Commissioner of Police v Liu

[2021] NZHC 667

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-2017

[2021] NZHC 667

UNDER

Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

SHUCHEN LIU

First Respondent

SIUSIU HAO
Second Respondent

JAEMAL HONEYCOMBE
Third Respondent

…/cont

Hearing:	On the papers
Counsel:	H Macdonald and C Purdon for the Applicant M Kan for the Fourth Respondent
Judgment:	30 March 2021

JUDGMENT OF GORDON J

This judgment was delivered by me on 30 March 2021 at 2 pm, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:           Crown Solicitor, Auckland

Dominion Law, Auckland

CounselR Mansfield, Auckland M Ryan, Auckland

M Pecotic, Auckland

COMMISSIONER OF POLICE v LI [2021] NZHC 667 [30 March 2021]

YAN LI

Fourth Respondent

TAINUI KARAKA
Fifth Respondent

ANTON KAHOTEA
Sixth Respondent

XINYU CHEN
Seventh Respondent

[1]    In this proceeding the Commissioner of Police (Commissioner) has obtained without notice restraining orders against all respondents and on notice restraining orders against some of the respondents under the Criminal Proceeds (Recovery) Act 2009 (the Act).

[2]    The Commissioner and the fourth respondent, Yan Li, now seek the Court’s approval for a settlement under s 95 of the Act.

[3]    The proceeding arose out of a police investigation commenced in July 2020 which focused on what was said to be an organised crime group believed to be involved in the importation, supply and distribution of MDMA and methamphetamine throughout the Auckland area.

[4]    The production and distribution of MDMA and methamphetamine were said to have occurred mainly from a commercial property rented by the first and second respondents. When the police investigation concluded on 28 October 2020, over 1,000 MDMA pills and approximately 3 kg of methamphetamine were located at addresses associated with the first and second respondents.

[5]    The police intercepted communications between the first respondent and Mr Li which suggested that Mr Li was both supplying the first respondent with MDMA and methamphetamine and, in turn, was assisting the first respondent in supplying third party associates with MDMA.

[6]    On 29 October 2020, Whata J made orders in terms of the Commissioner’s amended without notice application of 28 October 2020 in relation to various items of property owned by, or said to be in the effective control of the respondents, including real estate, motor vehicles and bank funds.

[7]    On 3 November 2020, before the without notice restraining orders lapsed, the Commissioner filed an on notice application for restraining and further orders over the same property subject to the without notice restraining orders and over further property.

[8]    On 26 November 2020, at the first call of the on-notice application, Hinton J made orders in relation to some of the respondents, including Mr Li. The only property restrained by order of the Court against Mr Li in this proceeding is a 2020 Ford Ranger, registration MQT128 (Ford Ranger) registered to Mr Li, and excluding the interest of UDC Finance Ltd.

[9]    At this stage, the Commissioner has not yet filed an application for civil forfeiture orders.

Proposed settlement

[10]   By joint memorandum dated 26 March 2021, the Commissioner and Mr Li advised that they have agreed to settle the question of forfeiture of assets between themselves, subject to the Court’s approval which is required under s 95 of the Act. The proposed settlement is on the following terms:

(a)An asset forfeiture order is made under s 50(1) of the Act by consent, over the Ford Ranger;

(b)The Commissioner will not pursue an application for profit forfeiture orders against Mr Li in relation to the significant criminal activity said to be evidenced in this proceeding;

(c)Mr Li abandons all claims, under the Act or otherwise, to the property that is to be forfeited; and

(d)Costs in relation to the matter lie where they fall as between the Commissioner and Mr Li.

[11]   The parties note that the proposed settlement entails the entirety of the property subject to the orders of this Court referred to above, being forfeited to the Crown.

Statutory provision

[12]Section 95 of the Act, which governs settlement, provides:

95High Court must approve settlement between Commissioner and other party

(1)The Commissioner may enter into a settlement with any person as to the property or any sum of money to be forfeited to the Crown.

(2)A settlement does not bind the parties unless the High Court approves it.

(3)The High Court must approve the settlement if it is satisfied that it is consistent with—

(a)the purposes of this Act; and

(b)the overall interests of justice.

[13]   First, as to the purposes of the Act: the primary purpose, in s 3(1) is to establish a regime for the forfeiture of property that has been derived directly or indirectly from significant criminal activity or that represents the value of a person’s unlawfully derived income. The ancillary purposes in s 3(2) include to eliminate the chance of persons to profit from undertaking or being associated with significant criminal activity and to deter significant criminal activity.

[14]   The words “overall interests of justice” in s 95(3) require a broad inquiry.1 Relevant factors include the saving of time and cost and the litigation risk of a hearing to the Commissioner and a respondent.2 The Courts have recognised that a decision to settle proceedings under the Act will often reflect a “pragmatic” arrangement or solution, a “common sense compromise” or a “sensible resolution” that will meet the purposes of the Act and the overall interests of justice.3

[15]   For the reasons advanced by the parties, I am satisfied that the settlement proposed is consistent with the purposes of the Act and the overall interests of justice:

(a)There will be a saving of time and cost if the matter can be resolved by consent without the need for the Commissioner to file a civil forfeiture application and a consequential hearing;

1      Commissioner of Police v Li [2018] NZHC 1566 at [32].

2      Commissioner of Police v Kree [2013] NZHC 2972 at [11]; Commissioner of Police v Zhang

[2016] NZHC 930 at [8].

3      Commissioner of Police v Douglas [2015] NZHC 1293 at [6].

(b)Settlement will also obviate the need for expenditure of the Court’s time and resources in determining an application for civil forfeiture orders;

(c)The agreed settlement recognises the risks inherent in such litigation to both parties and allows them to have certainty and control as to the outcome; and

(d)Finally, and fundamentally, the proposed settlement results in forfeiture of all the property restrained against Mr Li, with nothing to be released to him.

Result

[16]   Given I am so satisfied, under s 95, I must approve the settlement. I make the following orders, so as to give effect to the settlement:

(a)Assets forfeiture orders, under s 50(1) of the Act: the following property vests in the Crown absolutely and is in the Official Assignee’s custody and control:

(i)2020 Ford Ranger, registration MQT128, registered to Yan Li, excluding the interest of UDC Finance Ltd.

(b)Costs: costs in relation to the matter lie where they fall as between the Commissioner of Police and Mr Li.

[17]   Further, as requested by the parties, I note the further terms of the agreed settlement:

(a)The Commissioner will not pursue an application for a profit forfeiture order against Mr Li in relation to the significant criminal activity said to be evidenced in these proceedings;

(b)Mr Li abandons all claims, under the Act or otherwise, to the property that is to be forfeited; and

(c)The settlement is entered into by Mr Li expressly on the basis of no admission of liability.

[18]   For completeness I record that once the orders are sealed, the proceeding so far as it concerns Mr Li, will be at an end.

Gordon J