SNOWDEN v COMMISSIONER OF POLICE [2021] NZCA 336

SNOWDEN v COMMISSIONER OF POLICE [2021] NZCA 336 [26 July 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA486/2020[2021] NZCA 336BETWEEN PAUL ANDREW SNOWDENAppellantAND COMMISSIONER OF POLICERespondentHearing: 21 June 2021Court: Kós P, Brewer and Davison JJCounsel: A G Speed for AppellantM R Harborow and R S Ching for RespondentJudgment: 26 July 2021 at 9 amJUDGMENT OF THE COURTA The application for extension of time to cross-appeal is granted.B The appeal is dismissed.C The cross-appeal is allowed.D There is no order for costs.____________________________________________________________________REASONS OF THE COURT(Given by Kós P)[1] Mr Snowden pleaded guilty to possessing methamphetamine for supply andconspiring to supply methamphetamine. Subsequently the Commissioner of Policesought civil forfeiture orders under the Criminal Proceeds (Recovery) Act 2009.1A trust controlled by Mr Snowden owns a rural property at Karaka. Gault J found itwas tainted but gave relief against its forfeiture. Instead he made a profit forfeitureorder against Mr Snowden personally, in the sum of $743,308. And he orderedthe Karaka property be sold to meet that order.2 Both parties appeal.BackgroundThe Karaka property[2] In December 2001 Mr Snowden settled the Paul Andrew Snowden FamilyTrust. He and his parents were trustees. His children were the principal beneficiaries;Mr Snowden, his spouse and other relatives were discretionary beneficiaries.As settlor, Mr Snowden retained the power to appoint trustees.[3] In March 2002 the Trust purchased all the shares in Karaka Farmlets Ltd, whichin turn owned the 1.6 ha rural property in Karaka referred to earlier. The vendor ofthe shares was an entity controlled by a Mr Kimball Johnson, himself a participant inorganised crime in Auckland. The purchase price was $100,000 (funded as totwo-thirds by transfer of a Harley Davidson motorcycle to Mr Johnson — albeitthe machine seems to have been worth far less)3 and the Trust assumed responsibilityfor a $320,000 mortgage over the property.[4] Thereafter mortgage repayments of $333,615 were made by the Trust.One fundamental question in this case is the extent to which this was funded bylegitimate sources. The Commissioner says less than one-tenth of this funding wasfrom legitimate sources. The Judge found at least one-fifth was legitimately sourced.41 We refer to the Act hereafter as the CPRA.2 Commissioner of Police v Snowden [2020] NZHC 2036 [High Court judgment].3 At [113]–[114].4 At [121], being the $32,158 the Commissioner conceded came from legitimate sources andthe $34,485 in benefit payments the Judge did not accept were proven to be the result of benefitfraud. See [14] below.Convictions[5] In 2010 Mr Snowden was convicted on one charge of possession of cannabisfor supply and one charge of possession of methamphetamine. The former involved,amongst other things, some 1.5 kg of loose cannabis plant material.[6] In 2013 Mr Snowden was again arrested. He later pleaded guilty to possessingmethamphetamine for supply and conspiring to supply methamphetamine. On thatoccasion he had 93 g of methamphetamine concealed between his buttocks, worthsome $93,000 or so.5 In sentencing him, Judge Garland rejected a submission that hewas just a follower, rather than a leader.6 Mr Snowden received a sentence ofimprisonment of four years and 10 months' imprisonment on the possession charge.He was subsequently sentenced in 2015 to one year and five months cumulative onthe previous sentence for the conspiracy to supply charge.7True extent of criminal activity[7] The Judge's conclusion that the convictions were unlikely to represent the fullextent of Mr Snowden's criminal activity is in our view amply sustained onthe evidence.8 The salient features of that evidence are now summarised.[8] First, Mr Snowden travelled some 12 times to Christchurch between December2012 and April 2013 (on the last occasion of which he was arrested in possession ofthe methamphetamine referred to at [6]). In Christchurch Mr Snowden dealt witha Mr Carr — providing, Mr Snowden said, protection while Mr Carr undertook debtcollection and drug-dealing. Intercepted communications between them were stronglyprobative of Mr Snowden supplying drugs to Mr Carr, which Mr Carr then on-sold.[9] Secondly, after Mr Snowden was imprisoned, intercepted communicationsdemonstrated Mr Snowden's capacity to arrange for Mr David O'Carroll, a seniorpatched member of the Head Hunters motorcycle gang, to visit Mr Snowden's mother5 The sentencing Judge stated the value of the 93 g as being $93,000: R v Snowden DC ChristchurchCRI-2013-009-4039, 22 January 2014 at [4]. The Judge below in the present proceedingproceeded on the basis it was worth $42,000: High Court judgment, above n 2, at [14].6 R v Snowden, above n 5, at [11].7 R v Snowden [2015] NZDC 2142.8 High Court judgment, above n 2, at [104].and provide her with funds. In evidence she acknowledged receiving $10,000 fromhis daughter. In October 2015 Mr O'Carroll was sentenced in the High Court to16 years and five months' imprisonment on three charges of manufacturingmethamphetamine in early 2014.9 We set out some of these communications inthe Appendix to this judgment.[10] Thirdly, Mr Snowden also paid a sum of $123,000 to his girlfriend, a Ms Jiang(of which she later returned $20,000 to his mother).[11] Fourthly, Mr Snowden gave evidence before the Judge. The Judge did notaccept his denial of engaging in methamphetamine supply.10 Nor his claim that hisrental income from the property was as much as $488,770.11 Although the Judge didnot say so directly, we infer he found Mr Snowden's evidence unreliable unlesscorroborated by documentary or other reliable oral evidence.[12] Fifthly, Mr Snowden declared no income in the seven years between 2010 and2016.[13] Sixthly, Mr Snowden operated wholly outside the regular banking systembetween 2009 and 2016, apart from two Karaka Farmlets accounts used to meetthe mortgage on the Karaka property.[14] Seventhly, and as noted above, $333,615 in mortgage repayments were madeon the Karaka property.12 In January 2018 the property was worth approximately$1 million, and the remaining debt stood at $164,258 as at 19 June 2018.13 The Judgefound $32,158 was derived from legitimate sources (conceded by the Commissioner),$34,485 from benefit payments (which while not necessarily legitimate, were at leastnot derived from criminal activity)14 and a further uncertain sum derived from rentpaid by third party occupants of the property.15 The Judge found Mr Snowden proved9 R v O'Carroll [2015] NZHC 2404.10 High Court judgment, above n 2, at [84]–[87].11 At [89]–[99]. See also [14] below.12 The figure is not materially in contest.13 It follows the Trust's equity then stood at $835,742.14 High Court judgment, above n 2, at [66] and [111].15 At [121].rental income of $179,758.16 But the Judge did not determine exact rental sum appliedto the mortgage — it may be as much as $164,276.17 (The Commissioner says thatmuch of this was itself tainted, as it derived from an asset that became tainted at latestby September 2006.) But a balance of between $102,696 and $183,346 mortgagerepayments is attributable to unexplained cash deposits and appears to be proceeds ofcriminal activity.[15] Eighthly, Mr Snowden's own living expenses appear to have been fundedeither from rental not applied to the mortgage or unexplained cash receipts thendisbursed in kind.[16] The Judge found Mr Snowden's drug offending extended "well beyond theinstances for which he has convictions".18 His unexplained cash receipts over the14-year period between 2002 and 2016 "seem to exceed $300,000".19Statutory framework[17] The CPRA provides a regime for recovery of proceeds of significant criminalactivity. Subpart 3 of pt 2 of the CPRA sets out the regime for civil forfeiture orders.There are two types of orders, both relevant here: assets forfeiture orders and profitforfeiture orders.[18] With respect to assets forfeiture orders, s 51 is relevant. It provides theHigh Court may, on application by the respondent, exclude certain property from anassets forfeiture order if it considers that, having regard to all of the circumstances,undue hardship is reasonably likely to be caused to the respondent if the property isincluded in the assets forfeiture order.[19] An application for a profit forfeiture order must per s 52(c) specify the valueof the benefit said to have been received as a result of significant criminal activity.Section 53(1) provides that if the Commissioner proves, on the balance of16 At [99].17 Namely, the rental income the Commissioner conceded was applied to the mortgage andthe additional cash rental income the Judge accepted as proven by Mr Snowden.18 High Court judgment, above n 2, at [104].19 At [105].probabilities, that the respondent has, in the relevant period of criminal activity,unlawfully benefited from significant criminal activity, the value of that benefit ispresumed to be the value stated in the application under section 52(c). Section 53(2)provides that the presumption may be rebutted by the respondent on the balance ofprobabilities. As is apparent, s 53 provides for a reverse onus.[20] Section 55(1) of the CPRA provides the High Court must make a profitforfeiture order if it is satisfied on the balance of probabilities that the respondent hasunlawfully benefited from significant criminal activity within the relevant period ofcriminal activity and has interests in property. Section 7 defines the meaning of"unlawfully benefited from significant criminal activity": a person has unlawfully benefited from significant criminal activity ifthe person has knowingly, directly or indirectly, derived a benefit fromsignificant criminal activity (whether or not that person undertook or wasinvolved in the significant criminal activity).[21] The CPRA provides for protection against civil forfeiture orders in two ways.First, ss 51 and 56 provide for the exclusion of the respondent's property from an assetsforfeiture order and a profit forfeiture order respectively if the High Court considerson the balance of probabilities that undue hardship is reasonably likely to be caused tothe respondent if the property is included in the assets or profit forfeiture order.[22] Secondly, persons other than the respondent may apply for relief from a civilforfeiture order under s 61. Section 63 sets out the necessary particulars anyapplication must contain. As to the grounds on which relief may be ordered, relevantto this appeal is s 67. Section 67(1) provides for relief where the High Court considersundue hardship is reasonably likely to be caused to the applicant if relief is not granted.Section 67(2) sets out circumstances the Court may have regard to in making thatassessment.Judgment appealed[23] After setting out the essential facts the Judge identified the issues to bedetermined. These were six:2020 At [18].(1) whether the Karaka property was tainted;(2) whether a sum of $2,725 cash was tainted;(3) whether Mr Snowden unlawfully benefited from possession and sale ofmethamphetamine and cannabis;(4) whether Mr Snowden had interests in the Karaka property andthe $2,725 cash;(5) whether the Limitation Act 1950 operated to exclude consideration ofMr Snowden's criminal activities prior to 1 January 2011; and(6) whether Mr Snowden and/or the beneficiaries of the Trust were likelyto suffer undue hardship.[24] The Judge dealt first with the limitation issue. He noted that counsel forMr Snowden relied on s 4(5) of the Limitation Act, the effect of which is to bar actionfor recovery of a penalty or forfeiture (other than a fine) two years from the date onwhich the cause of action accrued. Counsel for the Commissioner submitted thats 4(5) does not apply to assets forfeiture orders under the CPRA. The Judge did notagree with the Commissioner's submission. He considered the CPRA and s 4(5) ofthe Limitation Act were not irreconcilable. Parliament could be taken to have beenaware of the s 4(5) time bar when it enacted the CPRA. Parliament could easily haveexpressly excluded s 4(5) when it enacted the CPRA if it intended to do so.More particularly, it could have done so a year later when it enacted the LimitationAct 2010, with its transitional provisions and express exclusion of the CPRA from thenew Limitation Act.21[25] It followed that an action for an assets forfeiture order would be time barredby s 4(5) if the tainting occurred before 1 January 2009.22 However, to the extentthe Commissioner's application was based on tainting prior to 1 January 2009 from21 At [57].22 At [62].proceeds of Mr Snowden's drug offending, the Judge held the limitation period waspostponed under s 28 of the Limitation Act, on the basis of a deliberate concealment.Mr Snowden had concealed his involvement in drug dealing from the Commissioner.There was no suggestion it could with reasonable diligence have been discoveredearlier. Accordingly, the application for an assets forfeiture order was not timebarred.23[26] The Judge then considered whether the Karaka property was tainted. That isto say, whether it had wholly or in part been acquired as a result of significant criminalactivity or directly or indirectly derived from significant criminal activity.24That required the Judge to assess the evidence of drug offending by Mr Snowden,the essential particulars of which we have summarised at [7]–[16] above. The Judgewas not satisfied that the original acquisition of the Karaka property in 2002 wasacquired as a result of significant criminal activity.25 However, based on the evidencesummarised at [7]–[16] above, he concluded that substantial sums of money fromsignificant criminal activity had been used to meet mortgage payments and that,following the decision of this Court in Doorman v Commissioner of Police,the property was thereby tainted.26[27] Next, the Judge found that a sum of $2,725 in cash seized from the Karakaproperty (and located underneath a fridge-freezer) was on the balance of probabilitiescash derived from Mr Snowden's drug offending. It was therefore tainted.27 There isno appeal from that finding.[28] Next, the Judge considered the Commissioner's application for a profitforfeiture order against Mr Snowden for $754,533. The relevant period of criminalactivity for the purposes of s 55(1) of the CPRA ran from 13 December 2009 to 19 July2018, though the Commissioner's financial analysis of Mr Snowden's unlawfulbenefit only ran until 31 March 2016.28 This was uncontroversial. A restraining order23 At [67].24 See definition of "tainted property" in s 5(1) of the Criminal Proceeds (Recovery) Act.25 High Court judgment, above n 2, at [115].26 At [117] and [121], citing Doorman v Commissioner of Police [2013] NZCA 476, [2014] 2 NZLR173 at [32].27 At [123].28 At [126].had been filed on 12 December 2016, so the seven-year backstop date was13 December 2009.29[29] After noting that Mr Snowden had conducted his financial affairs outsidethe banking system, the Judge went on:30 His mortgage payments and living expenses until he went to prison (evenexcluding his methamphetamine use of at least $100 per week and maybe asmuch as $500 per week) exceeded his identifiable rental income. It is likelyhe was receiving substantial undeclared income to meet these expenses,including the payments from Mr O'Carroll. Given the disparity betweenMr Snowden's identifiable rental income and his access to large sums of cash,I consider on the balance of probabilities that he has unlawfully benefited fromsignificant criminal activity in a substantial way.[30] The next question for the Judge was the extent of unlawful benefit received byMr Snowden. Here, s 53 applied. We explained that provision above, at [19].The Commissioner had an initial burden of establishing on the balance of probabilitiesthat the respondent has unlawfully benefitted from significant criminal activity.If the Commissioner discharged that burden, it was then for Mr Snowden to rebutthe statutory presumption that he had benefitted to the value claimed bythe Commissioner.31[31] The Judge went on to note the recent decision of this Court in Cheah vCommissioner of Police, wherein it was said there were only two possible outcomes.32First, the Commissioner has the benefit of the presumption and, if the respondent failsto rebut it, the presumed value stands. The second, where the respondent succeeds inrebutting the presumption. But that will only occur if the respondent has proved, alsoon the balance of probabilities, a different value. As the Judge put it:33Under s 53 the Court's role is limited to deciding on the balance ofprobabilities whether the Commissioner has proved that the respondentunlawfully benefitted, during the relevant period of criminal activity, fromsignificant criminal activity, and whether the respondent has rebutted thepresumption that the value of that benefit is correctly stated in the application.29 At [29]. The seven-year backstop date is a result of the definition of "relevant period of criminalactivity" in s 5(1) of the Criminal Proceeds (Recovery) Act.30 At [129].31 At [131].32 At [132], citing Cheah v Commissioner of Police [2020] NZCA 253 at [47].33 At [132].[32] The specified amount nominated by the Commissioner was calculated asfollows:34(a) cash deposits $ 66,087(b) cash seized $ 2,725(c) cash expenditure $ 32,613(d) Karaka property capital gain and rental income $189,108(e) methamphetamine use $ 86,000(f) approximate value of methamphetamine supply $378,000We comment briefly on (e) and (f). The calculation of methamphetamine use wasbased on expenditure of $500 per week from December 2009 to April 2013. The valueof the methamphetamine supply was based on nine trips to Christchurch (from the12 identified), each allegedly to the value of $42,000 per trip. This, the Judge noted,was "said on behalf of the Commissioner to be conservative".35[33] The Judge considered the Commissioner's presumed value had not beenrebutted by Mr Snowden in evidence (or by cross-examination of the Commissioner'switnesses) except in one respect.36 Namely, in relation to the Karaka property capitalgain and rental income benefit. The Judge was concerned about the potential need toapportion some of the capital gain, and some of the repayment of mortgage, onthe basis that initially at least, funding was not tainted. However, applying Cheah, theJudge considered that Mr Snowden had not proved a different value.37 Accordingly,the Judge accepted the prescribed benefit of $754,533 for the profit forfeiture order.38[34] Next, the Judge considered whether Mr Snowden had interests in the Karakaproperty (and the cash found in it). This conclusion he reached readily, based ons 58(1) of the CPRA, concerning whether the respondent had effective control over34 At [133].35 At [133], n 44.36 At [138].37 At [139].38 At [140].the property. We have set out at [2] above the control which Mr Snowden had overthe Trust. Based on that evidence, the Judge considered that although the propertywas legally owned by Karaka Farmlets Ltd, Mr Snowden had effectively treatedthe Karaka property as his own and held effective control over it.39[35] Finally, the Judge turned to an application made by Mr Snowden for relief fromforfeiture under ss 51 and 56 of the Act. The application here was based onMr Snowden's assertion that he had no other place to live, and that he had put hiswhole life savings into the Karaka property. The Judge noted that there was noapplication for relief by other beneficiaries of the Trust.40 Although there was somesuggestion that his mother would suffer hardship, losing her "retirement home",the evidence did not support that claim, given she owned and lived elsewhere in herown freehold property — and preferred living there than at Karaka.41 However,the Judge went on to say:42Having regard to these circumstances, particularly the ownership ofthe Karaka property and the limited extent of the tainting, I consider that relieffrom assets forfeiture is appropriate. The beneficiaries of the Trust –particularly the primary beneficiaries, Mr Snowden's children – would sufferundue hardship if the Karaka property was asset forfeited.[36] Although not expressed in that reasoning, it is what the Judge did next thatreally explains what he was doing here. Having given relief against asset forfeiture,he denies relief against profit forfeiture. He reasoned this as follows:43I do not consider that the beneficiaries of the Trust – including Mr Snowdenbut particularly the primary beneficiaries, Mr Snowden's children – wouldsuffer undue hardship if the Karaka property is sold and part of the proceedsforfeited to meet a profit forfeiture order. They will suffer hardship, but itwould not be not out of the ordinary. It is not out of the ordinary for offenderswho have gained substantially from significant criminal activity to lose theirresidence. Although Mr Snowden claimed he has nowhere else to stay, heacknowledged he has previously lived with his mother and could return there.Only one of Mr Snowden's children has been living at the Karaka property.He is an adult and has been paying rent. I have addressed Ms Snowden'sposition. The loss of trust equity due to a profit forfeiture order reflectsthe prescribed unlawful benefit and is not out of the ordinary, particularly39 At [147].40 At [151].41 At [157].42 At [158].43 At [161].when it appears the Karaka property has not really been treated as a trust assetto date.[37] The practical effect of the Judge granting relief against asset forfeiture was toallow the Trust to retain the margin between the equity in the property and the profitforfeiture sum. That is said to be a sum of $90,000, more or less.Appeal and cross-appeal[38] As noted earlier, both parties contend the Judge erred.Appeal[39] In his appeal, Mr Snowden contends that the Judge erred in finding that he hadunlawfully benefitted from significant criminal activity to the extent of $754,533 suchthat a profit forfeiture order should be made. Two associated submissions were made:first, that the Judge was wrong to find that rental income was insufficient to explaincash deposits paid in, and secondly that the Judge was wrong to find that Mr Snowdenhad not proved a different value under s 53 of the CPRA.[40] A further appeal point is taken by Mr Snowden as to postponement oflimitation, it being contended that the two-year time bar was not displaced.[41] Mr Snowden seeks this Court direct an adjusted maximum recoverable amountunder s 54(1) of the CPRA.Cross-appeal[42] The Commissioner wishes to cross-appeal the Judge's decision to grant reliefagainst the asset forfeiture order made over the Karaka property. The Commissionercontends the threshold of undue hardship was not satisfied by evidence as tothe appellant's circumstances or those of any interested party. The Court erred inassessing the extent to which the Karaka Road property was tainted and in finding thatMr Snowden did not have a personal, legal or equitable interest in that property.Further, the application for relief was not advanced by beneficiaries of the Trust.The Commissioner seeks this Court discharge the order for relief.[43] The cross-appeal was filed eight working days out of time. Extension of timeis sought under r 29A(1) of the Court of Appeal (Civil) Rules 2005. Mr Speed opposesthe application. Counsel for the Commissioner take responsibility for the delay —due to oversight — in their written submissions. But an affidavit in supportdemonstrates the real cause was an oversight by the Commissioner's investigativestaff. Be all that as it may, there is no prejudice to Mr Snowden from the short delay,apart from the fact of revival itself. Extension of time to cross-appeal is granted.Proof and rebuttal[44] We here address Mr Snowden's first appeal point.Submissions[45] For Mr Snowden, Mr Speed set about challenging individual parts ofthe Judge's analysis. It is perhaps best to take these in order of importance, althoughthat was not the order in which they were taken by Mr Speed. One of his primarychallenges was to the approximate value of methamphetamine supply calculated at$378,000, based on a notional figure of $42,000 supplied per trip based on the 93 gMr Snowden was caught with on the last occasion. No evidence was offered to supportthe proposition that on eight other occasions he carried 93 g. Mr Carr appeared to bea "low level street dealer", and allegations made by counsel for the Commissioner thatMr O'Carroll was Mr Snowden's supplier were "entirely speculative". Secondly,Mr Speed challenged the calculation of methamphetamine use by Mr Snowden, basedon use at $500 a week from December 2009 to April 2013. It was also said that therewas "an obvious case of double counting" in relation to the alleged proceeds of sale(just dealt with). Thirdly, the Judge was wrong to find that rental incomes wereinsufficient to explain cash deposits made.[46] It is unnecessary for us to go through the detail here given the conclusion wereach on the basis of authorities we set out at [47] below. However, in relation todischarge of the reverse onus on Mr Snowden, we note Mr Speed's submission thatMr Snowden's inability to recall many details in relation to rental income "should nothave been to the Commissioner's advantage" given the passage of time.Discussion[47] We are unable to accept this submission, which runs directly contrary to otherdecisions of this Court, most notably that in Cheah v Commissioner of Police.44 In thatcase this Court gave approval to prior High Court decisions, namely the decisions ofKatz J in Commissioner of Police v Tang45 and Gilbert J in Commissioner of Police vFiler.46 The tenor of these decisions is that once the Commissioner discharges theinitial onus under s 53(1), the onus of proving the correct figure rests with therespondent under s 53(2) and does not pass back to the Commissioner.47That interpretation best serves the purposes of the forfeiture regime, includingeliminating the chance for persons to profit from undertaking or being associated withsignificant criminal activity and deterring such activity. As Gilbert J noted in Filer,the respondent will know what the benefit was and will have access to the witnessesand records that may be needed to prove this, whereas the Commissioner does not.48If the respondent fails to prove the benefit on the balance of probabilities, the amountstated in the Commissioner's application stands, even if its accuracy is questionable.49[48] Applying those authorities, this Court said in Cheah:50Under s 53 there are only two possible outcomes. The first is thatthe Commissioner enjoys the benefit of the presumption and the respondentfails to rebut the presumption. In that case the presumed value stands.The second is where the respondent succeeds in rebutting the presumption.As for the latter, by necessary construction, it follows that the respondent mustprove a different value.[49] That conclusion was based on four essential sources. First, the explicitstatutory wording in s 53, but also s 54. The latter provision tasks the court withdetermining the maximum recoverable amount by taking the value determined unders 53 and deducting it from the value of any property forfeited to the Crown as a resultof an assets forfeiture order. So in that situation, the court draws a distinction between44 Cheah v Commissioner of Police, above n 32.45 Commissioner of Police v Tang [2013] NZHC 1750.46 Commissioner of Police v Filer [2013] NZHC 3111.47 Commissioner of Police v Tang, above n 45, at [33] and [39]; and Commissioner of Police v Filer,above n 46, at [13].48 Commissioner of Police v Filer, above n 46, at [13].49 At [13].50 Cheah v Commissioner of Police, above n 32, at [47].values which are for the court to assess and others which are for others to prove.51Secondly, this Court noted the importance of the distinction made in the CPRA fromthe previous Proceeds of Crime Act 1991. Under that Act, the court had been requiredto assess the value of benefits derived from the commission of a serious offence.Instead of the previous criteria for analysis, the presumption in s 53 has beeninstalled.52 Thirdly, as we have said, this Court's conclusion in Cheah was based inpart on the earlier analysis of Katz and Gilbert JJ in Tang and Filer. Fourthly, there isthe important potential qualification, albeit one seldom used, that s 47(1) of the CPRApermits the court to amend an application for a civil forfeiture order, such that inan appropriate case the High Court might opt to reduce the value of the benefit claimedin a civil forfeiture application. So that provision is available in the case of executiveoverreach.[50] In this case Mr Snowden was always going to be in serious difficulty inrebutting the presumption. His denial of dealing in methamphetamine at all (otherthan the occasion of his arrest) plainly did not impress the Judge, who must have foundthat in this and other respects the evidence Mr Snowden gave under oath was false.To meet the reverse onus in s 53(2), Mr Snowden needed to lead cogent evidence eithereffectively valuing the benefit of the unlawful activity or, conversely, establishing tothat standard those parts of the asserted sum that must have come from lawful,untainted sources (so that the unlawful sum is definitively a figure less than thatasserted by the Commissioner). As Mr Harborow submitted, in the High CourtMr Snowden did not put forward an alternative value at all. He merely sought to chipaway at the accuracy of the sum asserted by the Commissioner. As we said in Cheah,that approach is not sufficient to engage s 53(2).[51] We turn now to assess the specific challenges to quantum advanced byMr Speed for Mr Snowden. First, the asserted value of the methamphetamine suppliedduring Mr Snowden's dealing. Taking a more realistic view of the facts than his client,Mr Speed suggests $189,000, half the value nominated by the Commissioner.He sought to challenge the evidential foundation of the gross profit figure for each ofMr Snowden's trips and for the conclusion Mr Snowden played a more than minor51 At [47].52 At [40]role in the operation. As to the latter, Mr Speed sought to justify the 50 per centreduction on the grounds the Judge found Mr Snowden took money to Auckland,where Mr Carr took it and passed it on to a third party — meaning the benefit toMr Snowden was lesser. But that was plainly not the Judge's finding.53 And there issimply no sufficient evidential foundation compelling the reduced figure over anyother. The mere assertion of a 50 per cent reduction on the overall amount adopted isindicative of the fundamental issue with this ground of appeal.[52] Secondly, the value of the rent with respect to the cash deposit sums.Strictly speaking, the Judge's analysis on this point went to the assessment of whetherMr Snowden engaged in significant criminal activity. We take the appeal point to berelevant to assessing the extent to which Mr Snowden's cash deposits were attributableto significant criminal activity rather than rental income. The rental sums alleged aresums at large. Probative records do not exist. The Judge correctly doubtedthe credibility of the rental payments summary provided by Mr Snowden's accountant,Mr Clive Johnson.54 It was both dependent on Mr Snowden's instructions andincluded demonstratable errors both as to the amount of rent paid and dates for whichsome rent payments were received.55 Even if some weight might be placed on the oralevidence of tenants, this source suffers the fatal problem of bootstrapping.The unreliability of Mr Johnson's summary is particularly damaging given thatsummary was the only alternative amount put forward by Mr Snowden.[53] As to the supporting affidavit and signed statement evidence, Mr Speedfocussed his criticism on the Judge's rejection that Ms Debbrah Repia paid $300 rentper week between January 2004 and May 2010.56 But Mr Speed does not explain whythe Judge's doubts as to the possibility of that amount given her income and likelyexpenses at that time was wrong. To the contrary, we agree with the Judge. Mr Speedsought to bolster the reliability of Ms Debbrah Repia's evidence, arguing her signedstatement was admissible as a business record under s 19 of the Evidence Act 2006and corroborated by her previous consistent statement to police to the same effect.Self-evidently, neither statement is a business record within the meaning of s 16(1) of53 High Court judgment, above n 2, at [76] and [84].54 At [90]–[93].55 In particular, those identified at [90(b) and (c)] and [94(a) and (b)].56 At [95].the Evidence Act. The Judge also did not discount the signed statement. But the mereact of repetition does not add anything to the reliability of the evidence.57[54] Thirdly, and more importantly, is the capital gain and rental income attributableto the Karaka property. Mr Speed challenged whether this could qualify as an unlawfulbenefit under s 7 of the CPRA.58 Payment of outgoings on a mortgage so as to keepa mortgagee at bay provides the benefit of a capital gain.59 Keeping the mortgagee atbay also provides the benefit of rental income. The Judge considered that if, inthe absence of Cheah, the Court had to assess the benefit, he would need to considerwhat proportion of capital gain and rental income was attributable to the unexplainedmortgage payments.60 We however consider that where the application of proceeds ofsignificant criminal offending is necessary to maintain ownership of an otherwiselegitimately acquired property, the entirety of the capital gain and rental income forthe relevant period should in principle be treated as indirect benefits of that significantcriminal offending. Here, there is no suggestion the rent generated by third partyoccupants was sufficient to pay the mortgage. Very substantial sums, inexplicableother than as proceeds of crime, were found by the Judge to have been applied byMr Snowden to the mortgage. But for those sums propping up the mortgage,the property could not have been occupied and the rent generated. Shorn ofinessentials, the rent is itself the laundered proceeds of the crime.[55] Fourthly, we are not persuaded the Judge erred in his analysis of the value ofmethamphetamine consumed by Mr Snowden, itself paid for by proceeds of crime.Mr Speed sought to challenge the admissibility of the Provisional Advice to Courts(PAC) report — on which the calculation was based — as a business record onthe basis the report writer was not unavailable as a witness. The Judge did not specifywhich s 19 ground the PAC was admissible under.61 Unavailability is only one of threegrounds.62 We are satisfied the PAC was properly admissible as a business record.The Judge's calculation of the value of methamphetamine accords with Mr Snowden's57 Hart v R [2010] NZSC 91, [2011] 1 NZLR 1 at [8]; and Wallace v R [2018] NZCA 2 at [37].58 See s 7 set out at [20] above.59 Commissioner of Police v Winsor [2014] NZHC 161 at [33]; and Commissioner of Police v Snook[2018] NZHC 2537 at [72].60 High Court judgment, above n 2, at [139].61 See at [136].62 Evidence Act 2006, s 19(1)(b) and (c).recorded statements in the PAC report. As to the reliability of the PAC report — alsochallenged by Mr Speed — there is no evidence that Mr Snowden challenged thatreport at the time of sentencing. In our view that is the appropriate time to do so.He now seeks to resile from the facts on which assumedly his sentence was assessed.63We are disinclined to place any weight in the evidence of an offender reportingsignificant methamphetamine use for sentencing purposes,64 only then to asserta lesser scale of use in subsequent criminal proceeds recovery proceedings. We noteMr Speed's submission that the value of the methamphetamine use was wronglydouble-counted, any use being paid for out of the proceeds from the $378,000 profitwe discuss at [51] above. That is possible but Mr Speed provided no evidence thatthat was the case. The presumption was not and could not be rebutted.[56] Finally, the assessment of Mr Snowden's cash expenditure — namely on ratesand electricity payments. Mr Snowden's mother gave evidence the rent fromthe Karaka property usually covered rates payments and any shortfall was made up byher or her husband. The evidential issues as to the value of rent payments has beenwell-traversed. There is also little explanation of where Mr Snowden's mother's fundscame from — problematic given the evidence of significant money transfers fromMr Snowden to his mother detailed at [9]–[10] above. As to the electricity payments,some of Mr Snowden's tenants stated in sworn statements that they paid their ownshare of any power bill. This evidence suffers the same problem reliability issueidentified at [52] with the rental income evidence. We also note some of thosestatements are sworn by tenants not identified on Mr Johnson's rental paymentssummary, while some of the tenants listed in the summary have provided no writtenstatement. That alone raises questions of reliability. More fundamentally there is noevidence corroborating those cash payments being received and then put towardsthe cash payments of electricity bills. Again, Mr Snowden cannot advance some othervalue as being more likely.63 See R v Snowden, above n 5, at [11].64 Which may cause them to attract a greater discount on sentencing, though Mr Snowden did notreceive such a discount: Zhang v R [2019] NZCA 507, [2019] 3 NZLR 648 at [143]–[150], inparticular [148] emphasising the need for persuasive evidence of addiction.[57] Finally, this not a case in which the evidence was either sufficiently reliable orsufficiently cogent to make an order substantially amending the Commissioner'sapplication under s 47 of the CPRA. The Judge was right not to do so.Limitation[58] We turn now to the secondary appeal point taken by Mr Snowden. It concernsthe postponement of limitation, he contending that the two-year time bar was notdisplaced.Submissions[59] Mr Speed advanced a number of challenges to the Judge's conclusion thatthe time bar was extended under s 28(b) of the Limitation Act.65 That provideslimitation is postponed where a right of action is "concealed by fraud".First, Mr Speed challenged the Judge's conclusion that the prior drug dealing couldnot with reasonable diligence have been discovered earlier. Secondly, that fraudshould in this context mean active dishonesty to achieve an advantage by wrongfulmeans. Thirdly, that there was no breach of duty by Mr Snowden and no duty atcommon law or statute law to voluntarily confess criminal conduct.Discussion[60] We do not accept this argument, which was not pressed with particular vigourby Mr Speed. "Fraud" in limitation terms has an equitable meaning,66 involvingdeliberate or reckless concealment of a cause of action.67 Moral turpitude is notrequired.68 We agree with Mr Harborow that fraud is used in the Limitation Act inthe equitable sense to denote conduct by the defendant such that it would be againstgood conscience for him to avail himself of the limitation. The effect of this is not torequire Mr Snowden to volunteer his illicit activity. Rather, it is simply that without65 See [25] above.66 Applegate v Moss [1971] 1 QB 406 (CA) at 413 per Lord Denning MR.67 Cave v Robinson Jarvis & Rolf [2002] UKHL 18, [2003] 1 AC 384 at [20], quoting King v VictorParsons & Co [1973] 1 WLR 29 (CA) at 33–34.68 Applegate v Moss, above n 66, at 413.doing so, he impairs his ability to advance a defence of limitation.69 Finally we do notaccept Mr Snowden's submission that his tainting of property from the proceeds ofdrug offending could have been with reasonable diligence discovered materiallyearlier. In our view that submission lacks any cogent evidential underpinning.Relief from forfeiture (cross-appeal)[61] We turn now to the cross-appeal.Submissions[62] As noted at [42] above, the Commissioner challenges the Judge's decision togrant relief against the assets forfeiture order made over the Karaka property.The Judge's reasoning is set out at [35]–[36] above.[63] The Commissioner submits that as Mr Snowden was the only party seekingrelief, undue hardship would have to have been caused to him personally in order forrelief to be granted under s 51. But, and appropriately, the Judge made no such finding.Instead relief was granted on the basis that the beneficiaries of the Trust, particularlyMr Snowden's children, would suffer undue hardship. Yet the Commissioner says noapplication for relief was brought by them under ss 61 and 67 of the CPRA.In addition, s 63 requires an application brought by a person other than a respondentto specify the applicant's interest in the property and the reason why they should begiven relief, and that did not occur here. Mr Snowden's children took no steps inthe proceeding. They did not give evidence, and no proper assessment of factorsrelevant to them could be made. For instance, s 67(2) provides that an applicant'sknowledge of the significant criminal activity to which the property relates, andthe use intended to be made of the property, are relevant, but these considerations werenot (and could not be) addressed.[64] In response, Mr Speed submits that the jurisdictional basis for relief lay unders 51 of the Act, which he said conferred a broad discretion. Mr Snowden was69 It may also be noted that the opportunity to rebut given by s 53(2) of the CPRA does not requireself-incrimination either; it can be fulfilled in the disclosure of lawful activity, as we point out at[50] above.a beneficiary of the Trust, and sought relief in his own right. Subject to thatclarification, Mr Speed sought to uphold the judgment as to relief in its own terms.Discussion[65] We start with the question of jurisdiction. We do not find s 51 of the CPRA toavail Mr Snowden here.70 As is evident however, that provision only applies inrelation to undue hardship caused to the respondent. That is, Mr Snowden.As Mr Harborow submitted, the Judge made no finding that Mr Snowden specificallywould suffer undue hardship if the property was forfeit. Nor could he have, giventhe fact that the Judge had concluded that Mr Snowden had unlawfully benefitted fromsignificant criminal activity in a substantial way, and that a large portion of the equityin the Karaka property must have been acquired by tainted funds. The relevant factsare those we set out at [7] to [16] above. It is distinctive that in the passage of thejudgment quoted at [36] above, the Judge did not frame the perceived undue hardshipin terms of Mr Snowden at all. The hardship, to the extent it existed, was identified inrelation to Mr Snowden's children. The child that lived at the Karaka propertybetween 2016 and 2017 is however an adult. Mr Snowden's other two children areapproximately 15 and 13 but do not live at the Karaka property. There was noevidence that they acquired any interest in the property for valuable consideration (asdiscretionary beneficiaries, they had an equitable expectation only) and nor in theabsence of application could findings be made as to whether they had any knowledgeof the significant criminal activity their father had benefited from.[66] If relief was to be granted on the basis of the interests of other beneficiaries (incontradistinction to Mr Snowden), then we consider an application under s 61 wasrequired. No such application was here made. Had it been, it would have needed tobe supported by evidence by the applicant, and the Commissioner would ordinarily beentitled to cross-examine the deponent in relation to the matters provided for in s 67(2).[67] In these circumstances, we have no option but to set aside the relief granted bythe Judge.70 See [21] above.[68] That is sufficient to deal with the cross-appeal but we make two further pointsin light of the argument advanced by Mr Harborow. First, we agree with hissubmission that the Judge's determination that Mr Snowden had effective control overthe Karaka property, but did not have a legal or equitable interest in it, understated hisdegree of interest for the purposes of the CPRA. That is because the CPRA has itsown particular definition of "interest" which goes beyond legal or equitable interest inthe conventional sense to include "a right, power, or privilege in connection withthe property".71 The powers of Mr Snowden as settlor, which we note at [2] above,meet that requirement.[69] The second point we note is that the approach taken by the Judge in relation torelief from assets forfeiture appears inconsistent with that taken by him in relation toprofit forfeiture. We have described the approach taken by the Judge at [36]–[37].The practical effect of the Judge's order is that the Karaka property will be sold, despiteassets forfeiture relief, but leaving the Trust with the equity, a sum of approximately$90,000 noted in [37]. That will be accessible to all beneficiaries, includingMr Snowden. Why the Judge opted for that course is not clear to us, but for presentpurposes it does not matter given our conclusion on jurisdiction.Result[70] The application for extension of time to cross-appeal is granted.[71] The appeal is dismissed.[72] The cross-appeal is allowed.[73] Costs not being sought, no order is made.Solicitors:Keam Law, Auckland for AppellantMeredith Connell, Auckland for Respondent71 Definition of "interest" in s 5(1)(b) of the Criminal Proceeds (Recovery) Act. See also s 58, furtherextending the effective meaning of "interest" to include "effective control".APPENDIXThe intercepted communications concerning funding from Mr O'Carroll, referred toat [9] above, include the following between Mr Snowden (PS) and his mother (LS):On 2 November 2014:PS: You got the money eh, Dave got you some money eh mumLS: I've been using mine for thatPS: No just use that money mumLS: I knowPS: How much did he give you?LS: I'm not sayingPS: Heaps?LS: NoPS: Well fuck get heaps off himLS: Oh yeah no just let it goPS: I'll write another letter mum I'll write another letter tell him to giveyou fucking heaps look I'm in here for fucking yearsLS: I knowPS: I'm going to need money I'm not going to sit in here and fucking rotwith no moneyOn 5 October 2015:PS: Ok just remember there's more money there when you need itmumLS: YeahPS: I don't I don't want I know there's a lot on but at least I've gotmoney to to you know what I meanPS: Cause I don't wanna worry like that I've got DaveLS: No I knowPS: You know what I mean mum and I know you've got a lot on but ifthere's money that you need the money's thereOn 4 December 2015:PS: Okay well that's another I'll talk to him about that now but whatI'm gonna do is I'm gonna get Dave to um maybe give you a big whackof money to put it in my account to ensure that my mortgage neverruns because if my mortgage ever runs out and because I'm in jail.PS: What I'll need you to do what I'll do is I'll get some moneydropped off to you, yeah, I'll get you to put possibly like that threegrand in the bank.LS: My three grand?PS: Yep and I'll get some more money dropped to ya or even more andum it's just to ensure that there's always money in the bank, likethere's always like a couple of months ahead.