Commissioner of Police v Jobes
[2024] NZHC 1163
•10 May 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2022-404-1616
[2024] NZHC 1163
UNDER the Criminal Proceeds (Recovery) Act 2009 BETWEEN
COMMISSIONER OF POLICE
Applicant
AND
JAMES LUKE JOBES
First Respondent
SARA LEIGH JOBES
Second RespondentALIREZA FARID NASSIRI
Third Respondent
Hearing: 5 and 6 December 2023 Appearances:
R Gibbs and G Young for the applicant K Hogan for the first respondent
N Batts for the second respondent
Judgment:
10 May 2024
JUDGMENT OF CAMPBELL J
This judgment was delivered by me on 10 May 2024 at 11.30 am pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
COMMISSIONER OF POLICE v JOBES [2024] NZHC 1163 [10 May 2024]
[1] A Police search in June 2020 of the home of the first and second respondents, Mr Jobes and Ms Jobes, uncovered 129 cannabis plants in various stages of maturity. The plants were in several locations in the home, including a concealed space. There were four grow tents, electric fans and specialist lights. Electronic scales and eleven Ziplock bags of dried cannabis were found in a storage room. Investigations revealed that electricity usage at the home since Mr Jobes and Ms Jobes purchased it in December 2016 was many times that of an average household. Investigations also showed unexplained cash deposits into the Jobes’ bank accounts.
[2] The Commissioner of Police says that Mr Jobes and Ms Jobes unlawfully benefited by $1,083,600 from the cultivation and sale of cannabis. The Commissioner applies under the Criminal Proceeds (Recovery) Act 2009 (the Act) for a profit forfeiture order against Mr Jobes and Ms Jobes in the sum of $1,083,600, and for orders that the Jobes’ home, some cash and funds held in their bank accounts be realised to satisfy the order.
[3] Mr Jobes and Ms Jobes, who are now separated, oppose any profit forfeiture order. They say they did not unlawfully benefit from the cultivation and sale of cannabis. They accept Mr Jobes cultivated cannabis but say it was for his personal use rather than sale. Further, Mr Jobes says that he was convicted in the criminal jurisdiction only of cultivating cannabis for personal use, not of selling it, and that it is an abuse of process for the Commissioner to now allege in the civil jurisdiction that the same offending generated $1,083,600. If there is to be a profit forfeiture order, Mr Jobes and Ms Jobes say it should be in a sum much lower than that sought by the Commissioner, and they apply for relief, asking that their home and their bank accounts be excluded from the property that is realised to satisfy any order.
[4]I have to determine four issues:
(a)Did Mr Jobes and Ms Jobes unlawfully benefit from significant criminal activity?
(b)Is the Commissioner’s claim an abuse of process?
(c)If Mr Jobes and Ms Jobes unlawfully benefited from significant criminal activity, what was the value of that benefit?
(d)If a profit forfeiture order is made, what property should be realised to satisfy the order (taking into account the applications for relief)?
Factual outline
[5] On 29 June 2020, Police officers conducting a routine patrol of Botany Town Centre noticed a strong smell of cannabis coming from a parked Mercedes car. Two men were sitting in the front of the car: Mr Jobes and the third respondent, Mr Nassiri. The Police officers questioned them about the smell of cannabis. Mr Nassiri, who was sitting in the driver’s seat, handed one of the officers a small bottle containing dried cannabis from the centre console of the car.
[6] The officers then searched the Mercedes. They found 449 grams of dried cannabis in a plastic bag in a sports bag in the boot, 454 grams of cannabis in a brown paper bag in the boot, and $5,600 cash under the driver’s seat. They also found $2,360 cash in Mr Jobes’ wallet.
[7] The officers found Mr Jobes’ car, a Ford Falcon, parked nearby. They searched it. A large white bin, containing plant remnants and smelling of cannabis, was found in the boot. Mr Jobes denied that the bin had contained cannabis.
[8] The next day, 30 June 2020, Police searched Mr Jobes and Ms Jobes’ property at Skyhigh Road, Hunua. Officers found 129 cannabis plants at different stages of maturity. They were located in three areas of the home. Four grow tents had been erected and modified with equipment such as lights and fans. A concealed space was discovered within the garage. Inside were 19 of the cannabis plants. Officers found electronic scales and eleven Ziplock bags of dried cannabis inside a storage room.
[9] Given the lighting and other equipment found at the property, Police investigated the electricity consumption at the Skyhigh property. I will refer to the details of this later, and to the Police’s analysis of Mr Jobes and Ms Jobes’ bank accounts.
[10] Mr Jobes was charged with cultivation of cannabis, possession of cannabis for supply, and failing to carry out obligations in relation to a computer search. Mr Jobes pleaded guilty to the cultivation charge. He was sentenced to 150 hours of community work and 18 months’ intensive supervision. Police then withdrew the other charges.
[11]Ms Jobes was not charged.
The Commissioner’s application and the Jobes’ response
[12] The Commissioner says it was likely that Mr Jobes was cultivating cannabis at the property from soon after he and Ms Jobes acquired it in December 2016. Indoor cannabis cultivation uses equipment such as lighting and fans to encourage the rapid growth of plants. This equipment consumes significant power. Police investigations showed that, from January 2017 to December 2020, annual electricity consumption at the Skyhigh property ranged from 18,803 kWh to 35,834 kWh. The Ministry of Business, Innovation and Employment reports that from 2017 to 2020 the average household in New Zealand used just over 7,000 kWh each year. Police analysis of the Jobes’ bank accounts from 2017 to June 2020 showed a total of $37,212.20 in what Police say were unexplained cash deposits. Police also say that from 2017 to 2020 Mr Jobes purchased equipment and materials that are typically used in the cultivation of cannabis.
[13] The Commissioner estimates the value of the cannabis cultivated at the Jobes’ property as $1,038,600. This estimate is based on assumptions that I address later in this judgment.
[14] The Commissioner says Mr Jobes and Ms Jobes have, jointly and severally, unlawfully benefited by this amount of $1,038,600, being the value of the cannabis grown at their property from December 2016 to June 2020. The Commissioner applies for a profit forfeiture order in that amount, together with orders that the Skyhigh property, funds in the Jobes’ bank accounts and the cash found under the driver’s seat of the Mercedes and in Mr Jobes’ wallet be realised to satisfy the profit forfeiture order. All that property is currently subject to restraining orders made under the Act earlier in this proceeding.
[15] Mr Jobes and Ms Jobes both resist the making of any profit forfeiture order. Mr Jobes says he started growing cannabis at the property only about six months before the Police search. He says he grew the cannabis for his personal use. Mr Jobes has suffered from serious back issues for the last ten years and has undergone four spinal operations. He says he used about half an ounce of cannabis each day to treat his back pain. He says he did not sell or supply any cannabis or receive any income from it. He says the high power consumption and the cash deposits can be explained.
[16] Ms Jobes says that Mr Jobes was a casual cannabis smoker before his back surgery, but that after his surgery he would smoke every day. She says it was only once the COVID-19 lockdown started in March 2020 that Mr Jobes started growing cannabis. She says she had nothing to do with the cannabis growing. She accepts that she knew Mr Jobes was growing cannabis and that she turned a blind eye to it. She says she believed he was growing the cannabis for personal use, and that at no point did she have knowledge, let alone involvement in, the sale of cannabis. She says the high power use is explained by her habit of putting the heater on whenever she is at home, winter and summer. She says she always sleeps with the heater on, even when it is hot.
[17] If a profit forfeiture order is made, Mr Jobes and Ms Jobes each seek relief from the order. They ask that the Skyhigh property, most of the cash and their bank funds be excluded from the reach of the order. They say they would suffer undue hardship if those assets were realised to satisfy the order. They say they acquired the Skyhigh property with legitimate funds, and that they are already suffering financial and health problems that would be exacerbated if the assets were realised to satisfy the order.
The Act’s civil forfeiture regime
[18] The Act establishes a regime for the forfeiture of property (i) that has been derived from significant criminal activity or (ii) that represents the value of unlawfully derived income. The Act allows for two types of civil forfeiture orders. One is an asset forfeiture order. This is aimed at property that has been derived from significant criminal activity. The other is a profit forfeiture order. This is aimed at stripping the
value of a person’s unlawful benefit from significant criminal activity by forfeiting any property the respondent has an interest in (regardless of whether that property was derived from significant criminal activity). It is the latter type of forfeiture order that the Commissioner seeks against Mr Jobes and Ms Jobes.
[19] The primary purpose of the Act, as relevant to a profit forfeiture order, is stated in s 3(1)(b) to be the “establishment of a regime for the forfeiture of property … that represents the value of a person’s unlawfully derived income”. Section 3(2)(a) says the regime proposes to “eliminate the chance for persons to profit from undertaking or being associated with significant criminal activity”. The Supreme Court has said:1
The aspirational language of s 3(2)(a) gives a clear and emphatic signal as to the legislative purpose.
[20] Section 55 provides that a court must make a profit forfeiture order if it is satisfied, on the balance of probabilities, that (relevantly):
(a)the respondent has “unlawfully benefited from significant criminal activity”;2 and
(b)the respondent has interests in property.
[21] There is no dispute that Mr Jobes and Ms Jobes have interests in property. A key issue is whether they have “unlawfully benefited from significant criminal activity”. That phrase is defined in s 7:
In this Act, unless the context otherwise requires, a person has unlawfully benefited from significant criminal activity if the person has knowingly, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person undertook or was involved in the significant criminal activity).
[22] There are three elements to that definition. The Commissioner must show that Mr Jobes and Ms Jobes:
1 Marwood v Commissioner of Police [2016] NZSC 139, [2017] 1 NZLR 260 at [12].
2 The respondent must also have unlawfully benefited within the “relevant period of criminal activity”. No issue arises in relation to this requirement.
(a)knowingly;
(b)directly or indirectly derived a benefit from;
(c)significant criminal activity.
[23] The knowledge element can be met by showing that the respondent was wilfully blind to the fact that the benefit was derived from significant criminal activity.3 “Benefit” includes “proceeds and property”, and “property” means “real or personal property of any kind”.4 “Significant criminal activity” is defined in s 6. It includes, relevantly, offending that consists of one or more offences punishable by a maximum term of imprisonment of five years or more. There is no requirement that the respondent be charged, let alone convicted. This emerges from s 6(2), which provides:
A person is undertaking an activity of the kind described in subsection (1) whether or not—
(a)the person has been charged with or convicted of an offence in connection with the activity; or
(b)the person has been acquitted of an offence in connection with the activity; or
(c)the person’s conviction for an offence in connection with the activity has been quashed or set aside.
[24]If a court makes a profit forfeiture order, the order must, by s 55(2), specify:
(a)The value of the respondent’s unlawful benefit from the significant criminal activity, determined in accordance with s 53. Section 53(1) presumes the value to be that stated in the Commissioner’s application. That presumption may be rebutted by the respondent, on the balance of probabilities: s 53(2). I address the effect of this presumption later in this judgment.
3 Vincent v Commissioner of Police [2013] NZCA 412 at [52]–[53].
4 Criminal Proceeds (Recovery) Act 2009, s 5.
(b)The “maximum recoverable amount” in terms of s 54. This is the value of the benefit determined in accordance with s 53, less the value of any property that has been forfeited under an assets forfeiture order in relation to the same significant criminal activity. In this case, there has been no such assets forfeiture order, so no deduction is needed.
(c)The property that is to be disposed of in accordance with s 83(1), being property in which the respondent has an interest. Section 83(1) provides that the Official Assignee must dispose of the property specified in the order and apply the money resulting from the disposal in the manner set out in that subsection.
[25] A profit forfeiture order is, by s 55(4), enforceable as an order made as a result of a civil proceeding instituted by the Crown against the respondent to recover a debt due to it. The maximum recoverable amount is recoverable from the respondent by the Official Assignee as a debt due to the Crown. This debt can be enforced by disposing of the property specified in the order, but the debt can also be enforced by utilising other debt-enforcement mechanisms that may be available.5
[26] A respondent may apply under s 56 for the court to exclude certain property from being able to be disposed of under a profit forfeiture order. If the court excludes any property from being disposed of, that does not affect the maximum recoverable amount under the order. The respondent remains obliged to pay that amount.6
Did Mr Jobes and Ms Jobes unlawfully benefit from significant criminal activity?
Mr Jobes
[27] Mr Jobes accepts that he cultivated cannabis. He says it was for personal use and that he started cultivating only a few months before the Police search of his property in June 2020.
5 Commissioner of Police v Harrison [2021] NZCA 540, [2022] 2 NZLR 339 at [53].
6 This is clear from the narrow focus of any exclusion under s 56(1) (which addresses only the property specified under s 55(2)(b)) and from the terms of s 55(4). It also necessarily follows from Commissioner of Police v Harrison [2021] NZCA 540, [2022] 2 NZLR 339.
[28] Cultivation of cannabis is an offence for which the maximum penalty is imprisonment for seven years.7 Mr Jobes’ cultivation therefore constituted significant criminal activity. The cultivation produced a cannabis crop which Mr Jobes says he consumed. That crop was property, and therefore a benefit in terms of the Act. That Mr Jobes may have, as he contends, consumed the entire crop (other than that seized by Police) does not, it appears to me, detract from him having benefited. On the face of it, Mr Jobes therefore derived a benefit from significant criminal activity. Plainly, he did so knowingly.
[29] However, the Commissioner did not put his case on this basis. The Commissioner’s case was that the significant criminal activity was the cultivation and sale of cannabis.8 The case was put this way in pleadings, evidence and submissions. That is the case that Mr Jobes answered. I heard no argument on whether personal consumption constitutes a benefit in terms of the Act.9 In these circumstances, and in fairness to Mr Jobes, I determine whether he unlawfully benefited from significant criminal activity by reference to the Commissioner’s case.
[30] The issue, then, is whether the Commissioner has satisfied me, on the balance of probabilities, that Mr Jobes sold cannabis that he grew. There is no direct evidence of any sales. The Commissioner asks me to infer, from circumstantial evidence, that Mr Jobes sold cannabis. Mr Jobes (and Ms Jobes) submit that the circumstantial evidence is equally consistent with Mr Jobes being a heavy user of cannabis. They say I cannot safely infer that Mr Jobes was selling cannabis.
[31] Mr Jobes has had chronic and severe back pain since about 2013. He had four surgeries at about that time. One of them was on the wrong disc and created an infection.
[32] Mr Jobes’ evidence was that from 2013 he would use about half an ounce of cannabis daily to treat his back pain. In cross-examination, he accepted that meant the equivalent of “easily” as many as 14 cannabis joints each day. He also accepted
7 Misuse of Drugs Act 1975, s 9.
8 The sale of cannabis is an offence for which the maximum penalty is imprisonment for eight years:
Misuse of Drugs Act 1975, s 6.
9 See, similarly, Commissioner of Police v Keen [2020] 3365 at [27].
that he would not have been smoking half an ounce on days that he was working (his work primarily being as a welder or welding tutor).
[33] I accept that Mr Jobes was a cannabis user throughout the period that the Commissioner says he was cultivating cannabis (2017 to June 2020). Bongs were found at his house, consistent with personal use. I also accept that for much of that period he was using cannabis heavily in order to deal with his back pain. His back pain was often severe. This was clear both from the medical records and from the way in which he recounted his experiences of it in his oral evidence. But, for the reasons that follow, I am satisfied that, more probably than not:
(a)Mr Jobes sold surplus cannabis (beyond that which he consumed) from his cultivations; and
(b)Mr Jobes did so from 2017 to June 2020.
[34] The scale of Mr Jobes’ cannabis operation, and the range of equipment used, is much more consistent with cultivation for sale than cultivation solely for personal use. A total of 129 cannabis plants were found at the Skyhigh property, in a range of conditions and maturities. The plants were found in three different locations. There were four grow tents. There were associated lights, heat lamps, fans, extensive ducted ventilation, carbon filters, timers and thermometers and pressurised tanks and gauges. Mr Jobes had constructed a concealed space (in which cannabis plants were growing) in the lower part of the house. It is most unlikely that someone would grow this many plants, and expend so much time, effort and money, merely to produce cannabis for personal use, even heavy use.
[35] Mr Jobes sought to downplay the cost he incurred in setting up the operation. He said the growing equipment was given to him by a former partner of Ms Jobes’ mother. I do not accept his account. There was evidence that Mr Jobes purchased equipment associated with cannabis cultivation from 2017 through to 2020: an air quality monitor, a humidity controller, a carbon-dioxide monitor, a digital soil tester, an ultra-violet water filter, a fan, and specialist lighting. Mr Jobes and Ms Jobes said these items were used for other activities: a vegetable garden, fruit trees and brewing
beer. But there was little if any evidence of those activities having been pursued at the Skyhigh property. The vegetable “garden” turned out to be a raised pod on the deck, used for a short time only. Photographs showed a solitary fruit tree on the property. The only photographic evidence of brewing was at an earlier property that Mr Jobes and Ms Jobes had owned.
[36] Other equipment and material found at the Skyhigh property is more consistent with sale of cannabis than with personal use. In the storage room were electronic scales and, in a cardboard box, eleven Ziplock bags containing dried cannabis head. Each bag contained about one ounce of cannabis. Cannabis is often sold by the ounce. Mr Jobes’ explanations for the ounce bags of cannabis lacked credibility. He said he had bagged up a harvest for his own use as that was how he had previously received and used cannabis. This did not explain why the bags had to be weighed by electronic scales and was inconsistent with his evidence that he was used to consuming half an ounce (not an entire ounce) each day. In cross-examination he offered a further explanation, saying that he put different strands of cannabis into different bags so that he knew which strand he was consuming. But the bags were unmarked and found together in one box.
[37] Analysis of Mr Jobes and Ms Jobes’ bank accounts from 2017 to June 2020 showed a total of $37,212.20 in what Police say were unexplained cash deposits. The analysis also showed that various living expenses usually paid from bank funds (such as rates, electricity, and telecommunications) did not appear in the bank statements or appeared only regularly. In their search of the Skyhigh property, Police found invoices from March through May 2020 totalling $1,981.10 that had been paid in cash. All this evidence is consistent with Mr Jobes and Ms Jobes having ready access to significant amounts of cash. This is, again, consistent with Mr Jobes selling cannabis.
[38] Mr Jobes and Ms Jobes offered innocent explanations for their access to cash. The explanations were vague and generally unsupported by documentary evidence. Most of the explanations I do not accept. Mr Jobes said he received cash from selling various cars. But motor vehicle licencing records revealed that most of those sales predated the period in question. Mr Jobes said he and Ms Jobes received about
$14,000 cash as wedding gifts. He accepted, however, that they married about
20 months before the period in question, though he said that the money was added to the “stash” that they kept at home. He said he had received rental income from a Mr Richards in cash. He did not provide any tenancy details. Bank records showed that in fact Mr Richards had paid rent by automatic payment. Mr Jobes said that Ms Jobes’ mother stayed with them at the Skyhigh property and paid rent in cash. Bank records showed that in fact Ms Jobes’ mother had made payments by direct credit to Ms Jobes’ bank account rather than by cash.
[39] Ms Jobes said that they received “tens of thousands of dollars” in cash as wedding gifts. In her affidavit, she deposed “I know we put our wedding money into [the mortgage] account.” This was inconsistent with Mr Jobes’ evidence, who said the cash was not banked (and that a smaller sum was involved). In cross- examination, Ms Jobes conceded she did not know whether the cash had been banked.
[40] Mr Jobes’ meeting with Mr Nassiri in the car park at Botany Town Centre is a further strand indicating that Mr Jobes sold cannabis. Commercial quantities of cannabis were in the Mercedes. Mr Jobes had a significant amount of cash on him. There was a further significant amount of cash under Mr Nassiri’s seat. Mr Jobes denied dealing cannabis with Mr Nassiri. He said he had previously met Mr Nassiri, who had similar back injuries and also smoked cannabis for pain relief. He said he met Mr Nassiri in the car park simply so they could smoke cannabis together. I find this explanation implausible. The car park was a 30-minute drive from Mr Jobes’ home. If Mr Jobes was going to drive for 30 minutes to meet up with Mr Nassiri merely to smoke cannabis, it makes little sense that they would choose to do so in a busy public car park outside a shopping mall. It makes more sense to choose such a location if they also intended to deal cannabis.
[41] Ms Hogan and Mr Batts, counsel respectively for Mr Jobes and Ms Jobes, submitted that several matters pointed against Mr Jobes selling cannabis. They said the growing operation was not sophisticated. I accept that it was unsophisticated and appeared disorganised. This was reflected in the condition of some of the plants found in the Police search. But disorganisation and a lack of sophistication does not indicate that Mr Jobes was growing for personal use only (though they may be relevant to the value of the benefit that Mr Jobes or Ms Jobes obtained, a matter I address later in
this judgment). The number of plants, amount of equipment, the construction of a concealed space and the weighing and bagging of cannabis are inconsistent with personal use only.
[42] Counsel submitted that there were none of the usual indicia of commerciality or dealing. There were no tick lists and no inculpatory communications. Mr Jobes and Ms Jobes did not appear to have enjoyed a lavish lifestyle. Police did not find any large quantities of cash when they searched the Skyhigh property. I consider these matters are neutral as to whether Mr Jobes was selling cannabis,10 though they may be relevant to the value of the benefit that he or Ms Jobes obtained.
[43] The combined force of the matters to which I have referred points inexorably to Mr Jobes having sold cannabis from his growing operation. As to the period of that operation and of Mr Jobes selling cannabis, I infer that it spanned 2017 to June 2020. The unexplained cash deposits span that period, as do the purchases of equipment used in the cultivation of cannabis. The power consumption at the Skyhigh property was many times that of the national household average throughout that period (though I accept there were large fluctuations, a matter that goes to the value of the benefit obtained). I do not accept the explanations offered by Mr Jobes and Ms Jobes for the high usage. They said that Ms Jobes’ mother used a tanning bed while she lived with them. There was no evidence of how much that would have contributed to the power consumption, and in any event Ms Jobes’ mother lived there for only part of the time in question. Ms Jobes made the implausible claim that she turned the heater on in the house whenever she was home, winter or summer, and slept with the heater on even when it was hot.
[44] In summary, I am satisfied, on the balance of probabilities, that Mr Jobes unlawfully benefited from significant criminal activity in the form of the cultivation and sale of cannabis over the period 2017 to June 2020.
10 In particular, the lack of inculpatory communications is of little moment, given that Mr Jobes refused to provide Police with the passcode to his mobile phone.
Ms Jobes
[45] There is no suggestion that Ms Jobes actively cultivated or sold cannabis. The Commissioner does not have to show that she did. Section 7 expressly provides that a person may unlawfully benefit from significant criminal activity “whether or not that person undertook or was involved in the significant criminal activity”.
[46]In respect of Ms Jobes, two matters are in issue:
(a)Did Ms Jobes directly or indirectly derive a benefit from Mr Jobes’
cultivation and sale of cannabis?
(b)If so, did she do so knowingly?
[47] I am satisfied, on the balance of probabilities, that Ms Jobes derived a benefit from Mr Jobes growing and selling cannabis. Some of the benefit was direct. Mr Jobes and Ms Jobes had individual bank accounts as well as joint accounts. I acknowledge that some of the unexplained cash deposits were paid to Mr Jones’ bank accounts. But some were paid directly into Ms Jobes’ bank account. Others were paid into a joint bank account, and then used to fund deposits into Ms Jobes’ bank account.
[48] Some of the benefit (probably the majority) was indirect. Ms Jobes accepted that she and Mr Jobes were paying off the mortgage together and that they both contributed to living costs. To that extent, their finances were joint and a benefit received by one of them was a benefit to them both.11 There was evidence of such indirect benefit. Some of the unexplained cash deposits that were paid into a joint bank account were used to pay household bills (electricity, insurance, internet). Some living expenses that are usually paid from bank accounts (rates, electricity, telecommunications and internet) either did not appear in bank accounts or appeared only irregularly. It is likely that cash earned by Mr Jobes from selling cannabis was used to pay these expenses.
11 See, similarly, Commissioner of Police v Keen [2020] NZHC 3365 at [59].
[49] As to knowledge, Ms Jobes said she did not know or believe that Mr Jobes was selling cannabis. Indeed, Ms Jobes was reluctant to accept that she knew of the extent of Mr Jobes’ cultivation of cannabis. Ms Jobes’ evidence in this respect was unsatisfactory:
(a)One of Mr Jobes’ grow tents was in a spare bedroom next to the master bedroom. This had been intended to be their daughter’s bedroom, but was not used for that purpose. When Police searched the property there was a considerable amount of cannabis leaf on the floor of the bedroom (next to toys belonging to their daughter). Although Ms Jobes had to walk past this spare bedroom to get to her bedroom, she insisted that she never went in the spare bedroom or observed what was happening in there.
(b)Other grow tents were in the garage. The laundry was also in the garage. Ms Jobes said that she used the laundry when they first purchased the house, but that once Mr Jobes said he would grow cannabis in the garage (which Ms Jobes insisted was only in early 2020) she did not want to go down there anymore, and instead took all of her washing to a laundromat. Analysis of the bank accounts showed regular payments at a laundromat from June 2015 to 18 November 2019, but no payments from 19 November 2019 to July 2020 (the period when Ms Jobes says she started using the laundromat). In cross- examination, Ms Jobes could not explain this. When taken to photographs showing a large quantity of washing hanging up at the property during the Police search, Ms Jobes suggested that this might have been the time that Mr Jobes started doing the washing.
(c)The electronic scales and packaged cannabis were in a media room. Also in that room were a large number of board games. In cross- examination, Ms Jobes accepted that these were games she had been collecting. She then said that she never went into that room.
(d)Ms Jobes said that by early 2020, when she said that Mr Jobes started cultivating, the relationship between her and Mr Jobes had deteriorated to the point where she only went to the house to sleep. In an attempt to distance herself from Mr Jobes’ activities, she said she and her daughter (then about four years old) would stay elsewhere until about 10 pm every night. In cross-examination, however, she accepted that during the full COVID-19 lockdown in March and April 2020 she and her daughter never left the house. When the inconsistency in her evidence was pointed out, Ms Jobes contradicted herself, saying that during the lockdown she left the house every day to stay at her father’s house.
[50] Ms Jobes said that she had never lived off cash. Her evidence on this topic was also unsatisfactory. She was taken to the unexplained cash deposits made to her individual bank account or made to the joint account but then transferred to her account. She was shown that, once the money was in her account, she promptly used it to pay household bills. She nonetheless insisted that she had not used cash to pay these bills.
[51] I find that it is more likely than not that Ms Jobes knew that she was deriving a benefit from Mr Jobes cultivating and selling cannabis. I have found that Mr Jobes was cultivating and selling from 2017 to June 2020. I do not accept Ms Jobes’ evidence that she was unaware of the extent of the cultivation. The cultivation was of such a scale that it must have been obvious to Ms Jobes (unless she turned a blind eye) that Mr Jobes was also selling cannabis. Ms Jobes knew that cash was being paid into her individual account (either directly or indirectly through the joint account). She used those cash deposits promptly. It must have been obvious to Ms Jobes that the cash was from Mr Jobes’ cannabis operation.
[52] In summary, I am satisfied, on the balance of probabilities, that Ms Jobes also unlawfully benefited from significant criminal activity in the form of the cultivation and sale of cannabis over the period 2017 to June 2020.
Is the Commissioner’s claim an abuse of process?
[53] Ms Hogan said that Mr Jobes was “expressly” convicted of cannabis cultivation “for his own personal use”. She submitted that, for two reasons, it was an abuse of process for the Commissioner to now allege that the cultivation was for sale and for Mr Jobes’ benefit. First, she submitted that matters that are proved beyond reasonable doubt in the criminal jurisdiction are not able to be relitigated in the civil jurisdiction. Secondly, she submitted that the principle of res judicata means the Commissioner is not able to collaterally attack, nor the High Court rule inconsistently with, the findings in the criminal jurisdiction.
[54] I do not accept Ms Hogan’s submission. It rests on a false premise. Mr Jobes was convicted of cultivation of cannabis in contravention of s 9(1) of the Misuse of Drugs Act 1975. He was not convicted of cultivation “for his own personal use”. Section 9(1) is indifferent as to the purpose of the cultivation. The summary of facts to which Mr Jobes agreed when pleading guilty made no reference to the purpose of the cultivation. The sentencing Judge said it was not disputed that Mr Jobes was using cannabis “initially for a health reason”,12 but there is no suggestion in the sentencing notes that Mr Jobes was sentenced on the basis of a finding that his cultivation was solely for personal use. That is not surprising. When giving Mr Jobes a sentencing indication, the Judge recorded that Mr Jobes’ counsel intended to submit at sentencing that “a lot of the cannabis” (not all of it) was used by Mr Jobes.
Given that Mr Jobes and Ms Jobes unlawfully benefited from significant criminal activity, what was the value of that benefit?
[55] As noted earlier, s 53(1) presumes the value of a respondent’s unlawful benefit to be that stated in the Commissioner’s application. Under s 53(2), the respondent may rebut the presumption, on the balance of probabilities.
[56] The implications of the s 53(1) presumption, and of the onus placed on a respondent to rebut it, were set out by the Court of Appeal in Snowden v Commissioner of Police,13 summarising that Court’s decision in Cheah v Commissioner of Police:14
12 New Zealand Police v Jobes [2023] NZDC 13074 at [4].
13 Snowden v Commissioner of Police [2021] NZCA 336.
14 Cheah v Commissioner of Police [2020] NZCA 253.
[47] … [I]n Cheah this Court gave approval to prior High Court decisions, namely the decisions of Katz J in Commissioner of Police v Tang and Gilbert J in Commissioner of Police v Filer. The tenor of these decisions is that once the Commissioner discharges the initial onus under s 53(1), the onus of proving the correct figure rests with the respondent under s 53(2) and does not pass back to the Commissioner. That interpretation best serves the purposes of the forfeiture regime, including eliminating the chance for persons to profit from undertaking or being associated with significant 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 witnesses and records that may be needed to prove this, whereas the Commissioner does not. If the respondent fails to prove the benefit on the balance of probabilities, the amount stated in the Commissioner’s application stands, even if its accuracy is questionable.
[48]Applying those authorities, this Court said in Cheah:15
Under s 53 there are only two possible outcomes. The first is that the Commissioner enjoys the benefit of the presumption and the respondent fails 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 must prove a different value.
[49] … [T]there is the important potential qualification, albeit one seldom used, that s 47(1) of the CPRA permits the court to amend an application for a civil forfeiture order, such that in an appropriate case the High Court might opt to reduce the value of the benefit claimed in a civil forfeiture application. So that provision is available in the case of executive overreach.
[57] In this case, the Commissioner stated in his application that the value of Mr and Ms Jobes’ unlawful benefit was $1,038,600. This amount was explained in evidence as being based on the following assumptions:
(a)Four 90-day crop cycles were possible each year. The Commissioner allowed for 12 such crop cycles, assuming that growing started from the second quarter of 2017, and excluding the last cycle (given that those plants and the cannabis head were seized by Police).
(b)Each cycle consisted of 129 plants. This was based on the number of plants found in the June 2020 search.
15 Cheah v Commissioner of Police [2020] NZCA 253 at [47].
(c)Each plant produced two ounces of cannabis head. This was a mid- point of a range of one to three ounces per plant.
(d)The cannabis was sold in ounce quantities (reflecting the ounce bags found in the search).
(e)Each ounce was valued at $350, being the mid-point of the price range for sale of ounce quantities of cannabis over the period in question.
[58] Mr and Ms Jobes did not put forward an alternative value of the unlawful benefit that they received. They denied any cannabis sales and so denied receiving any benefit. Respondents who take such a position can struggle to rebut the presumption in s 53(1). For example, in Snowden the Court of Appeal observed:16
[50] In this case Mr Snowden was always going to be in serious difficulty in rebutting the presumption. His denial of dealing in methamphetamine at all (other than the occasion of his arrest) plainly did not impress the Judge, who must have found that 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 either effectively valuing the benefit of the unlawful activity or, conversely, establishing to that 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 that asserted by the Commissioner). As Mr Harborow submitted, in the High Court Mr Snowden did not put forward an alternative value at all. He merely sought to chip away 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).
[59] Nonetheless, the Court of Appeal has made it clear, in its subsequent decision in Zhou v Commissioner of Police, that the presumption may be rebutted if the respondent puts forward “[g]enuine evidence concerning the actual benefit obtained”.17 The Court contrasted that with a mere “critique of the Commissioner’s methodology”.18 The Court then addressed Mr Zhou’s arguments as to why factual assumptions underlying the Commissioner’s calculation were unsound. While the Court rejected each of the arguments, its rejection was based on a consideration of the evidence.19
16 Snowden v Commissioner of Police [2021] NZCA 336.
17 Zhou v Commissioner of Police [2023] NZCA 137 at [30].
18 At [30].
19 At [32]–[50].
[60] Mr Jobes and Ms Jobes did offer evidence that went to the value of the benefit that they received. They both gave evidence that Mr Jobes’ cultivation began only in early 2020 (in contrast to the Commissioner’s assumption that the cultivation spanned 2017 to June 2020). I have found, on the balance of probabilities, that cultivation did span 2017 to June 2020.
[61] They also offered evidence as to the state of the 129 cannabis plants found in the search of the Skyhigh property. Those plants included 74 plants located on a table in the garage or on the floor next to that table.20 The plants on the table were alive but those on the floor were dead. Cross-examination of Ms Moeakiola, a special investigator with the Police, confirmed that the dead plants were included in the overall count of 129 cannabis plants found at the property. Detective Sergeant Sowter had made the calculations underlying the Commissioner’s stated figure of $1,038,600. He confirmed that his calculations assumed that the 129 plants found at the property were all alive. He had assumed, incorrectly, that the 129 plants did not include the dead ones found on the garage floor.
[62] The actual number of live plants is difficult to determine. Of the 74 found on the garage table or garage floor, Police did not count how many were alive. However, the photographic evidence is clear that there were far fewer than 74 plants on the table, probably just under half that number. Mr Jobes and Ms Jobes have satisfied me that the June 2020 crop produced no more than 90 live plants.
[63] I am also satisfied that the value of the benefit should be calculated on the basis that the June 2020 crop is good evidence, all other things being equal, of the likely crop produced in previous cycles. That, of course, was the basis on which the Commissioner assessed the value of the benefit obtained by Mr Jobes and Ms Jobes. The presence of a large number of dead plants in the June 2020 crop is consistent with the lack of organisation evident in the photographs of the growing operation. There is no reason to think that the growing operation would have been any better organised in previous cycles.
20 The summary of facts to which Mr Jobes pleaded guilty said that these 74 plants were on the table. Photographs showed that the plants on the table were alive. While the summary was admissible in this proceeding, it was open to Mr Jobes to dispute some or all of it: Hatley v R [2021] NZCA 183 at [39]. He did, successfully.
[64] I said that the June 2020 crop is good evidence of earlier crops, all other things being equal. Not all other things were equal. First, the photographs taken during the Police search show that the scale of Mr Jobes’ growing operation in June 2020 was such that it affected almost every part of the house. Between 2017 and June 2020, boarders stayed with Mr Jobes and Ms Jobes at the Skyhigh property, for a total period of about one year (Ms Jobes’ mother for about six months, and a Mr Hereroa for about six months). I find it most unlikely that Mr Jobes could have operated at the June 2020 scale while an additional adult was living in the house.
[65] Mr Jobes and Ms Jobes have also persuaded me that there was not an ongoing constant cycle of cultivation from 2017 to June 2020. Mr Batts showed, both in his cross-examination of Ms Moeakiola and in his submissions, that power consumption at the Skyhigh property fluctuated dramatically over this period. The evidence showed the power consumption at the property from late 2016 through to September 2021. It thus included about 15 months after the Police search. Daily power consumption over those 15 months was dramatically lower than daily consumption in the months leading up to the June 2020 search. I infer this was because Mr Jobes’ cultivation ceased.
[66] Two things are notable about the overall power consumption. First, for the first half of 2017, the first half of 2019 and the first quarter of 2020 the daily power consumption was roughly the same as the daily power consumption in the 15 months after the search. The only reasonable inference is that there was no cultivation during those periods. I am satisfied this means there were eight crop cycles rather than the 12 assumed by the Commissioner.21 Secondly, although the daily power consumption in the second half of 2017 and the last quarter of 2018 was roughly double that seen after the search, it was still only about half the daily power consumption in the lead up to the search. This reinforces my conclusion that the scale of Mr Jobes’ operations was not always as seen in June 2020. Together with the evidence that there were boarders, this satisfies me that I should assume that for one year Mr Jobes operated at no more than half the June 2020 scale.
21 My calculation takes into account that the Commissioner assumed there was no crop cycle in the first quarter of 2017.
[67] I therefore consider that the value of the benefit should be calculated on the basis that there were eight crop cycles, four of which produced 45 plants and four of which produced 90 plants. Using the Commissioner’s assumption of two ounces per plant (there being no contrary evidence), this means it is likely something in the order of 1,080 ounces were produced over the period in question (as compared to the Commissioner’s assessment of 3,096 ounces).
[68] The respondents also offered evidence of Mr Jobes’ personal consumption of cannabis. For reasons set out earlier, I was easily satisfied that Mr Jobes was a regular user of cannabis throughout the period in question, and for much of that time a heavy user. This needs to be allowed for in assessing the benefit that he and Ms Jobes received from cultivating and selling cannabis.22
[69] Mr Jobes said he used about half an ounce of cannabis a day to deal with his back pain. I found his evidence on this topic credible. He explained the severity of his symptoms. He did not seem to me to be exaggerating his use (which accounted for a fraction of the harvest assumed by the Commissioner’s calculations). He readily acknowledged that he would not have consumed cannabis during work. Detective Sergeant Sowter accepted that a heavy recreational user of cannabis might consume one to two ounces of cannabis a week. He acknowledged that he had no expertise on the quantities that might be smoked by someone using cannabis for medicinal purposes.
[70] Inland Revenue records show that Mr Jobes was earning about $50,000 per annum in the two years to the end of March 2018. I infer from that income (and from Mr Jobes’ qualifications as a welder) that it was part-time work. That covers the first year of the period in question. I am satisfied Mr Jobes would have been consuming cannabis during this time, but less than half an ounce a day. I will assume, on average, a quarter of an ounce a day, say 80 ounces for the year. For the rest of the period in question (a further two years), Mr Jobes’ earnings (as reported to Inland Revenue) were negligible. I am satisfied that I should assume he was consuming, on average, half an ounce a day over that period, say 360 ounces over the two years.
22 For reasons set out earlier at [29], I ignore the possibility that personal consumption constitutes a benefit under the Act.
[71] Allowing for a total consumption of 440 ounces over the period in question, the respondents have satisfied me that the surplus cannabis available for sale was no more than 640 ounces. At $350 per ounce (a price estimate that was not challenged), this means the value of the respondents’ benefit was $224,000.
[72] For completeness, there were suggestions in the respondents’ submissions that the Commissioner had overreached in stating an unlawful benefit of $1,038,600. The risk of executive overreach, and safeguards against it, were referred to by the Court of Appeal in Snowden, in the passages set out above at [56]. Those safeguards were further identified in a recent judgment of Cooke J:23
[52] The ability of the respondent to prove some other benefit gives protection against the application going beyond a reasonable calculation of the benefit obtained by a respondent by the offending. In addition the fact that the Commissioner is required to prove, on the balance of probabilities, that the respondent has unlawfully benefitted is a significant evidential hurdle. Moreover as Ellis J said in Commissioner of Police v Keen, the Commissioner is not permitted to choose a random figure in the application as this would be an arbitrary and wrongful exercise of statutory power.24 The Court has the power under s 47 to amend the application for a civil forfeiture order, and “whether the Court then deals with the matter by amending the application under s 47 (as suggested by the Court in Cheah) or by making its own assessment based on the evidence as a whole, will depend on the circumstances of the case”.25 I agree that these are important safeguards against executive overreach.
[73] This was not a case of executive overreach. The Commissioner’s stated value of $1,038,600 was not arbitrary. There was a reasonable basis for it. The respondents then availed themselves of the opportunity of proving a different value.
If a profit forfeiture order is made, what property should be realised to satisfy the order (taking into account the applications for relief)?
[74] Given my findings, I will be making a profit forfeiture order against Mr Jobes and Ms Jobes. Section 55(2)(c) provides that the order must specify the property that is to be disposed of to satisfy the order in accordance with s 83(1), “being property in which the respondent has, or is treated as having, interests”. In specifying property,
23 Commissioner of Police v Cheng [2023] NZHC 606 at [52].
24 Commissioner of Police v Keen [2020] NZHC 3365 at [13].
25 At [13].
the first step, therefore, is to identify property in which Mr Jobes and Ms Jobes have interests.
[75] There is no dispute that Mr Jobes and Ms Jobes have interests in the Skyhigh property, in the bank accounts and in the cash found in Mr Jobes’ wallet when he was searched in the car park at Botany Town Centre. The only issue is whether Mr Jobes has an interest in the $5,600 cash found under the driver’s seat of the Mercedes. I am not satisfied that Mr Jobes did. Although I consider it more probable than not that Mr Jobes met Mr Nassiri for the purposes of selling cannabis to him, I am not satisfied that any sale had been completed. The cash was still under the driver’s seat in which Mr Nassiri was sitting.
[76] This means that the property that can be realised to meet a profit forfeiture order consists of the Skyhigh property, the funds in the bank accounts (which totalled about $175,000 when first restrained) and the $2,360 cash located in Mr Jobes’ wallet.
[77] Mr Jobes and Ms Jobes apply for relief under s 56. They ask that none of the property be realised to satisfy the profit forfeiture order.
[78] Under s 56(1), property may be excluded from the reach of a profit forfeiture order if “undue hardship is reasonably likely to be caused to the respondent if the property were realised”. Section 56(2) says that the matters the court may have regard to, in deciding whether to grant relief under s 56(1), include:
(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 profit forfeiture order; and
(b)the nature and extent of the respondent’s interest in the property; and
(c)the circumstances of the significant criminal activity to which the profit forfeiture order relates.
[79] The hardship must be undue and be reasonably likely. This is a high threshold. An applicant for relief must show more than mere inconvenience or difficulty. In Cheah, the Court of Appeal said it must be shown that any hardship will be “so disproportionate as to require the objectives of recovery and deterrence to be
subordinated to the particular needs of the wrongdoer”.26 The focus is usually on the disproportion between the gravity of the offending and the value of the property sought to be forfeited.27
[80] I cannot see how any undue hardship could be caused to Mr Jobes or Ms Jobes if the bank funds and the cash in Mr Jobes’ wallet were realised to satisfy the profit forfeiture order. Indeed, Ms Hogan’s and Mr Batts’ submissions on the applications for relief focussed on the Skyhigh property rather than on the bank funds and cash.
[81] As to the Skyhigh property, the Court of Appeal has said that those who have profited from significant criminal activity “will expect to lose their major assets including land and home even where these have enormous economic and emotional value for the owner”.28 Mr Jobes and Ms Jobes say that the Skyhigh property was acquired from legitimate sources before the cannabis cultivation began. That is correct to a large extent, though I am satisfied that the mortgage over the property was serviced to some extent (directly or indirectly) by proceeds from cannabis sales. Further, the Court of Appeal in Cheah said that the loss of equity in a home acquired from legitimate sources before the criminal activity began is not undue hardship, as the risk of losing a home ought to have been contemplated when embarking on the criminal activity.29
[82] I nonetheless consider that there are special circumstances in this case that would likely cause undue hardship to Mr Jobes and Ms Jobes were the Skyhigh property to be sold. It is reasonable to assume that the bank funds and cash will quickly be realised in part satisfaction of the profit forfeiture order. The balance owing under the order would then be in the region of $50,000.30 If the Skyhigh property were to be sold by the Official Assignee under s 83, it would only be to satisfy that balance (with the surplus proceeds, after payment of the costs of sale and the repayment of the mortgage, being paid to Mr Jobes and Ms Jobes). Such a sale would provide only a modest contribution to achieving the objectives of recovery and deterrence, given
26 Cheah v Commissioner of Police [2020] NZCA 253 at [64].
27 Cheah at [68]; and Lyall v Solicitor-General [1997] 2 NZLR 641 (CA) at 647.
28 Nicholas v Commissioner of Police [2017] NZCA 473, [2018] NZAR 172 at [57].
29 Cheah v Commissioner of Police [2020] NZCA 253 at [65].
30 The precise amount depends on whether any funds were released to Mr Jobes and Ms Jobes and on any interest earned. I was not informed of these matters.
that the $50,000 balance would remain a recoverable debt if the Skyhigh property were not sold, and given that the bank funds and cash would already have been forfeited.
[83] When weighed against that modest contribution to the objectives of the Act, the effects of a sale on Mr Jobes and Ms Jobes would be disproportionate. The first effect reflects an emotional connection with the property. It is true that Mr Jobes and Ms Jobes are now separated and that the property therefore is not a home to both of them. But it is the home that their young daughter (of whom Mr Jobes and Ms Jobes share custody) has known for most of her life. Removing the connection that the daughter has with this home at her young age will cause her, and through her Mr Jobes and Ms Jobes, undue hardship. The second concerns the financial consequences of a forced sale by the Official Assignee. These are likely to be significant, in the way that forced sales almost always are. While this is an ordinary consequence of forfeiture, it is not a consequence ordinarily borne when the amount outstanding under the order is only a small fraction of the value of the property, as it is here.
[84] Accordingly, I exclude the Skyhigh property from being able to be realised under s 55(2)(c).
Result
[85] I make a profit forfeiture order against Mr Jobes and Ms Jobes, jointly and severally, under s 55(1) of the Act. The value of their unlawful benefit from significant criminal activity was $224,000. The maximum amount recoverable is $224,000. The property that is to be disposed of in accordance with s 83(1) of the Act are the funds in the bank accounts identified in paragraph 1(a)(iii)(B) of the Commissioner’s application and the $2,360 cash located in Mr Jobes’ wallet.
[86]If any issues arise as to costs, brief memoranda may be filed.
Campbell J
9
1