THE COMMISSIONER OF THE NEW ZEALAND POLICE v HARRISON [as to status of without notice restraining order] [2020] NZHC 1785

THE COMMISSIONER OF THE NEW ZEALAND POLICE v HARRISON [as to status of without noticerestraining order] [2020] NZHC 1785 [22 July 2020]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV 2016-485-000543[2020] NZHC 1785UNDER the Criminal Proceeds (Recovery) Act 2009IN THE MATTER OF an application under sections 22 and 25BETWEEN THE COMMISSIONER OF THE NEWZEALAND POLICEApplicantAND JOANNE HARRISONFirst RespondentAND PATRICK FREDERICK SHARPSecond RespondentAND THE OFFICIAL ASSIGNEEInterested PartyHearing: In Chambers(on the papers)Counsel: A W M Britton for the ApplicantN Bourke for the ApplicantE J Watt counsel assisting the CourtJudgment: 22 July 2020JUDGMENT OF GWYN J[as to status of without notice restraining order]This judgment was delivered by me on 22 July 2020 at 3.00pmPursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarIntroduction[1] On 18 June 2020 this Court issued a judgment (the judgment) declining theCommissioner of Police's application under the Criminal Proceeds (Recovery) Act2009 (the Act) for an on notice restraining order over $23,000 realised fromMs Harrison's KiwiSaver account (the $23,000).1 On 16 July 2020 the Commissionerfiled a notice of appeal in the Court of Appeal and served a copy on Ms Harrison.[2] Prior to the judgment a without notice restraining order over the $23,000 hadbeen granted by Ellis J on 29 May 2019 (the without notice order).2 TheCommissioner and the Official Assignee now seek a direction that the without noticeorder continues to have force until the appeal is finally disposed of, in order to preservethe position should the appeal succeed.[3] Ms Harrison opposes such a direction on the basis that allowing her assets toremain restrained, despite the judgment effectively deciding that a restraining order isnot legally supportable, runs counter to Parliament's intent underpinning the criminalproceeds recovery regime.The Commissioner's proposed approach[4] The Commissioner submits that r 29(1)(a) of the Court of Appeal (Civil) Rules2005 (the Rules) allows for an appeal to be filed within 20 working days after the dateof the decision being appealed. The notice of appeal was filed on 16 July 2020, whichfalls within 20 working days.[5] Counsel notes that under s 39(2) of the Act a without notice restraining ordercontinues in force until an application for a restraining order on notice in relation tothe same property is "finally disposed of". Given an appeal proceeding is impending,counsel says it is appropriate and in the interests of justice for the Court to order thatthe without notice order continues, in order to preserve the restraint position. That isfor the following reasons:1 Commissioner of Police v Harrison [2020] NZHC 13802 Commissioner of Police v Harrison [2019] NZHC 1199 at [6].(a) the Court earlier determined there was a sufficient basis to determinethe without notice order;(b) the Commissioner and the Official Assignee have not exhausted theirright to appeal the judgment declining the on notice restraining order;(c) the Commissioner has a duty to prosecute the on notice application fora restraining order "with all due diligence" under s 39(3) of the Act,which counsel says must extend to the exercise of the appeal right;(d) there appears to be no appellate mechanism to reinstate the withoutnotice order pending the appeal;(e) rule 12(3) of the Rules allows either the Court of Appeal or this Court(as the court being appealed from) to, on an interlocutory application,order a stay of the proceeding in which the decision was given or a stayof the execution of the decision, or grant any interim relief; and(f) if the $23,000 does not remain under restraint until the appeal is finallydisposed of the relief sought on appeal will be rendered nugatory.The response for Ms Harrison[6] Counsel for Ms Harrison contends that an appeal regarding a restraining orderis not governed solely by the Rules but must be viewed in the context of the Act.[7] Section 38 of the Act provides that a restraining order in force at the time thata court declines to make a forfeiture order that is associated with the same propertywill not expire until:(a) the date that is the end of a period of 7 working days from the date ofthat decision, if an appeal has not been lodged in the court by that date;or(b) if an appeal has been lodged in the court by that date, on the date ofthe withdrawal or determination of that appeal, or, if a further appealis lodged, on the date of the withdrawal or determination of thatfurther appeal.[8] While the judgment being appealed did not involve declining a forfeiture ordercounsel says s 38 demonstrates a legislative intent that the Commissioner can onlypreserve his effective appeal right if an appeal is filed within seven working days – inorder to prevent respondents being deprived of their assets or property unnecessarily.While the Commissioner is still able to file an appeal under the Rules, counsel says heis not entitled to further restrain the $23,000.[9] Finally, counsel submits that this Court has already determined the restrainingorder was unlawful and therefore there is no valid restraining order existing to beextended.Decision[10] There is no provision in the Act specifically dealing with an appeal against adecision of this sort.[11] Counsel for Ms Harrison appropriately recognises that the seven working dayexpiry period of a restraining order following a decision declining a forfeiture orderimposed by s 38 does not directly apply in this case. That is to do with the unusualnature of the application decided in the judgment – which sought a fresh restrainingorder after asset and profit forfeiture orders in respect of the same period of criminalactivity had already been determined. I deemed that application legally untenable forreasons including that the scheme of the Act indicated that restraining orders were onlyavailable prior to, and not after, the determination of forfeiture orders.[12] This appeal appears to fall into something of a lacuna not anticipated in thedrafting of the Act. That being the case, I consider the language in s 39(2) is applicableas written. A without notice order will continue in force until an on notice restrainingorder is finally disposed of. I consider it plain that this includes a right to appeal.[13] I recognise that this is a somewhat unusual position, arising from the novelcharacter of the restraining order being sought. It does not sit easily with the s 38requirement for an appeal against a decision under the Act to be brought within sevenworking days if a restraining order is to remain in force. However, nothing in the Actexplicitly extends s 38 to this particular situation. I do not consider the policyindicated in that section, of restoring individuals' access to their assets or propertywithin seven days of a restraining order being declined if no notice of appeal is filedwithin that time, is clearly intended to override the language in s 39(2) in a novelsituation such as this. I consider the without notice order remains on foot pending theconclusion of the appeal.[14] I am not required to address r 12(3) of the Rules. However, for the sake ofcompleteness I note that an application under r 12(3) generally requires the Court tobalance the need to preserve an appellant's position (in case the appeal succeeds) andthe rights of a respondent to receive the benefit of the judgment.3 I accept that thepoints of law to be determined on appeal in this case are novel and of some legalsignificance. I also accept that although a successful appeal on the issues of law maystill be useful to the Commissioner and the Official Assignee in future cases, denyinga stay in this particular case would render the appeal nugatory in practice. While MsHarrison will be meaningfully inconvenienced by further delay, I consider that a stayof execution would likely have been appropriate if required.Result[15] I direct that the $23,000 remains subject to the without notice restraining orderdetermined by Ellis J on 29 May 2019,4 pending a final determination of the on noticeapplication for a restraining order through the appeals process.______________________Gwyn JSolicitors/Counsel:A W M Britton, Barrister, WellingtonCrown Solicitor, WellingtonNathan Bourke, Barrister, New Plymouth3 Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA) at 87.4 Commissioner of Police v Harrison, above n 2, at [6].