Republic v Kwok Hou Ng [2019] KIHC 50; Miscellaneous Application 144 of 2018 (27 March 2019)

IN THE HIGH COURT OF KIRIBATI 2019

MISCELLANEOUS APPLICATIONS NOS. 144 OF 2018 AND 9 OF 2019

[THE REPUBLIC APPLICANT
[
BETWEEN [AND
[
[KWOK HOU NG RESPONDENT

Before: The Hon Chief Justice Sir John Muria

19 March 2019

Ms Pauline Beiatau for the Republic
Ms Taoing Taoaba for the Respondent

JUDGMENT

Muria, CJ: There are two applications before this Court. The first application, Miscellaneous Application 144/18, is by the Republic (Applicant/Respondent) seeking an order to extend the Order made by the Court on 7 June 2018 which ordered the detention of the Telegraphic Transfer (TT) of $878,900.00 and cash deposit of $600,000.00 into Kwok-Hou Ng (respondent) business account
No. 571808 in the name: Fair Price at the ANZ Bank (Kiribati). For ease of reference, I shall treat the applicant as “the Republic” throughout this judgment.

2. The second application, Miscellaneous Application 9/19, is by the applicant/respondent, Kwok-Hou Ng, to discharge or lift the order made on
7 June 2018 and to have the money ($878,900.00 and $600,000.00) held in the ANZ Bank (Kiribati) paid to Kwok Hou Ng. For ease of reference, I shall treat
Kwok Hou Ng as “the respondent” throughout this judgment.
3. Before proceeding further with the applications, I wish to point out a fundamental flaw in the manner this is being instituted. The case against the respondent is brought as Criminal Case No. 30 of 2018. The respondent,
Kwok Hou Ng, has not been charged with any criminal offence in connection with the detained currency in this case. It is therefore wrong for the Republic to bring this case as Criminal Case No. 30 of 2018. Presently, the case is focused on the suspected currency. It is a civil case and should be treated as such until criminal proceedings are brought, if at all, against the respondent. A clear example is the case that Counsel referred to, Commissioner of Police –v- Burgess [2015]
NZHC 1008 (13 May 2015). You only open and file a Criminal Case in Court against a person who has been charged with a criminal offence.

Order of 7 June 2018

4. Upon application by the Republic, for an order of detention of the respondent’s money in the ANZ Bank (Kiribati), the Court made the following order on 7 June 2018:

“Date: 7 June 2018

ORDER

The telegraphic transfer of $878,900.76 and the cash deposit of $600,000.00 which are currently seized and kept with the ANZ Bank (Kiribati), for being reasonably believed to involve the suspicious transactions are to be continued detained with the ANZ Bank (Kiribati) until further orders are made”.

5. The basis for seeking the order of 7 June 2018 was set out in the affidavit of Senior Police Constable Bunaua Abaua, sworn to on 7 June 2018. A subsequent order was also sought by the Republic to freeze another ANZ Bank Account of the respondent held at Kiritimati Island ANZ Bank Branch, Account No: 855955 in the name of Fair Price. The order sought when the respondent was about to make a Telegraphic Transfer in the sum of $199,759.17 from the respondent’s account in Kiritimati Island to an account in Brisbane, Australia.

6. Should the order of 7 June 2018 be extended? The only reason given for extending the order is basically to allow police further investigation into the activities of the respondent regarding the use of the money in question. According to the affidavit of Bunaua Abaua, following the Order of 7 June 2018, contacts were made to the Pacific Transnational Crime Centre in Samoa and the Australian Federal Police (AFP) in Sydney. Enquiries were made as to the authenticity of the recipient company of the funds in Australia.

7. Following the investigation by the Australian Federal Police, it is said that the recipient company in Australia, Nak Tech Trading, was only registered as a company just two days after the reported suspicious transactions in ANZ Bank (Kiribati). This Court has not been shown any evidence of the existence of
Nak Tech Trading and its purported Registration in Australia. One would have expected the Republic to produce evidence to this effect to support their assertion that investigation is still going and the need to continue detaining the respondent’s funds in the bank. That has not been done, and so the Court can only assume that what was stated in the affidavit were mere assertion.

8. The Republic relied on section 117(3) of the Proceeds of the Crime Act 2003 to extend the Order made on 7 June 2018. Sections 116 and 117 authorise seizure and detention of suspicious currency. Those two sections provide as follows:

“116. An authorized officer may seize and detain any currency that is brought into or taken out of Kiribati if:

(a) The amount is not less than the equivalent of $1,000 (or a higher amount prescribed by regulation for this paragraph); and

(b) There are reasonable grounds for suspecting that it is:

• (i) Derived from a serious offence; or
• (ii) Intended by any person for use in the commission of a serious offence.
  

117(1) Currency detained under section 116 may not be detained for more than 24 hours after it is seized.

(2) However, the Court may order its continued detention for a period not exceeding 3 months from the day it is seized, upon being satisfied that:

(a) There are reasonable grounds for the suspicion mentioned in section 107(1)(b); and

(b) Its continued detention is justified while:

• (i) Its origin or derivation is further investigated; or
• (ii) Consideration is given to the institution (in Kiribati or elsewhere) of criminal proceedings against a person for an offence with which the currency is connected.
  

(3) The Court may subsequently order the continued detention of the currency if satisfied of the matters mentioned in subsections (2)(a) and (b), but the total period of detention may not exceed 2 years from the date of the first order made under subsection (2)”.

9. The Court, however, has power under section 118 to order release of the detained currency in whole or in part if the continued detention is no longer justified. The onus is on the Republic to justify the continued detention of the currency. If no reasonable grounds is shown in the present case to justify continuing detention of the currency, and as the respondent has applied for its release, the Court is entitled to order the discharge of the Order of 7 June 2018 and release the detained currency to the respondent.

10. In the present case, the Republic applied for and was granted the detention Order on 7 June 2018 which was over nine months ago. The Court accepts that in a case such as this, investigation is carried out both within and outside the country and present a big challenge to investigating officers. But there will come a time when the detention of the currency can no longer be allowed to continue on end. This is why the law puts time limits to the detention of suspected currency.

11. It must also be pointed out in a case such as this, that there are constitutional parametres to observe when detaining a person’s assets pending investigation or trial. These parametres are enshrined in the Constitution of Kiribati to protect persons’ rights to their property, as well as to prevent the misuse of power by the State. It is the undoubted duty of the State to control and prevent crime and to curb criminal activities, but that must be done within legally permissible limits.

12. In the present case, the Republic has to satisfy the Court that the nine (9) months old order made on 7 June 2018 ought to be allowed to continue and that the matters deposed to in the supporting affidavit of Bunaua Abaua justify its continuation. On the other hand, the respondent, having applied for the discharge of the Order and release of the detained currency, bears the burden of establishing that the continued detention of the currency is no longer justified. The respondent must also demonstrate by evidence that the detained currency has no connection with any suspicious unlawful conduct of the respondent.

13. Ms Beiatau referred the Court to the New Zealand case of Commissioner of Police –v- Burgess [2015] NZHC 1008 (13 May 2015) to support the Republic’s case for an extension of the Order. That case is not for an extension of a detention order, but rather it concerns with the second respondent’s application for discharge or variation of the restraining order. The Court in that case refused to discharge the order and also refused to vary the order so as to increase
Mrs Burgess’ living costs and other expenses. The continued restraining order was to remain continuing until the completion of the examination of the respondent and seeking a forfeiture order.

14. In the Burgess case, criminal proceedings had already been taken against the Burgess. Mr Burgess was convicted and sentenced while Mrs Burgess was discharged on the receiving charges, although she was convicted and fined on another charge. No criminal proceedings has yet been taken in the present case.

15. I accept that on the evidence of Bunaua Abaua, there is a need to wait for the feedback from the AFP regarding the respondent’s alleged unlawful conduct in relation to the fund sent to an Account in Australia. The suggestion by the respondent that the continued detention of the money is no longer justified cannot be correct.

16. The Republic is seeking to have the order of 7 June 2018 extended. I do not understand why the order and how it can be extended when the Order does not have an end date to it. The only limit in the Order is “until further orders are made” and no further order has been made yet. The Republic is effectively seeking the Court to place a time limit on the Order of 7 June 2018 by seeking to have a date which the Order is to be extended to. That, taken together with the respondent’s application to discharge the Order of 7 June 2018, I feel the Court should now fix a time limit with which the Republic must act, so as to justify the continued detention of the respondent’s money.

17. In the present case, I feel that the existing Order of 7 June 2018 shall continue until 7 June 2019 which would make it 12 months since the Order was first issued. In the Court’s view, 12 months is more than adequate time to complete the investigation and take the necessary actions required to be taken in this matter, if those conducting the investigation are serious about the matter. It is not acceptable, in today’s means of communication, that after nine months so far, nothing has yet turned up.

18. The present Order of 7 June 2018 shall continue until 7 June 2019. If the Republic is unable to produce evidence to justify extending the Order beyond
7 June 2019 the respondent shall be at liberty to apply to have the said Order discharged and seek the release of the detained fund.

19. In this regard, the present application by the respondent for discharge of the Order of 7 June 2018 must be refused.

Dated the 27^th day of March 2019

SIR JOHN MURIA
Chief Justice