Commissioner of Police v Yan [2015] NZHC 3315 (18 December 2015)

Last Updated: 21 March 2016

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2040 [2015] NZHC 3315

UNDER	the Criminal Proceeds (Recovery) Act 2009
BETWEEN	THE COMMISSIONER OF POLICE Applicant
AND	WILLIAM YAN First Respondent
AND	WEI YOU Second Respondent

Hearing:	24 November 2015
Appearances:	D Johnstone and T Refoy-Butler for the Applicant D Jones QC for the Respondents
Judgment:	18 December 2015

_{JUDGMENT OF THOMAS J}

This judgment was delivered by me on 18 December 2015 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:...............................

Solicitors:

Meredith Connell, Auckland.

Counsel:

David PH Jones QC, Auckland

THE COMMISSIONER OF POLICE v YAN [2015] NZHC 3315 [18 December 2015]

Introduction

[1] In August 2014, the High Court made restraining orders pursuant to the Criminal Proceeds (Recovery) Act 2009 (the Act) over property allegedly held by or on behalf of the respondents as a result of a without notice application. The applicant, the Commissioner of Police (the Commissioner), then filed an on notice application for restraining orders in respect of the same property (the 2014

application).¹

[2] In September 2015, a second on notice application for restraining orders over further property allegedly held by or on behalf of the respondents was filed (the 2015 application).

[3] The applications are opposed by the respondents and have been set down for a three week hearing commencing in June 2016.

[4] This decision concerns an application by the respondents seeking orders as to discovery.

Background

[5] The Commissioner claims that Mr Yan is a Chinese economic fugitive who is wanted in his homeland, China, for alleged fraud committed in 2000 and 2001 involving theft of an estimated NZD $129 million. Mr Yan is the subject of a warrant for his arrest in China and an INTERPOL Red Notice.

[6] Mr Yan left China for Australia in November 2001 and arrived in New Zealand in December 2001. He was previously the subject of a financial investigation in Australia relating to alleged money laundering as a result of which over AUD $6 million were seized and restrained. The Australian proceedings have

_{been settled.}

1. The 2014 application and the orders sought have since been amended by consent. The respondent’s application seeking further particulars has now been resolved by the parties.

[7] The Commissioner alleges that Mr Yan and Ms You have been engaged in large scale money laundering of the proceeds of fraud since their arrival in New Zealand being associated with transactions involving over NZD $30 million.

[8] The Commissioner’s investigations have now identified alleged mortgage fraud involving Mr Yan as well as his having allegedly benefitted from breaches of other restraining orders.

[9] The respondents allegedly have a significant asset base in New Zealand involving property valued at over $40 million. The Commissioner says that they have taken complex steps to conceal their interest in and control of the property.

[10] As a result of an application by the respondents, Venning J ordered that unless the Commissioner applies for civil forfeiture orders by 29 April 2016, the existing restraining orders will be discharged.²

Notice of opposition

[11] The respondents have filed a notice of opposition to the 2014 application on the following grounds (as relevant to this decision):

(a) The respondents deny the commission of any offences comprising significant criminal activity, either by way of a crime committed in China or money laundering (or any other crime) in New Zealand.

(b) The evidence before the Court relating to the allegations of fraud in China is inadmissible. It is hearsay, unreliable and otherwise insufficient to establish to the requisite standard significant criminal activity.

(c) There is an unexplained and unsatisfactory delay in the Commissioner taking these proceedings under the Act. There is a delay of approximately five years between the dates of the statements from the

_{Chinese witnesses and the making of the application.}

² Commissioner of Police v Yan [2015] NZHC 2544.

(d) There is insufficient evidence to satisfy the court that any crime comprising significant criminal activity has occurred in China.

(e) Money laundering offences in New Zealand cannot be established to the requisite standard.

(f) The application for restraining orders is an abuse of the court’s process in the circumstances. The Chinese witnesses, necessary to establish the offending alleged to have occurred in China, have failed to give evidence on the same issues in a previous proceeding in New Zealand. There is no satisfactory evidence that these witnesses will participate in New Zealand proceedings.

(g) In any event (and without prejudice), the value of the assets restrained exceeds any amount that could properly be considered as derived from significant criminal activity.

(h) The Commissioner has failed to provide any undertaking pursuant to s

29 of the Act.

[12] No notice of opposition has yet been filed to the 2015 application.

Application for particular discovery

[13] The respondents seek the following order:

The Commissioner provide discovery of all documents in a complete format that are referred to in the affidavits filed in support of the applications and which are not already exhibited at all, or are exhibited but are incomplete.

[14] The grounds for the application are:

(a) Discovery is necessary as the exhibits to the affidavits are incomplete.

The affidavits filed in support of the applications contain references to numerous documents, only some of which are appended as exhibits and not always as a complete document.

(b) The applications involve determination of substantive rights. The

2015 application has added additional complexity.

(c) Discovery in these circumstances will assist the court in determining whether or not to grant the applications. The documents are relevant to matters at issue in these proceedings and should be provided by the applicant and made available for inspection.

(d) Discovery is necessary for the respondents to be able properly to defend the proceedings and address the evidential issues raised in the Commissioner’s evidence.

(e) The discovery that is sought is not inconsistent with the just, speedy and inexpensive determination of originating applications and is also proportionate.

(f) The documents sought are in the custody or control of the

Commissioner and are known to exist.

[15] Mr Jones QC appeared for the respondents. The application was made, he said, because any document referred to or relied upon by a deponent should, as a matter of elementary fairness, be produced to the respondents so the document can be assessed. Fundamental enquiries such as the document’s authenticity, any enquiries arising from it, the context in which any material has been used by the Commissioner as it appears in the document, and the ability to cross-examine are key issues.

[16] Furthermore, in his submission, the Commissioner was illegitimately relying on the originating application process to minimise the requirement for disclosure. It is fundamentally unfair and unjust for one party which has expansive powers of investigation and compulsion to select such material as he sees fit to assist his case and keep all other information which is gathered confidential, and to withhold material which may assist the respondents or indeed assist the court to assess whether the proceedings have merit.

[17] The Commissioner has filed nine affidavits in support of the applications. They are extensive and exhibits are attached to most of them. This is the evidence upon which the Commissioner relies and which the respondents must address in their affidavits to be filed and served by the end of January 2016.

[18] The Commissioner opposes the application on the grounds that:

(a) such orders are not appropriately made in the context of restraining order applications in general, and in this proceeding in particular;

(b) they are likely to prejudice the Commissioner's investigation; and

(c) in any event, the respondents have not sufficiently particularised the documents they seek so as to enable the Commissioner (and the court) properly to assess the application.

Outline

[19] In determining the application I consider:

(a) the rules as to discovery and how they pertain to originating applications (as applications for restraining orders are commenced by such an application);

(b) the nature of restraining orders; and

(c) whether, in the circumstances, discovery should be ordered.

Discovery and originating applications

[20] The application relies on r 8.8 of the High Court Rules (Rules) whereby tailored discovery must be ordered when the interests of justice require an order involving more or less discovery than standard discovery would involve.

[21] Rule 8.19 provides that the court may make an order for particular discovery after the proceeding has commenced where:

...it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not discovered 1 or more documents or a group of documents that should have been discovered ...

[22] The decision of Robert v Foxton Equities Ltd succinctly summarises the relevant principles.³

The following general principles may be taken from decisions of this Court in ANZ National Bank Ltd v Tower Insurance Ltd and Southland Building Society v Barlow Justice Ltd:⁴

a. A document should be discovered if it is relevant to matters which will actually be in issue before the Court.

b. Relevance is determined by the pleadings.

c. On an application for particular discovery under r 8.19, there must be prima facie evidence that the document exists and is in the party’s control (although the applicant need not prove that the document actually exists).

[23] Proceedings under the Act for restraining orders and civil forfeiture orders are civil proceedings.⁵ They are commenced by originating application under Part

_{19 of the Rules.}⁶

[24] The respondents rely on r 19.11, which provides that r 7.43A applies, with necessary modifications, to an originating application. Rule 7.43A allows a Judge to make directions as to the conduct of proceedings, including as to how a hearing is to be conducted, directing steps which must be taken to prepare a proceeding for a substantive hearing and making any other direction or order the court may make under the Rules.

[25] In Katavich v Meltzer, Duffy J noted a general trend to order discovery on originating applications in “a narrow band of marginal cases” where the court has “genuine difficulty” in determining whether a party has made out its case and there is

_{substantial reason to believe discovery will or may be able to assist.}⁷

³ _{Robert v Foxton Equities Ltd [2014] NZHC 726 at [8].}

⁴ ANZ National Bank Ltd v Tower Insurance Ltd [2009] NZHC 1155; (2009) 15 ANZ Insurance Cases 61-816 (HC) at

_{[18] – [24]; Southland Building Society v Barlow Justice Ltd [2013] NZHC 1125 at [12]–[14].}

⁵ _{Criminal Proceeds (Recovery) Act 2009, s 10(1).}

⁶ _{High Court Rules, r 19.2.}

⁷ Katavich v Meltzer HC Auckland CIV-2006-404-5968, 29 May 2009 at [15]. The Judge cited as

[26] In McCullagh v Robt Jones Holdings Ltd, the High Court considered the appropriate procedure for discovery in relation to originating applications and, in particular, the application of rules 19.11 and 7.43A. The Judge stated:⁸

Unlike general proceedings brought by notice of proceeding and statement of claim, discovery is not available as of right in an originating application... Part 19, which deals with originating applications, is directed at providing a speedy and inexpensive mechanism. On an application for directions the court may in its discretion order discovery.

[27] The High Court in McCullagh also set out a number of matters for the court to consider in determining whether to exercise this discretion. One such consideration is whether it has a difficulty in determining whether a party has made out its case and discovery would or might well assist the court in its determination.

In addition, the Court stated:⁹

In originating applications, the party seeking discovery must show that discovery is necessary. The objective of securing the just, speedy and inexpensive determination of the proceeding will guide the discretion. Not only relevance, but also proportionality will come into consideration...

On applications under r 8.19, the starting position is a presumption that the affidavits of documents already filed are conclusive. The party seeking further discovery has to establish that the existing affidavit of documents is incomplete.

[28] In McCullagh, the Judge distinguished Katavich on the grounds it concerned an application under s 290 of the Companies Act where discovery is rarely required because the court is typically concerned only with whether the plaintiff has established that the defendant has no defence, or whether a debt is the subject of substantial dispute. In such cases, the court is not required to make a final determination of the merits. The Judge considered that, in other cases, there may be

_{a need for wider discovery.}

authority Shuttle Petroleum Distribution Ltd v Caltex New Zealand Ltd (2002) 16 PRNZ 126 (HC).

⁸ _{McCullagh v Robt Jones Holdings Ltd [2015] NZHC 1462 at [3].}

⁹ At [6]-[7] (emphasis added).

Nature of restraining orders

[29] The purpose of restraining orders was explained by the Court of Appeal in

Vincent v Commissioner of Police as:¹⁰

(a) Restraining orders are effectively interim orders of limited duration and may be made without notice. The explanatory note to the Criminal Proceeds (Recovery) Bill identified the purpose of restraining orders as being “to preserve property while the Crown is gathering evidence to support an application for forfeiture”. They may subsequently lead to forfeiture orders, but that requires the completion of a further process. So, for example, before an assets forfeiture order may be made, the Commissioner must file and serve a further application and the court cannot make the order unless it is satisfied, on the balance of probabilities, that the relevant property is tainted property.

[30] Before issuing a restraining order, the Court must be satisfied there are reasonable grounds to believe either that the property sought to be restrained is tainted property, or that the respondents have unlawfully benefitted from significant criminal activity.¹¹

[31] Restraining orders are by their nature interim and are intended to operate as a “preliminary mechanism”, pending the completion of the Commissioner’s investigation and, following that, the progression of a civil forfeiture application (if one is to be advanced). They are “qualitatively different” from civil forfeiture orders. The purpose of the legislation is to establish a robust process for the

recovery of ill-gotten gains.¹²

[32] Restraining orders are often brought and determined under circumstances of urgency and it is therefore in the interests of justice that the freezing and ancillary order jurisdiction is responsive to litigants who need to apply at short notice.¹³

[33] In Twentieth Century Fox Film Corp v Dotcom, the evidence in support of a restraining order application came from affidavits in support, none of which gave

_{direct evidence of the factual basis for the allegations against the respondent. An}

¹⁰ _{Vincent v Commissioner of Police [2013] NZCA 412 at [45] (footnotes omitted).}

¹¹ _{Criminal Proceeds (Recovery) Act 2009, ss 24 and 25.}

¹² _{The Commissioner of Police v Marwood [2014] NZHC 1866 at [38].}

¹³ Twentieth Century Fox Film Corporation v Dotcom [2014] NZHC 1789 at [40].

affidavit in support of the application simply exhibited a summary of the evidence. Courtney J said:¹⁴

It is evident from the allegations made by the applicants and from the summary of evidence attached to Ms Thorland's affidavit that it would not have been possible to provide direct evidence of the allegations within a short time frame because of the sheer number of witnesses, the extent of the documentary material referred to and the complexity of the evidence overall.

Restraining orders and the originating application procedure

[34] Mr Johnstone appeared for the Commissioner. In his submission, discovery is not appropriate in an application such as this, made by way of an originating application, where the Court will make its decision on the basis of the affidavit evidence and the issue will be whether the Commissioner has put before the Court sufficient material to enable the Court to be satisfied as to the requirements in ss 24 and/or 25 of the Act.

[35] In Mr Jones’ submission, the principles normally relating to originating applications and disclosure have limited application in the circumstances. He said that the Commissioner’s applications for restraint involve substantive rights adversely affecting the respondents. Heightened transparency and disclosure is needed in these circumstances, he said, because restraining orders under the Act

remove property from the respondents’ control.¹⁵

[36] Mr Jones referred to the submission on behalf of the Commissioner that:

The Commissioner does not assume a burden of proof (even to the civil standard) in applying for restraining orders.

[37] As Mr Jones said, that cannot be right. The test for the court under either ss

24 or 25 of the Act when making a restraining order is whether the court is satisfied it has reasonable grounds to believe that any property is tainted property (s 24) or that the respondent has unlawfully benefitted from significant criminal activity (s

_{25). It is the Commissioner’s application and any burden of proof must fall on him.}

¹⁴ _{Above n 13, at [40].}

¹⁵ See Hong Kong and Shanghai Banking Corporation Ltd v Erceg [2010] NZHC 1352; (2010) 20 PRNZ 652 (HC) at

[21].

[38] I accept that the nature of a restraining order application is different from many other cases involving the use of the originating application procedure.

[39] The 2014 application was brought by way of an ex parte application which was granted with the effect that the assets are currently restrained. The matter is now proceeding on notice and the application must be determined on its merits after being subject to challenge.

[40] There is also not the same degree of urgency given the assets are currently restrained and the property is preserved. The circumstances of this case can therefore be distinguished from those in Twentieth Century Fox Film Corp v Dotcom.

[41] Given this context, I accept that discovery is not precluded simply because the application is an originating application. Whether discovery should be ordered is discretionary and depends upon whether the documents sought are relevant to the issues before the court and is subject to considerations of proportionality.

Should the Court exercise its discretion to order discovery?

Relevance

[42] In Mr Jones’ submission, if a document has been referred to, then it must be relevant and must therefore be discovered. By way of example, he referred to a number of paragraphs in the affidavit of Detective Senior Sergeant Craig Hamilton dated 23 September 2015 as detailed below.

_{Examples of documents relied on but not exhibited}

[43] Paragraph 4.27 of that affidavit states that, as the result of a production order, another detective received a copy of a conveyancing file relating to a property. The affidavit includes extracts from a loan agreement which is an exhibit to the affidavit. In Mr Jones’ submission, however, the conveyancing file itself should be discovered because it may inform the issue of the loan.

[44] Paragraph 4.30 of that affidavit refers to the ANZ Bank accounts and states:

A review of the bank statements confirms that funds from [the] loan have not been used for the [purpose] as stated in the loan agreement.

[45] Mr Jones asked how the respondents can challenge that statement if the relevant bank statements have not been discovered.

[46] Paragraph 4.33 of that affidavit includes an extract from a handwritten file note but does not exhibit the file note itself. Paragraph 4.42 of the affidavit refers to an email by another detective and sets out the text of part of it but the email itself is not exhibited.

[47] At paragraph 4.46, Detective Hamilton refers to receiving a trust account print out with all information except for a single entry having been redacted but the print out is not exhibited to the affidavit.

[48] Paragraph 6.22 of the affidavit notes that the Commissioner obtained banking documents pursuant to a production order and then states that these documents record certain transactions. Without the underlying material as a result of which those conclusions were drawn, it is impossible to challenge them, in Mr Jones’ submission, and this amounts to trial by ambush.

[49] In Mr Jones’ submission, the respondents require access to the documents referred to in order to ensure what is said is accurate, complete and to properly contextualise the material referred to. Without that, he said, he will be significantly hampered in his cross-examination of Detective Hamilton and the other deponents whose evidence is similarly drafted.

[50] In response, Mr Johnstone, who appeared for the Commissioner, referred to paragraph 4.42 by way of example and said, when that is considered in light of the notice of opposition, the record of the email is irrelevant to the question as to whether the respondents were involved in significant criminal activity in China or New Zealand. Any cross-examination on the document referred to at paragraph 4.42 would, therefore, in his submission, be irrelevant and of little value to the Court.

[51] Mr Johnstone emphasised that significant parts of the affidavit evidence relate to the respondents’ ownership of or control of various property and this will not be relevant at the hearing into restraint.

[52] I note, however, that the notice of opposition relates to the 2014 application only. The 2015 application was made in September 2015 and the notice of opposition will likely be filed at the same time as the respondents’ affidavits at the end of January 2016.

[53] Without knowing the grounds of opposition to the 2015 application, it is difficult to assess relevance. However, I accept that, if a document has been referred to in an affidavit, it must have been assessed by the deponent to be of sufficient relevance so as to require it to be referred to.

_{Examples of documents only partially exhibited}

[54] Mr Jones then referred to paragraphs 4.47 and 4.48 of Detective Hamilton’s affidavit which refers to examination interviews attended by two named persons. Aspects of what those persons said in the interviews are included in the body of the affidavit. Annexed to the affidavit are extracts from the two examination transcripts.

[55] This is an example of where the respondents seek the full copy of documents, excerpts only of which have been exhibited to the affidavits. In Mr Jones’ submission, without the context and full record of those examinations, it is impossible properly to draw the inferences and conclusions which the Commissioner seeks. It may be, in Mr Jones’ submission, that those persons said other things, or even elsewhere contradicted what is recorded in the excerpt and it is fundamentally unfair that the respondents do not receive a full copy of the transcripts of the interviews.

[56] Mr Johnstone said the respondents should take comfort from the way in which the affidavit evidence has been presented because it includes matters which are of benefit to the respondents. In support of that, he referred to paragraphs 5.16 and 5.17 of Detective Hamilton’s affidavit which refers to evidence given by a person as a result of examination which is of benefit to the respondents, he said.

[57] Mr Johnstone submitted that it was plain why the full transcripts of the examinations of the two named person would not be made available. The interviews were as a result of court ordered examinations, where the subjects were required to answer all questions put to them whether or not their answers incriminated them and were under a statutory obligation not to disclose the fact of having been examined or

the content of it.¹⁶ The need for a protective veil, as Mr Johnstone described it, was

therefore obvious, in his submission.

[58] This emphasises the reason for one of the grounds of opposition to the application being the potential prejudice to the ongoing police investigation and the impact on potential witnesses.

_{Prejudice to the C omm iss ioner ’s investi gati on}

[59] Mr Johnstone said that the police investigation is ongoing. As the 2015 application itself demonstrates, the investigation has developed and evolved since August 2014. He submitted that while the investigation is active, it is inappropriate for a discovery order to be made. To do so risks prejudicing the maintenance of law, including the prevention, investigation and detection of offences. Similarly, s 56 of the Evidence Act 2006, relating to litigation privilege, also applies to information received and compiled in preparation for the anticipated civil forfeiture application.

[60] Furthermore, the Commissioner is continuing to investigate activities of the respondents. Mr Johnstone referred to the most recent affidavits sworn at the end of September 2015 which refer to the seizure of certain documents which, he said, are still being examined for relevance.

[61] Ordering full discovery of documents referred to in the affidavits, including and in particular, transcripts of examination interviews with third parties, also creates a risk of witness interference. That risk is not simply academic, said Mr Johnstone.

[62] He submitted that providing additional information to the respondents which

_{(at this stage) is not relied upon by the Commissioner, or has been withheld or}

¹⁶ Criminal Proceeds (Recovery) Act 2009, s 153.

redacted in affidavit evidence, presents an unnecessary risk to persons who have been compelled to co-operate with the ongoing police investigation (and to those who may be the subject of future applications for examination orders).

[63] Mr Jones did not accept the Commissioner’s argument as to the ongoing investigation. He pointed out that in criminal proceedings, the Police routinely makes discovery even though investigations are continuing. In his submission, it is disingenuous for the Commissioner to apply for restraining orders against the respondents and refer to the documents sought in supporting evidence, yet refuse to disclose those documents on the basis that it will affect the maintenance of law or the Police investigation.

[64] Mr Jones did however concede that prejudice to the Commissioner’s investigation may be a ground for declining to disclose a particular document or a series of documents, but said it is not a basis for a blanket refusal to do so.

Specificity and proportionality

[65] The discovery sought by the respondents is of copies of documents referred to in the affidavits filed on behalf of the Commissioner which are:

(a) not exhibited at all; or

(b) are exhibited, but are incomplete.

[66] Mr Johnstone submitted that the application lacks the necessary specificity. The respondents need to identify which particular documents are sought so that questions of privilege and prejudice can properly be addressed. As a result, neither the Commissioner nor the Court is in a position to assess the relevance and importance of such documents to the applications, nor identify any grounds on which the document(s) should be withheld and/or suppressed, he said.

[67] Mr Johnstone pointed out that discovery orders ordinarily apply to all parties to the proceeding. He submitted it would be unnecessarily expensive, time

consuming and out of all proportion for both parties to have to discover all documents referred to, often in passing, by all deponents.

[68] Mr Johnstone pointed out that the first of the affidavits filed on behalf of the Commissioner in support of the 2014 application were served on the respondents on 25 August 2014, more than a year ago. No explanation has been provided for the substantial delay by the respondents in seeking orders for discovery.

[69] That emphasises, in his submission, that the application could result in a huge waste of resources for no real reason if all material which is uncontroversial and irrelevant were to be discovered.

[70] In Mr Jones’ submission, the discovery orders sought are proportionate: the respondents are not undertaking a fishing expedition but are asking for documents which have already been referred to and/or exhibited in the supporting affidavits (and have therefore been relied upon directly or indirectly by the Commissioner). The documents sought are in the custody or control of the Commissioner, and are known to exist.

[71] Mr Jones emphasised that the application relates only to documents referred to in the affidavits and relied on by the deponents in reaching their opinions and conclusions. In Mr Jones’ submission, it is not for the respondents to traverse all the affidavits and identify what is needed. It is for the Commissioner to do so given it is the Commissioner’s evidence and the situation is of his making. There is no need to particularise the discovery sought, in his submission.

[72] The respondents accept that this does not apply to any document which has been redacted for proper purposes. Furthermore, Mr Jones clarified that the respondents do not seek documents referred to by way of general background, for example, where an affidavit recites that documents were ceased during the execution of a search warrant.

[73] The affidavits in support of the application are voluminous. Mr Jones accepted that not every document referred to needs to be discovered. It is, therefore,

difficult to make any orders given that situation, coupled with the fact that the issues in dispute have not yet been clarified.

[74] For example, in the case of the documents discussed at [43] to [45], the whole of the conveyancing file is not necessary given that the affidavit exhibits a full copy of the loan agreement. I accept that the respondents should have access to the bank statements if the Commissioner is relying on the affidavit evidence that a review of those statements confirms the loan has not been used for the purpose stated in the loan agreement. This demonstrates the need for specificity in the application for discovery to enable the question of proportionality to be properly considered.

Evidential considerations

[75] Mr Johnstone maintained that the affidavit evidence filed on behalf of the Commissioner to date is detailed, voluminous and more than sufficient to enable the Court to “be satisfied” of the relevant legal issues. Moreover, it is a matter for the Commissioner whether supporting documents are exhibited in any particular case, whether in whole or in part.

[76] Mr Johnstone accepted that the Court will effectively ignore or place little weight on assertions made in the affidavits if there is nothing to substantiate them, recognising that Mr Jones will emphasise this in his cross-examination of the witnesses and his submissions to the Court.

[77] The Court will determine the restraining order application by applying the rules of evidence.

[78] In the past, reference has been made to the “best evidence” rule which has its origins in the eighteenth century decision of Lord Hardwicke LC in Omychund v Barker that “the judges and sages of the law have laid it down that there is but one general rule of evidence, the best that the nature of the case will admit”.¹⁷ As Cross

_{on Evidence notes:}¹⁸

¹⁷ _{Omychund v Barker [1744] EngR 927; (1744) 26 ER 15.}

¹⁸ Cross on Evidence (looseleaf ed, LexisNexis) at [1465].

[Lord Hardwicke’s] view appears to have been that, where there was nothing better, recourse might be had to evidence which would be inadmissible in other cases; but the typical illustrations of the rule are provided by cases in which evidence is excluded because better was available.

[79] However, as summarised by Elias CJ in the decision of Dotcom v United

States of America:¹⁹

What documents can or must be produced in evidence in this way were in the past a function of the largely common law principles of admissibility, for instance as to hearsay and the so-called “best evidence rule”. The current law is provided in ss 128 to 149 of the Evidence Act 2006.

[80] The Judge determining the application for the restraining order will determine the admissibility of any evidence. For example, if a witness purports to reach a conclusion on the basis of material which is not before the Court, little, if any, weight will be attached to that conclusion.²⁰

[81] To the extent that a witness purports to give evidence in the nature of expert evidence outside his or her expertise by drawing conclusions from documents not exhibited, for example bank statements, that evidence will be inadmissible.

[82] Where a document has been exhibited in part, the weight which can be attached to it is significantly reduced. It is obvious that the context of a document influences its interpretation and, in the case of a witness statement, what is said in one part may be qualified or even contradicted by what is said in other parts. Therefore, by exhibiting only part of the documents, the Commissioner again runs the risk of his application being weakened.

[83] The Commissioner, by presenting the affidavits in the way he has, takes that risk. No doubt Mr Jones will stress any such shortcomings in cross-examination and submissions. I do not accept his contention that, inevitably, the Court will attach weight to an opinion of an experienced police officer notwithstanding that the

_{information on which that opinion is based is not before the Court.}

¹⁹ _{Dotcom v United States of America [2014] NZSC 24, [2014] 1 NZLR 355 at [242].}

20. A similar approach was taken by Courtney J in Twentieth Century Fox Film Corp v Dotcom, above n 13, at [41].

Outcome

[84] I accept that, as a matter of fairness, the respondents require discovery of certain documents in order to be able effectively to oppose the application. As noted, the assets are currently restrained and so the question of discovery is being considered in a different context from urgent and/or ex parte applications. That said, discovery must be proportionate and relevant.

[85] As a general principle, the respondents should have access to documents referred to in the affidavits as supporting a statement or opinion in the affidavit. I also accept that the respondents should have access to the full copy of documents only partially exhibited.

[86] If the Commissioner is not willing to discover a document which, on the basis of this decision should be discovered, then he must accept that the portion of the affidavit which relies on the document will not be considered or will be given minimal weight.

[87] So far as the examples of documents only partially exhibited are concerned, all those discussed at the hearing related to documents which Mr Jones acknowledged could be withheld for proper purposes.

[88] In the circumstances, I can do no more than indicate that, in principle, the application is granted, subject to identification of which particular documents are sought so that questions of proportionality, privilege and prejudice can properly be addressed.

[89] I encourage counsel to work together constructively on this matter, reminding them of the requirement in the rules²¹ to cooperate on issues of discovery.

_{Thomas J}

²¹ High Court Rules, r 8.2.