Criminal Proceeds (Recovery) Bill

It is good to take a call and finish what I was beginning to say when we started talking about Part 2 of the Criminal Proceeds (Recovery) Bill, a bill that stands for the great principle that crime should not pay. Part 2 achieves that purpose. Part 2 is the lion’s share of the bill, with over 220 clauses. It provides for restraining orders, civil forfeiture orders, and much more than that.

I note something in relation to the civil forfeiture orders, and it is really a large theme in this legislation before the Committee. I note that this provision takes us to a civil regime, which is a very significant and important change with this bill. Most of the time in criminal law, the standard of proof is one of being beyond reasonable doubt. This standard means that juries have to be sure. If they have any sort of reasonable doubt as to someone’s guilt, then that is the end of the matter. That may be OK—in fact, it is more than OK; it is absolutely right—when we are dealing with the liberty of a citizen, but it is not necessarily right when we are dealing with sums of many millions of dollars that are probably ill-gotten gains. Parliament has made a good value judgment in this bill in moving from the criminal standard of guilt being beyond reasonable doubt to the civil standard of guilt being more likely than not, or more probable than not. In my view, that is the right thing to do.

This is a significant change in the law. It makes all the difference, because there is now no need for the offender necessarily to have been caught; it is about the offence. The corollary of this is that we can get to people and to money in situations where the person involved did not necessarily get his or her hands dirty. We can get the assets, even though there may be a series of Chinese walls between the person and the money. It is quite a common situation in the criminal arena that people higher up the chain have their mules do the work. They have others—

💬 Hon Clayton Cosgrove: Or their camels.

—their camels, if we are going back to earlier in the day—do the work.

So there are two significant shifts here. There is a change in the standard of proof, down from the criminal standard to the civil standard, but there is also a change so that no longer do we need to have a person be caught in the act. We can get to the property even where, as is so often the case in gang-related activity, the people at the top have managed successfully to get away from the criminal behaviour—where they have managed to extract themselves and to have others who are lower down the chain do the work. That is often done through very nasty means or through coercion, and it may surprise some in this Chamber, including the Greens, to learn that those means can include torture. That happens in this country. I have been involved in cases where people have been forced by torture into doing illegal acts. This bill cuts through all that, as we have gone to a civil standard of proof.

I also rise to support the Criminal Proceeds (Recovery) Bill. As we know, much of this bill was authored by the previous Labour Government. I think the member opposite has made some valid points. I was over in South Australia—and I believe the Minister in the chair, the Hon Simon Power, was there—recently. It has had similar legislation to this bill for some time.

💬 Hon Simon Power: No, they haven’t had this one yet.

I am sorry; South Australia is getting it. The member who just spoke made an interesting point. He said that the tentacles, if you will, of crime can extend right through to secondary and tertiary parties. In this country we know that they often extend, with regard to gangs, to kids—to children. Children are often used, to use the previous speaker’s term, as mules: as people who can traffic drugs or act as couriers. Those young people are often used because a different standard of law applies to them if they are caught and put through the court system than applies to adults. The forfeiture regime within the bill allows the tentacles of the law to go right to secondary and tertiary parties in order to recover money and assets.

This bill, in Part 2 particularly, strikes at the heart of organised criminal activity. As members have already said, crime should not pay, but we know that some members of our society are uniquely placed, as criminals with devious criminal minds, to be able to hide assets and funds and to accrue income well beyond their means unless it has come directly from criminal activity. The bill deals with that problem. It gives the Crown the ability to move in and confiscate those assets and profits, if they have been obtained by criminal activity, on the basis of the civil standard of proof, as the previous speaker said. I think that will strike at the heart of some of the organised crime and gang activity that we see in this country.

I am not sure who it was, but I think a member of this House has said previously that if we do many of these measures, some people in our society will accuse us of driving gang activity underground. Well, I would argue that the real gang activity, the organised criminal activity, is always underground. The real activity is always the stuff that we do not see—the heavy-duty crime—and many organised criminal groups and gangs do not want the light to be shone upon them. They do not seek any profile, because they want to carry on very quietly and stealthily, in the criminal activities that they engage in, in order to amass substantial assets and dollars.

When we look at the provisions within Part 2, we see that they are common-sense, substantial provisions. There are a number of safeguards, and that is appropriate. In its report, the Law and Order Committee has argued that the police should be the recovery body, and that the definition of the owner of property should be extended to include those who might have, as the previous speaker, Simon Bridges, has said, an interest in that property. The easiest thing for criminals to do is to sign over all the assets—the boat, the Porsche, the flash cars, and all the shares—because some of these criminals are involved in quite substantial, so-called legitimate commercial activities, to their family members, trusts, or whatever, so that the criminal appears to be asset-less or penniless when the recovery body, in respect of the police, comes around to do its duty. As I say, these provisions give the ability to extend the tentacles of the law into secondary and tertiary parties.

I think the bill is a good, solid bill. It will have a very solid and practical effect. It does not deal with apparel, as we have done recently. I mean no disrespect to the Wanganui District Council (Prohibition of Gang Insignia) Bill, but, although it is well intentioned, I do not think that bill will deal to and cut to the heart of gang activity. There is an old saying that we should follow the money, and I think that is right. We should follow the money and the assets when we really want to hurt, harass, and deal with the activities of gangs and organised criminals. Those criminals do not really mind what they wear, but they do mind when we take their cheque books out of their pockets, their wallets off them, and their boats and flash cars away, and when we do not allow them to make money or accrue those assets. That is at the heart of this bill, and that is what we support.

I follow the member who has just resumed his seat, Clayton Cosgrove, and I will make a couple of comments in response to his remarks. Of course, Part 2 of the Criminal Proceeds (Recovery) Bill contains some of the clauses that matter in this part of the legislation. The previous speaker is right in that I did spend some time in South Australia recently, looking at the gang legislation, but also meeting with academics and the local law society to get a broad view of that legislation. One of the things I learnt while I was there was that we are actually a bit ahead of the game on this particular work. Yes, other jurisdictions are looking at the complete outlawing of gangs by way of what could be described as the equivalent of domestic terrorism legislation. I suspect that that is the best way to term it. New Zealand is leading in some respects with this particular bill.

Exactly what we are doing here should not be underestimated. This bill flips the burden of proof in respect of the confiscation of assets, in quite a remarkable way. Rather than the prosecution having to meet a certain standard in order for forfeiture to occur, the burden is flipped to a civil standard to allow those assets—and in “assets” I include cash—to be seized. Of course, then the burden of proof that the assets were not gained from criminal activity is placed upon those seeking to recover the assets or cash that has been, up to that point, confiscated. Safeguards exist in the legislation for innocent third parties who might find themselves caught up in this regime. Those avenues give plenty of opportunities for matters to be rectified when a perceived injustice has occurred—for example, in regard to a spouse or partner of some criminal whose family home has been caught up in this regime, but without his or her knowledge of the criminal activity that was occurring.

We should neither underestimate the strength of what is proposed here, nor turn from the fact that both major political parties in the House have supported this legislation from the start, when it was introduced, right through until this point. That goes to show how seriously the Parliament takes this issue. The Hon Clayton Cosgrove is right in that to go to the heart of the power of these organisations is to take from them the assets and cash they derive from illegal activity. Therein lies the modern equivalent of the cry made by, I think, Norman Kirk, to “take the bikes from the gangs”. In fact, the modern equivalent of that cry is to “take the assets and the cash”.

The bill that appears in the Committee stage today had a fairly good working-over in the Law and Order Committee under the watchful eye of Martin Gallagher, who ensured that a fair and robust discussion was allowed to occur without implanting his own personal views on the proceedings of the committee. That was helpful, because I was not sure what they were. Part 2 contains a fair chunk of the operative clauses here. I will listen with interest to contributions from members, and I look forward to hearing their views on some of the clauses contained in this part.

It is a pleasure to stand and take a call on the Criminal Proceeds (Recovery) Bill, and to voice my support for it. As other members have acknowledged before me, this bill was originally, of course, a bill introduced by the previous Labour Government. I do not get the opportunity to do this very often, but on this occasion I will congratulate the National Government on showing some good judgment. I have heard other members speak about the principle behind this bill, which is that crime simply should not pay. I think everyone in this Chamber would agree with that very sound and precious principle.

The Proceeds of Crime Act 1991 allowed the Crown to confiscate profits made from a crime after someone was convicted, but we all know that those profits can be spread among many people, and not all of those people can be convicted. I might use organised crime as an example of that. This bill addresses that problem, and gives the Crown the power to confiscate the profits and assets obtained. It will allow us to tackle gang leaders who, although they do not get their own hands dirty, certainly enjoy the benefits of illegal activity. We think this bill strikes an appropriate balance between targeting the proceeds of crime and protecting personal and property rights. I also note that Australia, Ireland, and the UK have passed similar laws quite recently.

Two orders are established to deal with removing the profits of crime from a person. One is the forfeiture order, which deals with a person’s unlawful income. It also targets the property used to commit the crime. For example, if a farm is used to grow marijuana, then that property will be termed an “instrument of crime”. A recovery body is also established under the bill, and that will be part of the Organised and Financial Crime Agency. The New Zealand Police will still be responsible for the confiscation of instruments of crime, but the bill will help the two agencies to carry out their roles by giving them a broad suite of powers to search for, seize, and restrain the proceeds of crime. All in all, the bill is a very constructive one, which goes a long way towards addressing what was missing before it came into the House.

Like the previous speaker, the Minister in the chair, the Hon Simon Power, I would also like to acknowledge the Law and Order Committee, which undertook a robust—I think that was the Minister’s term—analysis of the bill, and also, under the very excellent guidance of its chair, Martin Gallagher, gave some very constructive suggestions, which were taken up. Certainly, maintaining that the Police should be the recovery body, defining the owner of the property, extending that definition to include those who may have an interest in the property, and defining the term “instrument of crime” are suggestions that show this was a very hard-working committee, as I am sure the Minister will agree.

Other recommendations from the committee include the clarification of the circumstances in which property was acquired after a restraining order was made, the clarification of the ability of third parties to have property separated from a restraining order, the deletion of the powers of the director of the recovery body to issue a notice requiring production of documents, and alignment with other legislation regarding immunity for people who disclose information on money laundering. I think that was a very important contribution that the select committee made. The committee also recommended that the Inland Revenue Department be permitted to provide the police with information for the purpose of civil recovery. I think there were other recommendations that covered asset forfeiture only, interests on a title of the Crown, and the duration of production orders being shortened to 30 days. The retention of documents for as long as is necessary only was a very common-sense suggestion, and I am sure the Minister will agree with me on that point. The disclosure in the application for the search warrant of any other applications made and the provision that tax advisors are protected with professional privilege were other recommendations of the select committee.

All in all, after what was already a good draft bill from the Labour Government, the committee amendments and suggestions and the common sense that has prevailed have gone a long way towards making this a very good bill that will really address justice and, as I said before, really reinforce the principle that we all hold dear, which is that crime should not pay. Thank you very much, Mr Chairperson.

I am pleased to have the opportunity to rise and speak on the Criminal Proceeds (Recovery) Bill. As speakers who have gone before me have pointed out, this bill is supported by Labour. I think it gives some contrast to the bills that we have previously debated in the House around the consequence of gangs in our communities. I also think it goes beyond some of the more tokenistic legislation that we have seen coming through this Chamber to date, so I am pleased to be debating this bill. I am also pleased that the—

💬 Hon Simon Power: Tokenistic? It took me 3 years to draft it!

I say to the Minister of Justice that I would not call this bill at all tokenistic. I also point out that we are pleased that there is some acknowledgment over the seriousness of the shift in onus, which the Minister has already spoken about, and which is probably the most substantial part of this bill.

We are debating Part 2 of the bill, which deals with the forfeiture regime. We have already heard about the primary aims of the bill, and that is the means by which we extend the confiscation of property used to facilitate or commission a crime beyond those solely convicted—and for good reason. The Hon Clayton Cosgrove has already talked about the comparisons that we can make with New South Wales and the legislation that has been used there. I would like to make some comparisons regarding the monetary difference that this legislation could make. In New Zealand in the past 12 years $14.3 million has been paid to the Crown through assets seized on the basis of criminal activity. In comparison, taking into account the different jurisdictions that we are dealing with, New South Wales has seized more than $100 million in the past 14 years. It is a comparable time period, and it shows a significant difference in the size of the criminal proceeds that have been recovered.

Our existing law at that time had been criticised as being too weak because of the requirement of proof that assets were acquired by the profits of crime, so the onus was primarily on the Crown in that regard. I reiterate that shifting the onus on to the criminal to prove that those assets were legally obtained is a significant shift and one that will make a marked difference to the way this legislation operates in our jurisdiction. In shifting the onus, it is still important to have a certain number of standards around such a procedure. We are talking about those who have not necessarily been convicted through the criminal courts, but we are still giving the Crown the ability to seize their assets. This bill does that very well, as the bill still requires a civil standard of proof.

The Law and Order Committee deliberated for some time on two additional protections that are in the bill, and I will dwell on a couple of those important features for a time. One is around the instruments of crime. The bill stipulates that these are liable for forfeiture only after criminal conviction. This is in order to reflect the reality of some of the seizures that we might see in a New Zealand context. For instance, it may be unknown to a farmer that marijuana is being grown on his or her property, and we have seen that in some parts of New Zealand where forestry is particularly thick. I am thinking of parts of the Bay of Plenty and around the Rotorua area; this might occur in some of those areas. I would love to hear the member from that area take a call on this issue, and, I am sure, applaud this bill also.

This bill is not intended to unduly punish those who have not been part of some kind of criminal activity, so there are protections in it to make sure that that does not occur within the New Zealand context. I think those are important tests.

The bill also looks at the issue of third parties. On both sides of the Chamber, we acknowledge that there is the potential for third parties to be unfairly brought into the seizure of criminal property when that may not be intended. They may have a stake in forfeited property but it is not known to them that this criminal activity has occurred. This bill, in the forfeiture regime provisions, gives the ability for the situations of dependants, banks, spouses, and innocent victims to be considered and for them to be able to make appeals to have their part of an asset excluded.

I will dwell very briefly on some parts of Part 2 that demonstrate well the gains that have been made through this bill. Clause 13 lays out that no identifiable owner is required for certain proceedings relating to specific property. This will give additional speed to the Crown when dealing with forfeiture, and it addresses a problem that was raised back in 2007—and highlighted, I think, by the media—that it can take decades and beyond to resolve the issue of, or to fully confiscate, land that is identified as being involved in criminal activity, due to the very lengthy process that has to be undertaken once land is seized. That is one mechanism that could move a little more swifty. Clause 16, “Quashing criminal proceedings does not impact on civil forfeiture”, demonstrates again the considerable shift from a criminal test; it allows civil standards to be used around our forfeiture regime. Also, clause 17 allows for multiple forfeiture orders. Clause 17(1) states that nothing restricts a court from making one or more forfeiture orders—one can cover assets, instrument forfeiture orders, and profit forfeiture orders, in combination. Again, it is particularly comprehensive.

In considering this bill, the select committee has done a very good job of ensuring that we have found the right balance between making sure the Crown is able to act where it is obvious that the profits and proceeds of crime are in abundance—they may not have been of direct benefit to a criminal, but they may have been moved around in a particular way—and applying a new standard, a civil standard, that also includes safety checks and measures for those who may indirectly be affected. I think we have come out with a very balanced bill. It achieves what it intends to achieve, and it ensures that no one benefits from crime in this country. I look forward to seeing the effective implementation of this bill.

I rise to take a call this afternoon on Part 2 of the Criminal Proceeds (Recovery) Bill, and I comment, as other members have done, on how pleasing it is to be speaking in the Chamber on a bill that has such widespread support and such wide agreement on its necessity. There is recognition of the fact that our current law is simply not meeting the needs of our community, hence the need to get it done.

I also join with my colleagues on both sides of the Chamber in congratulating the Minister in the chair, the Hon Simon Power, the former Minister, the Hon Annette King, and the select committee that worked on the bill. As we have heard this afternoon already, there is currently a significant deficiency in the law we have around the recovery of the proceeds of criminal activity. We have heard that under current legislation we are not able to get right to the heart of the gang empire, which is, as has already been said, in gang members’ pockets. If we cannot start effectively to get them where it hurts, we will not make meaningful inroads into the problem.

We are looking at the moment at Part 2, which is obviously the most meaty part of the bill before us. It is made up of 10 subparts, and contains the real heart of the regime. It goes about setting up a new civil forfeiture regime, which I think will be a powerful enhancement in the crime-fighting arsenal we currently have, and which will certainly aid New Zealand’s police force in its ability to clamp down on gang activity. Let us remember at this point that gang activity is a serious concern to the people of New Zealand. Up and down this country it is one of the No. 1 issues being talked about, and I think that it is no coincidence that this bill has been so widely supported.

We have heard already, in relation to this bill, that the current Proceeds of Crime Act really helps us only in the simple crime situation where the guy who has pulled the trigger, for want of a better term, is the one who will profit from the crime. But the reality is that that is just not the way the business of complex crime-rings now works. And it is a business—that is what we need to recognise. It is a business, and to effectively deal with it as a business we have to stop the money flow. That is what this bill will do.

We need a more comprehensive system where those ill-gotten gains can be traced right through the criminal network, and the important point is that that goes beyond those directly involved in the commission of the offence. That means we have to have a system that does not require the physical, legal owner of the goods to have been convicted of a specific offence, and that is the key aspect of the change in this bill. Part 2 clarifies the civil aspects of the regime, and the property that can be restrained or forfeited, or first restrained and then forfeited. We know that restraining prevents property being sold, and moves it to the official assignee on the basis of there being reasonable grounds to believe that the property is tainted and that the person has unlawfully benefited from significant criminal activity. In general terms, restraint of that property would expire 1 year after the order was made or until a forfeiture order was granted or declined.

One of the points I want to make around forfeiture orders, in particular, is about their flexibility. The assets to be forfeited can be the specifically tainted assets that were involved in the crime, which is provided for under assets forfeiture orders, or—and this is particularly interesting—they can simply represent the value of a benefit a person has derived from significant criminal activity. This is an important hurdle to be able to overcome, because we no longer need to show that the Harley Davidson the gang member in question is riding is stolen; it is enough if that item represents the value that that gang member has acquired from criminal activity. That flexibility will go a long way to addressing those deficiencies in the current legislation that I have already spoken about.

If we did not bring into place that sort of change, it would be an insurmountable evidential hurdle. I suspect that that is why we have seen relatively few successful prosecutions under the Proceeds of Crime Act, we have certainly seen a decline in the numbers and value of proceeds that have been confiscated under that regime. That evidential hurdle is significantly reduced if prosecutions can go for either tainted property or property representing the value of the benefit.

Part 2 also deals with the difficult question of who the recovery bodies should be, as we have already heard talked about, and, following the particularly good work of the Law and Order Committee, which we have already made reference to, the bill now provides that the recovery body for this legislation should be the New Zealand Police. I think the consensus we have across the Committee is that that is the obvious and sensible place for that function to rest.

As I said in my earlier speech on this bill, I support and like this bill. Originally authored by the then Minister, the Hon Annette King, it is based on the clear principle that crime must not pay. Labour believes that this legislation will help to uphold that principle. I like this bill because it is a bill that has real teeth. To tackle crime, particularly organised crime, we need bills of real substance, not window dressing. In my last speech on this bill, I cited the ACT Party’s “three strikes and you’re out” bill idea as one of the window-dressing bills. Mr John Boscawen felt, in his own words, honour-bound to stand up and respond to some of the comments I made. Fortunately, Mr Boscawen’s speech was brought to an end because it was not addressing the right bill—namely, the Criminal Proceeds (Recovery) Bill—and he had ample time to respond to what the chairman believed was a passing comment made by me on the “three strikes and you’re out” bill. Unfortunately, Mr Boscawen did not respond to my comment that the “three strikes and you’re out” scheme was one that had a 20-year implementation period, and that it was internationally condemned as a failed model. Therefore, to tackle crime, particularly organised crime, we need measures that have real teeth.

The Criminal Proceeds (Recovery) Bill consists of three parts. Of course, it is intended that at the end of this Committee stage, Subparts 1 and 2 of Part 3 will be divided from the rest of the bill to become two separate bills. Parts 1 and 2 will remain as the Criminal Proceeds (Recovery) Bill, and on commencement will replace the Proceeds of Crime Act 1991. Currently, the Proceeds of Crime Act 1991 allows the Crown to confiscate the profit made from a crime, but only after someone is convicted of that crime. This bill deals with this problem, and instead of employing the criminal standard of “beyond reasonable doubt”, the bill gives the Crown power to confiscate profits and assets obtained through criminal activity on the civil standard of proof on the balance of probability.

Subpart 3 of Part 2, which we are debating, establishes two orders to deal with the removal of the profits of crime from a person. One is the profit forfeiture order, which deals with the unlawful income of a person; the other is the assets forfeiture order, which targets property directly or indirectly gained from criminal activity, regardless of who the owner of that property is.

It is also worth noting that the report from the Law and Order Committee has recommended a number of changes. The key recommendations include that the New Zealand Police should be the recovering body, the definition of the owner of a property should be extended to include the words “who might have an interest”, the definition of instruments of crime should be amended to include the words “proceeds from the sale of a property”, and other aspects that I hope we will be able to address in detail at a later stage.

To conclude, this bill is a substantive measure that will go quite a way towards addressing, hitting head-on, and dealing with gang leaders and organised crimes. Labour believes that this bill finds an appropriate balance between targeting the proceeds of crime and protecting personal and property rights. Thank you.

Indeed it is a pleasure to be able to stand today with my colleagues from both sides of the Chamber to support the Criminal Proceeds (Recovery) Bill, particularly when the Committee is speaking as one, rare though that is, on an issue of such importance as gang violence. We are addressing Part 2, which is the cornerstone of this bill because it gives effect to the intentions that this Parliament wants to drive in recovering the proceeds of crime.

In particular, I highlight clause 18, “Applying for restraining order”, which provides the power to a commissioner to apply for a restraining order to seize property, whether it has been directly acquired by an accomplice or by associates. Clauses 19 and 20 detail how that process will work. Clauses 24 and 25 talk a bit more about the way that those specific restraining orders are to be applied, and defines tainted property in terms of the property that is to be confiscated.

The reason that all of those specific requirements are needed is simply that there is no doubt we are dealing with organised crime in this process. Of course, although we are aware that we do not operate in the true style of the Mafia where organised crime had its own tradition, none the less it is present in many of our gangs. During my research in support of this bill, I was able to obtain information on a number of cases where in recent times the law enforcement agencies have been unable to, if you like, take from criminal gangs and their associates the proceeds that have been acquired during the course of carrying out crimes. The importance of that, of course, is that the fact that they might do time in jail is really of little consequence to them. It is more of a badge of honour. What really does hurt them is when their nest egg is taken away. That, of course, is the intention of this bill. It provides the power for the authorities to do so, which we should fully support.

The next point I want to highlight, which is equally as important as that, is that in exercising such powers it is incumbent on the authorities to do so responsibly. Those accountabilities, if you will, are set out in clause 28, and I think it gives a very thorough description of the process so that we do not have unbridled power in the exercise of those authorities. The recent gang killings at airports in Australia are an example of what is being driven by the drug trade. There is no question that throughout organised crime, and particularly in the gangs, high levels of money and assets are involved. I heard it described on Television One last night as a house that is full of money. Thank you, Mr Chairperson.

I rise in support of the Criminal Proceeds (Recovery) Bill, and I am speaking to Part 2. I note a number of issues that were raised in debates when this matter was previously before the House that drew some concern from people, particularly from the Māori Party, who were concerned about parcels of land or assets that were held as joint property or where a number of people had an interest in that property. It is important to note that there are a number of protections within the legislation that provide for that interest, and for the protection of that interest. For instance, where the matter is brought before the court and in proceedings before the court, whether it is on the initial application or whether it is for an extension of an application for an order, anybody with an interest in the land or in the property has an ability to be heard in that respect.

That is important, obviously, from an interest of justice point of view, because it could well be that where there is an interest in a particular property by a large number of people, there needs to be the ability to protect that interest not only for the people who are aware of it but for those who will come later and will take over that interest further down the track.

It is interesting to note, too, that where a search order has been made in respect of any item of property, the person who is holding the property or facilitating the execution of the order is not to disclose the existence of the order or the execution of the order to certain people. Those people may well have had a duty to disclose in any other circumstances, under any other legislation, or under another provision. Of course, the reason for that, obviously, is to protect the integrity of the investigation or the examination that is being carried out, to make sure, for instance, that the property is not dealt with in some way that would prevent the public interest in being able to restrict the use of that property or to prevent the disposal of that property.

I turn to Subpart 9, which looks at offences, including clause 156, “Contravention of restraining orders or foreign restraining orders”, clause 157, “Contravention of forfeiture orders or foreign forfeiture orders”, and clause 158, “Failing to comply with orders and search warrants”. It is those particular clauses that protect the integrity of that investigation and prevent those parties who are the respondents in these actions from being able to dispose of that property. It is an offence to disclose the existence or operation of a search order not just when it has been actioned—for instance, if it is to do with proceeds of a crime being held in a bank account or a security box within a bank’s premises—and not just when it has been executed but also as soon as a person becomes aware of it. Then, of course, it is an offence to obstruct in any way the execution of such an order. That is important, too, because when one is executing a search warrant the ability of one person or another to hinder the execution of that order or warrant has the ability to affect the evidence that can be brought before the court at a later date.

Clause 163 makes the point that compliance with the order is not actionable. So it could be, for instance, that if an order were being executed on a legal firm, then clients who would normally expect their lawyer to operate with a duty to them to not disclose information may try to take some action against their legal counsel—the person whom the clients would expect to act in their best interests—to prevent disclosure of what remains on their file, or within the confines of the law firm, from being disclosed to those who might come and look for it. So it prevents an action against people such as solicitors, accountants, bank managers, and so on.

Clause 164 provides an indemnity for enforcement officers who are acting out and executing the order as required by the documents. Once those documents are signed before the court, the enforcement officers’ actions are protected from contest on behalf of the respondent.

It is legislation that works very hard to protect those members of the public who are the victims of crime. Obviously, if there are organisations or individuals who work towards gaining property and profit at the expense of others, we need to do all we can to prevent them from moving down that track and creating more victims. In the past a much higher standard of proof has been required, and these particular actions could be taken only when someone had been before the court and convicted of an offence.

Part 2 allows for an explanation of how the whole bill will work, once it is enacted. It provides for a reverse onus of proof in cases where some significant piece of property is found—whether it be land, motorbikes, vehicles, houses, or homes, as we have heard before—in circumstances where there does not appear to be any explanation to show that the property items were gained legitimately. There is a reverse onus on the respondent to prove that it was gained legitimately, and then only to a standard of the balance of probabilities. And with the balance of probabilities being less than within the criminal jurisdiction, a heavy weight is put upon those people who, most of us would say, have been getting away with it for years.

We all know of such people within our communities. We have all looked around the neighbourhood and seen someone who is driving a new car, or riding up and down the street on a brand-new motorbike, or towing a big boat behind a big four-wheel drive. We have then wondered how that person on the dole is able to afford that late model Toyota Land Cruiser with the $30,000 boat being towed behind it. We all know that it is the fruit of ill-gotten gains. We want to live in a society where those people are held to account. It is not so much a matter of Big Brother watching over our shoulders, but of it being a protection for those of us who work hard to earn a living, support our families, and pay our taxes.

I am pleased to be part of an administration and a Parliament—because this bill has received wide support right across the House—where these people will be brought before a court and held to account if there is no clear explanation as to how they obtained that property. I am pleased to stand in support of this bill, and I encourage the whole of the House to continue in their support for it.

I want to summarise what I last spoke about on Part 2, and in general on the Criminal Proceeds (Recovery) Bill. Firstly, it seems to me that we have a consensus that the purpose of this bill is that crime should not pay. We want to make sure that it does not pay. The issue is whether, in implementing the purpose in Part 2, we will achieve that. There is an interesting dichotomy between the purpose and the implementation, and whether we will achieve our goals or intent in this bill. Having read it, I would say to the Committee that we are achieving them. We will be able to implement the purpose very successfully. Secondly, I say the other notable thing this bill shows is that the House is able to come together on important, significant issues, gain agreement, and act in a bipartisan manner. I think that Governments should not be afraid, or ashamed, of picking up bills drafted by previous Governments when they have merit, examining them on their merits, and taking them from there. This Government is doing that. I think that is something to be proud of, and it is good to see that the Opposition—the previous Government—is sticking with the position it had when it was in Government. That is a very good thing. We have agreement about the purpose, and we have bipartisanship being shown on this bill.

I have talked already about Part 2, and about the fact that there are a couple of important changes. Firstly, we are moving from the criminal standard of proof to a civil standard. That is a substantial change and a good one, given that we are not dealing with the liberty of our citizens in this bill. We are dealing with large amounts of money on the basis of the balance of probabilities, and that is right. We have made the right value judgment on that issue as a country—as a nation—in this Parliament. It is proper that such a change is decided on by Parliament and not by the courts. We have done that. Secondly, we have got away from the need for there to be an offence committed by a particular offender, and we are dealing with the property. I think that that is exactly right as well, given that, as the Hon Clayton Cosgrove said, we can have situations where things can be many parts removed from the offender. So we have done the right thing there also.

I want to talk about Subpart 3 of Part 2, which deals with civil forfeiture orders. Clause 43 tells us that those orders may be applied for by the Commissioner of Police rather than the Director of the Serious Fraud Office. There are in fact some important safeguards in Subpart 3 that, I think, really put to rest any concerns that civil libertarians—whom I have a great deal of time for; they play an important role in relation to criminal legislation—may have about this bill. Firstly, civil forfeiture orders can be applied for only in the High Court. I think that is significant. These applications will not be coming before the District Court on a busy list on a Monday morning, when a District Court judge may have 25 drink-driving cases and many other cases to deal with. Applications will be dealt with on their merits in the High Court by our High Court judges, who are, essentially, the best lawyers in the country. That is a significant safeguard. It means that applications will be heard by judges who are alive to the justice of the case, who will give it detailed consideration, and who are aware of the nuances of the facts before them. That is pretty important.

Clause 45, “Application for civil forfeiture order on notice”, also provides a significant safeguard, given, as I have already said, that we have decoupled this measure from the offender. There is not a need for an offender to be included. Clause 45(1) states: “The Commissioner must serve a copy of an application . . . on every person who, to the knowledge of the Commissioner, has an interest in the property”. So it is not as though there will be difficulties with regard to people being unable to get before a High Court judge and have their say about this property. The spouses, the affiliates, the whānau, or the neighbours who say they have an interest in the property will be able to come along, and they must be served with notice of an application for an order. That is far from a ramshackle situation.

It is good to be able to stand again to speak to the Criminal Proceeds (Recovery) Bill, given that a little earlier so many people wanted to speak in support of it I had to stand down. I want to talk in particular this time about quite a significant change made by the Law and Order Committee to a provision that was in the original bill when it was introduced to the House, which, so far in my intensive listening, I have heard no one mention—and in particular, no one from the Opposition. It is the move now to make the authority in respect of pursuing these cases the Commissioner of Police.

When the original bill was first tabled, there was a proposal that the Serious Fraud Office take responsibility for the oversight and management of this legislation. That is, of course, addressed in Part 2. I must say it is pleasing to see that the select committee came to its senses and overrode the intentions of the previous Government to have the Serious Fraud Office oversee the enforcement of the measures in this bill, particularly given that the previous Government was working to disband the Serious Fraud Office, either by way of ensuring a lack of resourcing for it or, as we subsequently found out, by doing a deal with its then coalition partner. The Labour Government was not only, in fact, preparing to disband it but also failing to even provide it with sufficient resources. There was some suggestion that it would get $3 million.

The fact of the matter is that the people who are being pursued here are hardened criminals. They will stop at nothing to protect their property—in particular, they will do so in very violent ways. So it really is sensible that at the select committee the enforcing authority in respect of this legislation was shifted from being the Serious Fraud Office to being the Commissioner of Police. One can imagine the situation, as was talked about last night on TV, of arriving at a house full of money. One can imagine the machine-guns, shotguns, or any other source of armoury that the gangs would use to protect their ill-gotten gains. So it is only sensible that our law enforcement division, being the New Zealand Police—and in this case probably the armed offenders squad—be given responsibility for entering into these very dangerous situations.

I want to commend the select committee for recognising the deficiency in the original bill, removing the Serious Fraud Office as the empowering body, and turning that role over to the Police—in particular, to the Commissioner of Police. That now means that in enforcing any power that is used in respect of the provisions of this legislation, we can provide appropriate levels of resourcing to address any situation, particularly when it is dangerous, and we can take great comfort from the fact that the commissioner will be the one who oversees that enforcement.

I rise to take another call on the Criminal Proceeds (Recovery) Bill, because this part really is the teeth of the legislation and it contains a number of important points that are worth commenting on further. Before I speak on Subpart 2, I will endorse the comments just made by my colleague Paul Quinn. He made the point, absolutely correctly, that it is sensible that the New Zealand Police is the enforcement body that will be looking after this matter. It is the organisation that has the detailed knowledge of criminal activity in this country. It has the best knowledge and understanding of our criminal organisations. Certainly it makes sense that the police can use that knowledge across the board, not only in their crime-fighting and law enforcement objectives but also in extending that out to the recovery of the proceeds of crime. So I do endorse what Mr Quinn has said in that regard.

However, what I want to talk about primarily in this call is Subpart 2 of Part 2, which, in complement with what my colleague Mr Bridges was talking about in relation to forfeiture orders, is the part that deals primarily with restraining orders. This is often where the rubber meets the road in these recovery claims and I think it is worth spending just a few moments on it.

We see in Subpart 2 the core constraints in relation to applying for restraining orders. We know that not only can the Commissioner of Police apply for restraining orders for specific tainted property but also the prosecutor can do so in respect of a prosecution for an offence that has been committed. That gives us two key aspects, and in clause 19 we go through what the order has to set out.

Clause 22 is titled “Application for restraining order without notice”, and anyone who has been around the legal system will understand the importance of being able to bring these sorts of applications without notice. To put it quite simply, often we are not playing by Queensberry Rules in these situations. If we give gangs notice that their Harleys will be seized a week from Tuesday, my bet is that they will not be there to seize. So it is really important to highlight that provision. These are not people who play by the rules. We have to give the good guys every tool we can to help make these provisions effective, and that is what we are talking about here. We are taking policy that we all agree with and giving it more teeth to make it more effective. Clause 22 is a very, very important aspect of the proposal.

Clause 24 lets us know that the court can award that restraining order if it is satisfied there are reasonable grounds—and that is the civil standard of proof coming in there—that the property is tainted. With all of this, and the debate that has gone on in the Committee today, people who are listening to the debate may start to wonder whether law enforcement is given just too much width. Yes, we need to crack down on gangs and crime, but the bill also gives considerable weight and, I think, proper consideration, to the checks and balances that need to be put on this sort of order being made. I am very pleased to see in Subpart 2 that a number of the provisions include those sorts of checks and balances. Certainly, if I go back to the issuing of the order without notice, there are all the usual provisions one would expect to see around that sort of order in terms of timing, notification, ensuring that the application is suitable, and the like.

We know that when the restraining order is being made, the court has the ability to consider a number of factors, not least amongst them the reasonable living costs of the respondent and his or her dependants, reasonable business expenses, the payment of specified debts, and the like. So the court does seek to strike a balance, when making the restraining order, with the fair and reasonable circumstances of not only the respondent but also his or her dependants, in debt situations. We do not want to be creating more hardship and more problems for ourselves. So that check and balance is there and it allows the court to give due weight to those factors.

Another check and balance in this Part is in clause 29, which provides the court with the power to require undertakings for damages or costs. Again, that is a very significant legal mechanism by which the bodies that are charged with applying these rules are made to be very careful that they do not overstep the bounds. If they get it wrong, there can be considerable cost. That sort of check and balance is an important mechanism to make sure that these powers are not used inappropriately.

One of the other points I wanted to talk about is the rights of co-owners of property that might be affected by restraining orders, and in particular clause 30 of the bill.

I move, That the question be now put.

The CHAIRPERSON (Hon Rick Barker): I will take another call or two.

I thank my friend and colleague on the other side of the Chamber for giving me the opportunity to speak so early in this debate. I recognise the work that the Law and Order Committee has previously done on this issue. As I was looking through the notes just a moment ago I noticed that of the members of the select committee who worked so hard on this issue, some are currently in this Chamber, but, unfortunately, some are no longer with us today. I recognise a former chair of the select committee, Ron Mark. When it comes to Part 2 of the Criminal Proceeds (Recovery) Bill, which is quite a weighty part, if Ron Mark—a man who spoke very strongly on law and order issues in this House and outside of it—was in favour of this, then that means some good work was done in that select committee.

I also say that it is good to see that this bill has been given priority, and I congratulate the Government and the Minister in the chair, the Hon Simon Power, on taking the issue of gangs seriously and on taking the issue of crime seriously. I say to this Committee that anything that we can do as humble representatives of the people of New Zealand and our electorates to be serious about gangs and get on top of crime so constituents in our electorates and all the people who live in New Zealand will be safer is worthy of our consideration tonight.

It is time we clamped down on gangs in this country, and time that they hear a message loud and clear from this Parliament that they serve no good purpose in New Zealand or for New Zealand society and that we will not condone them or their criminal practices. This bill goes a long way to starting the process of getting on top of crime and gangs in New Zealand. Some communities in my electorate of Rotorua are afflicted by the poison that gangs spread. The gangs act criminally and they trumpet their gains from crime. If their possessions are gained through illegal activity, as the bill refers to and as Part 2 deals with, then they deserve to have them taken from them, and they deserve to be imprisoned. I think there is no disagreement in this Committee about what should happen to goods gained illegally.

In certain circumstances the bill will alter the burden of proof, and do so quite substantially. If we are to take the confiscation or recovery of the proceeds of crime seriously, we must, as a Committee, balance the possible loss of the rights of some in New Zealand against the rights of the majority of law-abiding New Zealanders who have nothing to do with crime and who have nothing to do with gangs, and make sure that gangs cannot profit from their crimes.

The bill seeks to reform the existing criminal proceeds recovery regime, and Part 2 is an important part of this. My colleague Paul Quinn spoke earlier about the role of the New Zealand Police, and I think the Committee has rightly seen that the police are in a very good place to implement parts of this draft legislation. Criminals care about their possessions, and they seem to care even more about possessions that have been gained through illegal activity. In my electorate there is a small town of great people, called Murupara. People have come together and stood up and said that gangs are not acceptable to them, that crime is not acceptable, that they want a better future for themselves in their small town, and that they want a better future for their children in their small town.

As I cast my mind back to last year, I recall that a certain gang in New Zealand—I will not mention them, because I do not want to give them any more publicity than they deserve; indeed, they deserve none at all—decided to call a meeting. Gang members from all over the country came to Murupara to do whatever it is they do on their weekends away. The police in Rotorua were superb in the way that they dealt with this issue, at what could have been quite a difficult and dangerous time for the people of Murupara. They showed a presence; they took it seriously. When I was able to meet and talk with them and ask them why they were so successful at making sure Murupara was not damaged and that the great community was not harmed by these people, whose intent was illegal, they told me that in showing a presence they set up roadblocks and they went out and stopped the various bikes to see who was there and find out what they were doing.

It surprises me that the police said that some of these bikes, which would have been gained through illegal activity and the proceeds gained from illegal conduct, are so important to these big, burly gang members that they left their bikes at home. They got in minivans and asked their partners and wives to drive them to the meeting so that they would not lose those possessions.

The CHAIRPERSON (Hon Rick Barker): I call Todd McClay.

Thank you. I had not quite finished talking about the great work of the police in Rotorua and Murupara.

The CHAIRPERSON (Hon Rick Barker): I remind the member that this speech should be a little more about the bill and less about his personal reflections.

In fact, Part 2 refers directly to the role that the New Zealand Police has. I want to give an example of why it is important that the Committee has recognised that the police should play a role here. To finish what I briefly started, I say that the example from Murupara suggests to me that the police can get out and stop gang members from riding their illegally gained motorbikes into a town or a small community. This bill will help them to do this when it passes into law. The police know greatly what they are doing—and they should do.

Paul Quinn also said that criminals will stop at nothing to protect their gains and the gains from crime, and that they will be violent in doing so and will wreak havoc upon society. I accept the intelligent and sage words of my colleague Paul Quinn. I am glad that I have had the opportunity to hear him speak on Part 2 this afternoon, because this is a serious issue for New Zealand. When we come to Part 2 we see that it does a number of things. As I look at the overview—the great work of the select committee—I see it states that Part 1 and Part 2 will “provide for the restraint and forfeiture of property derived as a result of significant criminal activity without the need for a conviction;”.

💬 Simon Bridges: Define “significant”.

Well, “significant” is obvious to those people out there in New Zealand who have suffered at the hands of these criminals. We need to get serious about this issue; we need to not allow criminals to hide behind the current law and to use the law to keep their property. I think Part 1 and Part 2 will go a long way towards this. The overview also states that Part 2 “deals with general matters relating to the criminal proceeds and instruments forfeiture regime;” which is important; it “deals with the restraint of property that may later become the subject of a forfeiture order;”, which is also important; and “it deals with civil forfeiture orders (which are assets forfeiture orders and profit forfeiture orders);”. I am glad that my colleague Simon Bridges spoke at great length on this issue earlier in the evening, particularly on Part 2.

💬 Simon Bridges: He makes it sound like it was boring.

It was an entertaining speech from my colleague from Tauranga; I can see why the people of Tauranga like him so much.

Part 2 deals with civil forfeiture orders, as I have said. Also, it “deals with certain procedural matters associated with conviction-based instrument forfeiture orders;” and “sets out the powers of the Official Assignee;”, and “subpart 6 of Part 2 sets out the powers of the police;”. I think everybody in this Chamber supports the role of the police, and I am glad that the Committee is able to decide that this is an appropriate place for the power to implement the bill. Part 2 “provides for investigative powers for various agencies;”—well, if we do not know what these gangs and criminals are doing and where they are hiding their assets, then how can we find them to take them from them? Part 2 also “deals with foreign restraining orders and foreign forfeiture orders;”.

💬 Simon Bridges: What’s a restraining order?

A restraining order is an order whereby we restrain something, in the simple terms of the law. Finally, it sets out the consequential amendments to the bill. I would like to refer to other parts, but I say to members opposite that yawning, in itself, will not help the people of New Zealand, yawning will not help us move Part 2 forward, and yawning in relation to this bill is part of the reason that members opposite are on that side of the Chamber and not on this side. I happily offer my support for the bill.

💬 Hon Annette King: It happens to be our bill, actually.

I again congratulate the select committee on its good work. I recognise that the bill was put up by the previous Government, but how many years did the bill sit on the Order Paper? It is serious legislation—Part 2 in particular—and the previous Government trumpeted it election after election, but the bill just sat there. Although Part 2 will do the most to implement this law and make New Zealanders safer by getting rid of gangs, the bill languished on the Order Paper for far too many years. I congratulate the Government and the Minister on deciding that the bill must be a priority. I very happily give my support.

I move, That the question be now put.

💬 Paul Quinn: Mr Chairman—

💬 Hon Annette King: This is absolute repetition.

The CHAIRPERSON (Hon Rick Barker): No, I think the speakers so far have been doing all right. I call the honourable Paul Quinn and I hope that he speaks directly to Part 2 with a luminous address.

I indeed intend to talk specifically to Part 2, because previously I had—unfortunately—been unable to finish what I was focusing on, due to running out of time. I turn the Committee’s attention to Subpart 6, “Role of police”, in Part 2 of the Criminal Proceeds (Recovery) Bill. This issue is what I was addressing a little earlier, and I want to highlight the specific fact that it is in Part 2.

I note the common sense that obviously came out of the Law and Order Committee’s consideration in respect of the redrafting of those powers of the police. There is a large amount of redlining in many parts of Subpart 6. I compliment the members of the select committee, particularly the National members, who obviously managed to bring some sense to the issue of the actual authorities that would enforce this legislation, because the previous Government was responsible for first bringing the bill to the House. But during the select committee deliberation, members were able to highlight the fact that the New Zealand Police is the proper authority to deal with this matter, and Subpart 6 spells out quite specifically what can be done. The police can move rapidly to obtain orders and to go to the High Court, because time is of the essence in those sorts of things. The select committee members, particularly the National members—hard-working, loyal members—should be congratulated on driving the change necessary for the Police to be the appropriate authority to deal with this. I congratulate those hard-working, loyal members on bringing sense to the deliberation of the select committee. Thank you.

The question was put that the following amendment in the name of the Hon Simon Power to the amendment set out on Supplementary Order Paper 7 in his name to new clause 154 be agreed to:

to omit “section 149A(3)(a), (b), or (c)” and substitute “section 149A(2)(a), (b), or (c)”.