SOLICITOR-GENERAL V DE BRUIN HC AK CIV. 2002-404-3302

SOLICITOR-GENERAL V DE BRUIN HC AK CIV. 2002-404-3302 27 July 2006IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV. 2002-404-3302UNDER Proceeds of Crime Act 1991 BETWEEN SOLICITOR-GENERAL OF NEW ZEALAND Plaintiff AND ROBERT CHARLES DE BRUIN Defendant Hearing: 27 July 2006 Coram: Williams and Andrews JJ Counsel: Anna Longdill for applicant R A A Weir for respondent Judgment: 27 July 2006[ORAL] JUDGMENT OF THE COURT GIVEN BY WILLIAMS J [Re: (a) Adjournment of Application for Restraining Orders and (b) Solicitor-General's application for a restraining order]Solicitors: Crown Solicitor, Auckland, for Applicant Email: Anna.Longdill@meredithconnell.co.nz Email: David.Johnstone@meredithconnell.co.nz Dyer Whitechurch, P O Box 5547 Auckland, for respondent Copy for: Rob Weir, P O Box 46-281 Herne Bay, Auckland, for applicant Email: suzie@crescentchambers.co.nz Rob@crescentchambers.co.nzSusan Stanney, Case Officer, Auckland High Court ( susan.stanney@justice.govt.nz)[1] This judgment deals with an application by the respondent to adjourn the application for a restraining order issued by the Crown against him. The main ground on which the adjournment is sought by Mr Weir, counsel for Mr de Bruin, is that the application for the restraining order was only filed as recently as 25 July 2006 and, Mr Weir submits, difficult questions of law arise which require an adjournment for him to research the position concerning the application rather more thoroughly than he has had the opportunity to date. [2] In order to set that observation in context, it is necessary to recount a little of the history. [3] Mr de Bruin was charged with serious offences under the Misuse of Drugs Act 1975 a number of years ago. Through a combination of circumstances his latest trial in May of this year resulted in convictions. He and his partner, Ms Delaney, own the property at 90 Riddell Road, Glendowie, Auckland. That property has been the subject of restraining orders since at least mid-2002. In accordance with the procedure for which the Proceeds of Crime Act 1991 provides, those orders have been extended regularly since that time for six months at a time. [4] Through an oversight on the part of the Crown, however, the last extension of the restraining order expired on 20 July 2006 and accordingly the Crown wishes to obtain a further restraining order, hence this application. [5] Mr Weir's submission, however, is that the latest application raises matters either of issue estoppel or res judicata. In brief, he submits that the Proceeds of Crime Act 1991 does not provide for serial applications for restraining orders and that, the former restraining order having expired, it is not now open to the Crown to seek a further order. Mr Weir puts that submission on the basis that the position concerning the restraining orders in this case is a matter of res judicata and in that he relies on the elements of that plea appearing in Spencer Bower Turner & HandleyRes Judicata (3rd edn 1996 at p 17).[6] With respect to the argument, however, a more appropriate passage in that work would appear to be para 162 (at pp 73-74) where the learned author deals with decisions which are final as long as they persist but are subject to revision by the tribunal, and makes the observation that the finality component of res judicata in relation to decisions of that type founds a plea of res judicata only as long as the decision remains in force. [7] It is now clear that applications under the Proceeds of Crime Act 1991 are predominantly civil in nature although, plainly, being parasitical on criminal proceedings, there is an element of the criminal about them. In the well-known case of Connelly v Director of Public Prosecutions [1964] AC 1254 the House of Lords dealt with the circumstances in which successive prosecutions or proceedings against the person can amount to an abuse of process and thus be susceptible to orders for stay or the like. [8] Even if an authority such as Connelly is applicable in this case, it is clear that the application currently before the Court cannot give rise to a plea of res judicatabecause, by force of statute, the restraining orders and extensions are valid only for a maximum period of six months but are subject to extension on further application. Similarly, given that the current situation where there is no restraining order in force arises solely through oversight, it could not be contended that to permit this matter to proceed would amount to an abuse of process. [9] Mr de Bruin's interest in the Riddell Road property has been the subject of restraint now for about four years through the course of the criminal proceedings against him and it is only through mistake that it has had no restraining order against it for the past few days. [10] In light of all of that, the appropriate conclusion is that res judicata, issue estoppel and abuse of process are not matters that can be validly raised on Mr de Bruin's behalf and accordingly there is no basis made out for the adjournment sought. The application is dismissed.[11] This is a continuation of the judgment given declining the application for an adjournment. This part of the judgment deals with the Solicitor-General's application for a restraining order. [12] Some procedural matters need to be noted at the outset. [13] The first is that in its terms the application by the Solicitor-General, dated 25 July 2006 currently under consideration seeks an order that -"The restraining orders made in this proceeding by His Honour Justice Venning on 22 July 2005 as subsequently varied and extended shall be re- instated".As Ms Longdill, counsel for the Solicitor-General said, "re-instated" in that citation requires to be read as an application for a new restraining order on the same terms as that issued by Venning J on 22 July 2005. [14] The second matter that needs to be noted is that the application has come on for hearing at short notice and certainly less than the 3 days' notice for which the High Court Rules provide for interlocutory applications. It is accordingly necessary to abridge the time appointed by the Rules for the taking of actions and hearing the matter as empowered by R 6. There will be an order in that regard. [15] Turning to the merits of the matter, as mentioned in the adjournment part of this judgment, Mr de Bruin and his partner Ms Delaney own the property at 90 Riddell Road, Glendowie, Auckland. Their interest has been subject to restraint under the Proceeds of Crime Act 1991 since June 2002. [16] Ms Delaney's interest, however, was calculated and specifically excluded from the ambit of the restraining order made by Venning J on 22 July 2005. The amount of her equitable interest in the property was crystallised in the judgment on that date at $20,125 together with interest on that sum at the Judicature Act rate from 28 May 2004. [17] Since the present application seeks orders in the same terms, the exception of Ms Delaney's interest in the property is maintained and accordingly because herinterest cannot be affected there is no need to direct service of the current application on her. [18] Ms Abdale, who appeared as Mr Weir was unable to appear when this matter was first called on 26 July, also advised that the title to the property is subject to a caveat lodged against it by Dyer Whitechurch & Bhanabhai. She suggested that firm should have been served with the application. However, again, whatever interest that firm may have as a caveator cannot be affected by the making of any restraining order such as that currently sought and accordingly no order needs to be made for service in that respect. [19] The essential question under the Proceeds of Crime Act 1991, s 43, is whether there are –"reasonable grounds for believing that (a) the property is tainted property in relation to the relevant serious offence, or (b) the defendant derived a benefit directly or indirectly from the commission of the offence".[20] As Mr Weir points out, there are pecuniary penalty proceedings in train against Mr de Bruin and set down for hearing on 3 August 2006 and in those proceedings one of the considerations pursuant to s 25 will be whether such an order should be made in respect of "benefits derived by a person from the commission of a serious offence" come within the definition of 'proceeds' in s 2 of the Act". [21] There are obvious echoes between the test in s 25 and that in s 43(1)(b). However, the application in this case is based on s 43(1)(a), that is, that there are reasonable grounds for believing Mr de Bruin's interest in 90 Riddell Road is tainted property in relation to the relevant serious offence. [22] Mr Johnstone, who has been counsel for the Crown on almost all occasions throughout this matter, confirms that on 20 May this year Mr de Bruin was convicted of five counts of importing MDMA and five counts of selling the same drug. Accordingly he has been convicted of relevant serious offences. [23] Mr Johnstone also put in evidence Venning J's judgment of 22 July 2005, para [23] of which reads :[23] Detective Peat's evidence is that when the police searched the property on 30 November 2001 they located in excess of $379,000 cash on the property. The cash was hidden or stored about the property at various locations. Mr Weir submitted that none of the money had traces of drugs on it. With respect that is not significant. It does not affect the fact that large sums of money were hidden or stored at Riddell Road which, in conjunction with the other evidence before the Court provides reasonable grounds for believing that Mr de Bruin committed the money laundering offences with which he is charged. In relation to Riddell Road itself, Mr de Bruin's use of Oldcrest Corporation to transfer the funds from the co-accused to purchase the property is sufficient to provide reasonable grounds for believing he committed the money laundering offences that relate to those transactions so that Riddell Road is tainted property. The evidence also supports a strong prima face case the money seized was the proceeds of the illicit drug dealing operation and was hidden or stored at Riddell Road. There is also evidence that Mr de Bruin kept records concerning the drug dealing operation at Riddell Road and used it as a base for the operation.[24] Accordingly, it is clear that, following a defended hearing, Venning J reached the view that there were reasonable grounds to believe that Mr de Bruin's interest in 90 Riddell Road was tainted property in relation to the serious offences he then faced, and although the convictions of May 2006 differ from all the charges Mr de Bruin faced at the commencement of that trial, there is nothing to disturb the conclusion that such must still continue to be the case. [25] As mentioned also in the adjournment aspect of this judgment, the necessity for the present application has arisen solely through oversight on the part of Crown counsel which resulted in Venning J's restraining order expiring on 20 July 2006. There was then a brief period before the present application was filed 5 days later and the adjudication on that application 2 days later again. There is no basis to decline the application when the necessity for it simply arises through oversight and when the statutory and evidential grounds are made out for further orders to be made in the same terms as those made by Venning J on 22 July 2005. [26] There will accordingly be orders in those terms. [27] At that point in the dictation of the judgment, Mr Weir raised the question of his fees and the fees of Ms Abdale (though Mr Weir accepted they were rolled up in his). It is not possible for this Court to order that the fees be paid, certainly not in any particular amount given that the Court is unaware of all the background circumstances. But it is certified in this judgment that Ms Abdale appeared onMr Weir's behalf on 26 July in the Duty Judge's List and was engaged for probably up to about an hour. She then notified by email her unavailability to attend when the matter was stood down to 2:15pm. Mr Weir prepared for this morning's hearing. He acknowledges that the preparation required was, in his words, "minimal". He has been required to attend from 8:30am-8:55am and from 9:25-9:55am. ..WILLIAMS J