The Commissioner of the New Zealand Police v Harrison - [2021] NZCA 540

Date of Judgment

18 October 2021

Decision

The Commissioner of the New Zealand Police v Harrison (PDF 269 KB)

Summary

Ms Harrison was convicted of dishonesty offences involving the misappropriation of a large sum of money from her employer.  In April 2019 the Commissioner of Police obtained final assets and profit forfeiture orders against Ms Harrison under the Criminal Proceeds (Recovery) Act 2009.  Those orders did not include her KiwiSaver account because the High Court had ruled that was protected from enforcement action by s 127 of the KiwiSaver Act 2006.  In 2020 Ms Harrison who had by that time been deported to England sought to have her KiwiSaver funds released on grounds of significant financial hardship.  A partial release was approved, following which funds totalling $23,000 arising from the sale of assets in the relevant KiwiSaver scheme were credited to a bank account in the name of the Public Trust pending transfer to Ms Harrison’s UK bank account.   

On the eve of the transfer to Ms Harrison, the Commissioner applied without notice to the High Court for a restraining order over the $23,000.  Following an urgent hearing, the High Court determined that the $23,000 was no longer protected by s 127 of the KiwiSaver Act and granted the without notice restraining order but suggested the Commissioner give thought to converting the proceeding to one seeking a freezing order under the High Court Rules. 

The Commissioner then filed an on notice restraining order application along with an alternative freezing order application in relation to the $23,000.  Ms Harrison successfully opposed those applications in the High Court. The High Court found it had no jurisdiction to grant either application. 

The Commissioner then appealed to this Court. 

The Court has dismissed the appeal and awarded costs to Ms Harrison.  The Court’s reasons were as follows: 
(a)  It is not possible under the Criminal Proceeds (Recovery) Act to obtain a restraining order after final forfeiture orders have been made. 

(b) A debt owing under a profit forfeiture order may be enforced through the means of a freezing order against property acquired by a respondent even although the property in question was not specified in the forfeiture order. To the extent that the decision of this Court in Doorman v Commissioner of Police decided otherwise, we consider it was wrong and should not be followed. 

(c) In this case however, a freezing order is not available to the Commissioner, because for so long as the $23,000 remains in the Public Trust account, it is still being held under the terms of the trust deed of the particular KiwiSaver scheme of which Ms Harrison is a member and it still forms part of her member’s account. That means s 127 of the KiwiSaver Act 2006 does still apply to preclude any enforcement action. 

In the judgment, the Court also observed that the issue of the relationship between the Criminal Proceeds (Recovery) Act and the KiwiSaver Act requires urgent legislative attention. It says that apart from the fact scenario that arose in this case, another crucial matter that needs to be addressed is what happens when KiwiSaver members turn 65.  As matters currently stand, the Court said it was not persuaded there are compelling reasons to treat KiwiSaver schemes as so sacrosanct as to be beyond the reach of the Crown under the Criminal Proceeds (Recovery) Act.  However, that was not the case before the Court and in any event given the competing policy considerations and the importance of avoiding further delay and uncertainty, may well be an issue best resolved by Parliament.