THE COMMISSIONER OF THE NEW ZEALAND POLICE v HARRISON [2020] NZHC 1380

THE COMMISSIONER OF THE NEW ZEALAND POLICE v HARRISON [2020] NZHC 1380 [18 June 2020]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV 2016-485-000543[2020] NZHC 1380UNDER 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: 13 May 2020Appearances: A W M Britton for the ApplicantN Bourke for the ApplicantE J Watt counsel assisting the CourtJudgment: 18 June 2020JUDGMENT OF GWYN JThis judgment was delivered by me on 18 June 2020 at 12 noonPursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors/Counsel:A W M Britton, Barrister, WellingtonCrown Solicitor, WellingtonNathan Bourke, Barrister, New PlymouthIntroduction[1] The Commissioner of Police has applied for an on notice restraining orderunder the Criminal Proceeds (Recovery) Act 2009 (the Act). The application seeks torestrain $23,000 realised from Ms Harrison's KiwiSaver account. Counsel representsboth the Commissioner and the Official Assignee as an interested party (togetherreferred to as the Commissioner). If the order sought is not legally possible theCommissioner seeks to convert this application to one for a freezing order under theHigh Court Rules 2016. Ms Harrison opposes. There are also helpful submissionsfrom Ms Watt as counsel assisting the Court.[2] The substantive issues requiring resolution are:(a) whether a restraining order under s 25 of the Act is available where finalasset and profit forfeiture orders were already determined by the HighCourt on 18 April 2019 and sealed on 8 May 2019 (alternatively,whether the order sought constitutes an abuse of process or is otherwiseprocedurally inappropriate in this case);(b) whether the Official Assignee has the power to enforce a profitforfeiture order against property acquired by the respondent that has notbeen specified in the profit forfeiture order such that grounds exist forthe Commissioner's alternative application for a freezing order underthe High Court Rules; and(c) whether s 127 of the KiwiSaver Act 2006 acts as a bar to the ordersought being made.[3] I will address these issues in turn, setting out the substance of the submissionsfollowed by my analysis. On all three issues I find against the Commissioner.Background[4] There is no dispute that Ms Harrison has unlawfully benefitted from significantcriminal activity. The present proceeding is the latest stage in a series of proceedingsgrowing out of Ms Harrison misappropriating money from her employer, the Ministryof Transport.1 On 21 February 2017 she was sentenced to three years and sevenmonths' imprisonment. She was deported from New Zealand to the United Kingdomon 21 January 2019, having served approximately two and a half years of her sentence.[5] In her judgment of 14 December 2017 Ellis J declined a civil forfeitureapplication under the Act seeking to recover the unrealised funds in Ms Harrison'sKiwiSaver account.2[6] Pursuant to a determination on 18 April 2019, the High Court sealed assets andprofit forfeiture orders on 8 May 2019. The Court determined that the value of theunlawful benefit recoverable via the profit forfeiture order was $784,172.16, minusthe value of the property subject to the assets forfeiture order.[7] In May 2019 Ms Harrison applied to her fund manager for early access to thefunds in her KiwiSaver account on the grounds of financial hardship. The fundmanager referred the application to Public Trust (the sector supervisor), who approvedthe application on 16 May 2019. On 21 May 2019 $23,000 arising from the sale ofassets in the KiwiSaver scheme (the $23,000) was credited to the Public Trust bankaccount pending transfer to Ms Harrison, which was due on 30 May 2019.[8] The Commissioner's without notice application for a restraining order inrespect of the $23,000 was filed on 23 May 2019. The Commissioner considered themoney should be restrained because:(a) [Ms Harrison] had unlawfully benefited from significant criminalactivity;(b) There was a risk of the cash amount being destroyed, disposed of,altered, or concealed if notice were given, in view of the imminentdate of electronic transfer to the first respondent on 30 May 2019;(c) Restraint was sought with a view to the cash amount contributingtowards satisfaction of the maximum recoverable amount in the profitforfeiture order; and1 The detail of that offending is set out in the judgment of Ellis J in The Commissioner v Harrison[2017] NZHC 3140, at [2]-[5].2 The Commissioner v Harrison, above n 1. Ms Harrison's KiwiSaver account is with Kiwi WealthLtd, number KWKS102501, with a balance (at the date of application) of approximately$109,211.98.(d) Restraint would enable the Commissioner to secure the cash amountwhile it prepares to file and service an on-notice application for arestraining order and an amended on-notice application for civilforfeiture.[9] Justice Ellis initially issued a minute expressing concern that the applicationmight constitute an abuse of process in light of her judgment of 14 December 2017.On 29 May 2019 she held:3[5] As a result of those submissions and that hearing my provisional viewof the matter now is that the $23,000 that has been released fromMs Harrison's account is (as the Commissioner says) no longer protected bythe provisions of the KSA. But whether the funds can be the subject ofrestraint strictly so called seems conceptually problematic, given that finalorders under the 2009 Act have been made. That said, however, in light of theindisputable debt owed to the Crown by Ms Harrison it seems to me that thefunds could equally be made the subject of a (without notice) freezing orderunder Part 32 of the High Court Rules. Such orders operate in a materiallysimilar way to restraining orders under the 2009 Act. I am satisfied that thegrounds for such an order would exist, at least at this without notice stage.[6] Given the present form of the application, however, I grant the withoutnotice restraining order sought. I would suggest that thought should be givento converting the proceeding to one brought under Part 32, but for now I leavethat to the Commissioner and his counsel.[10] On 30 May 2019 the Commissioner executed a production order onMs Harrison's KiwiSaver fund manager. The material produced suggested that, as at3 May 2019, Ms Harrison's balance of investments in that fund had a value of$115,973.4 The material also indicated that Ms Harrison was applying for a cashing-up of investments to the value of $350,000. The reasons given for that applicationrelated to her accommodation status, expenses, lack of savings and income andinability to obtain government assistance in the United Kingdom.[11] On 4 June 2019 the Commissioner filed the on-notice application for arestraining order. On 7 June 2019 Ms Harrison filed a notice of opposition to theapplication as well as applying for a variation of the restraining order to provide forher reasonable living costs. No admissible evidence was filed in support of thatapplication and the Commissioner filed a notice of opposition on 27 June 2019.Ms Harrison later abandoned her application to vary the restraining order.3 The Commissioner v Harrison [2019] NZHC 1199 (footnotes omitted).4 This is based on Ms Harrison's "Significant Financial Hardship Withdrawal Form" completed on26 April 2016.[12] At present the Official Assignee has not completed its discharge of the estatefollowing the sealing of the profit forfeiture order. As at 13 March 2020 thereremained $237,704.50 outstanding, excluding both the $23,000 and the proceeds of anauction for items of jewellery which was due to occur on 15 March 2020.The application[13] The present application seeks an order under s 25 of the Act that the $23,000realised from Ms Harrison's KiwiSaver account is not to be disposed of, or dealt with,other than as is provided for in the restraining order; and is to be in the OfficialAssignee's custody and control.[14] The grounds on which the order is sought are that:(a) Ms Harrison has unlawfully benefitted from significant criminalactivity.(b) The profit forfeiture order against Ms Harrison is enforceable as anorder made as a result of civil proceedings instituted by theCommissioner against Ms Harrison to recover a debt due to the Crown.(c) Restraint of the $23,000 will preserve the position as between theapplicant and Ms Harrison and will enable the Commissioner to prepareproceedings to recover the $23,000 as part of the debt due to theapplicant.[15] Ms Harrison's grounds of opposition are that:(a) the funds sought for restraint retain the essential character of KiwiSaverfunds and thus s 127 of the KiwiSaver Act 2006 is effective to preventthem being transferred into the Official Assignee's custody and control;(b) the application is an abuse of process and constitutes an attempt to re-litigate matters already determined; and(c) an order pursuant to s 25 of the Criminal Proceeds (Recovery) Act isdiscretionary and it is not in the interests of justice that an order bemade.Preliminary issue[16] The Commissioner seeks leave pursuant to r 7.32 of the High Court Rules torely on the affidavits of:(a) Detective Senior Sergeant Brent Andrew Murray sworn on 29 June2017, originally filed in support of applications for civil forfeitureorders;(b) Detective Senior Sergeant Brent Andrew Murray sworn on 23 May2019 and filed in support of the without notice application forrestraining order;(c) Detective Senior Sergeant Brent Andrew Murray sworn on 2 October2019 and filed in support of the on-notice restraining order; and(d) Ian MacKenzie sworn 28 May 2019 and filed in support of the withoutnotice application for restraining order.[17] The Official Assignee also seeks leave to file and adduce the affidavit of DerekRichard Shane Webb sworn on 13 March 2020.[18] The Commissioner submits that these affidavits will assist the Court todetermine the issues before it by filling out the details of the wider factual picture.[19] There does not appear to be opposition to these affidavits being before theCourt.[20] Rule 7.32 allows the Court to grant leave for affidavits already filed in anyother proceeding between the same parties to be used on the disposal of an applicationif prior notice of the intention to use them has been given to the opposite party. Iconsider that the affidavits listed at [16] are useful in determining the proceeding. Ido not consider their admission controversial. I grant leave accordingly.[21] The affidavit of Derek Webb serves two purposes: "to inform the Court of thestatus of the estate in this proceeding" including the discharge of the forfeiture orders,and to outline the role of the Official Assignee in relation to already-satisfied forfeitureorders under the Act. Again, I consider the affidavit useful, and grant leave for itsfiling.Issues[22] The submissions for the Commissioner and Ms Harrison and from Ms Watt allframe the issues differently. Broadly, the issues requiring resolution are:(a) whether a restraining order under s 25 of the Act is available where finalasset and profit forfeiture orders were already determined by the HighCourt on 18 April 2019 and sealed on 8 May 2019 (alternatively,whether the order sought constitutes an abuse of process or is otherwiseprocedurally inappropriate in this case);(b) Whether the Official Assignee has the power to enforce a profitforfeiture order against property acquired by the respondent that has notbeen specified in the profit forfeiture order such that grounds exist forthe Commissioner's alternative application for a freezing order underthe High Court Rules; and(c) whether s 127 of the KiwiSaver Act 2006 acts as a bar to the making ofthe order sought.Statutory scheme overview[23] It is helpful at this point to note some general features of the statutory scheme.As the Court of Appeal summarised it in Doorman v Commissioner of Police, thereare two regimes under which the forfeiture of what may be loosely termed "theproceeds of crime" can occur.5[24] The first regime is that established under the Sentencing Act 2002.6 Aninstrument forfeiture order may be made where a person is convicted of a qualifyingoffence and property is used to commit or facilitate the commission of that offence.Such orders are made as part of the sentencing process and so are taken into accountwhen sentencing the offender.[25] The second regime is that established under the Act, which provides for themaking of asset forfeiture and profit forfeiture orders.7 An asset forfeiture order ismade in relation to tainted property – that is, property that is wholly or in part acquiredor derived, directly or indirectly, from significant criminal activity. The otherpossibility is a profit forfeiture order, where it is not necessary for the property to betainted property.[26] Asset and profit forfeiture orders can be made even though the individualwhose property is forfeited is not charged with a criminal offence, is acquitted of anoffence, or has his or her convictions set aside.8Whether a restraining order under s 25 of the Act is available where final assetand profit forfeiture orders were already determined by the High Court[27] The restraining order is sought under s 21, but the determination is made unders 25, which provides:25 Making restraining order relating to all or part of respondent'sproperty(1) A court hearing an application for a restraining order relating to all orpart of a respondent's property may, if the court is satisfied it hasreasonable grounds to believe that the respondent has unlawfullybenefited from significant criminal activity, make an order that theproperty it specifies in the order ("restrained property")—5 Doorman v Commissioner of Police [2013] NZCA 476, [2014] 2 NZLR 173 at [11]–[14].6 Sections 142A–142Q.7 For present purposes, instrument forfeiture orders which are provided for in ss 70–79 of the Actare not relevant.8 Sections 15 and 16.(a) is not to be disposed of, or dealt with, other than is providedfor in the restraining order; and(b) is to be under the Official Assignee's custody and control.(2) A restraining order made under subsection (1) may relate to any of thefollowing:(a) all of a respondent's property (including property acquiredafter the making of the order):(b) specified parts of a respondent's property:(c) all of a respondent's property (including property acquiredafter the making of the order) other than specifically excludedproperty.[28] Mr Britton for the Commissioner acknowledges that, under the statutoryscheme as written, there is no way for the Commissioner to apply to amend a profitforfeiture order that has already been made.9 The Commissioner accepts that a profitforfeiture order once determined is final.10 Instead, counsel for the Commissionerpoints to two provisions of the Act in tandem as making the order sought possible inprocedural terms. First, s 55 provides for the making of profit forfeiture orders:55 Making profit forfeiture order(1) The High Court must make a profit forfeiture order if it is satisfied onthe balance of probabilities that—(a) the respondent has unlawfully benefited from significantcriminal activity within the relevant period of criminalactivity; and(b) the respondent has interests in property.(2) The order must specify—(a) the value of the benefit determined in accordance withsection 53; and(b) the maximum recoverable amount determined in accordancewith section 54; and9 This is particularly in light of s 47 of the Act which expressly provides for the amendment of anapplication for such an order before it is made, but not after.10 Counsel assisting also explained that s 17 of the Act appears not to provide for multiple forfeitureorders of the same type in respect of the same subject matter, but instead only provides for multipletypes of forfeiture order in respect of the same instance of significant criminal activity.(c) the property that is to be disposed of in accordancewith section 83(1), being property in which the respondenthas, or is treated as having, interests.(3) Subsections (1) and (2) are subject to section 56.(4) A profit forfeiture order is enforceable as an order made as a result ofcivil proceedings instituted by the Crown against the person to recovera debt due to it, and the maximum recoverable amount is recoverablefrom the respondent by the Official Assignee on behalf of the Crownas a debt due to the Crown.[29] Second, s 83 sets out the process for discharging a profit forfeiture order, withsubs (4) being particularly material to the Commissioner's case:83 Discharge of profit forfeiture order by Official Assignee(1) If the High Court makes a profit forfeiture order, the Official Assigneemust, as soon as practicable after the expiry of the specified period (asdescribed in subsection (2)), dispose of the property specified in theorder and apply the money resulting from the disposal as follows:(a) first, by paying the costs recoverable by the Official Assigneeunder section 87:(b) secondly, by paying to the Legal Services Commissioner theamount (if any) payable by way of legal aid granted to theformer interest holder (less any contributions paid by theformer interest holder):(c) thirdly, by paying, in the order of priority set out in section86E of the Summary Proceedings Act 1957, any of thefollowing amounts imposed on the former interest holder:(i) any amount of reparation (as defined in section79 of the Summary Proceedings Act 1957):(ii) any offender levy (as defined in section 79 of theSummary Proceedings Act 1957):(iii) any other type of fine (as defined in section 79 of theSummary Proceedings Act 1957):(d) fourthly, by paying to the Crown the following amount, lessthe sum of the payments made under paragraphs (a) to (c),—(i) if the sum resulting from realising the property isequal to, or more than, the maximum recoverableamount specified by the Court under section 55, themaximum recoverable amount:(ii) if the sum resulting from realising the property is lessthan the maximum recoverable amount, the sumresulting from realising the property:(e) fifthly, by paying any remaining money to the former interestholder.(2) The specified period expires—(a) on the date that is 6 months after the time for bringing anyappeal against the profit forfeiture order expires, if no appealhas been filed; or(b) on the date that is 6 months after all appeals in respect of theprofit forfeiture order have been withdrawn or finallydetermined, if an appeal or any appeals have been filed.(3) Despite subsections (1) and (2), if the period for bringing an appealagainst the profit forfeiture order has expired and no appeal has beenfiled or all appeals have been withdrawn or finally determined, theOfficial Assignee—(a) may realise any asset that makes up the property that is thesubject of the profit forfeiture order; but(b) must, if he or she does so, hold the proceeds of realising thoseassets until the expiry of the specified period.(4) Subsection (1)(d)(ii) does not prevent the Official Assignee fromrecovering, by any lawful means, the balance of the maximumrecoverable amount that remains due to the Crown, after the Crownis paid a sum less than the maximum recoverable amount under theprovision.(5) This section is subject to section 84 and any regulations made undersection 173(d).(emphasis added)[30] Mr Britton reads s 83 as providing for a profit forfeiture order to be"discharged" by the Official Assignee, save for an ability to recover the balance of themaximum recoverable amount through s 83(4). Within that reading, counsel submitsthat, while it is for the Official Assignee to recover the $23,000 through the High CourtRules (rather than the Commissioner through the Act), this does not render theapplication for a restraining order over the $23,000 an abuse of process. That is forreasons to do with the differing functions of the Commissioner and the OfficialAssignee under the Act and in practice.[31] However, before those differences arise, Ms Watt in her submissions assistingthe Court raises a preliminary issue with the Commissioner's interpretation of the Act.On Ms Watt's reading the Act's scheme indicates, or appears to presume, thatrestraining orders are to precede, not follow, the determination of a profit forfeitureorder – and that the present restraining order, coming after a final profit forfeitureorder, is beyond the jurisdiction of this Court to make.[32] She submits that, although s 25 sets no temporal limitation on the making of arestraining order, the surrounding provisions suggest such an order can only predateforfeiture orders. In particular, the natural operation of the statute is that a restrainingorder expires on the date that the application for a profit forfeiture order is determined:37 Duration of restraining orders and further orders(1) A restraining order expires on the earlier of the following:(a) the date that is the end of the period that is 1 year after thedate on which the restraining order is made:(b) the date of the making or declining of a forfeiture orderassociated with the same property.[33] Ms Watt submits that this indicates that restraining orders are only intended, inthe Act's schema, to precede the determination of forfeiture orders.11 Supporting thisinference, s 11 states that property "may, but need not, be restrained property or foreignrestrained property before it becomes forfeited property".12[34] Ms Watt sets out the Act's formal requirements for a forfeiture order, whichare that it must:13(a) specify the value of the benefit the respondent has gained from thesignificant criminal activity, which under s 53 is presumed to be thevalue stated in the Commissioner's application;(b) state the maximum recoverable amount, which under s 54 isdetermined by deducting the value of any assets forfeited to the Crownpursuant to an asset forfeiture order from the value of the benefitdetermined under s 53.[35] Ms Watt takes the view that allowing for multiple profit forfeiture orders inrespect of the same period of criminal activity would potentially result in double11 She makes an analogy to interim injunctions, preserving the parties' positions pending a fullhearing on the substantive merits.12 Emphasis added.13 Criminal Proceeds (Recovery) Act 2009, s 55(2).counting and the forfeiture of property of greater value than the net benefit determinedunder s 53. In sum, then, she submits that there does not appear to be scope for arestraining order under the Act to be made after a forfeiture order has been determinedin respect of the relevant period of criminal activity, nor scope for the making of asecond profit forfeiture order. Finally, she suggests that an application for a furtherprofit forfeiture order would likely be barred by res judicata.[36] The submissions on behalf of Ms Harrison did not directly address thistechnical question, but echoed Ms Watt's concerns regarding the principle of finalityand the lack of any statutory provision for reopening the question of the "value ofbenefit" that a profit forfeiture order may address.Discussion[37] The issue here is a narrow one – whether, under the scheme of the Act,restraining orders are available in respect of a period of criminal activity afterforfeiture orders have been determined in respect of that same period of criminalactivity. The Court of Appeal in Vincent v Commissioner of Police relevantlycharacterised the general nature of restraining orders as follows:14Restraining orders are effectively interim orders of limited duration and maybe made without notice.15 The explanatory note to the Criminal Proceeds(Recovery) Bill identified the purpose of restraining orders as being "topreserve property while the Crown is gathering evidence to support anapplication for forfeiture".16 They may subsequently lead to forfeiture orders,but that requires the completion of a further process.17[38] While the Court in Commissioner of Police v Browne noted that nothing in theAct imposes a particular time limit by which a restraining order must be sought, thatcase involved an unusual circumstance where funds had been seized under s 150(1) ofthe Search and Surveillance Act 2012 almost three years prior to the application for arestraining order over the same funds but no forfeiture order had been determined inrespect of the money.1814 Vincent v Commissioner of Police [2013] NZCA 412 at [45(a)].15 Sections 37–42 of the Criminal Proceeds (Recovery) Act deal with the duration of restrainingorders and further orders.16 Criminal Proceeds (Recovery) Bill 2007 (81–1) (explanatory note) at 2.17 Sub-pt 3 of the Act deals with civil forfeiture orders.18 Commissioner of Police v Browne [2020] NZHC 484 at [29].[39] I note that the commentary in Adams on Criminal Law tends to support MsWatt's proposed position, beginning its discussion of s 25 by stating that "A'restraining order' under this section may be made in respect of any 'property' thatmay be the subject of a 'profit forfeiture order.' "19 Counsel has not provided, norhave I been able to find, an example of a restraining order being made by this Courtin respect of a period of criminal activity after forfeiture orders were made in respectof the same criminal activity. Nor have I identified a situation where two separateforfeiture orders of the same type were made in respect of the same period of criminalactivity, and counsel for the Commissioner agrees in his submissions that adetermination regarding such an order is final.[40] I agree with Ms Watt's reading of the Act. While the statute does not explicitlyprohibit the making of a restraining order subsequent to the determination of forfeitureorders, it does not clearly provide for such an order. Lacking a clear provision on theissue the surrounding sections – particularly the s 37 mandate that a restraining orderexpire after one year or the determination of a forfeiture order associated with theproperty – take on greater relevance. Together the phrasing of ss 11 and 37 and theoverall language of the scheme weigh against the Act providing for a restraining orderrelated to a period of criminal activity that has already been the subject of a forfeitureorder.[41] I consider that a restraining order is not available under s 25 in this case. I turnto whether a freezing order might be.Whether a freezing order is available[42] The Court may make a freezing order under r 32.2 of the High Court Rules.Much like a restraining order under the Act, a freezing order serves to restrain arespondent from removing any assets located in or outside New Zealand or fromdisposing of, dealing with, or diminishing the value of those assets. Freezing ordersoperate in personam rather than in rem, meaning that if I am to grant one then in19 Simon France (ed) Adams on Criminal Law (online ed, Thomson Reuters) at [CP 25.01].addition to the other necessary amendments to the application, once made it must beserved on the Public Trust as the party currently in possession of the $23,000.20[43] Justice Muir recently summarised the criteria for a freezing order in Chi vYue:21(a) the applicant must show that he or she has a good arguable case ontheir substantive claim;(b) there must be assets of the defendant within the jurisdiction to whichthe orders can apply;(c) the applicant must show there is a real risk of dissipation; and(d) balanced against the prospect the plaintiff's judgment may berendered barren must be any prejudice or hardship to the defendantand to the third parties from a grant of the order.[44] It is reasonably clear that if Ms Harrison receives the $23,000 that money willnot remain in New Zealand. Whether a freezing order is appropriate in this case willprima facie turn on whether a profit forfeiture order can be enforced against propertynot specified in that order. Here that is the $23,000, which did not technically exist atthe time of, and was not named in, the forfeiture order sealed on 8 May 2019.[45] Under s 55(1) of the Act the Court must make a profit forfeiture order if it issatisfied on the balance of probabilities that the respondent has unlawfully benefitedfrom significant criminal activity within the relevant period of criminal activity; andhas an interest in property. The order must specify the value of the benefit, determinedin accordance with s 53; the maximum recoverable amount determined in accordancewith s 54; and the property that is to be disposed of in accordance with s 83(1), beingproperty in which the respondent has, or is treated as having, interests.22[46] Section 83(1) provides for the Official Assignee to discharge a profit forfeitureorder by disposing of the specified property in accordance with a schedule set out in20 Official Assignee v Scott [2012] NZHC 2579 at [24]. While r 32.4 permits an order to be madeagainst a non party to the substantive proceeding, r 32.2 requires that the entity against which anorder is made be a respondent to the application: Mogilin v Jo HC Auckland CIV-2011-404-1584,26 August 2011 at [6].21 Chi v Yue [2018] NZHC 1298 at [41]; citing Shaw v Narain [1992] 2 NZLR 544 (CA) and Gongv Zhang [2016] NZHC 705.22 Section 55(2) (emphasis added).the section. Mr Britton directed the Court to s 83(4), which states that "subsection(1)(d)(ii)23 does not prevent the Official Assignee from recovering, by any lawfulmeans, the balance of the maximum recoverable amount that remains due to theCrown, after the Crown is paid a sum less than the maximum recoverable amountunder the provision." The Commissioner says this is consistent with s 55(4), whichprovides that "a profit forfeiture order is enforceable as an order made as a result ofcivil proceedings instituted by the Crown against the person to recover a debt due toit, and the maximum recoverable amount is recoverable from the respondent by theOfficial Assignee on behalf of the Crown as a debt due to the Crown."[47] The Commissioner's position is that ss 55(4) and 83(4) allow, in practice, forany further property acquired by the respondent to be recovered by the OfficialAssignee, pursuant to recovering the balance of the maximum recoverable amount,using established debt enforcement mechanisms. This is true even after a profitforfeiture order has been "discharged under s 83(1)".[48] The referenced mechanisms are part 17 of the High Court Rules, whichprovides for a court order to be enforced in the same way as a judgment.24 Counselwould seek a sale order under r 17.62 allowing for the seizure of personal property(here the $23,000) to discharge the judgment debt. Counsel submits that it would beappropriate for the Official Assignee as the party that has standing under the relevantprovisions of the Act, to seek such an order.[49] Ms Watt submits that this is not possible. She framed the Commissioner'sapproach as using the existing profit forfeiture order to realise the $23,000. In otherwords, allowing the forfeiture order to reach beyond the property specified in it andcreate a capacity for a future debt. She says that this cuts against both the provisionsof the Act requiring a profit forfeiture order (and the application for it) to specify theproperty to be disposed of pursuant to it, and the decision of the Court of Appeal inDoorman v Commissioner of Police.2523 Which provides that the fourth stage in the Official Assignee's application of money arising fromthe disposal of the property specified in the order will be paying to the Crown (less the moneyalready paid out at the prior three stages) the sum resulting from realising the property (if it is lessthan the maximum recoverable amount).24 High Court Rules 2016, r 17.2.25 Doorman v Commissioner of Police, above n 5.[50] The statutory provisions she points to are:(a) section 52(d), which requires the application for a profit forfeitureorder to identify the property in which the respondent holds interestsand the nature of those interests;(b) section 58, under which the Court may treat effective control overproperty as an interest in that property for the purpose of including it inan order;(c) section 55(2)(c), which requires that "the order must specify" theproperty that is to be disposed of by the Official Assignee inaccordance with s 83(1) of the Act (emphasis added); and(d) section 56(1), which provides for the Court to "exclude certainproperty from being able to be realised under s 55(2)(c)" on thegrounds that realising the property may cause undue hardship –suggesting that unless property is specified under s 55(2)(c), itcannot be realised by the Official Assignee.[51] Ms Watt submits that these requirements for specification point against thenotion that a profit forfeiture order may be enforced against property not specified,including property the respondent acquires in the future, up to the maximumrecoverable amount – which would render the requirement that orders identify specificproperty otiose. She says that, viewed in light of these specification requirements,ss 55(4) and s 83(4) are better interpreted as saying that a profit forfeiture order isenforceable as a civil order by the Official Assignee to recover the debt due to theCrown by realising the property specified in the order.[52] For support she points to the decision in Doorman v Commissioner of Police.In Doorman the house over which a forfeiture order was sought was found to be taintedproperty for the purposes of the Act and the amount of unlawful benefit derived wasupheld.26 Also challenged on appeal was whether the Court had the power to make aprofit forfeiture order where the only property identified as property to be disposed ofwas the house, which had been the subject of an asset forfeiture order. The High Courthad held that s 55 established a debt recoverable as a result of civil proceedings, withsubs (2) designed to ensure there was no double recovery where assets wereforfeited.27 The Court of Appeal rejected this view, saying:28[62] We take a different view. We consider that the wording of the Actmeans that before a profit forfeiture order can be made, property must bespecified in the order as the property to be disposed of. We emphasise therequirement in s 52 that the application for a profit forfeiture order identifythe property, the prerequisite that there be an interest in property in s 55(1)(b)and, particularly, the reference to "the property that is to be disposed of" ins 55(2)(c). It is difficult to see what the latter requirement means if not arequirement to specify the property subject to the order.[63] On its own, s 55(4), which treats a profit forfeiture order as a debtdue to the Crown recoverable by the Official Assignee, may support therespondent's approach. However, that section must be read alongside the otherrequirements in s 55 indicating that it is necessary to have interests in propertyand to specify the property that is the subject of the order. Our interpretationis supported by s 83 which deals with how the Official Assignee is to dischargea profit forfeiture order. That section envisages payment to the Crown ofamounts related to sums resulting from realisation of the property.[64] The sections in the Act dealing with the statutory purpose we have setout above show the Act is intended to deter criminal activity of the sortengaged in by Mr Doorman and to eliminate profit from such activities forpersons such as the appellants.29 However, those purposes are linked toproperty that is identifiable, albeit that may be hidden in some way. In thissense, the focus is on clawing back the value of property interests, broadlydefined, rather than on the value of lifestyle choices that are not reflected inproperty.[65] The legislative history suggests that the intention was that profitforfeiture orders would be available where a person has profited fromsignificant criminal activity, but concealed those assets.30 We consider that theAct does provide for that so long as the Court can be satisfied of the existenceof such property. The distinction we draw is between that scenario and thepresent case where the profit forfeiture order is simply creating a capacity fora future debt.26 At [36] and [46].27 Commissioner of Police v Doorman HC Nelson CIV-2010-442-169, 15 December 2011 at [46],28 Doorman v Police, above n 5, at [62].29 See Brazendale v R [2011] NZCA 494, (2011) 25 CRNZ 580 at [13] and [38]; Elliot v R [2011]NZCA 386, [2011] 3 NZLR 811 at [34]–[35].30 Criminal Proceeds (Recovery) Bill 2007 (81-1) (explanatory note) at 3.[53] Mr Britton for the Commissioner submits that Doorman was distinguishableon its facts and does not apply in the present case. It was a decision not to impose aprofit forfeiture order, as distinct from the present case, in which a profit forfeitureorder already exists, and the question is whether an outstanding debt under it can beused as a basis for restraining or freezing the money Ms Harrison stands to receivefrom her KiwiSaver provider.[54] I turn to s 83(4), which I set out again for convenience:(4) Subsection (1)(d)(ii) does not prevent the Official Assignee fromrecovering, by any lawful means, the balance of the maximum recoverableamount that remains due to the Crown, after the Crown is paid a sum less thanthe maximum recoverable amount under the provision.[55] Ms Watt submits that it is the final clause of the section (emphasis added) thatis instructive. She notes that the section does not provide for enforcement of the debtto the Crown against property not specified in the order, and emphasises s 83(1) statingthat the Official Assignee is to "dispose of the property specified in the order and applythe money resulting from disposal" in the order set out. In her written submissionsshe put it this way:Section 83(4) appears to be intended to ensure that payment by the OfficialAssignee of a sum to the Crown under s 83(1)(d)(ii) does not prevent the OAlawfully recovering further specified property to satisfy the amount due to theCrown under the profit forfeiture order. For example where, as here, thespecified property is realised over the course of time, there may be severalpayments made to the Crown towards the maximum recoverable amount.Section 83(4) makes clear that the fact of one payment under s 83(1)(d)(ii)does not prevent further payments may be made.[56] Ms Watt says that if I consider there is a good arguable case that the forfeitureorder may be enforced in respect of property not specified and acquired after the orderwas made, a freezing order may be available. Otherwise it will not.[57] Finally, Mr Bourke for Ms Harrison submitted that the Commissioner'sproposed approach is contrary to the spirit or principle of finality and would create anunpalatable position in which the Commissioner can stand ready to restrain MsHarrison's Kiwisaver funds into the far future.Discussion[58] This issue turns on the true interpretation of ss 55(4) and 83(4). Framednarrowly, I must decide whether, because the assets seized will likely lead to a shortfallbetween the Crown's recovery and the maximum recoverable amount under theexisting profit forfeiture order, there is a reasonable possibility that the Crown will beable to recover the $23,000 as though it were any other money required to satisfy aregular cash debt. If that is the case, it will be appropriate to grant the request to turnthis application into one for a freezing order over the $23,000.[59] This possibility was acknowledged by Ellis J, who recorded in her earlierjudgment that "after realisation of those assets there remains a considerable portion ofthe maximum recoverable amount which remains unpaid. That amount remainsrecoverable by the Official Assignee as a debt due to the Crown by virtue of s 55(4)of the 2009 Act" and that "in light of the indisputable debt owed to the Crown byMs Harrison it seems to me that the funds could equally be made the subject of a(without notice) freezing order". 31[60] Justice Ellis appears to have accepted, on a provisional basis, the readingproposed by the Commissioner, that ss 55(4) and 83(4) provide for, where the propertyrealised under the profit forfeiture order is insufficient to discharge the maximumrecoverable amount, the remainder to be recovered as an ordinary debt, without anyrestriction of recovery to property named in the order.[61] Support for this reading is widespread, albeit not deep – in that it is generallytreated as a matter of assumption, with writers pointing purely to the statutory textitself for support. In Commissioner of Police v Malcolm the Commissioner appliedfor a forfeiture order under s 55 for $62,400, being the profit from harvesting and saleof cannabis.32 The total assets available for forfeiture were $58,676.98 in cash.Justice Ronald Young simply stated that "if an order is made the difference, $3,713.02,would be a civil debt owed by Mr Malcolm to the Commissioner.33 He consideredthat sum could be "recovered as a civil debt pursuant to s 55(4) of the [Criminal31 Commissioner of Police v Harrison, above n 3, at [2] and [5] (emphasis added).32 Commissioner of Police v Malcolm [2013] NZHC 2986.33 At [2].Proceeds] Act".34 The Court did not elaborate on what the recovery of that debt mightlook like.35[62] Various other sources take it as read that ss 55(4) and 83(4) allow a profitforfeiture order to be enforced as an order made as a result of civil proceedingsinstituted by the Crown against the person to recover a debt due to it, and that themaximum recoverable amount is recoverable by the Official Assignee on the Crown'sbehalf as a debt due to the Crown, by any lawful means.36[63] The logical conclusion of such an approach (putting aside the issue of theKiwiSaver Act, which I come to later) would seem to be that, with the $23,000 havingbeen realised and its payment to Ms Harrison pending, a freezing order to ensure themoney goes towards the debt rather than being transferred out of the country might bepossible.[64] Against this Ms Watt and Mr Bourke argue that ss 55(4) and 83(4) are qualifiedby the sections around them, which require an application for a profit forfeiture orderto specify particular property which the Official Assignee is to dispose of in order todischarge the order. They also point to the Court of Appeal in Doorman holding thata profit forfeiture order must be in respect of particular property, rather than simplycreating a capacity for future debt.37 At the hearing counsel pointed to the applicationof this principle in Commissioner of Police v Zhang, where Brewer J declined to makea profit forfeiture order because it would be redundant, given there was no propertynamed in the application that was not already the subject of an assets forfeiture order.3834 At [13].35 I note that the decision followed that in Doorman by almost two months, but did not cite Doorman.36 Heather McKenzie Proceeds of Crime Law in New Zealand (1st ed, LexisNexis, Wellington, 2015)at 179 and 201; Simon France (ed) Adams on Criminal Law, above n 19, at [CP55.09]; andCommissioner of Police v Fennell [2018] NZHC 2249 at [18], in which the Court said "thequantum of a profit forfeiture order may exceed the property to be realised. The remaining balancecan be recovered by the Official Assignee on behalf of the Crown as a civil debt due to the Crownunder s 55(4) of the Act." I also note Commissioner of Police v Dollman [2017] NZHC 3094, inwhich the Court approved settlement agreements in accordance with s 95 of the Act, which madereference to the sums being realised being "in full and final satisfaction of the maximum amountrecoverable against [the respondent] and accordingly there will be no balance outstanding thatwould be recoverable as a civil debt pursuant to s 55(4) or 84(4) of the Act or any other applicablesection".37 Doorman v Commissioner of Police, above n 5.38 Commissioner of Police v Zhang [2017] NZHC 3211 at [46].[65] In my view, the potentially significant distinction is that Doorman and Zhangboth dealt with whether a profit forfeiture order should be made, whereas the presentcase arises in the aftermath of one having been validly made. In this case there wasspecified property, almost all of which has, at this point, been realised, but where itappears there may well still be a shortfall relative to the maximum recoverable amount.[66] There is a second potentially significant distinction. It is clear that a profitforfeiture order is not intended to create a capacity for future debt. The $23,000 didnot technically exist at the time the profit forfeiture order was made. However, it wasrealised from Ms Harrison's interest in a KiwiSaver account that largely did exist (atleast in an equivalent form) at the time the orders were made (though orders could notbe made in relation to it). This might arguably address the concern expressed inDoorman around simply creating a capacity for future debt. On such a reading thiswould be a situation in which an asset that would have been available for recovery bythe Crown, but for the application of the KiwiSaver Act, has potentially becomerecoverable.[67] However, this reading casts into doubt the purpose and function of therequirements in the Act that profit forfeiture orders meticulously specify property thatis to be realised in accordance with s 83. If a profit forfeiture order simply allows theOfficial Assignee to recover money as though a debt outright, those requirementswould become meaningless procedural hoops. It might be argued that, while thes 55(2) requirements are strict requirements for the Court to make a profit forfeitureorder in the first place, they do not necessarily limit recovery in all situations after thatorder has been made. But that approach would still render the ability to modify anapplication for a profit forfeiture order redundant, given the ultimate effect ofmodifications sought could simply be achieved after the fact without the additionalapplication.[68] While the issues are far from straightforward, I conclude that the betterinterpretation of the relevant provisions is that they do not support the enforcement ofa profit forfeiture order against property not specified in that order and therefore afreezing order.[69] In any event, there remains the outstanding issue of the KiwiSaver Act.Whether a freezing order is barred by the KiwiSaver Act[70] Counsel for Ms Harrison says that the $23,000 retains its essential character asKiwiSaver funds, and thus cannot be transferred to the Official Assignee's custodyand control. This is because of s 127 of the KiwiSaver Act, which says:127 Member's interest in KiwiSaver scheme not assignable(1) Except as expressly provided in this Act, a member's interest or anyfuture benefits that will or may become payable to a member underthe KiwiSaver scheme must not be assigned or charged or passed toany other person whether by way of security, operation of law, or anyother means.(2) However, subsection (1) does not prevent a member's interest or anyfuture benefits that will or may become payable to a member underthe KiwiSaver scheme from being released, assigned, or charged, orfrom passing to any other person if it is required by the provisions ofany enactment, including a requirement by order of the court underany enactment [71] The Act defines a "member's interest" as, in relation to a member of a scheme,the net value of the total of "the member's accumulation; and any unvested employercontributions".39 A "member's accumulation" is defined as the net value of the totalof:(a) the member's contributions; and(b) any vested employer contributions in respect of the member; and(c) any fee subsidies paid in respect of the member under regulationsmade under section 228(1) (n) or (o) before the revocation of thoseregulations; and(d) the Crown contribution paid in respect of the member"Net value" is defined as:(a) in relation to contributions, the values of the contributions onceappropriate debits and credits have been made for positive andnegative returns; and39 KiwiSaver Act 2006, s 4(1).(b) in relation to a member's accumulation, or a member's interest, meansthe value of the member's accumulation or member's interest (asapplicable) once any other appropriate debits and credits have beenmade to account for things like fees, permitted withdrawals, andpositive and negative returns.[72] Counsel's submissions focussed on whether a restraining order, rather than afreezing order, is available in circumstances such as this. I have already concluded arestraining order is not available after a profit forfeiture order has been determined.There would also likely be a bar because of the relationship of s 127 and the criminalproceeds recovery regime, which was the subject of close analysis in TheCommissioner v Harrison.40 Justice Ellis concluded that:41the provisions of the KSA prevail over those of the CPRA; the Court has nopower to make a civil forfeiture order in relation to the KiwiSaver funds of aperson who has been engaged in significant criminal activity. No doubt itfollows that there is no power to make a restraining order over such fundseither, although I heard no argument on the point.[73] This conclusion was based on several factors. While they address the Act'sregime, I consider their substance has some relevance in the context of a freezingorder:(a) Unlike the Insolvency Act 2006, the Act does not contain any provisionstating that civil forfeiture orders might be made in relation to moniesor interests held in superannuation schemes generally or KiwiSaverfunds in particular.42 This is despite the Act lacking any provision (likethat in the Insolvency Act) acknowledging that other statutes mightoverride it.43(b) The Act's forfeiture provisions are primarily concerned with deterringprofiting from criminal behaviour, and the Act does not purport tovindicate individual rights or provide specific redress to victims ofcriminal activity.44 This distinguishes it further from the InsolvencyAct, which also does not override s 127 of the KiwiSaver Act despite40 The Commissioner v Harrison & Sharp, above n 1.41 At [69].42 At [56].43 At [57].44 At [58]–[59].serving "relatively more important" interests.45 The Court also noted atechnical anomaly that if a person's KiwiSaver funds vested in theOfficial Assignee as a consequence of an order under the Act and thatperson became bankrupt, those funds would then become available tosatisfy creditors under the Insolvency Act.46(c) The general anti-avoidance provision at s 167 of the Act was sufficientto defeat any attempt by people involved in criminal activity to avoidforfeiture by depositing any surplus funds into a KiwiSaver fund.47(d) In the absence of specific statutory provisions detailing the interactionbetween the statutes, there were practical issues around how the Courtmight make workable orders under the Act in relation to KiwiSaveraccounts and how the Official Assignee might act on them.48 Inparticular Trustees Executors Ltd v Official Assignee makes clear thatthe Official Assignee would be unable to realise funds until either therespondent's 65th birthday or some other event triggered early releaseof funds – which sat awkwardly with the language of the Act, whichotherwise contemplates forfeiture as "more or less immediate actionby the OA to realise any assets that are identified in a profit forfeitureorder."49[74] The present issue is whether the $23,000 realised from Ms Harrison'sKiwiSaver qualifies as "a member's interest" and is therefore protected by s 127 ofthe KiwiSaver Act.45 At [59]–[60].46 At [62]. The Court noted this would cut directly against the decision in Trustees Executors Ltd vOfficial Assignee [2015] NZCA 118, [2015] 3 NZLR 224, which had held that a person's interestin KiwiSaver funds could not be divested pursuant to another statute unless that statute expresslyprovided for the vesting in a third party of a person's interest in those funds.47 At [63].48 At [64].49 At [66].[75] The submission for the Commissioner and the Official Assignee is that it doesnot. Mr Britton submits that the $23,000 has been withdrawn from investment,realised and is now a payable cash amount like any other cash amount.50[76] Counsel points to certain events following Ellis J's judgment in December2017 as transformative – particularly Ms Harrison's application for early access to herKiwiSaver funds on the ground of significant financial hardship, the approval of thatrequest, Public Trust's partial withdrawal of funds on 16 May 2019, Kiwi Wealth Ltd'srealisation or divestment of certain investments to the value of $23,000 and thatamount being withdrawn and held in a trust account for payment to Ms Harrison on30 May 2019. Mr Britton submits this is a sufficient transformation to render the$23,000 equivalent to any other cash amount, and able to be subject to a restraining orfreezing order without violating Ellis J's judgment.[77] Counsel points to rr 7, 10 and 11 of the KiwiSaver Act Rules,51 which governthe release of funds and provide for withdrawal in the case of significant financialhardship. He submits that the wording of those sections, particularly the use of thewords "withdrawal" and "release," indicate that, once withdrawal and release of fundshas been permitted by the fund manager, the cash amount realised and payable movesoutside of the KiwiSaver Act regime and is no longer subject to s 127. Accordingly,withdrawal or divestment of the amount from a KiwiSaver account means it no longercomprises a "member's interest".[78] Given at the date of the without notice application the $23,000 was payable toMs Harrison and held on trust pending electronic transfer to her, Mr Britton submits itwas either in her possession or under her effective control in terms of s 58 of the Act(which the Court may treat as an interest in property). Save for the transfer havinghappened, nothing prohibited her making use of the money. Counsel further submitsthe present situation is no different to other situations under the KiwiSaver Act where"permitted withdrawal" is allowed, such as for purchasing a first home. Counsel saysthat if the $23,000 was transferred to Ms Harrison and then deposited into another50 Counsel submits this brings it within the definition of property under s 2 of the Criminal Proceeds(Recovery) Act 2009.51 At sch 1 of the KiwiSaver Act 2006.account, withdrawn in cash and held or applied to the purchase of real property, therewould be no question that a restraining or freezing order could legitimately be sought.[79] Finally, Mr Britton submits that the various practical issues pointed to in EllisJ's judgment regarding making workable orders under the Act in relation to KiwiSaverActs do not arise in this case.52 That is fundamentally because of the Commissionerand Official Assignee's view that the $23,000 has been realised and can be acted onimmediately by the Official Assignee under s 83 of the Act – the Official Assignee canthen utilise the enforcement mechanisms under the High Court Rules to seekcontribution of the $23,000 towards satisfaction of the maximum recoverable amountof the profit forfeiture order.[80] That is not the view taken for Ms Harrison or by Ms Watt in her submissionsassisting the Court.[81] Counsel for Ms Harrison says the $23,000 remains protected by s 127 of theKiwiSaver Act against the order sought. This is because it is unquestionably derivedfrom her member contributions. Counsel says that while the approval of herwithdrawal application means the funds in question can be considered as a benefit thatwas to become payable to her the s 127 bar is still operative.[82] Mr Bourke says it is not seriously arguable that the funds were in MsHarrison's possession. They were placed in a bank account in the name of PublicTrust as Trustee for Kiwi Wealth Kiwisaver Scheme, operated by Kiwi Wealth Ltd.Ms Harrison had no authority or control over that account at the time they wererestrained – her KiwiSaver provider did. Counsel rejects the suggestion that MsHarrison had "effective control" of those funds wholesale. He points to the fact thatthis submission comes almost a year after the without notice restraint application wasfirst made, and in the interim there has been no application for an order that the$23,000 be treated as though the respondent had an interest.53 In the alternative, hesubmits that the purpose of s 58 is to allow the Court to go behind corporate structures,trusts, family relationships and other devices used to conceal the real position of the52 Commissioner of Police v Harrison, above n 1, at [64]–[68].53 Section 58 provides for the making of such an application.respondent in relation to the property in question.54 Such an analysis requiresinvestigating whether the respondent had the capacity to use, dispose of, or otherwisetreat the property in question as her own.55[83] Counsel submits that, until the moment of payment, the funds retain theircharacter as KiwiSaver funds. Clause 5 of the KiwiSaver Scheme Rules requires that"the manager must, at the member's request, pay a permitted withdrawal as a lumpsum."56 Counsel says that until that lump sum is paid, the funds have not altered incharacter from constituting a member's interest. Ms Watts notes that if funds wereplaced in a holding account pursuant to an approved early withdrawal application(such as for serious illness or the purchase of a first home) but the application was thenwithdrawn the funds would not be payable to the KiwiSaver member – because theywould not change their essential nature as KiwiSaver funds until actually paid out.57[84] That being so, counsel for Ms Harrison submits that allowing a restrainingorder in respect of the $23,000 in this case would cut against the spirit and policy ofthe KiwiSaver Act itself and Ellis J's decision that the Court has no power to makeforfeiture orders in relation to KiwiSaver funds.58 Counsel says s 127(2) requires anexpress provision allowing the seizure of KiwiSaver funds. That is what was requiredby the Court of Appeal in Trustees Executors Ltd v Official Assignee.59 Without such54 Pointing to Simon France (ed), Adams on Criminal Law, above n 19, at [CP58.01]; and Solicitor-General v Bartlett [2008] 1 NZLR 87 (HC) at [24]–[27].55 Citing Solicitor-General v Huang HC Auckland CIV-2005-404-1538, 18 December 2007 at [71],which leads to a paragraph quoting Connell v Lavender (1991) 7 WAR 9 (WASC) at [27] to similareffect.56 Kiwisaver Act 2006, sch 1, cl 5.57 Counsel also notes that for an early withdrawal for a first home purchase made before the sale andpurchase agreement is unconditional the withdrawn money is paid to a stakeholder obliged to holdthat money until the agreement becomes unconditional. Should settlement not occur, thestakeholder would be obliged to repay the money is returned to the purchaser's funds manager.58 Counsel also points to a specific perversity identified in Trustees Executors Ltd v Official Assignee,above n 46, at [76], wherein allowing control of KiwiSaver funds to pass to the Official Assigneewould interfere with the mechanism by which an account holder applies for early withdrawal offunds in the case of serious illness – leaving a seriously ill bankrupt at the mercy of the OfficialAssignee to apply on her behalf. Counsel warns that the present approach would similarlycompromise the position of respondents suffering serious illness or financial hardship.59 At [52]. Interestingly counsel points to the following quote at [54]: "The objective of the KSA isto encourage a long-term savings habit and the accumulation of funds that will increase thewellbeing and financial independence of individuals, particularly in retirement. There is nothingin the KSA to suggest that a purpose of the legislation is to accumulate funds for the benefit ofcreditors in the event of the member's bankruptcy. If that were the case, the important social andeconomic purposes of the KSA would be undermined and the burden of providing for the welfareof individuals would fall back on the state." This case occupies a narrow exception, in thata provision or clarification from the legislature the Commissioner's proposedapproach would constitute an overreach, particularly given the Act allows the state todeprive individuals of their possessions.[85] Counsel for Ms Harrison also points to Ellis J's comments that the effectivehierarchy between the interests protected by the relevant statutes is first the KiwiSaverAct; then the Insolvency Act; then the Criminal Proceeds (Recovery) Act. Counselsays allowing a seizure in this case would be unworkable or at least technicallyconvoluted in light of s 84 of the Insolvency Act, which states:84 Bankruptcy in relation to profit forfeiture order(1) If, after a profit forfeiture order is made, the Official Assignee is givennotice in writing of the filing of a creditor's application in respect ofthe person under section 13 of the Insolvency Act 2006, the OfficialAssignee must, until the petition has been withdrawn or been disposedof, refrain from taking, or continuing to take, any of the followingactions:(a) selling or disposing of the property specified in the order:(b) paying the amounts specified in section 83.(2) If a person whose property is the subject of a profit forfeiture orderbecomes bankrupt, the property that is the subject of the profitforfeiture order, if it has not yet been disposed of, ceases to be in thecustody and control of the Official Assignee and is deemed to bevested in the Assignee of the bankrupt's property under section 101of the Insolvency Act 2006.(3) A profit forfeiture order made against a person is provable in thebankruptcy of that person.(4) To avoid doubt, subsection (3) applies despite anything in section232(2) of the Insolvency Act 2006.[86] Counsel says this is particularly the case given all Ms Harrison's known assets,save her KiwiSaver funds, have been forfeited to the Commissioner, which creates areal possibility she will become bankrupt – at which point property that is the subjectof the profit forfeiture order, if it has not yet been disposed of, will be deemed to bevested in the Assignee of her property under s 101 of the Insolvency Act 2006.Ms Harrison has been deported and the New Zealand government will not be responsible for herwelfare.[87] Finally, Ms Harrison submits that allowing the Commissioner to access the$23,000 is contra finality, in that it would open the floodgates to restraint or forfeitureof her funds withdrawn at any time she experiences illness or serious hardship in thecoming years, through to her eventual retirement.[88] Ms Watt's submissions assisting the Court reach the same conclusion as MsHarrison on this issue, although framed in somewhat different terms. By reference tothe statutory definitions, Ms Watt reads s 127 as protecting:(a) the combined value of Ms Harrison's contributions, her employer'scontributions (whether vested or unvested), any fee subsidies paid inrespect of Ms Harrison, the Crown contribution, and any appropriatecredits for things like positive returns; less(b) appropriate debits made for things like fees, negative returns, andpermitted withdrawals.[89] Ms Watt points to the operation of the particular KiwiSaver scheme, as set outin the Kiwi Wealth KiwiSaver Trust Deed (the Deed). The Deed explains that PublicTrust is the trustee and supervisor of the scheme, and Kiwi Wealth Ltd is the scheme'smanager. The scheme's overall trust fund consists of assets vested in Public Trust,Member's contributions paid to Kiwi Wealth KiwiSaver and money transferred overfrom other schemes. Public Trust holds the trust fund as a trustee for the beneficiaries,being the members of the scheme and others entitled to benefits under it. Benefits aredefined by the Deed as payments made to or in respect of a member in accordancewith the Deed. Kiwi Wealth Ltd, as manager, operates various investment funds, theassets of which are held by Public Trust (or a custodian on its behalf) for the exclusivebenefit of members who hold an interest and members are entitled to direct theManager as to the proportion of their account invested in each fund.[90] Clause 19 of the Deed provides for the opening of a member account for eachmember in the scheme, and Kiwi Wealth's management and recording of thoseaccounts and their contents. In particular cl 19.3 states that money comes to amember's account and is increased by (among other things): "contributions paid bythe Member or in respect of the Member by a Contributing Employer or anotherPerson that have not been used by way of acquisition of Assets in a Fund"; "moneyreceived following the realisation of Assets in a Fund"; and income and cash returnsfrom Assets in a Fund. Clause 19.4 provides that money leaves a member account andit is reduced by "payments made to or at the direction of a Beneficiary". Counsel forMs Harrison makes a similar submission, emphasising that cl 19.4 lists a number ofscenarios whereby money leaves a member account. Other than the transfer to anotherKiwiSaver Scheme or Superannuation Scheme at the request of a member and fees,the other situations outlined by the clause require actual payment as the triggeringevent at which the member's account is decreased.[91] Ms Watt submits (as does Ms Harrison) that it is clear that a member's interestwill always comprise a "cash" component, including contributions by both themember and their employer (or employers) prior to investment, and cash fromdividends, interests and the realisation of assets. This is normal for an investmentfund, and therefore the fact that Ms Harrison's interest in the $23,000 takes the formof cash rather than investments is not material to the s 127 bar.[92] Ms Watt explains the legal effect of the Trust Deed is that Public Trust held arange of choses in action as trustee on behalf of Ms Harrison, amongst the otherbeneficiaries under the Deed. At the date the without notice restraining order wassought, certain assets it held had been sold in anticipation of Mrs Harrison's permittedwithdrawal, and the funds were transferred to another bank account held by PublicTrust.[93] Regarding whether the $23,000 remains a chose in action, counsel notes thatLord Millett in Foskett v McKeown held that a cash balance in a bank account is notmoney but a chose in action, representing the debt owed by the bank to the accountholder.60 As such, all that changed when the $23,000 was realised from investmentswas the form in which Public Trust held choses in action for Ms Harrison. Ms Harrisoncontinued to possess simply an interest in KiwiSaver assets. Ms Watt argues that the60 Foskett v McKeown [2001] 1 AC 102 (HL) at 127–128.wording of s 127 of the KiwiSaver Act is clear in its effect – a restraining or otherorder over the $23,000 is not legally tenable.Discussion[94] On this issue I accept the submissions of Ms Watt. While the Commissioner'sattempt to recover the money in this case is consistent with the underlying principlesof both the criminal proceeds recovery regime and the High Court Rules' debtcollection tools, neither provide an explicit route past the roadblock posed by s 127.Until the $23,000 enters Ms Harrison's possession it seems undeniable that her interestin it (or in the chose in action of being able to claim it) remains an interest or futurebenefit that will become payable to her under the KiwiSaver scheme, and so isprotected by s 127 against being assigned, charged or passed to another person.Accordingly, a freezing order over the money in its present state seems unsustainable.A finding otherwise would, in my view, subvert the earlier finding of Ellis J.[95] I note that freezing orders operate in personam rather than in rem. The Courtcould theoretically restrain Public Trust from dealing with the $23,000 without thatconstituting a charge over the property itself. However, it is not clear what, if anything,could legally be done by the Commissioner to recover the money while it remains inits present state protected by s 127. The freezing order would not therefore serve auseful purpose – while it is held in its present state no successful claim for its recoveryis tenable.Interests of justice[96] Mr Bourke advanced an alternative ground on which, in his submission, themaking of a restraining order was not in the interests of justice. In essence, hissubmission was that Ms Harrison's offending represented a loss to the Ministry ofTransport of $726,836.07. Of that total, it was accepted by the Serious Fraud Officeras prosecutor that $576,175.20 was paid to Ms Harrison and the remaining$150,660.87 to a colleague, Ms C.6161 There is a suppression order in place prohibiting publication of Ms C's name and identifyingdetails.[97] In the proceedings against Ms Harrison the Commissioner sought to recover$784,172.16 as the value of the benefit obtained, comprising the loss caused by MsHarrison's offending, plus the salary paid to the second respondent, Patrick Sharp.[98] Mr Bourke says that following the decision of Ellis J and the expiry of relevantappeal periods Ms Harrison made the decision not to contest or take further part in theproceedings. However counsel has since become aware that the Commissioner hasrecovered $75,000 from Ms C. Had he known that at an earlier stage the value of thebenefit obtained by Ms Harrison would have been disputed. The practical effect, hesays, is that the Commissioner now seeks to recover far more than the actual losscaused by Ms Harrison. Such a situation would, in his submission, be an abuse of theCommissioner's powers.[99] Mr Bourke also notes his concern that the Commissioner did not disclose thisinformation to counsel despite repeated requests some time ago. That lack of candour,when considered together with the significant amount already recovered by theCommissioner, means that it is not in the interests of justice that the restraint ordernow sought be granted.[100] In response, the Commissioner says that the Official Assignee's recovery fromMs C does not affect the value of the benefit personally received by Ms Harrison fromher significant criminal activity, particularised in the profit forfeiture order as$784,172.16.[101] Mr Bourke strongly rejects the allegation that the Commissioner has misledcounsel and the Court or is seeking to abuse the Court's process.[102] Because of my decision on the earlier questions, I do not need to resolve thisissue.Conclusion[103] For the reasons given, I decline the application for a restraining order over the$23,000. I also do not consider there is a sufficient statutory basis to convert theapplication to one for a freezing order.Costs[104] My preliminary view is that Ms Harrison is entitled to costs on a 2B basis. Ifthe parties cannot agree as to costs, counsel for the Commissioner and the OfficialAssignee may file a memorandum of no more than five pages within five workingdays of receiving this judgment. Counsel for Ms Harrison will then have five workingdays to file a memorandum in response.[105] Ms Watt is entitled to costs paid out of public funds under s 178(2)(b) of theSenior Courts Act 2016. If necessary, she should file a memorandum as to her costswithin five working days of receiving this judgment.______________________Gwyn J