COMMISSIONER OF POLICE v GONG [2019] NZHC 3441

COMMISSIONER OF POLICE v GONG [2019] NZHC 3441 [19 December 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV 2017-404-454[2019] NZHC 3441UNDER the Criminal Proceeds (Recovery) Act 2009BETWEEN COMMISSIONER OF POLICEApplicantAND XIAO HUA GONGRespondentHearing: On the papersAppearances: M E Harborow and H E Macdonald for the applicantA J Ellis for the respondentDate of judgment: 19 December 2019JUDGMENT OF JAGOSE JThe judgment was delivered by me on 19 December 2019 at 3.00pm.Pursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors/Counsel:Meredith Connell, AucklandAnthony Ellis Barrister, WellingtonFee Langstone, Auckland[1] My interim judgment noted I was satisfied of the Commissioner's entitlementto particular discovery under r 8.20 of the High Court Rules 2016 ("HCR"), but lacked"the specificity to identify what particular documents or groups of documents may benecessary to enable formulation of the Commissioner's claim".1 I then said:2Rather than dismiss the Commissioner's application for its present lack ofspecificity, I invite counsel (desirably jointly) to submit a timetable withinwhich the Commissioner will file and serve an originating application forforfeiture orders and supporting affidavit, both in draft, to illustrate theparticular documents or groups of documents necessary to enable theirformulation. I anticipate the timetable should provide also for an exchange ofmemoranda as to such necessity in the particular circumstances, and possiblyfor a further hearing if final determination on those papers is not desired.[2] In the event, separate memoranda were filed on the timetable, theCommissioner proposing to file his draft application, affidavit, and memorandum on6 December 2019, for Mr Gong's response on 13 December 2019. The Commissionerproposed any decision for further hearing await that exchange. Mr Gong respondedtimetable orders were premature. I disagreed, adopting the Commissioner's proposal,3with which the parties have complied, the Commissioner replying on 18 December2019 I should make my final determination on the papers.[3] My interim judgment explained "[p]articular discovery anticipates a bottom-up analysis, rather than the standard discovery approach adopted by theCommissioner".4 I summarised the Commissioner's approach:5The Commissioner seeks details of all Mr Gong's and related entities' bankaccounts, or over which Mr Gong has any signing authority; of all entities,property, and assets in which he has any interest; and all business,conveyancing, financial, meeting, and tax records, including accountingelectronic backups and passwords; as well as details of all businessconnections, accountants and lawyers. He also seeks information produced forthe purposes of the health supplements scheme, and of the supplier factory.[4] That 'bottom-up' approach is "to illustrate the materiality of the soughtparticular documents or groups of documents in formulation of the intended claim".61 Commissioner of Police v Gong [2019] NZHC 2735 at [31].2 At [32].3 Minute (no 2) dated 18 November 2019.4 Commissioner of Police v Gong, above n 1, at [25].5 At [24].6 At [25].I identified what was required for that formulation on the present application for assetsand profit forfeiture orders: on the former, "the property's acquisition as a result of orderivation from significant criminal activity"; and on the latter, "the value of thebenefit and its derivation from significant criminal activity, as well as the respondent'sinterests in property".7 The Commissioner correctly adds he also is required on theformer to specify what property is alleged to be 'tainted', and the grounds for thatbelief, as well as any other interests in the property.8[5] The Commissioner's draft originating application permits focus on specifiedinformation in respect of Mr Gong and four identified related entities for the periodfrom 10 April 2009 to 31 December 2017. In reliance on the further affidavit ofRichard Benjamin Trushell sworn 6 December 2019, the Commissioner asserts thosedocuments' pertinence respectively in terms of significant criminal activity, propertyand benefit derived therefrom, and identification of the extent property is 'tainted'.Their pertinence is, of course, "it is impossible or impracticable" for the Commissionerto formulate his originating application without reference to them.9The Commissioner's counsel submit accordingly.[6] Mr Gong's counsel, Tony Ellis, does not directly address the contended'impossibility or impracticability'. Instead he raises a raft of collateral matters,preferring the Commissioner respond to various "queries and concerns raised" aboutthe parties' respective theory of their case, with unspecified timetable orders to follow.Those matters' only relevance to the matter I am left to decide is if an order underHCR 8.20 presently is necessary.10[7] I am given no basis to doubt the impossibility or impracticability claimed bythe Commissioner. From my own consideration of the draft originating applicationand Mr Trushell's affidavit, the documents sought each appear responsive to thespecific requirements set out at ss 49 and 52 of the Criminal Proceeds (Recovery) Act2009 (the "Act") in the context of the Commissioner's intended claim for asset andprofit forfeiture orders against Mr Gong. I accept it is impossible or impracticable for7 At [19] and [20].8 Criminal Proceeds (Recovery) Act 2009, s 49.9 High Court Rules 2016, r 8.20.10 Rule 8.20(4).the Commissioner to formulate the claim in compliance with the Act without referenceto the documents he seeks.[8] I also am satisfied the order is necessary now to be made. The matters raisedby Mr Ellis are as insubstantial to determination of the present application as led mepreviously to disagree timetable orders for that determination were premature. Thisproceeding was initiated nearly three years ago, on 21 March 2017. Restraining ordershaving been made, it is incumbent on the Commissioner to pursue forfeiture with someexpedition. Such an inference is open from at least the Act's requirements for on noticerestraint to be prosecuted "with all due diligence" on pain of strike out, suchapplications to be "dealt with speedily",11 and for forfeiture orders to be discharged"as soon as practicable after the expiry of the specified period".12[9] No date is proposed for Mr Gong's provision of the particular discoverysought. I am not prepared to allow Mr Gong's application for leave to appeal, or anyof the other matters Mr Ellis raises, to operate informally as a stay of my judgment.I therefore will require return by the end of February 2020. Any application forextension of that timetable is to be substantiated by evidence of the timing of suchsteps as have been, and the time required for such steps remaining to be, taken incompliance with my order.[10] In respect of the documents listed at Tab B to Mr Trushell's 6 December 2019affidavit (the "documents"), I therefore order Mr Gong, by Friday, 28 February2020:(a) to file an affidavit stating—(i) whether the documents are or have been in his control; and(ii) if they have been but are no longer in his control, his bestknowledge and belief as to when the documents ceased to be inhis control and who now has control of them;11 Criminal Proceeds (Recovery) Act 2009, s 39.12 Sections 82 and 83.(b) to serve the affidavit on the Commissioner; and(c) if the documents are in his control, to make those documents availablefor inspection, in accordance with HCR 8.27, to the Commissioner.—Jagose J