THE COMMISSIONER OF POLICE v IRWIN [2020] NZHC 1370

THE COMMISSIONER OF POLICE v IRWIN [2020] NZHC 1370 [17 June 2020]IN THE HIGH COURT OF NEW ZEALANDNAPIER REGISTRYI TE KŌTI MATUA O AOTEAROAAHURIRI ROHECIV-2014-441-115[2020] NZHC 1370UNDER the Criminal Proceeds (Recovery) Act 2009IN THE MATTER OF an application under sections 43-44, 49-50,52, 55 and 58 of the Criminal Proceeds(Recovery) Act 2009BETWEEN THE COMMISSIONER OF POLICEApplicantAND DERRICK WAYNE IRWINRespondentAND PRISCILLA ANNE DRUMMONDInterested PartyHearing: 10 June 2020Appearances: F E Cleary for the ApplicantE R Fairbrother QC for the RespondentP Ross for the Interested PartyJudgment: 17 June 2020JUDGMENT OF COOKE JTable of ContentsUnopposed applications [8]Application for relief: Thomas Irwin [13]Did Thomas Irwin have an interest in the ANZ Funds? [17]What relief should be granted? [31]Application for relief: Priscilla Drummond [36]Alleged social welfare fraud [39]The drug offending [46]Conclusion and orders [55][1] By applications dated 9 September 2019 the Commissioner of Police appliesfor related asset and profit forfeiture orders against Mr Irwin pursuant to the CriminalProceeds (Recovery) Act 2009 (the Act).[2] The Commissioner seeks asset forfeiture orders under s 50 of the Act in respectof the following property:(a) $310,060 cash found by police at a property in Te Haroto at MatarikiForest in October 2014.(b) That property itself — 5594 State Highway 5, Te Haroto, Hastings,identifier HBB4/1204, section 1 Block XI, Tarawera Survey District(the Te Haroto property).(c) A 1970 Ford Mustang saloon registration RD1365 valued atapproximately $20,000.[3] An effective control order is also sought under s 58 of the Act in relation to thecash located at the property.[4] In addition the Commissioner seeks profit forfeiture orders under s 55 of theAct representing $793,067.33 in unlawful benefits. The following property is to berealised in satisfaction of that order:(a) An amount of $97,373 in Derrick Irwin's ANZ bank account (the ANZFunds).(b) The Te Haroto property, if an asset forfeiture order is not granted overthat property.[5] The application is supported by affidavits from Gordon Beattie, a financialinvestigator attached to the Central Asset Recovery Unit of the Police, CameronMcIver, an investigator for Fraud Intervention Services with the Ministry of SocialDevelopment and Phillip Sayers, a detective with the New Zealand Police who wasinvolved in the investigation of the relevant drug offending.[6] The orders are unopposed except in two respects. In particular:(a) Derrick Irwin's son, Thomas Irwin, seeks relief against forfeiture unders 66 of the Act in relation to part of the ANZ Funds which represent aparticular fund which he contends was held on trust for him; and(b) Derrick Irwin's de facto partner, Ms Priscilla Drummond, also seeksrelief under s 66 in relation to her share of the relationship property.The relief is only sought in relation to her half share in the Te Harotoproperty and the Ford Mustang vehicle.[7] The opposition to the orders is supported by affidavits from Thomas Irwin andPriscilla Drummond in relation to the opposition advanced by them. Derrick Irwinalso supplied an affidavit in support of his son's opposition. All of the deponents werecalled to give evidence and cross-examined before me. Mr Derrick Irwin did so byvideo link from prison.Unopposed applications[8] I first consider whether the applications to the extent that they are unopposedshould be granted.[9] I am satisfied that Derrick Irwin was engaged in significant criminal activityleading to his conviction for offences relating to the supply and sale ofmethamphetamine in 2018 for which he was sentenced to 13 and a half years'imprisonment.1 I also accept that there may be grounds to say the property inparagraph [2] is tainted property within the meaning of s 5 of the Act allowing for anassets forfeiture order under s 50. But that issue is not necessarily straightforward asboth the Te Haroto property and the Mustang were owned by Derrick Irwin before heengaged in the offending. It seems to me that the profit forfeiture order under s 55 isa more straightforward path for the Commissioner, and I make the orders under that1 R v Irwin [2018] NZDC 7741.application.2 In doing so I adopt the approach adopted in Pulman v Commissioner ofPolice.3 Applying the four steps outlined in that case:(a) I accept the Commissioner's argument, on the balance of probabilitiesthat Derrick Irwin benefited from significant criminal activity, and thatthe value of that activity under s 53(1) was $793,067.33.(b) From that amount should be deducted the value of any property alreadyforfeited to the Crown by any assets forfeiture order already made.Given that there might be arguments as to whether the property subjectto an asset forfeiture order was tainted property I have made no suchorders. It follows that there should be no amount deducted as aconsequence of such orders.(c) I am satisfied that there is no property that should be excluded from theorder with the exception of the property that I identify in paragraph [35]below.[10] I accordingly make a profit forfeiture order under s 55(1) on the basis that I amsatisfied that Derrick Irwin had interests in the property identified in [2] and [4] above.My conclusion that he had an interest in the cash located around the property makesthe effective control order under s 58 unnecessary. The value of the benefit to beobtained is $793,067.33. The property referred to in [2](b) and [2](c) above is to bedisposed of for that purpose.[11] I am also satisfied that the property that is to be disposed of, and the cash thatis available, has less value than the amount subject to the profit forfeiture order,particularly given the relief against forfeiture that I order in paragraph [35] below.[12] For these reasons I make the orders as profit forfeiture orders. Given that thisis a different form of orders proposed by the applicant, I reserve leave to the applicant2 Criminal Proceeds (Recovery) Act 2009, s 47(1)(a).3 Pulman v Commissioner of Police HC Auckland, CIV-2010-404-5666, 27 May 2011.to apply to any implications of making the orders in this form that I have notconsidered.Application for relief: Thomas Irwin[13] Derrick Irwin's son, Thomas Irwin makes an application for relief fromforfeiture in the form of a notice of opposition to the orders sought by theCommissioner. As filed that application was advanced on the basis that the forfeiturein question would cause undue hardship. Following a discussion with counsel at thecommencement of the hearing an amendment was made to that application so that itis an application under s 66 of the Act. The application relates to an amount thatDerrick Irwin received from his late wife's estate, being an amount of $84,269.73.These proceeds came from a life insurance policy that paid out on the death of DerrickIrwin's wife, Thomas Irwin's mother.[14] Section 66 of the Act provides:66 Making order for relief from civil forfeiture order where person hasinterest and was not involved in significant criminal activity(1) On receipt of an application for an order for relief from a civil forfeitureorder under section 61 or 62, the High Court must grant the relief thatthe Court considers appropriate if the applicant proves on the balanceof probabilities that the applicant—(a) has an interest, or would but for any civil forfeiture order have aninterest, in the property to which the application relates; and(b) has not unlawfully benefited from the significant criminalactivity to which the application relates.(2) The High Court may make an order for relief under this section at orafter the time the associated civil forfeiture order is made.[15] There is no suggestion that Thomas unlawfully benefited from the significantcriminal activity under s 66(1)(b). The written submissions by the Commissioneraddressed the question of whether there was undue hardship, but given the amendmentto the application to focus on s 66 there is no requirement to show this.[16] There are two relevant considerations in assessing the application for relief.The first is whether Thomas has established on the balance of probabilities that he hasan interest in the property to which the application relates. The second is what reliefshould be ordered if that interest is established.Did Thomas Irwin have an interest in the ANZ Funds?[17] Section 5 of the Act defines what an interest in property is:interest, in relation to property of any kind (including, without limitation,restrained property or forfeited property), means—(a) a legal or equitable estate or interest in the property; or(b) a right, power, or privilege in connection with the property[18] The evidence provided by Derrick and Thomas Irwin is largely undisputed.There was an insurance policy insuring the life of Thomas' mother, Ms Anna Hawkins.Thomas indicates that he had some chronic health problems and that his mother washis primary caregiver. When Thomas was nearly 10 she had a brain aneurysm anddied before medical assistance was available. Derrick Irwin was serving a prisonsentence at the time. These were obviously difficult circumstances for Thomas.[19] Derrick Irwin made the decision that the life insurance proceeds should pass toThomas. He said in his affidavit "I have always regarded Anna's life insuranceproceeds as belonging to Thomas and nobody else, including me". He explained thisto Thomas as he was growing up. Under cross-examination Derrick indicated that hewas always firm in his intention that that should happen, and I accept that this was hisintention.[20] Derrick did not pay the proceeds into a separate bank account. Rather he paidit into his normal ANZ bank account. They comprise the majority of the ANZ Funds.He gave evidence, which I accept, that he was not commercially experienced andneeded assistance in understanding any paperwork, but always kept the balance of thataccount higher than the amount of the insurance monies that had been paid in. He hadalso received an inheritance from his parents, and that the total amount he had paidinto the account from that inheritance and the insurance proceeds was approximately$150,000. He gave evidence that he also wanted to give Thomas what was left fromthe money he had received from his parents, but that he nevertheless treated thatamount (the difference between the $84,269.73 and the $150,000) as his own money.The life insurance proceeds were different, however, as he treated them as belongingto Thomas.[21] He provided details of how the insurance proceeds were made up. The originalfigure payable for premature death under the policy with Asteron Life was $66,508.At the time of her death it had increased in value $76,444.13. Interest accrued on thatamount until the date of settlement of the insurance claim. An amount of $86,441.74was paid into the lawyer's trust account, and with deductions resulting in a net balanceof $84,269.73 that was paid into the ANZ account.[22] In opposing the application for relief Ms Cleary relied on previous decisionsof this Court that have found that discretionary beneficiaries of a trust do not have aninterest in property meeting the definition in s 5.4 That is because such beneficiariesdo not have an interest in the trust fund itself, they only have what is called an"expectation" that distributions might be made. Ms Cleary argued that approach wasconsistent with general trust law, and the analysis of the position of discretionarybeneficiaries provided by the Court of Appeal in Johns v Johns where the Courtconfirmed that discretionary beneficiaries have a mere expectancy.5[23] I do not think these authorities address the key issue, however. That is becauseit is not suggested that Thomas is a discretionary beneficiary of any trust fund. If thearrangements referred to above did establish a trust over which Thomas was thebeneficiary, he would not have been a discretionary beneficiary. In the authorityMs Cleary relied on, Johns v Johns, the Court of Appeal distinguished between theposition of a discretionary beneficiary, and that of a residual beneficiary who wasentitled to what was left of the trust fund at the date of distribution. The Court heldthat a beneficiary's contingent interest in the residue of the trust fund amounted to afuture interest in the trust property.6 Here Thomas' interest would have beenconditional, but otherwise absolute as the only beneficiary of the fund.4 R v Corless [2013] NZHC 2735 at [82]–[83]; and Commissioner of Police v Winsor [2014] NZHC161 at [40]–[43].5 Johns v Johns [2004] 3 NZLR 202 (CA).6 At [45].[24] The real issue is whether a trust was established at all. This is a suggested trustover personal property — funds in a bank account. The requirements for theestablishment of such a trust are not technical. They are summarised by the authorsof Equity and Trusts New Zealand in the following way:7In general, inter vivos trusts of personal property do not require any particularformal requirements to be met. This is because equity looks to the intent ratherthan the form. All that needs to be established is that the settlor intended tocreate a trust.8 For example, in Belton v CIR B bought and sold sheep in hisson's name.9 The money used was kept in a separate account and the sheepwere grazed apart from B's flocks. Some of the trading profit was used forthe son's benefit. Although B started trading in 1948, it was not until 1957that there was any written evidence of a trust. The Commissioner of InlandRevenue argued that a trust had not existed until 1957. If the trust had beenestablished in 1948, B obtained certain taxation advantages. The court heldthat all that was required for the creation of an express inter vivos trust ofpersonal property was the "three certainties": it was not necessary for anythingto be in writing. The court held that on the facts a trust had existed since 1948.[25] The three certainties are: the intention to create a trust (noting there is no needfor the word "trust" to actually be used — rather it is the intention to create a trust inthe equitable sense);10 certainty in relation to the subject matter — namely whatproperty is to be the subject of the trust and the beneficiaries interest in that subjectmatter;11 and certainly in terms of objects — namely who is to receive the benefit ofthe trust and on what basis.12[26] Applying those requirements I am satisfied that a trust was established in thepresent case. The case of Belton v Commissioner of Inland Revenue summarisedabove provides a useful comparison.13 The question needs to be looked at realistically.Mr Derrick Irwin was a member of the Mongrel Mob, and a drug dealer. He was notcommercially sophisticated. The fact that he did not open a separate bank account intowhich to pay funds to be held for the benefit of his son is not particularly relevant inthose circumstances. What is truly relevant is his intention, and that is manifested bynot only his evidence, but also what happened with the funds. The balance of his bank7 Andrew Butler Creation of an express trust in Andrew Butler (ed) Equity and Trusts inNew Zealand (2nd ed, Thomson Reuters, Wellington, 2009) at 4.4.3(1).8 See 4.2.9 Belton v Commissioner of Inland Revenue [1959] NZLR 1372 (HC).10 Andrew Butler, above n 7, at 4.2.2.11 At 4.2.3.12 At 4.2.4.13 Belton, above n 9.account did not fall beneath the insurance proceedings received, and therefore intrudeinto the trust funds over a number of years. The background circumstances, includinghis wife's unfortunate premature death at a time when Derrick Irwin was in prison,with his son left without either of his parents, also provides circumstantial evidenceexplaining why this would have been Derrick Irwin's intention. Mr Irwin explainedthat he had intermittent involvement in his son's upbringing, and that his son had hisown family and appeared to be devoted to the welfare of his partner and their children.He indicated that his success to date reflected his "mother's considerable influence onhis upbringing and values". I found his evidence on the question honest, andstraightforward.[27] Ms Cleary relied on the fact that monies were intermingled in the account, andmonies were paid out of the account for other non-trust related matters. I accept thatthat is relevant, but it is not decisive in determining whether a trust existed overparticular funds. The point is met by the evidence that established that Mr Irwin neverlet the balance fall beneath the core trust fund. I accept that this factor means that anyinterest earned on the core fund may not be able to be identified and be treated as trustproperty. But that core amount of $84,269.73 was still held on trust.[28] The other certainties required for the existence of a trust were also satisfied forthe above reasons. Thomas was the sole beneficiary, and the fund was to be receivedby him absolutely. There were two conditions that needed to be satisfied before thatoccurred. The first was that Thomas needed to attain adulthood. He wasapproximately 10 when his mother died. He was 17 when the orders were first madein this proceeding restraining the proceeds. He is now 23. I accept that this conditionwas that he would receive the fund when he attained the age of 21 years.[29] Derrick Irwin also indicated that a further condition was that he was "able todemonstrate a constructive, law abiding lifestyle" and that this was also commonknowledge between him and his son. When he gave evidence Thomas effectivelyconfirmed this, describing the position in more condensed form was that "I needed togrow up". He explained to me that it was not easy to be the son of a Mongrel Mobmember and not be drawn into that lifestyle, as some of his school friends have. Iinterpret the condition to be that he not engage in a criminal lifestyle.[30] For these reasons I accept that a trust was established over the fund of$84,269.73 held in Mr Derrick Irwin's account with the ANZ bank, and that Thomaswas entitled to be distributed the trust funds once he attained 21 years of age providedthat he had not adopted a criminal lifestyle. Thomas has satisfied both conditions, andis now entitled to those funds absolutely. He therefore had an interest in the ANZFunds to this extent.What relief should be granted?[31] The next question is what relief should be granted in Thomas' favour unders 66.[32] Once the prerequisites for obtaining relief under s 66 are met, the Court has awide discretion to make orders that it thinks appropriate in a particular case. It seemsto me that the relevant considerations may include:(a) The nature of the person's interest in that property. For example anabsolute interest would be more compelling than a partial or conditionalinterest.(b) The circumstances that give rise to the interest in property. There maybe circumstances that make it very unfair for the person not to beentitled to the interest that is held because of the circumstances in whichit was established.(c) The extent to which the criminal activity gave rise to, enhanced, orpreserved the value of the property in question. Consideration mightbe given to limit the relief if the criminal activity has improved orsustained the value of the interest.(d) The needs of the person seeking to have the interest recognised.[33] In saying that, however, I do not think that there should be any prescriptiverequirements, and the Court should be guided by doing justice in the individual case.[34] I have very little hesitation in concluding that Thomas Irwin should be entitledto the full amount of his interest in the property, being the amount of $84,269.73. Hehas had challenges in life, and notwithstanding that his father was in the Mongrel Moband was involved in drug dealing, he has managed to avoid falling into a criminallifestyle himself. He now has a job and a family. Inter-generational criminality is afeature of matters that come before the Courts. Thomas deserves considerable creditfor avoiding the cycle. Some of this appears to be due to Derrick's encouragement,and also his mother's values. But he alone has had the strength of character to find abetter life, and he deserves to be encouraged in that, including by this Court makingorders to avoid his trust fund being confiscated because of his father's criminalactivities.[35] The application sought that all of the ANZ Funds be paid out to him, but thisis not appropriate given that only part of them represents the funds on trust. Inevertheless order under ss 66 and 68 that the amount of $84,269.73 is severed fromthe amounts subject to the forfeiture order, and I direct the Official Assignee to transferthe severed interest to Thomas Irwin.Application for relief: Priscilla Drummond[36] For some nine or 10 years Ms Priscilla Drummond was in a de factorelationship with Derrick Irwin and lived with him at the Te Haroto property. Sheclaims an interest in the property to be forfeit as a result of her entitlements under theProperty (Relationships) Act 1976. Initially the application included the property alsoclaimed by Thomas. But in the course of the argument before me the applicationbecame more confined, and was limited to her half share in the Te Haroto property andthe Ford Mustang vehicle.[37] The application is again made under s 66 of the Act. Here the central issue isnot so much whether she had an interest in the relevant property. It is clear that shehad such an interest in the Te Haroto property under the Property (Relationships) Act1976.14 There is doubt whether she has an interest in the Ford Mustang vehicle, which14 See Hayward v Commissioner of Police [2014] NZCA 625 at [26].may have been Derrick Irwin's separate property, but given the conclusions I reachbelow I do not formally determine that question.[38] The real issue is whether Ms Drummond is able to establish, on the balance ofprobabilities that she "has not unlawfully benefited from the significant criminalactivity to which the application relates" under s 66(1)(b).Alleged social welfare fraud[39] I deal first with a discrete allegation made by the Commissioner in relation tosuggested social welfare fraud. During her relationship with Derrick Irwin bothcontinued to claim the sole parent benefit. That was not appropriate as they wereliving together. The Commissioner contends that this was part of the significantcriminal activity to which this application relates.[40] Significant criminal activity is defined in the Act in the following terms:6 Meaning of significant criminal activity(1) In this Act, unless the context otherwise requires, significant criminalactivity means an activity engaged in by a person that if proceededagainst as a criminal offence would amount to offending—(a) that consists of, or includes, 1 or more offences punishable bya maximum term of imprisonment of 5 years or more; or(b) from which property, proceeds, or benefits of a value of$30,000 or more have, directly or indirectly, been acquired orderived.(2) A person is undertaking an activity of the kind described in subsection(1) whether or not—(a) the person has been charged with or convicted of an offence inconnection with the activity; or(b) the person has been acquitted of an offence in connection withthe activity; or(c) the person's conviction for an offence in connection with theactivity has been quashed or set aside.(3) Any expenses or outgoings used in connection with an activity of thekind described in subsection (1) must be disregarded for the purposesof calculating the value of any property, proceeds, or benefits undersubsection (1)(b).[41] No charges relating to social welfare offending have been laid against eitherMs Drummond or Mr Irwin. The evidence is that there is an ongoing investigation.The fact that no charges have been laid does not mean that there was not significantoffending, however.15[42] It is possible that social welfare offending can be charged as criminal offendingunder the Crimes Act 1961, and effectively meet the requirements of s 6(1)(a) as aconsequence. Before me the Commissioner did not identify any specific offences ofthis kind, at least in any direct way. But the evidence from the witness from theMinistry of Social Development, Mr McIver, outlined the level of net overpaymentMs Drummond and Mr Irwin are said to have received. In his affidavit he saidMs Drummond's net overpayment was $61,228.65 which is higher than the thresholdreferred to in s 6(1)(b) of the Act. When he came to give evidence, however, helowered that amount to $53,654.63.[43] It became apparent during cross-examination, however, that whilstMs Drummond was not entitled to the sole parent support entitlement, she was entitledto a benefit that she did not claim, namely the Job Seeker entitlement. Mr McIveraccepted that he had not made a calculation of what she would have been entitled tofor Job Seeker support. When I asked him whether the amount that she would beentitled to might be similar to the amount that she was said to have been overpaidMr McIver said that he was not sure. When I put to him that if there was any netbenefit it would be substantially less than the $53,654.63 he said that that was quitepossible.[44] It is the Commissioner that has the burden of proof, on the balance ofprobabilities, to establish that the relevant significant criminal offending occurred. Iam not satisfied that the Commissioner has established that there has been significantcriminal offending from which benefits of $30,000 or more were obtained. IfMs Drummond had gone to Social Welfare and reported the change in hercircumstances it may well be that her benefits would have remained similar. It is alsonot clear to me that Ms Drummond benefitted from any social welfare offending by15 Criminal Proceeds (Recovery) Act 2009, s 6(2)(a).Mr Irwin. For the purposes of more serious offending in the nature of fraud, asopposed to the less serious offending such as wilfully omitting information, I am alsonot satisfied that the relevant elements of the offending have been shown to have beenestablished, even on the balance of probabilities.[45] For these reasons I put to one side the alleged social welfare offending. Itseems to me that the application of s 66 turns on the drug dealing offending engagedin by Derrick Irwin.The drug offending[46] As I have already found, Mr Derrick Irwin was engaged in significant drugdealing and is now serving a lengthy prison sentence as a consequence. That drugdealing generated significant income that was used by both him and Ms Drummond.The only other income came from their social welfare benefits, and more minoractivities conducted by Mr Irwin such as selling firewood, pinecones, and theoccasional deer.[47] It is not disputed that Ms Drummond benefited from the proceeds of the drugdealing activity. She was responsible for paying their utility bills such as power,telephone and Sky. All the other expenses involved in their life together came fromcash generated from the drug dealing activities and the social welfare payments. WhenMs Drummond required money he provided her with cash.[48] I accept the evidence of both Mr Irwin and Ms Drummond that Ms Drummondwas not involved in the drug dealing activities, and that the couple did not talk aboutit. Moreover both of them gave evidence that Ms Drummond insisted that whenpeople came to visit the house, and particularly Mongrel Mob members, Mr Irwin notbring them inside. I accept that she did not want to be involved in whatever they weredoing, and did not want her children to be exposed to this activity.[49] It is for this reason that an arguable basis arises that Ms Drummond "has notunlawfully benefited for the significant criminal activity" under s 66(1)(b). She mustestablish this requirement on the balance of probabilities. Mr Ross relied on theCommissioner of Police v C as a comparable situation.16 A person unlawfully benefitsfrom the criminal activities when they have knowledge that the offending is producingthe benefit. In addition wilful blindness is enough to satisfy the requirement forunlawfulness. In Vincent v Commissioner of Police the Court of Appeal said:17[52] It is clear from his discussion of the authorities that Priestley Jappreciated that the test is a subjective one. He referred to the decisions of thisCourt in R v Martin18 and Diver v Locktronic Industries Ltd,19 where theconcept of wilful blindness is discussed in criminal and civil contexts. Bothcases identify the subjective elements, as the Judge noted: the person musthave his or her suspicions aroused (for example, be aware that a particularstate of affairs may exist) and must deliberately refrain from making enquiryin order to avoid learning whether the suspicion is justified. On the evidence,there is no doubt that Mrs Ashby did have concerns about the source of themoney as she asked Mr Vincent about it. He told her that LondonUnderground's party pill business was legal. But Priestley J considered thatMrs Ashby's suspicions remained and that she deliberately refrained frommaking further enquiry because she was concerned at the nature of theresponse.[50] In the present case I heard evidence from the officer in charge of theinvestigation, and from the financial investigator attached to the Asset Recovery Unit.Some of that evidence appeared to be opinion evidence in nature, and Mr Ross startedcross-examining them to challenge the opinions expressed. It is not unusual foraffidavits filed in proceedings under this Act to contain such material, which may beof assistance in connection with the initial applications to restrain proceeds or otherproperty. But when it comes to the questions required to be answered by the Courtunder s 66, such expressions of opinion have little relevance and are argumentative innature. The facts that emerge from an investigation are material, and there is nodifficulty with evidence of those facts being provided to the Court. But the drawingof conclusions based on the facts, or the provision of other kinds of opinion, are notlikely to be. I indicated during the course of the cross-examination that I was notassisted by those opinions, or the cross-examination of the witnesses in relation tothose opinions. I base my conclusions primarily on the evidence of Ms Drummondand Mr Derrick Irwin in light of the facts emerging from the investigation.16 Commissioner of Police v C [2018] NZHC 3334.17 Vincent v Commissioner of Police [2013] NZCA 412.18 R v Martin [2007] NZCA 386 especially at [10]–[11].19 Diver v Locktronic Industries Ltd [2012] NZCA 131, [2012] 2 NZLR 388.[51] I am not satisfied that Ms Drummond is able to prove on the balance ofprobabilities that she has not unlawfully benefited from the criminal activity. Thecircumstances clearly put Ms Drummond on notice that significant criminal activitywas likely occurring, and was the likely source of the funds she benefited from, butshe deliberately refrained from asking questions about it. This meets the concept ofwilful blindness referred to above. I say that for the following reasons:(a) Significant drug dealing activity was taking place from the property.That involved Mongrel Mob gang members, and other persons,regularly visiting the property to further the drug dealing activities. Shewas aware that he was a patched member of the Mongrel Mob gang.At her insistence Mr Irwin was required to deal with these peopleoutside. It would have been clear to Ms Drummond that this was gang-related business, and that it was illegal. As she said in cross-examination, she "didn't want to know" about it. In of itself thisinvolved a degree of wilful blindness.(b) She was aware that this activity was drug-related, as Mr Irwin boughtdrugs into the house as a consequence. She was a methamphetamineuser herself. There was a difference between Ms Drummond andMr Irwin as to how much she consumed. He gave evidence that shewas a daily user, but she said it was more occasional. The extent of theuse is not a major point. What is relevant is that she was aware that thebusiness that Mr Irwin was engaged in with the Mongrel Mob memberswho came regularly to the house was drug-related.(c) Mr Ross argued that Ms Drummond would only have understood thatMr Irwin was a buyer, and not a seller of the drugs. That strikes me asa rather fine distinction on the issue of wilful blindness. A question alsoemerges in terms of where Mr Irwin was getting the money supportingtheir relationship from. Ms Drummond knew that their lifestyle wasbeyond their means of social welfare beneficiaries. Her explanationwas that she knew that he had received a substantial inheritance, andthat this was the source of the funds. Mr Ross argued that for her the$150,000 inheritance would have seemed like an enormous amount.But it is also apparent that Mr Irwin supplied her the money in cashrather than deposits into a bank account. I do not accept her explanationin cross-examination that he would have been going into town andwithdrawing the cash, then returning to the house to deliver it to her inthat form. It would have been apparent to her that the cash was likelythe product of the activities associated with the gang members and thedrugs. I also note Mr Irwin's evidence that she would have been awarethat he had previously been in prison for drug offending.(d) Ms Drummond accepted that she had warned Mr Irwin when she sawpolice on the road. The police had text messages that showed this. Thatwould have been because she was aware that he was engaged in illegalactivities. I do not accept her explanation that she was warning himbecause he might otherwise get speeding tickets.(e) It is also relevant that the property was extensively used for drugdealing activity. Apart from the regular visits to the house by theMongrel Mob members, the property was also used for the storing ofmoney, drugs, and firearms located in containers concealed in theoutdoor areas dotted around the property. That included $310,060 incash. It is unlikely that Mr Irwin could have successfully been involvedin hiding such materials around the property in containers withoutMs Drummond having any knowledge which would have aroused hersuspicions.(f) Any doubt about the extent of her knowledge is removed fromMr Irwin's evidence, who said that Ms Drummond would have beenaware he was engaged in drug dealing activity because of the extent ofthe drugs and cash around the house. He explained that he kept thecash in their bedroom, and that she sometimes saw the cash, and alsooccasionally saw him counting it. He accepted, however, that theynever directly talked about the drug dealing activities. I do not acceptMr Ross's argument that this evidence implicating Ms Drummond wasmotivated by Mr Irwin's ill-will towards her, particularly in connectionwith her application being inconsistent with that made by his son in thisproceeding. If he wished to give untrue evidence defeating her claimfor relief it would have been very easy for him to say that he fullyexplained the drug dealing activity to her. But he did not. As I say, Ifound his evidence truthful. I cannot say the same for all ofMs Drummond's answers.[52] Mr Ross emphasised that Ms Drummond was young, and naive. She isnoticeably younger that Mr Irwin. But she was in the relationship with Mr Irwin forsome time, and presented as a person not without abilities under cross-examination.It is unrealistic to suggest that she was not put on notice that Mr Irwin was engaged insignificant drug offending with other Mongrel Mob members generating the incomeon which they lived.[53] For these reasons I am not satisfied on the balance of probabilities thatMs Drummond did not unlawfully benefit from significant criminal activity. I havesome sympathy for her as she is now alone and without the benefit of relationshipproperty. But on the other hand she has significantly benefited from this drug dealingactivity over the nine or 10 years of their relationship, and she must have been awareof the kind of activity Mr Irwin was engaged in, and that it was the source of the moneythat funded their lifestyle.[54] Accordingly for these reasons her opposition to the Commissioner'sapplication based on s 66 is dismissed.Conclusion and orders[55] Accordingly for the reasons outlined above I make the following orders:(a) Profit forfeiture orders are made under s 55 on the following basis:(i) the maximum value to be obtained is $793,067.33;(ii) no property is to be deducted from that value under s 54;(iii) the property referred to in [2](b) and [2](c) above is to bedisposed of to meet the profit forfeiture order, and the otherproperty referred to in [2] and [4] above may be accessed tosatisfy the order.(b) An amount of $84,269.73 is to be severed from the amount to be forfeitto the Crown, and is to be paid to Thomas Irwin under s 66.(c) The remainder is to be vested in the Crown under the control of theOfficial Assignee.[56] The Commissioner has leave to apply to alter, or otherwise vary the orders bythe filing of memoranda.Cooke JSolicitors:Elvidge & Partners, Napier for the ApplicantE R Fairbrother QC, Napier for the RespondentCathedral Lane Law, Napier for the Interested Party