Vincent and Another v Commissioner of Police

• Jurisdiction: New Zealand
• Judge: Arnold J
• Judgment Date: 03 September 2013
• Neutral Citation: [2013] NZCA 412
• Docket Number: CA721/2012
• Court: Court of Appeal
• Date: 03 September 2013

Between

Lee Vincent

First Appellant

Dianne Erlene Ashby

Second Appellant

and

Commissioner Of Police

Respondent

[2013] NZCA 412

Court:

Arnold, Harrison and Asher JJ

CA721/2012

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal by the first appellant against High Court's (“HC”) refusal to set aside restraining orders against property on the grounds there were irregularities in the way the first appellant was served notice of the application — appeal by the second appellant (first appellant's mother) against the HC's decision that a restraining order against her home was justified as there were reasonable grounds to believe that the second appellant had unlawfully benefited from serious criminal activity of the first appellant — Police alleged the first appellant was engaged in the manufacture and distribution of drugs and that large amounts of cash had been stored at second appellant's home — respondent had applied for orders under s25 Criminal Proceeds (Recovery) Act 2009 (“CPRA”) (making restraining order relating to all or part of respondent's property) — first appellant resided in Thailand — whether leave was required to serve him — whether the affidavits of police officers concerning the first appellant's criminal activities were admissible — test for wilful blindness.

Counsel:

T J Rainey for Appellants

M R Harborow and R K Thomson for Respondent

• A The appeals are dismissed.

• B The appellants are jointly and severally liable to pay costs to the respondent for one standard appeal on a band A basis, together with usual disbursements.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Arnold J)

Table of Contents

	Para No
Introduction	[1]
Factual background	[2]
Was Mr Vincent validly served?	[9]
The nature of applications for restraining orders	[17]
The requirements for service under the Act	[20]
The requirements for service under the High Court Rules	[26]
Further alleged non-compliance with the High Court Rules	[32]
(i)High Court Rules, r 19.8 — memorandum	[34]
(ii)High Court Rules, rr 6.31 and 6.35	[36]
Conclusion	[39]
Mrs Ashby's appeal	[40]
Concluding observation	[54]
Decision	[55]

Introduction

1 There are effectively two appeals in this case, arising out of the same matter. The first is an appeal by the first appellant, Mr Lee Vincent (also known as Kemp Warwick Ashby), against a decision of Priestley J refusing to set aside restraining orders made by Ellis J against certain of property in which he has an interest. 1 Essentially, Mr Vincent says that there were irregularities in the way he was served, with the result the restraining orders against him were wrongly made. The second is an appeal by Mr Vincent's mother, Mrs Ashby, against Priestley J's determination that a restraining order was justified as he was satisfied that there were reasonable grounds to believe that Mrs Ashby had unlawfully benefited from serious criminal activity. 2 The restraining orders were made on the application of the respondent, the Commissioner of Police (the Commissioner), under's 25 of the Criminal Proceeds (Recovery) Act 2009 (the Act). 3

Factual background

2 Mr Vincent is a New Zealand citizen but resides permanently in Thailand. He owns a 50 per cent shareholding in NZ Imports and Exports Ltd, a New Zealand-based company which operates under the trade name London Underground. There is one other shareholder, a trust controlled by Mr Christopher Chase. The Commissioner says that London Underground is a front for the manufacture and

distribution in New Zealand of class B and C controlled drugs, in the form of party pills

3 The police gathered evidence of London Underground's activities in various ways, including through telephone intercepts, in the course of a 12 month investigation known as Operation Ark. In the course of Operation Ark, the police seized a hard drive from a computer during a search of Mr Chase's home. On the hard drive they located a spreadsheet which indicated that London Underground's operations produced large amounts of cash — around $11 million between September 2010 and November 2011.

4 The police alleged that the cash generated by the business was taken on a regular basis to Mrs Ashby's home on the North Shore in Auckland for temporary storage. The cash was packed into boxes, generally in the form of bundles of $20 and $50 notes. The boxes were then picked up by couriers, who transported the cash to Hong Kong, where it was deposited in the bank accounts of three companies beneficially owned by Mr Vincent, namely, Profit Mark (Hong Kong) Ltd (Profit Mark), South Source Enterprises Ltd and Money Star Asia Ltd. Bank statements for these Hong Kong accounts were sent to Mrs Ashby's address in New Zealand. The police alleged that the “money laundering circle was complete” when one of the companies, Profit Mark, loaned money to a New Zealand company called Stepping Stone Finance Ltd (Stepping Stone). Mr Chase's trust was a 50 per cent shareholder in Stepping Stone. The police alleged a small portion of the cash, around $184,000, was retained by Mrs Ashby for her own purposes.

5 The Commissioner considered that there were reasonable grounds to believe that both appellants had “unlawfully benefited from significant criminal activity” in terms of s 25 of the Act. Accordingly, on 23 February 2012, he sought restraining orders against the appellants' property without notice. 4 MacKenzie J made the orders sought on the same day. 5 The restraining orders related to:

• (a) in the case of Mr Vincent, the sale proceeds from a property he owned next to his mother's house, funds held on his behalf by a company, two Thai bank accounts and the contents of an apartment in Thailand; and

• (b) in the case of Mrs Ashby, her North Shore home.

6 The Commissioner then applied for the same orders on notice on 29 February 2012. The “on notice” application was served on the solicitors for Mrs Ashby, Rainey Law, on 2 March 2012. Mr Rainey appeared on behalf of Mrs Ashby to argue that the “without notice” order against her property had lapsed. Allan J rejected this argument in a judgment on 28 March 2012. 6

7 Mr Vincent had not been served at this point as he was believed to be in Thailand. The Commissioner applied for an order for substituted service. Associate Judge Bell issued a minute dated 30 March 2012, in which he indicated that the application was premature 7 and drew counsel's attention to various provisions of the High Court Rules, in particular rr 6.27, 6.28 and 6.31. 8 Subsequently, on 21 May 2012 Ellis J made restraining orders in respect of Mr Vincent's assets in New Zealand and Thailand, on the basis that Mr Vincent had by then been served and had taken no steps.

8 When the matter came before Priestley J there were two points for argument:

We address each aspect in turn.

• (a) in relation to Mr Vincent, whether he had been validly served; and

• (b) in relation to Mrs Ashby, whether the restraining order was justified on the merits.

Was Mr Vincent validly served?

9 A secretary from the office of the Auckland Crown Solicitor, Meredith Connell, deposed that on 13 March 2012 she arranged for some documents to be couriered to Mr Vincent at an address in Pattaya, Thailand. These documents were: the “without notice” application for restraining orders dated 23 February 2012, three affidavits on behalf of the Commissioner, a memorandum of counsel for the Commissioner, the restraining orders made by MacKenzie J and a copy of the “on notice” application for restraining orders dated 29 February 2012. There was also a covering letter from Meredith Connell. Although several attempts were made, delivery was not effected.

10 The secretary made a further attempt at delivery by courier on 3 April 2012. She arranged for the same documents, and Allan J's judgment concerning Mrs Ashby's unsuccessful application, 9 to be delivered to an address in Pattaya, Thailand, together with a detailed covering letter from Meredith Connell. This time the material was delivered: it was signed for by “Chayada Staff” on 7 April 2012.

11 Mr Vincent denies that he received this material and says that he has no idea who or what “Chayada Staff” refers to. He says that he was not served with anything in relation to these proceedings until 4 May 2012. On that day Detective Superintendent Kane, a New Zealand police officer based in Thailand, served on him the documents referred to above (excluding Allan J's judgment) and a covering letter from Meredith Connell, which advised that the matter was to be called in the High Court in Auckland on 21 May 2012.

12 Mr Vincent says that he did not have time to instruct lawyers and brief them fully in the period between 4 and 21 May. Moreover, he says that he did not understand that he needed to do so. He does not explain why he did not have time to instruct lawyers or why he did not appreciate that there was any need to do so.

13 Against this background, Priestley J summarised Mr Rainey's argument as follows: 10

• [17] Mr Rainey essentially submits that the restraining order made by Ellis J should be set aside or recalled. The developed submission is:

  • [a] Because Mr Vincent is permanently resident in Thailand, the proceeding should have been served in accordance with subpart 4 of part 6 of the High Court Rules. The requirements of the relevant service rules were not followed.

  • [b] Leave to serve Mr Vincent overseas is required under rr 6.27 and 6.28. No leave was obtained.

  • [c] The memorandum required by r 19.8 was not included in the documents served on Mr Vincent.

  • [d] The notice required by r 6.31 was not included in the documents served on Mr Vincent.

  • [e] Mr Vincent was not allowed 30 working days at the date of service to file a defence as mandated by r 6.35.

• [18] All these assertions are...