Rodriguez v Commissioner of Police

• Jurisdiction: New Zealand
• Judge: Brown J
• Judgment Date: 26 November 2020
• Neutral Citation: [2020] NZCA 589
• Court: Court of Appeal
• Docket Number: CA680/2019
• Date: 26 November 2020

Between

Andreina Gamez Rodriguez

Appellant

and

Commissioner of Police

First Respondent

Map and Associates Trustee Company Limited

Second Respondent

Between

Map and Associates Trustee Company Limited

Appellant

and

Commissioner of Police

First Respondent

Andreina Gamez Rodriguez

Second Respondent

[2020] NZCA 589

Court:

Brown, Venning and Katz JJ

CA680/2019

CA35/2020

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Criminal Procedure, Criminal Sentence — appeal against a High Court decision which made a domestic restraining order under the Criminal Proceeds (Recovery) Act 2009 that funds transferred into a bank account were not to be disposed of or dealt with — the respondent claimed that the funds were derived from the dishonest conduct of the appellant's husband and that she transferred the funds to New Zealand for the purpose of concealing or disguising their source — whether the respondent was entitled to seek a domestic restraining order rather than an interim foreign restraining order — meaning of significant criminal activity

Counsel:

R A Kirkness for Appellant in CA680/2019 and Second Respondent in CA35/2020

P V Cornegé for Appellant in CA35/2020 and Second Respondent in CA680/2019

K R L Guthrie and K C Whyte for First Respondent in both appeals

• A The appeal in CA680/2019 is dismissed.

• B The appeal in CA35/2020 is dismissed.

• C The appellants must pay one set of costs to the first respondent for a standard appeal on a band A basis and usual disbursements.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Brown J)

Introduction

1 On 27 March 2019 USD 11,850,000 was transferred into a Bank of New Zealand (BNZ) account registered to MAP and Associates Trustee Company Ltd (the Trustee company) for the benefit of Ms Rodriguez. The Commissioner of Police (the Commissioner) claimed that the funds were derived from the dishonest conduct of Mr De Leon, the husband of Ms Rodriguez, and that she transferred the funds to New Zealand for the purpose of concealing or disguising their source.

2 On the Commissioner's application Moore J made a domestic restraining order under s 25 of the Criminal Proceeds (Recovery) Act 2009 (the Act) that the funds attributable to Ms Rodriguez in the Trustee company's BNZ account were not to be disposed of or dealt with but were to be in the Official Assignee's custody and control. 1

3 Ms Rodriguez (in CA680/2019) and the Trustee company (in CA35/2020) appeal from that judgment.

4 The agreed issues on appeal are:

• (a) whether, in the circumstances of this case, the Commissioner was entitled to seek a domestic restraining order rather than an interim foreign restraining order;

• (b) whether, on the basis of the evidence in the record, there were reasonable grounds for a Court to believe that Ms Rodriguez has engaged in significant criminal activity for the purposes of the Act (specifically money laundering); and

• (c) if such grounds exist, whether the Commissioner could establish Ms Rodriguez derived a benefit for the purposes of the Act.

Statutory framework

5 The Act provides for the restraint and forfeiture of property derived as a result of significant criminal activity without the need of a conviction. 2 Significant criminal activity is defined in s 6:

6 Meaning of significant criminal activity

(1) In this Act, unless the context otherwise requires, significant criminal activity means an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending—

• (a) that consists of, or includes, 1 or more offences punishable by a maximum term of imprisonment of 5 years or more; or

• (b) from which property, proceeds, or benefits of a value of $30,000 or more have, directly or indirectly, been acquired or derived.

(2) A person is undertaking an activity of the kind described in subsection (1) whether or not—

• (a) the person has been charged with or convicted of an offence in connection with the activity; or

• (b) the person has been acquitted of an offence in connection with the activity; or

• (c) the person's conviction for an offence in connection with the activity has been quashed or set aside.

(3) Any expenses or outgoings used in connection with an activity of the kind described in subsection (1) must be disregarded for the purposes of calculating the value of any property, proceeds, or benefits under subsection (1)(b).

6 The Act provides for domestic restraining orders in sub-pt 2 of pt 2. The Commissioner may apply for a restraining order under s 25 which provides:

25 Making restraining order relating to all or part of respondent's property

(1) A court hearing an application for a restraining order relating to all or part of a respondent's property may, if the court is satisfied it has reasonable grounds to believe that the respondent has unlawfully benefited from significant criminal activity, make an order that the property it specifies in the order restrained property—

• (a) is not to be disposed of, or dealt with, other than is provided for in the restraining order; and

• (b) is to be under the Official Assignee's custody and control.

…

7 A person will have unlawfully benefited from significant criminal activity if the person has knowingly, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person understood or was involved in the significant criminal activity). 3

8 The Act also makes provision in sub-pt 8 of pt 2 for interim foreign restraining orders. The Commissioner may apply for an interim foreign restraining order if authorised by the Attorney-General under s 60 of the Mutual Assistance in Criminal Matters Act 1992 (Mutual Assistance Act). 4 Section 25 applies to such an application, save that the reference to significant criminal activity must be read as a reference to significant foreign criminal activity. 5

Factual background

9 Mr De Leon is a dual citizen of Venezuela and the United States. He faced charges in the United States arising out of his actions as an attorney for a subsidiary of a Venezuelan state-owned and state-controlled oil company. It is said that he

pleaded guilty to the charges on 16 July 2018 under a plea agreement which is sealed. The following information is sourced from the High Court judgment: 6

[15] It is alleged [by the United States Department of Homeland Security (Homeland Security)] that between 2011 and 2013 Mr De'Leon and others received approximately US$119,000,000 in bribes. The amount of US$16,100,000 went to Mr De'Leon.

[16] The allegation is that he and his associates established a number of Swiss bank accounts into which the bribes were paid. The money was then funnelled into other accounts and disguised in an attempt to legitimise their receipt. This involved various complex financial transactions. Payments were sent to companies, intermediaries, relatives, friends, creditors and close associates.

[17] As a result of investigations into Mr De'Leon's offending, Homeland Security successfully froze US$17,000,000 in an account held by Credit Suisse and registered to Magnolia Products Limited (“the Magnolia account”). Ms Rodriguez is the sole beneficial owner of the Magnolia account.

…

[19] Mr De'Leon was arrested in Madrid on 26 October 2017. He was extradited to the United States.

[20] Ms Rodriguez established the Lombard Porfolio sometime in 2015, approximately two years after Mr De'Leon's offending. In early 2019 she contacted the Trustee Company with a view to transferring the Lombard Porfolio to a different jurisdiction. After some correspondence, the Lombard Porfolio was realised. On 29 March 2019 the funds so released were transferred to the Trustee Company's BNZ account. …

10 On receipt of the funds the BNZ made inquiries of the Trustee company in compliance with its obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. Details of the communications between the BNZ and the Trustee company are traversed in the context of our consideration of the second issue.

11 Although the Commissioner does not suggest that the funds held in the Magnolia account were transferred to the BNZ account, he contends that the receipt of those funds provides a strong basis to infer that Ms Rodriguez received other proceeds from Mr De Leon's criminal activity.

High Court judgment

12 After reciting the factual background, addressing the legal principles and recording the submissions for the Commissioner, Ms Rodriguez and the Trustee company, the Judge turned to address the three matters which comprise the agreed issues on appeal.

13 The Judge observed that the Commissioner could have applied for a foreign restraining order rather than a domestic restraining order, noting that there was nothing in the Act which compelled him to do so as the language of s 132 was permissive. The Judge viewed as irrelevant the fact that the significant criminal activity in question might have a foreign aspect to it, noting that s 25 does not exclude property originating from overseas. 7

14 Referring to the decision in Commissioner of Police v Gong 8 where a domestic restraining order was made in respect of assets purchased with funds dishonestly obtained abroad, the Judge considered that that approach reflected the reality of the statutory scheme. He viewed Ms Rodriguez's argument as an attempt to read in an unjustified restriction. 9

15 The Judge considered that there were reasonable grounds to believe that the money transferred to the Trustee company was the proceeds of criminal activity carried out by Mr De Leon. The central role Ms Rodriguez played in the transfer of the money to the Trustee company, her close relationship with her husband and his well-publicised legal troubles served to satisfy the Judge that she must have been at least reckless to, if not entirely cognisant of, the possibility that the...