Singaporean couple's tax evasion scandal unveiled, court costs sought

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

A Singaporean couple whose million-dollar tax evasion was discovered after their assets were frozen due to their son’s drug trafficking, have applied for court costs and damages.

William Cheng and partner Nyioh Chew Hong are the father and stepmother of former Gisborne man Thomas Cheng, who was arrested in 2016 for drug importation and dealing.

The couple, who live overseas, became entangled in Cheng junior’s case here because companies with which they are associated own 15 buildings in New Zealand — several of them in Gisborne. Those assets, along with $10 million in the couple’s New Zealand bank accounts, were frozen back in 2016 during the early stages of the criminal investigation into Cheng junior.

Police suspected the couple’s assets were part of a much greater criminal enterprise that included money laundering. Following Cheng junior’s conviction, the Commissioner for Police applied to the High Court for $20 million worth of those assets to be forfeited to the Crown under proceeds of crime law.

However, a High Court judge ruled in March this year that the couple’s wrongdoings were limited to tax evasion. And that that wrongdoing could not be linked to Cheng junior’s offending. The judge did not accept the Commissioner of Police’s contention that the couple’s assets should be used to make up a shortfall of about $470,000 towards the $512,000 profit forfeiture order against Cheng junior.

That said, the couple had landed themselves in a “world of trouble” with the Inland Revenue Department (IRD), Justice Francis Cooke said. A $1.6 million debt for income and GST tax they evaded had ballooned to more than $11.4 million in tax, penalties and interest.

Four days after the judgement was released, the couple wrote a memo to the court seeking costs and damages, which they claimed Justice Cooke had “overlooked”.

“We are not seeking costs for the court hearing held on February 13, 2023 — as we were not represented by any lawyer at said hearing — but we are seeking costs and damages for the whole seven-year action taken and initiated by the applicant (the Commissioner of Police)”.

“We wish to advise the honourable court that we had incurred various costs (like disbursements, professional lawyers fees, etc paid to date) and damages (resulted from the applicant’s restrain orders) in defending the seven years action.

“We therefore humbly seek for an order that costs and damages be agreed upon between us and the applicant, failing which (they) be assessed by the court.”

In April they filed a notice of appeal against the High Court’s decision not to award them damages and costs.

Justice Cooke addressed the issues in a second judgement released online recently.

He said there was no basis on which the High Court could award damages in relaton to the conduct of proceedings. Any such claim would have to be in a separate proceeding, and there was no basis for that here anyway.

As the couple themselves acknowledged, their decision not to instruct counsel or participate in the Police Commissioner’s profit forfeiture application proceedings, meant they were ineligible for any reward in relation to it. The only application they could make was for costs for the earlier stages of the  proceedings but they were ineligible for any recompense there as it was the Commissioner of Police who was successful in those early stages  — not them.

For example, the Commissioner had successfully applied for a continuation of the restraining order over the assets.  Accordingly, the court had awarded costs and disbursements to the Commissioner.

This was not a situation where the couple could be entitled to costs. Rather costs had been awarded against them, Justice Cooke said.

Finally, he noted that the couple had complained the amounts initially restrained by the court had not been released to them. However, that was because they had lodged an appeal, not a consequence of any decision by the Court.

Recovery of the couple’s tax debt is now in the hands of the IRD.

Thomas Cheng was sentenced to 13 years six months imprisonment for his drug offending, which continued for a time even while he was in prison. He is due to be released on parole and deported later this month.