COMMISSIONER OF POLICE v KEEN & ANOR [2020] NZHC 3365

COMMISSIONER OF POLICE v KEEN & ANOR [2020] NZHC 3365 [16 December 2020]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2016-485-968[2020] NZHC 3365UNDER the Criminal Proceeds (Recovery) Act 2009IN THE MATTER of an application under sections 22, 24 and25BETWEEN THE COMMISSIONER, THE NEWZEALAND POLICEApplicantAND TONY ROBERT KEENFirst RespondentWENDY JANE MILLIGANSecond RespondentAND ANZ BANK NEW ZEALAND LIMITEDInterested PartyHearing: 24 November 2020Counsel: A W M Britton and S McCusker for ApplicantV C Nisbet and E Blincoe for First RespondentL C Ord for Second RespondentJudgment: 16 December 2020JUDGMENT OF ELLIS J[1] On 5 November 2015, Police twice searched the respondents' home at2A Huia Street, Masterton.1 In one bedroom they found two "grow" tents, containinga total of 12 cannabis plants and 6 cannabis seedlings. Elsewhere, they found 72 g of1 There were two searches: one warrantless and one warranted. Both searches were later held to beunlawful but the evidence obtained from the earlier (warrantless) search was ruled admissibleunder s 30 of the Evidence Act 2006.dried cannabis in four snap-lock bags, 18 tinnies, some cut tin foil, some scales, and atwenty dollar note.2[2] During the second (warranted and more intrusive) search, Police found in thefridge a "Kinder Surprise" egg containing 18.5 g of cannabis oil. Also in the kitchenwere empty plastic drums of isopropyl alcohol3 and a large stainless steel tray thatcontained cannabis oil residue.4[3] No cash (apart from the $20 note—later returned by Police) was found at thehome during the Police searches, and there was no evidence in the form of otherproperty or lifestyle that suggested spending out of the ordinary.[4] The first respondent, Mr Keen, was interviewed by Police immediatelyfollowing the search. Relevantly, he said:(a) He had undertaken three "grows" in the previous seven to eight monthperiod, of which the last was by far the most successful. He denied anycultivation activity before then.(b) He did not sell cannabis but would sometimes give it to friends.(c) He was trying to keep his cannabis consumption down to two or threefoils a day, and he was using methamphetamine a couple of times aweek.(d) He was out of work but had been doing some cash jobs; he had recentlyhad to sell an expensive car (a Camaro) to help make ends meet.(e) He took responsibility for a message on the second respondent'sFacebook (which had been found open at the time of the search) askingif he had any "green".2 Under Schedule 5 of the Misuse of Drugs Act 1975 it is presumed that an excess of 28 g ofcannabis is for the purposes of supply.3 This can be used to prepare cannabis oil.4 The evidence of Detective Sergeant Dombroski explains that it is common for those cultivatingcannabis to also produce cannabis oil in order to make maximum profit from their plants.[5] The second respondent, Ms Milligan, had been sick in bed at the time of thesearches. She later told Police that the cannabis operation had nothing to do with herand that she did not use the drug herself. She said she had asked Mr Keen not to growit in the house, but he would not listen to her.[6] The Commissioner of Police (the Commissioner) was on 6 December 2016granted a without notice restraining order over 2A Huia Street under the CriminalProceeds (Recovery) Act 2009 (the CPRA). The order was made on notice inFebruary 2017. The Huia Street property was alleged to be "tainted",5 and Mr Keenand Ms Milligan were also said to have unlawfully benefited from significant criminalactivity.[7] Mr Keen on 21 February 2017 pleaded guilty to charges of cultivation andpossession of cannabis for the purposes of supply. He was sentenced by Judge Morristo six months' community detention and nine months' supervision.6 On2 November that year, Mr Keen's partner, Ms Milligan, was convicted and dischargedon one charge of allowing the property to be used for the cultivation of cannabis.[8] The Commissioner then, on 4 March 2019, applied for profit forfeiture ordersunder the CPRA against Mr Keen and Ms Milligan. In the application (as amended atthe hearing before me), he says that Mr Keen and Ms Milligan received an unlawfulbenefit of $239,5207 from significant criminal activity—the cultivation and supply ofcannabis. The only property liable to forfeiture is the 2A Huia Street property.8Approach to profit forfeiture order applications[9] Section 55(1) of the CPRA states that the Court must make a profit forfeitureorder if it is satisfied on the balance of probabilities that:5 Defined in the CPRA as any property that has been acquired or derived from significant criminalactivity (see s 5).6 R v Keen [2017] NZDC 13459.7 As explained later, this figure was later slightly reduced by the Commissioner.8 There is now no suggestion that the Huia Street property is, itself, tainted; it was acquired by thecouple 15 years ago with legitimate funds. Nor is there any suggestion that any profit from thesupply of cannabis has been used to pay the mortgage or on improvements.(a) the respondent has unlawfully benefited from significant criminalactivity within the relevant period of criminal activity; and(b) the respondent has interests in the property sought to be forfeit.[10] The Court must first determine whether the Commissioner has proved (on thebalance of probabilities) that the respondent has unlawfully benefited from significantcriminal activity during the relevant period. That requires that the respondent hasknowingly, directly or indirectly, derived a benefit from significant criminal activity.It does not matter if they personally undertook, or were involved in, the activity.Wilful blindness is sufficient to meet the knowledge requirement.[11] If that threshold is met, then, under s 53(1), the value of that benefit ispresumed to be the value stated in the Commissioner's application.[12] This presumption may nonetheless be rebutted by a respondent, again on thebalance of probabilities. As the Court of Appeal recently confirmed in Cheah vCommissioner of Police, it is not enough for the respondent to rebut the valuenominated by the Commissioner or to critique the methodology relied on. Therespondent must prove a different value.9 The Court recognised that while this burdengives rise to some potential for harshness, the respondent will always be best placedto explain not only in what respects the Commissioner's assessment is wrong, but alsowhat the correct figure should be.[13] But the presumption does not in my view mean that the Commissioner cansimply pluck a figure randomly out of the air and then require a respondent to callevidence to disprove it. That would constitute an arbitrary and wrongful exercise ofstatutory power. Rather, I would suggest that there must be a prior evidential burdenon him to show the basis for the amount of the unlawful benefit claimed. Indeed, thatis what the Commissioner invariably does. And if it becomes apparent—either as aresult of the respondent's evidence, cross-examination of the Commissioner'switnesses, or simply as a matter of logic—that the presumed figure is wrong andanother figure is (on the balance of probabilities) right, then the respondent will have9 Cheah v Commissioner of Police [2020] NZCA 253 at [47].discharged the reverse onus. Whether the Court then deals with the matter byamending the application under s 47 (as suggested by the Court in Cheah) or bymaking its own assessment based on the evidence as a whole, will depend on thecircumstances of the case.[14] Once the value of the benefit has been established (whether by the operationof the presumption or the rebuttal of it), the Court must then determine the "maximumrecoverable amount" by subtracting the value of any property that has already beenforfeited.[15] Then the Court must consider whether any property should be excluded fromthe operation of the profit forfeiture order because undue hardship is likely to becaused to the respondent (or any person who has not unlawfully benefited from thesignificant criminal activity).[16] Finally, the Court must make a profit forfeiture order if satisfied, on the balanceof probabilities, that the respondent has interests in property.Amendment to the unlawful benefit figure in this case[17] The $239,520 figure specified in the application was based on the Police's viewthat Mr Keen had grown and sold cannabis for the three years between the loss of hisjob in early 2013 and his arrest in late 2015. That assumption was, I think, initiallybased on Mr Keen's admissions that his own cannabis use had increased markedlyover that period and that he had a lot of spare time on his hands. But later, particularreliance was also placed on a statement made by the sentencing judge that:10[4] The probation report speaks of someone who was out of work forsome three years, and it is during this time that your addiction to cannabisaccelerated and during that time that this commercial operation grew.[18] I return to the significance of that statement later.[19] In terms of how the $239,520 figure was arrived at:10 R v Keen, above n 6.(a) The evidence of Sergeant Dombroski (a Police drug expert) was that:(i) the price of $350 an ounce (28 g) referred to in Mr Keen's textmessages was a standard price, with (1 g) tinnies selling for $20;(ii) plants such as those found growing at Huia Street could beexpected to yield between 3.5 and 5 ounces (or 100–150 g) ofcannabis;(iii) the method of growing used at Huia Street can yield four or fiveharvests a year (the plants at different stages of maturity foundat the address representing three such potential harvests); and(iv) the estimated value of all the cannabis found (both growing anddried) at Huia Street—depending on whether it was sold intinnie form or by the ounce—was between $19,460 and$34,260, plus $500 in cannabis oil.(b) Mr Graham Beattie (a Police financial investigator) then calculated thelikely past benefit of Mr Keen's cultivation operation. He said:If a similar amount had been grown at the potential yield of 4harvests a year, this would provide a benefit of between$77,840 and $137,040 per year.(c) The lower $77,840 figure was then multiplied by three11 to give$233,520. To this was added $6,000, to represent 12 cannabis oil salesof $500 each, giving the $239,520 total.[20] The Commissioner acknowledged at the hearing of the application that this$239,520 included the value of the dried cannabis, cannabis plants, and oil seized byPolice. Those items were part of the grows for year three from which Mr Keen couldnot be said to have received any benefit. The Commissioner therefore reduced the$239,520 figure by the value of the seized cannabis plants and products, giving a new11 On the assumption that Mr Keen had been cultivating cannabis for supply at the same level forthree years.unlawful benefit amount of $204,760. As counsel for the Commissioner noted at thetime, that concession was a generous one, because the initial figure was based on thelower Dombroski value, whereas the deduction was based on the higher Dombroskivalue.[21] I made a direction under s 47 of the CPRA that the civil forfeiture orderapplication be amended to substitute new unlawful benefit figure.[22] During closing submissions, however, a further issue about the unlawfulbenefit figure was flagged by counsel for Mr Keen. Upon specific inquiry from meafter the hearing, it become clear that it was necessary to make a further amendment.That was because the values taken from Sergeant Dombroksi's evidence ($19,460 to$34,260 for the cannabis found at the house) did not represent the value of a singlegrow, but rather the value of a little over three grows (the potential value of the plants,which were at three different stages of maturity, and the dried remainder of a previousgrow). It seemed to be wrong, and inconsistent with Sergeant Dombrowski'sevidence, to multiply his two figures by four to get the annual unlawful benefit figure,as Mr Beattie had done. That seemed to me to be not simply a matter of critiquing theCommissioner's methodology, but a fundamental error.[23] Counsel for the Commissioner later confirmed the error and advised his revisedcalculations, as follows: over the three year period of alleged significant criminal activity, theunlawful benefit to the respondents fell between $73,500-$105,000.Subtracting the value of the five mature cannabis plants and dried cannabishead seized of $34,260 produces and unlawful benefit figure between$39,240-$70,740.[24] The Commissioner did not go on to nominate a specific figure to be substituted.In light of his earlier (and in my view proper) approach—consistently adopting thelowest available figure—I now amend the application and substitute a new unlawfulbenefit figure of $39,240. That figure is also the maximum recoverable amount interms of s 54. And it is that figure that the respondents now bear the onus ofdisproving, on the balance of probabilities.[25] In my analysis below, I deal with the position of each of the respondentsseparately.Mr KeenDid Mr Keen unlawfully benefit from significant criminal activity?[26] There is no dispute that the cultivation and possession of cannabis for supplyqualifies as significant criminal activity; Mr Keen's 2017 conviction on that chargeestablishes this element.12 But the conviction does not, by and of itself, establish eitherpast supply or unlawful benefit.[27] Both these matters are confirmed, however, by Mr Keen's evidence at thehearing, which was largely consistent with his 2015 statement to police and (a littleless so) his subsequent affidavit. Mr Keen's position (which, as a matter of fact, Iaccept) has consistently been that he was growing cannabis for his own use or to swapfor methamphetamine. Certainly the latter would qualify as an unlawful benefit, butthe position in relation to the former is less clear and was not addressed by counsel.13In any event, the texts put to him under cross-examination—which spanned the one-month period just before the November 2015 search—also show a number of requestsmade to Mr Keen to buy cannabis and (rather fewer) offers to sell made by him. Thegoing rate was either $340 or $350 an ounce. And during cross-examination there wasalso the following exchange:Q. you were selling some of this cannabis for money?A. Yes I did.Q. And if you took the definition of commercial that it's a transcript oryou know you're growing for money that's in the sense what you weredoing?A. I was actually growing for personal use. People wanted some, Iwanted to swap what they had, their product, yeah.Q. But end of the day you were selling some of that cannabis for cash?A. But I didn't intentionally grow it to sell it.12 Because possession for supply is an offence punishable by five or more years' imprisonment.13 The value of the cannabis used by Mr Keen personally would presumably constitute an unlawfulbenefit derived from relevant significant criminal activity, namely cultivating cannabis.Q. But as a spinoff you were, would you say, that some of that cannabiswas being sold for money?A. A little bit.[28] Accordingly, the real issue in Mr Keen's case is whether he has rebutted thepresumed value ($39,240) of the unlawful benefit he received.Has Mr Keen rebutted the presumed unlawful benefit of $39,240?[29] Whether the presumption can be rebutted essentially depends on whether I amsatisfied on the balance of probabilities that Mr Keen did not grow cannabis:(a) on the scale alleged by the Commissioner (namely on a scale that isreflected in the number of plants found during the Police search); and/or(b) from the beginning of 2013, which was the starting point for theCommissioner's analysis.[30] The first point can immediately be put to one side; although he consistentlymaintained that he was growing largely for his own use, Mr Keen did not claim thatthe former grows had been on a smaller scale.[31] As to the second point, Mr Keen's evidence was that he was not engaged inany cultivation before 2015 and that in that year he undertook three grows. He saidthe first of these was ruined by mites and the second also had mite issues, although hewas able to harvest some low grade "cabbage", which he only smoked himself.[32] On this last point, I accept the evidence of Sergeant Dombroski that theremainder of (what Mr Keen said was) the second grow was of a considerably higherquality than Mr Keen would have it. As well as Sergeant Dombroski's undoubtedexpertise, the photos of the bagged cannabis clearly indicate a good quality crop. Butbecause of the concession recorded at [20] above (that the potential sale price of thecannabis found during the search is not counted as part of the unlawful benefit) thismakes no difference to the presumed amount.[33] The more difficult question relates to the duration of Mr Keen's growingactivity. In that respect the Commissioner sought to fortify his position that Mr Keenhad been cultivating for supply for the three years before the search in late 2015 byreference to:(a) Mr Keen's sentencing notes;(b) Mr Keen's tax records;(c) Mr Keen's estimated methamphetamine use over that three-year period,and the funds he would have needed to fund that habit;(d) unexplained cash deposits in the couple's bank accounts totalling a littleover $17,000; and(e) two cash purchases, totalling $400, made at Countdown by Ms Milliganshortly after the search of the property and seizure of the cannabis.[34] I address each in turn.Sentencing notes[35] Based on the passage from Judge Morris' sentencing notes, quoted at [17]above, the Commissioner submitted that Mr Keen had himself admitted that his"commercial" operation was related to, and coincided with, his increased spare timeand increased personal use of cannabis after the loss of his job in 2013.[36] In my view, however, it is drawing a long bow to interpret this passage asreflecting any kind of acceptance by either the Judge or Mr Keen that he had beengrowing cannabis commercially since 2013. The statement was expressly based onthe advice in Mr Keen's Provision of Advice to Courts (PAC) report, which (in fact)stated:[Mr Keen] advised that after losing his employment approximately three yearsago his cannabis use increased significantly due to being depressed and havingplenty of spare time, thus resulting in the growing operation to provide for hisincreased use. He advised that he normally smoked 5-6 'tinnies' per dayduring this period.[37] Given that the PAC report was written in February 2017, Mr Keen's referenceto losing his job "approximately three years ago" suggests only that he had beenunemployed since the beginning of 2014 (not 2013). And while it does suggest thatthere was some connection between the evolution of his growing operation and hisunemployment, there is nothing to suggest that they precisely coincided. Rather, it isgenerally consistent with Mr Keen's narrative of the operation evolving slowly overtime, initially at least as a result of his own increased use.Tax records[38] Mr Keen's tax records show no declared income from the end of the 2012/13tax year (that is, from 31 March 2013). This assists in establishing the start date forhis unemployment. By and of itself it is of no real assistance is establishing the startof his cannabis growing operation. That depends on a specific temporal link betweenthe two events being supported by other evidence.Methamphetamine spending[39] When Mr Keen was first interviewed by Police, he admitted to smokingmethamphetamine. When asked how often he smoked it, he said, "lately been a coupleof times a week". In his later affidavit, Mr Keen's evidence was that he had beenusing about two points (0.2 g) a month for two or three months before his arrest.[40] But Ms Milligan's affidavit evidence was that at the point of their arrestMr Keen had been in the throes of a methamphetamine addiction for some time, whichhe had funded by the sale of a Camaro motor vehicle. That evidence was notinconsistent with what Mr Keen had first told Police, and it was later corroborated byinquiries made by them, which showed that the sale of the vehicle occurred in April2013. Police confirmed that the sale price was $33,000, of which $10,000 was paidin cash. Mr Keen and Ms Milligan also said that he had sold his Harley Davidsonmotorbike for around $12,500 at about this time.1414 Although there was evidence of the bike having been advertised for sale by Mr Keen on Trademe,there was no independent evidence as to whether or when it had been sold, or for what price.[41] Evidence was called by the Commissioner that a methamphetamine habitinvolving the consumption of two points a week over the course of year would cost$10,400.15 I accept that evidence and also that Mr Keen's methamphetamine usagewas likely in that order. And I find that while Mr Keen's habit in 2013 may (asMs Milligan said) have been funded by the sale of one or both vehicles, by early 2014the position had changed. This is consistent with other objective evidence about thecouple's straitened financial circumstances in 2014. Based on Sergeant Dombroski'sevidence I consider that, from the beginning of 2014 until the end of 2015, therespondents would have needed an extra $10,400 a year to support Mr Keen'smethamphetamine use.Cash deposits[42] I begin this part of my analysis by noting that Ms Milligan had a full-time job(working in a bank) during the period in question. By 2015, her salary was in thevicinity of $70,000 a year. While it could not be suggested that the couple was welloff (particularly in light of the cost of Mr Keen's addiction), there was a legitimatesource of income from which they could meet their living costs. The presentcircumstances are not, therefore, the same as those found in many profit forfeiturecases, where a respondent simply has no explanation (other than the illegal activitysaid to give rise to the unlawful benefit) as to how day-to-day expenses costs weremet.[43] Similarly, there is no evidence of any of the ordinary indicia of a longstandingor profitable drug supply business. Ms Milligan drives a 20-year-old car. Their homeand chattels are very modest. There is no suggestion of extravagance of any kind. Nocash (apart from the $20 note that was later returned to Mr Keen) was found at thehouse or elsewhere. This is not a case where the Court is faced with lavish expenditureand a respondent who is unable to explain how it was funded.[44] But now the question of the unexplained deposits. Although Police analysedthe couple's bank accounts from the beginning of 2013 to just after their arrest in15 Sergeant Dombroski's evidence at the hearing was that a point of methamphetamine can yieldbetween four and eight "hits".November 2015, there were no unexplained cash deposits identified until 2 December2013. That is consistent (in my view) with Mr Keen funding his drug habit during2013 from the proceeds of the vehicle sales and inconsistent with (or at least notsupportive of) any cash proceeds from cannabis sales during that year.[45] But from 2 December 2013 until the end of November 2015, there were23 unexplained cash deposits made into Ms Milligan's bank account, totalling$17,665. Of these:(a) there are seven (five of which are for sums between $1000 and $1500)between March 2014 and August 2015 that bear the notation "TKwages";16(b) there is a deposit of $1,600 with the notation "Sarah" made on10 August 2015; and(c) there are two for $1,000 made a week apart over the 2013/14Christmas/New Year period.[46] I accept the explanation given by Ms Milligan (who was in charge of thecouple's finances and made the deposits) for all the deposits just mentioned. She saidthat the notation "TK wages" was an abbreviation of "Tony Keen wages" and signifiedthat the deposits were cash Mr Keen had received from doing under-the-tableplastering jobs.17 As noted earlier, Mr Keen acknowledged to Police from the outsetthat he had been undertaking such jobs. The fact that he chose not to pay tax on themis neither here nor there, for present purposes at least. There was also corroboratingevidence from Mr Keen himself and from Ms Milligan's father as to the source ofsome of those jobs.[47] The suggestion that these notations were part of some sort of ruse, in case theaccounts might one day be scrutinised defies common sense. If that had been so, onewould expect all the cash deposits to be so annotated. And with no disrespect intended,16 The other two are for $380 and $2520.17 Plastering is Mr Keen's trade.neither Mr Keen nor Ms Milligan strike me as sophisticated enough to engage in acalculated deception of that kind.[48] I also accept Ms Milligan's evidence that:(a) The notation "Sarah" was also a reference to money received byMr Keen for a cash plastering job done for friends; and(b) The two $1,000 deposits made a week apart in December 2013 andJanuary 2014 represented the price received from the sale of twopuppies bred by Ms Milligan.18[49] Removing these explained amounts from the calculations leaves unexplaineddeposits totalling $4,055:2 December 2013 $78517 January 2014 $30024 March 2014 $35012 May 2014 $20026 May 2014 $20011 August 2014 $18010 September 2014 $10029 September 2014 $10020 October 2014 $34017 July 2015 $1,500[50] It is difficult not to dismiss these deposits as de minimis. Nonetheless, it mustbe accepted that they do coincide with the period in which—based on the otherevidence—I find that Mr Keen's cannabis growing operation took off in earnest.18 Again, there was quite detailed corroborating evidence from both Mr Keen and Mr Milligan aboutthe dogs, which I found plausible.One Card records[51] Other evidence produced by the Commissioner was the analysis ofMs Milligan's One Card records over a two-year (2014/15) period. These showed thaton two occasions over a three-year period she paid for groceries in cash.19 Thecombined total of the purchases was $411.70. I also regard these as de minimis, andindicative of no more than that the purchases were made using cash.Conclusion: amount of unlawful benefit[52] I do not accept Mr Keen's evidence that there were only three grows or thatthese were limited in time to the seven to eight months before his arrest. But I doconsider that the respondents have rebutted the presumption to the extent that I amsatisfied that no unlawful benefit was obtained from any cannabis growing operationuntil the beginning of 2014.[53] Based on Sergeant Dombroski's evidence, therefore, I find that:(a) There were eight grows (the last of which is the seedlings seized);(b) Based on the Commissioner's latest calculations20 those grows give riseto an unlawful benefit amount of $49,000 ($24,500 per year);(c) Subtracting the value of the cannabis seized ($34,760) gives a totalunlawful benefit of $14,240.[54] Those figures are consistent with, and account for, the cost of Mr Keen'smethamphetamine addiction and also subsumes the residual amount of theunexplained deposits.[55] So the presumption is rebutted to that extent. I find the value of the unlawfulbenefit obtained by Mr Keen is $14,240. That is also the maximum recoverableamount.19 Both occasions were after the 5 November search.20 As noted at [23] above.Ms MilliganDid Ms Milligan unlawfully benefit from the significant criminal activity?[56] While the Commissioner acknowledges that Ms Milligan was not directlyinvolved in Mr Keen's cultivation and supply of cannabis, he says that she knowinglyderived a benefit from his significant criminal activity and therefore received anunlawful benefit for the purposes of s 7 of the CPRA.[57] I agree with the Commissioner that, although Ms Milligan may not have beenhappy about it, she must have known that Mr Keen was involved in the qualifyingcriminal activity. More particularly:(a) it would have been evident from paraphernalia of the sort found in theliving room of the property—plastic bags, scales, and tin foil—thatMr Keen was supplying cannabis and not just growing it for hispersonal use; and(b) Ms Milligan allowed her mobile phone and her Facebook account to beused by Mr Keen to communicate with customers for the sale ofcannabis.[58] Ms Milligan's conviction for permitting the house to be used by Mr Keen forthe cultivation of cannabis supports that view. At best, it could be said that she waswilfully blind to what was going on under her roof.Amount of the unlawful benefit[59] The unlawful benefit enjoyed by Ms Milligan must be the same as that enjoyedby Mr Keen: $14,240. The simple reason for that is that couple had joint finances; abenefit received by one of them—either in money or money's worth—was a benefitto them both. So, for example, if Mr Keen sold or swapped cannabis formethamphetamine that he then smoked, that was of benefit to Ms Keen because thatwas an expense that did not need to be met out of their joint account.[60] And again, the maximum recoverable amount is $14,240.Undue hardship[61] Both Mr Keen and Ms Milligan have applied under s 56 of the CPRA for anorder excluding the 2A Huia Street property from the reach of the assets forfeitureorder. They each hold a half-share in the property.[62] Section 56 of the CPRA relevantly provides:56 Exclusion of respondent's property from profit forfeiture orderbecause of undue hardship(1) The High Court may, on an application made by the respondent beforea profit forfeiture order is made, exclude certain property from beingable to be realised under section 55(2)(c) if it considers that, havingregard to all the circumstances, undue hardship is reasonably likely tobe caused to the respondent if the property were realised.(2) The circumstances the Court may have regard to under subsection (1)include, without limitation,—(a) the use that is ordinarily made, or was intended to be made,of the property that is, or is proposed to be, the subject of theprofit forfeiture order; and(b) the nature and extent of the respondent's interest in theproperty; and(c) the circumstances of the significant criminal activity to whichthe profit forfeiture order relates.[63] I do not propose to deal with the relevant authorities on "undue hardship" inany detail here; the principles are well known. The threshold is high. The claimedhardship must be disproportionate. The need for deterrence is said to outweigh theneeds of the wrongdoer. And the fact that a respondent may, as a result of a forfeitureorder, become reliant on the State for housing during a housing crisis is, apparently, oflittle consequence.[64] Even applying these rather swingeing and unforgiving principles, however, Iconsider undue hardship has been made out by both Mr Keen and Ms Milligan here.The significantly reduced quantum of the unlawful benefit favours them greatly interms of disproportionality as does the nature and seriousness of their offending. Onany analysis, it is at the lowest qualifying level; their sentences (or, in Ms Milligan'scase, the absence of any sentence) makes that clear.[65] I make the following, additional, "proportionality" points:(a) The house is the respondents' family home and was purchased by themfrom legitimate funds over 10 years ago. It is now worth in the vicinityof $400,000, although the respondents have a mortgage of around$150,000.(b) Given their age and current employment status, and Ms Milligan'shealth (discussed below), it seems highly unlikely that the respondentswould ever be able to buy back into the housing market, if this propertyis lost to them.(c) The (admittedly limited) evidence also suggests that they would not beable to rent an equivalent house in Masterton for the amount of theircurrent mortgage payments. They would need to seek further Stateassistance.(d) Mr Keen's offending was plainly driven by his addiction and the lossof his job. His more recent ability to obtain employment has beenaffected by the COVID-19 pandemic.(e) Notwithstanding that the law requires me to conclude that Mr Keen andMs Milligan have enjoyed an unlawful benefit from their offending, thefact of the matter is that pretty much the entirety of it has been smokedby Mr Keen.[66] As well, it is not disputed that Ms Milligan has experienced severe physicaland mental health issues since 2015. I do not propose to detail her afflictions here. Isimply record that she is undoubtedly vulnerable and, although one aspect of hermedical troubles has recently been resolved, there remains an underlying conditionthat can only be treated, not cured. I do not accept the suggestion that the loss of herhome would not exacerbate this illness; it is impossible to see how it would not. Nordo I accept the Commissioner's proposition that, due to the ongoing financial pressuresthe couple is under, it might come as a relief to them to have their house forfeit.2121 The submission was that: "The making of the forfeiture order sought may in fact have the effectof reducing any hardship experienced by Mr Keen and Ms Milligan – forfeiture will have the[67] Undue hardship is, accordingly, established here.[68] For completeness, I record that I would also have found undue hardshipestablished had the quantum of unlawful benefit been in the Commissioner's higherpresumed amount of $39,240.Result[69] In terms of s 55 of the CPRA, I make the following orders:(a) the respondents have unlawfully benefited from significant criminalactivity (the cultivation and supply of cannabis) during the relevantperiod of criminal activity;(b) the respondents have interests in property, namely the property situatedat 2A Huia Street and described in certificate of title WN665/67, legaldescription Lot No 9 Deposited Plan 17879;(c) the value of the benefit determined under s 53 is $14,240;(d) the maximum recoverable amount under s 54 is $14,240; and(e) under s 56, the respondents' interests in the property situated at 2A HuiaStreet and described in certificate of title WN665/67, legal descriptionLot No 9 Deposited Plan 17879 is excluded from the order and may notbe disposed of under s 55(2)(c), on the grounds that undue hardship islikely to be caused to the respondents if the property were realised bythe Crown.____________________Rebecca Ellis JSolicitors:Luke Cunningham and Clere, Wellington for ApplicantVal C Nisbet, Wellington for First RespondentOrd Legal, Wellington for Second Respondenteffect of releasing them from a financial burden which they have been unable to satisfy for asubstantial period of time."