Commissioner of Police v Baylis

[2024] NZHC 3985

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2017-409-393

[2024] NZHC 3985

IN THE MATTER OF

the Criminal Proceeds (Recovery) Act 2009

BETWEEN

COMMISSIONER OF THE NEW ZEALAND POLICE

Applicant

AND

DARRIN STEPHEN BAYLIS

First Respondent

DARRIN STEPHEN BAYLIS and CAMBRIDGE TRUSTEES NO 2 LIMITED
Second Respondent

AND

MORTGAGE HOLDING TRUST COMPANY LIMITED

First Interested Party

KATHY EMILY CRIBBETT

Second Interest Party

Hearing:

14 — 15 October 2024

Appearances:

K South, K A Courteney & O J Welsh for Applicant J D Lucas for First Respondent

C M Ruane for Second Interested Party

Judgment:

20 December 2024

JUDGMENT OF CHURCHMAN J

COMMISSIONER OF THE NEW ZEALAND POLICE v BAYLIS [2024] NZHC 3985 [20 December 2024]

Table of Contents

The assets forfeiture order  2

Cash  2
Jet ski and trailer  2

Artworks  2

Profit forfeiture order  4

Significant criminal activity where 100 per cent of gross receipts is alleged to amount to an unlawful benefit:  5

Otherwise, lawful activities in respect of which no income tax was paid and which result in income tax evasion of $159,731.22 in breach of s 143B of the Tax

Administration Act 1994:  5

Mr Baylis’ response  6

The relief against forfeiture application  8

Background  12
The acquisition of the properties  19
Mr Baylis’ sources of income  24

Harley Davidson repairs and unlicenced car sales  31

Debt collecting  37

Prostitution  42

Methamphetamine dealing  43
Obtaining a pecuniary advantage by deception  49

Income tax  51

The law  52

Assets forfeiture  52

The Commissioner’s case  58

Mr Baylis’ response  66
Analysis of evidence in support of AFO  71

Conclusion on AFO  84
The profit forfeiture order  89

Analysis  106

Outcome for PFO  108
Ms Cribbett’s application for relief  110

The law  116

Analysis  121

[1]    The  Commissioner  of  Police  (the  Commissioner)  has  applied  for   Assets Forfeiture Orders (AFO) and Profit Forfeiture Orders (PFO) against the respondents pursuant to the Criminal Proceeds (Recovery) Act 2009 (CPA).1

1      The second amended statement of claim is dated 11 October 2024.

The assets forfeiture order

[2]    The AFO is sought in respect of three residential properties. Two of those properties 76 and 76A Frankleigh Street, Christchurch are owned by the first respondent (Mr Baylis) and the third, 77 Ensign Street Christchurch, is owned by the Baylis  Family  Trust,  having  been  transferred  by  Mr  Baylis  to  that  trust  on     5 November 2007. Other assets sought to be forfeit are:

Cash

(a)$26,770 cash plus accrued interest seized from a Range Rover vehicle driven by Mr Baylis on 27 August 2016.

(b)$42,770  cash  plus  accrued  interest  seized  from  Mr  Baylis  on     6 December 2017.

Jet ski and trailer

(a) A 2014 Yamaha Wave Runner jet ski with a chassis number US-YAM14121415 on a trailer with registration number 1G498, together valued at $13,500.

Artworks

(c)       Seven art works (the artworks are collectively valued at $18,444.28).

[3]    The Commissioner seeks forfeiture orders on the basis that the property is tainted property because it has, wholly or in part, been acquired as a result of, or been directly or indirectly derived from, significant criminal activity namely:

(a)trading in motor  vehicles  while  an  unlicenced  dealer in  breach  of s 95(1)(a) of the Motor Vehicle Sales Act 2003;

(b)selling methamphetamine in breach of s 6 of the Misuse of Drugs Act 1975;

(c)carrying out repossession activities while unlicenced to do so in breach of s 23(2) of the Private Security Personnel and Private Investigators Act 2010;

(d)using a document to obtain a pecuniary advantage in breach of s 228 of the Crimes Act 1961 and/or obtaining by deception in breach of s 240 of the Crimes Act 1961 in relation to eligibility for the MSD unemployment benefit during 2018 and 2019; and

(e)income tax evasion in breach of s 143B of the Tax Administration Act 1994.

Profit forfeiture order

[4]    In the second amended profit forfeiture application dated 11 October 2024 the Commissioner also applies for a PFO in the sum of $967,950.61 (or such other sum as maybe proved) as being derived through significant criminal activity. The Commissioner acknowledges that the maximum recoverable amount of $967,950.61 must have subtracted from it the value of any property forfeited to the Crown as a result of the AFO. The property which is the subject of the PFO is the same property that is the subject of the AFO.

[5]The maximum recoverable amount sought in respect of the PFO of

$967,950.61 is broken down as follows:

Significant criminal activity where 100 per cent of gross receipts is alleged to amount to an unlawful benefit:

(a)Trading in motor vehicles while an unlicenced dealer in breach of      s 95(1)(a) of the Motor Vehicle Sales Act 2003 to the value of

$273,252.64.

(b)Selling methamphetamine, in breach of s 6 of the Misuse of Drugs Act 1975 to the value of $460,458.43.

(c)Carrying out repossession activities while unlicenced to do so in breach of s 23(2) of the Private Security Personnel and Private Investigators Act 2010 to the value of $58,887.55.

(d)Using a document to obtain a pecuniary advantage in breach of s 228 of the Crimes Act 1961 and/or obtaining by deception in breach of s

240 of the Crimes Act 1961 in relation to eligibility for MSD unemployment benefit during 2018 and 2019 in the sum of $15,620.77.

Otherwise, lawful activities in respect of which no income tax was paid and which result in income tax evasion of $159,731.22 in breach of s 143B of the Tax Administration Act 1994:

(a)vehicle maintenance;

(b)the provision of venue and security services for prostitution/sex workers;

with a total alleged unlawful benefit derived from income tax evasion of $159,731.22.

Mr Baylis’ response

[6]    Mr Baylis opposes the Commissioner’s applications. He denies that any of the properties sought to be forfeit were obtained from the proceeds of any significant criminal activity.

[7]    Although initially Mr Baylis denied that he had effective control over the trust that owned 77 Ensign Street, during the course of his closing submissions, Mr Lucas indicated that that challenge was no longer maintained. I therefore make an order that 77 Ensign Street is under the effective control of Mr Baylis.

The relief against forfeiture application

[8]    The Commissioner had initially commenced proceedings under the Act against the second interested party to these proceedings, Kathy Cribbett2 however those proceedings were resolved by agreement.

[9]    In her capacity as second interested party to these proceedings Ms Cribbett advanced an application pursuant to ss 61 and 62 of the Act for relief against forfeiture on the grounds of undue hardship. The specific property to which the relief against forfeiture application related was the three residential properties: 77 Ensign Street, 76 Frankleigh Street and 76A Frankleigh Street.

[10]   The claim was advanced on the basis that Ms Cribbett had an interest pursuant to the Property (Relationships) Act 1976 in respect of each of these three properties. The Court was advised of an agreement (as yet unsigned) that had been reached between Ms Cribbett and Mr Baylis to the effect that the parties had agreed to divide their relationship property on the basis that Ms Cribbett was to receive 100 per cent of the net equity in the three residential properties in satisfaction of her relationship property claims and Mr Baylis was to receive the balance of the relationship property.

[11]   Ms Cribbett’s claim for relief was supported by Mr Baylis but opposed by the Commissioner.

Background

[12]   Mr Baylis is 59 years old. He acknowledged having an association with the Harris gang since the 1990’s, then the Road Knights gang after that and then, in the times relevant to these proceedings, the Headhunters gang. He became a fully patched member of the Headhunters on 28 April 2020.

[13]   As at 25 February 2022 Mr Baylis had accumulated some 27 convictions, 10 of which were dishonesty related, and four were driving/alcohol related. Of relevance to these proceedings, he was convicted in 1994 of allowing a premises to be kept as a place of resort, in 2006 of conspiring to deal methamphetamine, in 2020 of two charges

2      Commissioner of Police v Cribbett and Ors CIV-2022-409-249.

of unlawfully carry/possess restricted firearms/explosives and procuring or possessing methamphetamine and in 2021 of possessing methamphetamine for supply.

[14]   In March 2021, Mr Baylis was tried on a charge of participating with others (some of whom were patched members of the Headhunters gang) in an organised criminal group relating to methamphetamine dealing. He was acquitted following a judge-alone trial with the Judge finding that the allegations that Mr Baylis had acted as the financial controller of a group associated with the Headhunters in connection with methamphetamine supply had not been proved beyond reasonable doubt. However, the Judge did note that the matter was ‘reasonably finely balanced’ and that the Crown had not met the proof beyond reasonable doubt standard ‘perhaps by a reasonably slim margin’.3

[15]   The Commissioner advanced a similar argument in respect of the defendant’s involvement in a 2016 incident where Mr Baylis was  apprehended  driving  a  Range Rover vehicle registered to a company owned by Ms Cribbett in which cash of

$30,340 was found in  the centre console along  with a notebook with  entries in    Mr Baylis’ handwriting, 17 grams of methamphetamine, digital scales and weapons. All four vehicle occupants had the charges against them dismissed due to the inability of the Crown to prove, to the criminal standard, ownership of the drugs and other items.

[16]   The Commissioner’s case in the present proceeding is that the cash found in the centre console was Mr Baylis’ as he was in control of the vehicle, that it was tainted, that the other items found in the vehicle supported the inference that Mr Baylis was the treasurer of the Christchurch Branch of the Headhunters gang at the time and was involved in methamphetamine dealing.

[17]   The Commissioner also refers to three other incidents which are said to establish, on the balance of probabilities, that he was deriving income from the sale of methamphetamine. On 23 March 2019 he was arrested following a police pursuit when riding a Harley Davidson motorcycle and wearing a Headhunters gang patch and found in possession of $510 cash and 1.69 grams of methamphetamine. On

3      R v Baylis and Murphy [2021] NZHC 617 at [63].

23 September 2020 a search warrant was executed at his then home. A woman threw a liquid substance out of the window as police entered the property, but 12.7 grams of methamphetamine was found in the residue of the substance. Also found were explosives, replica assault rifles, hundreds of zip lock bags and scales, and gang finance related notebooks.

[18]   The same day the Headhunters gang  pad  was  searched,  and  more  than  100 grams of methamphetamine was found  along  with  paperwork  belonging  to Mr Baylis and five vehicles linked to him. On 30 March 2021 Mr Baylis was found at his then residence, in possession of 12.1 grams of methamphetamine along with electronic scales, $675 in cash and three firearms. The Commissioner says that all of this evidence supports a conclusion that Mr Baylis was, during the relevant period, extensively engaged in the sale of methamphetamine.

The acquisition of the properties

[19]   Mr Baylis purchased 77 Ensign Street, with the assistance of a mortgage, in November 1995 for the  sum  of  $132,000.  He  commenced  a  relationship  with Ms Cribbett in  2000  and  their  daughter  Jemma  was  born  the  following  year.  77 Ensign Street became the family home and remained so until the relationship broke down. On 4 June 2016 Ms Cribbett left 77 Ensign Street.

[20]   In November 2007, at a time he was awaiting trial for serious drug related offending, Mr Baylis set up a family trust and transferred 77 Ensign Street to it.

[21]Mr Baylis purchased 76 Frankleigh Street in February 2007 for the sum of

$300,000. He used the equity in 77 Ensign Street together with a collateralised mortgage over both properties to fund the purchase. In February 2015, Mr Baylis purchased 76A Frankleigh Street for the sum of $400,000, again funding the purchase by extending the mortgage over 77 Ensign Street and 76 Frankleigh Street.

[22]   The mortgage over these properties continued throughout the period relevant to these proceedings with mortgage related payments and other outgoings being paid from Mr Baylis’ Westpac 026 account. Payments into this account came from various

sources but most relevantly for these proceedings, there were large numbers of cash deposits.

[23]   77 Ensign Street has been sold for the sum of $580,000 with the sale to settle in December of this year. 76 Frankleigh Street was subject of a conditional sale and purchase agreement for $590,000. The date for the agreement to become unconditional was 5 November 2024. Ms Cribbett presently resides in 76A Frankleigh Street which has an estimated value of $565,000. Current mortgage lending secured over the three properties is approximately $785,960 with interest accruing at a daily rate of $196.44. It is anticipated that some $800,000 will be required to discharge the mortgage. As at the date of hearing, the net equity in the three properties was estimated as being $948,477.07 with $692,500 of that estimated to be capital gain on the purchase price.

Mr Baylis’ sources of income

[24]   Mr Baylis had expertise in the repairing and maintenance of motorcycles and other   motor   vehicles.    He   established   a   workshop   and   service   centre   at 20 Gasson Street. He also had  a  second-hand  car  dealership  located  nearby  at 259 Colombo Street.

[25]   On 8 November 2007 Ms Cribbett incorporated Baylis Motor Company Christchurch Limited (BMCC). As noted in [20] above, this was at the time when  Mr Baylis was on bail awaiting trial on drug charges. There was a high likelihood that he would be convicted. A result of conviction would have been his inability to meet the good character test to hold a licence as a motor vehicle dealer. BMCC was set up to hold the motor vehicle dealer licence for the Colombo Street car yard and operate both the car yard and the Gasson Street repair business. Ms Cribbett was the sole shareholder and director.

[26]   Mr Baylis became an employee of the company, and the company utilised his technical skills and industry contacts. He was paid a modest salary which appears to have been in the high $20,000’s to low $40,000 range annually.  In his affidavit of  28 September 2022 Mr Baylis claimed his salary ranged from approximately $40,000 to $60,000 during the period 2011—2017 but the analysis undertaken by Mr Hugill

did not support this. Under cross-examination, Mr Baylis agreed that he wasn’t, during the relevant period, netting more than $27,000–40,000 per year from his wages. He also agreed that in 2018 and 2019 he no longer worked for BMCC.

[27]   On his release from prison, following his conviction on 14 March 2008 for conspiring to deal methamphetamine, Mr Baylis resumed the role of workshop manager at BMCC. As well as being paid wages by BMCC he also engaged in a variety of other activities that were unconnected with BMCC. The Commissioner’s case was that these activities amounted to significant criminal activity and the proceeds of those activities were therefore tainted and they also tainted the various assets in respect of which they were utilised.

[28]   The Commissioner’s case was that numerous cash payments received from criminal activities were paid into Mr Baylis’ 026 Westpac account and the funds in that account were used, in part, to meet the outgoings on the three residential properties.

[29]   Much of the evidence upon which the Crown relied in respect of the two applications is based on statements or admissions made by Mr Baylis in an electronically recorded interview with Detective Glenn Forrest and police forensic accountant Andrew Hugill on 21 April 2021. Based on the contents of that interview Mr Hugill has done calculations as to the income Mr Baylis would have earned from the various criminal activities which, in that interview, he acknowledged undertaking.

[30]   The interview was done pursuant to an examination order and Mr Baylis had his lawyer, Josh Lucas present with him. The period covered by the interview started in 2010 and lasted up to 2021.

Harley Davidson repairs and unlicenced car sales

[31]   Mr Baylis acknowledged doing repairs on Harley Davidson motorcycles at the Gasson Street yard. Relevant statements include:

…my Harley repairs were pretty much done on a cash basis. You know most of the them didn’t go through the books.

…so I’d do s-, Harley repairs, tyres and all those sorts of obvious warrant of fitness type issues for, for Harley stuff. And, and again that money pretty much all went into my back pocket. Um same with sometimes I might buy a wee trade-in car, you know a car might get offered for the, to the business for say arguments say $2,000… I’ll probably ah purchase that vehicle before it becomes a trade in and I might spend, arguments sake a $1,000 on it and it might only get three grand, I’ll put it down at the car yard where we might sell it for $5,000. I’ll pay the ah sales salesman, pocket the difference and um, I’d do that several times…. You know…from that period of time I had several, you know what I mean like it’ll be more than several obviously but not, not several a week….It was a regular thing.

[32]   Mr Baylis also explained that he would purchase cars on his own account and not on behalf of BMCC often in circumstances where another dealer would bring the car to him for repairs and the cost of repairs would make the car uneconomic to sell so he would buy the car off the dealer, do the repairs himself and sell it. Mr Baylis’ statement indicated that sometimes he would be paid cash for cars or if the car was financed through a finance company ‘I might even get a cash cheque from a finance company or, it maybe the salesman might cash it or something like that…’.

[33]   He confirmed that he would not put this money through BMCC ‘because it was my perk’. As to the quantity of the unlicenced sale of cars Mr Baylis said:

So, to me, buying a $2,000 car, spending 500 bucks on it and making a grand or 15 hundred bucks, if you can do that 10 or 15 times a year or 20 times a year…it’s an extra 20, 30, 40 grand in my back pocket I never had.

[34]   He indicated that the BMCC car yard held between 30 and 33 cars and that at any given time ‘six or, maybe even seven would be mine’. He stated that a conservative estimate of the profit he made would be $20,000 a year. He broke that down by saying that he would easily sell two cars a month and make an average profit of “two grand a car, easy.”

[35]   In  relation  to  $42,770  cash  found  in  a  safe  at  20  Gasson  Street   on     6 December 2016, Mr Baylis gave various explanations including that $25,000 of it related to a boat he had sold for $20,000 to $22,000 and $17,700 of it related to his car sale activities.

[36]   Based on Mr Baylis’ admissions, Andrew Hugill estimated that the average annual profit from vehicle sales was $40,000 a year while BMCC was operating and

half that once it closed. This figure did not include anything for the cash vehicle repair jobs.

Debt collecting

[37]   Mr Baylis acknowledged collecting debts and repossessing cars. He was not licenced to do that. He described what he did in the following way:

Hey I might go around there myself. Or if I deemed it might be a little bit too hard or s, I haven’t got time I’ll farm it out as we say to, to somebody, you know, to one of my mates. m, maybe a bit bigger, a bit more bolshier, a bit whatever…

You don’t have to be heavy handed. You just gotta tell them, mate you’ve entered into a agreement, eh, you know if you don’t follow it through and then I’ll enforce it. And that in itself normally is enough to scare them into even giving the car back for example, hey…

Q When you say, ‘enforce it’, what do you mean?

Well as in other words we’ll not gonna go away, we’ll take the car off ya.

[38]   He also said that if the people owing the debt didn’t pay ‘…if they don’t make an effort, we’ll take the car off them’.

[39]As to how he operated, Mr Baylis said:

…sometimes we’d say hey, we spoke to you just two weeks ago, you haven’t made contact, haven’t done anything, just give us the keys and we’ll leave it at that. And then … we’d return the vehicle to the owner. And then depending how much effort or how many times we had to go there, it could be anything from $500 to, as I say, it could be a half….Um and we, we’d get paid, we get paid in cash.

[40]   Mr Baylis sometimes involved other people and he explained how matters worked in that situation:

…so in other words if I sent somebody out there I would, as we say, clip the ticket, so I would S-, I would, I would be part of the process to the end so other words, if we got $2000…I’d give him $1000, I’d keep a $1000….If it was, if it was only $500 it was $500, that’s me and I’ve only had to go around to, to Aranui and pick up a car and bring it back…that’s $500.

[41]   Mr Hugill calculated that, based on his admissions, Mr Baylis had made a profit on the unlicensed debt collecting of at least $7,500 per year for the full period.

Prostitution

[42]   Mr Baylis explained how he provided premises from which prostitutes worked. Based on Mr Baylis’ admissions Mr Hugill estimated that Mr Baylis had made a profit from ‘local prostitution’ that averaged $48,000 per year up to the tax year ending    31 March 2013 and, ‘niche’ prostitution an average of $25,000 per year starting in the tax year 31 March 2014 and ending in the tax year 31 March 2018. He paid no income tax on these profits.

Methamphetamine dealing

[43]   Mr Baylis acknowledged that he had been engaged in methamphetamine dealing but, when questioned about how much money he was making, he stated:

‘well, I was supporting my own habit, that’s all it is [inaudible] I’m about a gram [or possibly a grand] a day, I don’t smoke it, I just sniff it, and, I regulate my intake, if you want to call it that, I just make it up for myself in wee gram bags, so that’s Monday to Sunday’.

[44]   In his affidavit and during the course of his oral evidence Mr Baylis attempted to back-track from that saying that he had really been talking about speed rather than methamphetamine. He described speed as being methamphetamine which had been cut with other substances.

[45]   Under cross-examination he acknowledged that in 2006 he started conspiring with another patched Road Knight member to supply methamphetamine although when it was put to him that this was part of a gang activity he said:

‘No necessary. You can work independently as a person. Just because you’re part of a club doesn’t mean the club knows what your doing or anything like that, so.’

[46]   Under cross-examination he also acknowledged that one of the instances where he had been involved with the other patched Road Knight member related to five and a half ounces (12.7 grams) of methamphetamine. He also acknowledged that he was charged in relation to conspiracy to supply methamphetamine in relation to the five and a half ounces and that it was shortly after that, on 21 February 2007 he purchased 76 Frankleigh Street.

[47]   On 20 September 2020 police searched Mr Baylis’ address. He was subsequently charged with methamphetamine for supply. Under cross-examination he denied that he had been in possession of three ‘tick lists’ and also suggested that he had been charged with possession of methamphetamine simpliciter rather than possession of methamphetamine for supply. He was then referred to the summary of facts to which he had pleaded guilty. This stated:

‘One large plastic bag and seven point bags containing a total of 12.10 grams of methamphetamine were located in a set of drawers in the defendant’s bedroom. The set of electronic scales and three tick lists were located along with the bags of methamphetamine.’

[48]   Mr Baylis received a sentence of eight months’ home detention on the charge of possession for supply.

Obtaining a pecuniary advantage by deception

[49]   Mr Baylis was in receipt of an unemployment benefit. Those payments amounted to $15,620.77.

[50]   Mr Hugill calculated the income that Mr Baylis was receiving from his various sources of income such as vehicle sales, repossession work and sale of methamphetamine would have resulted in him not being eligible to receive a benefit. Mr Baylis has therefore obtained a pecuniary advantage by deception.

Income tax

[51]   Based on Mr Baylis’ admissions at interview and an analysis of his bank accounts, Mr Hugill estimated that, over the relevant period, Mr Baylis’ undeclared income exceeded $550,000 and he calculated the unpaid tax on that sum as being

$159,731.22. The failure to declare the income or to make any attempt to pay tax on it was clearly intentional and amounts to significant criminal activity being a breach of s 143A of the Tax Administration Act 1994.

The law

Assets forfeiture

[52]   The Commissioner is required to prove, on the balance of probabilities, that the property that is the subject of an AFO is ‘tainted’. If the Court is so satisfied, it must make an AFO subject to any relief it might grant under either s 66 or 67 of the CPA.

[53]   ‘Tainted property’ means real or personal property of any kind in New Zealand or elsewhere. It includes interests in both real and personal property.

[54]‘Tainted property’ is defined in s 5 of the Act as:

(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 criminal activity; and

(b)includes any property that has been acquired as a result of, or directly or indirectly derived from, more than one activity if at least 1 of those activities is a significant criminal activity.

[55]   An activity can become a ‘significant criminal activity’ if it is an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending:4

(a)That consists of, or includes, 1 or more offences punishable by a maximum term of imprisonment of five years’ or more; or

(b)From which property, proceeds, or benefits of a value of $30,000 or more have, directly or in directly, been acquired or derived.

[56]   It is not necessary for a person to have been convicted or even charged with an offence in connection with the activity and, an activity can still fall within the ambit

4      Criminal Proceeds (Recovery) Act, s 6.

of the CPA notwithstanding criminal proceedings in respect of the same activity that resulted in an acquittal.5 This is because of the different standard of proof.

[57]   Any expenses or outgoings used in connection with a significant criminal activity must be disregarded for the purposes of calculating the value of any property, proceeds, or benefits under s 6(1)(b) of the CPA.

The Commissioner’s case

[58]   A central feature of the Commissioner’s case is the use by Mr Baylis of his 026 Westpac account. The Commissioner asserts that some $98,244.70 of unexplained cash deposits which went into the 026 account over the relevant period were either the proceeds of methamphetamine dealing (which is an offence that, if proceeded by way of criminal proceedings, would be punishable by a maximum term of imprisonment of five years’ or more) or from other unlawful activities such as unlicenced vehicle repossession contrary to ss 8A and 23 of the Private  Security  Personnel  and  Private Investigators Act 2010 or selling motor vehicles without a licence contrary to s 95 of the Motor Vehicle Sales Act 2003. Section 8(1)(b) of that Act makes it an offence for an unlicensed person to sell more than six motor vehicles a year.

[59]   Where the maximum penalty was less than five years imprisonment, the Commissioner relied on the second limb of the test for significant criminal activity, namely that proceeds or benefits of a value of $30,000 or more have been acquired or derived.

[60]The evidence of the Commissioner’s forensic accountant, Mr Hugill, was that

$98,244.70 of unexplained cash went into the 026 account along with electronic deposits of some $105,601. The electronic deposits were identified as having come from vehicle sales made by the defendant.

[61]   The Commissioner’s case was that both the cash deposits and these electronic deposits were the proceeds of significant criminal activity and that the 026 account therefore became tainted.

5      Criminal Proceeds (Recovery) Act, s 6(2).

[62]The Commissioner relied on the case of Commissioner of Police v He & Ors6

where the Court said:7

It is well established that depositing funds into a bank account creates a singular chose in action: a debt owned by the bank to the account-holder. That being the case, once tainted funds enter a bank account the entire account becomes tainted as each portion (legitimate or illegitimate) forms an indistinguishable part of the singular chose in action.

[63]   It was undisputed that mortgage and other outgoings on the three properties were paid from the 026 bank account.

[64]   The Commissioner also relied on the case of Doorman v Commissioner of Police8 for the proposition that when tainted funds are put into real property, such as by paying a mortgage, that taints the property, and that any degree of tainting renders the property tainted.

[65]   The Commissioner’s case was that the 2014 Yamaha WaveRunner Jetski and trailer were also tainted with the hire purchase payments on them coming from the 026 account and that the seven specified art works were also purchased with funds from the same account and therefore tainted.

Mr Baylis’ response

[66]   Mr Baylis claimed that the properties were not purchased with tainted monies nor was the mortgage serviced with such monies. He claimed that the mortgage was serviced by the rents the tenants would pay.

[67]   In relation to the $42,770 cash seized from 20 Gasson St on 6 December 2016 he said that this was “a combination of my money and money that I had earned on behalf of the company [BMCC]”.

[68]   Mr Baylis advanced the explanation that the cash deposits that had gone into the 026 account would have been the proceeds of his trading on Trade Me.

6      Commissioner of Police v He & Ors [2022] NZHC 533.

7 At [126].

8      Doorman v Commissioner of Police [2013] NZCA 476, [2014] 2 NZLR 173 at [30]–[32].

[69]   He said that the $26,770 cash seized from the Range Rover vehicle he was driving on 27 August 2016 were made up of two components: about $5,000 or $6,000 cash was his and the balance was money that belonged to the Headhunters gang having been generated by pokie machines at the gang pad.

[70]   At the relevant time Mr Baylis was alleged to be the bookkeeper for the Headhunters gang, Christchurch Branch. The gang had unlicenced gaming machines at its clubhouse which Mr Baylis said he was looking after on behalf of the gang.

Analysis of evidence in support of AFO

[71]   Mr Baylis’ claim that the outgoings on the three properties were met by the rent paid by the tenants does not stand close scrutiny. Mr Hugill’s calculations showed that the rental payments received for the relevant period amounted to $272,279.12 with the mortgage costs for the same period being $413,883.60 resulting in a shortfall of $141,604.48.

[72]   In cross-examination Mr Baylis also acknowledged that some $18,000 of rates had been paid in cash.

[73]   Given the absence of any credible explanation by Mr Baylis as to a legitimate source for the cash deposits paid into the 026 account, it is inescapable that those deposits represented the proceeds of the significant criminal activity that Mr Baylis had been involved in as detailed above and were therefore tainted. That in turn taints the property that they used to sustain namely the three residential properties.

[74]   Mr Baylis’ claim that the quantities of cash he had at his disposal represented income generated from his activities on Trade Me was contradicted by the evidence. The evidence from Detective Forrest was that far from making a profit on his Trade Me activities, the cost of Mr Baylis’ Trade Me purchases greatly exceeded his returns. Detective Forrest said his analysis showed that Mr Baylis only sold 20 listings between 12 November 2007 and 13 August 2017 bringing in a total income of $9,098 but he purchased on Trade Me between the dates 13 May 2007 and 6 September 2017 items to a total value of greater than $30,000.

[75]   Mr Baylis’ claim that the Jet ski and trailer were purchased on hire purchase and paid off out of his wages is also contradicted by the evidence. Mr Hugill pointed to multiple payments to Marac (who had financed the acquisition of the Jet ski and trailer) coming from the 026 account. Those items are therefore tainted.

[76]   Relating to the $42,520 of cash found in the safe, Mr Baylis’ claims that that money, at least in part, represented funds he had earned on behalf of the company, is also untenable.

[77]   At the time of the seizure of those funds, Kathy Cribbett was the sole shareholder and director of BMCC. At no stage has she advanced a claim to those funds on behalf of BMCC. It is not possible to be precise what the exact source of the cash is, but it is more probable than not that it is the proceeds of the sale of methamphetamine. In addition to the cash in the safe, $2,010 cash was located on a nearby bench and $240 in Mr Baylis’ wallet along with a point bag of methamphetamine. That is also supportive of Mr Baylis having been involved in dealing methamphetamine and the cash in the safe being the product of that dealing.

[78]   In relation to the $26,770 cash seized from the Range Rover vehicle Mr Baylis was driving on 27 August 2016, that cash cannot belong to the Headhunters gang as they do not have legal identity separate from the individuals involved. Mr Baylis’ reliance on the contents of a ‘pokies book’ also found in the Range Rover is misplaced. That book did not include any entries that accounted for the sum found and in any event any funds from pokie machines would in themselves have been the proceeds of significant criminal activity. Mr Baylis gave evidence as to the profits generated by the pokie machines and, over the specified period, those profits would have greatly exceeded $30,000. The pokie profits would therefore have represented the proceeds of significant criminal activity undertaken jointly by Mr Baylis and others.

[79]   The context in which the cash was found also supports a conclusion that, rather than being pokies income, the money was the product of methamphetamine dealing. Weapons and 17 grams of methamphetamine were also found in the vehicle and, while the Court that tried Mr Baylis and the other occupants of the vehicle found that it could not be established beyond reasonable doubt who of the occupants of the vehicle

various items belonged to, given Mr Baylis’ history of methamphetamine dealing, his control of the motor vehicle, his role in the Headhunters gang and his admissions as to selling methamphetamine I conclude that the cash was his and likely the product of methamphetamine dealing. I note that Mr Baylis’ claimed that some of the cash found came from a boat he had sold. However, he was unable to provide any details as to the type of boat, details of sale or the purchaser. I conclude that explanation is fictitious.

[80]   In his examination, Mr Baylis had acknowledged methamphetamine dealing. He claimed that he only sold enough to fund his own personal habit. As to what is ‘personal habit’ was, he said that it was either a grand (or possibly a gram) a day. In his oral evidence, Mr Baylis claimed that he had said a gram a day rather than a grand a day. Depending on whether it was purchased at wholesale or retail level the evidence was the cost of a gram could have been a little less than $1,000 a day.

[81]   In his affidavit evidence and in the evidence given at the hearing, Mr Baylis changed his position saying that what he was really referring to was ‘speed’ and that this was quite different to methamphetamine being a much weaker ‘cut down’ version with less methamphetamine. His claim was that instead of a gram a day (7 grams a week) he was really only using about 0.25 grams a week.

[82]   Mr Forrest was questioned about his recollection of what Mr Baylis had said at the examination. His evidence was that Mr Baylis had not at any time mentioned speed and it was clear to him that both he and Mr Baylis were referring to methamphetamine. He described Mr Baylis as someone who was normally quite forthright in saying that another person had got something wrong but, at no time, when he was questioning Mr Baylis about his methamphetamine use did Mr Baylis ever suggest to him that he had got it wrong and it was speed rather than methamphetamine that he was referring to. Mr Forrest also pointed to a number of other conversations outside of the examination during which he had spoken to Mr Baylis about his use of methamphetamine and  that on none of those occasions was there a reference to     Mr Baylis using speed.

[83]   It is clear from reviewing the transcript of the examination that there is no reference by Mr Baylis to speed. There was no evidence of speed having been found in Mr Baylis’ possession. He had been found on a number of occasionsin possession of methamphetamine. I found Mr Forrest to be a more credible witness than Mr Baylis and conclude that Mr Baylis’ reference in his affidavit and oral evidence to only using a gram of speed a day rather than a gram of methamphetamine to have been a recent invention.

Conclusion on AFO

[84]   The three properties of 76  Frankleigh  Street,  76A  Frankleigh  Street  and 77 Ensign Street are tainted. They are tainted because funds in the Westpac 026 were tainted, being the proceeds of significant criminal activity, and payments of the mortgage and other outgoings were made from the 026 account. Rates were also paid in cash which I am satisfied was, more probably than not, the product of significant criminal activity.

[85]   The cash of $26,770 (plus accrued interest) found in the Range Rover vehicle on 27 August 2016  and  the  $42,770  cash  (and  accrued  interest),  seized  from  20 Gasson Street, Christchurch on 6 December 2016 is tainted being the product of significant criminal activity.

[86]   The jet ski and trailer are tainted given that the hire purchase payments were made from the 026 Westpac account which itself was tainted.

[87]   The seven artworks appear to have been paid for from the 026 account and accordingly are also tainted.

[88]   On the basis that all of these items are tainted property, I make the asset forfeiture orders sought by the Commissioner.

The profit forfeiture order

[89]   Although, as a result of the assets forfeiture order I have made in respect of all of the property, it is not necessary for me to make a profit forfeiture order, I will

consider whether a profit forfeiture order would have been justified, had I not made the assets forfeiture order. A court must make a profit forfeiture order under s 55 of the Criminal Proceeds (Recovery) Act 2009 if it is satisfied on the balance of probabilities that a respondent:9

(a)has knowingly unlawfully benefited from significant criminal activity within the relevant period; and

(b)has interests in property.

[90]   Section 54 of the Act limits the maximum amount recoverable under a PFO to the ‘relevant period of criminal activity’ which is seven years prior to the filing of the restraint application.

[91]   These restraint proceedings in this matter were first filed on 9 June 2017 with the result that the Commissioner can seek a PFO in relation to the period 9 June 2010 onwards.

[92]   The Commissioner has the benefit of an important legal presumption.  Section 53 of the Act provides:

53 Value of benefit presumed to be value in application

(1)If the Commissioner proves, on the balance of probabilities, that the respondent has, in the relevant period of criminal activity, unlawfully benefitted from significant criminal activity, the value of that benefit is presumed to the value stated in—

(a)    the application under section 52(c); or

(b)    ff the case requires, the amended application.

(2)The presumption stated in subsection (1) may be rebutted by the respondent on the balance of probabilities.

[93]   The threshold requirement is for the Commissioner to prove on the balance of probabilities that the respondent has, in the relevant period of criminal activity, unlawfully benefitted from significant criminal activity.

9      Criminal Proceeds (Recovery) Act, s 55(1).

[94]   The Commissioner alleges that the following activities on the part of Mr Baylis amounts to significant criminal activity for the purposes of the PFO:

(a)selling methamphetamine;

(b)acting as a motor vehicle dealer when not licenced to do so;

(c)engaging in tax evasion across a range of activities;

(d)claiming an MSD benefit whilst simultaneously deriving an income that, if declared, would have make him ineligible, and

(e)engaging in repossession work when unlicenced.

[95]   The presumption in s 53(2) provides the Commissioner with a significant advantage. Relevant for the purposes of this case is the fact that it does not matter how the Commissioner assesses the benefit.10

[96]   The methodology used by the Commissioner in calculating the unlawful benefit is “irrelevant”.11 It is not enough for a respondent to simply critique aspects of the Commissioner’s methodology, the respondent must adduce their own evidence.12

[97]   How a respondent can go about discharging the onus created by s 53(1) of the Act was discussed by the Court of Appeal in Zhou v Commissioner of Police13 where the Court said:14

…that the statutory presumption in s 53(1) of the Act means that once the Commissioner has assessed the unlawful benefit obtained by an offender, the onus switches to the offender to prove the actual benefit. This will normally require much more than a critique of the Commissioner’s methodology. Genuine evidence concerning the actual benefit obtained needs to be put forward by the offender if he or she is to rebut the presumption.

10     See Commissioner of Police v Filer [2013] NZHC 3111 at [5].

11     See Commissioner of Police v Tang [2013] NZHC 1750.

12 At [39].

13     Zhou v Commissioner of Police [2023] NZCA 137.

14 At [30].

[98]   Effectively, a respondent has to prove a different value to that nominated by the Commissioner.15

[99]   The ‘benefit’ is the gross benefit rather than the net benefit after the deduction of ‘overheads’. In Zhou v Commissioner of Police the Court of Appeal stated:16

…there was no error involved when the Commissioner calculated Mr Zhou’s benefit by focussing on the gross revenue he received. That is because, the New Zealand statutory regime has been deliberately cast as a penal scheme designed to reduce the opportunity for a criminal to benefit from significant criminal offending and to deter others from engaging in similar offending.

[100]  A point that is relevant for the present proceedings is that capital gains on property are regarded as an indirect benefit of significant criminal proceeding as are rental income from such properties.

[101]The Court of Appeal in Snowden v Commissioner of Police17 said:

…where the application of proceeds of significant criminal offending is necessary to maintain ownership of an otherwise legitimately acquired property, the entirety of the capital gain and rental income for the relevant period should in principle be treated as indirect benefits of that significant criminal offending. There is no suggestion the rent generated by third party occupants was sufficient to pay the mortgage. Very substantial sums, inexplicable other than as proceeds of crime, were found by the Judge to have been applied by Mr Snowden to the mortgage.

[102]  The Commissioner’s case was that Mr Baylis had approximately $950,000 in equity in the three properties and that the $692,500 of that equity came from capital gain accumulated since the properties became tainted.

[103]  In the present case, the Commissioner has chosen to exclude capital gain and rental income from the PFO.

[104]  In his affidavit sworn on 10 October 2024 Mr Hugill detailed the following profit from undeclared income:

15     See Cheah v Commissioner of Police [2020] NZCA 253.

16     Zhou, above n 13, at [60].

17     Snowden v Commissioner of Police [2021] NZCA 336 at [54].

Vehicle sales	Debt collection	Local prostitution	Niche prostitution	Total from these sources
$273,252.64	$58,887.55	$134,926.03	$97,808.22	$564,874.43

[105]  In relation to methamphetamine  dealing,  Mr  Hugill’s  estimate  was  that  Mr Baylis would have to sell $460,458.43 of methamphetamine to generate enough profit to cover his personal use. That calculation was based on the assumption that Mr Baylis was using a gram of methamphetamine a day, rather than a gram of speed a day. For the reasons set out above I accept that assumption is likely to be correct.

Analysis

[106]  Mr Baylis has not rebutted the figures relied upon by the Commissioner. He acknowledged methamphetamine dealing, acting as a motor vehicle dealer when not licenced to do so, engaging in tax evasion, claiming a MSD benefit at a time when the income that he was receiving, if declared, would have made him ineligible and engaging in repossession work when unlicenced to do so.

[107]  All of the objective evidence points to Mr Baylis living a life style that could not have been funded by his relatively modest salary from BMCC which was his only legitimate source of income. As well as funding his own expensive methamphetamine habit he had also acquired assets that were inconsistent with his legitimate income. Information supplied by Mr Baylis to Westpac in a document called Mortgage Solutions Loan Application Fact Find and Risk Identification showed him as having assets that included a Camaro car worth $80,000; a Harley Davidson motorcycle worth

$45,000 and boats and a jet ski collectively worth $108,000. He could not have acquired these through his lawful income.

Outcome for PFO

[108]  As Mr Baylis has not rebutted the presumption that the figures relied on by the Commissioner are incorrect, the Commissioner is entitled to a profit forfeiture order in the sum of $1,025,332.86.

[109]  As noted, the value of an asset forfeiture order made by the Court needs to be deducted from a PFO. In the present case all of the assets that would otherwise have been covered by the profit forfeiture order have been the subject of an asset forfeiture order so there is no basis for making a profit forfeiture order in addition to the asset forfeiture order. If the asset forfeiture order had not been made, I would have made a PFO in the sum of $1,025,332.86.

Ms Cribbett’s application for relief

[110]  I now turn to discuss the application for relief made by Ms Cribbett under ss 66 and 67 of the Act.

[111]  Ms Cribbett’s application is based on the fact that she has an interest under the Property (Relationships) Act 1976 in the three properties. She had registered a claim of interest against the title to those properties.

[112]  The Commissioner accepted, that  in  the  absence  of  these  proceedings,  Ms Cribbett would have a 50 per cent interest in the properties pursuant to the Property (Relationships) Act. However, the Commissioner opposes the application.

[113]  Ms Cribbett relied on the unsigned agreement she said she had reached with Mr Baylis to resolve the parties’ property relationship dispute on the basis that the net equity in the three properties are vested in her and Mr Baylis received all other relationship property.

[114]  She does not dispute that Mr Baylis was engaged in significant criminal activity but says that she was not involved in that activity.

[115]  The Commissioner’s position is that there is very limited evidence to establish that Ms Cribbett knowingly unlawfully benefitted from Mr Baylis’ significant criminal activity but submits that she may have been at least suspicious as to Mr Baylis’ sources of illicit income as a result of his long-standing gang connections. The Commissioner also notes that Ms Cribbett had access to the 026 bank account and would have seen the frequent cash deposits into that account. She would also therefore have known of

the difference between the rental income and the amount required to service the mortgages and other outgoings.

The law

[116]  On receipt of an application for an order for relief from civil forfeiture under ss 61 and 62 of the Act, the High Court must grant the relief that that Court considers appropriate if the applicant proves on the balance of probabilities that the applicant:

(a)Has an interest, or would but for any civil forfeiture order have an interest, in the property to which the application relates; and

(b)Has not unlawfully benefitted from significant criminal activity.

[117]  Pursuant to s 67 of the Act an applicant for relief can rely on undue hardship being caused to the applicant if relief is not granted.

[118]In assessing undue hardship, the Court may have regard to:18

(a)the use that is ordinarily made, or was intended to be made, of the property that is, or is proposed to be, the subject of the civil forfeiture order;

(b)the nature and extent of any person’s interest in the property;

(c)the degree, if any, to which the person had knowledge of any significant criminal activity to which the civil forfeiture order or proposed civil forfeiture order relates; and

(d)the circumstances of any significant criminal activity to which the civil forfeiture order or proposed civil forfeiture order relates to.

[119]  In support of her claim  under  s  67  of  the  Act,  Ms  Cribbett  notes  that  77 Ensign Street was the family home and would in the normal course of events be

18     Criminal Proceeds (Recovery) Act, s 67(2).

subject to equal sharing unless such equal sharing was ‘repugnant to justice’. Counsel’s submissions acknowledged that once Ms Cribbett left 77 Ensign Street it was treated as a rental property.

[120]  It was acknowledged that 76 Frankleigh Street was an investment property purchased by Mr Baylis, but it was submitted that this would—in the normal course of events—be subject to equal sharing pursuant of the Property (Relationships) Act 1976. In respect of 76A Frankleigh Street, it was acknowledged that this was originally purchased as a rental property but  was  later occupied by  Ms  Cribbett. Ms Cribbett submitted that during her term of occupation she had paid rent and had formed an attachment to the property which it was submitted would normally be subject to equal sharing.

Analysis

[121]  The Court has considerable discretion as to the form and extent of the relief granted if it finds that, on the balance of probabilities, an applicant for relief has the requisite interest in the property.

[122]  There is no doubt that Ms Cribbett has an interest in all three of the properties. The extent of that interest and the nature of what might be an ‘appropriate’ order are an issue in this case.

[123]  In the case of Hayward v Commissioner of Police19 the Court of Appeal noted that the parliamentary debates on the Criminal Proceeds (Recovery) Bill referred to the purpose of protecting the interest of third parties such as a spouse, children or dependants of criminals who might otherwise become innocent victims of forfeiture orders.

[124]  The Court held that the provisions of the Property (Relationships) Act did not override s 66 of the Criminal Proceeds (Recovery) Act and did not require the Court’s discretion  to  be   exercised   as   if   the   claim   were   brought   under   the Property (Relationships) Act.

19     Hayward v Commissioner of Police [2014] NZCA 625.

[125]  The Court identified a number of considerations that the Court might consider appropriate to take into account, including:20

(i)the nature and extent of any legal or equitable interest in the property, whether held by the applicant under a constructive trust or otherwise;

(ii)the probable outcome of a claim under the PRA;

(iii)the hardship considerations under s 67 of the CPRA which overlap with those under s 66; and

(iv)the statutory purpose of the CPRA.

[126]  The Court noted that equal sharing would not necessarily be the result of such an inquiry. The Court also held:21

When all the relevant considerations are taken into account, there is no reason in our view why the Court ought not to have made an order under s 66 granting Mrs Hayward relief in respect of 50 per cent of the untainted share of the family home.

[127]  The Court also noted that once an order of this nature was made under s 66, it was not necessary for an order based on undue hardship to also be made under s 67.22

[128]  In that case, the Court ordered that Mrs Hayward was to be paid, pursuant to s 66, 50 per cent of the net equity of the untainted share of the family home.

[129]  In the case of Commissioner of Police v McEnirney,23 the High Court concluded that it was implausible that Ms McEnirney could have overlooked the significant amounts of money being brought in by her husband’s drug dealing operation. The Court noted that Ms McEnirney had made a financial contribution equivalent to 8.33 per cent of the purchase price of the house and that there was no suggestion that Ms McEnirney’s initial contribution was tainted but it also noted that Ms McEnirney’s knowledge of the criminal activity was constructive rather than actual and that she had continued working throughout the period of her husband’s

20 At [29].

21 At [37].

22 At [38].

23     Commissioner of Police v McEnirney [2013] NZHC 2697.

offending and had contributed to the maintenance of the family and that her income assisted in paying down the mortgage.

[130]  The Court discussed how it should go about quantifying Ms McEnirney’s equity in the property noting that in other cases Courts had excluded the capital gains on the applicant’s equity on the basis that the mortgage was likely to have been sustained through the proceeds of significant criminal activity.24 The Court ultimately found the fairest outcome was to award Ms McEnirney an 8.33 per cent interest in the property.

[131]  In the case of Commissioner of Police v Burgess25 the High Court was considering Ms Burgess’ application for relief on the grounds of undue hardship under s 67. It was accepted that Ms Burgess may not have been aware of the full extent of her husband’s offending.

[132]The Court said:26

In Ms Burgess’ case, the balance falls just in her favour. I am influenced by the significant contribution to Henwood Road from the sale of other properties legitimately acquired and also her personal circumstances. I accept Ms Burgess should have some relief from forfeiture in relation to her interest in Henwood Road. However, the relief should be limited. Ms Burgess should not benefit from the maintenance and improvements to the property which were from the sale of stolen gold, and nor should she benefit from the inflationary increase in the value of the property given that the property was sustained in part by the proceeds of criminal activity. In my assessment, a fair result is to grant relief to Ms Burgess for half of the untainted contribution to the property but based on the 2007 valuation of $1.2 million and after deducting the borrowing. Most of the improvements funded by Mr Burgess’ illegal activity were carried out after that time. That leads to a figure for relief of approximately $372,000.

[133]None of these cases are directly on all fours of the present case.

[134]  In Ms Cribbett’s favour is the concession by the Commissioner that there is very limited evidence that might establish that Ms Cribbett knowingly unlawfully benefited from Mr Baylis’ significant criminal activity and that the highest it can be

24     At [40]–[42].

25     Commissioner of Police v Burgess [2016] NZHC 2625.

26 At [106].

put is that she must have been suspicious of him deriving illicit income as a result of his gang connections. I accept that the evidence goes no further than raising a suspicion.

[135]  However, this case differs from some  of  those  discussed  in  that,  while  Ms Cribbett has made some limited contributions to the payment of outgoings on the properties, she did not provide significant capital contribution to the purchase. A record of  contributions  to  mortgage  payments  between  3  September  2021  and  5 September 2023 totalling $25,665 was produced as exhibit A. Counsel also referred to other contributions of some $8,000.

[136]  Applying the criteria listed by the Court of Appeal in Hayward v Commissioner of Police27 I find:

(i)The applicant has a legal interest in all three properties pursuant to the Property (Relationships) Act.

(ii)The probable outcome of a claim under the Property (Relationships) Act would be a 50 per cent interest in the net equity in the three properties (subject of course to this Court’s finding that all the properties are tainted and forfeit).  I  have  not  overlooked  the  unsigned  agreement  that  Ms Cribbett and Mr Baylis entered into purporting to vest all of the equity in the three properties in Ms Cribbett.

(iii)I have concluded that I can place little weight on this. The agreement was not signed and I cannot be confident that it was not simply a device entered into by Mr Baylis to attempt to try to preserve some share in the equity of the properties. I doubt that such an agreement would ever have been considered were it not for these proceedings and Mr Baylis’ apprehension of the likely outcome. The outcome achieved by the agreement also goes much further than, on the face of things, any outcome Ms Cribbett might have hoped to achieve under the Property (Relationships) Act.

27     Hayward, above n 17, at [29].

(iv)I accept that in terms of the s 67 consideration, that Ms Cribbett would suffer hardship. In particular, she has lived in 76A Frankleigh Street as her home and has an attachment to that property. She has continued to pay the mortgage in recent years, and no doubt, were it not for her actions, the mortgage would have fallen into arrears and the property would have been  sold  by  the  bank.  There  was  no  evidence  that  Ms Cribbett had any other assets or ability to rehouse herself.

[137]  As discussed above, a purpose of the Act was to protect the interest of third parties who might otherwise become innocent victims of forfeiture orders. This has to be balanced against the purposes set out in s 3 of the Act including eliminating the chance for persons to profit from undertaking or being associated with significant criminal activity, to deter significant criminal activity and to reduce the ability of criminals and persons associated with crime or significant criminal activity to continue to expand criminal enterprise.

[138]  Counsel for the Commissioner acknowledged that the Court must engage in a necessarily imprecise calculation in arriving at a relief figure. That submission is correct.

[139]  Just as in a number of the other cases discussed above, I have concluded that the ‘appropriate’ relief to be granted to Ms Cribbett should be limited. It will not be as extensive as Ms Cribbett’s Property (Relationships) Act potential interests in the three properties.

[140]  76A Frankleigh Street was purchased in February 2015 for $400,000. An agent’s appraisal in July 2024 was said to be $565,000. Because the property was purchased using a collateralised mortgage over the other two properties there was no specific equity put into it. Arguably all of its present value is a capital gain. It is also not possible to ascertain what any net equity in the property is as it depends on the net sale proceeds from the other two properties and how much of the collateralised mortgage remains outstanding.

[141]  The outcome of an application should attempt to ameliorate the hardship that Ms Cribbett would sustain if she was no longer able to live in the property because it was forfeit, however that objective must be balanced against the penal purposes of the Act.

[142]  I direct that once the sales of 77 Ensign Street and 76 Frankleigh Street have been completed and the collateralised mortgage over all three properties discharged, 76A Frankleigh Street will vest in Ms Cribbett. She will need to raise a mortgage on the  property  of  $300,000  and  pay  that  to  the  official  assignee.   Effectively   Ms Cribbett’s application for relief against forfeiture is quantified at $265,000 being approximately 49 per cent of the gross value of the property. Her application for relief against forfeiture in respect of 77 Ensign Street and 76 Frankleigh Street properties is dismissed.

Churchman J

Solicitors:
Raymond Donnelly & Co, Christchurch for Applicant