SOLICITOR-GENERAL OF NZ V FONG HC AK CIV-2006-404-007669

SOLICITOR-GENERAL OF NZ V FONG HC AK CIV-2006-404-007669 29 November 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2006-404-007669IN THE MATTER OF an application under the Proceeds of Crimes Act 1991 BETWEEN THE SOLICITOR-GENERAL OF NEW ZEALAND Applicant AND KIMBERLY SZE YING FONG Respondent Hearing: 29 November 2007 Appearances: M R Harborow for the Applicant S Tait for the Respondent Judgment: 29 November 2007(ORAL) JUDGMENT OF DUFFY JCounsel: S Tait P O Box 76538 Manukau City Auckland for the Respondent (Facsimile 09 263 0458) Solicitors: Meredith Connell P O Box 2213 Auckland for the Applicant (Facsimile 09 336 7629) P Singh P O Box 76323 Manukau City Auckland for the Respondent (Facsimile 09 263 5891)[1] This is an application pursuant to the Proceeds of Crimes Act 1991 in which Mr Tait, who is counsel for Kimberly Fong, seeks to have funds of Ms Fong that have been restrained under the Proceeds of Crimes Act made available to meet the reasonable legal expenses incurred in her defence of criminal charges. The amount he seeks to have released is to cover the actual costs incurred of $62,316.07. [2] Mr Tait was engaged initially on either 16 or 17 December 2006. A formal application for release of the restrained funds was filed in this Court on 1 November 2007. Since Ms Fong's arrest and Mr Tait's involvement in the case the work involved includes preparation for and appearance at a preliminary hearing. I understand there was a callover this week and it is likely now that guilty pleas will be entered. [3] Between December 2006 and the filing of this application actual legal expenses have been incurred without any application to this Court to approve the use of the funds seized under the Proceeds of Crimes Act 1991. It is this last issue that has caused the Crown to appear today with what in substance appears to be a show of resistance to the release of all or part of the funds. Although its stated position is neutral, I have heard submissions from Crown counsel which are to the effect that there has been delay in making the application, the proper process for making applications of this type, where an estimate of fees should be approved prior to the work being carried out, has not been followed, and it is suggested that the hours that have been spent may be excessive in that they do not conform with the approved Crown rates under the Crown Solicitors Regulations. [4] Mr Tait has advised me that on 14 February 2007, a written estimate of fees was provided to the Crown and he has provided me with a copy of the document. It shows that he estimated that the fees for defending Ms Fong would be $58,809.38. He tells me that no formal application was made to this Court until recently, because he was waiting for the sale of a property that was subject to the restraining order under the Proceeds of Crimes Act. And until that property had sold and funds became available from its sale there were no available funds from which he could expect payment.[5] Mr Tait also says that the gap between December 2006 when he was first instructed and February 2007 when he provided the Crown with a written estimate can be explained on the basis that he appeared at a bail hearing before Christmas where bail was never opposed and there was then the Christmas break. He submits that he provided the Crown at an early opportunity with an estimate of the fees and that, therefore, the Crown has not been surprised. [6] I accept Mr Tait's explanation for the delay in making the formal application to this Court. In the circumstances the delay is excusable. [7] Counsel for the Crown has filed a memorandum in which, at paragraphs 3.9, 3.10 and 3.11, concern is noted about the number of hours claimed, the absence of explanation as to why a second lawyer (Mr Cato) was engaged and a reference to the preparation of a written application which it says the Crown was responsible for preparing. [8] Counsel for the Crown has referred me to a decision of a Full Court of the High Court in Solicitor-General v Panzer [2001] 1 NZLR 224. In this case the Full Court found that, in general, the exercise of the discretionary authority in s 42 of the Proceeds of Crimes Act, to permit release of funds for payment of legal expenses, should be guided by the rates for senior counsel provided for in the Crown Solicitors Regulations. At [25] of the decision, and onwards, there is recognition that there can be exceptional circumstances where hours in excess of the set Crown Solicitor's hours are permitted. [9] The estimate of fees of $58,809.38 and the actual fees, which come to a total of $62,361.07, are within range of each other. Therefore, I consider that the actuals are not so excessive of the estimate that they should be discounted for that purpose. The Crown has been aware of the estimate since February of this year. The only issue it seems is of concern is the number of hours that have been spent. The hourly rate claimed ($297.00) is the same as for senior counsel under the Crown Solicitors Regulations and is acceptable in terms of the test in Panzer.[10] I am aware that trials that result from operations such as Operation Hose (of which Ms Fong is one of six accused) can take an excessive amount of time, that hours above the prescribed limit are permitted both by the Legal Services Agency and under the Crown Solicitors Regulations. This is especially so if outside senior counsel are engaged. [11] If there had been active opposition by the Crown and I had before me evidence which challenged the reasonableness of the actual fees I may well have been persuaded to reduce the amount for approval. However, when I offered the Crown the opportunity to have this matter treated as fully opposed and to have it adjourned to a date for a fully argued hearing following the filing of evidence and submissions from both parties, I was met with the response that the Crown was neutral. [12] It seems to me that, given the nature of this matter, the time spent by Ms Fong's legal team is reasonable. Insofar as this may be a departure from the general approach in Panzer, I am convinced that it is reasonable to treat this matter as an exception. The Crown has not presented any tangible basis that would cause me to believe the fees claimed are excessive and should be disallowed in part. I especially take this view having regard to the Crown's declared stance of neutrality. Accordingly, I approve the release of funds in the amount of $62,361.07. [13] There is also a request for release of funds to meet the application under the Proceeds of Crimes Act. The fee estimate for that work comes to $12,553.88. The Crown accepts that figure to be within the realm of what is expected for work of this type. Accordingly, I approve the release of funds in that amount. Duffy J