COMMISSIONER OF POLICE v SNOWDEN [2020] NZHC 2036

COMMISSIONER OF POLICE v SNOWDEN [2020] NZHC 2036 [12 August 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2016-404-3146[2020] NZHC 2036BETWEEN COMMISSIONER OF POLICEApplicantAND PAUL ANDREW SNOWDENRespondentHearing: 16, 17, 18, 19 and 20 March 2020 (written submissions filed on3, 24 April and 5 May 2020)Appearances: M R Harborow and R S Ching for the ApplicantA Speed for the RespondentJudgment: 12 August 2020JUDGMENT OF GAULT JThis judgment was delivered by me on 12 August 2020 at 11:30 ampursuant to r 11.5 of the High Court Rules 2016.Registrar/Deputy RegistrarSolicitors / Counsel:Mr M R Harborow and Ms R S Ching, Meredith Connell, Office of the Crown Solicitor, AucklandMr A Speed, Barrister, AucklandMr R Keam (respondent's instructing solicitor), Keam law, Auckland[1] The Commissioner of Police (Commissioner) seeks civil forfeiture ordersagainst Mr Snowden under the Criminal Proceeds (Recovery) Act 2009 (CPRA).[2] The Commissioner seeks assets forfeiture orders pursuant to s 50 of the CPRAin respect of three items of the property:(a) a 1.6158 hectare property at 383 Karaka Road, Karaka, Auckland (theKaraka property);1(b) a 2001 Aprilia RSV 1000 Mille motorcycle (the Aprilia);2 and(c) $2,725 cash seized on 12 April 2013.[3] The Commissioner claims that these items of property are "tainted" becausethey were wholly or in part acquired as a result of significant criminal activity and/ordirectly or indirectly derived from significant criminal activity. The alleged criminalactivity was possession and sale of drugs and benefit fraud.[4] Alternatively, the Commissioner seeks a profit forfeiture order againstMr Snowden under s 55 of the CPRA on the basis that Mr Snowden has unlawfullybenefited from significant criminal activity to the extent of $754,533, and he hasinterests in, or effective control over, the items of property.[5] Mr Snowden opposes the orders except in relation to the Aprilia. He deniesthat the other property is tainted and opposes profit forfeiture on the basis that he hasnot unlawfully benefited from significant criminal activity and does not have interestsin, or effective control over, the other property. Mr Snowden also raises a limitationdefence under the Limitation Act 1950 in relation to the assets forfeiture claim to theextent that the significant criminal activity occurred prior to 1 January 2011.1 Described in certificate of title NA39C/1072. The application does not extend to the mortgagee'sinterest.2 Registration number 38UWF. This motorcycle has been sold by consent, so the application nowrelates to the proceeds of sale.[6] In the alternative, Mr Snowden applies for relief from forfeiture on that basisthat he and/or a family trust are likely to suffer undue hardship.Factual background[7] In 2001/2002 Mr Snowden arranged the purchase of the Karaka property fromMr Kimball Johnson or a related entity:(a) On 22 February 2001 Mr Johnson incorporated Karaka Farmlets Ltd(KFL). Mr Johnson was the director of KFL and Johnson FamilyFoundation Ltd was the sole shareholder.(b) On 28 February 2001 KFL purchased the Karaka property for$460,000.(c) On 5 March 2001 Wadsworth Ray Solicitors Nominee Company Ltdregistered a mortgage over the Karaka property securing a loan of$320,000 to KFL to effect the purchase of the Karaka property.(d) On 14 December 2001 Mr Snowden settled the Paul Andrew SnowdenFamily Trust (the Trust). Mr Snowden and his parents were named asthe trustees. Mr Snowden's children were the primary beneficiariesand Mr Snowden, his children, spouse and a broad range of relatives(including the trustees) were named as eligible beneficiaries.(e) In March 2002 the trustees of the Trust purchased the shares in KFLfrom the Johnson Family Foundation Ltd for $100,000 and guaranteedthe $320,000 mortgage secured over the Karaka property. Mr Snowdensubsequently became the sole director of KFL.[8] On 11 November 2002 KFL refinanced the mortgage. The existing mortgagewas repaid and a new $320,000 loan from Mortgage Holding Trust Company Ltd wassecured over the Karaka property.[9] Mr Snowden has lived in a house on the Karaka property. He/KFL has maderegular mortgage repayments. There are other dwellings on the Karaka property whichhave been rented out to Mr Snowden's family members or others.[10] Between 2 December 2002 and 22 May 2006 Mr Snowden received paymentstotalling $61,050.21 from the Ministry of Social Development (MSD).An investigation undertaken by MSD in 2006/2007 determined that Mr Snowden wasnot entitled to receive these payments as he was receiving cash income. MSD decidednot to prosecute but still required Mr Snowden to reimburse MSD for theoverpayment. Mr Snowden repaid only $1,500.[11] On 3 March 2010 police searched the Karaka property and located 28 sealableplastic bags, each containing one ounce of cannabis, approximately 1.5 kilograms ofloose cannabis plant material, and 0.2 grams of methamphetamine. On 29 June 2010Mr Snowden was convicted of one charge of possession of cannabis for supply andone charge of possession of methamphetamine. He was sentenced to four months'home detention.[12] On 25 January 2013 Mr Snowden or his associate, Mr Carr, purchased theAprilia for $8,500 cash. Mr Snowden disputes that he purchased it rather thanMr Carr, but Mr Snowden accepts Mr Carr left it with him, that it is tainted and hedoes not oppose its asset forfeiture.[13] In 2013 the Christchurch Organised Crime Unit launched an investigation(known as Operation Smart) into Mr Carr, who lived in Christchurch. Mr Snowdenbecame a person of interest in the investigation. Police intercepted communicationsbetween Mr Snowden and Mr Carr. Mr Snowden made multiple return flights betweenAuckland and Christchurch. So did Mr Carr.[14] On 10 April 2013 Mr Carr flew to Auckland and caught a taxi to Mr Snowden'saddress. On 11 April 2013 they both flew from Auckland to Christchurch and onarrival they were arrested and searched by police. Mr Snowden had 93 grams ofmethamphetamine concealed between his buttocks. The value of thismethamphetamine was approximately $42,000. Mr Snowden subsequently pleadedguilty to possessing methamphetamine for supply and conspiring to dealmethamphetamine.[15] On 12 April 2013 Police searched the Karaka property and located the $2,725cash underneath a fridge/freezer, the Aprilia, a container of cannabis heads and a pointbag of cannabis.[16] On 22 January 2014 Mr Snowden was sentenced to four years and 10 months'imprisonment on the charge of possessing methamphetamine for supply.The Department of Corrections' Provision of Advice to Court (PAC) report recordedthat he had stated he was using methamphetamine almost daily, his use had increasedsince his father's death (12 December 2008) and he was spending about $500 per weekon methamphetamine.3[17] On 13 February 2015 Mr Snowden was sentenced to one year and five months'imprisonment on the charge of conspiring to supply methamphetamine, cumulative onhis previous sentence.Issues[18] The issues to be determined are:(a) whether the Karaka property is tainted;(b) whether the $2,725 cash is tainted;(c) whether Mr Snowden unlawfully benefited from the possession andsale of methamphetamine and cannabis;(d) whether Mr Snowden has interests in the Karaka property and the$2,725 cash;3 I deal with an admissibility objection to this report below at [136].(e) whether the Limitation Act 1950 operates to exclude consideration ofMr Snowden's criminal activities prior to 1 January 2011; and(f) whether Mr Snowden and/or the beneficiaries of the Trust are likely tosuffer undue hardship.[19] I will deal with the limitation issue first.Limitation[20] As indicated, Mr Snowden has raised a limitation defence under the LimitationAct 1950 in relation to the assets forfeiture claim to the extent that the significantcriminal activity occurred prior to 1 January 2011.4 The issue therefore particularlyrelates to the Karaka Road property and the alleged criminal offending by way ofbenefit fraud and that part of the drug offending that occurred prior to 1 January 2011.No limitation issue arises in relation to the profit forfeiture claim.[21] It is common ground that the Limitation Act 1950 applies in respect of civilproceedings and that an application for an assets forfeiture order is a civil proceeding.It is also common ground that the Limitation Act 1950 generally applies to the Crown.[22] In addition, it is common ground that the alleged benefit fraud and the cannabisoffending for which Mr Snowden was convicted both occurred prior to 1 January 2011,when the Limitation Act 2010 came into force replacing the Limitation Act 1950. It isalso common ground that the Limitation Act 2010 provides that the Limitation Act1950 continues to apply to actions based on acts or omissions before 1 January 2011to which the Limitation Act 1950 applied immediately before its repeal.54 This was not included in the notice of opposition, but the Commissioner did not take the pleadingpoint. Notwithstanding the words in s 4 that action(s) "shall not be brought", the effect of theLimitation Act 1950 is to provide an affirmative defence: Davys Burton v Thom [2007] NZCA215, [2008] 1 NZLR 193 at [79].5 Limitation Act 2010, s 59 and s 61 (inserting a new s 2A into the Limitation Act 1950).[23] Unlike the Limitation Act 1950, the Limitation Act 2010 contains an expressprovision excluding claims under the CPRA from the money claim provisions in Part 2of that Act.6[24] Mr Speed, for Mr Snowden, submitted that s 4(5) of the Limitation Act 1950applies and its effect is that the Commissioner needed to file proceedings within twoyears from when the police discovered the offending, being the date on which thecause of action accrued. Section 4(5) provided:An action to recover any penalty or forfeiture, or sum by way of penalty orforfeiture, recoverable by virtue of any enactment shall not be brought afterthe expiration of 2 years from the date on which the cause of action accrued:Provided that for the purposes of this subsection the expression "penalty" shallnot include a fine to which any person is liable on conviction of a criminaloffence.[25] Mr Speed relied on Securities Commission v Midavia Rail Investments BVBAand Commissioner of Police v Marwood.7 In Midavia, the two year limitation periodin s 4(5) was applied to an action for pecuniary penalties under the Securities MarketsAct 1988. This Court and the Court of Appeal held that determining when the causeof action accrued involved a consideration of the elements of the cause of action.8In that case, the cause of action was complete when the insider trading sale or purchasewas made. There was no reasonable discoverability test.9[26] Commissioner of Police v Marwood involved an action for a profit forfeitureorder under the CPRA. On an application to strike out on limitation grounds, Lang Jconcluded that the seven year period applicable to profit forfeiture orders in s 55 ofthe CPRA was a limitation provision and therefore the Limitation Act 1950 does notapply by virtue of s 33 of that Act, which provides that that Act does not apply wherea "period of limitation is prescribed by any other enactment".106 Limitation Act 2010, s 12(3)(e).7 Securities Commission v Midavia Rail Investments BVBA [2006] 2 NZLR 207 (HC) and [2007] 2NZLR 454 (CA); and Commissioner of Police v Marwood [2019] NZHC 743.8 Securities Commission v Midavia Rail Investments BVBA [2006] 2 NZLR 207 (HC) at [105]-[108]; and Securities Commission v Midavia Rail Investments BVBA [2007] 2 NZLR 454 (CA) at[9].9 Securities Commission v Midavia Rail Investments BVBA [2007] 2 NZLR 454 (CA) at [45]-[57].10 Commissioner of Police v Marwood [2019] NZHC 743 at [18]-[21].[27] Mr Harborow, for the Commissioner, submitted that s 4(5) also does not applyin relation to assets forfeiture orders under the CPRA. It is necessary to separate thetwo issues that arise. First, whether s 4(5) applies to claims for assets forfeiture orders.Secondly, if so, when the cause of action accrues.Whether s 4(5) applies to claims for assets forfeiture orders[28] On its face, a claim for assets forfeiture orders would appear to come withinthe qualifying words of s 4(5), that is an "action to recover any penalty or forfeiture,or sum by way of penalty or forfeiture, recoverable by virtue of any enactment".The issue is whether the application of s 4(5) is excluded in relation to assets forfeitureorders under the CPRA as Marwood has decided it is in relation to profit forfeitureorders. Midavia was not of assistance in Marwood because, as Lang J said, theSecurities Markets Act 1988 did not contain an equivalent section to s 55(1) of theCPRA.[29] Mr Speed contrasted the requirement to prescribe the "relevant period ofcriminal activity" in relation to profit forfeiture orders under s 55(1) of the CPRA withthe lack of any such requirement in relation to assets forfeiture orders under s 50. The"relevant period of criminal activity" is defined in s 5(1), in relation to an applicationfor a profit forfeiture order, as "the period that ends on the date the application is madeand starts 7 years before". The Commissioner claims that the relevant period ofcriminal activity for the profit forfeiture order is from 13 December 2009 to 19 July2018. Mr Speed accepted this period for the profit forfeiture. The application forprofit forfeiture was made on 19 July 2018. However, where an application for a profitforfeiture order relates wholly or in part to restrained property, it must be based onsignificant criminal activity that occurs within seven years prior to the date on whichthe application for a restraining order is filed.11 Here, the application for a restrainingorder was filed on 12 December 2016 so the period seen years before would start on13 December 2009.[30] However, as Mr Speed submitted, there is no equivalent seven year (or other)period in relation to assets forfeiture orders. Therefore, unlike in Marwood, s 33 of11 Section 55(1)(a). "Relevant period of criminal activity" is defined in s 5.the Limitation Act 1950 does not operate to exclude the application of the LimitationAct 1950.[31] Nevertheless, as indicated, Mr Harborow submitted that s 4(5) does not applyto assets forfeiture orders under the CPRA. He submitted that Parliament neverintended that the CPRA would be subject to any external limitation statute – and thatthe exclusion in the Limitation Act 2010 was solely for the avoidance of doubt (notingthe Limitation Act 1950 was not fit for purpose). He submitted that the CPRA eitherexpressly articulates its own temporal limits (in the case of profit forfeiture orders) orotherwise expressly provides that an application for a civil forfeiture order is notsubject to any time constraints (in the case of assets forfeiture orders).[32] Mr Harborow acknowledged that Marwood is not of direct relevance asexplained. However, he submitted that the lack of an equivalent temporal limit in thecase of assets forfeiture orders was explained by the difference between the types oforder. While a respondent retains tainted property, there is no reason why it shouldnot be subject to asset forfeiture. However, in respect of the proceeds of criminalactivity that have not attached to property, the limiting of profit forfeiture orders to theunlawful benefits accumulated within the prior seven years is statutory recognitionthat those benefits may be dissipated over time, without a corresponding increase inthe material wealth of the respondent.[33] In support of his submission that s 4(5) does not apply to assets forfeitureorders, Mr Harborow relied primarily on the policy or purpose of the CPRA.[34] The purpose of the CPRA is stated in s 3:3 Purpose(1) The primary purpose of this Act is to establish a regime for theforfeiture of property—(a) that has been derived directly or indirectly from significantcriminal activity; or(b) that represents the value of a person's unlawfully derivedincome.(2) The criminal proceeds and instruments forfeiture regime establishedunder this Act proposes to—(a) eliminate the chance for persons to profit from undertaking orbeing associated with significant criminal activity; and(b) deter significant criminal activity; and(c) reduce the ability of criminals and persons associated withcrime or significant criminal activity to continue or expandcriminal enterprise; and(d) deal with matters associated with foreign restraining ordersand foreign forfeiture orders that arise in New Zealand.[35] As the Court of Appeal confirmed in Hayward v Commissioner of Police,the CPRA has a "strongly expressed statutory purpose".12 More recently, in Marwoodv Commissioner of Police the Supreme Court said the language of s 3(2)(a) was"aspirational" and gave a "clear and emphatic signal as to the legislative purpose".13In Commissioner of Police v Tang, in the context of determining the correct approachto assessing the benefit derived from significant criminal activity under the CPRA,Katz J said:14I note the observations of Cooke P in Pedersen that [the Proceeds of CrimeAct 1991] was intended to deter serious crime by demonstrating emphaticallythat it does not pay. "It should therefore be judicially administered in thatspirit".15 The general tenor of the Explanatory Note and the Parliamentarydebates which preceded the passage of the CPRA suggests that Cooke P'sobservations apply equally to the interpretation of the CPRA, arguably evenmore so.[36] As Mr Harborow submitted, in colloquial terms the CPRA's message is thatcrime does not pay, and it operates by hitting serious criminals where it hurts most.The CPRA aims to eliminate the financial incentive of engaging in criminal activityand to weaken criminal enterprises by removing the funds on which they feed andgrow.12 Hayward v Commissioner of Police [2014] NZCA 625 at [29(c)].13 Marwood v Commissioner of Police [2016] NZSC 139, [2017] 1 NZLR 260 at [12]. See alsoCheah v Commissioner of Police [2020] NZCA 253 at [30].14 Commissioner of Police v Tang [2013] NZHC 1750 at [22].15 R v Pedersen [1995] 2 NZLR 386 (CA) at 391.[37] Mr Harborow submitted that this statutory purpose contrasts starkly with alimitation regime that severely curtails the ability of the Commissioner to pursue thosewho have engaged in significant criminal activity, from which they have derivedunlawful benefits, by restricting the time in which an assets forfeiture application mustbe brought. He submitted the clear legislative intent to grant the Commissioner alengthy jurisdiction is evident from the CPRA's treatment of profit forfeiture ordersand restraining orders. Not only is there a seven period for profit forfeiture orders butthat is extended where a restraining order has previously been filed. He submittedthere is no restriction in relation to restraining orders, which do not fall within thescope of s 4(5), indicating the CPRA contemplates an approach to civil forfeiturewhich is incompatible with a conventional limitation regime. He also noted thatrestraining orders can, if necessary, be extended year after year prior to the filing of anapplication for civil forfeiture, which would have no purpose if the forfeitureproceeding is limited by time. The intention behind allowing restraining orders to befiled at any time and to be extended is to give the Commissioner the necessary time toinvestigate and refine his forfeiture application. A requirement to file in two years ismanifestly inconsistent with this regime.[38] In this regard, Mr Harborow also submitted that the purpose of limitationstatutes, in essence that lawsuits should be brought within a reasonable time, is notengaged where the proceeding is for the forfeiture of proceeds of criminal activity.[39] Mr Harborow also relied on the Explanatory Note for the Criminal Proceeds(Recovery) Bill. In particular, he referred to the opening statement that the Bill seeksto make "more effective provision for the confiscation of property that eitherrepresents the profits of criminal offending or was used to facilitate the commissionof crime".16 In relation to profit forfeiture orders, the seven year period wasexplained:17For a profit forfeiture order to be made, the Crown will have to prove on thebalance of probabilities that the profit derived from relevant criminal activitywas received not more than 7 years prior to an application for a restrainingorder (or, if no restraining order was applied for, the application of a forfeitureorder).16 Criminal Proceeds (Recovery) Bill (81–1) (explanatory note) at 1.17 At 3.The 7-year period is set to allow for confiscation of wealth derived fromunlawful activity over a significant period, without going so far back in timeas to give rise to a high risk of unreliable assessments being made.[40] Mr Harborow submitted this indicated that the limitation for profit forfeitureorders was because of the draconian effect of the reverse onus, and it follows that nosuch limitation is required in relation to assets forfeiture orders where there is noreverse onus.[41] Mr Harborow also submitted that the mandatory nature of s 50(1) of the CPRAwas a further indicator against a two year limitation period, and that the Commissionercould apply for an assets forfeiture order at any time. Section 50(1) provides:If, on an application for an assets forfeiture order, the High Court is satisfiedon the balance of probabilities that specific property is tainted property, theCourt must make an assets forfeiture order in respect of that specific property.[42] Section 50(1) is subject to s 51, which permits the Court to exclude certainproperty from an assets forfeiture order if it considers that, having regard to all of thecircumstances, undue hardship is reasonably likely to be caused to the respondent.[43] Mr Harborow also relied on s 9 of the CPRA, which provides that the CPRAapplies to significant criminal activity before the commencement of the section.He submitted that this retrospective effect was also an indicator that s 4(5) does notapply. The CPRA was enacted to make more effective provision for the confiscationof property than was available under its predecessor, the Proceeds of Crime Act 1991,which was a conviction-based regime. Applying s 4(5) would defeat Parliament'sintent. Also, Mr Harborow submitted that the inconsistency between the position ifs 4(5) of the Limitation Act 1950 applies and the position under the Limitation Act2010 borders on the absurd.[44] Finally, Mr Harborow referred to the relief against forfeiture provisions, whichhe submitted meant that excluding s 4(5) was not unjust. He submitted that a two yearlimitation period for assets forfeiture orders seems absurd when there is a seven yearperiod for profit forfeiture orders and no limitation for instrument forfeiture orders,which are based in the criminal jurisdiction.[45] Having already concluded that s 33 of the Limitation Act 1950 does not applyin relation to asset forfeiture, I turn to Mr Harborow's submission that the CPRAotherwise expressly excludes the limitation period in s 4(5) of the Limitation Act 1950.The only express provision relied on in the CPRA relating to timing is s 9.As indicated, s 9 expressly provides that the CPRA applies to significant criminalactivity before the commencement of the section. It does not refer to the timing of thetainting of property. Moreover, it does not expressly exclude any limitation periodthat exists, in particular under s 4(5). It is therefore necessary to consider theCommissioner's argument by applying orthodox principles of statutory interpretationto determine whether s 4(5) is excluded by necessary implication.[46] In relation to statutory interpretation, the majority of the Court of Appeal hasrecently said in Fitzgerald v R:18Legislation must be interpreted having regard to its text and purpose.These are the twin drivers of interpretation.19 The text of a provision is oftencapable of being read in more than one way. The purpose of a provision –ascertained from its immediate and general legislative context and its widersocial, commercial or other objectives – may help the court to choose betweencompeting readings of the text, or may suggest a different reading that was notimmediately apparent on the face of the text. The task of a court interpretinga provision is usually to identify the reading of the provision that representsthe best fit with that provision's text and purpose.[47] Here we are dealing with an issue of inconsistency between different statutes.Two principles of statutory interpretation relevant in that context were recognised bythe Court of Appeal in Hayward.20 First, the desirability of finding an interpretationthat reconciles any apparent inconsistency and enables the provisions to standtogether.21 Secondly, the need, if necessary, to read the earlier statute as being subjectto the later statute.22 Implied repeal is a last resort. The alternative of implied repealpro tanto, where an earlier general provision is followed by a later special one,18 Fitzgerald v R [2020] NZCA 292 at [26].19 Interpretation Act 1999, s 5; and Commerce Commission v Fonterra Co-operative Group Ltd[2007] NZSC 36, [2007] 3 NZLR 767 at [22].20 Hayward v Commissioner of Police [2014] NZCA 625 at [28].21 JF Burrows and RI Carter Statute Law in New Zealand (4th ed, LexisNexis, Wellington, 2009) at449. Now see RI Carter Burrows and Carter: Statute Law in New Zealand (5th ed, LexisNexis,Wellington, 2015) at 467.22 JF Burrows and RI Carter Statute Law in New Zealand (4th ed, LexisNexis, Wellington, 2009) at453. Now see RI Carter Burrows and Carter: Statute Law in New Zealand (5th ed, LexisNexis,Wellington, 2015) at 471.involves engrafting an exception onto the general one.23 In effect, this is what theCommissioner submits here.[48] If the two statutes could not be read together, their relative timing may besignificant. In Hayward, the Court of Appeal considered the apparent inconsistencybetween the CPRA and the Property (Relationships) Act 1976 (PRA). The Courtconcluded that the PRA does not override s 66 of the CPRA and require the discretionto be exercised as if the claim were brought under the PRA. One of the reasons wasthat the CPRA was a subsequent enactment with a strongly expressed statutorypurpose.24[49] Here, the CPRA was of course enacted after the Limitation Act 1950. But theprior question is whether there is an inconsistency between the two statutes orprovisions. There was no inconsistency in relation to profit forfeiture by virtue of s 33which Lang J applied in Marwood. Indeed, that analysis suggests that, but for s 33,the limitation periods in the Limitation Act 1950 would apply. However, Lang J wasnot directly considering that wider question. In relation to asset forfeiture, the specificquestion is whether there is an inconsistency between s 50 of the CPRA and s 4(5) ofthe Limitation Act 1950 that cannot be reconciled. That involves an assessment of therespective purposes of the provisions.25[50] As indicated, s 3(2)(a) gives a clear and emphatic signal as to the legislativepurpose of the CPRA – to eliminate the chance for persons to profit from undertakingor being associated with significant criminal activity. I am conscious this purpose maybe curtailed if there is a limitation period applicable to actions for assets forfeitureorders.23 RI Carter Burrows and Carter: Statute Law in New Zealand (5th ed, LexisNexis, Wellington,2015) at 478-480. For example, see Stewart v Grey County Council [1978] 2 NZLR 577 (CA);Auckland Gas Co v Auckland City Council [1990] 2 NZLR 420 (CA); and Chief Executive of LandInformation New Zealand v Luke [2008] NZCA 43.24 Hayward v Commissioner of Police [2014] NZCA 625 at [29(c)].25 R v Allison [2002] 1 NZLR 679 (CA).[51] On the other hand, the purpose of limitation statutes is also relevant. As theCourt of Appeal said in Amaltal Corporation Ltd v Maruha Corporation, limitationprinciples embody a tension between competing policies of:26• finality in civil litigation and that defendants should have theopportunity to avoid meeting stale claims as secured by the impositionof limitation periods; and• justice being done in the individual case, which is secured by thefacility for extension or postponement of the limitations periods.[52] As Lord Millett said in Cave v Robinson Jarvis & Rolf (A Firm):27With the passage of time cases become more difficult to try and the evidencewhich might have enabled the defendant to rebut the claim may no longer beavailable. It is in the public interest that a person with a good cause of actionshould pursue it within a reasonable period.[53] While I accept that the proceeds of crime context weighs against finality, suchevidential difficulties in adjudicating stale claims may also apply in that context,especially those that do not rely on criminal convictions. In the case of profitforfeiture, the seven year limit was enacted to avoid unreliable assessments.[54] More generally, the facility to extend or postpone limitation periods addresses,at least in part, the Commissioner's concerns about the application of the LimitationAct 1950.[55] I acknowledge the mandatory rather than discretionary nature of s 50 (subjectto s 51). This also reflects the strong statutory purpose of the regime. Section 55 issimilarly mandatory. But I do not consider that the mandatory nature of s 50(1) is anindicator in relation to limitation beyond what the strong statutory purpose alreadyimplies. Unlike s 55, s 50 is silent as to limitation.[56] However, s 50 is worded so as to capture property that is tainted property.That present tense indicates that s 50 is not concerned with when the property becametainted but whether it is tainted at the time of the application or order. This aligns withMr Harborow's submission that while a respondent retains tainted property, there is26 Amaltal Corporation Ltd v Maruha Corporation [2007] 1 NZLR 608 (CA) at [147].27 Cave v Robinson Jarvis & Rolf (A Firm) [2002] UKHL 18, [2003] 1 AC 384 at [6].no reason why it should not be subject to asset forfeiture. Having said that,the definition of "tainted property" refers to "property that has, wholly or in part, been"acquired as a result of, or directly or indirectly derived from, significant criminalactivity.28 Reference to tainting occurring when property is acquired or derived is notnecessarily inconsistent with a limitation period. Of course, property can be taintedon multiple occasions such as when making mortgage repayments.[57] Taking these various considerations into account, I do not consider that theclear statutory purpose of the CPRA, the ability to extend restraining orders, theretrospective effect of s 9, the mandatory nature of s 50 or its present tense necessarilyimply that s 4(5) of the Limitation Act 1950 is excluded from applying to claims forassets forfeiture orders. I consider the CPRA and s 4(5) of the Limitation Act 1950are not irreconcilable – they can stand together. Parliament may be taken to have beenaware of the s 4(5) time bar when it enacted the CPRA in 2009. Parliament couldeasily have expressly excluded s 4(5) when it enacted the CPRA if it intended to doso, and more particularly could have done so a year later when it enacted theLimitation Act 2010, with its transitional provisions and express exclusion of theCPRA from the new Limitation Act. I was not referred to any material in theParliamentary history that indicated that that express exclusion was merely for theavoidance of doubt. As Mr Speed submitted, Parliament must be taken to have beenaware of the existing s 4(5) time bar when it enacted the Limitation Act 2010 with aspecific exception for CPRA claims going forward. Parliament did not address s 4(5)and there is not a clear basis to conclude it intended to do so.When the cause of action accrues[58] If s 4(5) of the Limitation Act 1950 applies, Mr Speed submitted that here theelements of the action are the criminal offending and the tainting, so the time bar mustapply to the effect that criminal activities prior to 1 January 2011 cannot be consideredin respect of any forfeiture under the assets forfeiture orders sought.28 Section 5(1).[59] Mr Harborow sought to distinguish Midavia on the basis that here the criminaloffending may lie hidden.29 But he did not pursue a reasonable discoverabilityargument and accepted that the cause of action accrues as soon as payments of 'dirty'money are applied to property. He accepted that it follows from the definition oftainting that the Commissioner's knowledge is irrelevant to accrual of the cause ofaction.[60] In written submissions Mr Harborow characterised the application for assetsforfeiture orders as relying on a continuing cause of action – because the taintedquality of the property continues – and so falling under the Limitation Act 2010.But he refined this orally to submit that a fresh cause of action accrues with eachpayment.[61] I consider that, in relation to an assets forfeiture order, the cause of actionaccrues when the specific property in question has been wholly or in part, eitheracquired as a result of significant criminal activity, or directly or indirectly derivedfrom significant criminal activity.30 As indicated, property can be tainted on multipleoccasions. If the same property is tainted more than once, it does not matter whethera cause of action based on the first tainting is out of time under the Limitation Act1950 if subsequent tainting is not out of time.[62] As indicated, the Limitation Act 1950 continues to apply to actions based onacts or omissions before 1 January 2011 to which the Limitation Act 1950 appliedimmediately before its repeal. The words "to which the Limitation Act 1950 applied"mean that Act continues to apply to actions that were time barred under that Act, notthat all actions based on acts or omissions before 1 January 2011 continue to be subjectto the Limitation Act 1950. Therefore, under the Limitation Act 1950, an action foran assets forfeiture order would only be time barred if the tainting occurred two yearsbefore 1 January 2011 (applying s 4(5)) and no limitation extension applied.For example, any tainting resulting from the cannabis offending in March 2010 wouldnot have been time barred when the Limitation Act 2010 came into force.29 Compare Securities Commission v Midavia Rail Investments BVBA [2006] 2 NZLR 207 (HC) at[85] and [110].30 Criminal Proceeds (Recovery) Act 2009, s 5(1).[63] A further issue arises in relation to the extent of the retrospective effect of theCPRA, which commenced on 1 December 2009. For example, Mr Snowden's allegedbenefit fraud, and any related tainting, occurred prior to the commencement of theCPRA. The Commissioner relies on the CPRA's retrospective effect. As indicated,s 9 expressly provides that the CPRA applies to significant criminal activity before thecommencement of the section, but s 9 does not refer to the timing of the tainting ofproperty. Assuming that the CPRA was intended to create a retrospective assetsforfeiture right of action in respect of tainting of property before 1 December 2009,would the new cause of action only accrue when the CPRA came into force?Otherwise, tainting that occurred two years before 1 January 2011 – that is, on orbefore 1 January 2009 – would, as indicated, be time barred under the Limitation Act1950 subject to a limitation extension. Despite the retrospective effect of s 9, I do notconsider it goes so far as to provide that for limitation purposes an action for an assetsforfeiture order accrues upon the commencement of the CPRA rather than upontainting.[64] Mr Harborow relied on the limitation extension in s 28 of the Limitation Act1950 which applies to cases of fraudulent concealment. Section 28 relevantlyprovides:28 Postponement of limitation period in case of fraud or mistakeWhere, in the case of any action for which a period of limitation is prescribedby this Act, either—(a) The action is based upon the fraud of the defendant or his agent or ofany person through whom he claims or his agent; or(b) The right of action is concealed by the fraud of any such person asaforesaid; or(c) The action is for relief from the consequences of a mistake,—the period of limitation shall not begin to run until the plaintiff has discoveredthe fraud or the mistake, as the case may be, or could with reasonable diligencehave discovered it:[65] In relation to s 28(b), "fraud" covers deliberate or reckless concealment of acause of action.31 I consider that s 28(b) can apply in the context of an action underthe CPRA.[66] In relation to the alleged benefit fraud, assuming the Commissioner can relyon tainting of property prior to the commencement of the CPRA, the Commissioneror his agents were not aware of this offending until March/April 2018 notwithstandingthat MSD became aware of it much earlier. I do not consider that MSD's knowledgeshould be imputed to the Commissioner. The question is whether Mr Snowden can besaid to have deliberately or recklessly concealed the cause of action. Even assuminga retrospective right of action, I do not consider such concealment can have occurredbefore the cause of action was enacted in the CPRA on 1 December 2009. After that,in these unusual circumstances, I am reluctant to conclude there was such concealmentin relation to the alleged benefit fraud. MSD had decided not to pursue the matter.Mr Snowden had no dealings with the police about it. He had no reason to do so.This is not a case where he was asked by the police about it and deflected them.32 Theaction for an assets forfeiture order based on tainting due to the alleged benefit fraudin 2002 to 2006 is time barred.[67] In relation to the alleged drug offending, there is no such difficulty. I acceptthat insofar as Mr Snowden was engaged in drug offending, he concealed it from theCommissioner until it was discovered by police. There was no suggestion it couldwith reasonable diligence have been discovered earlier. The action for an assetsforfeiture order based on tainting due to the alleged drug offending is not time barred.Whether the Karaka property is tainted[68] As mentioned, for an assets forfeiture order to be made under s 50(1), the Courtmust be satisfied on the balance of probabilities that specific property is "taintedproperty", which is defined:3331 Cave v Robinson Jarvis & Rolf (A Firm) [2002] UKHL 18, [2003] 1 AC 384.32 Compare Amaltal Corporation Ltd v Maruha Corporation [2007] 1 NZLR 608 (CA) at [169]-[170].33 Section 5(1).tainted property–(a) means any property that has, wholly or in part, been—(i) acquired as a result of significant criminal activity; or(ii) directly or indirectly derived from significant criminalactivity; and(b) includes any property that has been acquired as a result of, or directlyor indirectly derived from, more than 1 activity if at least 1 of thoseactivities is a significant criminal activity[69] Mr Snowden cannot dispute that his drug convictions involve significantcriminal activity. The dispute is as to the extent of his drug offending. Mr Snowdenalso disputes the alleged benefit fraud.Extent of drug offending[70] As indicated, on 29 June 2010 Mr Snowden was convicted of one charge ofpossession of cannabis for supply and one charge of possession of methamphetaminefollowing a police search of the Karaka property on 3 March 2010 which located28 sealable plastic bags, each containing one ounce of cannabis, approximately1.5 kilograms of loose cannabis plant material, and 0.2 grams of methamphetamine.[71] Mr Snowden claimed the 28 sealable plastic bags of cannabis were all for hispersonal use – one year's usage. He indicated he packaged it into bags in order toration it and because it is better to keep cannabis in small amounts to avoid commentand theft. The latter reason is inconsistent with keeping all 28 bags together, but incross-examination Mr Snowden said he had only just plucked it that morning. Thatseems unlikely. A further approximately 1.5 kilograms of loose cannabis plantmaterial was located in the freezer. Mr Snowden denied ever selling cannabis butacknowledged giving some away to friends. There is no other direct evidence ofcannabis dealing up to this period, but the level of Mr Snowden's cash receipts isrelevant to the extent of his drug dealing. I will return to this below.[72] As also indicated, Mr Snowden pleaded guilty to possessing methamphetaminefor supply following his arrest on 11 April 2013 after arriving in Christchurch with93 grams of methamphetamine. He also pleaded guilty to conspiring to dealmethamphetamine.[73] Between 20 December 2012 and 11 April 2013 Mr Snowden madeapproximately 11 or 12 return flights between Auckland and Christchurch.Mr Snowden also drove down to Christchurch a couple of times around then. Mr Carralso made approximately six return trips during the same period. Some ofMr Snowden's trips were only for the day, and others were for one or two nights.Some of Mr Snowden's trips were booked using Mr Carr's email address or Mr Carr'spartner's credit card. Mr Carr paid for Mr Snowden's flights and motels inChristchurch quite regularly.[74] The Commissioner's case is that Mr Snowden was suppling Mr Carr.Mr Snowden denies ever supplying Mr Carr. Mr Snowden said it was the opposite.He said Mr Carr used him to provide "protection" when he flew down to Christchurchon one occasion. Mr Carr offered to supply him with methamphetamine if he carriedthe methamphetamine, and stupidly he agreed. Mr Carr provided a letter to that effectto the Court for Mr Snowden's sentencing (which the Court did not place any weighton). Mr Snowden said that was the only occasion he was involved withmethamphetamine. Mr Snowden said he also travelled to Christchurch to visit hisgirlfriend, Ms Jiang, and for other reasons.[75] In cross-examination, Mr Snowden said Mr Carr would pay for his flights andaccommodation because he would help Mr Carr collect money by providingprotection. Mr Snowden said he asked for the money or most of the time just stayedin the car. Mr Snowden also said that Mr Carr regularly bought things for him forhelping Mr Carr out.[76] Mr Snowden said he was taking packages, which he thought contained money,from Mr Carr back to Auckland for someone to pick up. The Commissioner's case isthis cash was payment for supply of methamphetamine by Mr Snowden. Mr Carr'stext to Mr Snowden on 19 March 2013, the day Mr Snowden returned to Auckland,said: "I just woke up I see ya on the flip side bruv ill fill up the toy box and see yathen". Mr Snowden said he had no idea what that meant. He said Mr Carr "talks inriddles and rhymes".[77] Mr Carr's text messages over the following period, before Mr Snowden's nexttrip to Christchurch on 31 March 2013, indicate that Mr Carr was collecting "coin"from people who owed him money. The Commissioner's case is that Mr Carr wascollecting drug debts to pay Mr Snowden, who was his supplier of methamphetamine,and that Mr Carr passed cash to Mr Snowden when they met again on 1 April 2013.[78] Late on 2 April 2013, Mr Snowden sent a text to Mr Carr saying: "am I catchingup with u before 10 tomorrow". Mr Carr replied: "Yup I just trying get maxi I canbefore ya depart ill be there bright and early bruv". The Commissioner's case is thatthis is clear illustration of Mr Carr collecting drug debts to pay Mr Snowden before heflew back to Auckland on 3 April 2013.[79] On 3 April 2013 Mr Snowden texted Mr Carr stating: "ive come a long way todo a few things be good ivf u could realise this". Mr Carr replied:Just got out of court and to shed bruv I've had the day from hell I tryin bruvbelieve me bout to go postal on cunts fucking me round and got the Hondaimpounded this morning didn't help I trying to sort it bruv on my word it begood I make sure.[80] Mr Snowden texted: "back home now bit of a waste of trip for me when u saidu had it sorted i believed u". Mr Carr replied: "I sorry bro I will make it good".[81] On 8 April 2013 Mr Carr texted Mr Snowden: "Just got into town bro chch fullof tire kickers but if we could carry on as usual I make those hours up in no time ".Mr Snowden replied: "cum up". Mr Carr replied: "K tomorro sweet?" Mr Snowdensaid: "yea". Mr Carr said: "See ya then". Mr Carr deferred for a day but travelled toAuckland on 10 April 2013, the day before they flew to Christchurch and werearrested.[82] Mr Harborow submitted that the text messages leading up to their arrest makeit clear that Mr Snowden was in a position akin to a boss to Mr Carr and that Mr Carrwas subordinate to him. Mr Carr frequently provided explanations and excuses toMr Snowden when he appeared frustrated with Mr Carr. Mr Carr arranged and paidfor Mr Snowden's flights and accommodation. Mr Carr was hastily chasing peoplewho owed him "coin" before and upon Mr Snowden's arrival in Christchurch. Thevarious references to Mr Carr having to pay his "bill", get the "maxi" and "make uphours" make it clear that Mr Carr was indebted to Mr Snowden. This is consistentwith Mr Snowden being Mr Carr's methamphetamine supplier but plainly inconsistentwith the reverse relationship, as asserted by Mr Snowden.[83] Their text messages sometimes used coded language. Mr Snowdenacknowledged that 'noodles' was referring to methamphetamine. He initially said"paper" was referring to Zig-Zag cigarette papers but then acknowledged it might bereferring to money.[84] I consider this evidence indicates that Mr Snowden was likely supplyingmethamphetamine to Mr Carr or conspiring with Mr Carr to supply others inChristchurch during the period before their arrest in April 2013. The evidence is muchless consistent with Mr Snowden's claim that Mr Carr was supplying him. I do notconsider the summary of facts indicates the police accepted that Mr Carr's letter wastrue. If it were true, Mr Snowden would have had no reason to conceal the packagein his buttocks. That Mr Carr wrote the letter is consistent with his subservient role.There are additional reasons for concluding that Mr Snowden was likely supplyingmethamphetamine to Mr Carr or conspiring with Mr Carr to supply others.[85] First, the police evidence that methamphetamine in the Christchurch market isgenerally sourced from Auckland (which I consider was admissible but not of muchweight), and that Mr Snowden was consuming methamphetamine well before hisseries of trips to Christchurch from December 2012.[86] Secondly, the evidence indicates that Mr Snowden had an association withanother drug offender, Dave O'Carroll. Mr Snowden has known Mr O'Carroll for along time. He has been to Mr O'Carroll's house, Mr O'Carroll would come over tothe Karaka property now and again, and they went on a trip together to motorcycleraces in Invercargill in 2012. The Commissioner's case is that Mr Snowden andMr O'Carroll were involved in drug offending together. Mr O'Carroll is a seniorpatched member of the Head Hunters motorcycle gang and is currently serving asentence of 16 years and five months' imprisonment for manufacturingmethamphetamine. I accept that Mr O'Carroll was sentenced in 2015 on the basis thatthere was no suggestion he was engaged in criminal offending between 2008 and 2014.However, police located over $1,000,000 in cash hidden in the bed frame of his bed.The Commissioner took assets forfeiture action against him – a settlement was reachedand that cash was forfeited. A telephone conversation between Mr Snowden andanother associate suggests that Mr Snowden was aware of Mr O'Carroll's drugoffending. As indicated below,34 Mr Snowden obtained money from Mr O'Carrollwhen Mr Snowden was in prison.[87] I also consider it likely the cash Mr Snowden was taking back to Auckland waspayment for his supply of methamphetamine and that at least some of this wenttowards the cash deposits into his bank accounts and his living expenses.[88] The level of Mr Snowden's cash receipts is also relevant to the extent of hisdrug dealing. The was a good deal of evidence about Mr Snowden's cash receipts.The Commissioner's case is that financial analysis identified that between 1 March2002 and 31 March 2016 income from known sources of $213,235.10 was receivedinto Mr Snowden's bank accounts. This included rental income of $99,108 receivedfrom November 2010 (even though Mr Snowden and KFL did not declare any incometo Inland Revenue in the seven years from 2010).35 In addition, there were cashdeposits into the bank accounts totalling $225,595.17. $66,087.97 of this was in thelatter period from 13 December 2009.[89] Mr Snowden claimed that these cash deposits were also rental income for theKaraka property. Mr Snowden's accountant, Mr Clive Johnson, calculated that therental income during the period totalled $488,770, of which $391,177 was paid incash. That evidence was not accepted by the Commissioner. The Commissioner'scase is that Mr Snowden's explanation is consistent with a common money launderingtypology of mixing a legitimate cash source or income stream with cash derived from34 At [101].35 KFL has recently declared rental income to Inland Revenue.criminal activity to conceal its true source and provide a bona fide explanation as tothe source of funds.[90] Mr Johnson's calculation is entirely dependent on Mr Snowden's instructionsas to the tenants. There were no contemporaneous records (tenancy agreements,bonds, receipts etc). Mr Snowden's input was inconsistent in some cases with otherevidence. Examples of such inconsistency include:(a) Mr Snowden claims that during 2006 the rent came from multipletenants even though he only told the MSD investigator in 2006 thatMs Debbrah Repia was living at the Karaka property with her children.The others claimed for were Mr Tebbutt (January-September),Mr Bennett (August-December) and Mr Elliott (January-August).I refer to Mr Tebbutt and Mr Elliott further below.(b) The claimed rent during 2015 was $800 to $850 per week even thoughMr Snowden's mother advised him in a telephone conversation on22 May 2015 that two tenants were paying a total of $500 rent whichwas $50 short of satisfying the mortgage repayments.(c) Mr Michael Repia is recorded as paying $300 between January andSeptember 2015 even though Mr Snowden's mother advisedMr Snowden in the telephone conversation in May 2015 that MichaelRepia was paying "nothing" as he has "always got some excuse" andthat he was "moving out next week". I refer to him further below.(d) Mr Oldham was recorded as paying $250 per week in 2015 even thoughthe automatic payment records indicated weekly payments of $200 perweek for all but two weeks (when $250 and $300 were paid).[91] Mr Johnson's calculation is also inconsistent with his understanding in 2007when he assisted Mr Snowden with the MSD investigation, referring to the onlyincome from rent being $300 per week. More generally, the level of detail in thecalculation for rent paid weekly going back to 2002 was inconsistent with the lack ofrecords. Whenever an automatic payment was less than the total rent figure providedby Mr Snowden, Mr Johnson appears simply to have attributed the difference to a cashpayment.[92] As the Commissioner notes, there are no patterns of cash deposits such asconsistent amounts at regular intervals that would be expected if the deposits were forrent (even allowing for Mr Snowden's cash lifestyle at least in later years). Also,Mr Snowden was regularly behind with his mortgage payments in the early years 2002to 2004, which does not appear consistent with the rental income claimed.[93] As Mr Johnson's calculation of rent totalling $488,770 is not based on reliablefactual evidence, it is necessary to work from the other available evidence.The evidence indicates there were several buildings on the Karaka property. Somewere rented at various times. As indicated, Mr Snowden had no records, but he saidthat the buildings had people in them. A number of persons signed statements (whichwere witnessed) claiming to have paid rent, but only three of those available gaveevidence:(a) Ms Lambert said she paid rent of $300 per week from March toNovember 2002 by cash or cheque. That totals $11,100. She said herfamily rented building 1 (the main house) and Mr Snowden moved toanother dwelling on the Karaka property. She said no one else wasliving there at the time apart from Mr Snowden. I accept her evidenceeven though Mr Snowden did not disclose this to MSD.(b) Mr Elliott said he paid rent of $300 per week from July 2004 to August2005 (not 2006 as claimed by Mr Snowden). That totals approximately$18,300. He rented a unit (building 3). His credibility was challenged,and $300 per week for a unit (as opposed to the main house) seemshigh, but on balance I accept his evidence. He also said his brotherlived at the Karaka property at some stage after he left but there was noevidence as to the amount of rent paid by him beyond Mr Snowden'sclaim.(c) Mr Walker paid by direct credit and so is already included by theCommissioner for the relevant period. He recalled that Chloe also livedthere. Chloe Repia paid rent by automatic payment from March 2016,which is also included by the Commissioner for the relevant period.[94] Four provided signed and witnessed statements from overseas. I accept theywere unavailable to give evidence:(a) Mr Tebbutt's statement said he paid $250 per week from 9 May 2004to 1 September 2006 for building 6. On balance, I accept he paid rent.The total is $30,250 (deducting $1,000 from the amount claimed byMr Snowden, which was based on payment through to 28 September2006).(b) Mr Michael Repia's statement said he paid $300 per week from August2011 to September 2015 for building 1 (the main house). Mr Snowdenonly claimed payments from Mr Repia from November 2011. Many ofMr Repia's payments were by bank transfer and are already includedby the Commissioner. Given Ms Snowden's comment to Mr Snowdenreferred to above,36 there is insufficient evidence to accept thatMr Repia made regular payments in cash to increase the total paid.(c) Ms Deann Repia's statement said she paid $300 per week from Januaryto June 2012 (in building 3), $150 per week in July to August 2012(in building 5) and $300 per week from February to November 2013(in building 7). Some of these payments were by bank transfer and soare already included by the Commissioner. In the weeks without a banktransfer, it is not clear whether she paid cash, but on balance I accepther statement. The total is $21,000.(d) Mr Bushett's statement said he paid $300 per week from 15 October2014 to 26 August 2015. He paid by bank transfer from November36 At [90](c)].2014. Those payments are already included by the Commissioner.Mr Snowden did not claim in respect of any earlier cash payments.[95] I also accept it is likely that Mr Snowden's sister in law, Ms Debbrah Repia,lived at the Karaka property and paid rent in cash for some period, givenMr Snowden's statement to MSD in 2006. He told MSD she was paying board of$300 cash per week. Her signed statement said she paid $300 per week from January2004 until May 2010 for building 1 (the main house). This would total $105,900.However, she was not called to give evidence. Deann Repia's signed statement didcorroborate the 2004 to 2010 timeframe saying she lived in building 1 on and offduring that period with her mum, who I understand is Debbrah Repia. Deann Repiasaid she contributed $80 per week. Even with that contribution at times, it is unlikelyDebbrah Repia was able to pay $300 per week for a long period. The evidenceindicated she was on a single parent benefit receiving total benefit payments averaging$536.89 per week. This would mean that, if paying rent of $300 per week, Ms Repiahad only $236.89 per week to meet living costs for herself and her three children. Theevidence based on the Statistics New Zealand Housing Economic Survey for 2007indicated that such living costs would be more than $360 per week. In the absence offurther explanation and given the family connection, I consider on balance it unlikelythat she paid $300 per week for the full period. Having accepted she lived on theKaraka property and likely paid rent in cash for some period, I consider it more likelythat Mr Snowden was acknowledging to MSD rental income of $300 per week in 2006by reference to her rather than the other tenants who I have also accepted were payingrent in that period. That is not to say that the total rent was only $300 per week – thatwas all Mr Snowden acknowledged to MSD (and Mr Johnson). But having alreadyaccepted that Mr Elliott was paying $300 per week in 2004 to 2005 and Mr Tebbuttwas paying $250 per week in 2004 to 2006, there is insufficient evidence to concludethat Debbrah Repia was also paying $300 per week or indeed to make any specificallowance for rent paid by her during that period or later.[96] In aggregating this evidence of rental payments, I deal separately with theperiods from 2002 to 2009 and from 2010 to 2016 because none of the $99,108 renttransferred into the bank accounts was in the period before 2010 and because themajority of the cash deposits were in that first period (as indicated at [88] above).I acknowledge that, in the earlier period, the full amount of rent said to be paid in cash(even by the tenants who I accept paid some rent in cash) exceeds the total cashdeposits. That of itself is not inconsistent with the payment of rent in cash. Some cashmay have been used to pay other expenses rather than deposited into the bank. But,on the other hand, in some years – particularly 2007 and 2008 – even the full amountof rent said to be paid in cash was insufficient to explain the cash deposits.[97] In the first period from 2002 to 2009, I have accepted the evidence ofMs Lambert and Mr Elliott, and the signed statement of Mr Tebbutt, that they paid rentother than by recorded bank transfer, totalling $59,650.[98] In the period from 2010, rent began being transferred into the bank accounts –totalling $99,108 accepted by the Commissioner, as mentioned. In addition, I haveaccepted the claim of Deann Repia that she paid rent other than by recorded banktransfer, totalling $21,000. Otherwise, the fact that rent was being paid by automaticpayment makes it less likely that it was also being paid in cash by the same tenants ona regular basis. Also, the fact that the cash deposits reduced substantially afterMr Snowden was arrested in 2013 suggests they were not derived from rentalpayments.[99] Accordingly, I accept that the rental income for the Karaka property was higherthan the $99,108 accepted by the Commissioner because some rent was paid in cash.The evidence indicates the rental income was $80,650 higher,37 totalling $179,758,but not the $488,770 claimed by Mr Snowden.[100] Cash rental receipts of $80,650 (and any cash Mr Snowden may have receivedmore recently from selling palm trees from the Karaka property that he raised only incross-examination) do not explain the extent of Mr Snowden's cash deposits into thebank accounts totalling $225,595.17 during the same period, nor the other cashhe must have used to fund his living expenses. Mr Snowden acknowledged that hehas not operated a transactional bank account in his name since 2006 and most of hisliving expenses were paid for using cash outside of the banking system. His bankrecords indicate only $9,392 of living expenses over the 14 year period.37 $59,650 + $21,000.The Commissioner's case is that Mr Snowden would have been expected to incurliving costs in excess of $150,000 during that period (excluding his acknowledgedmethamphetamine use), and that he had access to large sums of cash which isconsistent with involvement in drug offending over a much longer period than thetimeframes covered by his convictions.[101] The evidence also indicated that Mr Snowden had access to money fromassociates. Four telephone conversations between Mr Snowden and his motherreferred to obtaining money from Mr O'Carroll, to be used to pay the mortgage.Two of the conversations indicated amounts of $10,000. The amount was notspecified in the other conversations, but Mr Snowden indicated there was moneyavailable when needed. As indicated, the Commissioner's case is that Mr Snowdenand Mr O'Carroll were involved in drug offending together. It is also theCommissioner's case that that is the source of the cash Mr O'Carroll provided toMr Snowden. Mr Snowden said these receipts were loans, but that was not suggestedin the conversations. I consider it likely these payments were directly or indirectlyderived from significant drug offending.[102] Mr Snowden's need to access cash from Mr O'Carroll to meet mortgagepayments when he was in prison is also consistent with my conclusion that the rentalincome claim is inflated.[103] There was also evidence that Mr Snowden stored a large amount of cash withhis girlfriend, Ms Jiang, in Christchurch. Telephone conversations indicated that shereceived $123,000 from Mr Snowden and returned $20,000 to Mr Snowden's mother,the majority of which was used to pay her mortgage. Ms Snowden said this was a giftfrom Ms Jiang, but it is more likely this was a partial repayment of Mr Snowden'smoney. Mr Snowden wanted to recover the rest. Police had seized a large amount ofcash on 4 April 2014 from a brothel run by Ms Jiang in Christchurch, $42,800 of whichwas found wrapped in an Auckland newspaper in a wardrobe beside a bag containinga glass pipe (consistent with pipes used to smoke methamphetamine). Letters toMs Jiang from Mr Snowden were also in the wardrobe. The Commissioner's case isthis was Mr Snowden's cash derived from drug dealing. While I accept that Ms Jianghad access to large sums of cash from her own activities, in the circumstances outlinedI consider it likely this $42,800 was Mr Snowden's.[104] Taking the evidence together, I consider that Mr Snowden's drug offendingextends well beyond the instances for which he has convictions. The quantity ofcannabis seized in 2010 and methamphetamine seized in 2013 (over three and a halfyears' usage according to Mr Snowden's admitted use)38 indicate drug dealing duringthose periods. This, and his unexplained cash receipts during the period, indicate thatMr Snowden was likely receiving income from drug dealing over a longer period.[105] I accept that Mr Snowden's known assets do not suggest he has accumulatedwealth from drug offending beyond the contribution to his mortgage payments.As indicated, in the early years 2002 to 2004, Mr Snowden was regularly behind withhis mortgage payments. I also accept that his known expenditure does not indicate aparticularly extravagant lifestyle. Nevertheless, the combination of the cash deposits,the cash seized from Ms Jiang, and Mr Snowden's estimated living expendituresuggest cash receipts in broad terms of over $400,000 of which only $80,650 isexplained by rental income. Mr Snowden's unexplained cash receipts over the 14 yearperiod seem to exceed $300,000.Alleged benefit fraud[106] I have found the action for an assets forfeiture order based on tainting due tothe alleged benefit fraud in 2002 to 2006 is time barred. It may be helpful to addressit nevertheless.[107] Although MSD decided not to prosecute, the Commissioner's case is thatMr Snowden committed the offences of making false statements and misleading toreceive benefits under s 127 of the Social Security Act 1964 and dishonestly using adocument under s 226 of the Crimes Act 1961.38 $500 per week equates to 0.5 g per week according to the prevailing prices in the summary offacts.[108] Mr Snowden did not contest MSD's determination that he was not entitled toreceive these payments as he was receiving cash income. He repaid $1,500 in 2012.The Commissioner's case is that this confirms Mr Snowden accepted (at least at thetime) that he was not entitled to these benefit payments. In any event, I consider theevidence indicates that Mr Snowden was receiving income (whether characterised assalary from KFL or rent paid to Mr Snowden directly) and therefore was not entitledto the benefit payments. After the payments were cancelled in 2006, it is not clearwhy Mr Snowden's repayments only started in 2012 and what, if anything, happenedafter they stopped that same year.[109] In written submissions after the hearing, Mr Speed objected to the admissibilityof the MSD evidence. The objections were addressed by Mr Harborow in replysubmissions. Ms Godinet from MSD was called to give evidence. She essentiallyadopted the evidence of Mr Atkins who had filed an affidavit but had since retiredfrom MSD and moved to Australia. His affidavit had annexed correspondence toMr Snowden from Ms Haru, who conducted the MSD investigation, and Ms Haru'sinvestigation notes. Ms Haru had ceased working for MSD in 2009. Ms Godinet wasMs Haru's manager.[110] I consider that Mr Atkins' affidavit is admissible. He had not been required forcross-examination. His affidavit did little more than annex Ms Haru's notes andsummarise the investigation. Ms Godinet was well placed to adopt it given her roleas Ms Haru's manager. Ms Godinet did not claim personal involvement in thediscussions between Ms Haru and Mr Snowden. I also consider Ms Haru's notes areadmissible business records under the Evidence Act 2006 (although s 20 and r 7.30 ofthe High Court Rules do not assist). As Mr Speed seemed to acknowledge, the issueis the weight to be given to the investigation notes, which he also relied on in somerespects.[111] Even admitting the MSD evidence including the investigation notes, there waslittle evidence to support the alleged criminal offending. There was no direct evidenceof false statements made to receive benefits or of documents used. Ms Haru's letterto Mr Snowden referring to s 127 indicated MSD considered that Mr Snowden hadfailed to notify MSD when he received other income. I accept MSD considered thatMr Snowden had failed to do so, and I also accept that Ms Haru's notes indicate thatMr Snowden acknowledged he should have done so. Ms Haru's notes in July 2007indicate that s 128 (the 12 month limitation period) had expired and there were "nofalse documents" so the matter was not to be referred for prosecution. But I noteMr Atkins' affidavit stated that MSD determined that there was insufficient evidenceto show that Mr Snowden and Ms Stoddart were living together in a de-factorelationship, a separate issue. While an offence under s 127 was only punishable byimprisonment for a term not exceeding 12 months, such offending qualifies assignificant criminal activity under the CPRA where the proceeds are $30,000 or more– whether or not the activity is treated as a single offence. But in the circumstances,I do not consider that Ms Haru's letter is sufficient to establish that Mr Snowdencommitted an offence under s 127. Also, there was no reference by MSD to the CrimesAct offence of dishonestly using a document. I consider there was insufficientevidence to conclude that Mr Snowden's initial applications for benefits in December2002 and February 2003 were dishonest, even accepting that in 2002 there were cashdeposits (including rent properly attributable to KFL). Therefore, even if the allegedbenefit fraud were not time barred, I am not satisfied, on the balance of probabilities,that Mr Snowden committed the offences claimed.Acquisition of the Karaka property[112] The Commissioner's case is that the Trust acquired the Karaka property for$420,000 in March 2002, leaving a deficit of $40,000 not accounted for in the purchasegiven KFL's purchase for $460,000. It is accepted that $23,355.83 was refunded asGST on the purchase. I do not consider the discrepancy is significant. Mr Snowden'saccountant, Mr Clive Johnson, had been Mr Kimball Johnson's accountant, andMr Clive Johnson had advised Mr Kimball Johnson on the sale. I accept Mr CliveJohnson's evidence that the Johnson Family Foundation Limited had taken the GSTrefund belonging to KFL as part repayment of its shareholder loan account.The liability for repayment of the GST on sale of the property (or change of use) thenfell on the new shareholder of KFL. This offset the equity deficit. $40,000 was a highestimate and Mr Clive Johnson was involved in the decision not to pursue a largerrefund.[113] The Commissioner also questioned the Trust's $100,000 payment for theshares in KFL. No such transaction was identified in any of Mr Snowden's knownbank accounts. Mr Snowden said that Mr Kimball Johnson accepted a HarleyDavidson worth $70,000 as part payment and the remaining $30,000 was paid fromproceeds of sale of three vehicles. The Commissioner's case is that the HarleyDavidson was only worth $20,000 as Kimball Johnson sold it for that price in February2002. Also, there were no records in relation to the sale or value of the three vehicles.[114] The discrepancy as to the value of the Harley Davidson was not fullyexplained. It is not clear why Mr Kimball Johnson would accept a motorcycle aspayment of $70,000 if it was only worth $20,000. However, Mr Clive Johnsoncorroborated Mr Snowden's evidence in relation to the ascribed value of $70,000 onthe basis that Mr Kimball Johnson had a larger profit in the overall deal and over-valued the Harley Davidson to induce Mr Snowden to do a deal. As Mr KimballJohnson was a trader, that explanation may be correct but, as Mr Clive Johnsonacknowledged, it was based on his general knowledge of Mr Kimball Johnson,memory of an expensive motorbike and what Mr Snowden said, rather than anindependent recollection of the $70,000.[115] Even so, I am not satisfied that the Karaka property was, wholly or in part,acquired in 2001/2002 as a result of significant criminal activity. The alleged benefitfraud began after the acquisition and there is no real evidence of significant drugoffending or even of unexplained cash going back that far prior to the purchase.The lack of records relating to payment of the $100,000 is not necessarily surprisingso long after the event, especially given those involved. Mr Kimball Johnson diedabout 15 years ago.[116] It follows that I also do not consider the rental income derived from the Karakaproperty is tainted by reason of the initial acquisition being tainted. I accept it wouldbe different if the Karaka property was tainted at acquisition.Mortgage refinance and repayments[117] It is clear that where money from significant criminal activity is used to meetmortgage payments and thus increase the respondent's interest in a property, that willqualify the property as tainted.39[118] As indicated, the mortgage was refinanced in November 2002. The mortgagewas made up of two separate revolving credit home loan accounts totalling $320,000.From November 2002 to August 2006 fortnightly transfers were made from one ofMr Snowden's bank accounts (the 59 account) to these two revolving credit accounts.The 59 account was funded by the MSD payments, cash deposits and $7,096.80 inwages (the only wages identified in the 2002 to 2016 period). The 59 account wasclosed on 28 November 2006 following the MSD investigation.[119] From September 2006 to July 2009 fortnightly transfers to the two revolvingcredit accounts were made from a new account opened by Mr Snowden's mother inthe name of KFL (the 02 account). During this period, $84,531.16 was transferred tothe revolving credit accounts. The Commissioner's case is that during approximatelythe same period Mr Snowden received likely cash deposits of $83,680. Mr Snowden'smother said she was not involved in managing the finances for the Karaka propertybefore Mr Snowden went to prison in 2013. I accept that Mr Snowden was likely incontrol of this account and that it was opened following the MSD investigation intocash being deposited into his account.[120] After the fortnightly transfers to the two revolving credit accounts from the02 account ceased in July 2009, mortgage repayments were funded by large irregularcash deposits made directly into the revolving credit accounts. The Commissioner'scase is these were all the proceeds of Mr Snowden's drug offending.[121] Over the full period from 2002 to 2016, the Commissioner's case is thatmortgage repayments totalled $333,615.14 and only $32,158.40 came from legitimate,explained sources. The Commissioner's case is that the capital gain on the Karakaproperty is also tainted. I have addressed the alleged benefit fraud and accepted cash39 Doorman v Commissioner of New Zealand Police [2013] NZCA 476, [2014] 2 NZLR 173 at [32].rental income of $80,650 in addition to the rental income accepted by theCommissioner ($83,626.12 of which was used to meet mortgage repayments).Otherwise, for the reasons already given, I consider on the balance of probabilities thatthe mortgage repayments were funded by significant criminal activity. Therefore, theKaraka property is tainted property.Whether the $2,725 cash is tainted[122] As mentioned, the $2,725 cash was seized from the Karaka property, locatedunderneath a fridge/freezer. Although Mr Snowden said in his affidavit the cashbelonged to Mr Huband and provided a statement from him, I consider it likely thecash belonged to Mr Snowden. In cross-examination Mr Snowden acknowledged thatMr Huband is an old family friend whose name Mr Snowden had previously referredto when stopped by police in Christchurch, that the statement was written forMr Huband to sign, and that Mr Huband was going to give the money to him for a vanhe had given to Mr Huband. Mr Huband told police the cash was in an envelope, butpolice photographs indicate it was not in an envelope when found. Mr Huband hasmade no formal claim to the $2,725 cash in the proceeding.[123] I also consider on the balance of probabilities the $2,725 cash was derived fromMr Snowden's drug offending. It was seized the day after he was arrested with 93grams of methamphetamine. Having denied it was his cash, he provided no otherexplanation for it. It is tainted.Whether Mr Snowden unlawfully benefited from the possession and sale ofmethamphetamine and cannabis[124] To the extent that assets forfeiture orders are not made in relation to all theproperty sought, the Commissioner seeks a profit forfeiture order against Mr Snowdenfor $754,533.[125] Section 55(1) of the CPRA provides: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.[126] As mentioned, the relevant period of criminal activity is from 13 December2009 to 19 July 2018. However, the Commissioner's financial analysis calculatesMr Snowden's unlawful benefit over the shorter period from 13 December 2009 to31 March 2016.[127] A person has unlawfully benefited from significant criminal activity "if theperson has knowingly, directly or indirectly, derived a benefit from significant criminalactivity (whether or not that person undertook or was involved in the significantcriminal activity)".40[128] The Commissioner's case is that the evidence supports a finding thatMr Snowden derived an unlawful benefit from drug offending over a number of years,reflected in the large sums of cash deposited into his bank accounts and available tohim between 13 December 2009 to 31 March 2016, which the Commissioner sayswere more likely than not the proceeds of Mr Snowden's drug offending. During therelevant period, Mr Snowden received $66,087.97 in cash deposits. As indicated,these reduced substantially from 2013 when he was arrested as part of OperationSmart.[129] Except for the $21,000 paid by Deann Repia during this period, I do notconsider these cash deposits are additional rental income as claimed by Mr Snowden,for the reasons already given. Also, since August 2009, Mr Snowden conducted hisfinancial affairs outside of the banking system. His mortgage payments and livingexpenses until he went to prison (even excluding his methamphetamine use of at least$100 per week and maybe as much as $500 per week) exceeded his identifiable rentalincome. It is likely he was receiving substantial undeclared income to meet theseexpenses, including the payments from Mr O'Carroll. Given the disparity betweenMr Snowden's identifiable rental income and his access to large sums of cash,40 Section 7.I consider on the balance of probabilities that he has unlawfully benefited fromsignificant criminal activity in a substantial way.Extent of unlawful benefit[130] Section 53 provides: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 benefitis presumed 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.[131] Thus, once the Commissioner has discharged the initial burden of proving onthe balance of probabilities that Mr Snowden unlawfully benefitted from significantcriminal activity, as he has done here, it is then for Mr Snowden to rebut the statutorypresumption that he benefitted to the value claimed by the Commissioner.[132] As the Court of Appeal said recently in Cheah v Commissioner of Police,41under s 53 there are only two possible outcomes. The first is that the Commissionerenjoys the benefit of the presumption and the respondent fails to rebut thepresumption. In that case the presumed value stands. The second is where therespondent succeeds in rebutting the presumption. As for the latter, by necessaryconstruction, it follows that the respondent must prove a different value. Under s 53the Court's role is limited to deciding on the balance of probabilities whether theCommissioner has proved that the respondent unlawfully benefitted, during therelevant period of criminal activity, from significant criminal activity, and whether therespondent has rebutted the presumption that the value of that benefit is correctlystated in the application.41 Cheah v Commissioner of Police [2020] NZCA 253 at [47].[133] The Commissioner's specified amount of $754,533 in the application is madeup of:(a) cash deposits $66,087(b) cash seized $2,725(c) cash expenditure42 $32,613(d) Karaka property capital gain and rental income $189,108(e) methamphetamine use43 $86,000(f) approximate value of methamphetamine supply44 $378,000[134] Mr Harborow submitted that Mr Snowden has not provided any cogentevidence to show the actual benefit he received and accordingly the Commissioner'sfigure is the only figure that has been proposed.[135] Mr Snowden's position is based on his more fundamental denial that the onlyoccasion he was involved with methamphetamine (for supply) was on 11 April 2013when he was arrested after the flight to Christchurch. I have not accepted that.[136] Nor do I accept Mr Snowden's evidence that his methamphetamine use wasmuch lower than he stated to the probation officer for his PAC report. In writtensubmissions after the hearing, Mr Speed objected to the admissibility of this report.I consider it is admissible as a business record and in any event Mr Snowden'sevidence acknowledged that his methamphetamine use increased following hisfather's death. At sentencing the judge noted that Mr Snowden's counsel hadreminded him that Mr Snowdon had used drugs for many years.45 In any event,Mr Snowden has not proved a different value.42 Rates and electricity payments, a car rental payment and purchase of the Aprilia.43 Based on $500 per week from one year after Mr Snowden's father died.44 Based on nine trips to Christchurch at $42,000 per trip, said on behalf of the Commissioner to beconservative.45 R v Snowden HC Christchurch CRI-2013-009-004039 22 January 2014 at [11].[137] I have dealt with the cash deposits and the $2,725 cash seized. In relation tothe cash expenditure, there was some evidence that Mr Snowden's mother paid rateswhile he was in prison, but it was not clear whether this was ultimately paid out of hisfunds.[138] In the absence of cogent evidence as to the actual benefit received, given thereverse onus here I do not consider the Commissioner's presumed value has beenrebutted except possibly in one respect.[139] That exception is in relation to the Karaka property capital gain and rentalincome benefit, which is made up of a prescribed capital gain of $90,000 plus $99,108rental income. Having not found that the Karaka property was acquired in 2001/2002as a result of significant criminal activity nor that the rental income derived from theKaraka property is tainted by reason of the initial acquisition being tainted,the prescribed benefit has been partly rebutted. But, as the Court of Appeal said inCheah v Commissioner of Police, the respondent must prove a different value.46Mr Snowden has not done so. If the Court were required to assess that part of thebenefit, I would need to assess the capital gain on the equity represented by theunexplained mortgage repayments during the relevant period. I would also need toconsider whether some or all of the rental income could still be included on theseparate basis that, even though the initial acquisition was not tainted, the propertywas tainted by the unexplained mortgage repayments, which might also require anapportionment. Those amounts were not clear from the evidence. But, followingCheah, I must conclude that, having not proved a different value, Mr Snowden has notrebutted the presumption. I have also considered whether this case is distinguishablefrom Cheah on the basis that I have made factual findings about the originalacquisition of the property which are inconsistent with the factual position upon whichthe Commissioner's calculation is premised. However, I consider the effect of theCourt of Appeal's decision is clear and it is applicable in this case where a differentvalue has not been shown.[140] Accordingly, the value of the benefit is $754,533.46 Cheah v Commissioner of Police [2020] NZCA 253 at [47].Whether Mr Snowden has interests in the Karaka property and the $2,725 cash[141] Section 55(2)(c) requires that a profit forfeiture order specify the property thatis to be disposed of, being "property in which the respondent has, or is treated ashaving, interests". An interest, in relation to property, means—47(a) a legal or equitable estate or interest in the property; or(b) a right, power, or privilege in connection with the property.[142] Further, s 58 provides that:58 Court may treat effective control over property as interest inproperty(1) If the High Court is satisfied that a respondent has effective controlover property, the Court may, on an application made by theCommissioner, order that the property is to be treated as though therespondent had an interest in the property specified by the Court.(2) An order under subsection (1) may—(a) be made even if the respondent has no interest in the property;and(b) specify an interest that differs from the interest that therespondent has in the property.(3) Without limiting the generality of subsections (1) and (2), the Courtmay have regard to—(a) shareholdings in, debentures over, or directorships of, anycompany that has an interest (whether direct or indirect) in theproperty; and(b) any trust that has a relationship to the property; and(c) family, domestic, and business relationships between personshaving an interest in the property or in companies of the kindreferred to in paragraph (a) or in trusts of the kind referred toin paragraph (b), and any other persons.(4) Property that is subject to an order under subsection (1) may beincluded in any profit forfeiture order and in any restraining order thatis made against the respondent.(5) If the Commissioner applies for an order under subsection (1),—47 Section 5.(a) the Commissioner must, so far as it is practicable to do so,serve notice of the application on the respondent and on anyperson who, to the knowledge of the Commissioner, has aninterest in the property; and(b) the respondent and any other person who claims an interest inthe property are entitled to appear and to adduce evidence atthe hearing of the application.[143] As Moore J said in Commissioner of Police v Read:48This section enables the Court to go behind any corporate structure or trustwhich disguises the true and effective control of property and determine theactual factual position of the respondent in relation to that property. It allowsthe Court to consider the practical reality of ownership, rather than beinglimited by legal forms. In particular, it has been used to set aside corporatestructures and trusts to identify the person exercising control over the property.The fundamental question is whether, in fact, the respondent has the capacityto control, use, dispose of, or otherwise treat the property as their own.[144] I need to determine whether Mr Snowden has an interest in, or effective controlover, the Karaka property and the $2,725 cash. As Mr Snowden is not opposing assetforfeiture of the Aprilia, it is unnecessary to determine that he has an interest in it oreffective control over it.Karaka property[145] The Commissioner's case is that Mr Snowden had interests in, and effectivecontrol over, the Karaka property. Mr Snowden disputes that he has interests oreffective control.[146] Mr Snowden does not have an interest in the Karaka property. It is owned byKFL. His status as its sole director, sole shareholder in his capacity as trustee, and asan eligible (discretionary) beneficiary of the Trust do not change that. TheCommissioner does not claim the Trust is a sham.[147] I am satisfied that Mr Snowden had effective control of the Karaka property atthe relevant time, being the date of hearing,49 for the following reasons. Apart frombeing the sole director and legal shareholder of KFL, he is a trustee of the Trust.48 Commissioner of Police v Read [2015] NZHC 2055 at [60] (footnotes omitted). See alsoCommissioner of Police v Jiang [2020] NZHC 695 at [29].49 Commissioner of Police v Jiang [2020] NZHC 695 at [49]-[51].Although his mother is also a trustee, he is the settlor of the Trust and, importantly,has the power of appointment to remove and replace trustees. Apart from theestablishment documents in 2001/2002, there is no real evidence the Trust or KFLhave been properly administered. The bank account Ms Snowden opened in 2006 wasin the name of KFL rather than for the Trust and coincided with the conclusion of theMSD investigation. No Trust or company administration records were produced, suchas ongoing trustee resolutions, nor evidence of trustee consultation other than whenMs Snowden became involved after Mr Snowden was in prison. Ms Snowden's rolethen appears essentially to be acting on Mr Snowden's behalf as an agent for KFLrather than as trustee. While the property was legally owned by KFL and the legitimaterental income was paid to KFL, Mr Snowden has effectively treated the Karakaproperty as his own, including living in it and not properly accounting for any rentpaid, rather than treating it as an asset owned by KFL whose shares he held on trustfor all the beneficiaries of the Trust.The $2,725 cash[148] For the reasons already given in relation to tainting, I also consider thatMr Snowden had an interest in, and effective control over, the $2,725 cash.Application for relief[149] Mr Snowden seeks relief by way of exclusion of property from any forfeitureorder because of undue hardship, under s 51 in respect of an assets forfeiture order ands 56 in respect of a profit forfeiture order. The circumstances the Court may haveregard to include, without limitation—50(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 forfeiture order;(b) the nature and extent of the respondent's interest in the property; and(c) the circumstances of the significant criminal activity to which the orderrelates.50 Sections 51(2) and (56(2).[150] "Undue hardship" must be more than ought properly to be due in giving effectto the relevant purposes of the CPRA. As the Court of Appeal said in Nicholas vCommissioner of Police:51In such a regime, as the cases consistently show, those who have profited fromsignificant criminal activity will expect to lose their major assets, includingland and home, even where these have enormous economic and emotionalvalue for the owner. The level of disproportion required to be "undue" mustbe greater than that. As the authorities have consistently said the level ofhardship must be so disproportionate as to require the objectives of recoveryand deterrence to be subordinated to the particular needs of the wrongdoer(s 56) or other interested parties (ss 61 and 62).[151] Mr Snowden's hardship focused on the fact that he has no other place to liveand no other property. He said he has put his whole life savings into this home.He also referred to the fact that his mother would suffer undue hardship as she wouldlose her "retirement home" that she and Mr Snowden senior "both put considerablemoney and time and trouble into". Apart from Mr Snowden's reliance on unduehardship in his notice of opposition, there is no application for relief by beneficiariesof the Trust.[152] It is appropriate to consider undue hardship separately in relation to assets andprofit forfeiture.Relief from assets forfeiture[153] In relation to assets forfeiture, I deal first with the Karaka property. I haveconcluded it is tainted property as the mortgage repayments were funded, at least inpart, by significant criminal activity. In effect, I consider the extent of the taint islimited to that contribution to the mortgage repayments and that part of the capitalgain.[154] I have also concluded that Mr Snowden has effective control over the Karakaproperty. But, as indicated, he personally does not have a legal or equitable interest init. It is owned by KFL of which he is the sole shareholder, holding the shares on trustfor the Trust. He is merely one of the eligible (discretionary) beneficiaries of the Trust.It is not suggested the Trust is a sham.51 Nicholas v Commissioner of Police [2017] NZCA 473, [2018] NZAR 172 at [57].[155] Mr Snowden met the cash component of the purchase price for the Karakaproperty and met the mortgage repayments (except for the rent paid). Once the Trustwas established and purchased the shares in KFL, it is not clear whether Mr Snowden'scontribution towards the purchase price of the Karaka property by KFL was recordedas a loan to the Trust or treated as a gift.[156] Mr Snowden lives at the Karaka property, as have members of his extendedfamily from time to time – some paying rent. The evidence did not indicate out of theordinary contributions by others towards improvements. Mr Snowden said thatimprovements to the Karaka property were funded by the sale of vehicles he hadworked on and his father had paid $1,500 for a garage/carport. He suggested only inre-examination that his parents had contributed $100,000 over time. Police enquiriesof the New Zealand Transport Agency cast doubt on Mr Snowden's claims in relationto the three vehicles he referred to selling for a total of $30,000. In any event, thetransactions referred to date back to 2001/2002 – that is, before or around the time theKaraka property was purchased. They may have contributed to the purchase price butthere is inadequate evidence of substantial expense incurred on improvements.[157] Nor did the evidence indicate that Ms Snowden was looking to move to theproperty as her retirement home. She owns and lives in a freehold property and saidshe has not moved to the Karaka property because she has an illness and needs to livenear her doctor and the hospital.[158] Having regard to these circumstances, particularly the ownership of the Karakaproperty and the limited extent of the tainting, I consider that relief from assetsforfeiture is appropriate. The beneficiaries of the Trust – particularly the primarybeneficiaries, Mr Snowden's children – would suffer undue hardship if the Karakaproperty was asset forfeited.[159] Relief is not sought in relation to the Aprilia and I do not consider there wouldbe undue hardship if the $2,725 cash is forfeited.Relief from profit forfeiture[160] Given my conclusions in relation to asset forfeiture of the Aprilia and the$2,725 cash, relief from profit forfeiture arises only in relation to the Karaka property.The remaining issue is whether the factors raised by Mr Snowden already consideredin relation to relief from assets forfeiture also justify relief from profit forfeiture.[161] I do not consider that the beneficiaries of the Trust – including Mr Snowdenbut particularly the primary beneficiaries, Mr Snowden's children – would sufferundue hardship if the Karaka property is sold and part of the proceeds forfeited to meeta profit forfeiture order. They will suffer hardship, but it would not be not out of theordinary. It is not out of the ordinary for offenders who have gained substantially fromsignificant criminal activity to lose their residence. Although Mr Snowden claimed hehas nowhere else to stay, he acknowledged he has previously lived with his motherand could return there. Only one of Mr Snowden's children has been living at theKaraka property. He is an adult and has been paying rent. I have addressedMs Snowden's position. The loss of trust equity due to a profit forfeiture order reflectsthe prescribed unlawful benefit and is not out of the ordinary, particularly when itappears the Karaka property has not really been treated as a trust asset to date.Conclusion and form of orders[162] In relation to assets forfeiture, I have concluded that the Aprilia and the $2,725cash are to be forfeited, and in relation to the Karaka property that – while it is tainted– there should be relief from forfeiture.[163] In relation to profit forfeiture, s 55(2) provides: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 section 83(1),being property in which the respondent has, or is treated as having,interests.[164] I have concluded the value of the benefit is $754,533.Maximum recoverable amount[165] Section 54(1) provides:Before the High Court makes a profit forfeiture order, the Court mustdetermine the maximum recoverable amount by—(a) taking the value of the benefit determined in accordance with section53; and(b) deducting from that the value of any property forfeited to the Crownas a result of an assets forfeiture order made in relation to the samesignificant criminal activity to which the profit forfeiture order relates.[166] Having concluded that the Aprilia and the $2,725 cash are subject to assetforfeiture, they are to be deducted from the value of the benefit.52 The maximumrecoverable amount is therefore $743,308.[167] The property to be disposed of for the purpose of the profit forfeiture order isthe Karaka property.Costs[168] Having largely succeeded, the Commissioner is entitled to costs. If costscannot be agreed, I will receive memoranda (not exceeding three pages) on behalf ofthe Commissioner within 20 working days and on behalf of Mr Snowden within afurther 10 working days. I will determine costs on the papers unless I need furtherassistance from counsel.________________________________Gault J52 The Commissioner's benefit calculation included the purchase of the Aprilia at $8,500.