LOUISE RUTH CHANWAI V THE COMMISSIONER OF POLICE HC ROT CIV-2010-463-544

LOUISE RUTH CHANWAI V THE COMMISSIONER OF POLICE HC ROT CIV-2010-463-544 31 March 2011IN THE HIGH COURT OF NEW ZEALANDROTORUA REGISTRYCIV-2010-463-544IN THE MATTER OF an application pursuant to the CriminalProceeds (Recovery) Act 2009BETWEEN LOUISE RUTH CHANWAIApplicantAND THE COMMISSIONER OF POLICERespondentHearing: 25 March 2011Counsel: for Applicantfor CrownJudgment: 31 March 2011JUDGMENT OF JOSEPH WILLIAMS J[1] Louise Chanwai makes an ex-parte application to vary a restraining order and an examination order granted on 9 March 2011. These orders were made under theCriminal Proceeds (Recovery) Act 2009. The applicant's partner is Bruce MichaelKunac who was convicted on drug and firearms charges on 26 May 2010 and is currently in prison.[2] As an aside I note that when the matter first came before me on Wednesday last week I advised Mr Badcock for the applicant that I was unwilling to deal with the application by the ex-parte procedure. In particular the Act only contemplates restraining order variations on notice, and while there is no equivalent procedure with respect to examination orders (itself an argument made by Mr Pilditch for the Crown against the court having the power to do so) I saw no particular reason to deal with that matter on an ex-parte basis either.[3] Mr Badcock suggested this was necessary because the applicant was due to be examined two days later, but I do not see that as a reason to avoid giving the Commissioner an opportunity to be heard on the application. As matters transpired informal notification was given to the Crown solicitor and I heard brief argument on Thursday and on Friday morning.[4] Having heard argument I indicated that the application would be dismissed with reasons to follow. I now give those reasons.[5] The restraining order froze transactions in respect of a Taupo property, some vehicles and a number of bank accounts either owned by or connected to the applicant in this matter. It is common ground that there is jurisdiction to apply to vary a restraining order but any such application must be on notice. That matter needs to take its proper course. It is to be placed in the next list for timetabling and then set down for a fixture. I therefore set that application to one side for the purposes of this judgment.[6] The examination order was due to be effected on the day of the hearing. The order required Ms Chanwai to tell the police how much she knows about three matters:(a) the criminal activities of Mr Kunac in terms of cultivation, sale and distribution of cannabis and the income generated from those activities;(b) her financial affairs including general day to day expenditure and overseas travel;(c) the income earned by Mr Kunac and her daughter Ms Kristin Brehaut,the way in which they financed day to day "lifestyle" spending andoverseas travel.[7] The applicant says she has no knowledge of the matters raised in respect of Mr Kunac and Ms Brehaut. She says at paragraph 12 of her affidavit:Although I am willing to answer questions surrounding my financial statement I am unable to comment on the transactions of my partner or Ms Brehaut or the criminal offending of my partner as I have no knowledge of these matters.These questions should be asked of them.[8] The applicant wants the examination order varied to exclude the first and third categories of examination. Implicit in that argument is the proposition that it is inappropriate to use the examination order process to ask questions of an examinee in relation to the acts or omissions of a third party.[9] Mr Pilditch for the respondent says there is no jurisdiction to vary an order for examination whether under s 33 of the 2009 Act, or under the High Court Rules. Nor, he says, is there any right for the applicant to participate in the setting of terms for the examination.[10] For completeness, I should note ss 163-165 of the 2009 Act which when read together, remove privilege against self-incrimination insofar as examinations are concerned but render any answers inadmissible except in proceedings for perjury or for breach of s 108 or s 154 of the 2009 Act.[11] Under Part 2 (Criminal Proceeds and Instruments Forfeiture Regime) Subpart 2 (restraining orders) there is a limited power to vary restraining orders. The relevant provisions are contained in ss 33-35. An application for "a further order"can be made by a person with an interest in restrained property. Section 34(1) givesthe court broad discretion to make "further orders" in relation to the restrainedproperty (which may, but need not, be an order of any one or more of the types referred to s 35).[12] Section 35 is cast in relatively wide terms. It begins "without limiting the generality of s 34(1)" and then provides examples of the kinds of order that can be made without intending to be an exhaustive list. Examination orders are mentioned in the context of s 35(c) which provides that the court can "order any person (including without limitation, the respondent) to be examined by the court or the Registrar of the court concerning the nature and location of any restrained property."[13] I do not think these provisions allow the applicant in this case to apply to vary the order relating to her. Section 35(c) appears to be aimed at any consequential need to examine a respondent or other person further in the event that restrained property is removed or tampered with in some way. It is clearly not intended to be a review provision relating to s 107.[14] Section 107 is in an entirely different subpart (Subpart 7) headed up"Investigative Powers". As Mr Pilditch points out, these powers include powers of search and seizure, powers to require production of relevant documents, and of course powers to require a respondent to appear for examination. They are different in nature to restraining orders.[15] I tend therefore to agree with Mr Pilditch's view of s 33. The examination order procedure under ss 106-107 and the restraining order procedure are distinct. While there is a clear review process in respect of the latter, the Act is silent on the former. There is therefore no specific statutory review power for examination orders.[16] During the course of argument Mr Badcock submitted that the effect of s 10 of the 2009 Act was to import the High Court Rules in respect of examination orders. Mr Pilditch appears to have proceeded on the basis that that analysis is correct although he rejected any suggestion that the general review right for interlocutory orders contained in r 7.49 had any application. I have now had an opportunity to review the terms of s 10 and I do think it has the effect argued for. Section 10(1) lists a number of orders, the proceedings relating to which are deemed to be civil proceedings. They are as follows:(a) a restraining order:(b) an order excluding an interest from restrained property:(c) an assets forfeiture order:(d) a profit forfeiture order:(e) an order for relief from a civil forfeiture order;(f) an appeal from a civil forfeiture order:(g) an interim foreign restraining order:(h) registering a foreign restraining order in New Zealand:(i) registering a foreign forfeiture order in New Zealand:(j) an order for relief from a foreign restraining order or foreign forfeiture order registered in New Zealand.[17] The relevant proceedings all relate to restraint and forfeiture orders. They do not relate to examination orders.[18] On reflection therefore, I am satisfied that r 7.49 providing a general power to vary interlocutory orders has no application to the examination order procedure under s 107.[19] I consider therefore that examination orders are not reviewable prior to being given effect. Rather, the remedy for those affected by evidence obtained by that procedure is exclusion under the Evidence Act and of course, opposition to on-notice the applications for forfeiture orders.[20] Mr Badcock is also in difficulty in satisfying me that Cooper J was wrong on the substance. The order requires that the applicant present herself to answer questions. If, as she claims, she genuinely has no knowledge about the activities of her partner or her daughter, then she can say so. If she is disbelieved, the Commissioner has the remedy available to him or her under s 108. It is misconceived in my view to come to court to argue that an order should be varied because the examinee does not know the answer to the questions. That would require me to be satisfied that she is telling the truth when that is clearly not my role. The only authority that will hear her answers to the questions viva voce is the police. It must be for the police in the first instance to decide whether they believe the answer, not me. If they do not then there are processes under s 108(2) (they also appear to be ex-parte) and the offence provisions under s 152.[21] Whatever the position in respect of the reviewability of examination orders, the deeper question perhaps is whether the procedures under the Act are designed toget answers from an examinee in relation to the activities (and indeed potentially the criminality) of a third party. Mr Badcock says it is not.[22] It seems to me that the scheme of the Act indicates that they are. Section 3(2) says that it is the purpose of the Act to target both those engaged in criminal activity and those associated with it: to prevent further profit from, and the continuation or expansion of criminal activity. Sections 33-35 to which I made reference earlier allow for the examination of any person – including a person other than the respondent. That at least seems to indicate that information in relation to therespondent's interests can be gained from someone else. And finally s 164 is explicit in respect of the admissibility of self-incriminating information, but not otherwise. The purpose of the Act appears self-evidently to cast the investigative net very wide while providing protection only in respect of self-incriminating information.[23] The applicant also protests about the police's intention to record the examination on video. I do not know why she makes such a protest. A video recording will be for her benefit as well as that of the police. I see no merit in that argument.[24] It follows that there is no jurisdiction for this application to be entertained and even if there were, it lacks merit on the substance and should be dismissed. There will be no order for costs.___________________________Joseph Williams JSolicitors: Lance Lawson, Barristers & Solicitors, RotoruaCrown Solicitor, Rotorua