SIU JUN ZHOU v COMMISSIONER OF POLICE [2023] NZSC 124

SIU JUN ZHOU v COMMISSIONER OF POLICE [2023] NZSC 124 [14 September 2023]IN THE SUPREME COURT OF NEW ZEALANDI TE KŌTI MANA NUI O AOTEAROASC 52/2023[2023] NZSC 124BETWEEN SIU JUN ZHOUFirst ApplicantLEVONZ INVESTMENT LIMITEDSecond ApplicantAND COMMISSIONER OF POLICERespondentCourt: O'Regan, Ellen France and Williams JJCounsel: A J Ellis for ApplicantsP D Marshall and M W McMenamin for RespondentJudgment: 14 September 2023JUDGMENT OF THE COURTA The application for an extension of time to apply for leaveto appeal is granted.B The application for leave to appeal is dismissed.____________________________________________________________________REASONS[1] The respondent (the Commissioner of Police) applied to the High Court forprofit forfeiture orders under the Criminal Proceeds (Recovery) Act 2009(the CPR Act) against the first applicant, Mr Zhou, and a company associated withhim, Levonz Investment Ltd (Levonz).1 The High Court Judge made the orders.2 Shefound that the unlawful benefit obtained by Mr Zhou was $2,214,000 and ruled that1 There was also an application for asset forfeiture orders but this did not need to be determined, onthe basis that the profit forfeiture orders were made.2 Commissioner of Police v He [2022] NZHC 533 (Doogue J) [HC judgment].the Commissioner was entitled to recover that amount under the CPR Act. Mr Zhouand Levonz appealed to the Court of Appeal, but their appeal was dismissed.3[2] The background to the CPR Act proceedings was that Mr Zhou, a Ms He andothers were involved in a large-scale synthetic cannabis supply operation. Mr Zhoupleaded guilty in 2015 to a charge of possessing a psychoactive substance for thepurpose to sell or supply. In 2019, Mr Zhou pleaded guilty to a charge of selling orsupplying non-approved psychoactive substances and two charges of possession forsupply of such substances. The amount involved was approximately 173 kilograms.Mr Zhou also pleaded guilty to charges involving possession of weapons and ofammunition. Mr Zhou was sentenced to 26 months' imprisonment on the drugscharges, with concurrent one-year terms imposed in relation to the other charges.4[3] In the High Court, Mr Zhou conceded that he had unlawfully benefited fromsignificant criminal activity, which enlivened the jurisdiction under the CPR Act.5 Healso conceded that the value of the benefit was presumed to be the value stated in theapplication ($2,214,000). But he sought to rebut the presumption as to the value ofthat benefit on the balance of probabilities, as provided for in s 53(2) of the CPR Act.The High Court Judge found he failed to achieve this, and that was upheld by theCourt of Appeal.[4] The appeal to the Court of Appeal was based on three grounds. The first wasthat the High Court Judge had been wrong that Mr Zhou failed to rebut thepresumption that the benefit was $2,214,000. The second was that the Commissionerhad recovered twice from the benefit received by Mr Zhou and Ms He (Ms He wassubject to a forfeiture order of $3,510,000). The third was that the High Court Judgewas wrong to find Mr Zhou would not suffer from undue hardship. All three groundsof appeal failed.3 Zhou v Commissioner of Police [2023] NZCA 137 (Collins, Venning and Gendall JJ).4 R v He [2019] NZDC 24130.5 The High Court recorded his counsel's submission that, on the balance of probabilities, theCommissioner could prove an unlawful benefit: HC judgment, above n 2, at [32].[5] The application for leave to appeal to this Court is out of time, but the Crowndoes not object to an extension of time to make the application. We grant theextension.[6] As mentioned above, it was conceded in the Courts below that the jurisdictionwas enlivened and that the value of the benefit was presumed to be at least $2,214,000.There are now effectively concurrent findings of the Courts below that there is no basisto make an order for less than $2,214,000, because the presumption is not rebutted,there is no double recovery (or, if there is, it does not matter) and there is no unduehardship.[7] The application for leave to appeal is advanced on the basis that it is notproposed to take issue with the findings of the Courts below but rather on the basisthat, if leave is granted, a new argument will be advanced. The applicants wish toargue that the CPR Act regime is criminal in nature and therefore triggers rights underss 9, 21, 25(d) and 26(2) of the New Zealand Bill of Rights Act 1990 and also art 10of the Bill of Rights 1688, which prohibits the imposition of "excessive fines". Theessence of the proposed argument is that Mr Zhou, having served a sentence ofimprisonment, has now been subjected to a second criminal proceeding (the CPR Actproceeding) involving the imposition of a second penalty and, given the size of thepenalty, this amounts to an excessive fine. They also submit that there was amiscarriage of justice as the Courts below did not apply the criminal standard of proof.[8] The respondent opposes the grant of leave. Counsel for the respondent makethe point that this Court usually refuses to give leave on points that have not been takenin the Courts below, citing LM v R and Cuthers v R.6 They also submit the proposedargument would confront the very plain wording of the CPR Act. And, they submit,even if the proposed argument were accepted, there would be arguments available tothe respondent to resist the contention that there were breaches of rights arising fromthe process followed in the present case.[9] We accept that there may be an argument that the question of whether theregime created by the CPR Act is criminal in nature would raise a matter of public6 LM v R [2014] NZSC 9, (2014) 26 CRNZ 643; and Cuthers v R [2016] NZSC 109.importance.7 But we do not consider that it would be appropriate to grant leave toappeal to this Court to argue the point in circumstances where it has not been arguedin either of the Courts below. That means we do not have the benefit of decisions inthe lower Courts assessing the merits of the proposed argument to inform our decisionas to whether leave should be granted or, if leave were granted, to inform ourassessment of the merits of the argument on appeal. In addition, the challenge nowproposed runs counter to the concessions made in the High Court that the regimeapplied to Mr Zhou and the basis on which the case was argued below. In thosecircumstances we do not consider any risk of a miscarriage of justice arises.8[10] The application for leave to appeal is dismissed.Solicitors:Malley & Co, Christchurch for ApplicantsCrown Law Office, Wellington for Respondent7 Senior Courts Act 2016, s 74(2)(a).8 Section 74(2)(b).