POLICE v WISELY [2020] NZHC 2941

POLICE v WISELY [2020] NZHC 2941 [6 November 2020]IN THE HIGH COURT OF NEW ZEALANDDUNEDIN REGISTRYI TE KŌTI MATUA O AOTEAROAŌTEPOTI ROHECIV-2018-412-000103[2020] NZHC 2941BETWEEN THE COMMISSIONER OF POLICEApplicantAND KELVIN BRUCE WISELYRespondentHearing: 28 July 2020 and 5 August 2020Appearances: M J Grills for the ApplicantM A Stevens QC for the RespondentJudgment: 6 November 2020JUDGMENT OF NATION JIntroduction[1] On 17 July 2017, the Police intercepted $39,000 in cash sent by Mr Wisely toan associate in payment for four ounces of methamphetamine.[2] On 19 July 2017, the Police executed a search warrant at Mr Wisely's addressat Clutha. They found a purpose-built commercial cannabis growing operation behinda false internal wall in the three bay barn. In a freezer at his house, they found 26.5grams of methamphetamine. Digital scales and bags associated withmethamphetamine dealing were located in the kitchen. Cash of $25,110 was locatedin the master bedroom. Also on 19 July 2017, a thermos flask containing three ouncesof methamphetamine was intercepted by Police en route to Mr Wisely's address.[3] In 2018, Mr Wisely pleaded guilty to charges of supply and possession forsupply of methamphetamine, conspiracy to supply methamphetamine, possession ofcannabis for supply and cultivation of cannabis. On 12 March 2018, he was sentencedto imprisonment for seven years and 10 months.[4] The Commissioner has pursued an application for assets forfeiture and profitforfeiture orders under the Criminal Proceeds (Recovery) Act 2009 (the Act). TheCommissioner seeks forfeiture orders in respect of the benefit he says Mr Wiselyobtained from dealing in methamphetamine and cannabis cultivation and dealing inthe sum of $233,737.50.The legal context[5] With this application, the Commissioner must prove, on the balance ofprobabilities, that Mr Wisely has, in the relevant period of criminal activity, unlawfullybenefited from significant criminal activity.[6] The relevant period of criminal activity on this application was the period thatstarted seven years before 16 November 2018, the date the application was made fora restraining order.[7] Significant criminal activity means an activity engaged in by a person that, ifproceeded against as a criminal offence, would amount to offending:1(a) that consists of, or includes, 1 or more offences punishable by amaximum term of imprisonment of 5 years or more; or(b) from which property, proceeds, or benefits of a value of $30,000 or morehave, directly or indirectly, been acquired or derived.[8] There is no dispute that Mr Wisely was engaged in significant criminal activitywithin the relevant period. The Commissioner proceeds on the basis Mr Wisely wasinvolved in the alleged way with methamphetamine dealing, and cannabis cultivationand dealing in the period between March 2016 and his arrest on 19 July 2017.[9] "Benefit" means gross receipts rather than profits.2 The Act defines "benefit"as including "proceeds and property" and specifies that any "expenses or outgoings1 Criminal Proceeds (Recovery) Act 2009, s 6(1).2 Cheah v Commissioner of Police [2020] NZCA 253 at [24].used in connection with [qualifying significant criminal activity] must be disregardedfor the purposes of calculating the value of any [qualifying] property, proceeds, orbenefits".3[10] Section 53 of the Act provides:53 Value of benefit presumed to be value in application(1) If the Commissioner proves, on the balance of probabilities, that therespondent has, in the relevant period of criminal activity, unlawfullybenefited from significant criminal activity, the value of that benefit ispresumed to be the value stated in—(a) the application under section 52(c); or(b) if the case requires, the amended application.(2) The presumption stated in subsection (1) may be rebutted by therespondent on the balance of probabilities.[11] Relevantly, s 55 of the Act states:55 Making profit forfeiture order(1) The High Court must make a profit forfeiture order if it is satisfied on thebalance of probabilities that—(a) the respondent has unlawfully benefited from significant criminalactivity within the relevant period of criminal activity; and(b) the respondent has interests in property.(2) The order must specify—(a) the value of the benefit determined in accordance with section 53;and(b) the maximum recoverable amount determined in accordance withsection 54; and(c) the property that is to be disposed of in accordance with section83(1), being property in which the respondent has, or is treated ashaving, interests.[12] Section 55(1) and (2) are subject to s 56. The High Court may exclude certainproperty from the profit forfeiture order if it considers that, having regard to all the3 Criminal Proceeds (Recovery) Act, ss 5(1) and 6(3); Cheah v Commissioner of Police, above n 2,at [24].circumstances, undue hardship would result to Mr Wisely if his property had to besold. Mr Wisely has made an application under s 56. I discuss that further below.4[13] Here, the benefit stated in the application was $242,389.81. That figureincluded the amount of a benefit paid to Mr Wisely by the Ministry of SocialDevelopment for approximately 27 weeks from June 2016, being $8,652.31.[14] The Crown's application for a profit forfeiture order was based on Mr Wisely'sconvictions for dealing in methamphetamine and cannabis cultivation and dealing, andnot the alleged unlawful obtaining of an unemployment benefit. On the hearing of theapplication, the Commissioner sought to amend the benefit as stated in the applicationto $233,737.50. This was consistent with the amount calculated as the value of thebenefit Mr Wisely had received, less the amount of the unemployment benefit. Theapplication is amended accordingly so is to be considered on the basis the benefit, asstated in the application, is $233,737.50.[15] Mr Wisely has the burden of rebutting the statutory presumption that hebenefited to the value of $233,737.50. Accordingly, Mr Wisely has to adduce evidencewhich establishes, on the balance of probabilities, what the actual amount of his benefitwas.5[16] The property which the Commissioner asks the Court to refer to in a profitforfeiture order is Mr Wisely's residential property at 215 Circle Hill Road, Circle Hill,Clutha. The rateable value of that property at 1 September 2017 was $335,000. It wassubject to a mortgage on which $211,338.03 was owing as at 14 October 2019.[17] The Commissioner says the maximum recoverable amount for the purposes ofs 54 is $208,627.50. That is the amount of the claimed benefit, less the $25,110 cashthe Police had seized and was forfeited by an order of Judge Crosbie at Mr Wisely'ssentencing on 12 March 2018.4 At [116]-[124].5 Cheah v Commissioner of Police, above n 2, at [48].[18] The Commissioner relied primarily on an affidavit from Detective Gillespie.A forensic accountant, Andrew Robert Hugel, in an affidavit, also analysed relevantbanking records obtained by Detective Gillespie. Mr Wisely filed two affidavits. BothDetective Gillespie and Mr Wisely were cross-examined at the hearing of thisapplication.[19] The primary issue before me is whether Mr Wisely's evidence was sufficientto rebut the statutory presumption and, if so, to what extent.Background[20] On 19 July 2017, Mr Wisely was 48 years of age. He had a conviction forpossessing cannabis from 1999 and for cultivating cannabis from 1996. He had aconviction for possession of cannabis plant for supply from 2006. On 22 January2016, he purchased a four hectare residential lifestyle block at Clutha for $330,000with a mortgage from the ANZ. He was then employed as a truck driver for DynesTransport. His application for a mortgage for the purchase of 215 Circle Hill Roadwas based on his then employment with Dynes Transport. On 11 June 2016, whiledriving a car, Mr Wisely failed alcohol breath testing procedures. This resulted in hissixth drink driving conviction. He was unable to continue working as a truck driverfrom that time. He was later disqualified from driving for a year and a day from 23August 2016.[21] Mr Wisely swore an affidavit on 8 June 2020 in opposition to the application.In it he confirmed he was sentenced for the drink driving offence on 23 August 2016,received nine months' supervision with four months' community detention, and a 12months and one day disqualification. He was to be on community detention until 23December 2016 and was disqualified from driving until 24 August 2017. He receiveda payment of $4,785.22 from Dynes Transport at the end of his employment with themon 15 June 2016, which included his last pay and holiday pay. He said he worked atthe freezing works, Finegand Balclutha, for three months from January 2017, then atthe Waitahuna Goldmine as a digger operator at $25 an hour for 12 hour days, two orthree days a week. He said his income from this was $200 net a day. He said thismeant he was "on the edge financially". The mortgage payment owing fortnightlywas $573.59 and there were other expenses. He said during the period he was on thebenefit it barely covered the mortgage and his credit card was used to pay other billslike insurance, food, power, phone and transport. He said his credit card balance as at9 December 2016 was $14,340.77 owing. He said he then idiotically decided he couldsell drugs to give him a safety buffer economically rather than be under the stress ofliving on the financial edge.[22] Mr Wisely said he decided to sell drugs when he was working at Waitahunawhere he could only get two to three days work a week and so was making no headwayon the credit card debt. He said he was approached by a woman while he was stillworking to see if he wanted to "sell some stuff with an enticing profit margin". Hewas then put in contact with the Hamilton supplier. It was arranged he would receivethe first shipment of two to three ounces "on tick" and have three weeks to pay it.Benefit from cannabis offending[23] The evidence of Detective Gillespie was that, in March 2016, Mr Wisely madea $100 purchase from Hyalite Ltd, a hydroponics supplier. At the same time, therewere other purchases from garden supply companies, along with numerous cashwithdrawals. In April 2016, Mr Wisely paid Genesis Energy $105, presumably for hismonthly power bill. In May 2016, his power bill was $404. Based only on electronicbill payments for power, Mr Wisely's power consumption averaged $401 per monthuntil July 2017. Detective Gillespie considered this a strong indicator that Mr Wisely'scannabis growing operation was running from early May 2016. This would haveallowed for an additional three cycles over what had been described in the summaryof facts. Detective Gillespie said that the finding on 19 July 2017 of dried cannabisplant, some 214 grams, indicated there had been at least two cycles of the cultivation.[24] Detective Gillespie said, on the basis Mr Wisely had been involved in cannabiscultivation for 15 months, from the time of his purchase and highlighted powerconsumption increase, Mr Wisely would have obtained a benefit of $32,200 fromcannabis cultivation over that period.66 See [48] of this judgment.[25] In his first affidavit, Mr Wisely said Detective Gillespie over-estimated theyield from his cultivation of cannabis. He said the grow the Police found was hisfourth. He said his first cannabis grow was pretty bad and he could not do much withit. His second was a bit better. The third was his first decent one. He said:I was an amateur and clearly like everything it takes practice. I must have gotabout 22 ounces of cannabis and I sold some ounces, smoked a bit and theremainder, the seven and a half ounces was seized by the Police.[26] He said his electricity bill at $400 a month was for lighting, coolers, chestfreezer, stove and fridge. He said he was growing cannabis for about 10 months andfrom roughly September 2016. He accepted he sold about 14 ounces at $400 an ounce.[27] In a second affidavit of 20 July 2020, Mr Wisely said his first commercial growwas from eight clones. He said the first crop had a spider mite and the crop was afailure. He said the second crop was cuttings from the first grow but he must haveunwittingly transferred the mites and this crop failed as well. He said, before the thirdgrow, he obtained a spray to avoid another mite activity. He said 11 plants flourished,he picked the cannabis and obtained about two ounces per plant. He said he had sevenounces left from this grow at the time of his arrest, after he had smoked and sold about15 ounces. He accepted he had sold 15 ounces at $400 an ounce.[28] Through adopting a calculation made by his counsel, Mr Wisely claimed thebenefit he obtained from cannabis should be on the basis he had sold 15 ounces at$400 an ounce, that is $6,000.[29] Detective Gillespie considered the cultivation of cannabis for sale likely beganaround the time of the purchase from the hydroponics business in March 2016 and theincrease in the cost of electricity consumption from that time. Consistent with thatand from what had been observed with the cannabis grow in July 2017, he estimatedthere had been four growing cycles, concluding with what was observed in July 2017.Mr Wisely himself acknowledged four growing cycles, consistent with DetectiveGillespie's analysis.[30] With his reply affidavit, Detective Gillespie had annexed the brief of evidencefrom Detective Sergeant Boucher. In a statement of 19 July 2017, he provided expertevidence as to the evidence of the commercial growing operation he had observed,concluding:In my opinion this was a sophisticated commercial operation utilising the threestage cultivation method. It was apparent to me that it was not the first timeWISELY had cultivated cannabis and that based on the set up and theassociated costs involved it was likely to be an ongoing commercial operationif left un-detected.[31] Mrs Stevens QC said this evidence was hearsay and should not be admitted.Ms Grills for the Commissioner said, before the hearing, she had asked Mrs Stevensif Detective Boucher was required to give evidence in person and be available forcross-examination. She had been told this was not necessary.[32] Mrs Stevens relied on statements and a photograph associated with DetectiveBoucher's statement when presenting arguments in support of Mr Wisely's case.[33] I consider Detective Boucher's statement was admissible evidence pursuant tos 18(1) Evidence Act 2006. It was prepared by a detective, conscious it was to be usedin criminal proceedings. What he said was not subject to challenge by counsel. Thecircumstances relating to the statement provide reasonable assurance his statementwas reliable. He was not available as a witness at the hearing before me because MrWisely's counsel indicated he did not have to be available for cross-examination.[34] In any event, the nature of the grow was detailed in the summary of facts whichMr Wisely had accepted with his guilty plea to the cultivation charge. What was foundwould not appear to have been cultivation by an "amateur" as Mr Wisely claimed. Inthe summary it was referred to as a purpose-built commercial cannabis growingoperation.[35] The grow was located in the one locked bay of a free-standing three bay barn.It was in a fully enclosed hidden room behind a false wall. Shelving had beenconstructed for storing products commonly found in the cloning and cultivation ofcannabis plants. An old fridge had been converted into a cloning chamber for growingcannabis plants from clones with fluorescent lighting on the top shelf and a heat padon the bottom shelf. Within the room, Mr Wisely had erected an indoor growing tentcomplete with operating high-density discharge lights, carbon filter and centrifugalfan.[36] In his second affidavit, Mr Wisely denied the cannabis cultivation was asophisticated commercial operation, utilising the three-stage cultivation method. Hedescribed the cannabis cultivation beginning with his purchasing eight clones andgrowing his first crop in pots in one room with light on a timer, a fan and manualwatering. He did not provide any detail as to when he built the false wall or when andhow he developed the grow facility to the way it was in July 2017.[37] Had there been a complete failure of the first two cycles of cannabiscultivation, it is hard to see why he would have proceeded to put in place the elaboratesetup that was found by the Police.[38] In his second affidavit, Mr Wisely said the first two crops failed completelybecause of spider mites. In his first affidavit of 8 June 2020, Mr Wisely only said:My first cannabis grow was pretty bad, could not do much with that, mysecond was a bit better, the third my first decent one. The grow the policefound was my fourth.There was none of the detailed evidence about spider mites causing a complete failureof the first and second crops.[39] As is apparent from the summary of facts, when first spoken to by the Police,Mr Wisely claimed what they found was his second cultivation and the cannabis wasfor personal use.[40] I do not accept that Mr Wisely was a novice grower as he claimed. He had aprevious conviction for cultivating cannabis from 15 January 1996. He was able toset up a sophisticated commercial cannabis growing operation and admitted to fourcycles of cultivation. The photographs produced with Detective Boucher's statementillustrate just how sophisticated it was. Mr Wisely did not suggest in his evidence thathe needed the assistance of anyone else to establish this setup.[41] There was evidence of a purchase from a hydroponics business in March 2016.Despite the loss of an income from his employment as a driver in June 2016, there wasevidence of significantly increased cash deposits to Mr Wisely's bank accounts fromSeptember 2016.[42] There have been significant inconsistencies in Mr Wisely's descriptions of theduration, extent, success and purpose of his cannabis cultivation. There have beenother instances where I find the evidence he has given in response to theCommissioner's case has been dishonest and/or unreliable.[43] In submissions for Mr Wisely, Mrs Stevens suggested there were a number ofshortcomings in the evidence provided for the Commissioner as to the proceedsobtained from cannabis cultivation and sales. For instance, she said his calculationassumed that earlier grows were successful when there was no direct evidence of this.She said there was inadequate evidence from which to conclude Mr Wisely'selectricity use was out of the ordinary.[44] The fact a small container of a spider mite herbicide was photographed in thearea of the grow when it was searched by the Police does not provide a sufficientevidential basis to conclude, even on the balance of probabilities, that Mr Wisely wasgiving honest or reliable evidence in saying the first two grows failed completelybecause of spider mites.[45] Counsel's criticisms however overlook the way the Act must be applied andinterpreted. As other courts have referred to, the explanatory note to the CriminalProceeds (Recovery) Bill 2007 explained, with this legislation, the onus was placedon a respondent to establish the value of profit derived from significant criminalactivity because of the difficulty of obtaining evidence showing the unlawful originsof profit or property.7 With the presumption referred to in s 53(1), the Commissionerwas not required to prove the extent to which Mr Wisely benefitted from significantcriminal activity. How the Commissioner calculated the benefit relied upon wasstrictly irrelevant. It was not for the Commissioner to prove, on the balance of7 Commissioner of Police v Tang [2013] NZHC 1750 at [21]-[22]; Cheah v Commissioner of Police,above n 2, at [28].probabilities or otherwise, the amount Mr Wisely received or to justify how the amountrelied on was calculated. It was not enough for Mr Wisely to critique aspects of theCommissioner's methodology.8 It was accordingly for Mr Wisely to rebut thestatutory presumption by adducing evidence as to what the actual amount of his benefitwas. He has not done that as to either his cannabis or methamphetamine offending.9[46] Mr Wisely has not proved, on the balance of probabilities, that the grossproceeds he received from the sale of cannabis amounted to only $6,000.[47] The Commissioner's calculation of the benefit obtained from cannabiscultivation was based on three successful cultivation cycles of 11 plants with what wasobtained from the sale of each cycle being the amount Mr Wisely accepted he wouldhave obtained from the third cycle. The plants grown in the fourth cycle were seizedby the Police so no benefit was obtained from them nor is any claim made on the basisof such a potential benefit.[48] Detective Gillespie's calculation of the benefit obtained from cannabiscultivation was on the basis there had been four cycles yielding two ounces per plantfrom 11 plants, that is a total of 22 ounces at a value of $400 per ounce. Mr Wiselyaccepted this would have been obtained from the sale of cannabis from 11 plants.Detective Gillespie thus arrived at a total value from the four cycles of $35,200. ThePolice however found and seized 214 grams of dried cannabis head, located in a plasticbag in the wardrobe of Mr Wisely's master bedroom. At the same value of $400 perounce, the value of the dried cannabis was over $3,000. Mr Wisely said the driedcannabis was from the third cycle as the fourth cycle plants found by the Police werestill growing. Detective Gillespie discounted $3,000 from the value of four cyclesbefore arriving at the claimed benefit from cannabis cultivation of $32,000.10[49] I find, on the balance of probabilities, that the benefit obtained from threecycles of cultivation was:8 Commissioner of Police v Tang, above n 7, at [39].9 Commissioner of Police v Tang, above n 7, at [33] and [39], cited with approval by the Court ofAppeal in Cheah v Commissioner of Police, above n 2, at [32]-[33] and [48].10 Detective Gillespie rounded down $32,200 to come to the $32,000 claimed benefit.3 x $8,800 $26,400Less value of 7.5 ounces of dried cannabis seized by Police $3,000Gross $23,400Methamphetamine dealing[50] In his restraint affidavit, Detective Gillespie said "[a] very conservative view"had been taken in determining a preliminary benefit figure. He then calculated abenefit based on the median between wholesale rates and retail rates from the sale ofmethamphetamine based on the quantities of methamphetamine involved in the supplyand conspiracy to supply charges to which Mr Wisely had pleaded guilty and theaccepted summary of facts as to those charges. The summary of facts related to MrWisely's admitted methamphetamine dealing from May to July 2017.[51] On that basis, Detective Gillespie calculated Mr Wisely's benefit from dealingin 11 ounces of methamphetamine was $201,537.50. That was calculated on the basisthe wholesale rate for methamphetamine was, at its lowest, $110,000, that is $10,000an ounce, and the retail value, commonly $950 per gram in the Dunedin area at thetime, that is a street value of $293,075 for 308.5 grams. In calculating the benefit,Detective Gillespie adopted the figure of $201,537.50 as being the median betweenthe $110,000 and $293,000. Detective Gillespie said his calculations took into accountmethamphetamine dealing Mr Wisely was involved in only from May to July 2017.[52] In his second affidavit and through submissions of his counsel, Mr Wiselyaccepted this was the benefit obtained from his methamphetamine dealing but claimedthere had to be a deduction from that sum for the value of methamphetamine and cashintercepted or seized by the Police.[53] The Commissioner, through Detective Gillespie's evidence, was not howeversaying Mr Wisely was involved in methamphetamine offending only between Mayand July 2017, as referred to in the summary of facts. The Commissioner had simplyadopted the value of methamphetamine involved in that offending as the benefit MrWisely obtained from all his methamphetamine offending. Once that figure had beenadopted by the Commissioner, pursuant to s 53(1), it was for Mr Wisely to prove, onthe balance of probabilities, that the benefit obtained from all his methamphetamineoffending was a lesser sum.[54] Although Detective Gillespie had calculated the benefit obtained frommethamphetamine dealing with regard to the quantities of methamphetamine heobtained for sale over the period of May to July 2017, that was not the limit of theperiod during which the Commissioner alleged Mr Wisely had been involved inserious methamphetamine-related criminal offending. I am satisfied that, incalculating a benefit based on the methamphetamine Mr Wisely had purchased or soldin the period between May and July 2017, the Commissioner was, as DetectiveGillespie said, calculating the benefit from methamphetamine dealing on a veryconservative basis.[55] As referred to earlier, Mr Wisely said in his first affidavit he had decided to selldrugs when he was working at Waitahuna Goldmine in approximately April 2017. Hesaid he acted on a suggestion from a woman that he "sell some stuff with an enticingprofit margin".[56] At another point, Mr Wisely said the first purchase of methamphetamine fromthe Hamilton supplier "was in April 2017 as I recall now. I think it was two ounces at$11,500.00 an ounce."[57] When spoken to by the Police on 19 July 2017, referring to his sending cash toHamilton and receiving methamphetamine in return, Mr Wisely said "he had only beendoing this for several weeks and had been approached with an offer too good torefuse".[58] In his first affidavit however, Mr Wisely referred to his inability to meet hisoutgoings while he was on a benefit, which barely covered mortgage payments, andthe fact his credit card balance as at 9 December 2016 was $14,340.77 owing. Thatwas followed immediately by the statement "I then idiotically decided that I could selldrugs to give me a safety buffer economically rather than be under the stress of livingon the financial edge."[59] The summary of banking transactions provided indicated that the way MrWisely used his bank account and credit card changed significantly after June 2016when his employment ended. Before June 2016, there was a pattern of cash depositsto his bank account when funds were needed to pay bills. On occasions, cash waswithdrawn from the account. Between August 2016 and July 2017, the number ofrecorded purchase transactions through the bank account dropped significantly. AfterJuly 2016, there were no instances of cash being withdrawn from that bank account.[60] Detective Gillespie also referred to evidence, which I accept, from the analysisof bank accounts that, in July 2016 after he had lost his employment, Mr Wiselywithdrew a total of $9,200 in cash, including $8,000 withdrawn on 13 July 2016.Detective Gillespie observed the $8,000 could have been the start up funding for MrWisely's methamphetamine dealing. Mr Wisely's recorded spending reducedsignificantly from that point on. Cash deposits became a feature, particularly on hiscredit card. There were cash deposits from September 2016 to June 2017 of $23,830.[61] I accept the evidence of Detective Gillespie from his analysis of bank accountsthat Mr Wisely's outgoings in April, May and June 2016 were greater than his income.[62] I accept the analysis of Mr Wisely's bank accounts indicates he had a sourceof income alternative to the benefit and wages he was receiving in the months afterAugust 2016, and probably from earlier than that.[63] Mr Wisely said:I was growing cannabis for about 10 months or from roughly September 2016.I accept I sold about 14 ounces at $400 an ounce and some of that money wenton beer and other treats, gifts for people running me around and the rest wasin the click clack or helping to pay for the meth because the people buying themeth from me were slow in paying.[64] That indicates Mr Wisely had decided to involve himself in selling drugs forcash, including methamphetamine, much earlier than April 2017.[65] Accordingly, in assessing the benefit Mr Wisely obtained from all hismethamphetamine dealing, based on just the offending referred to in the summary offacts, the Commissioner's approach was very conservative. That can also be said asto the Commissioner's calculation of the value of the methamphetamine involved inthat offending.[66] With his guilty pleas and acceptance of the summary of facts, Mr Wiselyaccepted the methamphetamine totals for both the supply and conspiracy to supplycharges was 308.5 grams, with a street value of $293,075 if sold by the gram. At thetime, the value of methamphetamine in the Otago region, if sold retail, was $950 pergram. The summary of facts recorded the wholesale value would have been between$10,000 and $12,000 per ounce so that, on that basis, the 308.5 grams, or 11 ounces,sold would have provided a gross revenue of $110,000 to $132,000. The benefit theCommissioner claimed Mr Wisely had obtained from his methamphetamine offendingat $201,537.50 was based on the median between the $110,000 for 11 ounces soldassuming a wholesale value of $10,000 and the street value of that amount ofmethamphetamine at $293,075. As already referred to, Mr Wisely accepted$201,537.50 was the value of the methamphetamine dealing referred to in thesummary of facts.[67] In any event, the value Detective Gillespie used in assessing the benefitobtained from dealing in methamphetamine was reasonable. Mr Wisely claimed hegenerally sold only at wholesale rates. There was however evidence of sales of onegram quantities. The median value was also arrived at on the basis of the lower rangeof values that could have been obtained for methamphetamine if sold in one ouncequantities at the wholesale value.[68] In his first affidavit, Mr Wisely said the profit on each ounce was about $2,000although on one occasion he sold methamphetamine to a particular person for a $1,000profit. He referred to this person normally paying him $11,500 an ounce. He said thefirst two ounces he bought from the Hamilton supplier were $11,500 each but fromthen on it was $10,500 an ounce.[69] At the forfeiture hearing, Mr Wisely sought to explain the $25,110 cash foundat his house on 19 July 2017. He said he had sold 20 sheep at $200 each a week beforethe search. He produced a receipt from his friend Barry Youngman for $600,supposedly paid by Mr Youngman to Mr Wisely for three sheep. Mr Wisely said hehad this receipt at his home, but accepted he had not been to his home (and was thusunable to collect the receipt) after his arrest.[70] Under re-examination, Mr Wisely said Mr Youngman brought the receipt tohim while he was in prison after Mr Wisely had asked him to. He said Mr Youngmanand a woman had found the receipt when they were emptying out his house.[71] Mr Wisely claimed the remaining $21,000 or so was from the sale of a HarleyDavidson motorcycle for $9,200 on 7 September 2016, paid for on a drip feed basisafter 7 September 2016, and from the sale of a Victory Hammer for $12,000 on 16July 2017.[72] At the forfeiture hearing associated with his sentencing, Mr Wisely claimed MrYoungman had bought the Victory Hammer motorcycle and begun paying for it inSeptember 2016 but, the Sunday before his arrest, another person had purchased theVictory Hammer and paid $12,000 for it. So, the payments Mr Youngman hadsupposedly made for the Victory Hammer were treated as payments for a HarleyDavidson Night Train motorcycle instead.[73] At the forfeiture hearing, Mr Wisely produced pages, supposedly from anexercise book, which he said recorded payments by Mr Youngman for the VictoryHammer motorcycle. The writing in that book was however Mr Youngman's writing.Although it recorded payments supposedly on account to Mr Wisely, it was MrWisely's evidence that the book had been kept by Mr Youngman. Despite MrYoungman supposedly having bought this motorcycle and been paying for it, themotorcycle had remained parked in Mr Wisely's garage.[74] Although the pages from the claimed notebook recorded payments supposedlyfor the purchase of a Victory Hammer, the notes referred only to payments for a HarleyDavidson.[75] Although Mr Wisely and Mr Youngman said the payments Mr Youngman hadmade in instalments were for the Victory Hammer, Mr Youngman was referred to aheading on the top of a page "payments to Kelvin Wisely from Barry Youngman forHarley". Mr Youngman said he would have written that around the time of the firstpayment, around 7 September 2016. On being questioned about why the entry wouldhave related to a Harley if he was buying a Victory, Mr Youngman said the headingwould have been "updated" once the Victory was changed, that he probably added thatin afterwards.[76] Mr Wisely claimed the exercise book in which Mr Youngman's payments hadbeen recorded had been in Mr Wisely's lounge at the time of his arrest but MrYoungman had brought the sheets of paper to the prison. Then, when asked about theexercise book, Mr Wisely said it had been in his lounge at the time of his arrest but hehad taken sheets of paper out of the book. He did not produce the book in evidence atthe time of the forfeiture hearing.[77] Mr Youngman said at the time of the forfeiture hearing (12 March 2018) theexercise book was kept at Mr Youngman's house and had been on a stationery shelf athome for the kids' school books. He said he had taken the book into Mr Wisely at theprison after Mr Wisely asked if he had the book. Mr Youngman said nothing abouthaving collected it from Mr Wisely's home.[78] In his evidence, Mr Youngman accepted he did not have a licence at the timehe supposedly agreed to purchase the Victory Hammer and started paying for it.[79] Mr Youngman said he had paid "just over 9,000, nine and a-half or 9,300 orsomething like that" for the Victory Hammer.[80] Mr Youngman said he was pretty sure he and Mr Wisely agreed to substitutethe Harley Davidson for the Victory Hammer after Mr Wisely sold the VictoryHammer to another person, this would have been around the end of 2016. Mr Wiselysaid at the forfeiture hearing he had sold the Victory Hammer to someone else duringthe week before he was arrested, that is July 2017.[81] After the forfeiture hearing, Judge Crosbie found the evidence from Mr Wiselyand Mr Youngman lacked both reliability and credibility. He concluded that, if he waswrong in this and there were legitimate transactions in relation to the motorcycles, thescale of Mr Wisely's methamphetamine purchases and sales were such that the Judgefound the overwhelming inference was that all of the cash found was for the purposeof funding the purchase of methamphetamine or represented profit from the sale ofmethamphetamine.[82] On reviewing the evidence from the earlier forfeiture hearing, I am satisfiedthe evidence both Mr Youngman and Mr Wisely gave at that hearing to explain the$25,110 cash found at Mr Wisely's home was dishonest and a fabrication.[83] Detective Gillespie referred to the $8,000 cash withdrawn on 13 July 2016 andcash deposit of that amount in October 2016. Mr Wisely said he withdrew the $8,000from the bank to pay Doug Sinclair, his friend, for a Holden ute he intended to buy.Mr Wisely kept it out as cash but put it back into the bank a few months later whenMr Sinclair decided not to sell the vehicle. When first giving evidence about this, inanswer to questions, Mr Wisely said, when Mr Sinclair said he wanted to keep thevehicle for a while, Mr Sinclair "didn't say exactly when he was going to sell it. Igave him three months and he decided he didn't want to sell it."[84] At the time Mr Wisely says he took $8,000 out to pay for this vehicle, theincome available to him was insufficient to cover all his normal outgoings and otherexpenses. At the time he withdrew that $8,000, he had received the first payment of abenefit. Under cross-examination, he accepted that the future was looking bleak. Hehad lost his job with Dynes Transport and he was inevitably going to lose his licencefor drink driving.[85] Despite Mr Wisely's difficulty in being able to pay all his outgoings whilereceiving a benefit, he claimed to have withdrawn $8,000 in cash and then kept thiscash intact in the same denominations until he deposited $8,000 back into his accountin October 2016. Ms Grills has referred to bank records of the cash deposited inOctober 2016 and Mr Wisely's evidence as to the denominations in which he hadwithdrawn cash in July 2016. In doing so, she showed that Mr Wisely's evidence asto withdrawing, keeping and redepositing the same cash was untrue.[86] I find Mr Wisely's explanation as to why he withdrew $8,000 in cash from hiscredit card account in July 2016, kept it as cash and then paid it back into the accountin October 2016 to be so implausible that his evidence as to that has to be regarded asa fabrication. I do not accept the evidence of Mr Wisely as to his withdrawing andholding the $8,000 in the same notes to buy a Holden vehicle from Mr Sinclair was"cogent evidence" as submitted by Mrs Stevens. The inference I draw is that the$8,000 was withdrawn to be used in connection with his drug dealing activities. I alsoconsider the $8,000 he paid back into that account in October 2016 had to have comefrom drug dealing activities, in all likelihood proceeds from the sale ofmethamphetamine.[87] I thus find Mr Wisely gave dishonest evidence as to the source of the $8,000paid into his account in October 2016. I find that he and Mr Youngman fabricatedevidence and records as to the supposed sale and payment on an instalment basis forthe Victory Hammer motorcycle in 2016. Having made those findings as to hisdishonesty, I have been unable to accept Mr Wisely as a credible witness on a numberof crucial matters, including the duration and extent of his cultivating and sellingcannabis and the period over which he was dealing in methamphetamine.[88] From September 2016 to June 2017, in excess of $23,000 of cash deposits wentinto Mr Wisely's bank accounts. Mr Wisely was not able to explain where those cashdeposits came from. Generally, when a cash deposit was made into an account, therewas a matching withdrawal from either a credit card account or another account. Therewas thus evidence of Mr Wisely relying on cash deposits to make payments betweenSeptember 2016 and June 2017 without Mr Wisely being able to explain how thosedeposits could have come from legitimate income.[89] On all the evidence I heard, I consider it likely that Mr Wisely was regularlyreceiving and selling three ounces of methamphetamine at least fortnightly from atleast December 2016 to July 2017. On that basis, he would have received and soldmethamphetamine 16 times over the period between 1 December 2016 and 12 July2017. That would be consistent with his selling around 48 ounces ofmethamphetamine at that time. At a wholesale value of $10,000 an ounce, that wouldresult in his realising gross sales of $480,000 from the methamphetamine supplied.He would likely have been selling the methamphetamine for more than that.[90] That would also have been consistent with him receiving approximately$15,000 a week from the sale of methamphetamine over that time.[91] Mr Gillespie's evidence, which I accept, was that the net profit Mr Wiselywould have made from the sale of methamphetamine after paying for thatmethamphetamine would have been half the amount he was selling themethamphetamine for. That would equate to $7,500 a week.[92] On 11 July 2017, Mr Wisely had a conversation with Amanda Dale. Mr Wiselysaid it was a general conversation about a ticket. He told her he had a count up ofwhat was sitting in the bedroom. He said he had $30,000 in cash in the bedroom, thathe never had that much cash sitting in his bedroom before, that "it's just building reallyfast", "building around about and eight and ten a week".[93] I accept that the "eight and ten a week" was a reference to his accumulating$8,000 to $10,000 a week.[94] At the forfeiture hearing, Mr Wisely accepted that, in talking to Ms Dale andreferring to about $8,000 to $10,000 coming in, he was talking about cash frommethamphetamine.[95] In evidence before me, Mr Wisely claimed, in saying this, he was exaggeratingand what he said to Ms Dale was not true. He had made no such claim when he wasasked about these statements and accepted he had made them during the forfeiturehearing at the time of his sentencing.[96] There was other evidence consistent with Mr Wisely dealing generally inmethamphetamine which would have had a gross value to him of at least $201,537.50.[97] In pleading guilty to the charge of conspiracy to supply methamphetamine,through the summary of facts, Mr Wisely accepted that he and his Hamilton associatehad been involved in his being sent four ounces of methamphetamine which Mr Wiselyhad sold and paid for with $39,500 in cash sent in a package to the Hamilton associateon Monday 17 July 2017. He also accepted that, on 19 July 2017, a package containingthree ounces of methamphetamine, sent to him by the Hamilton associate, wasintercepted by Police.[98] He accepted the seven ounces of methamphetamine had a wholesale value ofbetween $10,000 and $12,000 per ounce, that is between $70,000 and $84,000 in total.He accepted that, if that methamphetamine had been sold for $950 a gram, a commonsum that a gram was sold for in Otago, the street value of that seven ounces ofmethamphetamine would have been $186,200.[99] On 19 July 2017, the Police found a bag containing 26.5 grams ofmethamphetamine in Mr Wisely's freezer. That equated to just under one ounce (28grams methamphetamine), which again would have been worth $10,000 to $12,000wholesale and much more if sold by the gram.[100] There was also evidence that, around the time of his arrest, Mr Wisely hadeither paid for or could commit to significant expenditure:(a) approximately $8,000 for solar panels for his property;(b) laser eye surgery at a cost of around $6,000; and(c) the cost of extending a deck and installing a spa.[101] Through intercepted phone calls, there was evidence that in July 2017 MrWisely indicated he was busy with his small lifestyle block and did not want to workmore than a few days a week. In a conversation on 14 July 2017, Mr Wisely said hehad solar power coming the following week and the builder coming to extend andcover the deck so he could put in a spa. In that conversation, Mr Wisely spoke abouthaving a farmlet, being over driving trucks and said he had a few other bits and piecesgoing on that paid more than driving trucks. In another part of the conversation, MrWisely and the other person responded as if they were both talking about other thingsgoing on, not to be talked about over the phone, but of it being about something tomake a living.[102] It was established from ANZ records that there were three $1,000 purchases ofbonus bonds in Mr Wisely's name on 16 June, 26 June and 14 July 2017.[103] Mrs Stevens submitted that a major factor in Mr Wisely's favour was theabsence of evidence he was living a life of luxury or was out "spending up large".There was the evidence that he had spent $8,000 on purchasing solar panels and wasready to commit to further expenditure but the absence of evidence as to his having anexpensive lifestyle has not helped Mr Wisely prove the benefit he obtained frommethamphetamine dealing was less than the $201,537.50 referred to by theCommissioner.[104] Counsel submitted, despite the arrangement Mr Wisely had with his Hamiltonassociate, there was no evidence methamphetamine was supplied to Mr Wisely on aweekly basis. Counsel submits the Court could not accept there would be weeklyshipments without evidence of payment for the particular supply.[105] These submissions however ignore the fact that it was not for theCommissioner to prove just what Mr Wisely supplied and how often. The onus wason Mr Wisely to establish just what methamphetamine was supplied to him, when itwas supplied and what he sold that methamphetamine for. He failed to do that.[106] Though adopting a calculation made by his counsel, Mr Wisely claimed thebenefit he obtained should have been calculated as follows:Methamphetamine benefit as determined byDetective Gillespie $201,537.50Cannabis benefit on basis of 15 ounces at $400 an ounce: $6,000Subtotal: $207,537.50Less three ounces seized on 17 July 2017 fromcourier pack at $10,500 per ounce: $31,500One ounce seized from freezer on 19 July 2017: $8,000$39,500 seized from courier pack on 19 July 2017: $39,500$25,110 seized from bedroom on 19 July 2017: $25,110Subtotal: $104,110Benefit: $103,427[107] That calculation however starts from the mistaken premise that Mr Wisely'scannabis and methamphetamine dealing was limited to the extent described in thesummary of facts.[108] The Commissioner did not have to explain or justify the way the benefit sheclaimed Mr Wisely had obtained from his methamphetamine dealing was calculated.Nevertheless, on my analysis of all the evidence and having regard to the likely periodover which Mr Wisely was dealing in methamphetamine, there was no error in theCommissioner calculating the benefit Mr Wisely received, that is the gross proceeds,would have been at least $201,537.50. I reach this conclusion without in any waybringing into account the methamphetamine or cash the Police seized or the $39,500Mr Wisely had sent to the Hamilton supplier in payment for methamphetamine thathad already been delivered.[109] I do not consider it necessary to make any such allowance as to those matters.The Commissioner's calculation of the benefit obtained from methamphetaminedealing was based on the quantity of methamphetamine of which there was evidencethrough the summary of facts accepted in Mr Wisely's guilty pleas. There was nosuggestion this was the only methamphetamine Mr Wisely had received and sold. Itwas used only as a basis for calculating, on a conservative basis, the benefit he waslikely to have received from dealing in methamphetamine over a more sustainedperiod than the 1 May to 19 July period referred to in the summary of facts.[110] I have held there was a reasonable basis for the Commissioner's calculation ofthe benefit obtained from methamphetamine dealing at $201,537.50. There was noonus on the Commissioner to prove that was the benefit obtained. I had to accept thatvalue unless Mr Wisely was able to prove on the balance of probabilities that thebenefit was for a lesser sum. He has not been able to do that. He has not been eithera reliable or honest witness as to his evidence on crucial matters. I do not accept thathis dealing in methamphetamine began only in April 2017. I do not accept thesuggestion that methamphetamine was supplied to him at intervals or over a periodwhich would not have allowed him to receive and sell methamphetamine worth at leastthe $201,537.50 which the Commissioner says was the benefit from themethamphetamine offending.[111] The benefit Mr Wisely thus obtained from methamphetamine dealing remainsat $201,537.50 as claimed by the Commissioner.[112] I have accepted that the benefit obtained from the cultivation and dealing incannabis is $23,400. The Commissioner's application is accordingly amended so thetotal unlawful benefit which the Commissioner says Mr Wisely obtained fromsignificant criminal activity is $224,937.50. Mr Wisely has not, on the balance ofprobabilities, rebutted the presumption that this is the value of the unlawful benefit heobtained.[113] Before the Court makes a profit forfeiture order as sought by theCommissioner, it must determine the maximum recoverable amount by taking thevalue of the benefit, calculated in accordance with s 53, namely $224,937.50. It mustthen deduct from that value the value of any property forfeited to the Crown as a resultof an assets forfeiture order made in relation to the same significant criminal activityto which the profit forfeiture order relates.[114] Associated with Mr Wisely's sentencing, the Court made an order for MrWisely to forfeit to the Crown the sum of $25,110, cash which was found in MrWisely's bedroom when his house was searched and he was arrested on 19 July 2017.With a deduction for that sum, the maximum recoverable amount is the sum of$199,827.50.[115] Section 55(1) requires me to make a forfeiture order for that sum unless MrWisely is entitled to relief because of undue hardship.Mr Wisely's hardship application[116] The Court's obligation to make a profit forfeiture order, as set out in s 55(1), issubject to s 56. Section 56 states: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 before aprofit forfeiture order is made, exclude certain property from being ableto be realised under section 55(2)(c) if it considers that, having regard toall of the circumstances, undue hardship is reasonably likely to be causedto 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 theproperty that is, or is proposed to be, the subject of the profitforfeiture order; and(b) the nature and extent of the respondent's interest in the property; and(c) the circumstances of the significant criminal activity to which theprofit forfeiture order relates.(3) After a profit forfeiture order is made, nothing in this section prohibits arespondent from realising the property that was excluded from being ableto be realised under section 55(2)(c) if—(a) after realising other property under that section there is still a debtowed to the Crown under section 55(4); and(b) the respondent agrees to realise the excluded property in order to payall or part of that debt.[117] Mr Wisely has made an application for his lifestyle property at 215 Circle HillRoad, Circle Hill, Clutha to be excluded from the profit forfeiture order on thegrounds, in all the circumstances, undue hardship would likely be caused to him if theproperty were sold to recover the maximum recoverable amount in a profit forfeitureorder. The 1 September 2017 rateable value of his property was $335,000. At 14October 2019, it was subject to a mortgage for $211,338.03. The equity is thus likelyto be less than the maximum recoverable amount which the Commissioner will beentitled to retain from a sale of the property pursuant to a profit forfeiture order. If MrWisely does not succeed with his application on hardship grounds, he will thus losehis home and all the equity in that property.[118] Mr Wisely says the property was purchased with the proceeds of sale from a"pretty crummy house in town" that he had been able to buy "after years of hard worktruck driving" and with an inheritance from his father. He said the property is a linkto his father and it is precious to Mr Wisely and his sanity to have that link to his fatherthrough owning the farmlet. He says he suffers from anxiety but does not want to bemedication-dependent to deal with this, so having a home to go to is critical to hismental health. He says he will have nothing if he has no home. He will be an ex-prisoner in his 50s with only his truck driving experience. Just trying to rent will, hesays, be a miserable experience. He says he has resolved never to offend again. Hehas no family support. He says it would "be beyond hardship" to have to rehabilitatehimself without his own home. He says he would work to obtain the income neededto pay the order made under the Act.[119] In Cheah, the Court of Appeal said:11[64] The threshold for relief under s 56 is high. Hardship for offenders andthird parties is to be expected. For the Court to grant relief an applicant mustshow not merely inconvenience or difficulty, but that any hardship will be sodisproportionate as to require the objectives of recovery and deterrence to besubordinated to the particular needs of the wrongdoer.[65] The loss of equity in a home acquired from legitimate sources before thecriminal activity, and the consequent prospect the respondent will need to relyon State assistance for housing, has been held not to constitute undue hardship;the risk of losing a home ought to have been contemplated at the time therespondent embarked on the criminal activity.[120] As Gilbert J said in Commissioner of Police v Filer, and as approved by theCourt of Appeal in Cheah, the purposes of the forfeiture regime include "eliminatingthe chance for persons to profit from undertaking or being associated with significantcriminal activity and deterring such activity".12[121] Mr Wisely put his ownership of his Circle Hill property at risk when he choseto engage in a significant commercial cannabis cultivation on the property and thensold cannabis, and when he involved himself in serious methamphetamine dealingfrom that property. Thermoses containing significant quantities of methamphetaminewere delivered to his home. He was found with nearly one ounce of methamphetamineworth between at least $10,000 and $12,000 wholesale in a freezer at his address. Hekept cash accumulated from the sale of methamphetamine at his address. A packagecontaining three ounces of methamphetamine, intercepted by Police on 19 July 2017,11 Cheah v Commissioner of Police, above n 2 (footnotes omitted).12 Commissioner of Police v Filer [2013] NZHC 3111 at [13], cited by the Court of Appeal in Cheahv Commissioner of Police, above n 2, at [35].was destined to Mr Wisely's address. The summary of facts referred to associates, aMr Hood and Karen Youngman, coming to his address to collect methamphetamineand, in Hood's case, bringing cash he owed through purchasing methamphetaminefrom Mr Wisely. Mr Wisely's property was thus connected to the extremely seriouscriminal offending that Mr Wisely admitted to.[122] Mr Wisely says he will suffer added anxiety if his home is not available to him.That however has to be kept in perspective. In embarking on commercial cannabiscultivation and involving himself in extensive methamphetamine dealing, he waswilling to subject himself to what should have been the stress of engaging in serioussignificant criminal activity, and financial dealings with people who were alsocommitting serious criminal offences. He was purchasing, at great cost, significantamounts of methamphetamine from people who, on his own evidence, would nottolerate delays in payment of the purchase price.[123] To the extent Mr Wisely suffers from anxiety now, it is not to the extent thatrequires medication. With the time he has spent in prison, he says he is now committedto avoiding further criminal offending. With the forfeiture of his property, he will nothave a farmlet to provide him with financial support, but he was not dependent on orapparently obtaining an income from that property sufficient for his own supportbefore he involved himself in his drug dealing activities. He says he can now husbandsheep and drive long hours and, from such work, would be able to obtain an incomesufficient to pay the debt he will have to the Commissioner. If he considers himselfable to do that, he should be able to obtain employment and support himself in thefuture. With that income and through such employment, he should also be able tohave a home. He does not have dependents.[124] In Cheah, the Court of Appeal held the Judge was correct to find that unduehardship had not been established where Mr Cheah would lose his home with themaking of a profit forfeiture order. So too here, I hold that forfeiture in this case willnot lead Mr Wisely to suffer undue hardship in the correct legal sense, having regardto both the severity of his offending and his personal circumstances. His applicationfor relief from forfeiture on the grounds of undue hardship is declined.Conclusion[125] Accordingly, I make a profit forfeiture order pursuant to the Criminal Proceeds(Recovery) Act 2009 in respect of the property at 215 Circle Hill Road, Circle Hill,Clutha owned by the respondent Kelvin Bruce Wisely, legal description Lot 2,DP462524, title number 610347, subject to mortgage 10356129.3 to the ANZ BankNew Zealand Ltd.[126] The value of the benefit determined in accordance with s 53 of the Act is$224,937.50.[127] The maximum amount recoverable is $199,827.50.[128] That property is to be disposed of in accordance with s 83(1) of the Act.Costs[129] The Commissioner is entitled to costs together with disbursements as fixed bythe Registrar. Costs should be fixed on a 2B basis. If agreement cannot be reachedover costs, a memorandum is to be filed for the Commissioner within four weeks. Amemorandum for Mr Wisely is to be filed within three weeks of the filing of thememorandum for the Commissioner. The Commissioner may file a memorandum inreply within two weeks of receiving the memorandum from Mr Wisely. I will dealwith any costs issue on the papers.Solicitors:RPB Law, DunedinM A Stevens QC, Barrister, Dunedin.