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Bin Huang v Police [2020] TOSC 28; CR 150 of 2019 (2 June 2020)

IN THE SUPREME COURT OF TONGA
CRIMINAL JURISDICTION
NUKU’ALOFA REGISTRY

CR 150 of 2019


BETWEEN:
BIN HUANG and others (according to the attached Schedule)
Applicants


-and-


POLICE
Respondent



JUDGMENT


BEFORE:
LORD CHIEF JUSTICE WHITTEN
Counsel:
Mr. ‘A. Pouvalu for the Applicants
Mr. T. ‘Aho of Crown Law for the Respondent
Date of hearings:
Date of submissions:

Date of judgment:
13 January 2020, 7 February 2020 and 11 March 2020
28 January 2020, 31 January 2020, 11 March 2020, 25 March 2020 and 20 April 2020
2 June 2020

CONTENTS



INTRODUCTION

  1. On 18 August 2019, the Applicants, along with others, were charged with playing games of mere chance (or illegal gambling) contrary to s.83 of the Criminal Offences Act. During the course of the raid, the police seized, and subsequently detained, all cash found on the premises, which included over TOP$30,000 belonging to the Applicants. In this proceeding, the Applicants seek an order for the return of their cash.
  2. The Respondent opposes the application on the basis that because the Applicants did not file a notice of appeal within 30 days of the seizure of the cash, it was automatically forfeited pursuant to s.19G(5) of the Money Laundering and Proceeds of Crime Act (“the Act”), which provides:

(5) Where cash has been seized under sections 19C and 19D and no notice of appeal has been received by either the seizing authority or the Court within the period of 30 days from the time of seizure, then the cash will be automatically forfeited to the Crown.

  1. Notwithstanding its commencement in 2001, there have been relatively few decisions on the Act.
  2. Recently, in Attorney General v Xi Yun Qian [2019] TOCA 20 (“the Qian decision”), one of the issues sought to be raised by the Attorney General was whether ‘legitimate cash is immune from automatic forfeiture under s.19G(5)’ of the Act. As that issue was not raised before the primary judge, the Court of Appeal did not determine it. However, the Court did instruct:[1]
“... It is not clear what the Crown means by ‘legitimate cash’, but if it means cash not falling within s.19C then the answer to the issue posed would be that if there was no power to seize the cash under s.19C, there was no power to detain it under s.19D and no occasion for it to be forfeited under s.19G.”
  1. The Court of Appeal also noted[2] that issues in relation to whether cash had been lawfully forfeited under s.19G(5) could be raised in civil proceedings, either by the Crown seeking a declaration that the cash had been validly forfeited or by the Respondents seeking its return, in which questions as to whether the subject cash was lawfully seized under s.19C and detained under s.19D would then arise.
  2. On 13 May 2020, this Court decided the civil claim by the Respondent in the Qian decision.[3]
  3. This proceeding is yet another civil claim concerning whether cash forfeited under s.19G(5) of the Act should be released and returned. It presents some issues similar to those considered in Qian. However, because the underlying offending does not involve attempts to take undeclared cash out of the Kingdom, this proceeding raises other important questions on the interpretation and application of the Act.

BACKGROUND

  1. On 18 August 2019, police raided a warehouse at Tofoa belonging to Lin Xiu Ming. There, they found the Applicants in this proceeding, together with others, sitting at a number of tables playing card games for money or gambling. There was money in the middle of each table and each of the players had other monies in front of them. Other money was also found on the persons of the players, in their pockets, wallets, bags and elsewhere on the premises.
  2. The police seized all the cash found which amounted to TOP$89,837, RMB$1,200 and IDR$46,000.
  3. The next day, all 25 players were each charged with playing games of mere chance contrary to s.83 of the Criminal Offences Act, which provides:

83 Games of mere chance

Every person who plays for money or other stakes of any description whatever at any game of mere chance shall be liable to a fine not exceeding $1,000 and in default of payment thereof to imprisonment for any period not exceeding 3 months.

  1. On 23 August 2019, all the accused appeared before the Magistrates Court. Four of them, namely, Huanga Ming Di, Ming Sen Tsai, Jian Yan Pan and Bing He, pleaded not guilty. The others, including the Applicants in this proceeding, pleaded guilty and were each fined $300. The Applicants paid their fines that same day.
  2. On 27 August 2019, the Crown applied ex parte for, and Cato J granted, an order pursuant to s.19(D) of the Act for the cash to be detained by police for a further three months from the date of the order. The order reserved leave to apply for the order to be rescinded on three days notice to the Crown.
  3. It is common ground that the Applicants did not lodge a notice of appeal against the detention of the cash within 30 days of seizure as required by s.19G(5).
  4. The trial of the accuseds who pleaded not guilty was never heard. The total amount of the cash seized from three of them was $9,728.65. Notwithstanding a number of dates for hearing scheduled between September and 27 November 2019, for various reasons, the Crown was not able to proceed on each occasion and sought adjournments. On the last occasion, after the Crown prosecutor failed to appear, Senior Magistrate Langi struck out the charges.
  5. On 28 November 2019, those accused applied for the release of their monies. The Crown consented to the application. On 29 November 2019, Cato J ordered the release.
  6. The fourth of those accused, Bing He, had a total of TOP$27, 449, RMB 1200 and IDR 46,000 seized. The Crown withdrew the charge against him because a review of the evidence showed that he was not on any of the gambling tables, but in a bedroom; and also his cash was in a suitcase so there was nothing to tie that money to gambling. On 28 November 2019, Bing He applied for the return of his money, and Cato J granted that application.
  7. On 3 December 2019, the Applicants in this proceeding filed an ex parte application seeking that the detention orders of 27 August 2019 be rescinded and that all the money seized by police from them be released to them. The grounds of the application, relevantly, were that:
  8. The Applicants requested that the application be determined without a hearing.
  9. On 10 December 2019, I directed that the application proceed on notice.

EVIDENCE

  1. On 7 February 2020, I further directed that in light of the Court of Appeal’s decision in Attorney General v Xi Yun Qian [2019] TOCA 20 (“the Qian decision”), it would be necessary to hear and assess evidence relevant to the requirements of sections 19 C, D and G of the Act.

Applicants

  1. The application was supported by a number of affidavits by one of the Applicants, Juan Huang, sworn 4 December 2019, 27 February 2020 and 20 April 2020.
  2. While documents were filed which authorised Juan Huang to ‘represent’ the other Applicants, insofar as her affidavits conveniently purported to adduce evidence by or on behalf of the other Applicants, strictly speaking, it was hearsay. However, as the Respondent did not raise any objection, I have received and considered the evidence in that form.
  3. The Applicants’ evidence may be summarised as follows:
  4. The Respondent did not require Juan Huang or any other Applicant for cross-examination. [7]

Respondent

  1. The Respondent filed a total of some seven affidavits from police officers all of whom were involved in the raid either as part of the Drugs Enforcement Taskforce or the Serious Organised and Transnational Crime Unit. Their evidence may be summarised as follows:

Comparison of the evidence as to location of cash seized

  1. A comparison of the police evidence and that of the Applicants about the locations of the cash when it was seized reveals:[8]
POLICE
APPLICANTS

Applicants
Tables
$
Other
$
Tables
$
Other
$
1
Bin Huang
155
700
5
(155)
700
2
Lu Xianwu
(Lu Xian Yu)
10
320
5
(10)
400
(320)
3
Huang Quan Hu
625
0
5
(75)
550
4
Xiaoqing Huang
0
1,620
200
(300)
1,600
(1,450)
5
Qiqiang Chen
0
2,770
300
2,770
6
Haiqiang Chen
0
3,400
360
3,440
(3,450)
7
Jianfeng Chen
(Chen Jian Fang)
0
2,200
200
2,200
8
Zhi Xing Huang
0
2,000
5
2,000
9
Juan Huang

200
(555)
1600
(1,655)
10
Chen Ling
0
7,712
5
(0)
7,800
(7,712)
11
Yun Ying Chen
0
6,030
5
(0)
6,030
12
Xiangyu Huang
85
3,176.45
5
(85)
2,500
(3,175.45)
13
Shenghua He
(He Shekuhua)
3,865
0
5
(10)
3,855
(3,865)

  1. Insofar as there are some discrepancies, for the reasons that are developed further below, little turns on them.

SUBMISSIONS

  1. Each of the parties filed a sequence of written submissions as the matter unfolded during the hearings and the real issues for determination were exposed.

Applicants

  1. Mr Pouvalu filed memoranda of submissions on 28 January 2020, 28 February 2020 and 20 April 2020, which may be summarised as follows:

Respondent

  1. Mr ‘Aho filed, memoranda of submissions on 31 January 2020 and 25 March 2020, which may be summarised as follows:

CONSIDERATION

  1. As noted in the introduction, this case presents a number of issues concerning the interpretation, application and operation of the Act. The resolution of some of those issues is likely to have implications extending beyond this case and the parties to it.

Approach taken

  1. After careful consideration of the issues presented, the evidence filed and the submissions made, I have determined to deal with all issues raised by addressing the following questions:

Standard of proof

  1. In R v Milk Marketing Board, ex p Austin,[11] it was held that where an enactment would inflict a serious detriment on a person if certain facts were established, then even though the case is not a criminal cause or matter, the criminal standard of proof will be required to establish those facts, so that anyone testing it would feel sure.
  2. Imprisonment is clearly a serious detriment to personal liberty. However, whether forfeiture of cash amounts to a serious detriment will obviously depend on the circumstances of each case including the amount of cash in question, the circumstances in which it was seized and ultimately forfeited and the individual’s other financial circumstances.
  3. In Xi Yun Qian v Kingdom of Tonga,[12] I referred to the standard of proof on that application as the civil standard.[13] Despite this application being filed within the court’s criminal jurisdiction, as the Court of Appeal in Qian noted, an application such as the present is a civil proceeding.
  4. The Act is largely silent on the standard of proof to be applied on applications pursuant to the Act. The vast majority of provisions dealing with orders the Court can make merely state that it may do so where the Court is 'satisfied' as to the various requirements prescribed therein. Only ss 35C (forfeiture order for terrorist property) and 37 (protection of third parties) specify that in applications under those provisions, the Court is to be satisfied on the balance of probabilities.
  5. While the Act may in many respects be considered penal in nature, it is not expressly stated to form part of any sentencing or other process within the criminal law. Although, as seen in Qian, whether seized/detained cash has been or is to be forfeited will almost always be relevant to the determination of an appropriate sentence.
  6. I am also guided in the above view by the approach taken by equivalent legislation in the region such as s.8 of the Queensland Criminal Proceeds Confiscation Act 2002 which expressly provides that proceedings under that Act are civil, not criminal, and that questions of fact must be decided on the balance of probabilities.

DO SECTIONS 19 TO 19J APPLY?

  1. The evidence, submissions presented, and other material filed in this proceeding all assumed that s.19G(5) applies to the subject cash, so that the only issue for determination is, as the Court of Appeal alluded, whether the requirements of ss 19C and D were met.
  2. Consideration of that issue has led to a deeper examination of the Act as a whole and, in particular, ss 19 to 19J (“the s.19 group”). From that, a question arises as to whether, on a proper interpretation, the s.19 group was intended by Parliament to apply at all to cases such as here involving illegal gambling.
  3. As this issue was not raised during the hearings, and the parties naturally did not make submissions on it, it is neither appropriate nor indeed necessary for me to express any concluded view. However, for future cases involving resort to s.19G(5) as a means of purportedly forfeiting cash seized during the course of criminal investigations, particularly in relation to minor offences, the following may be instructive.

Relevant principles and rules of statutory interpretation

  1. This question calls for an exercise in statutory interpretation of the s.19 group. In that, I am guided by the following oft-cited common law principles, discussed recently in 'Atenisi Institute Inc v Tonga National Qualifications and Accreditation Board [2019] TOSC 45 and otherwise as contained in the seminal text “Statutory Interpretation” by Francis Bennion (“Bennion”).[14]
  2. The paramount object in statutory interpretation is to discover what the legislature intended. This intention is primarily to be ascertained from the text of the enactment in question. That does not mean the text is to be construed merely as a piece of prose, without reference to its nature or purpose. It is the duty of courts of justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be construed.[15]
  3. The interpreter’s task is always to scrutinise the Act and determine, in the light of its particular provisions, the legal consequence most likely to have been intended for breach of the duty.
  4. The plain meaning rule requires that where:

the legal meaning of the enactment will correspond to the grammatical meaning and is to be applied accordingly.[16]

  1. However, the natural and ordinary meaning of the words of the Act must be read in their context and in the light of the purpose of the Act.[17] A word or phrase is not to be construed as if it stood alone, but in the light of its surroundings and associated words. The context may indicate that a restriction is intended on the literal or usual meaning.[18]
  2. If the words of a statute are clear and unambiguous, they themselves indicate what must be taken to have been the intention of Parliament, and there is no need to look elsewhere to discover their intention or their meaning, unless when so construed they produce an inconsistency, or an absurdity or inconvenience so great as to convince the court that the intention could not have been to use them in their ordinary signification or where the construction renders the words senseless or opposed to the general scope and intent of the instrument.[19]
  3. The Court must give effect to the ascertained purpose of the legislature when it enacted the contested law by construing it in such a way as to implement, rather than defeat, the legislative purpose.[20] That is to be achieved by advancing the remedy which is indicated by the words of the Act for the precise scope and ambit of the mischief that enactment was designed to remedy. The implications arising from those words should aim to further every aspect of the legislative purpose. Such purposive construction will often require going beyond a purely semantic approach to discovery of statutory meaning.[21] Strict grammatical meaning must yield to sufficiently obvious purpose.[22] That is, a purposive construction is one which gives effect to the legislative purpose by following the literal meaning of the enactment where that meaning is in accordance with the legislative purpose or applying a strained meaning where the literal meaning is not in accordance with the legislative purpose.[23]
  4. The Court is to infer that the legislator, when settling the wording of an enactment, intended it to be given a fully informed, rather than a purely literal, interpretation (although they will usually produce the same result). An informed interpretation is to be applied no matter how plain the statutory words may seem at first glance.[24] For the purposes of applying the informed interpretation rule, the context of an enactment comprises, in addition to the other provisions of the Act containing it, the legislative history of that Act, the provisions of other Acts in pari materia, and all facts constituting or concerning the subject matter of the Act.[25]
  5. To ascertain context, the document must be read in its entirety.[26] This principle recognises the risks that can arise in giving meaning to particular words viewed in isolation from the context in which those words appear. Necessarily, words take their colour from their context.[27]
  6. The Courts have the responsibility to maintain the consistency and coherence of the law as a whole. That assumes that Parliament does not intend to make casual changes in the law. One aspect of that is that law should be predictable, and that use should not be made of legal institutions for indirect ends. The Court should therefore strive to reach a construction which was reasonably foreseeable by the parties concerned.
  7. Another aspect is that the law should be just, so that when considering which of opposing constructions of the enactment would give effect to the legislative intention, the court should strive to avoid adopting a construction that leads to injustice. [28]
  8. Penal statutes are to be construed strictly, that is, in favour of the defendant and against the prosecution. Principles of legal policy such as the principle against doubtful penalisation and that in favour of the public good tend to indicate that the court should be ready to narrow the effect of a coercive enactment and widen than that of a relieving enactment. That principle is only an aspect of the principle of justice and fairness that persons should not suffer under a doubtful law (whether written or unwritten).[29] Further, where an enactment involves expropriation, the courts are particularly astute to impose a strict construction. Where there is any doubt as to the way in which language should be construed, it should be construed in favour of the party who is to be dispropriated.[30] Also, whenever the literal meaning of an enactment would lead to the infliction of some detriment twice over, the maxim bona fides non patitur, ut bis idem exagitur[31] calls for the application of a strained construction to avoid that result.[32]
  9. It is presumed that the legislator intends the court to apply a construction which rectifies any error in the drafting of the enactment, where this is required to give effect to the legislator's intention.[33]
  10. The court must seek to avoid any construction that produces an absurd result, since this is unlikely to have been intended by Parliament. Here, the concept of 'absurdity' is given a very wide meaning. It includes virtually any result which is unworkable or impracticable, inconvenient, anomalous or illogical, futile or pointless, artificial, or productive of a disproportionate counter mischief.[34]
  11. Where a broad term[35] which is substantive is used, it is not to be supposed that the drafter could have had in mind every possible combination of circumstances which may chance to fall within the literal meaning of general words. Such use of general terms virtually gives a court an unlimited delegated authority, subject to the remedies available on appeal or review. The width of a broad term when read literally is often intended by Parliament to be cut down by implication arising from the words of the Act. Although the literal meaning of a broad term may, on particular facts, be found to be ambiguous, the court is often able to find an implication that reduces its width.[36]
  12. Those principles are to be applied subject to s.34 of the Interpretation Act which requires that every Act be read and construed subject to the Constitution. Relevantly, clause 1 of the Constitution enshrines the freedom of all persons to acquire, possess and dispose of property as they will.

Purpose of the Act

  1. Apart from that indicated by its operative provisions, the Act does not contain any stated purpose or objects. Pursuant to s. 8 of the Interpretation Act, the preamble may be referred to for assistance in explaining the Act’s scope and object. The preamble states the reason for passing the Act. It may include a recital of the mischief to which the Act is directed. It is thus a useful guide to the legislative intention.[37]
  2. The preamble to the Act describes it as:

An act to enable the unlawful proceeds of all serious crime including drug trafficking to be identified, traced, frozen, seized and eventually confiscated; to establish a transaction reporting authority; and to require financial institutions and cash dealers to take prudential measures to help combat money laundering.

  1. In 2017, in Attorney General v Yin Lin Wei, Cato J said of the Act:[38]
[2] Although the legislation has been in force in Tonga since 2000, I am informed this is the first time it has sought to be used in this jurisdiction. Overseas, similar legislation has been used very successfully against particularly organised crime to attach the profits derived from criminal activity such as drug-related offending by confiscation orders and pecuniary penalty orders directed at offenders' disgorging profits. In some cases, very large sums have been involved in confiscated to the Crown, and, all pecuniary orders have been made. The legislation is a potent reminder to offenders the property derived from criminal activity may be attached by confiscation orders... And that, where appropriate, profits that can be shown to have been derived from criminal offending may be the subject of pecuniary penalty orders under section 28, 41-45 of the Act. It has been said in a number of cases that these measures were enacted to deter serious criminal offending. Thus, in R v Pederson [1995] 2 NZLR 386, the Court of Appeal in New Zealand emphasised the deterrent purpose of these remedies by, in the words of Cooke P, demonstrating emphatically that crime does not pay."

Structure of the Act

  1. In order to understand Parliament’s intended operation of the s.19 group, it is important to consider the context of each section within the group, the context of the group among other provisions in the Part of the Act in which the group appears and the context of that Part within the Act as a whole.
  2. There are three Parts to the Act:

Part II – Money laundering

  1. In Rex v Potemani [2015] TOSC 33, Paulsen LCJ described money laundering as:[39]
“... a process by which criminals disguise the original source, ownership and control of the proceeds of criminal activity. They do this by taking the proceeds of a crime, called a predicate offence, and laundering the money in various ways to make it appear to have been obtained legitimately. A predicate offence then in this context is the crime that produces the property (usually cash) that is to be laundered. In section 17(1)(b)(i) the term “a serious offence” refers to the predicate offence. What constitutes a “serious offence” is defined in section 2 of the Money Laundering and Proceeds of Crime Act 2000 ...”.
  1. Within Part II, ss 11 to 16A and 20 to 25 are concerned with the creation, functions and powers of the Transaction Reporting Authority and obligations on financial institutions and cash dealers. The primary functions of the Authority include receiving, analysing, assessing and sharing with other relevant law enforcement agencies, information and reports on financial transactions relevant to serious offences, money laundering activities, the financing of terrorism or violations of the Act. The obligations on financial institutions and cash dealers are similarly aimed at preventing, detecting and reporting on financial transactions and the use of the financial system for the purpose of money-laundering, serious offences or terrorist financing.
  2. Those provisions are bifurcated by s.17 to and including the s.19 group. The reason is not apparent.
  3. Section 17 creates the offence of money laundering and provides:

17 Money laundering offences

(1) A person commits the offence of money laundering if the person —

(a) acquires, possesses or uses property knowing or having reasonable grounds to believe or suspect that it is derived directly or indirectly from the commission of a serious offence;

(b) by—

(i) the conversion or transfer of property derived directly or indirectly by the commission of a serious offence, with the aim of concealing or disguising the illicit origin of that property or of aiding any person in the commission of the offence;

(ii) concealing or disguising the true nature, origin, location, disposition, movement or ownership of the property derived directly or indirectly by the commission of a serious offence,

and shall upon conviction be liable to imprisonment for a period not exceeding 10 years or to a fine not exceeding $500,000 or both, and in the case of a body corporate to a fine not exceeding $1,000,000.

(2) For the purposes of proving a money laundering offence under subparagraph(1), it is not necessary to prove which serious crime has been committed.

(3) Knowledge, intent or purpose required as an element of an offence in subsection (1) may be inferred from objective factual circumstances.

(4) Nothing in this Act prevents a person that committed an offence that generated proceeds of crime from being convicted of a money laundering offence in respect of those proceeds of crime under subsection (1).

  1. Section 18 creates offences in relation to the opening and operating of accounts with a financial institution or a cash dealer in a false name or an anonymous account.
  2. The last two sections in the Part, 26 and 27, provide respectively for the restitution of ‘restrained’ property in the circumstances set out therein and allow a person whose property has been restrained to claim damages where the action of the Government involved any abuse of process.
  3. Overall then, one sees that, as stated by its title, Part II is concerned with all activities giving rise to, preventing and detecting money laundering as proscribed by s.17.
  4. It is in that context that we now turn to ss 19 to 19J.

The s.19 group

  1. In 2010, s.19 in its original form, was deleted and replaced with what is now ss19 to 19J.[40] The amending Act does not shed any light on the purpose or object of the replacement provisions. Other amendments included new definitions within s.2 for terms such as:
  2. For ease of reference, and relational context, all the provisions within the s.19 group are set hereunder:

19 Cash declarations

(1) Any person who enters or leaves the Kingdom with cash amounting to more than the prescribed sum or its equivalent in any other cash shall make a declaration to an authorised officer in the prescribed form in the Foreign Exchange Control Regulations.

(2) Any person sending out of or receiving in to the Kingdom currency amounting to more than the prescribed sum by any means, including but not limited to postal services, courier services or trans-shipment by any craft must make a declaration to Customs in the prescribed Form under the Foreign Exchange Control Regulations.

(3) Any person failing to declare cash in the prescribed sum to an authorised officer commits an offence under this Act and shall be liable on conviction to a fine not exceeding $50,000.

19A Questioning

(1) Any authorised officer may question any person arriving in or departing from the Kingdom about the source, ownership, acquisition, use, or intended destination of any cash in that person’s possession.

(2) Any person who, without reasonable excuse, on so being questioned by an authorised officer fails or refuses to answer any question put to that person commits an offence and shall be liable on conviction to a fine not exceeding $20,000.

19B Searches

(1) Any authorised officer may search any premises, place, or craft, if he has reasonable grounds for suspecting that there is on the premises, place, or craft, cash —

(a) which is recoverable cash or is intended by any person for use in unlawful conduct, and

(b) the amount of which is not less than the minimum amount.

(2) An authorised officer may search any person if he has reasonable grounds for suspecting that a person is carrying cash —

(a) which is recoverable cash or is intended by any person for use in unlawful conduct, and the amount of which is not less than the minimum amount; or

(b) has failed to declare cash, the amount of which is not less than the minimum amount in the prescribed form.

(3) An authorised officer may, so far as he thinks it necessary or expedient, require a person searched under this section —

(a) to submit to a search of any goods he has with him, and, where the authorised officer requires; and

(b) to submit to a search of his person.

(4) An authorized officer exercising powers by virtue of subsection (3)(b) may detain the person for so long as is necessary for their exercise of the powers of search.

(5) The powers conferred by this section are exercisable only so far as reasonably required for the purpose of finding cash.

(6) Any personal search of a person shall be carried out only by an authorised officer of the same gender of the person to be searched.

19C Seizure of cash

(1) An authorised officer may seize any cash, if he has reasonable grounds for suspecting that —

(a) it is recoverable cash;

(b) intended by any person for use in unlawful conduct; or

(c) it is undeclared cash intended for use in unlawful conduct.

(2) Any authorised officer may also seize cash part of which he has reasonable grounds for suspecting that it is —

(a) recoverable cash;

(b) intended by any person for use in unlawful conduct; or

(c) it is undeclared cash intended for use in unlawful conduct.

19D Detention of seized cash

(1) While the authorised officer continues to have reasonable grounds for his suspicion, or for the purposes of investigation, cash seized under section 19C may be detained for a period of 72 hours.

(2) The period for which the cash or any part of it may be detained may be extended by an order made by the Court, but the order may not authorise the detention of any of the cash —

(a) beyond the end of the period of 3 months beginning with the date of the order; or

(b) in the case of any further order under this section, beyond the end of the period of 2 years beginning with the date of the first order.

(3) An application for an order under subsection (2) may be made by the authorised officer, and the Court may make the order if satisfied, in relation to any cash to be further detained, that either of the following conditions is met —

(a) there are reasonable grounds for suspecting that the cash is recoverable cash and that either —

(i) its continued detention is justified while its source, ownership, use or destination is further investigated or consideration is given to bringing proceedings against any person for an offence with which the cash is connected; or

(ii) proceedings against any person for an offence with which the cash is connected have been started and have not been concluded;

(b) there are reasonable grounds for suspecting that the cash is intended to be used in unlawful conduct and that either —

(i) its continued detention is justified while its intended use is further investigated or consideration is given to bringing proceedings against any person for an offence with which the cash is connected, or

(ii) proceedings against any person for an offence with which the cash is connected have been started and have not been concluded.

(4) An application for an order under subsection (2) may also be made in respect of any cash seized under section 19D, and the Court may make the order if satisfied that —

(a) the condition under subsection (3) is met in respect of part of the cash; and

(b) it is not reasonably practicable to detain only that part.

(5) An order under subsection (2) shall provide for notice to be given to any persons affected by it.

19E Interest

If cash is seized under section 19D for more than 48 hours, it shall be as soon as practicable, be paid into an interest-bearing account, and the interest accruing on it is to be added to it on its forfeiture or release.

19F Release of seized cash

(1) This section shall apply while any cash is seized under section 19D.

(2) The Court may direct the release of the whole or any part of the cash if the following condition is met —

(a) the Court is satisfied, on an application by the person from whom the cash was seized, that the conditions in section 19D for the detention of the cash are no longer met in relation to the cash to be released;

(b) after notifying the Court under whose order cash is being seized, an authorized officer may, release the whole or any part of it if satisfied that the seizure of the cash to be released is no longer justified.

19G Forfeiture

(1) While cash is detained under section 19D, an application for the forfeiture of the whole or any part of it may be made to the Court by an authorised Customs or Police officer.

(2) The Court may order the forfeiture of the cash or any part of it if satisfied that the cash or part is —

(a) recoverable cash; or

(b) intended by any person for use in unlawful conduct.

(3) In the case of recoverable cash which belongs to joint tenants, one of whom is an exempted joint owner, the order may not apply to so much of it as the Court thinks is attributable to the exempted joint owner’s share.

(4) Where an application for the forfeiture of any cash is made under this section, the cash is to be seized (and may not be released under any power conferred by this Act) until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded.

(5) Where cash has been seized under sections 19C and 19D and no notice of appeal has been received by either the seizing authority or the Court within the period of 30 days from the time of seizure, then the cash will be automatically forfeited to the Crown.

19H Application of forfeited cash

(1) Cash forfeited under this Act, and any accrued interest on it shall be paid into the Seized Assets Fund.

(2) Any forfeited cash under subsection (1) shall not be paid in —

(a) before the end of the period within which an appeal is made; or

(b) before the appeal is determined or otherwise disposed of.

19I Victims and other owners

(1) A person who claims that any cash or any part of it, seized under this Act belongs to him may apply to a Court for the cash or part to be released to him.

(2) The application may be made in the course of detention or forfeiture proceedings or at any other time.

(3) If it appears to the Court concerned that —

(a) the applicant was deprived of the cash to which the application relates, or of cash which it represents, by unlawful conduct;

(b) the cash he was deprived of was not, immediately before he was deprived of it, recoverable cash; and

(c) that cash belongs to him,

the Court may order the cash to which the application relates to be released to the applicant.

(4) The Court may order the cash to which the application relates to be released to the applicant or to the person from whom it was seized, if —

(a) the applicant is not the person from whom the cash to which the application relates was seized;

(b) it appears to the Court that that cash belongs to the applicant;

(c) the Court is satisfied that the conditions in section 19D for the seizure of that cash are no longer met or, if an application has been made under section 19G, the Court decides not to make an order under that section in relation to that cash; and

(d) no objection to the making of an order under this subsection has been made by the person from whom that cash was seized.

19J Compensation

(1) If no forfeiture order is made in respect of any cash seized under this Act, the person to whom the cash belongs or from whom it was seized may make an application to the Court for compensation.

(2) If, for any period beginning with the first opportunity to place the cash in an interest-bearing account after the initial seizure of the cash for 48 hours, the cash was not held in an interest-bearing account while seized, the Court may order an amount of compensation to be paid to the applicant.

(3) The amount of compensation to be paid under subsection (2) shall be the amount the Court thinks would have been earned in interest in the period in question if the cash had been held in an interest-bearing account.

(4) If the Court is satisfied that, taking account of any interest to be paid under section 19E or any amount to be paid under subsection (2), the applicant has suffered loss as a result of the seizure of the cash and that the circumstances are exceptional, the Court may order compensation or additional compensation to be paid to him.

(5) The amount of compensation to be paid under subsection (4) shall be the amount the Court thinks reasonable, having regard to the loss suffered and any other relevant circumstances.

(6) Compensation shall be paid in the first instance from the general fund held by the Court.

(7) A forfeiture order shall be made in respect only of a part of any cash seized under this Act and this section has effect in relation to the other part.

Discussion

  1. The fact that Parliament replaced the original s.19 with the s.19 group clearly suggests, in my view, that whatever work the original s.19 did was thereafter to be done by the group. Further, the fact that each additional provision within the group is denoted by a capital letter after 19 suggests that they are intended to be related to, spring from and extend or enhance the object and operation of s.19. Otherwise, if they were intended to address some different object than that addressed by s.19, one would have expected them to be inserted elsewhere in the Act as stand-alone provisions, possibly even within a different existing Part or a new one altogether.
  2. Just as ss 11 to 16A and 20 to 25 are aimed as money laundering through financial institutions, s.19 – ‘Cash declarations’ – is aimed at preventing money laundering through the transborder movement of undeclared and significant sums of cash. It requires a person entering or leaving the Kingdom with, or sending out of or receiving into the Kingdom, cash amounting to more than ‘the prescribed sum’ to make a declaration in the prescribed form in the Foreign Exchange Control Regulations.[42] Subsection 19(3) creates an offence of failing to declare cash in the prescribed sum which is subject to a fine on conviction not exceeding $50,000. That, it should be noted, does not amount to a ‘serious offence’ as defined in the Act. It is also to be noted that the object of s.19 is also covered to various extents by other legislation such as the Regulations just referred to and the Customs and Excise Management Act.[43]
  3. The ‘prescribed sum’ is not defined within the Act. However, the Foreign Exchange Control (Restriction on Removal of Cash) Regulations, which prohibit the removal of ‘restricted cash’ from the country, define ‘restricted cash” as cash exceeding TOP$10,000 or its other currency equivalent. Regulation 5 provides for the seizure, confiscation and forfeiture of ‘restricted cash’. Sub-regulation (5) provides penalties for offences against the regulations, in addition to the forfeiture of any restricted cash, of a fine for an individual up to $100,000 or up to 3 years imprisonment, or in the case of a body corporate, a fine not exceeding $200,000.
  4. The said Regulations and other legislation referred to above contemplate and provide for a similar law enforcement approach to undeclared cash, namely, creation of the offence and enforcement through powers of questioning, search, seizure, detention and forfeiture or confiscation.
  5. So too do the additional provisions within the s.19 group operate to facilitate and provide enforcement measures for the offence created by s.19 by creating powers of questioning (19A), search (19B), seizure (19C), detention (19D) and forfeiture (19G).
  6. The connections between the said provisions stemming from, and in my view, confined to, undeclared cash, are clear:
  7. A further element of this contextual analysis is to compare (and contrast) the s.19 group of provisions in Part II with Part III – Confiscation. That Part defines its subject matter as, broadly speaking, the seizure, confiscation and forfeiture of ‘tainted property’ from persons convicted of ‘serious offences’ or the imposition of pecuniary penalty orders against such persons in respect of benefits derived from the commission of ‘serious offences’.
  8. It is clear that Part III is only concerned with conduct arising out of or in connection with serious offences. The powers of confiscation in Division 1 and imposition of pecuniary penalty orders in Division 2 can only be exercised upon convictions for a serious offence. Powers of search for, and seizure of, tainted property are conferred in Division 3 which can be exercised pursuant to a search warrant issued on reasonable grounds for suspecting a person has, or may within the next 72 hours have, tainted property; or without a warrant in emergencies meaning if the reasonable grounds exist and, among other things, a search is necessary to prevent concealment, loss or destruction of the property. Under Division 4, restraining orders against tainted property may be issued where a person has been convicted of a serious offence or where he/she is charged or is about to be charged with a serious offence. Special powers are conferred in respect of terrorist property. Section 35C permits orders for forfeiture where a court is satisfied on the balance of probabilities that property to which the application relates is terrorist property. Similarly, restraining orders may be made under ss 57A and B where there are reasonable grounds to suspect that any property is property in respect of which a forfeiture order may be made under s.35C. Divisions 5 (realisation of property) and 6 (production orders and other information gathering powers) are not material for present purposes.
  9. One obvious difference between Part III and the s.19 group is that the latter are not preconditioned by any conviction, only reasonable grounds for suspecting, relevantly, that cash is recoverable cash, intended for use in unlawful conduct or undeclared cash intended for use in unlawful conduct. For some reason, Parliament did not see fit to use the term 'recoverable cash' in Part III. Conversely, the terms 'tainted property' and 'proceeds of crime' are not to be found within the s.19 group where the term 'recoverable cash' appears. Can the intended difference be explained solely on the basis that Part III is concerned with serious offences whereas the s.19 group does not contain any express reference to being confined to conduct involving serious offences? For instance, the offence created by s.19(3) is not a serious offence. Curiously, equivalent offences found in other legislation such as the Foreign Exchange Control (Restriction on Removal of Cash) Regulations do amount to the equivalent of a serious offence as defined in the Act. Also, as noted above, the offence of money laundering itself, created by s.17, carries a penalty which makes it a serious offence.
  10. By that comparison, the s.19 group appears to be intended to occupy a special and specific position within the Act. However, can it be said that by reason of the fact that the group does not contain any express reference to its operation depending on any serious offence, that Parliament intended for the various powers of questioning, search, seizure, detention and forfeiture of cash to be extended to what might be described as minor offences, that is, not serious offences?
  11. In my view, and consistent with the principles of statutory interpretation referred to above, any such imposition or curtailment of property rights, even for minor offences which themselves do not provide for forfeiture of the subject matter of the offence such as illegal gambling here, could only be effected by the clearest language. That does not appear here. Instead, for the reasons canvassed above, the s.19 group commences from, and in my view, is an extension of, s.19 which is solely concerned with undeclared cash in excess of $10,000. A narrow or restrained interpretation, which confines the s.19 group to such offences, is consistent with the statutory interpretation principles set out above and, in particular, with the above contextual analysis as to the relationship between each provision within the group, the group's place within Part II (being concerned with money-laundering), and that Part's place within the Act as a whole, the very raison d'être for which, is to combat money laundering and deal with the proceeds of serious crime.

Conclusion

  1. For those reasons, and on the provisional basis stated at the outset of this chapter, I am of the view that it is arguable that Parliament intended the s.19 group to apply only to transborder movements of undeclared cash over TOP$10,000 where there are reasonable grounds for suspecting that that cash may have been derived from, and/or has been used or is intended for use in, the commission a serious offence.

LEGAL BASIS FOR THE APPLICANTS’ CLAIM

  1. If the interpretation discussed above is considered incorrect, such that on a broader interpretation and as the parties assumed, the s.19 group does apply to the instant case, then the first issue which arises is whether the Applicants have a legal basis upon which to apply for the release and return of the cash. A number of possibilities present.

Leave reserved by Cato J

  1. Section 19D(5) requires that notice of any order for an extended period of detention be given to any persons affected by it. However, in his Honour’s orders extending the period of detention on 28 August 2019, Cato J went further. He reserved leave to the Applicants to apply to have the order rescinded. The file does not contain any reasons for his Honour’s decision to grant the Crown’s application or for reserving leave to apply. It may have been a natural concomitant to the Police application being made ex parte, or it may have reflected reservations about the evidence supporting the application. In any event, the reservation of leave to apply was not stated to be limited by time or circumstance (such as while the cash was detained).
  2. Putting to one side for the moment any potential effect s.19G(5) may have on the competence of the instant application by reason of its timing, to the extent that it is made pursuant to Cato J’s reservation of leave, any rescission of the order as a result would have the effect of reversing any automatic forfeiture under s.19G(5). That is because if the police were not lawfully entitled to further detain the cash under s.19D(2), then it would not be cash to which s.19G(5) could apply.

The three month period expired

  1. The three month period ordered by Cato J had expired by the time the instant application was filed. In the ordinary course, without a further order, any lawful basis for the police continuing to detain the cash would also have expired and the cash ought to have been returned. Further, by that time, the Applicants had all been dealt with on the s.83 offences.
  2. However, the Respondent contends that well before the expiry of the three month extension period, the cash had been automatically forfeited by operation of s.19G(5). If that is so, does it mean that Cato J’s order ceased to have effect from that date or was frustrated in some way, even though the order itself was not expressed to contemplate nor be subject to any ‘behind the scenes’ operation of s.19G(5)?
  3. If automatic forfeiture has the effect of altering the character of the holding of the cash by police to no longer being detained (or ‘seized’) under earlier provisions, then it reveals an inherent tension, and potential injustice.
  4. The Act affords authorities between three months and two years within which to detain cash for the purpose of further investigation, deciding whether to commence proceedings and the completion of any such proceedings, whereas a person from whom cash is seized and detained has only 30 days within which to appeal against that detention. Neither s.19G(5) nor the nascent jurisprudence in relation to this part of the Act yet make clear what any such ‘appeal’ might entail or require save perhaps for what is provided by s.19F.
  5. Most people are unlikely to be aware of the 30 day apparent ‘guillotine’ lurking in s.19G(5). No similar provision is to be found elsewhere in the Act. Of course, ignorance of the law is no excuse. But this is a procedural provision with a potentially very serious pecuniary sanction. While there may be some who are aware of the sanction but are content not to appeal against seizure for fear of further investigation and possible prosecution where their cash meets the criteria for forfeiture, there are also likely to be others who are not aware of the 30 day period and who are able to demonstrate that their cash does not meet the criteria for forfeiture.
  6. Another tension presents between ss 19G(1) to (4), which contemplate the Crown making an application for forfeiture while cash is being detained pursuant to s.19D, and the automatic forfeiture provided by s.19G(5). Arguably, that may be resolved by application of the Court of Appeal’s instruction which has the arguable effect, in any proceedings for release of the cash, of placing the onus on the Crown to demonstrate that it was seized and detained in accordance with the conditions for doing so prescribed by ss 19C and D.
  7. These, of course, are not issues which are necessary to determine on this application. Suffice to say that any potential for injustice would be heightened if cash automatically forfeited under s.19G(5) could not be released. That issue is considered further below.

Section 19F

  1. The application is also stated to be pursuant to s.19F of the Act, the terms of which have been set out above.
  2. By subsection (1), an application under s.19F can only be made while cash is ‘seized’ under s.19D.
  3. Like the reference in s.19G(5) to cash being ‘seized under ss 19C and 19D’, the reference here to cash being ‘seized’ under s.19D is a misnomer. Noteably, ss 19C and D do not use the words ‘seized’ and ‘detained’ interchangeably. Unless the terms are intended to be used interchangeably in the Act, cash may be seized under s.19C and then detained under s.19D. Section 19G(1) correctly opens with ‘while cash is detained under section 19D’. Yet, provisions such as ss 19G(5) and 19F appear to confuse the terms.
  4. This is but an example of what might be regarded as textual or drafting infelicities or peccadillos in this part of the Act. A further grammatical example is the missing words “it is” at the beginning of s.19C(1)(b) and (2)(b). Another is the apparent cross-referencing error in s.19D(4) to “cash seized under s.19D” which must be taken to mean s.19C. Yet a further anomaly is to be found in s.19J. It provides, relevantly, that if no forfeiture order is made in respect of cash seized under the Act, then the person from whom the cash was seized may claim compensation. The automatic nature of s.19G(5) means no forfeiture order will be made. Here then, if the Respondent’s submissions are accepted, the Applicants could make a claim for compensation under s.19J. Whether Parliament intended that result is, at least, doubtful.
  5. In any event, it is sufficiently clear that s.19F applies while cash is being held under s.19D.
  6. Subsection (2) enables cash to be released if the Court is satisfied that the conditions in s.19D for detention of the cash are no longer met; or, the authorised officer is satisfied that the seizure of the cash is no longer justified.
  7. The cash here was seized on 18 August 2019, initially detained under s.19D(1) for 72 hours and then purportedly further detained for three months under s.19D(2)(a) pursuant to an order of Cato J made on 28 August 2019. That three month period expired on 27 November 2019. This application was filed on 3 December 2019. Therefore, if, at that date, the cash was no longer detained pursuant to the said order, an application under s.19F could not arise.
  8. Moreover, if, as the Respondent contends, the cash was automatically forfeited under s.19G(5) 30 days after it was seized, and if the act of forfeiture ended any period of detention of the cash under s.19D, then again, an application under s.19F could not arise.
  9. That temporal alteration to the status of the cash adds to the tensions caused by s.19G(5) discussed above. For how then might a person who is able to demonstrate that cash should be released pursuant to s.19F(2) do so if the cash has already been forfeited under s.19G(5) but, until then, was still being detained pursuant to an order under s.19D?
  10. On the other hand, if forfeiture is interpreted as simply also being held by the Crown, then s.19F could apply. What then does the Act say about cash forfeited by operation of the s.19 group? Section 19H requires forfeited cash and any accrued interest to be paid into the Seized Assets Fund. There is no reference elsewhere in the Act to that fund nor is there any explanation as to what is to happen to cash after it has been paid into the fund. That may be compared with the Tonga Confiscated and Forfeited Assets Fund established by s.48A in Part III, out of which, the Minister for Finance may authorize prescribed payments.

Section 19I

  1. The Respondent's case proceeds from the premise that once cash is forfeited under s.19G, that is the end of the matter, and that it cannot thereafter be released or returned to its owner or person from whom it was seized.
  2. In my opinion, that is not correct.
  3. Further to the question posed above about what happens to cash forfeited under s.19G, s.35(1), within Part III of the Act, provides that property the subject of a confiscation order vests absolutely in the Government. A similar provision is found in s.113 of the related Customs and Excise Management Act. Part II of the Act does not contain any similar provision.
  4. Section 19I of the Act, as set out above, provides another pathway by which cash may be released, even after forfeiture.
  5. Notwithstanding the heading to the section – “victims and other owners” - suggesting it applies only to persons other than those from whom cash was seized, subsection (1) permits any person to apply in respect of cash which belongs to that person. Subsection (2) permits an application to be made in the course of detention or forfeiture proceedings or at any other time, which must include after cash has been forfeited. Subsection (3)(a) refers to the applicant being deprived of the cash by unlawful conduct. While that may have been intended to apply to an owner of cash which was stolen by a thief who then used it or intended to use it for a serious offence, it does not preclude alternative scenarios such as if the cash:

Subsection (4) provides a separate means by which the Court may order release. The chapeau provides for release to an Applicant or to the person from whom the cash was seized. However, the matters of which the Court must be satisfied set out in subsubsections (a) to (d) appear to apply only to an Applicant who is not the person from whom the cash was seized and thereby excludes the possibility of the Court being able to order the release of cash to the person from whom it was seized even if that person owned the cash. That apparent internal contradiction renders the provision unclear.

Section 26

  1. I should also mention s.26 which provides that where an investigation has commenced against a person for a serious offence and property has been ‘restrained’[44] under the Act in relation to that offence, if, among other things, the person is not charged with that serious offence within 6 months after the property has been restrained, then on application, the Supreme Court shall order restitution of the restrained property.
  2. Although illegal gambling is not a serious offence as defined in the Act, s.26 along with s.19I and arguably s.19F do make clear that Parliament intended to provide means within the Act by which forfeited cash could still be released in prescribed circumstances.

Civil proceedings per the ‘Qian’ decision

  1. As indicated by the Court of Appeal in Qian, it is open to the Applicants here to bring this civil proceeding seeking return of the cash, not necessarily by reason of any of the other bases or pathways discussed above, but by seeking to demonstrate that the cash could not be forfeited under s.19G(5) because the relevant conditions in ss 19C or D were not satisfied at the time the cash was seized or later detained.

No application for extension of the 30 days

  1. Contrary to that anticipated by the Respondent in its submissions, the Applicants have not applied for any extension of the 30 day period in s.19G(5) whether pursuant to the court’s inherent jurisdiction or otherwise. That observation would ordinarily not require any further consideration by the Court. However, it is appropriate to say something briefly about the Respondent’s reliance on the decision of the Western Australian Court of Appeal in Centurion Trust Company Limited v Director of Public Prosecutions.
  2. Section 79 of the Criminal Property Confiscation Act 2000 (W.A.) provides 28 days within which to object to the confiscation of ‘frozen’ (meaning seized or restrained) property, or any further time allowed by the court. Section 87 provides the conditions for release of confiscated property (also to be determined on the balance of probabilities). The W.A. Court of Appeal decided that the court’s inherent jurisdiction could not be exercised to extend time after the property had been confiscated, for to do so would:
“...be acting in disregard of the statutory limitations upon the exercise of the power in s.79 to allow further time and will be circumventing the scheme of the legislation by enabling a person in the position of the appellant to, in substance, challenge the confiscation of property without satisfying the requirements of section 87....”
  1. For the reasons canvassed in relation to ss 19F and 19I above, the instant case, and potentially others in future concerning s.19G(5), may be distinguished from the decision in Centurion and the Western Australian provisions considered by it. Firstly, s.19G(5) does not itself provide for any extension of the 30 day period. Secondly, cash may be released by order of the Court, arguably under s.19F, almost certainly under s.19I and definitely under the Qian enquiry as to whether the requirements of ss 19C and D, at any time including after forfeiture.

CRITERIA FOR FORFEITURE

  1. Following on from the Court of Appeal’s instruction recited in the Introduction above, the principal issue on this application is whether the seizure and detention of the cash met the requirements of ss 19C and 19D.
  2. In order to be able to seize cash under s.19C, an authorised officer (which includes a police officer) must have reasonable grounds for suspecting, relevantly,[45] that the cash is:
  3. In order to be able to detain cash under s.19D, the authorised officer (for the first 72 hours) or the court (for a further extension of three months or up to two years), as the case may be, must be satisfied, among other things, that there continue to be reasonable grounds for suspecting, among other things, that the cash seized under s.19C, is either recoverable cash or is intended for use in unlawful conduct. Other requirements prescribed by s.19D(3) are considered further below.
  4. The Court of Appeal in Qian also observed that s.19D(1) makes clear that ‘the authorised officer must not only have reasonable grounds to suspect, but must have a suspicion of, any of the matters in ss19B and 19C. The lawfulness of the detention of the cash and hence the application of the automatic forfeiture provision in s 19G(5) would in turn depend upon such evidence’.[46]

WAS THE SEARCH UNLAWFUL?

  1. The Applicants contend that the search which led to the seizure of the cash was not conducted in accordance with ss 122 or 124 of the Tonga Police Act and was therefore unlawful.
  2. Sections 122and 124 of the Tonga Police Act provide:

122 Search of persons without warrant

(1) This section applies if a police officer is satisfied, on reasonable grounds, that —

(a) a person has any of the objects mentioned in subsection (2) in his possession; and

(b) it would be impracticable, unreasonable or not in the interests of justice if the officer was required to apply for a warrant in order to search the person for the objects.

(2) The following are the objects for the purposes of subsection (1) —

(a) a prohibited explosive or weapon;

(b) an illicit drug;

(c) a controlled chemical or controlled equipment;

(d) stolen property;

(e) an object that may have been used, is being used or is intended to be used in the commission of a serious offence;

(f) an object that may be used by the person to cause harm to himself or to another person; or

(g) any other object which is prohibited or restricted under any other enactment.

(3) The police officer may —

(a) stop and detain the person;

(b) search the person and anything in the person’s possession for an object mentioned in subsection (2); and

(c) seize any object or part of an object that the police officer believes on reasonable grounds is an object mentioned in subsection (2).

(4) Tonga Police may keep any object obtained as a result of a search under this section only for as long as is reasonably necessary, but for no more than 60 days, unless a Magistrate, on application by a police officer, has issued an order authorising the object to be kept for a longer period.

(5) A police officer may apply to the Magistrate’s Court for an order for subsection (4).

(6) Any police officer who has exercised the powers under this section shall provide a report in writing to the Commissioner within 24 hours, covering the details of the search, the objects found, any offences detected and any other relevant matter.

124 Applications for search warrants

If a police officer is satisfied on reasonable grounds that an offence or a serious offence has been committed, is being committed or is likely to be committed in any house, premises, vehicle, vessel or aircraft, the police officer may apply for a search warrant to search the house, premises, vehicle, vessel or aircraft and to seize any thing set out in the warrant.

[emphasis added]

  1. There is no evidence before me that the police officers conducted the raid pursuant to a search warrant. In fact, their collective evidence is silent on that point. There was evidence that they were acting on ‘time sensitive intelligence’. I therefore proceed on the assumption that they did not have a warrant.
  2. Section 122 permits searches without warrant where a police officer is satisfied on reasonable grounds that a person has any of the objects mentioned in subsection 2 in his possession and it would be impracticable, unreasonable or not in the interests of justice if the officer was required to apply for a warrant in order to search the person for the objects.
  3. The cash here does not fall within any of the descriptions of 'object' in subsection 2. It could not fall within subparagraph (e) because it was not being used or intended for use in the commission of a serious offence, which is defined by s. 3 of that Act as an offence punishable by imprisonment for a period of 3 years or more, or a fine of $2,000 or more. Nor could the cash fall within subparagraph (g) being any other object which is prohibited or restricted under any other enactment. The only basis upon which the cash could be said to be prohibited or restricted for the purposes of s.19B of the Act is if it was recoverable cash or intended for use in unlawful conduct and was more than $10,000. No single applicant was caught with more than $10,000 on them. Even if they had, there was no evidence that those sums of cash were 'undeclared' for the purposes of s.19 meaning cash being brought in or sent out of the country. The only other basis within the Act upon which the cash could possibly be considered prohibited or restricted may have been if it was tainted property or any other property the subject of Part III. For the reasons already stated, the cash here could not constitute any such type of prohibited or restricted property.
  4. Moreover, it is not clear on the evidence before me that it was impracticable, unreasonable or not in the interests of justice if the officers were required to apply for a warrant. The only evidence which comes near the point is from the affidavit of Police Detective Inspector Polutele on the application for extension of detention in which he said that on the day in question the police "worked towards credible intelligence that the (Applicants here) were currently playing games of mere chance" and that the intelligence received was "time sensitive". That in my view, is insufficient to satisfy the requirements of s.122(1). In that regard, I note that s.52 of the Act permits urgent applications for search warrants under s.51 in relation to tainted property to be made by telephone.
  5. Section 123 of the Tonga Police Act provides similar powers of search without a warrant in respect of places, vehicles, vessels and aircraft. However, it requires a police officer to be satisfied on reasonable grounds that a serious offence has been committed, is being committed or is about to be committed; and, again, that it would be impracticable, unreasonable or not in the interests of justice if the officer was required to apply for a warrant. Here, for the reasons stated above, playing games of mere chance did not constitute a serious offence. Further, there was no evidence that any of the officers involved in the raid had reasonable grounds for suspecting that anything other than illegal gambling was going on inside the premises. Therefore, any search without warrant purportedly pursuant to s.123 was unlawful.
  6. On that analysis, Mr Pouvalu’s submissions are correct and if the raid was carried out pursuant to the aforesaid provisions of the Tonga Police Act, it may be considered unlawful.
  7. However, the argument assumed that the only statutory basis upon which the police could effect a search and seizure of the cash was the Tonga Police Act.
  8. In light of the fact that the Respondent here relies on s.19G(5) as the basis for the automatic forfeiture of the cash, it must follow that it also relies on s.19B of the Act. As discussed above, s.19B permits authorised officers to search any premises or persons where the officers have reasonable grounds for suspecting there is on the premises or the person recoverable cash or cash intended for use in unlawful conduct and the amount is not less than the minimum amount. For the reasons stated above, if the 'minimum amount' means more than $10,000, there is again no evidence that any of the officers involved in the raid had reasonable grounds to suspect that any of the Applicants (who were all individually charged) had more than $10,000 on them, let alone that it may have constituted undeclared cash for the purposes of s.19. The only relevant evidence was that officers had reasonable grounds for suspecting that cash was being used for the purposes of playing games of mere chance. Whether that constitutes 'unlawful conduct' for the purposes of Part II of the Act is considered further below.
  9. For those reasons, I consider that the search was most likely unlawful. However, Mr Pouvalu did not raise this aspect of the argument (in relation to s.19B) and Mr ‘Aho did not address the unlawful search argument at all. Again, therefore, it is not appropriate to determine the application on this basis. Nor, as it will be seen, is it necessary to do so. Even if it were, what would be the effect of such a finding? The Applicants pleaded guilty to the respective charges under s. 83 of the Criminal Offences Act. None sought to raise a defence based on any unlawful search. Be that as it may, in my view, the unlawfulness of the search, while not determinative, is a relevant consideration in determining whether the cash should now be released and returned to the Applicants.

WHAT IS “RECOVERABLE CASH”?

  1. If I am wrong on any of the above analyses so far, I now turn to consider what may be regarded as the critical issues on the simplest characterisation of the application, namely, whether the cash was lawfully seized under s.19C and subsequently detained under s.19D. That enquiry reduces to whether, at all material times, there were reasonable grounds for suspecting that the cash was ‘recoverable cash’ or cash ‘intended for use in unlawful conduct’.
  2. As noted by the Court of Appeal in Qian:[47]
“[18] ... There is no definition in the Money Laundering Act of the phrase ‘recoverable cash’. In Police v Felipe (CR132 of 2019) Cato ACJ treated it as equivalent to “proceeds of crime” (as defined). At least arguably it is cash which is proceeds of crime or tainted property (as defined) recoverable under another provision of the Money Laundering Act....”
  1. The word ‘arguably’ suggests further consideration is required in order to achieve greater certainty about the definition of ‘recoverable cash’.
  2. In Felipe, Cato J stated:
“[14] Further, it is important to consider the definition of proceeds of crime when it comes to considering what may be regarded as recoverable property. ...”
  1. His Honour’s instinctive identification of ‘proceeds of crime’ as informing the meaning of ‘recoverable cash’ was, with respect, well-founded. However, in that case, his Honour was not required to conclusively define the term because the focus shifted to whether the subject cash there was “linked to drugs or an attempt to bribe a police officer”.
  2. To ascertain Parliament’s intention by its use of the phrase, or more precisely, the word ‘recoverable’, the rules of statutory interpretation, as discussed above, call for the natural and ordinary meaning of the words to be read in their context and in the light of the purpose of the Act.[48]
  3. The dictionary definition of ‘recoverable’ submitted by Mr Pouvalu is inapt for the use of the word in the Act because that definition contemplates a person recovering something belonging to them after they have spent or lost it or otherwise parted with it. Here, the term is more apt to mean cash which is able to be recovered, in the sense of being taken or seized or appropriated by authorised officers, pursuant to one or other provisions of the Act or other legislation.
  4. If one applies that preferred literal meaning, and asks what cash is recoverable under the Act, then apart from cash which constitutes 'tainted property' within the operation of Part III, one ends up with the circuitous and unhelpful answer that the cash which is recoverable under Part II of the Act, is recoverable cash or cash which is intended for unlawful conduct, etc.
  5. In considering context, one sees that the term ‘recoverable cash’ only appears in ss 19B, C, D, G and I of the Act. It does not appear in any other legislation in the Kingdom, nor, as far as my research has revealed, does it appear in any legislation in the United Kingdom, Australia or New Zealand. Such very specific and selective use of the term is consistent with the confined application of the s.19 group postulated above.
  6. However, if the present analysis maintains that the s.19 group is intended to apply to cash such as that under consideration here, the Court must strive to discover what the legislature intended. That includes considering the whole scope of the Act and the legal consequence most likely to have been intended for breach of the duty prescribed or conduct proscribed by the Act.
  7. It is clear that ‘recoverable cash’ is grammatically capable of more than one meaning. However, when read in context, and in light of the purpose of the Act as a whole, a conformable and likely meaning is that it is cash which can be recovered because it is proceeds of crime as defined, meaning cash derived from a serious offence, again as defined.
  8. That definition arrives at the same place Cato J pointed to in Felipe. Such a construction implements, rather than defeats, the legislative purpose so far as that is revealed by the preamble to the Act and the surrounding provisions in the three Parts to the Act. A purposive approach also advances a remedy for the mischief sought to be addressed by Part II, namely, money laundering. For to enable authorities to seize, detain and have forfeited, cash which is reasonably suspected of having been derived from a serious offence, is an important step in preventing and/or detecting money laundering which by definition involves cash derived from the commission of a serious offence (or a ‘predicate offence’ as Paulsen LCJ described it). It also produces consistency and coherence within the Act as well as between it and other legislation related to undeclared cash.

WAS ANY OF THE CASH “RECOVERABLE CASH”?

  1. There was no evidence before Cato J, or before me, that any of the seized cash was derived directly or indirectly from, or used or intended to be used in, the commission of an offence punishable by imprisonment of not less than 12 months or more severe penalty.
  2. Even if the table cash or any of it was derived from winnings on the gambling itself, then, as Mr Pouvalu correctly submitted, s.83 of the Criminal Offences Act is not a serious offence as defined in the Act. Therefore, such winnings could not constitute ‘recoverable cash’.
  3. As for the other cash, the only evidence of provenance was from the third Huang affidavit, to the effect that it was derived from legitimate business activities. That evidence was unchallenged.
  4. Any submission or statement that the cash was ‘proceeds of crime’ reflected an erroneous understanding of the meaning of that term within the Act. By comparison to the prescribed penalty for the offence, playing games of mere chance is not a serious offence under the Act.
  5. There being no evidence that the cash was derived from a serious offence, I find that none of the cash was ‘recoverable cash’ for the purposes of the Act and that there were no reasonable grounds for the police to suspect that it was.

WAS ANY OF THE CASH INTENDED FOR USE IN ‘UNLAWFUL CONDUCT’?

  1. At the time of the raid, and since, it was not possible to determine, without admission, whether any of the Applicants who may have just won a hand intended to put those winnings (not recoverable cash) away and not use for them for any further gambling.
  2. However, on balance, I am satisfied that the evidence of the police officers involved as to the physical location of the table cash proximate to each of the Applicants, and the admissions on behalf of the Applicants,[49] leads to the conclusion that, at the time of the seizure, there were reasonable grounds for suspecting that the table cash was intended for use in illegal gambling.
  3. However, for the reasons which follow, I am not satisfied, on the balance of probabilities, that at the time of the seizure, there were reasonable grounds for suspecting that the other cash was intended for use in illegal gambling. Alternatively, if there were grounds for so suspecting, they were not reasonable.
  4. As noted above, the unchallenged evidence of the Applicants was that the cash in their respective pockets, bags and elsewhere on the premises was from, and was intended for, their business activities and that they carried it on their persons for security reasons.
  5. Against that, the Respondent relied on the collective evidence of the various police officers that, in their professional opinion, the other cash was “either winnings from gambling or capital for gambling” or that it was “materially linked” to gambling.
  6. Whether cash is “materially linked” to unlawful conduct is not a requirement or relevant consideration provided for by the Act.
  7. If the police evidence was intended to be advanced as expert opinion evidence, it did not satisfy the requirements of s.24(2) of the Evidence Act. Subsection (2) confers on the Court a discretion to admit a statement of an expert as prima facie evidence of the matters stated therein save for such facts as have been communicated to him by others. In my view, the exercise of that discretion requires consideration of matters such as those discussed in Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No. 3) [2012] VSC 99 at [98], namely whether the opinion evidence is:
  8. As Mr Pouvalu did not object to the admissibility of the police opinion evidence, I have considered it. Apart from the physical location of the various amounts of cash and their proximity to the Applicants and the gaming tables, the police evidence did not expound on any of the above rules or explain the bases for the opinions expressed. Mere repetition of the same opinion, without demonstrating the grounds or reasoning for that opinion, will rarely add much, if anything, in terms of weight to any submission based on such opinions.
  9. There is little doubt that police officers working within the Drugs Enforcement Taskforce or the Serious Organised and Transnational Crime Unit develop and gain valuable experience in understanding the evidence and criminal activities generally associated with illicit drugs and other serious crimes which may, in certain respects, be considered matters for expert opinion. However, the present case concerned neither drugs nor serious crime. An observation that cash on tables at which various persons were gambling was likely to be intended for that gambling does not require expert opinion. It is a matter of common sense or ordinary deductive reasoning.
  10. Further, any opinion that other cash on those persons, in their pockets, bags and elsewhere on the premises in which the gambling was taking place, was also intended for use in the gambling, without more, is entirely speculative. The only objective evidence for that opinion was that the cash belonged to persons on the premises and that there was gambling taking place there. That logic is as compelling as suggesting that if a man goes into a shop with $100 in his pocket, takes out $10, and offers it to the shop keeper to buy certain goods, the fact that he has another $90 in his pocket must mean he intends to spend it all on other goods in that shop.
  11. The basis for the police hypothesis for the other cash being intended for use in gambling is equally consistent with the Applicants’ unchallenged evidence that it was intended for their legitimate business activities. On the balance of probabilities, I accept those explanations over the police opinion evidence to the contrary. Alternatively, and given the nature of the Act, any doubt about which of those intended uses was more likely, ought be resolved in favour of the Applicants.
  12. Accordingly, I am satisfied that at the time of the raid, any grounds for suspecting that the other cash might have been intended for use in the gambling were not a reasonable basis for seizing that cash under s.19C(1)(b). It follows that there were no reasonable grounds for the initial detention of the other cash under s.19D(1) or its extended detention under s.19D(2).

DOES ILLEGAL GAMBLING CONSTITUTE ‘UNLAWFUL CONDUCT’ WITHIN THE ACT?

  1. Having determined that there were reasonable grounds to suspect that the table cash was intended for use in further illegal gambling, the next question is whether that illegal gambling constituted ‘unlawful conduct’ sufficient to justify initial seizure and subsequent detention of that cash under ss 19C and D of the Act.
  2. The Respondent’s submission in this regard adopts a literal interpretation, that is, illegal gambling is unlawful conduct.
  3. For the reasons which follow, and solely for the purposes of the Act, I have concluded that the Respondent’s submission ought not be accepted.
  4. Firstly, as noted above, where a literal interpretation is clear and unambiguous it is to be accepted as reflecting Parliament’s intention unless, when so construed, it produces an inconsistency, or an absurdity or inconvenience so great as to convince the court that Parliament could not have intended that interpretation or where the construction renders the words opposed to the general scope and intent of the Act. Parliament is presumed not to have intended to legislate in a manner which is absurd.[50]
  5. In the present case, a literal interpretation has the potential to result in absurdity and real injustice. To illustrate:
  6. Thus, it can be seen how any purported distinction between cash that is ‘recoverable cash’ and that which may be ‘intended for use in unlawful conduct’ can, in the context of illegal gambling, produce inconsistent and absurd outcomes, which vary according to the timing of a police raid. In my view, that cannot have been intended by Parliament.
  7. Secondly, there is an unacceptable incongruity between not being able to seize cash if it has been derived from an offence which is not a serious offence under the Act, but then being able to seize it if there are grounds for suspecting it is intended for use in the very same type of offence. Again, in the absence of the clearest language to the contrary, an interpretation which leads to such incoherence and unpredictability cannot be accepted as having been intended by Parliament.
  8. Thirdly, what if a gambler won $1 million on a game of mere chance and was about to bet with it again as the raid commenced? Whether that cash could be seized (and ultimately forfeited) as recoverable cash (which it couldn’t) or as cash intended for use in unlawful conduct if that be further gambling, pales into insignificance when one considers the maximum statutory penalty under s.83 of the Criminal Offences Act of $1,000 (and that the Applicants here were each fined only $300) and that there is no provision within that section or elsewhere in the Criminal Offences Act for forfeiture or confiscation of the proceeds of illegal gambling as an additional punishment.[51] Such an outcome is likely to offend the principles referred to above that whenever the literal meaning of an enactment would lead to doubtful penalisation, the infliction of some detriment twice over, or produce a disproportionate counter mischief. In those circumstances, a strained construction is required to avoid those results. Had Parliament intended that cash or other valuables used or intended for use in games of mere chance contrary to s.83 were to be forfeited in addition to the fine prescribed therein, it would have been a simple matter for it to have included that additional penalty. It chose not to.
  9. Fourthly, and in answer to the Respondent’s submission that the Applicants “should not be allowed to profit from their offending” (or as Cato J described it “crime does not pay”), it must be remembered that the forfeiture and confiscation powers conferred by the Act have been determined by Parliament to apply, as additional detriments, only to those who engage in serious crime (meaning the commission of serious offences). While it may be accepted that returning cash to the Applicants that was derived from the gambling may amount to some of them ‘profiting’ from the offending, it is Parliament that has determined the threshold between minor offences and serious offences (i.e. 12 months imprisonment). For the reasons stated above, in my view, there is no compelling indication on the proper interpretation of the Act that it was intended to apply to minor offences. There may be very good reasons why Parliament decided that s.83 of the Criminal Offences Act should not constitute a serious offence for the purposes of the Act. One possibility, exposed by the use of the word ‘some’ above, is that transfers of money in gambling amount to taking from some and giving to others among those voluntarily gambling at a given time and place. There is unlikely to be any detriment or harm caused, directly at least, to any outside the group. It is only when illegal gambling is used to facilitate money laundering, that the seriousness of that activity may attract the sanctions of the Act. That may occur where cash from serious crime is exchanged in say a casino for gambling chips or credits, and later the gambler’s balance of chips is exchanged back for cash, thereby purportedly converting (or laundering) it into ‘money won at the casino’.
  10. Otherwise, in the absence of any evidence of money laundering or other serious crime, Parliament must be taken to have intended that simply playing games of mere chance is not sufficiently serious to attract the operation of the Act. If it intended otherwise, it could have raised the maximum penalty to 12 months imprisonment or more. Section 83 was amended in 1990 and in 2012. Notwithstanding, it remains a ‘minor’ offence.
  11. Fifthly, this outcome achieves a just consistency with the outcomes of the other four players who had their cash returned. Even though the police were still detaining their cash 30 days after seizure, there was no suggestion there that their cash was automatically forfeited under s.19G(5). Nor was there any suggestion that those persons should lose their cash because they were suspected of intending to use it for illegal gambling being unlawful conduct. That their charges were either struck out (without any determination on the merits) or withdrawn is no different to the Applicants pleading guilty to their charges and paying their fines when it comes to what should happen to all the cash seized from the gambling after all those cases were finalised.
  12. Accordingly, I agree with Mr Pouvalu’s submission. From the foregoing interpretation of the Act, ‘unlawful conduct’ referred to within the s.19 group in the Act should be read consistently with the meaning of ‘recoverable cash’ so that both pertain to ‘serious offences’ as defined in the Act.
  13. Therefore, I find that as the games of mere chance was not a serious offence, the table cash which may have been intended for further games, was not intended for unlawful conduct to which the Act applies. On that basis, the table cash was not lawfully susceptible to seizure under s.19C or detention under s.19D or forfeiture under s.19G.

WAS DETENTION OF THE CASH BEYOND THE INITIAL 72 HOURS LAWFUL?

  1. Again, if I am wrong in any of the above analyses and findings to this point, I turn now to the Applicants’ other, more technical, grounds as to why they say the cash has not been lawfully forfeited under s.19G(5).
  2. The Applicants contend that the cash ought to have been released after 72 hours of its seizure. This was another point with which the Respondent did not directly engage.
  3. As noted above in the statutory interpretation section, a law that inflicts hardship or deprivation of any kind or authorises interference with property is, in essence, penal. The confiscation and forfeiture provisions of the Act are penal. Penal enactments are to be construed strictly and prescribed conditions are to be treated as mandatory.
  4. Part II of the Act does not permit continuing detention of cash other than in the circumstances prescribed by s.19D. Therefore, if the required circumstances do not exist, or come to an end, the authorised officer/s have no lawful right to continue to detain the cash.
  5. It is to be inferred that the purpose of the initial 72 hour detention period provided by subsection (1) is to provide police (or other authorised officers) a reasonable time within which to determine if further detention is necessary for, say, further investigation and, if it is, to obtain an order for extension pursuant to s.19D(2) and (3).
  6. Any extension of the period of detention pursuant to subsection (2) can only be obtained by an order of the Court. It is not achieved by the mere filing of an application for an extension. Therefore, continuity of detention requires not only that an application be filed, but that a Court order be made before the expiration of the initial 72 hour period.
  7. That should not present any insuperable difficulties to authorised officers applying for such orders because:
  8. It follows that once the period for lawful detention of seized cash comes to an end, whereupon the cash is to be released to those from whom it was seized, the Act neither provides for, nor contemplates, any ‘re-seizure’ of the released cash for the purposes of then seeking a longer period of detention under s.19D(2). In other words, once the mechanism for detention under s.19D expires, in the absence of any other court order under Part II or other provision within Part III applying, the cash must be released.
  9. In my view, the implication of that plain interpretation of s.19D(1) and (2) is that if authorised officers wish to apply for an order for longer detention, such application must be brought and granted before the expiry of the initial 72 hour period. So too, if an order is validly granted under s.19D(2)(a), any further order under s.19D(2)(b) for a total period up to two years from the date of seizure must be obtained before the expiration of the three months.
  10. The cash here was seized on 18 August 2019. Assuming for present purposes that it was validly seized under s.19C, and that the police continued to have reasonable grounds that the criteria for seizure continued, then under s.19D(1) the police were entitled to detain the cash for 72 hours. That period ended on 21 August 2019 at or about the hour the cash was first seized. At that point in time, in the absence of a court order for a further period of detention under s.19D(2) and (3), the right of police to continue to lawfully detain the cash ended and the cash should have been released to the Applicants.
  11. Further, it was not until 3:55pm on 23 August 2019 that the police filed an application under s.19D(2) for the further detention for three months. There was no indication on the application that it was urgent. The supporting affidavit did not contain any explanation for the delay of two days.
  12. Earlier that same day, the Applicants’ charges were dealt with and finalised. At that point then, the authorised officer could not have continued to have reasonable grounds for the suspicions that resulted in the seizure, nor was the cash required for the purposes of investigation, as referred to in s.19D. The application for extension should therefore not have been filed. Similarly, after the application was filed, but before it was determined, s.19F(2)(b) required the authorised officer to release the cash.
  13. Accordingly, I agree with the Applicants’ submission. In the absence of any statutory power to confiscate the cash used in playing games of mere chance, in my view, it should have been returned upon the expiry of 72 hours after seizure. Alternatively, it should have been returned upon the Applicants’ cases being finalised, which was only five days after the seizure and well before the expiry of the 30 days under s.19G(5). The further detention of the cash thereafter was unlawful.

THE APPLICATION BEFORE CATO J

  1. Finally, it follows from the foregoing that the application to Cato J for a further three-month extension of the period of detention should not have been made. As at the date the application was filed, the Applicants were entitled to the release of the cash. There was therefore no lawful subject matter in respect of which the application before Cato J could have been validly brought, considered or granted.
  2. The possibility that these (and other) matters were not ventilated during the Crown’s ex parte application is reflected in his Honour’s second order that day reserving leave to apply for the order to be rescinded on three days notice. That reservation of liberty to apply suggests, among other things, that Cato J’s order was provisional or de bene esse in that his Honour may not have then been in a position to make any comprehensive determination about the requirements of s.19D.
  3. The Applicants did not make such an application prior to the three-month extension which expired on 26 November 2019. Nor have they appealed Cato J’s order. In the meantime, and unbeknownst to the Applicants until its ‘defence’ stated in this proceeding, the Crown’s position was and is that the cash was automatically forfeited under s.19G(5) upon the expiry of 30 days from seizure (being 17 September 2019) for want of a notice of appeal.
  4. Whether one revisits the Crown’s application before Cato J or treats this application as pursuant to his Honour’s grant of leave, s.19D(3) required the police to satisfy the Court that either:

or


(b) there were reasonable grounds for suspecting that the cash was then intended to be used in unlawful conduct and that either —
  1. In his affidavit in support, Detective Inspector Polutele deposed, relevantly, that during the raid, each table was found to have money in the middle and some of the players had money in front of them. Those cash amounts were said to be set out in Annexure 2 to his affidavit.[53] He also opined that ‘given the close proximity of the property (cash) to the players of games of mere chance [he was] of the view that the property was intended for excessive stakes in the game of mere chance’.[54]
  2. In fact, Annexure 2 listed all the cash seized that day, being both table cash and other cash. However, the officer’s opinion about cash being intended for use in gambling was based solely on the table cash, not the other cash.
  3. In my view, that evidence was not sufficient to satisfy the requirements of s.19D(3).
  4. Firstly, the evidence did not address subsection (a) in terms of whether there continued to be any reasonable grounds for the officer to suspect that any of the table cash (or any of cash for that matter) was ‘recoverable cash’.
  5. Secondly, to the extent the evidence sought to address subsection (b), the highest it could have been taken was that the presence of the table cash on the gambling tables was a reasonable ground for suspecting that that cash was intended for use in illegal gambling that day (which I have found above does not constitute ‘unlawful conduct’ for the purposes of the Act). The chapeau to subsection (b) refers to reasonable grounds for suspecting that the cash is intended for use in unlawful conduct. It does enquire into whether the cash, at some point in the past, was intended for use in unlawful conduct. At the time of the application on 23 August 2019, and then when considered and determined by Cato J on 28 August 2019, there was no evidence that any of the seized cash was then intended for future unlawful conduct.
  6. Thirdly, the officer did not provide any evidence of reasonable grounds for suspecting, or that he in fact suspected, that the other cash was intended for use in unlawful conduct.
  7. Fourthly, the evidence did not address the additional requirements in either subsubsections (i) or (ii). The first could not apply because once the raid broke up the gambling on 18 August 2019, there was no suggestion that on 23 or 28 August 2019, the cash was intended for use in further gambling or any other unlawful conduct. It does not appear that any of the Applicants or the other players were interviewed by police in relation to the provenance of the various amounts of cash or their intended use for it, particularly, the other cash. The second limb to (i) could not apply either for by the time the application was filed, the Applicants had all been charged and, on that day, they pleaded guilty in the Magistrates Court, were fined and their fines were paid. For the same reasons, subsubsection (ii) could not apply because the proceedings against the Applicants were all concluded on 23 August 2019, some five days before Cato J’s order was made.
  8. Therefore, of the primary requirements for an extension order under s.19D(3)(a) and (b), there was only evidence that the table cash may have been intended for use in further gambling at the time of its seizure, but not at the time of the application for extension; and there was no evidence whatsoever which could have satisfied any of the secondary requirements in subsections (i) and (ii) of each subsection.
  9. Accordingly, on that analysis, the application for extension should not have been made and the order on 28 August 2019 should, with respect, not have been made; or, should have been rescinded.

RESULT

  1. For those reasons, I find that the:
  2. The application is granted.
  3. I order that all the cash seized from the Applicants on 18 August 2019, together with all interest accrued thereon pursuant to s.19E, be released and returned to them forthwith.
  4. Any application for costs is to be filed within 14 days hereof. Otherwise, there will be no order as to costs.
  5. I recommend that consideration be given to amending the Act so as to clarify or address the issues raised in this judgment, in particular, the proper interpretation and intended application of the provisions within the s.19 group.
NUKU’ALOFA
M.H. Whitten QC
2 June 2020
LORD CHIEF JUSTICE

SCHEDULE OF APPLICANTS


  1. Bin Huang
  2. Lu Xian Wu
  3. Huang Quan Hu
  4. Huanga Xiao Jing
  5. Qioiang Chen
  6. Haoqiang Chen
  7. Chen Jian Feng
  8. Zhi Xing Huang
  9. Juan Huang
  10. Chen Ling
  11. Yunying Chen
  12. Xiangyu Huang
  13. He Shekuhua

[1] [46]
[2] [52]
[3] Xi Yun Qian v Kingdom of Tonga [2020] TOSC 16; CV 67 of 2019

[4] According to her first affidavit at [5].
[5] According to the second Huang affidavit at [5].
[6] Compare the third Huang affidavit at [16] to [18].
[7] As provided by Order 27 rule 7 of the Supreme Court Rules.
[8] The amounts in parenthesis are the different amounts estimated in the third affidavit of Juan Huang.

[9] CR 132/19, Supreme Court of Tonga, 23 August 2019.
[10] There is no evidence before the Court on this application of the raid being conducted pursuant to a search warrant.
[11] (1983) The Times 21 March; cited by Bennion at p.574.
[12] Ibid, fn 1.
[13] [46], [47] and [100]
[14] Second edition, Butterworths.
[15] Liverpool Borough Bank v Turner [1860] EngR 1276; (1861) 30 LJ Ch 379 at 380, referred to by Bennion at p.29. See also p.328.
[16] Bennion, p. 405.
[17] Crown v Schaumkel [2012] TOCA 10, referring to McKenzie v Attorney General [1991] NZCA 105; [1992] 2 NZLR 14 at 17. See also Pacific International Commercial Bank Ltd v National Reserve Bank of Tonga [2018] TOSC 26 at [88].
[18] Per the maxim noscitur a sociis; Bennion, p. 853-855.
[19] Gough Finance Ltd v Westpac Bank of Tonga [2005] Tonga LR 390 at 394 and the so-called 'golden rule' referred to in Fowell v Tranter [1864] EngR 746; (1864) 3 H&C 458 at 461, River Wear Commissioners v Adamson (1877) 2 App Cas 743 at 764 and Nokes v Doncaster Amalgamated Collieries [1940] AC 1014 at 1022.
[20] Otherwise expressed by the maxim: ut res magis valeat quam pereat - Bennion, p. 411.
[21] Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56 at [96]; Bennion, pp 635, 646-647.
[22] Crown v Schaumkel (supra).
[23] Bennion, p. 659.
[24] Bennion, p. 427.
[25] Bennion, p. 429.
[26] Wiebenga v 'Uta'atu [2005] TOCA 5 at [8].
[27] Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56 at [96].
[28] Vervaeke v Smith (Messina and A-G v intervening) [1983] 1 AC 145; Bennion, p.539, 549, 551.
[29] Bennion, p.382, 537.
[30] Methuen-Campbell v Walters [1979] QB 525 at 542; Chilton v Telford Development Corporation [1987] 1 WLR 872; Bennion, p.585.
[31] Good faith does not suffer the same thing to be exacted twice.
[32] Bennion, p. 779.
[33] Bennion, p.607.
[34] Erven Warnink Bureau Veritas v J Townsend & Sons (Hull) Ltd (No 2) [1982] 3 All ER 312 at 320; Bennion, p. 679.
[35] Known as a nomen generale or 'open-ended expression' or 'somewhat comprehensive and somewhat indeterminate term': Hunter v Bowyer (1850) 15 LTOS 281, Express Newspapers Ltd v McShane [1980] 2 WLR 89 at 94, Campbell v Adair 1945 JC 29.
[36] Bennion, p. 813.
[37] Bennion, p. 499.
[38] Unreported, CR 79 of 2013, 29 May 2017.
[39] [32]
[40] Money Laundering and Proceeds of Crime (Amendment) Act 2010, Act 32 of 2010.
[41] Curiously, the term “proceeds of crime” only appears in s.17 (money laundering) and s.57 (in Part III) of the Act in relation to applications for restraining orders.
[42] The regulations were repealed by s.33(2) of the Foreign Exchange Control Act 2018 assented to on 21 June 2018. The regulations were in force on 15 May 2018 when the offence occurred.
[43] Considered in the Qian decision.
[44] Again, not defined or used elsewhere in the Act save for s.27.
[45] There is no issue of the cash here being ‘undeclared cash’ for the purposes of s.19.
[46] [19]
[47] At [18].
[48] 'Atenisi Institute Inc v Tonga National Qualifications and Accreditation Board [2019] TOSC 45 referring to Crown v Schaumkel [2012] TOCA 10; McKenzie v Attorney General [1991] NZCA 105; [1992] 2 NZLR 14 at 17; and Pacific International Commercial Bank Ltd v National Reserve Bank of Tonga [2018] TOSC 26 at [88].
[49] Second Huang affidavit at [10] and third Huang affidavit at [6] to [18].
[50] Frucor Beverages Ltd v Rio Beverages Ltd [2001] 2 NZLR 604 at [28] (CA): Skycity Auckland Ltd v Gambling Commission [2007] NZCA 407; [2008] 2 NZLR 182 at [57]; Sheehan v Watson [2010] NZCA 454; [2011] 1 NZLR 314.
[51] Compare ss 44 (forfeiture of lands and other property for treason), 73 (forfeiture of property belonging to an unlawful society) and 78 (forfeiture of arms when going armed in public to cause terror).
[52] Compare Part III of the Act, specifically ss 57, 57A, 72 and 78, which expressly provide for ex parte applications.
[53] [7]
[54] [8]

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