POLICE v LADBROOK [2018] NZHC 1227

POLICE v LADBROOK [2018] NZHC 1227 [29 May 2018]IN THE HIGH COURT OF NEW ZEALANDINVERCARGILL REGISTRYI TE KŌTI MATUA O AOTEAROAWAIHŌPAI ROHECIV-2013-425-000334[2018] NZHC 1227BETWEEN THE COMMISSIONER OF THE NEWZEALAND POLICEApplicantAND DIRK JAMES LADBROOKThird RespondentHearing: 8 May 2018Appearances: R W Donnelly for the ApplicantR G R Eagles for the Third RespondentJudgment: 29 May 2018JUDGMENT OF NATION JIntroduction[1] The Police Commissioner seeks profit forfeiture orders under the CriminalProceeds (Recovery) Act 2009 (the Act) on the basis that the third respondent, DirkJames Ladbrook, has unlawfully benefitted from significant criminal activity. Theorders sought are for a 2008 Harley Davidson Motorcycle (registration 44ZSD) and aresidential property at 306 Crinan Street, Invercargill owned by Mr Ladbrook.[2] On 6 December 2013, the Commissioner of Police (the Commissioner)obtained restraining orders preventing any dealing with the above assets. On 27 June2014, the Commissioner filed an application for profit forfeiture orders under the Act.That application specifies that Mr Ladbrook had unlawfully benefited from cultivatingcannabis,1 selling a Class C drug,2 possession of a Class C drug,3 and theft.4[3] In the application, the Commissioner claimed the value of the unlawful benefitwhich Mr Ladbrook had obtained from significant criminal activity was $241,025.On 22 August 2016, Mr Ladbrook filed a notice that he intended to oppose thatapplication. He denied he had benefited to the value of $241,025 from significantcriminal activity. He further sought relief from forfeiture on the basis that fullforfeiture would cause undue hardship.5The Criminal Proceeds (Recovery) Act 2009[4] Section 55 of the Act provides that, if the High Court is satisfied on the balanceof probabilities, that the respondent has unlawfully benefited from significant criminalactivity within the "relevant period of criminal activity" and has interests in property,then the Court must make a profit forfeiture order in respect of that property.[5] "Significant criminal activity" is defined in the Act to mean:6(a) one or more offences punishable by a maximum term of five years'imprisonment or more; or(b) an offence from which property, proceeds, or benefits of a value of$30,000 or more have, directly or indirectly, been acquired or derived.[6] The term "unlawfully benefited from significant criminal activity" means theperson has "knowingly, directly or indirectly, derived a benefit from significantcriminal activity (whether or not that person undertook or was involved in thesignificant criminal activity)".71 Misuse of Drugs Act 1975, s 9(1).2 Misuse of Drugs Act 1975, s 6(1)(e).3 Misuse of Drugs Act 1975, s 6(1)(e).4 Crimes Act 1961, s 219(1)(a).5 Criminal Proceeds (Recovery) Act 2009, s 56.6 Criminal Proceeds (Recovery) Act 2009, s 6.7 Criminal Proceeds (Recovery) Act 2009, s 7.[7] Section 53 provides that the value of that benefit is presumed to be the valuestated in the application if the Commissioner proves, on the balance of probabilities,that the respondent has, in the relevant period of criminal activity, unlawfully benefitedfrom significant criminal activity. The respondent can, however, rebut thatpresumption on the balance of probabilities.8[8] The Court is then required to determine the maximum recoverable amount.Section 54 provides that the maximum recoverable amount is the value of the benefitunder s 53, less the value of any property forfeited to the Crown as a result of an assetsforfeiture order made in relation to the same significant criminal activity. Thus, if anassets forfeiture order is made, the terms of the profit forfeiture order must be adjustedto reflect that.9[9] Under s 56, the Court must determine whether any property should be excludedfrom the operation of the profit forfeiture order because undue hardship is likely to becaused to the respondent if such property were realised.[10] Once the Court has undertaken such of these exercises as may be relevant, itmust make a profit forfeiture order under s 55(1) if it is satisfied, on the balance ofprobabilities, that the respondent has interests in property. Any such order mustspecify the value of the benefit, the maximum recoverable amount, and the propertythat is to be disposed of.Mr Ladbrook's serious criminal offending[11] There is no dispute that Mr Ladbrook was involved in serious criminaloffending, as defined in the Act. Mr Ladbrook has been convicted of cultivatingcannabis, selling a Class C drug, possession of a Class C drug, and theft. He pleadedguilty to those charges on 22 June 2014 and was sentenced to three years'imprisonment.[12] The evidence which the Police relied upon, in initially seeking a restrainingorder, was contained in an affidavit of Detective Beswick. It largely repeated what8 Criminal Proceeds (Recovery) Act 2009, s 53(2).9 Criminal Proceeds (Recovery) Act 2009, s 50. No assets forfeiture order is made here.was set out in a summary of facts supporting charges to which Mr Ladbrook pleadedguilty.[13] The summary explained that a search of Mr Ladbrook's property arose out ofa Police investigation, between December 2012 and November 2013, of members andassociates of the Invercargill and Dunedin chapters of the Road Knights motorcyclegang. The investigation included the interception of incoming and outgoing voicecalls. On 22 July 2013, the Police intercepted a conversation between Mr Ladbrookand Christian Dollman, the president of the Invercargill Road Knights. During thatconversation, the two discussed a recently harvested crop of cannabis belonging to MrLadbrook.[14] On 24 July 2013, Police executed a search warrant at the residential address ofKarl Dollman. The Police located a "tick book" which outlined a series of financialrecords totalling $12,480 that had been "paid to Dirk". It was apparent that, throughintercepted communications and the $400 monetary amounts contained within the tickbook, these payments were for large quantities of cannabis which Karl Dollman hadpurchased off Mr Ladbrook.[15] On 31 October 2013, the Police executed a search warrant at Mr Ladbrook'sresidential address. The summary describes a sophisticated indoor growing operationin a number of vacant rooms inside the property, designed to allow the growing ofcannabis on an ongoing basis:(a) In the bathroom, 46 cannabis seedlings were being grown under lightswithin polystyrene fish containers and in buckets of soil.(b) In a spare bedroom, 21 maturing cannabis plants were located rangingfrom 90 to 120 centimetres in height, being grown under lights in soil inplastic bags.(c) Contained in another spare bedroom at the property were 19 cannabisplants in a vegetative state of growth, ranging from 60 to 80 centimetresin height, being grown under lights in plastic bags. There was whitereflective lining around the walls to reflect light and heat, high-densitydischarge lights and shields hanging from the ceilings, ballasts, plasticducting running from each of the rooms with carbon filters to extract theodour of the cannabis, oscillating fans, dehumidifiers and electronictimers.(d) Located on the outside of each of the three growing room walls were 2013calendars outlining dates of previous cannabis cultivations that occurredon 3 March, 19 May, 5 June and 14 September 2013. These calendars alsocontained key dates for fertiliser and nutrient feeding as well astemperatures.(e) Located in another room of the house were a number of lateral branchesfrom cannabis plants that had been recently harvested and were hangingand drying from a string. To assist the drying process, an oscillating fanand heater were operating in the room. When the cannabis was manicuredand weighed by Police at a later date, there were 44 ounces of dried usablecannabis with a street value of $17,600.(f) Also scattered around the address were various pieces of cultivationequipment such as high-density discharge bulbs, stakes, ballasts andvarious plant food nutrients used for growing cannabis.(g) The electronic meter at the property had been tampered with. There werewires hanging from it. In the summary, it was said this had been done soas "not to raise suspicions with the power company".[16] As to yield, the summary said a cannabis cultivator can expect to obtainbetween three to five ounces of dried usable cannabis head from each cannabis plantas they grow through to maturity. The summary said the 86 cannabis plants grown bythe defendant were in excellent condition, high grade and could conservativelygenerate three to five ounces of dried usable cannabis per plant which was being soldfor $400 per ounce. A successful cannabis growing operation indicates significantexperience and/or skill on behalf of the grower.[17] The summary said the total yield between 3 March 2013 to 31 October 2013(138 cannabis plants) would be between 414 to 690 ounces of dried usable cannabis,with a street value of between $165,600 and $276,000. The Police said that figure didnot take into account any previous cannabis grows or the cannabis grows that MrLadbrook told Police he was going to continue doing through until February 2014.The Police said any future cannabis grows through until February 2014 couldconservatively generate a further 76 plants, on average yielding between 228 to 380ounces of dried usable cannabis, with a street value of between $91,200 to $152,000.On that basis, the potential yield for this operation could have been between 642 to1,070 ounces of dried usable cannabis that could be cultivated and sold for $256,800to $428,000 per annum. This figure did not include the 44 ounces of dried cannabisalready mentioned, valued at $17,600.[18] The summary said Mr Ladbrook acknowledged the facts as outlined. Inexplanation for the cannabis cultivation, possession and sale of cannabis, Mr Ladbrookexplained that he was compelled by greed and what he saw as an easy way to makemoney.[19] In his affidavit, Detective Beswick said that, when Mr Ladbrook wasinterviewed by a detective after the search, he admitted the cultivation, claimed he hadonly been in operation for about four months and had never actually sold any cannabis.He also denied knowledge of tampering with the power meter at the address.[20] In his first affidavit, sworn on 10 November 2016, Mr Ladbrook said he hadwanted to challenge a number of matters in the summary of facts. He referredspecifically to Police estimates as to the value of the drugs but said that his lawyer didnot engage with him and, in the end, he took his lawyer's advice and pleaded guilty.There was no challenge to the summary of facts.[21] Mr Ladbrook asserted there was nothing sophisticated about the operation. Inhis affidavit, he commented specifically on various matters in the summary which hetook issue with:(a) As to the number and size of the plants, the only point he made was thatPolice estimates of height were from the ground, not the height of actualplants, which he said were smaller.(b) The rooms had not been altered to allow the cultivation of cannabis withwhite reflective lining around the walls. He said it was simply polystyreneand black and white panda film.(c) He referred to the low cost of the two dehumidifiers which he said hadbeen bought second-hand at a garage sale, the oscillating fan he hadbought from the Warehouse and an electronic timer which cost about $10.(d) He said there were no carbon filters but there was a foam filter over theextractor which was intended to stop insects from entering the house.(e) He said he had been unaware that the electricity meter at the property hadbeen tampered with.Calculation of the benefit obtained and maximum recoverable amount[22] Section 53 of the Act provides that the value of the benefit of serious criminaloffending is presumed to be the value stated in the application if the Commissionerproves, on the balance of probabilities, that the respondent has, in the relevant periodof criminal activity, unlawfully benefited from significant criminal activity. Therespondent however can rebut that presumption on the balance of probabilities.10[23] In the application for forfeiture dated 27 June 2014, the Commissioner claimedMr Ladbrook had, during the relevant period of significant criminal activity between22 November 2006 and 26 June 2014, benefited to the value of $241,025.00.[24] In submissions for the Commissioner, the figure of $209,025.00 was adopted.This figure was based on the affidavit of Detective Beswick, who estimated a yield of$160,000 from five cycles of cultivation over an eight-month period, and what theCommissioner said were unexplained cash deposits totalling $49,025 between 6 April2010 and 4 December 2013.10 Criminal Proceeds (Recovery) Act 2009, s 53(2).The yield per plant[25] The affidavit of Detective Beswick estimates the quantity of cannabis producedper plant by Mr Ladbrook. The Police identified that the cannabis drying at the addresswas derived from the 17 harvested plants of which only the stalks in plastic potsremained. The drying cannabis plants were manicured by the Police and produced 45ounces of cannabis head, an approximate yield of 2.6 ounces per plant. They alsofound cannabis stalks in a plastic bag which they believed had come from the 17harvested plants. They said this indicated those stalks had already been manicuredand would have produced cannabis head. Detective Boucher, who had specialistknowledge in this area, considered that, putting together the cannabis head obtainedfrom the drying material and what would have been obtained from the earliermanicured plant, the probable yield per plant would have been four ounces.Total yield of the plants[26] Detective Beswick said the plants found at the address were in four differentstages of maturity. When interviewed by Detective Sergeant Boucher on 28 November2013, Mr Ladbrook stated that his typical cannabis crop rotation was every four to sixweeks, meaning he would have harvested plants every four to six weeks. DetectiveBeswick inferred from the cannabis plants at the address, that a typical harvest wasapproximately 20 cannabis plants. Detective Beswick said that, based on a harvestevery six weeks, this would equate to a minimum of eight harvests per year. Over theeight-month period, between 1 March and 31 October 2013, there would have been atleast five harvests. The harvest would have been of 100 plants, with each plantyielding approximately four ounces of cannabis head. On this basis, the Police saidMr Ladbrook would have obtained 400 ounces of cannabis head over that period.[27] The onus was on Mr Ladbrook to show, on the balance of probabilities, thatthe Police assessment of the benefit obtained was wrong. He attempted to do this inhis affidavits and when being cross-examined in Court by saying the operation wasnot sophisticated in the way the Police described and that his cultivation only startedin March.[28] Mr Ladbrook said in his affidavit that there had been only three different grows.He referred to the Police information as to the calendars and said there had been threecycles of cultivation. He said, in the first cycle, the cannabis plants were open andsparse. They were over-dried and unproductive. He said the second attempt at growthwas also defective and only half of the plants reached healthy maturity. He put thisdown to problems from power cuts to the nearby freezing works that affected the housewhere the grow was taking place. He said only the third yield had been successful.[29] The evidence of Detective Beswick in an affidavit of 1 October 2015 was that,when Mr Ladbrook was interviewed by Detective Johnston on 31 October 2013, theday of the search, he claimed that an unnamed person owned all the plants except forthree of them but admitted the cultivation of the cannabis and claimed he had onlybeen in operation for four months. He stated that the drying cannabis obtained fromthe 17 harvested plants was his first harvest in the operation. He stated he had not soldany cannabis. In contradiction, he said his first ever grow was seven or eight plantsand the funds received from those plants were used to purchase more cultivatingequipment.[30] He was interviewed again by Detective Sergeant Boucher on 28 November2013 when the surveillance investigation was terminated. At that time, Mr Ladbrooksaid that he had two previous cannabis cycles which funded equipment to expand hisenterprise. He acknowledged he had a cannabis crop in March 2013. Heacknowledged that entries on the calendars found at the address represented threecannabis crops and the cannabis harvest rotation was every four to six weeks.[31] Mr Ladbrook's credibility was not assisted by the conflicting explanations hegave under cross-examination when asked what he knew of the way the electricitymeter had been tampered with. He claimed he had not known of the tampering, butalso that he had known of it but did not know who had done it or why this hadhappened. The tampering was obvious from photographs showing wires hanging fromthe meter. In his affidavit, Detective Beswick explained that an examination by anelectrical inspector had established that two wires were fitted as electricity breakers,effectively preventing the meter from measuring some of the power usage at theaddress. One breaker prevented the measuring of power usage in the bedroom where21 plants, ranging from 20 to 120 centimetres, were growing. The other breaker didthis in a bedroom where 19 plants, ranging from 60 to 80 centimetres, were growing.Both breakers were wired to the plug sockets in those respective bedrooms. Therewould have been considerable electricity usage with the lighting and heating set up forthe plants in those rooms. I am satisfied Mr Ladbrook well knew what had been donewith the meter board and that it had been rewired to assist with the cannabis cultivationoperation.[32] Mr Ladbrook did not, in either of his two interviews, tell the Police that theinitial grows had been unsuccessful. When asked by the Police about the tick listfound at Mr Dollman's address on 24 July 2014, he did not indicate the list had nothingto do with him. His response, as described by the Police, suggested the contrary.[33] Notwithstanding the inconsistencies of his testimony, there was some evidencethat, with the way Mr Ladbrook dried the plants, he had not always achieved theoptimum production. In the conversation on 22 July 2013, Mr Ladbrook had talkedto Christian Dollman as to how it was possible to over dry the plant and how, as aresult, he had some "crunchy" material. After his house was searched, there was anintercepted conversation in which Mr Ladbrook told an associate that he had not beenable to "bag up anything" from what was hanging up drying.[34] I have not been able to accept as reliable Mr Ladbrook's evidence as to thequantity produced. It may be that the cultivation was not as "sophisticated" as somebut, with the facts as now accepted by Mr Ladbrook and the photographs of what thePolice found at the address, this was a set-up which had been and was going to be usedon an ongoing basis.The revenue Mr Ladbrook obtained from selling cannabis[35] Mr Donnelly, for the Commissioner, submitted the value to be taken intoaccount for forfeiture purposes was the 'street value' of the cannabis rather than theamount for which Mr Ladbrook actually sold the cannabis.[36] Mr Donnelly directed the court to Commissioner of New Zealand Police vMurray as support for the value adopted by the Police in this case.11 That caseconcerned an offender who was apprehended with drugs in his possession. He arguedthat he was simply a courier of the drugs and gained no benefit from them. Gendall Jsaid that he had possession of the drugs and "always had the chance to profit from hiscriminal activity."12 On that basis, the Court found that the unlawful benefit was thevalue for which the drugs could be sold.[37] The stated purpose of the Act is to establish a regime for the forfeiture ofproperty that has been derived, directly or indirectly, from significant criminal activityor that represents the value of a person's unlawfully derived income.13 In Nicholas vCommissioner of Police, the Court of Appeal rephrased that:14The underlying purpose of this aspect of the civil forfeiture regime is to exposethose who have obtained benefit from significant criminal activity to the lossof their assets (however obtained) up to the assessed value of that benefit.[38] In the case of a drug courier, who is not directly profiting from committingcriminal activities, it is likely the gang member will profit from such activities eitherin good will or monetary terms at a later date. It will be open to the court to assess theindirect value of the benefit of that offending. If there is no evidence of actual sales,the value of the cannabis to the grower could nevertheless be assessed as the marketvalue of that cannabis.[39] If Mr Ladbrook was a member of the Road Knights and was growing cannabisfor the gang without being directly paid for it, it might be open to the Court to assessthe benefit of his offending as the market value of the cannabis. However, if MrLadbrook was selling cannabis to the Road Knights motorcycle gang who were thenreselling it for a profit, with such sales, Mr Ladbrook would have received a directmonetary benefit from selling to the gang. The value of Mr Ladbrook's unlawfullyderived income would have been the price for which he sold the cannabis to the RoadKnights, not the amount for which it could be resold.11 Commissioner of New Zealand Police v Murray [2016] NZHC 2699.12 Commissioner of New Zealand Police v Murray [2016] NZHC 2699 at [29].13 Criminal Proceeds (Recovery) Act 2009, s 3(1).14 Nicholas v Commissioner of Police [2017] NZCA 473 at [23] (emphasis added).[40] There is no evidence that the cannabis was grown for Mr Ladbrook's own useand thus to avoid the cost of having to buy the cannabis from someone else. Indeed,his evidence in an affidavit was that he did not smoke or use marijuana. Mr Ladbrookhad been working mainly in the freezing works over the last 20 years. He said he hadundertaken some 30 to 40 drug tests at work over that time and never showed a positiveresult. The benefit for Mr Ladbrook was generally the price at which he sold thecannabis.[41] The Police suggest this was $400 per ounce. When Karl Dollman's address inInvercargill was searched on Wednesday 24 July 2014, the Police found various ticklists. There were a number of entries under the heading DRK, each for $400.Detective Beswick considered these were consistent with Mr Ladbrook sellingcannabis head to Karl Dollman for $400 per ounce.[42] Mr Ladbrook said the cannabis obtained from the grows was not worth $400an ounce to him. In his first affidavit, Mr Ladbrook accepted the Police contentionthat there were 44 ounces of dried usable cannabis but objected to the Policecontention that this had a street value of $17,600 on the basis he was not selling "onthe street" but to an individual. He said he was being paid $250 an ounce so that the44 ounces would have been worth just $11,000 for him.[43] There was no evidence from the Police to indicate that Mr Ladbrook wasregularly selling to individuals. His offending was uncovered through an investigationand surveillance of a number of people associated with the Road Knights. DetectiveBeswick's evidence in respect of Mr Ladbrook and the summary of facts for MrLadbrook's offending also referred to the offending of these other people. Thesummary of facts states that Christian Dollman was, at the time of the investigation,the president of the Invercargill Road Knights group. Mr Ladbrook referred to him inan affidavit as being a friend. The Judge's sentencing notes for these defendantsindicates that Christian Dollman's eight charges represented 66 controlled drugdealing offences. His father, Karl Dollman's charges represented 131 controlled drugdealing offences. The Commissioner's forfeiture application, to which these two menalong with Mr Ladbrook were respondents, valued the benefit Christian Dollman hadobtained from his drug dealing at $506,787 and the value of Karl Dollman's offendingat $397,877.[44] I consider it likely that Mr Ladbrook was supplying at least some cannabis toothers who were in a better position to obtain the value of that cannabis on a street-sale basis but the value to Mr Ladbrook would have been less than this, as he claimedin an affidavit.[45] I am satisfied Mr Ladbrook had sold cannabis before the house was searchedon 31 October 2013. I do not accept that it was only the cannabis plants growing ordrying in the house at that time which would result in his obtaining money. I considerit likely that he was selling cannabis throughout the period between March 2013 andOctober 2013, consistent with the cultivation as noted on the calendars at his address.[46] The Police said Mr Ladbrook would have obtained 400 ounces of cannabishead over that period, at a price of $400 per ounce. This would have provided a totalbenefit of $160,000 over the eight-month cultivation period.[47] The Police calculation as to the benefit that Mr Ladbrook would have obtainedin the March to October 2013 period however assumes that each grow would havebeen completely successful, that the drying process would have been carried outexpertly without anything going wrong and that, with each harvest, production from20 plants would have been obtained.[48] In his affidavit of 10 November 2016, Mr Ladbrook said that he had been ableto undertake just three cycles of cannabis cultivation. He said the first cycle wascompletely unsuccessful but, in light of the evidence I referred to earlier, I do notaccept this. He said the second was more successful but did say half of the plantsreached maturity. I do not accept that what he says is an accurate assessment of howproductive the grows were but I do accept that they may well not have been asproductive as the Police have assumed in calculating the benefit he obtained in theperiod March to October 2013.[49] Although there is no direct evidence of Mr Ladbrook cultivating cannabis overthe years prior to March 2013, the nature of the cannabis growing set up that existedat his address over his time suggests that it had all been set up with the benefit ofprevious experience. The affidavit of Detective van der Pol supports this.[50] Detective van der Pol analysed Mr Ladbrook's bank accounts over the period1 April 2010 to 31 October 2013. Detective van der Pol identified that a total of$49,025 had been deposited into three different accounts over that period, with thecash deposits being for amounts of between $150 and $4,000. Most of the depositswere in multiples of $100, including $200, $400 and $500. She identified that cashdeposits had increased significantly during July, August and September 2013 with$16,730 paid into the bank accounts of Mr Ladbrook over that three-month period.[51] In his third affidavit, sworn on 1 March 2018, Mr Ladbrook said that, since1996, he had a business cutting and selling firewood. He said he also accumulatedcash through savings when he was working in the freezing works and sometimes lentmoney. He believed the cash deposits could largely be attributed to the sale offirewood and from cash loan repayments. There was no documentation to supportthis. There were no affidavits from the two people who he had identified as oftensupplying him with firewood to support what he was saying.[52] Mr Ladbrook told me that, over the winter of 2013, he was in full employmentat the freezing works so, at that time, would not have needed to cut firewood for anincome. The significant cash deposits into his bank accounts during the winter of 2013are consistent with his receiving significant cash payments over that time from the saleof cannabis.[53] Mr Ladbrook has not produced satisfactory evidence to show there was alawful explanation for the cash deposits to his bank account. It was his evidence thatover that time his employment had been mainly of a seasonal nature with the freezingworks. Despite that, he was able to provide the deposit required to buy the propertyat 306 Crinan Street, Invercargill on 13 September 2012 for $124,000. As at 5 October2012, the ANZ bank mortgage over the property was $99,000. He also purchased theHarley Davidson motorcycle for $25,000 although this appears, in part, to have beenwith a loan.[54] When giving evidence, Mr Ladbrook seemed genuinely startled at theproposition that he had received something like $160,000 from selling cannabis overthat period. However, the onus falls on a respondent to prove that a different amountshould be taken as the actual benefit. As was said by Gilbert J in Commissioner ofPolice v Filer:15Once the Commissioner discharges the initial onus under s 53(1), the onus ofproving the correct figure rests with the respondent under s 53(2) and does notpass back to the Commissioner. This interpretation serves the purposes of theforfeiture regime which include eliminating the chance of persons who profitfrom undertaking or being associated with significant criminal activity anddeterring such activity. These objectives could be frustrated if the legislationwas interpreted so as to require the Commissioner to prove the benefit in allcases where a respondent can establish some error in the Commissioner'sassessment. The respondent will know what the benefit was and all of theaccess to the witnesses and records that may be needed to prove this, whereasthe Commissioner does not. I conclude that if the respondent fails to provethe benefit, on the balance of probabilities, the amount stated in theCommissioner's application must stand, even if the correctness of theunderlying assessment is questionable.[55] Mr Ladbrook has put little satisfactory evidence before me to meet the onuswhich was upon him to provide the actual benefit he had obtained from his offending.While I accept the police estimate is high, even a modest estimate of the benefit of hisoffending would still be greater than the value of the assets being seized. Pursuant tos 53 of the Act, the value of that benefit is presumed to be the value stated in theapplication of $209,025.00. I determine the maximum recoverable amount as beingthe same figure.16Application for relief on the grounds of hardship[56] Mr Ladbrook has applied to have property excluded from a profit forfeitureorder on the basis he is likely to suffer undue hardship. Relief against civil forfeitureorders is provided for pursuant to s 56 of the Act in relation to claims of undue hardshipon the respondent against whom the application is made. It provides:15 Commissioner of Police v Filer [2013] NZHC 3111 at [13].16 Criminal Proceeds (Recovery) Act 2009, s 54.56 Exclusion of respondent's property from profit forfeiture orderbecause of undue hardship(1) The High Court may, on an application made by the respondentbefore a profit forfeiture order is made, exclude certain propertyfrom being able to be realised under section 55(2)(c) if it considersthat, having regard to all of the circumstances, undue hardship isreasonably likely to be caused to the respondent if the property wererealised.(2) The circumstances the Court may have regard to under subsection(1) include, without limitation,—(a) the use that is ordinarily made, or was intended to be made, ofthe property that is, or is proposed to be, the subject of the profitforfeiture order; and(b) the nature and extent of the respondent's interest in theproperty; and(c) the circumstances of the significant criminal activity to whichthe profit forfeiture order relates.(3) After a profit forfeiture order is made, nothing in this sectionprohibits a respondent from realising the property that was excludedfrom being able to be realised under section 55(2)(c) if—(a) after realising other property under that section there is still adebt owed to the Crown under section 55(4); and(b) the respondent agrees to realise the excluded property in orderto pay all or part of that debt.[57] In this case, the Commissioner seeks forfeiture orders as to two significantassets owned by Mr Ladbrook:(a) The property at 306 Crinan Street, Invercargill. This was purchased on 13September 2012 for $124,000. In his affidavit of 27 October 2017, MrLadbrook provided an appraisal of the Crinan Street property from a realestate agent, based on a street-side evaluation. The agent suggested aselling price of $123,000-$135,000. As at 28 February 2018, the ANZbank mortgage over the property was $93,385.19.(b) A 2008 Harley Davidson Softail motorcycle. Applying for a restrainingorder, the Police said this motorcycle had a value of $17,500. On theirforfeiture application, they said this motorcycle had a value of $8,000. Inhis second affidavit, Mr Ladbrook said he bought this motorcycle in 2012for $25,000. In an affidavit of 27 October 2017, Mr Ladbrook said he didnot know what the then value of the motorcycle would be.[58] In his application to have the property excluded from forfeiture order becauseof undue hardship, Mr Ladbrook sought to exclude both the property at 306 CrinanStreet, Invercargill and the Harley Davidson motorcycle. In submissions for MrLadbrook, Mr Eagles said Mr Ladbrook was no longer resisting the seizure of themotorcycle but submitted the seizure of the motorcycle should be taken into accountwith regard to whether the Commissioner should also be able to seize and sell thehouse property.[59] In seeking relief due to undue hardship, Mr Ladbrook gave evidence as to hisbackground. He was born at Invercargill and had 14 brothers and sisters. He said hisfather left them when he was born and the family were "very poor". He has nevermarried, never had children and, from his affidavit, appears to be someone who iscontent to live a singular life. He said, and I accept, that he likes being in employmentand he must be well regarded by employers.[60] To his credit, Mr Ladbrook has been able to find employment again at thefreezing works following his recent release from prison. That provides goodemployment up to the end of the freezing work season in May. He has good prospectsof obtaining employment during the off-season. He has also given evidence as to theway he is able to obtain an income from cutting and selling firewood. He says hisonly extravagance was what he described as a lolly habit. Mr Ladbrook is aged 43and has no dependents. He has only himself to care for.[61] In considering an application for relief, s 56(2)(a) directs the Court to considerthe use ordinarily made of the property. Mr Ladbrook is currently living with his twinbrother. The Crinan Street property has been rented out with the rent being used topay the mortgage. Mr Ladbrook says the house is important for him as a home and hewishes to return there. I cannot accept that Mr Ladbrook has a particular financial oremotional investment in the Crinan Street property, meaning it would be onerous forhim if he were required to sell it. He was not living at the address when he involvedhimself in the cultivation of cannabis. He has not lived at the property since his releasefrom prison on parole on 2 October 2016. Mr Ladbrook said in his affidavit of 27October 2017 that he was living with his brother as a temporary arrangement and heneeded to get back into the property at an early date. He was, however, not living atCrinan Street when this application was heard in May 2018. It cannot be said that MrLadbrook will find it difficult or impossible to obtain accommodation for himself ifthe property at Crinan Street is sold.[62] The Act also directs the Court to consider the nature and extent of therespondents' interest in the property.17 Thus, it would be open to the Court to considerthat undue hardship would be caused by, for example, making asset forfeiture ordersin respect of items of significant value where only a small portion of their value wasobtained illegitimately.18 Mr Ladbrook involved himself in significant criminaloffending. I am satisfied the benefits he obtained from that were well in excess of thevalue of both the Harley Davidson motorcycle and the equity in his Crinan Streetproperty. Mr Eagles urged me to find that, for Mr Ladbrook to lose his house as wellas his motorcycle, would be severely disproportionate to the benefit which he obtainedfrom his offending. I cannot accept that.[63] As reflected in his prison sentence, Mr Ladbrook's offending was serious. Itwas of significant financial value to him. As he acknowledged, he became involvedin that offending and sought those benefits out of greed.[64] The threshold for establishing hardship is high and has to be assessed in lightof the legislative policy that wrong-doers should be stripped of proceeds of crime.19Mr Ladbrook must show not merely inconvenience or difficulty but that any hardshiphe will suffer will be disproportionate to the gravity of his offending. He has not doneso.17 Criminal Proceeds (Recovery) Act 2009, s 56(2)(b).18 Commissioner of the New Zealand Police v Drake [2017] NZHC 2919 At [131].19 Lyall v Solicitor-General [1997] 2 NZLR 641 (CA).Conclusion[65] Once the criteria for forfeiture is met, orders must be made subject to theexception as to undue hardship.20 I am satisfied that Mr Ladbrook has unlawfullybenefited from significant criminal activity and has an interest in the residentialproperty and motorcycle over which forfeiture is sought. I accept the value of thebenefit obtained from the significant criminal activity is, as the Police state, at$209,025.00 and I set the maximum recoverable amount at that figure. Mr Ladbrookhas not satisfied me that he will suffer undue hardship to the extent required to avoidforfeiture. The Commissioner has established the criteria for forfeiture of a 2008Harley Davidson Motorcycle (registration 44ZSD) and a residential property at 306Crinan Street, Invercargill. The Court must make the orders sought. I do so.[66] Leave is reserved to the Commissioner to seek orders in the particular formthat may be required to give effect to this judgment.Solicitors:Preston Russell Law, InvercargillEagles Eagles & Redpath, Invercargill.20 Criminal Proceeds (Recovery) Act 2009, s 55.