COMMISSIONER OF POLICE v WONG [2021] NZHC 2713

COMMISSIONER OF POLICE v WONG [2021] NZHC 2713 [11 October 2021]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2018-404-000140[2021] NZHC 2713UNDER the Criminal Proceeds (Recovery) Act 2009BETWEEN COMMISSIONER OF POLICEApplicantAND SHUI TONG WONGFirst RespondentYANFANG WUSecond RespondentYUEN CHEUNG CHANThird RespondentHearing: On the papersAppearances: M Harborow and R Ching for the ApplicantM Ryan for the Second Respondent and Ms YX Wu (interestedparty)Judgment: 11 October 2021JUDGMENT OF WALKER J[redacted version]This judgment was delivered by me on 11 October 2021 at 3 pmPursuant to Rule 11.5 High Court RulesRegistrar/Deputy RegistrarIntroduction[1] Before the Court is a joint memorandum from counsel for theCommissioner of Police (the Commissioner) and counsel for Yanfang Wu (Ms Wu)and Yanxian Wu (Ms YX Wu), an interested party. The memorandum invites the Courtto approve a proposed settlement reached between the Commissioner and those partiesunder s 95 of the Criminal Proceeds (Recovery) Act 2009 (the Act).[2] Any settlement made in relation to proceedings brought under the provisionsof the Act is required to be approved by this Court.1Background[3] These proceedings arose following an investigation by Police into a criminalsyndicate that imported 160 litres of N-tert-butoxycarbonyl-methamphetamine (t-bocmethamphetamine) disguised as dishwashing liquid into New Zealand in January2017. The first respondent, Shui Tong Wong (Mr Wong), received the consignmentand conspired with others to use it to manufacture methamphetamine.[4] On 14 March 2017, Police searched the home address of Mr Wong and hispartner, Ms Wu. They located 23 grams of methamphetamine and $251,280 cash.[5] On 6 July 2018, Mr Wong was convicted of:(a) Conspiring to manufacture methamphetamine;(b) Possessing material with intention to manufacture methamphetamine;(c) Possessing equipment with intention to manufacturemethamphetamine; and(d) Possessing methamphetamine.1 Criminal Proceeds (Recovery) Act 2009, s 95(2).[6] On 2 August 2018, Mr Wong was sentenced to nine years and nine months'imprisonment, with a minimum period of imprisonment of four years and ten months.[7] It is the Commissioner's case that Mr Wong and Ms Wu unlawfully benefitedfrom Mr Wong's drug offending. Mr Wong also admitted to profiting over an extendedperiod of time from unlawful lending to "retail loan sharks".[8] Further, the Commissioner considers that Ms Wu committed benefit fraudbetween 2012 and 2018. He identified that Ms Wu received benefits by filingapplications with the Ministry of Social Development that declared that she wasseparated from her partner, was not receiving any income and had no cash assets:statements which the Commissioner says were false.These proceedings[9] On 28 March 2018, restraining orders were made under the Act over fundsfrom bank accounts held in the names of Mr Wong, Ms Wu and Ms YX Wu, and thecash found at Mr Wong and Ms Wu's address and on Mr Wong's person.[10] Ms YX Wu is Ms Wu's sister. She resides in China and travelled to NewZealand in 2003, 2012 and 2015, spending a total of 36 days in the country.[11] At the commencement of the Commissioner's proceedings, Ms YX Wu heldfour New Zealand bank accounts in her name, all of which Ms Wu had authority tooperate. The Commissioner says that Mr Wong and Ms Wu had effective control overthese accounts and used them to launder their proceeds of crime.[12] On 23 August 2019, the Commissioner applied for civil forfeiture orders inrespect of the restrained funds. That application is for hearing, commencing18 October 2021.Terms of the proposed settlement[13] The Commissioner, Ms Wu and Ms YX Wu have now agreed to settle Ms Wuand Ms YX Wu's interests in the proceeding between themselves on the terms set outin the joint memorandum provided to the Court. This is subject to the Court's approvalunder s 95 of the Act.[14] The proposed terms of settlement are:(a) $55,000 NZD of the restrained funds, previously held in bank accountsin Ms YX Wu's name, be released from restraint and deposited into abank account nominated by Ms YX Wu;(b) Assets forfeiture orders under s 50 of the Act be made by consent overall remaining funds previously held in the following bank accounts inthe name of Ms YX Wu (excluding the sum of $55,000 NZD referredto in paragraph (a) above) and any accrued interest:(i) ASB Bank Limited account number: [REDACTED];(ii) ASB Bank Limited account number: [REDACTED];(iii) ASB Bank Limited account number: [REDACTED];(iv) ASB Bank Limited account number: [REDACTED];(c) Assets forfeiture orders under s 50 of the Act be made by consent overall funds previously held in the following bank accounts in the name ofMs Wu and any accrued interest:(i) ASB Bank Limited account number: [REDACTED];(ii) Australia and New Zealand Banking Group Limited (ANZ)account number: [REDACTED];(d) The Commissioner will abandon his application for a profit forfeitureorder against Ms Wu;(e) Ms Wu and Ms YX Wu will abandon all claims they may have, underthe Act or otherwise, to any of the property to be forfeited or to any ofthe other restrained property in this proceeding;(f) The settlement is in full and final settlement of the civil forfeitureapplication brought by the Commissioner against Ms Wu and Ms YXWu under the Act; and(g) Costs will lie where they fall.[15] The approximate value of the funds held in Ms YX Wu's name to be forfeitedis $71,000. The approximate value of the funds held in Ms Wu's name to be forfeitedis $1,500.Legal principles[1] Section 95 of the Act governs court-approved settlements and provides asfollows: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.[2] Section 95 had no predecessor under the former legislation (Proceeds of CrimeAct 1991). In enacting s 95, Parliament expressly empowered the Commissioner toenter into settlement discussions with respondents and interested parties regarding theforfeiture of assets. I accept the proposition in the parties' joint memorandum that, indoing so, Parliament is likely to have had in mind the significant cost associated withcivil litigation and the benefits to all parties if proceedings can be settled and resolvedby consent.[3] As has been previously observed, Parliament has entrusted the High Court witha supervisory jurisdiction to ensure that settlements are consistent with theparliamentary intention.2[4] The primary purpose of the Act is contained in s 3(1). It is the establishmentof a regime for the forfeiture of property which has been derived directly or indirectlyfrom significant criminal activity or that represents the value of a person's unlawfullyderived income. Ancillary statutory purposes are to "eliminate the chance" for personsto profit from undertaking or being associated with significant criminal activity(s 3(2)(a)) and to "deter" significant criminal activity (s 3(2)(b)). The Court of Appealin Hayward v Commissioner of Police recently affirmed the Act has a "stronglyexpressed statutory purpose".3[5] The overall interests of justice requirement calls for a broad inquiry. Inconsidering whether a settlement is in the interests of justice, relevant factors willinclude the savings of time and cost and the litigation risk of a hearing to both theCommissioner and a respondent.4 The Court has recognised the decision to settleproceedings under the Act may be made on economic and pragmatic grounds andreflect a "common sense compromise" between the parties.5The result[6] The Commissioner, Ms Wu and Ms YX Wu submit that the proposedsettlement is consistent with the purposes of the Act and the overall interests of justice.[7] Having considered the matters in the joint memorandum dated 6 October 2021,I agree. My reasons are:2 Commissioner of Police v Know-All Group Ltd HC Auckland CRI-2010-404-403, 7 November2011 at [11].3 Hayward v Commissioner of Police [2014] NZCA 625 at [29].4 Commissioner of Police v Kree [2013] NZHC 2972 at [11].5 Commissioner of Police v Douglas [2015] NZHC 1293 at [6]; and Commissioner of Police v Venn[2014] NZHC 361.(a) there will be a saving of time and cost if the matter as between theCommissioner, Ms Wu and Ms YX Wu can be resolved by consent;(b) an agreed settlement will allow the parties to have certainty and controlas to the outcome;(c) the Commissioner considers he has a strong case to show that Mr Wongand Ms Wu unlawfully benefited from drug offending, unlawfullending and benefit fraud. He also considers he has a strong case toshow that their cash assets are tainted by this criminal activity;(d) for Ms Wu's part, she recognises the risk that the funds from the bankaccounts held in her name are determined to be the proceeds of crime;(e) there is strong evidence that Ms Wu was in regular use of Ms YX Wu'sbank account number [REDACTED], including while Ms YX Wu wasnot in New Zealand. This account held approximately $70,000 uponrestraining orders being granted. The Commissioner does, however,acknowledge that there was little activity in the remaining three of MsYX Wu's bank accounts and that there is litigation risk in respect of thefunds from these accounts; and(f) a sum proportionate to the funds held in Ms YX Wu's three accountsfor which there was little activity will be returned to her. Fundsproportionate to those in the account used by Ms Wu will be forfeitedto the Crown. That is appropriate given the serious criminal offendingwhich the Commissioner alleges Mr Wong and Ms Wu committed. Thesettlement also seeks to suitably recognise Ms YX Wu's lack ofinvolvement in Mr Wong and Ms Wu's alleged criminal activity.[8] I make the following orders to give effect to the settlement:(a) Further orders under s 34 of the Act: $55,000 NZD of the restrainedfunds previously held in the following bank accounts in Ms YX Wu'sname (Ms YX Wu's Bank Accounts) is released from restraint and theOfficial Assignee is directed to pay this sum into a bank accountnominated by Ms YX Wu:(i) ASB Bank Limited (ASB) account number: [REDACTED];(ii) ASB account number: [REDACTED];(iii) ASB term deposit: [REDACTED]; and(iv) ASB term deposit: [REDACTED].(b) Assets forfeiture orders under s 50(1) of the Act: all remaining fundspreviously held in Ms YX Wu's Bank Accounts (excluding the sum of$55,000 NZD referred to at paragraph (a) above), and any accruedinterest, vests in the Crown absolutely and is in the Official Assignee'scustody and control.(c) Assets forfeiture orders under s 50(1) of the Act: all funds previouslyheld in the following bank accounts in the name of Ms Wu, and anyaccrued interest, vests in the Crown absolutely and is in the OfficialAssignee's custody and control:(i) ASB account number: [REDACTED];(ii) Australia and New Zealand Banking Group Limited (ANZ)account number: [REDACTED].(d) Costs: costs lie where they fall in relation to all matters between theCommissioner, Ms Wu and Ms YX Wu.[9] I record further terms of the agreed settlement at the request of these parties:(a) The Commissioner abandons his application for a profit forfeiture orderagainst Ms Wu;(b) Ms Wu and Ms YX Wu abandon all claims they may have, under theAct or otherwise, to any of the property to be forfeited or any of theother restrained property in this proceeding; and(c) The settlement is in full and final settlement of the civil forfeitureapplication brought by the Commissioner against Ms Wu and Ms YXWu under the Act.[10] Orders accordingly.............................................................Walker J