to conclude the s 28 application in NZ as it frees up moneyfor David to spend on some tax advice in the UK and an offshore structure toreplace NZ. I will keep you advised but wanted you to know that is very muchin hand and a work in process [sic].[153] Mr Rae was cross-examined about this evidence. He did not deny that he andhis advisors were looking to replace the New Zealand structures with other similarstructures in another country.[154] I infer from this evidence that, although Mr Rae has characterised his s 28claim as being to fund current living expenses and pay debts, he actually intends touse some or all of any funds made available for completely unconnected purposesrelating to further unspecified business activities in other countries. That is not whats 28 is for.Business expenses[155] Mr Rae makes a claim under s 28(1)(b) for "business expenses" totalling£8,935 (said to be NZ$17,718). The submissions in support of this say:This figures comprises air fares, accommodation, administration fees, andVisa costs that Mr Rae incurred in international travel to Thailand and HongKong when maintaining his business interests there.[156] The business expenses relate to a trip that Mr Rae made to Bangkok in 2020shortly after his release from prison in the United States. Mr Rae has been reluctantto provide any details as to the nature of any business he had in Thailand. In hisaffidavit in support of the s 28 application, he says:I have incurred the business expenses set out below following travelling toThailand and ultimately being stranded there. Prior to my incarceration I hadother business interests in Thailand and Hong Kong that were unrelated to thepresent proceedings. My intention was to stop off briefly in both Thailand andHong Kong to deal with those matters and then travel onto New Zealand.[157] Nowhere in the evidence before the Court is there anything which describesany legitimate business activity in neither Thailand nor Hong Kong. The onlyevidence about the Hong Kong business is the evidence discussed above obtainedthrough the taped conversation with FBI undercover agent. Business activities of thattype are not legitimate. There is no evidence that Mr Rae generated any income fromeither Thailand or Hong Kong in 2020, let alone any profit. The Court inCommissioner of Police v Burgess indicated that it was not appropriate to apply forfunds by way of a s 28 application to prop up a business that was not making a profit.17[158] There is little evidence of any legitimate business activity having beenundertaken by Mr Rae over the past decade. We know from the decision of theSolicitors Disciplinary Tribunal that Mr Rae's involvement with the law firmoriginally known as Emmett Solicitors, began in 2011 when a company associatedwith him purchased shares in the firm. We know from that decision that thereafterMr Rae provided what was said to be consultancy services to the firm, but was in effectcarrying out the job of Chief Executive Officer.[159] We know that Emmett Solicitors was engaged in wholesale fraud in respect ofa litigation funder known as Axiom. The model seem to be that a call centre was usedto call people who may potentially have valid litigation claims, often in the consumerarea. Emmetts Solicitors was an agent of Axiom and, for each claim it opened, it17 Commissioner of Polilce v Burgess, above n 9.received a retainer from Axiom. The retainer was meant to cover the cost of pursuinglitigation in respect of the clients whose files were opened but those funds were usedby those controlling the firm (including Mr Rae) for other purposes. This ultimatelyresulted in the insolvency of the firm and losses of some £29 million to Axiom.[160] When Mr Rae's involvement in this scam was put to him in cross-examination,with the question: "So the Tribunal found that you had received payments dishonestly,do you deny that?" Mr Rae's voluble response was, "I absolutely do deny that". It istherefore helpful to look at exactly what findings the Solicitors Disciplinary Tribunalmade against Mr Rae.[161] The Tribunal made a number of findings of dishonesty. At [44.9.2] of thedecision, it said:[Mr Rae] had a personal stake in the borrowing continuing and this wasreflected in the substantial financial benefit he had received. He had beenimmune from being sacked precisely because of his integral role in the fundingarrangements of the Firm. The Tribunal was satisfied beyond reasonabledoubt that ordinary decent people would regard it as dishonest for a seniormember of a Firm to cause and permit excessive and reckless borrowing oftens of millions of pounds when that individual stood to make a substantialpersonal gain from that, notwithstanding the dire consequences for the Firmand its clients.[162] At [59.8], it concluded:Matters were aggravated by [Mr Rae's] dishonesty and the fact that his actionswere deliberate, calculated and repeated. It continued over a period of timeand [Mr Rae] clearly knew that he was in material breach of his obligations,as evidenced by the deed of trust device put in place to get around therestrictions on the ownership of the Firm.[163] The "trust device" being referred to was the use of the trust to hold shares in acompany which in turn held shares in the firm. It was not dissimilar to the sort of truststructure Mr Rae created in New Zealand. A further similarity was the fact that Mr Raehad extracted money from the firm of Emmetts Solicitors by way of a consultancyagreement rather than through the company that held his shares.[164] After the collapse of Emmetts Solicitors, the next business activity that wehave any evidence of relates to his contact with H in 2013 and the establishment of thecomplex New Zealand structures. It was those structures that facilitated Mr Rae'smoney laundering activities which resulted in him pleading guilty to moneylaundering and having a sentence of imprisonment imposed. Before he was sentencedin the money laundering case, he was questioned under oath and confirmed that he hadcommitted the offence with which he had been charged and was entering a plea ofguilty because he was in fact, guilty.[165] Surprisingly, in these proceedings, Mr Rae's position has completely changed.He is now saying that it is "my position that I did not commit the underlying offending"and that he only entered a guilty plea "given the practicality of the circumstances".18[166] Accepting that proposition would involve a finding that Mr Rae committedperjury in the United States. It would also involve disregarding the evidence of histaped conversation with the FBI undercover witness and the evidence of Mr Rae's pastdishonest modus operandi. I am not prepared to do that. I therefore draw the inferencethat Mr Rae's business activities in the United States were dishonest ones. Thatsupports the inference that the unspecified business activities in Thailand andHong Kong that he has sought recompense for are unlikely to have been legitimate.[167] I also note that there is no evidence that any of the £17,000 of claimed businessexpenses is still an outstanding debt. By whatever means, Mr Rae has been able topay all the accounts from one source or another. They are not therefore mattersproperly the subject of an application under s 28.Other claimed debts[168] Mr Rae claims a number of payments pursuant to s 28(1)(c) as being a debtincurred by him in good faith. The first of those is the sum of US$50,000 (NZ$72,000)which was paid to his first US attorney in respect of the money launderingproceedings, Thomas Ashley.[169] In cross-examination, Mr Rae conceded that these funds had been sourced fromR Ltd. His evidence was:18 Affidavit in opposition to a forfeiture application at [95].So Sarah advanced the money from [R Ltd], and you can see that on the[R Ltd] bank statement, the 50,000, and I had to repay [R Ltd] plus Sarah,that's what it's for.[170] There is no debt owing to Sarah Rae in this regard. The finding I have madeas to effective control means that all that happened was that Mr Rae was effectivelyusing funds that he had effective control over to pay his US lawyer in the criminalproceedings.[171] Mr Rae also applies for the sum of US$30,000 (NZ$43,200) in respect of thefees of his second US attorney, Mr Touger. Mr Touger was paid at the time but Mr Raesays that he borrowed the money from his parents and is obliged to repay them. Hefurther claims, "They are retired and that money was paid from their savings".[172] Elsewhere in his evidence, Mr Rae has claimed that his father is continuing towork so that he can provide money to assist him. It is impossible to reconcile theinconsistency between the two claims.[173] In any event, there is no evidence of any loan agreement or any demand forrepayment from Mr Rae's parents. In support of this claim, Mr Rae filed a screenshotof part of a bank statement. The screenshot did not show the name of account holderand, in cross-examination, Mr Rae conceded that the screenshot did not confirm hisclaim that the account in question was his mother's. Mr Rae's explanation, in cross-examination, as to why a copy of the full account was not provided was:I asked my mother if I could take a screenshot of her Internet banking to helpprove the point and this is what I could get. They are not prepared because ofthe things I've outlined previously to release anything else. But I said it'sreally important that I prove it to the Court the best I can and this is what I got.[174] Mr Rae's counsel, in written submissions, repeated the claims made by Mr Raeas to why there is no evidence from Mr Rae's parents supporting the various claimsMr Rae makes about them, saying, "Third parties like Mr Rae's parents have goodreasons for not wanting to become involved in these proceedings".[175] As noted above, Mr Rae's claim that his parents have been affected by"intimidation" by the Commissioner and that this why they will not provide evidencein these proceedings, is simply not credible.[176] I conclude that the evidence does not establish that there is a debt owed by MrRae to his parents in respect of the US$30,000.True Matrix Ltd invoices[177] Mr Rae also seeks a total of NZ$103,770.68 (£52,146.07) to pay True MatrixLtd. This is said to relate to activities by "legal consultant", Howard Young, onMr Rae's behalf in relation to the United States proceedings.[178] Counsel for the Commissioner challenged this claim on a number of grounds.The first was genuineness. The inconsistency between Mr Young's original estimateof £30,000 for his services was contrasted with the much higher figure subsequentlyclaimed. It was also noted that the sum claimed appeared out of proportion to thevalue that Mr Young could have added to the proceedings. The US based lawyersundertook the burden of representing Mr Rae in the US proceedings. Mr Young wasnot qualified to practice law in the United States, and neither was he qualified topractice law in the UK having been struck off some years previously.[179] It was also noted that between May 2019 and January 2020 (the period coveredby the invoices from True Matrix Ltd) approximately NZ$133,330 (£67,000) wastransferred from an account associated with Mr Rae in New Zealand True Matrix.[180] The response of Mr Rae's counsel was firstly that previous correspondencebetween the parties (in relation to the projected costs of Mr Young) "should not beviewed as having been prepared with the same rigour as a formal application like thepresent one". It was also claimed that "any previous sums paid to True Matrix areirrelevant for the purposes of Mr Rae's current request". It was claimed that theNZ$103,770.68 (£52,146.07) was only the balance of unpaid True Matrix fees anddisbursements. If that is so, then the total account for Mr Young's services throughTrue Matrix in connection with his involvement in the US proceedings isNZ$238,130.88 which is more than double the total fees charged by Mr Rae's two USattorneys which together came to NZ$116,729.62. It is not possible to accept that thesums claimed by True Matrix represents reasonable remuneration for the actualservices Mr Young provided in relation to Mr Rae's criminal prosecution in the UnitedStates.[181] However, there is an even more fundamental reason why the accounts fromTrue Matrix Ltd cannot be claimed under s 28. That is because none of them wereincurred by Mr Rae.[182] The exhibits attached to Mr Rae's affidavit of 1 February 2021 confirm thatthe invoices from True Matrix Ltd were addressed to R LP.R Ltd invoices[183] Mr Rae seeks release of NZ$139,302 (US$96,750) in respect of sums he is saidto owe to R Ltd.[184] The Commissioner disputes that the services in respect of which the fees wererendered could be said to be a specified debt incurred and good faith for the purposesof s 28(1)(b). It was correctly submitted that the issue of whether a debt has occurredin good faith is judged from the vantage point of the respondent (Mr Rae) rather thanthe creditor.19[185] It was submitted that a debt will not be incurred in good faith where the debtorobtains it for a purpose that is contrary to the purposes of the CPRA. It was submittedthat the establishment and operation of the structures in New Zealand that the invoicesrelated to, facilitated Mr Rae's criminal activities and included the payment of "kick-backs" out of New Zealand to co-conspirators in New Zealand and Latin America. Itwas also submitted that some of the payments appear to have been made by R Ltd withlimited information about the transactions involved.[186] In response to this claim, Mr Rae's counsel noted that the Commissioner hasnot made allegations of criminal wrongdoing against the director of R Ltd.19 See Commissioner of Police v Taylor, above n 16, at [19].[187] That submission is correct, however, for the reasons set out above, that doesnot resolve the issue of whether the debts could be said to have incurred in good faith.[188] The focus is on Mr Rae's purposes and intentions rather than those of theperson who provided the services. There is evidence to support the Commissioner'sargument that Mr Rae's use of structures to which the accounts relate, involvedfacilitating his criminal activities.[189] However, just as with the case of the True Matrix invoices, none of the invoicesappended as exhibits to Mr Rae's affidavit of 1 February 2021, are addressed to himpersonally. The invoices are addressed either to R LP or to S Ltd. On that basis, theycould not be said to be debts that Mr Rae has personal liability for and cannot be thesubject of an application under s 28.Outcome[190] For the reasons detailed above, the application under s 28 of the CPRA isdismissed.[191] The parties are invited to agree costs between themselves. If such agreementis not forthcoming within 14 days, the applicant will file written submissions as tocosts of no greater than three pages, with the respondent to file submissions in reply,again, of no greater than three pages within 14 days of receipt of the applicant'ssubmissions. I will then address the issue on the papers.Churchman JSolicitors:Crown Solicitor, Wellington for ApplicantK3 Legal Limited, Auckland for Respondent