SOLICITOR GENERAL V HUSEIN HC AK CIV 2006-404-006798

SOLICITOR GENERAL V HUSEIN HC AK CIV 2006-404-006798 14 February 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2006-404-006798IN THE MATTER OF an application pursuant to s 66C of the Proceeds of Crime Act 1991 and the Mutual Assistance in Criminal Matters Act 1992 BETWEEN THE SOLICITOR GENERAL OF NEW ZEALAND Applicant AND HUSEIN SALEH HUSEIN Respondent Hearing: 14 February 2007 Appearances: GAD Neil for applicant Respondent in person Judgment: 14 February 2007ORAL JUDGMENT OF WINKELMANN JMeredith Connell, PO Box 2213, Auckland H S Husein, 1/45 Byron Avenue, Takapuna[1] The Solicitor-General applies under s 66C of the Proceeds of Crime Act 1991 and the Mutual Assistance in Criminal Matters Act 1992 for restrained property to be transferred to the custody and control of the Official Assignee. That application is opposed by Mr Husein. [2] The background to this matter is that a foreign restraining order was issued by the District Attorney at Liestal, Switzerland on 28 June 2004 after a criminal investigation was initiated by the Swiss authorities. The order was in respect of $25,812.45 held in a Westpac suspense account 030275-0998907-11. On 17 November 2004 on the application of the Solicitor-General, Allan J ordered that the foreign restraining order be registered in New Zealand in reliance upon s 56 of the Mutual Assistance in Criminal Matters Act 1992. That order continues in force. [3] Section 66C of the Proceeds of Crime act 1991 provides:(1) Where a foreign restraining order against property is registered in the High Court under the Mutual Assistance Act, the Court may, if satisfied on application by the Solicitor-General that is desirable to do so, by order direct the Official Assignee to take custody and control of the property, or of such part of the property as is specified in the order.[4] The Solicitor-General seeks an order under s 66C that the Official Assignee take custody and control of the money held in the Westpac suspense account. The application is brought on two principal grounds, firstly that Westpac is experiencing difficulty in complying with the on-going internal audit requirements which are imposed on it in respect of that account. An affidavit has been filed by Stuart Hansen, Manager of Financial Crime and Intelligence in the Fraud and Security Services Department of Westpac Banking Corporation. [5] Mr Hansen states that Westpac originally transferred the $25,812.45 from Mr Husein's account to a Westpac suspense account with Mr Husein's agreement. He says that the suspense account is an internal account that is required to be checked daily and cleared to a zero balance. Westpac's internal audit requirements are to report on balances that are outstanding in the suspense account on a monthly and quarterly basis. When the funds were originally transferred to the suspenseaccount on 4 June 2004, Westpac believed that the matter would be resolved within one to two months and did not envisage that the matter would still be open two years later. Because the suspense account does not have a zero balance (by reason of the funds being held there) it has been necessary to produce reports for auditing and internal monitoring requirements to explain why the suspense account is not at a zero balance. Mr Hansen says that that is becoming increasingly difficult from an administrative point of view, for Westpac to justify this discrepancy in a suspense account. [6] The second ground on which the application is brought also relates to Mr Husein's evidence. Mr Husein's says that no interest is being earned on the funds in the suspense account. [7] Mr Guy Sayers of the Official Assignee's office has filed an affidavit. He says that when money is received by the Official Assignee by order of the Court it is placed in a money market call account with Westpac Bank. The interest bearing call account into which the monies would be paid by the Official Assignee currently attract an interest rate of 7.15% per annum. He notes that the Official Assignee has strict reporting requirements for any money it holds on trust pursuant to the Act, but those reporting requirements are less stringent than those of Westpac and would not cause the Official Assignee the same difficulties now experienced by Westpac. [8] Mr Husein opposes the making of the order. He says that he wishes the funds to be retained with Westpac in the suspense account until resolution of the matters. Westpac is his banker. [9] I am satisfied that it is desirable that the Official Assignee take custody and control of the funds. The continued retention of the funds in the Westpac suspense account is causing Westpac considerable administrative difficulties. Further, the funds are attracting no interest. This latter aspect is to the detriment of Mr Husein should the funds ultimately be released to him, or alternatively to the detriment of the Swiss claimant should the claimant make good their allegation that the funds are properly payable to that claimant.[10] Accordingly, I make orders that until further order of the Court the Official Assignee take control and custody of the $25,812.45 held in Westpac Bank's suspense account 03-0275-0998907-11 and further that that property not be disposed of or otherwise dealt with by any person other than the Official Assignee. Winkelmann J