COMMISSIONER OF POLICE v LI [2021] NZHC 667

COMMISSIONER OF POLICE v LI [2021] NZHC 667 [30 March 2021]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2020-404-2017[2021] NZHC 667UNDER Criminal Proceeds (Recovery) Act 2009BETWEEN COMMISSIONER OF POLICEApplicantAND SHUCHEN LIUFirst RespondentSIUSIU HAOSecond RespondentJAEMAL HONEYCOMBEThird Respondent/contHearing: On the papersCounsel: H Macdonald and C Purdon for the ApplicantM Kan for the Fourth RespondentJudgment: 30 March 2021JUDGMENT OF GORDON JThis judgment was delivered by meon 30 March 2021 at 2 pm, pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors: Crown Solicitor, AucklandDominion Law, AucklandCounsel R Mansfield, AucklandM Ryan, AucklandM Pecotic, AucklandYAN LIFourth RespondentTAINUI KARAKAFifth RespondentANTON KAHOTEASixth RespondentXINYU CHENSeventh Respondent[1] In this proceeding the Commissioner of Police (Commissioner) has obtainedwithout notice restraining orders against all respondents and on notice restrainingorders against some of the respondents under the Criminal Proceeds (Recovery) Act2009 (the Act).[2] The Commissioner and the fourth respondent, Yan Li, now seek the Court'sapproval for a settlement under s 95 of the Act.[3] The proceeding arose out of a police investigation commenced in July 2020which focused on what was said to be an organised crime group believed to beinvolved in the importation, supply and distribution of MDMA and methamphetaminethroughout the Auckland area.[4] The production and distribution of MDMA and methamphetamine were saidto have occurred mainly from a commercial property rented by the first and secondrespondents. When the police investigation concluded on 28 October 2020, over1,000 MDMA pills and approximately 3 kg of methamphetamine were located ataddresses associated with the first and second respondents.[5] The police intercepted communications between the first respondent and Mr Liwhich suggested that Mr Li was both supplying the first respondent with MDMA andmethamphetamine and, in turn, was assisting the first respondent in supplying thirdparty associates with MDMA.[6] On 29 October 2020, Whata J made orders in terms of the Commissioner'samended without notice application of 28 October 2020 in relation to various itemsof property owned by, or said to be in the effective control of the respondents,including real estate, motor vehicles and bank funds.[7] On 3 November 2020, before the without notice restraining orders lapsed, theCommissioner filed an on notice application for restraining and further orders over thesame property subject to the without notice restraining orders and over furtherproperty.[8] On 26 November 2020, at the first call of the on-notice application, Hinton Jmade orders in relation to some of the respondents, including Mr Li. The only propertyrestrained by order of the Court against Mr Li in this proceeding is a 2020 Ford Ranger,registration MQT128 (Ford Ranger) registered to Mr Li, and excluding the interest ofUDC Finance Ltd.[9] At this stage, the Commissioner has not yet filed an application for civilforfeiture orders.Proposed settlement[10] By joint memorandum dated 26 March 2021, the Commissioner and Mr Liadvised that they have agreed to settle the question of forfeiture of assets betweenthemselves, subject to the Court's approval which is required under s 95 of the Act.The proposed settlement is on the following terms:(a) An asset forfeiture order is made under s 50(1) of the Act by consent,over the Ford Ranger;(b) The Commissioner will not pursue an application for profit forfeitureorders against Mr Li in relation to the significant criminal activity saidto be evidenced in this proceeding;(c) Mr Li abandons all claims, under the Act or otherwise, to the propertythat is to be forfeited; and(d) Costs in relation to the matter lie where they fall as between theCommissioner and Mr Li.[11] The parties note that the proposed settlement entails the entirety of the propertysubject to the orders of this Court referred to above, being forfeited to the Crown.Statutory provision[12] Section 95 of the Act, which governs settlement, provides:95 High Court must approve settlement between Commissioner andother party(1) The Commissioner may enter into a settlement with any person as tothe property or any sum of money to be forfeited to the Crown.(2) A settlement does not bind the parties unless the High Court approvesit.(3) The High Court must approve the settlement if it is satisfied that it isconsistent with—(a) the purposes of this Act; and(b) the overall interests of justice.[13] First, as to the purposes of the Act: the primary purpose, in s 3(1) is to establisha regime for the forfeiture of property that has been derived directly or indirectly fromsignificant criminal activity or that represents the value of a person's unlawfullyderived income. The ancillary purposes in s 3(2) include to eliminate the chance ofpersons to profit from undertaking or being associated with significant criminalactivity and to deter significant criminal activity.[14] The words "overall interests of justice" in s 95(3) require a broad inquiry.1Relevant factors include the saving of time and cost and the litigation risk of a hearingto the Commissioner and a respondent.2 The Courts have recognised that a decisionto settle proceedings under the Act will often reflect a "pragmatic" arrangement orsolution, a "common sense compromise" or a "sensible resolution" that will meet thepurposes of the Act and the overall interests of justice.3[15] For the reasons advanced by the parties, I am satisfied that the settlementproposed is consistent with the purposes of the Act and the overall interests of justice:(a) There will be a saving of time and cost if the matter can be resolved byconsent without the need for the Commissioner to file a civil forfeitureapplication and a consequential hearing;1 Commissioner of Police v Li [2018] NZHC 1566 at [32].2 Commissioner of Police v Kree [2013] NZHC 2972 at [11]; Commissioner of Police v Zhang[2016] NZHC 930 at [8].3 Commissioner of Police v Douglas [2015] NZHC 1293 at [6].(b) Settlement will also obviate the need for expenditure of the Court's timeand resources in determining an application for civil forfeiture orders;(c) The agreed settlement recognises the risks inherent in such litigation toboth parties and allows them to have certainty and control as to theoutcome; and(d) Finally, and fundamentally, the proposed settlement results in forfeitureof all the property restrained against Mr Li, with nothing to be releasedto him.Result[16] Given I am so satisfied, under s 95, I must approve the settlement. I make thefollowing orders, so as to give effect to the settlement:(a) Assets forfeiture orders, under s 50(1) of the Act: the followingproperty vests in the Crown absolutely and is in the Official Assignee'scustody and control:(i) 2020 Ford Ranger, registration MQT128, registered to Yan Li,excluding the interest of UDC Finance Ltd.(b) Costs: costs in relation to the matter lie where they fall as between theCommissioner of Police and Mr Li.[17] Further, as requested by the parties, I note the further terms of the agreedsettlement:(a) The Commissioner will not pursue an application for a profit forfeitureorder against Mr Li in relation to the significant criminal activity saidto be evidenced in these proceedings;(b) Mr Li abandons all claims, under the Act or otherwise, to the propertythat is to be forfeited; and(c) The settlement is entered into by Mr Li expressly on the basis of noadmission of liability.[18] For completeness I record that once the orders are sealed, the proceeding so faras it concerns Mr Li, will be at an end.___________________________________Gordon J