The fine adds to a substantial penalty imposed by the District Court
The Auckland High Court has slapped a Korean doctor and his lawyer with $130,000 in civil penalties for attempting to obstruct an investigation by the Overseas Investment Office (OIO).
The fine is in addition to penalties imposed by the District Court back in February 2020.
The OIO’s investigation involved the purchase of a $3m Helensville property by medical doctor Dr Won Joo Hur in July 2016. Although a permanent resident of New Zealand, Hur had not spent the required amount of time in the country to be considered “ordinarily resident.” Thus, at the time of the purchase he was characterised as an “overseas person” under the Overseas Investment Act.
Due to his status, Hur had to obtain consent from the OIO before acquiring an interest in the property. On failing to receive the requisite consent, he engaged Dr Jaeho Choi as his lawyer.
Choi suggested that Hur nominate HK Search Limited, a New Zealand company directed by Choi’s wife, as the purchaser – a suggestion Hur followed despite receiving legal advice that this arrangement breached the Overseas Investment Act.
The NZ Herald reported that when the OIO began to investigate the purchase the following year, Hur and Choi sent a fictitious loan agreement backdated to September 2016 in a bid to corroborate their story and throw investigators off.
Hur eventually admitted to the pair’s lies and was fined $100,000 by the District Court. Choi was slapped with a $62,500 penalty and suspended from legal practice for five-and-a-half months.
High Court Justice Sally Fitzgerald imposed additional civil penalties of $100,000 and $30,000 on Hur and Choi, respectively. She found that while the District Court fines reflected different conduct to that at issue in the current proceedings, they added to the “overall financial burden” for Hur and Choi.
Fitzgerald noted that Hur’s acts were based on Choi’s advice, and thus it was “appropriate to categorise his conduct as negligent rather than anything more culpable.” She also commented on the “common ground” that the maximum civil penalty Choi could afford to pay was $30,000 and said the regulator had “no interest in bankrupting” the lawyer.
“This has been a long-running investigation leading to action being taken in both the criminal and civil spheres,” said Simon Pope, Toitū Te Whenua Land Information New Zealand enforcement manager, in a statement published by the Herald.
“To keep themselves safe, overseas investors can make sure that any purchase agreements they enter into are subject to consent from the Overseas Investment Office. That's a simple act that can prevent these kinds of penalties.”
