Commissioner of Police v Wallace

[2018] NZHC 439

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2016-412-48

[2018] NZHC 439

BETWEEN

THE COMMISSIONER OF THE NEW ZEALAND POLICE

Applicant

AND

PHILLIP DAVID WALLACE

Respondent

AND

MICHAEL DESMOND JAMES WALLACE

First Interested Party

DEIDRE JEAN SIM

Second Interested Party

Hearing:

7 February 2018

Appearances:

M J Grills for the Applicant

No appearance by or for the Respondent

No appearance by or for the First Interested Party J Turner for the Second Interested Party

Judgment:

14 March 2018

JUDGMENT OF MANDER J

[1]    The Commissioner of Police (the Commissioner) seeks an assets forfeiture order in relation to two motorcycles with a combined value of $28,250, registered in the name of  the  respondent,  Mr  Phillip  Wallace.  The  second  interested  party, Ms Deidre Sim, opposes the application claiming that one of the motorcycles is her property.

COMMISSIONER OF NEW ZEALAND POLICE v WALLACE [2018] NZHC 439 [14 March 2018]

Background

[2]    Mr Wallace was convicted and sentenced on 13 July 2016 on 19 charges relating to his ongoing dealing in drugs between July 2014 and April 2016. The convictions included nine charges of selling cannabis, four charges of possessing cannabis for supply, two charges of offering to supply methamphetamine, one of offering to supply LSD, and notably three charges of supplying methylphenidate, more commonly known as Ritalin. Mr Wallace was sentenced to a term of imprisonment of two years and three months.

[3]    His convictions on these charges represented a continuation of Mr Wallace’s earlier offending for selling cannabis and offering to supply Ritalin in October and November 2013, for which he was convicted in June 2014 and sentenced to home detention and community work.

[4]    Between July 2014 and September 2015, Mr Wallace made seven sales of cannabis and two of Ritalin to an undercover officer. A search warrant was executed at Mr Wallace’s address on 21 April 2016. The police obtained a production order for text messaging data with respect to Mr Wallace’s cellular phone. Some 21 persons were identified as being regular customers, with the text messaging consistent with Mr Wallace having drugs for sale and performing transactions from his home address. The Ritalin was sourced by Mr Wallace from his sons’ longstanding prescriptions for the drug

[5]The undercover officer found Mr Wallace was offering Ritalin for sale at

$1 per mg. He was selling 10 mg tablets for $10 and 20 mg tablets for $20. Ministry of Health records documenting the Ritalin dispensed to Mr Wallace’s two sons revealed that between October 2013 and April 2016, 2319 10 mg and 2325 20 mg Ritalin tablets had been dispensed. At a street price of $1 per mg, this equates to Ritalin with a street value of $69,690. The cannabis sold by Mr Wallace to the undercover officer on nine separate occasions was valued at $450.

The Commissioner’s application and the parties’ responses

[6]The Commissioner applies for assets forfeiture orders in respect of:

(a)A 2005 Harley-Davidson Road King Custom motorcycle, coloured black, registration no 94ZTJ (the Harley-Davidson), and

(b)A 2000 Triumph Sprint  motorcycle,  coloured  yellow,  registration no 92ULE (the Triumph).

[7]    Originally, the Commissioner also sought profit forfeiture orders, however, police inquiries revealed that Mr Wallace has no other assets beyond the vehicles. Mrs Grills, who appeared on behalf of the Commissioner, advised that the Commissioner sought to proceed only on his application for assets forfeiture orders.

[8]    Mr Wallace filed no opposition to the Commissioner’s application for forfeiture and has taken no steps in the proceeding.

[9]    The first interested party, Mr Michael Wallace, has also taken no formal steps to be heard on the Commissioner’s application. After the property was restrained, Michael Wallace contacted the police and advised the Triumph was his. A copy of an affidavit was provided to police in November 2016, annexed to which was an affidavit from the previous owner. However, no evidence of how he had paid for the motorcycle was provided. Neither the affidavit nor any notice of opposition or application for relief has been filed.

[10]   Michael Wallace appeared on a telephone conference in December last year, when the matter was set down for hearing. At that time, he was undecided as to whether he wished to proceed with a claim. He was directed to notify the applicant and to file written notice of his intention to claim an interest in the Triumph by      19 January 2017 if he wished to be heard on the Commissioner’s application. He was advised that in the absence of formal notice being provided it would be presumed he had abandoned any intention to make a claim as an interested party. No written notice was filed and Michael Wallace did not appear at the hearing.

[11]   Ms Deidre Sim claims the Harley-Davidson is hers. She says she paid for it, and she opposes the Commissioner’s application for forfeiture of that motorcycle.

Asset forfeiture order

[12]   Section 50(1) of the Criminal Proceeds (Recovery) Act 2009 (the Act) governs applications for assets forfeiture orders. It provides as follows:

(1) If, on an application for an assets forfeiture order, the High Court is satisfied on the balance of probabilities that specific property is tainted property, the Court must make an assets forfeiture order in respect of that specific property.

[13]Section 5(1) defines “tainted property” as meaning:

(a)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 one of those activities is a significant criminal activity.

[14]   “Significant criminal activity” is defined in s 6 of the Act, insofar as it is relevant to the present case, as follows:

(1)In this Act, unless the context otherwise requires, significant criminal activity means an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending—

(a)that consists of, or includes, 1 or more offences punishable by a maximum term of imprisonment of 5 years or more; or

(b)from which property, proceeds, or benefits of a value of

$30,000 or more have, directly or indirectly, been acquired or derived.

[15]“Property” is defined widely as meaning:1

(a)real or personal property of any kind

(i)whether situated in New Zealand or a foreign country; and

1      Criminal Proceeds (Recovery) Act 2009, s 5(1).

(ii)whether tangible or intangible; and

(iii)whether movable or immovable; and

(b)includes an interest in real or personal property

[16]Having an “interest” in relation to property means:2

(a)a legal or equitable estate or interest in the property; or

(b)a right, power, or privilege in connection with the property

[17]   Under s 50(1) the making of an assets forfeiture order is mandatory if the Court is satisfied that on the balance of probabilities that specific property is tainted. Section 46 provides that any person who claims an interest in the property to which the application relates is entitled to appear and to adduce evidence at the hearing.

Issues

[18]The issues for me to determine are:

(a)Should the Harley-Davidson and Triumph Sprint motorcycles be made subject to assets forfeiture orders on the basis they are tainted property?

(b)Should Ms Sim be granted relief on the basis of her claimed interest in the Harley-Davidson?

Should the motorcycles be made subject to assets forfeiture orders?

[19]   I must determine whether the Commissioner has proved on the balance of probabilities that the motorcycles are tainted property. If I determine they are, I must make assets forfeiture orders in respect of them, subject to any relief.3

[20]   I am satisfied that Mr Wallace was involved in significant criminal activity between October 2013 and April 2016. On a foundation of text messaging evidence, he was convicted on a representative charge of offering to supply Ritalin between 11

2      Section 5(1).

3      Criminal Proceeds (Recovery) Act, s 50(1). See also Hayward v Commissioner of Police [2014] NZCA 625 at [19].

October and 27 November 2013 and a representative charge of selling cannabis during approximately the same period. Despite his apprehension, Mr Wallace continued with this type of offending. He sourced Ritalin from his sons who have been prescribed the drug for many years.

[21]   Both the evidence of the undercover officer and that obtained from text messaging data shows Mr Wallace was engaged in this trade over a long period. The officer made evidential purchases on eight occasions between July and September 2015, and the text messaging evidence encompasses the whole period between July 2014 and April 2016. The nature of Mr Wallace’s trade in Ritalin is illustrated by when the undercover officer attempted to purchase that drug from Mr Wallace  on    7 March 2016, which was a Tuesday. Mr Wallace told her he did not have any and that he “doesn’t normally get those until Thursday”. Ministry of Health records reveal that Mr Wallace’s son was dispensed seven 10 mg tablets of Ritalin and seven 20 mg tablets of Ritalin on Thursday, 9 March 2016. The records reveal the regular weekly dispensing of Ritalin to both that son and another.

[22]   While apparently less lucrative, Mr Wallace was regularly selling quantities of cannabis over the same period. The drug dealing was ongoing until the police executed a search warrant at Mr Wallace’s address in April 2016. Cannabis and empty Ritalin packages were located at that time. As a result, Mr Wallace was convicted of offences against s 6 of the Misuse of Drugs Act 1975 which carry maximum terms of imprisonment of five years or more. The offending clearly constituted significant criminal activity.

[23]   Financial inquiries were undertaken by the Commissioner with the Department of Inland Revenue and Work and Income New Zealand (WINZ). For the tax years ending 2009-2016, Mr Wallace’s total declared income over that eight year period was

$155,251.88. For the tax years ending 31 March 2009-2011, Mr Wallace was employed with Goodman Fielder New Zealand Limited and his annual income was between $28,000 and $32,000. It is apparent that in the 2012 tax year Mr Wallace became unemployed. Income from limited employment during that year together with that sourced from a benefit totalled some $17,000. For the tax years 2013-2016, which is the period over which Mr Wallace was offending and acquired the two motorcycles,

Mr Wallace was on a benefit with an  income  of  between  $10,600  and  $12,750 per annum.

[24]   Mr Wallace has rented his home since 2011. He has been the legal tenant at this address which is where the offending took place. Inquiries from the landlord revealed that Mr Wallace initially paid $310 per week rental, which was raised to $315 per week. Other people have lived at the address from time to time, with there being up to five people living at the property, but at other times only Mr Wallace has resided at the address. The rent payments alone ($310) were more than Mr Wallace’s average weekly income ($224.67) during the 1 April 2012 to 31 March 2016 period.

[25]   It follows that for the period  of  the  offending,  between  2013  and 2016, Mr Wallace received a very low income with his sole source of declared income over that time being from a WINZ benefit. Despite this modest income, Mr Wallace obtained a Harley-Davidson on 1 March 2015 and the Triumph motorcycle on 21 October  2015.   Together   both  motorcycles  are  valued  at  more  than  double    Mr Wallace’s annual declared income during this period. Valuations obtained by the Commissioner in April 2016 provided a retail value for the Harley-Davidson of

$21,250 and $7,000 for the Triumph. Both vehicles were registered in Mr Wallace’s name when acquired by him, and remained in Mr Wallace’s name as the legal owner up until the date the property was restrained on 20 April 2016.

[26]   It is the Commissioner’s case that it was not possible for Mr Wallace to accumulate savings or purchase the motorcycles once rent and other living expenses were paid. The financial circumstances of Mr Wallace, particularly when coupled with the circumstances of his drug dealing, the Commissioner says, demonstrates a significant source of illegitimate income. Documents seized by police at Mr Wallace’s address at the time of the execution of the search warrant also show significant cash spending not consistent with his declared average income of $224.67 per week.

[27]   The Act only requires there to have been some contribution from the proceeds of criminal activity towards the acquisition of property in order to taint that property.

So long as it can be shown that some proceeds of significant criminal activity has contributed to its acquisition, it will become tainted property under the Act.4

[28]   Ms Sim’s opposition to the Commissioner’s application for forfeiture of the Harley-Davidson motorcycle is based on her contention that the motorcycle was purchased with money she received from her adoptive mother’s estate. Ms Sim claims she was the source of the funds used to purchase the Harley-Davidson in March 2015 and that she purchased the motorcycle.

[29]   Ms Sim’s opposition related solely to the Harley-Davidson. In the absence of any opposition or contrary evidence, I am satisfied the Triumph motorcycle was, wholly or in part, acquired by Mr Wallace as a result of significant criminal activity. In particular, that income from Mr Wallace’s drug dealing was applied to purchase the Triumph motorcycle thereby rendering it tainted property. Accordingly, there will be an assets forfeiture order in respect of the Triumph. I turn now to Ms Sim’s opposition to the Commissioner’s application for forfeiture of the Harley-Davidson based on her claim that she purchased the motorcycle.

Ms Sim’s claimed interest

[30]   Ms Sim was in a domestic relationship with Mr Wallace for about 18 months prior to his arrest in April 2016. Her present relationship with Mr Wallace is unclear. It is uncontested that Ms Sim received $85,000 from her adoptive mother’s estate. This money was paid to her in several instalments, the largest of which was $60,000 transferred to her on 16 October 2012.

[31]   Ms Sim deposed that she had experienced a number of difficult years. Her birth mother died of cancer and was very unwell for several years leading up to her death. Ms Sim was the primary caregiver and nursed her throughout that time. She had, not long before, reconnected with her birth mother, and she described losing her again in the way she did as devastating for her. In addition, around the same time her adoptive mother was also diagnosed with terminal cancer. In October 2012, Ms Sim’s daughter, who had two young children, was diagnosed with having a brain tumour.

4      Commissioner of Police v Drake [2017] NZHC 2919 at [105] and [114].

Ms Sim describes supporting her and her family at that time as being emotionally challenging. Her daughter required serious medical intervention, including brain surgery, before she recovered and is now in remission.

[32]   Because of this difficult period, Ms Sim deposed that she decided she would like to use the money she had inherited “to do something different and to have a bit of fun”. Ms Sim claims that is how she came to purchase the Harley-Davidson motorcycle.

[33]   Ms Sim’s evidence was that she and Mr Wallace found a suitable bike on Trade Me from a vendor in Hokitika, which was listed for approximately $18,000. In her first affidavit of 31 August 2016, Ms Sim stated she paid a $2,000 deposit into the vendor’s bank account by bank transfer in January 2015. In a second affidavit sworn on 7 September 2016, Ms Sim corrected herself. She advised that two $2,000 withdrawals from her on-call account on 13 and 23 January 2015 were deposited into her Westpac daily account (the daily account). The day after the first of these deposits were made, Ms Sim deposed she went to the bank and requested the teller withdraw

$3,300 from her daily account which she handed to Mr Wallace to pay the vendor the deposit for the motorcycle. The balance of the purchase price Ms Sim deposed was paid in cash when she and Mr Wallace travelled to Christchurch to collect the motorcycle. Her evidence was that they met the vendor at a park and that she gave Mr Wallace $16,000 in cash to pay the balance owing.

[34]   Ms Sim’s evidence was that around the same time both her mothers were terminally ill, her long-term relationship with a former partner was deteriorating. She deposed he had access to her bank accounts. As a result, Ms Sim’s evidence was that she decided to withdraw her inheritance money in large cash amounts and hide the cash “in the cellar amongst other belongings” she had inherited from her mother, so as to stop him accessing the money through her bank account. Ms Sim deposed she would transfer money from her on-call account to her daily account and from there make the cash withdrawals. It was this secreted cash that Ms Sim maintained was the source of the funds used to pay the $16,000 cash to the vendor.

[35]   Ms Sim said that she and Mr Wallace decided the motorcycle would be registered in Mr Wallace’s name because he had a motorcycle licence. She also maintained she was eager that any speeding or infringement tickets would be issued in Mr Wallace’s name and not hers as she did not want to assume any liability for them. Ms Sim maintained the motorcycle was registered in Mr Wallace’s name only as a matter of convenience at the time and only as a temporary measure.

[36]   In explanation for purchasing the motorcycle, Ms Sim explained that she thought it was a “good investment in her and Mr Wallace’s relationship”, and because she saw it as an opportunity to do something different in her life, and “get out and explore the  country”.  Ms  Sim  deposed  that  throughout  her  relationship  with  Mr Wallace he never seemed to have any money, and that to the best of her knowledge he did not have sufficient funds to purchase the motorcycle himself.

[37]   Upon receipt of Ms Sim’s second affidavit, the Commissioner made inquiries regarding the purchase of the Harley-Davidson from the previous owner, Mr Shaun Robinson. He swore an affidavit detailing the circumstances of his sale of the Harley- Davidson to Mr Wallace. His evidence conflicts with that of Ms Sim. Mr Robinson was contacted by Mr Wallace in February 2015 regarding the motorcycle which he had listed on Trade Me for $20,000. Mr Wallace offered $18,000 cash for the vehicle unseen, and Mr Robinson agreed. He requested an $8,000 deposit.

[38]   Banking records confirm that $8,000 was deposited into Mr Robinson’s account on 23 February with an accompanying narration of “Phill”. Mr Robinson requested that a further deposit be made into his account in the sum of $5,000 as he did not wish to receive all the balance of the purchase price in cash at the time he delivered the motorcycle. A printout from Mr Robinson’s bank account shows a further deposit of $5,000 on 25 February with the narration “Phillip”. Ms Sim when cross-examined about her evidence of the $3,300 cash she provided to Mr Wallace in January for the purpose of providing a deposit, in comparison to Mr Robinson’s bank records, replied she must have been mistaken and been confused when preparing her evidence.

[39]   Mr Robinson’s evidence was that he delivered the Harley-Davidson to Christchurch on 1 March. Mr Wallace was late. Mr Robinson described that when he arrived “there was another guy and girl with him” who stayed in the car and went around the corner to  a house  which Mr  Robinson described  was the address of   Mr Wallace’s “mate’s house” where he had been directed to deliver the motorcycle. Mr Robinson met and dealt only with Mr Wallace. It was only Mr Wallace to whom he showed the motorcycle, and it was Mr Wallace who paid him the balance of $5,000 in cash.

[40]   Mr Robinson deposed that Mr Wallace gave him his driver’s licence number and they carried out the change of ownership online. Mr Robinson obtained a receipt from Mr Wallace which both men signed. That document was subsequently located at Mr Wallace’s  address  at  the  time  of  the  execution  of  the  search  warrant.  Mr Robinson recalls Mr Wallace texting him, either on the following Monday or Tuesday, to tell him the motorcycle went well and he was very happy with it.

[41]   Under cross-examination, Ms Sim again conceded that her evidence of having handed Mr Wallace $16,000 in cash to pay the balance owing was incorrect, and that she was confused. Ms Sim was also cross-examined about her claim that she had withdrawn large amounts of cash which she had physically stored in her cellar to hide from her previous partner who she said was able to access her accounts. Ms Sim was taken through her bank statements.

[42]   Ms Sim deposed that she had been in a relationship with Mr Wallace for about 18 months prior to his arrest in April 2016. That takes the commencement of her relationship with Mr Wallace back to October/November 2014. Her relationship with her prior partner had by that time come to an end. Ms Sim accepted that had been the case “give or take” a few months.

[43]   It was put to Ms Sim that from October/November 2014 there was no reason for her to be taking out money and hiding it. In response, Ms Sim maintained the cash had already been taken out and hidden by her. That conflicts with Ms Sim’s affidavit evidence which relies on a number of transfers from her on-call account to her daily

account and cash withdrawals during the period she was in her relationship with    Mr Wallace.

[44]   Ms Sim under cross-examination conceded that to avoid her former partner having access to her account she would merely have to change passwords. She acknowledged that she had done this, but maintained that her former partner was “very computer savvy” and suggested he was able to hack into her account. Despite exhibiting her bank statements, Ms Sim provided no examples of her former partner’s illicit use of her bank accounts, or expenditure by him from those accounts to illustrate his unauthorised access, which she maintained was the motivation for her accumulating and hiding a large amount of cash.

[45]   There is one transfer from the on-call account to Ms Sim’s daily account in the sum of $8,500 which was the subject of a teller-assisted withdrawal on the same day. However, subsequent transfers of sums from the on-call account to the daily account were used for apparently normal daily expenditure. There are some cash withdrawals but nothing to suggest the accumulation of at least $18,000 in cash in the period up to when the relationship with her former partner ended in October/November 2014. By the time of the Harley-Davidson purchase which occurred on 1 March 2015, Ms Sim had withdrawn all but $3,000 from her on-call account from the original $60,000 that had been deposited in October 2012.

[46]   Around the time of the transfer of the two deposits of $8,000 and $5,000 on 23 and 25 February 2015 to Mr Robinson’s account, there are no withdrawals from    Ms Sim’s bank account which can be linked to those electronic payments. Ms Sim’s daily account only had a modest balance during this period, and text messages from Ms Sim made shortly after, on 10 and 11 March to Mr Wallace, show that Ms Sim was struggling for money. She was complaining that she could not afford her medications or buy items at a shop without her card being declined. Ms Sim referred to needing money to see a specialist, and having to scrounge for food. She appears to be comparing her unfavourable financial position to Mr Wallace’s more advantaged position in terms of what he was able to afford. That appears incongruous with the situation Ms Sim seeks to present, that little over a week before she had provided thousands of dollars to purchase the Harley-Davidson.

[47]   The text messaging data also includes numerous references by Mr Wallace to the “trike” as belonging to him. The Harley-Davidson motorcycle is a three-wheel vehicle and is referred to as a “trike”. Mr Wallace, frequently when responding to people who were messaging him, described himself as being “out on my trike”. There were references to him “washing my trike” or “cleaning me trike” or “taking my trike for a ride” In one exchange, Mr Wallace refers to paying expenses relating to the Harley-Davidson:

Unknown N:    Hey mate you should come out and c me one evening.

Mr Wallace: Well my mate from Chch is coming down  today; we were doing same thing we are; so will come see you tomorrow; I am so broke just cost me $700 to put reg on trike & the rest had to spend on jag to get it a WOF & reg; waiting for Ben to pay his rent; haven’t been this broke for long time

UnknownN:    Well suck it in because ur getting paid for the work u did over the summer any day now

And on 20 March 2016, Mr Wallace exchanged texts:

Mr Wallace:     My trike reg is 94ZTJ Cheer’s Carl

Carl:Whatt cc is ur bike? Got a relay for u. Pricing oil and filter now

Mr Wallace:     1450cc bud

Mr Wallace:     And a chrome oil filter bud

[48]   Significantly, Mr Wallace would refer to the trike as being his even in text message exchanges with Ms Sim. For example, on 5 November 2015:

Ms Sim:         Do you hav my keys

Ms Sim:         Can’t find them anywhete

Mr Wallace:     Ok well we just about at Marks will check my trike boot.

A further example was on 23 January 2016:

MsSim:         At concert heaps of people its at a winery windycloudy but warm thinkin of you xxx

MrWallace:     Is it a outside concert? Me cleaning me trike; me thinking of you.

And in a similar vein on 21 March 2016:

Mr Wallace:     Me is Hm hun was just short ride. Hope you had good sleep. Ms Sim:  No nt really too sore.

MrWallace:     No good hun; I just spent last couple hrs cleaning my trike & the wagon still luxin it. Its so dirty.

[49]   Ms Sim in cross-examination suggested that Mr Wallace always called it his trike, and that it was a joke between them because he really liked it, but knew that it really belonged  to  her. I do not consider that explanation to be convincing. Mr Wallace’s references to the Harley-Davidson as  being his  to the exclusion of  Ms Sim, particularly when communicating with her, suggests the motorcycle was his. Realistically, at the very least, if Ms Sim had paid the whole $18,000 to purchase the vehicle and for the purposes she claimed, he would have referred to the motorcycle as “our” trike.

[50]   There are other related aspects of Ms Sim’s evidence which do not ring true. She described in her affidavit evidence the importance she placed upon the purchase of the Harley-Davidson, and that she purchased the motorcycle to get herself into a better “head space” and saw it as an opportunity “to do something different” in her life. She referred to exploring the country with Mr Wallace, and that it would offer her some freedom from the stresses that she had been under. However, the evidence shows that she took no  interest  in  the  purchase  of  the  Harley-Davidson  from  Mr Robinson. Furthermore, and importantly, she gave no evidence of how she had been involved in using the motorcycle with Mr Wallace. The evidence is to the contrary. The text message evidence has numerous references to Mr Wallace using the Harley-Davidson and being out on “my trike”. There is no evidence of Ms Sim going on any rides or trips with Mr Wallace, nor of her taking any steps to obtain her motorcycle licence to allow her to use the Harley-Davidson. Ms Sim gave no evidence of how she had used or been involved in using the motorcycle for the purposes she claimed it had originally been purchased by her.

[51]   Ms Sim sought in her evidence to suggest the Harley-Davidson was under repair and that was why it was at Mr Wallace’s place. She refers to the motorcycle needing some work, and that Mr Wallace and his son were working through those

things “for me”. The text messaging data which covers the period from October 2015 to April 2016 makes numerous references to the Harley-Davidson and to Mr Wallace being out riding on the “trike”. It is apparent that the Harley-Davidson was fully operational during this period. There is no indication of any major mechanical problems, only to maintenance and to him cleaning it. There is some evidence from the undercover officer of speaking to Mr Wallace on 6 August 2015 when he told her he had been working on the Harley-Davidson, but again he referred to it as “his” bike.

[52]   While of only secondary importance, financial inquiries made of the Inland Revenue Department relating to Ms Sim’s declared income shows she received a low income between 2010 and 2016. For the year ending 31 March 2014, Ms Sim’s income from benefits and employment amounted to $14,017.96; for the following tax year, she received $21,735.67; and for the year ended 31 March 2016, $13,729.91. Ms Sim does not own her own home and was paying the additional expense of rent.

[53]   Her inheritance in October 2012 is not in issue. However, as already observed, those funds steadily reduced over the subsequent years. Ms Sim’s bank statements do not show any withdrawals of cash in February 2015 to pay the deposits for the Harley- Davidson either directly to the vendor or to provide cash to Mr Wallace. It would have been quite simple for Ms Sim to have electronically transferred the money to the vendor if she was truly the purchaser, or to Mr Wallace’s account for him to pay if she wanted him to act as her agent.

[54]   For the reasons canvassed, I do not consider Ms Sim’s claim of having covertly built up a cash reservoir in her cellar is tenable. Under cross-examination, when many of the inconsistencies in her evidence were highlighted by reference to her own bank statements, she claimed to have been confused, and in explanation referred to the stresses she had been under as a result of being on medication, and her family’s difficulties. However, she was unable to account for the discrepancies in her evidence. I found her evidence inconsistent and unconvincing. Her account of how she purchased the Harley-Davidson motorcycle for herself was not credible.

[55]   It is possible Ms Sim may have provided some money to Mr Wallace which he used to assist in his purchase of the motorcycle, but that is not the basis upon which

Ms Sim presented her claim. It would be speculative to dwell on the circumstances of any such payments. Based on the totality of the evidence, I find it proved on the balance of probabilities that the  Harley-Davidson  motorcycle  was  obtained  by  Mr Wallace, wholly or in part, with funds from his drug dealing activities. As already observed, it is sufficient that there has been some contribution from the proceeds of significant criminal activity for the asset to become tainted property. It follows that I am obliged to make an assets forfeiture order in respect of that item of property.

Decision

[56]I make the following orders:

(a)An assets forfeiture order in respect of the 2005 Harley-Davidson Road King Custom motorcycle, coloured black, registration no 94ZTJ. That property is vested in the Crown absolutely and is to be placed into the custody and control of the Official Assignee.

(b)An assets forfeiture order in respect of the 2000 Triumph Sprint motorcycle, coloured yellow, registration no 92ULE. That property is vested in the Crown absolutely and is to be placed into the custody and control of the Official Assignee.

Solicitors:

Crown Solicitors Office, Dunedin Community Law Otago, Dunedin