COMMISSIONER OF POLICE v GONG [2018] NZHC 1530

COMMISSIONER OF POLICE v GONG [2018] NZHC 1530 [25 June 2018]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2017-404-000454[2018] NZHC 1530UNDER The Criminal Proceeds (Recovery) Act 2009BETWEEN COMMISSIONER OF POLICEApplicantAND XIAO HUA GONGRespondentHearing: On the papersJudgment: 25 June 2018JUDGMENT OF DOWNS JThis judgment was delivered by me on Monday, 25 June 2018 at 3 pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors:Meredith Connell, Auckland.Chapman Tripp, Auckland.MR Heron QC, Auckland.MA Corlett QC, Auckland.Copy to:J Anthony, Stuff.J Savage & S Hurley, New Zealand Herald, NZME.V Young, National Business Review.The applications[1] Representatives of the New Zealand Herald, National Business Review andStuff wish to access the Court file under the Senior Courts (Access to CourtDocuments) Rules 2017. Mr Gong opposes access. The Commissioner does not. Atthe heart of the file are two judgments of Davison J:(a) The first, making a restraining order the Criminal Proceeds (Recovery)Act 2009.1(b) The second, giving reasons for the first.2[2] The Judge suppressed both. Because suppression affects access—and becausecircumstances have changed since the Judge dealt with the case in March of last year—I called for submission on whether suppression should endure. Mr Gong contends itshould; the Commissioner submits it should not.Background[3] Background is important.[4] On 21 March 2017, the Commissioner of Police applied, without notice, for arestraining order under the Criminal Proceeds (Recovery) Act. The Commissionersought restraint of Mr Gong's property and property connected to him.[5] Davison J granted the application on 24 March, save for one piece of realty.On 29 March, the Judge released a comprehensive judgment explaining his decision.In brief, the Judge concluded there were reasonable grounds to believe Mr Gong hadunlawfully benefitted from significant criminal activity in China, and there werereasonable grounds to believe identified items of property constituted tainted property.The Judge referred to extensive affidavit evidence Mr Gong and others allegedlyperpetrated a pyramid-style fraud in China "in the order of $202,000,000".3 The Judge1 Commissioner of Police v Gong [2017] NZHC 556.2 Commissioner of Police v Gong [2017] NZHC 603.3 At [18].also referred to the alleged transfer of $77 million to Mr Gong's New Zealand bankaccounts, and later transfer of some funds from here to Canada.[6] The Judge suppressed both his results judgment and his reasons judgment.Neither contains reasons for suppression, but it is highly likely the Judge wasconcerned to preserve Mr Gong's position at what was then the very commencementof the Commissioner's proceeding, and one which had been brought without notice toMr Gong.[7] Mr Gong now lives in Canada. The Ontario Securities Commission arrestedMr Gong late last year and charged him with fraud. Those charges are connected tothe "significant criminal activity" underlying the Commissioner's proceeding:Mr Gong's alleged criminal offending in China. Chinese prosecutors have obtainedwhat Davison J described as a "detention warrant" authorising Mr Gong's arrest.There was evidence before the Judge Mr Gong will be prosecuted if he returns toChina.[8] Mr Gong has attracted media attention in Canada not merely because of thecriminal proceedings; he also attended "one of Prime Minister Justin Trudeau'scontroversial cash-for-access fundraising dinners".4 The same Globe & Mail articlerefers to Mr Gong's alleged "key role in a massive pyramid scheme that took in morethan $350 million". As will be apparent, Mr Gong's name is not suppressed in Canada.Nor is it suppressed in China. Or here.[9] Davison J's restraining order captures more than $60 million of assets inNew Zealand. Criminal charges here are possible, but the Commissioner observes thatlikelihood is "now remote" given Mr Gong is being prosecuted in Canada in relationto the same underlying fraud.Mr Gong's position[10] Mr Gong contends suppression should endure as New Zealand publicity may,in a digital age, compromise the fairness of his Canadian criminal trial. Mr Gong also4 Globe & Mail, 28 July 2017.observes the Commissioner's allegations are serious—but untested; the proceeding isstill at an early stage; and it remains possible criminal charges will be laid here.Analysis[11] The Commissioner's proceeding is a civil one, so suppression is governed bycommon law. Applicable principle can be summarised this way: the presumption ofopen justice assumes disclosure of all aspects of civil court proceedings, unlessspecific adverse consequences are sufficient to justify an exception to the fundamentalrule of open justice.5 Consequently, the threshold for suppression is high.[12] I am satisfied suppression is no longer in the interests of justice for fiveinterrelated reasons.[13] First, continued suppression is inconsistent with the presumption of openjustice and legitimate public interest in the case.[14] Second, publication of Davison J's judgments would not compromiseMr Gong's interests in the sense described at [11]. Mr Gong does not live inNew Zealand; nor does he operate a business here. The possibility ofNew Zealand-based reputational damage is thus something of an abstract concern.Importantly, criminal trial in this country is now highly unlikely given Mr Gong'sprosecution in Canada.[15] Third, the fact of Canadian publicity in relation to Mr Gong's alleged criminaloffending undermines the basis for continued suppression here; the same allegedoffending underlies the restraining order.[16] Fourth, it would be odd if New Zealand courts continued to suppressinformation Canadian courts have chosen not to—or never been asked to—givenMr Gong will be tried there and, in all likelihood, not here.5 See the helpful analysis of Woodhouse J in Commissioner of Police v C [2016] NZHC 2852 at[15] (footnotes omitted), citing Erceg v Erceg [2016] NZSC 135, [2017] 1 NZLR 310 andY v Attorney-General [2016] NZCA 474.[17] Fifth, the same point addresses risk of prejudice to Mr Gong's Canadian trial.In any event, doubt attaches to whether New Zealand-based online publicity couldtruly endanger the fairness of Mr Gong's trial in Canada, given:(a) Publicity there has already referred to the assistance of theNew Zealand Police and "Financial Crime Group in New Zealand".(b) Canadian readers are unlikely to closely follow websites of theNew Zealand Herald, National Business Review or Stuff.6[18] Absent suppression, media representatives—indeed "every person"—arepresumptively entitled to access judgments, orders, and minutes on the Court file.7There is no reason why this should not occur given the points expressed above. Again,there is no demonstrable risk of appreciable prejudice to Mr Gong.8[19] Mr Gong observes Palmer J (as Duty Judge) declined an application for mediaaccess by the New Zealand Herald on 8 December 2017. However, Davison J'ssuppression orders then remained live; Mr Gong had not been arrested (until21 December 2017); and the Commissioner then supported continued suppression.Circumstances have changed materially since then including those just mentioned, aswell as heightened media interest both here and abroad in the wake of Mr Gong'sCanadian arrest and prosecution.[20] All media representatives also seek to access the substantial affidavit evidencefiled by the Commissioner. Unlike judgments, orders, and minutes, this materialattracts no presumption of access.9 A balancing of interests is required. A Court mustconsider:10(a) The orderly and fair administration of justice:6 True, someone interested in Mr Gong could search for his name using, for example, Google News.But this concern is more obviously one for the Canadian criminal courts, and more particularly,the court seized of Mr Gong's trial.7 Senior Courts (Access to Court Documents) Rules 2017, r 8.8 For completeness, Mr Gong sought suppression of the balance of the file. For the reasonsexplained earlier, there is no basis for suppression. But as discussed shortly, matters other thanjudgments, orders and minutes attract no presumption of access.9 Senior Courts (Access to Court Documents) Rules, rr 11 and 12.10 Rule 12.(b) The right of a defendant in a criminal proceeding to a fair trial:(c) The right to bring and defend civil proceedings without the disclosure ofany more information about the private lives of individuals, or mattersthat are commercially sensitive, than is necessary to satisfy the principleof open justice:(d) The protection of other confidentiality and privacy interests (includingthose of children and other vulnerable members of the community) andany privilege held by, or available to, any person:(e) The principle of open justice (including the encouragement of fair andaccurate reporting of, and comment on, court hearings and decisions):(f) The freedom to seek, receive, and impart information:(g) Whether a document to which the request relates is subject to anyrestriction under rule 7:(h) Any other matter that the Judge thinks appropriate.[21] Here, I consider Mr Gong's interests should prevail, at least for the moment.Unlike Davison J's judgments (and other rulings on the file), this material is bothdetailed and extensive. Reportage would necessarily be one-sided, as the affidavitevidence has not been tested and Mr Gong has not yet presented his case. Permittingaccess to a judgment is one thing; permitting access to the totality of evidenceunderlying a judgment is another.[22] This distinction—one recognised by the Senior Courts (Access to CourtDocuments) Rules—strikes the appropriate balance between the competing interestsof open justice and those of Mr Gong.11 The public is entitled to know the High Courthas restrained Mr Gong's New Zealand assets, and the reasons for that restraint (whichnecessarily include a summary of the Commissioner's case). However, the public isnot yet entitled to know every evidential detail of the case; a case Mr Gong has not yethad an opportunity to test. The issue is not quite so much prejudice; rather, it is oneof due process.11 The Senior Courts (Access to Court Documents) Rules draw a distinction between documentscomprising the formal court record and other documents. The formal court record includes "ajudgment, an order, or a minute of the Court, including any record of the reasons given by a Judge";see r 4.[23] In summary, suppression is no longer in the interests of justice, and lapses.Access to judgments, orders, and minutes on the Court file is available as a matter ofright. Access to the affidavit evidence is not, and declined.Orders[24] Orders:(a) The suppression order made by Davison J in relation to each of hisjudgments lapses.(b) Media representatives may access these judgments, and otherjudgments, orders, and minutes on the Court file, as well as its registeror index.(c) Access to the affidavit evidence and any other material on the filebeyond (b) is declined...Downs J