Commissioner of Police v Musson [2016] NZHC 43 (2 February 2016)

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BETWEEN	THE COMMISSIONER OF THE NEW ZEALAND POLICE Applicant
AND	PHILLIP JAMES MUSSON First Respondent
AND	LESLEY ANNE MUSSON Second Respondent
AND	ANNE MARIA HAMMILL Fifth Respondent

Hearing:	12 October 2015
Appearances:	K B Bell for the Applicant T Aickin for the Respondents
_Judgment:	_{2 February 2016}

[1] The Commissioner of Police applies, pursuant to the Criminal Proceeds (Recovery) Act 2009 (the Act), for profit forfeiture orders against the respondents Phillip Musson, his wife Lesley Musson and his mother-in-law Anne Hammill.

(b) a 2004 Chrysler Grand Cherokee, registration URUZ, registered in the name of Phillip Musson;

[3] The 2009 Chrysler Grand Cherokee was not the subject of a restraining order and has remained in the possession of the respondents. At the hearing of the application, the Commissioner sought to amend the application so as to refer to that vehicle or the proceeds of its sale. That amendment was not opposed.

[5] The Commissioner’s applications are consented to insofar as they relate to all property and cash other than 40 Breens Road.

[6] I accordingly make an assets forfeiture order in respect of $5,000 cash located at 40 Breens Road, Christchurch on 23 May 2012. I vest that property in the Crown absolutely and put it in the custody and control of the Official Assignee.

[7] In relation to the further property owned by Phillip James Musson, the Court determines:

(a) the value of the unlawful benefit Phillip James Musson obtained from significant criminal activity is $795,958 less the $152,667.83 forfeited to the Crown as a result of a profit forfeiture order made against a fourth respondent (Mr John Wisker) in respect of the same significant criminal activity to which the profit forfeiture order relates and the value of any profit forfeiture order made against Mrs Hammill;

(b) the maximum recoverable amount, determined in accordance with s 54, is the amount referred to in (a) less the $5,000 value of the further asset forfeiture order now made against Mr Musson in respect of the $5,000 cash; and

• a 2004 Chrysler Grand Cherokee, registration URUZ, registered in the name of Phillip Musson, or the proceeds of sale obtained from that vehicle;

• a 2009 Briford 6 x 4 silver trailer, registration P667L, registered in the name of Phillip Musson; and

[8] The Commissioner’s application is opposed insofar as it relates to the property at 40 Breens Road. On this application, the Commissioner must prove on the balance of probabilities that the respondents have, in the relevant period of criminal activity, unlawfully benefited from significant criminal activity.

[9] In accordance with the definition in the Act, the relevant period during which there must have been significant criminal activity is the seven years from 16 April

2007 to 16 April 2014 when the Commissioner filed in the High Court an application for restraining orders under the Act.¹

[10] The serious criminal offending relied on by the Commissioner is, firstly, Mr Musson’s offending under the Medicines Act 1981 which involved the importation, sale and possession for sale of prescription medicines (anabolic steroids, human growth hormones and other performance and image enhancing drugs). The Commissioner contends that this was significant criminal activity in terms of the Act

[11] Mr Musson arranged for the prescription medicines to be sent to him or to false names, care of Courier Post depots or Post Shops in the Canterbury region and to his home address.

[12] Total prescription medicines imported and/or seized from Mr Musson and his associate, Mr Bailey, had an estimated street value of $1,498,826. Of this total, prescription medicines with a street value of $1,256,300 were imported by Mr Musson or in his possession.

[13] The evidence for the Commissioner, by way of an affidavit from Detective Nicola Robinson, was that Mr Musson had been involved in this offending involving prescriptions over the period 1 April 2010 to 31 March 2013.

[14] Mr Musson pleaded guilty to 187 charges under the Medicines Act 1981, a charge of forgery and a charge of use of a forged document. The Medicines Act charges covered a 16 month period from 12 October 2011 until 26 February 2013. Mr Musson was sentenced to four years, five months and three weeks’ imprisonment.

[15] The Commissioner’s application is also based on Mr Musson’s offending in the manufacture, possession and sale of party pills containing Class C controlled drugs contrary to the Misuse of Drugs Act 1975. (“Party pills” is a colloquial term for Ecstasy or Ecstasy mimic pills.) The Commissioner says this was serious significant criminal activity because it involved offending punishable by over five years’ imprisonment or because proceeds or benefits valued in excess of $30,000 were directly or indirectly acquired or derived from the offending.

[16] The affidavit evidence of Detective Robinson explains how, jointly with Chetan Viraj Jethwa of Hamilton, he imported 4-MEC, MDPV and alpha PVP (Class C controlled drugs) and then manufactured, possessed and sold party pills containing those ingredients. This resulted in party pill sales of not less than $701,350.

[17] Mr Musson went into partnership with Mr Jethwa towards the end of 2011 or start of 2012 to make and sell party pills. Their roles were defined and they shared

the profits equally. Mr Musson sold the party pills. He would receive the orders, organise the manufacture and delivery of these party pills by Mr Jethwa and arrange for payment for the party pills. Mr Jethwa imported the active ingredients for the party pills. Mr Jethwa then manufactured party pills in quantities Mr Musson advised. Once manufactured, Mr Jethwa sent the party pills to the customers as advised by Mr Musson. Mr Musson ensured Mr Jethwa received his share of the proceeds from the sale of the party pills.

[18] Over the period 1 April 2010 to 31 March 2013, when the evidence indicates Mr Musson was involved in the offending over prescription drugs and later the party pills, he had unexplained income of not less than $795,958.

[19] In her affidavit dated 11 April 2014, Detective Robinson said that charges in relation to offending under the Misuse of Drugs Act were “in the process of being resolved”. There is no evidence to indicate the Crown continued with charges in relation to that offending. Presumably, the Crown chose not to continue with such charges given Mr Musson’s guilty pleas to the Medicines Act charges. The significant criminal activity which the Commissioner’s application is based on did

not have to be the subject of any criminal proceedings.²Mr Musson has not denied

that he was involved in significant criminal activity in the way Detective Robinson outlined in her affidavit.

[20] The application in respect of the $5,000 cash was made against Mr Musson as an assets forfeiture order on the grounds that:

[21] In relation to the other property, the application was for a profit forfeiture order.

[22] In respect of Mr and Mrs Musson, the Commissioner contended that Mr Musson had been engaged in significant criminal activity. Mrs Musson was married to Mr Musson. The Commissioner contended that she and Mr Musson had lived off the proceeds of Mr Musson’s significant criminal activity.

(a) the value of the benefit they derived from the serious criminal offending, in terms of s 53 of the Act, was $795,958 less the amount of any profit orders made against John Phillip Wisker and Mrs Hammill, or another value the respondents proved in accordance with s 53(2) of the Act;

(b) the maximum recoverable amount was the value referred to in (a), less the amount of Mr Musson’s interest in property that was subject to an asset forfeiture order; and

(c) the property against which the orders were sought was that specified in paragraphs [2](a), (b), (c) and (d) above. With regard to the property at

40 Breens Road, an order was sought in respect of Mr and Mrs Musson’s interest in that property after allowing for the amount due on a mortgage over the property and Mrs Hammill’s equitable interest in the property.

[24] The way the Commissioner framed the application, in relation to the benefit obtained, has been confusing. The value of the benefit was stated as being $795,958 less any profit forfeiture orders made against Mr Wisker and Mrs Hammill.

[25] Section 52 requires the Commissioner to state in an application the value of the benefit that has been obtained from the significant criminal activity which is the basis for the application. The purpose of the Act is to allow the Commissioner to recover from a person, who has benefited from significant criminal activity, property to the extent of the benefit they received.³Logically, there is no reason why the

benefit which one respondent has obtained from significant criminal activity should be reduced by what another respondent is required to pay the Commissioner in respect of the benefit which that other respondent obtained from the same significant criminal activity. The value of the benefit obtained by Mr and Mrs Musson thus should not logically be reduced on account of any profit forfeiture order that might have been made against Mr Wisker or which might be made in respect of Mrs Hammill. The case, however, proceeded with the Commissioner contending, through submissions by counsel, that $152,667.83, which was said in submissions to be the subject of a “profit order” against Mr Wisker, should be deducted from the

$795,958. It was submitted that the amount of any order that might be obtained against Mrs Hammill was to be determined through these proceedings.

[26] The record shows that ultimately, by consent, the Commissioner obtained an assets forfeiture order against Mr Wisker dated 17 December 2014 for forfeiture of property worth $122,667.83 and a profit forfeiture order in respect of other property worth $30,000.

[27] Section 53(1) states that the value of the benefit is presumed to be the value stated in the application although that may be rebutted by the respondent on the balance of probabilities.

[29] In contrast to the Commissioner’s approach in dealing with Mr and Mrs Musson, in her application as against Mrs Hammill, the Commissioner made no allowance for any recovery that might have been obtained from another party.

[30] Section 52 did not require the Commissioner to state the maximum recoverable amount which she contended the High Court should determine on the making of a profit forfeiture order.

(1) Before the High Court makes a profit forfeiture order, the Court must determine the maximum recoverable amount by—

(a) taking the value of the benefit determined in accordance with section 53; and

(b) deducting from that the value of any property forfeited to the Crown as a result of an assets forfeiture order made in relation to the same significant criminal activity to which the profit forfeiture order relates.

[32] In her application against Mr and Mrs Musson, the Commissioner claimed that this maximum recoverable amount would be the value of the benefit obtained on the basis just discussed, less the value of any assets forfeiture order obtained against Mr Musson. There was no suggestion that the maximum recoverable amount obtainable against Mrs Hammill should be reduced by the value of an assets forfeiture order obtained either against Mr and Mrs Musson or Mr Wisker. I consider the approach adopted by the Commissioner in relation to Mrs Hammill is correct.

[33] I accept that s 54(1) was designed to avoid double counting in the determination of a profit forfeiture order.⁴It would be illogical and result in a windfall to the Commissioner if the Commissioner were able to recover from a respondent both the value of an asset seizure pursuant to an assets forfeiture order, and property of a similar value through a profit forfeiture order.

[34] However, s 54(1)(b) should be interpreted with due regard to the purpose of this legislation. There should be implied into s 54(1)(b) the words required to ensure that a person who has benefited from significant criminal activity is not able to retain some or all of the value of those benefits through deduction of the value of property which the Commissioner is recovering through an assets forfeiture order against another person who also, albeit separately, benefited from the significant criminal activity.

[35] The legislation should not be applied in a way that allows a number of respondents to bring into account against the value of what they might have to forfeit

to the Commissioner, the amount which the Commissioner is recovering from one person in relation to the benefits that person obtained and the property which that person owns. Section 54(1)(b) should thus be applied as if it reads:

Deducting from that the value of any property forfeited to the Crown as a result of an assets forfeiture order made in relation to property owned by the respondent and in relation to the same significant criminal activity to which the profit forfeiture order relates.

[36] However, given the way the Commissioner framed the application, the presumption in s 53(1) and the particular circumstances of this case, I am proceeding on the basis that the maximum recoverable amount which the Commissioner will be able to obtain against Mr and Mrs Musson will be the sum of $795,958 less

$152,667.83 recoverable from Mr Wisker, the $5,000 which the Commissioner is entitled to through the assets forfeiture order made against Mr Musson and any amount the Commissioner may be able to recover from Mrs Hammill as a result of any order I may make in respect of her interest in the property at Breens Road. In reality, that is unlikely to disadvantage the Commissioner because the value of any property obtained from Mr and Mrs Musson, pursuant to profit forfeiture orders against them, is likely to be less than the maximum recoverable amount after giving them credits for what the Commissioner has already obtained against Mr Wisker or might obtain from Mrs Hammill.

(a) the value of the benefit she had obtained from the serious criminal offending was $99,907.70;

[38] The order was sought on the basis that Mrs Hammill had unlawfully benefited from Mr Musson’s significant criminal activity through payments which were made to her by Mr Musson as detailed in affidavits filed for the Commissioner.

[39] In an amended notice of opposition dated 22 June 2015, Mr and Mrs Musson and Mrs Hammill all opposed the making of profit forfeiture orders against them. For Mrs Musson and Mrs Hammill, it was contended that they had not unlawfully benefited from the significant criminal activity.

[40] All three respondents made an application for relief pursuant to s 56 in respect of their interest in the forfeit of 40 Breens Road on the basis of undue hardship that would be caused to all three of them and to the Mussons’ daughter.

[41] In Commissioner of Police v Rewita, the Court approved the four-step process formulated by Lang J in Pulman v Commissioner of Police.⁵The Court stated:⁶

(a) First, the Court must determine under s 53(1) whether the Commissioner has proved on the balance of probabilities that the respondent has unlawfully benefited from significant criminal activity during the relevant period. If the Court is so satisfied, the value of the benefit derived by the respondent is presumed to be the value stated in the application or any amended application. This presumption can be rebutted by the respondent, again on the balance of probabilities.

(b) Secondly, the Court must determine the maximum recoverable amount by taking the value of the benefit as assessed, and deducting from that figure the value of any property already forfeited to the Crown by virtue of any assets forfeiture order made in relation to the same criminal activity.

(c) Thirdly, the Court must determine whether any property should be excluded from the application of the profit forfeiture order because undue hardship is likely to be caused to the respondent if such property were to be realised.

(d) Finally, the Court must make a profit forfeiture order under s 55(1) if it is satisfied on the balance of probabilities that the respondent has interests in the property. It has no discretion. Any such order must specify the value of

⁵Commissioner of Police v Rewita [2012] NZHC 967, citing Pulman v Commissioner of Police

the benefit, the maximum recoverable amount, and the property that is to be disposed of. A profit forfeiture order is made in Form 22 as described in the Schedule to the Criminal Proceeds (Recovery) Regulations 2009.

[42] With all three respondents, the first step is to determine whether they unlawfully benefited from Mr Musson’s significant criminal activity during the relevant period, having regard to the definition of “relevant period” in s 5 of the Act and of “significant criminal activity” in s 6.

[43] There is no dispute that Mr Musson was involved in significant criminal activity, as that term is used in the Act. There is no dispute that he obtained benefits from that significant criminal activity to the extent claimed by the Commissioner.

[44] There is an issue as to whether Mrs Musson and Mrs Hammill unlawfully benefited from that activity.

[45] “Unlawfully benefited from significant criminal activity” is defined in s 7 of the Act as follows:

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).

[46] These being civil proceedings, the Commissioner must prove that, on the balance of probabilities, Mrs Musson and Mrs Hammill “knowingly” benefited from Mr Musson’s serious criminal activity. Importantly in this case, the adverb “knowingly” includes wilful blindness.⁷

_{knowingly benefited from Mr Musson’s criminal activity if their
suspicions were}

aroused that he may have been engaged in such criminal activity but deliberately refrained from making enquiry in order to avoid learning whether the suspicion was justified.⁸That was the way Priestley J in the High Court held that knowledge could be established in the context of an application such as this.⁹The Court of Appeal approved of his approach on appeal, expressly endorsing his reference to the way the

Court of Appeal had discussed the concept of wilful blindness in criminal and civil contexts in R v Martin and Diver v Loktronic Industries Ltd.¹⁰

[48] Pursuant to s 53(1) and (2), this must be proved on “the balance of probabilities”. I am mindful of the observation of the majority of the Supreme Court in Z v Dental Complaints Assessment Committee that, when serious allegations are made of criminal conduct which has serious consequences, there will be a natural tendency to require stronger evidence before being satisfied to the balance of probabilities standard.¹¹

[49] On the evidence from the affidavits filed in the proceedings and the evidence given during the hearing, I set out the circumstances relevant to the determinations which I must make.

[50] Mr Musson was charged with importing and distributing anabolic steroids in November 2005. He received diversion under the Adult Diversion Scheme. Mrs Musson denied any knowledge of this charge. Mrs Hammill said she had been aware of it.

[51] Before the Canterbury earthquakes in September 2010 and February 2011, Mr Musson may have had some work as a bodybuilding coach. He also competed in

¹⁰At [59] and [61], citing R v Martin [2007] NZCA 386 at [10]- [11]; Diver v Loktronic Industries

¹¹Z v Dental Complaints Assessment Committee [2008] NZSC 55, [2009] 1 NZLR 1 at [102].

2000 for $195,000 but were able to do this only with an interest-free mortgage from Mr Musson’s father for the full purchase price. By 31 March 2013, they had reduced this debt to $39,550 through monthly payments of $1,082.50.

[53] Inland Revenue Department (IRD) records indicated Mr and Mrs Musson received a joint sickness benefit from 25 November 2007 until 11 August 2010. The records indicated that Mr and Mrs Musson each obtained income from Work and Income benefits in the year to 31 March 2011 of $3,745.13 (gross), and in the year to

[54] Although there were inconsistencies in what she said to the Police about this when interviewed by Detective Grainger on 23 May 2012, Mrs Hammill said she had lent $30,000 to her daughter and son-in-law in about 2004 when they were at risk of repossession.

[55] Mr Musson says that, as a result of the Christchurch earthquakes, his claimed legitimate coaching client base was decimated.

[56] Mr Musson’s criminal activity must have required him to be busy when he was at home in connection with his activities and when communicating by text in connection with his offending. Often packages connected with his offending, including cash, were sent to him at his home, on occasions addressed to false names at the address. He also used items from the home in connection with the offending, namely photographs of Mrs Musson taken from either her driver licence or a passport.

[57] When a search warrant was executed on 23 May 2012, 11 false driver licences were found in the home (five showing photos of Mr Musson, six showing photos of Mrs Musson). As a result of the search warrants executed on both 23 May

2012 and another on 26 February 2013, a total of 18 cellular phones were located at the home. Couriers frequently had to call at the home in circumstances which it is likely all occupants would have been aware of. Those calls were in connection with Mr Musson’s offending.

[58] Mr Musson must also have often had to leave the home to arrange collection of materials or cash from various Post Shops or courier depots, or to meet others involved with his offending.

[59] Mr Musson was interviewed on 27 March 2012 by a Medsafe investigator when he arrived to collect a parcel containing prescriptions medicines at a Courier Post depot at Wairakei Road, Christchurch. Despite that, Mr Musson warned those he was dealing with that he had been “busted” by Medsafe but indicated that he was going to continue with his dealing in both prescription medicines and party pills.

[60] On 28 March 2012, Mr Bailey, who was working with Mr Musson with the importation of prescription medicines, texted Mr Musson and asked him if he was still in business following the dealings with Medsafe the previous day. Mr Musson’s response was:

Yep I’m full doing my personal training. It will be disjointed for the rest of this week but all good. Do not send any cash to the depot. I will give you an alternative.

[61] In the context of this application and the arguments put forward on behalf of Mrs Musson and Mrs Hammill, it is significant Mr Musson referred to his business in dealing with prescription medicines as “my personal training”.

[62] On 31 March 2012, Mr Musson arranged for Mr Bailey to pick up an order from Mr Musson’s mailbox at Breens Road. In a text, Mr Musson referred to the letterbox at his home as “one of my safest drop points”. On 1 April 2012, Mr Musson sent a text to a customer saying that no money was to be sent to the Wairakei Road Courier Post depot any more and it should be sent to “Kyle Musson, 40 Breens Road, Bishopdale, Christchurch 8051”. Kyle was a false name. On 2 April 2012, payment for a party pill order had to be made by way of couriering cash to “Lelou Dallas” at the address of 40 Breens Road. Payments for party pill orders around this time were made into Mrs Hammill’s Westpac account.

[63] Search warrants were executed on 23 May 2012 at Mr Musson’s home address of 40 Breens Road, his storage facility at Unit 301 Wairakei Road, Christchurch and his Chrysler Grand Cherokee. During execution of those warrants,

$195,621 worth of prescription medicines was located. Also located were active pharmaceutical ingredients sufficient to manufacture $102,282 worth of products and

[64] Located in the house were prescription medicines, anabolic steroids and human growth hormones, bulk quantities of tablets and capsules of various colours, numerous items for the manufacture and supply of these pharmaceuticals, such as courier packaging including pre-labelled parcels to Mr Musson’s post office box using false names, small plastic ziplock “deal” bags and 11 counterfeit driver licences, 13 cellular phones, $5,000 cash and two silver ingots. In a double garage at the back of 40 Breens Road, numerous items were found consistent with that being a place where Mr Musson would manufacture tablets. Numerous items including prescription medicines, anabolic steroids, human growth hormones and items associated with their packaging were also found in Mrs Hammill’s self-contained unit. Numerous items associated with Mr Musson’s prescription medicine business were found in Unit 301. These included bulk quantities of tablets, digital scales, “Titan” labels, NZ Post track-and-trace documents and nine false counterfeit licences.

[65] During the execution of the search warrants on 23 May 2012, both Mrs Hammill and Mrs Musson were interviewed at 40 Breens Road. Mr Musson was subsequently interviewed by appointment over two days on 28 and 29 May 2012.

[66] When interviewed by Police on 28 May 2012, Mr Musson said that his wife had no role in distribution:

... and my mother-in-law is very ignorant about what I do and my wife knows hardly anything. I have done this deliberately because I don’t want them to have to lie for me.

I purposely keep them in the dark so instances like this where I get into trouble they don’t know anything. If they ask me a question I joke with them “if I told you I would have to kill you”. That’s my code that I am not going to tell you.

[68] Despite the execution of the search warrant on 23 May 2012 and his interview with Police, Mr Musson continued with his prescription medicine importing and distribution business. On 25 June 2012, Mr Musson collected a parcel which Medsafe had earlier intercepted and which had originally contained prescription medicines. On 6 August 2012, Medsafe examined a parcel addressed to P Musson, 40 Breens Road, Bishopdale, Christchurch, 8051. There were no sender details. It contained $850 cash. Medsafe copied the contents and then returned the parcel to the postal system for delivery to Mr Musson with a letter saying what they had done. After Mrs Hammill provided her account number to Mr Musson on 28

March 2012, Mr Musson provided Mrs Hammill’s bank account to customers for payment of orders for prescription medicine. There was a deposit of $1,000 made into the account on 31 August 2012 for 75 x 10 ml vials of test-E containing the prescription medicine testosterone enanthate. The Police estimated the value of this order would have been $7,500.

[69] Between 7 August 2012 and 23 October 2013, 24 deposits (totalling $27,225) destined for Mr Musson were paid into Mrs Hammill’s bank account by cash deposit or electronic transfer. Of that amount, beginning on 8 August 2012, $17,050 was transferred into Mr Musson’s accounts. Mrs Hammill received a further $3,885 in payments up to 31 March 2013.

[70] On 25 October 2012, Mr Musson was served with summonses for 291 charges laid by Medsafe under the Medicines Act. These charges related to the offending up to 20 June 2012 for imported parcels and 23 August 2012 for parcels Mr Musson sent to customers.

[71] On 7 November 2012, Mr Musson was arrested for two parcels he had dropped off at the Fendalton Post Shop on 26 October 2012. A further seven charges were laid under the Medicines Act. He was remanded in custody until 13 November

2012. Despite this, Mr Musson continued to obtain prescription medicines and provide them to Mr Bailey.

I am just having a wee sleep in. Bin a very stressful wekend with very little sleep and a lot of very fast foot work lol. The result is gd tho and it wil work out beta for us.

[73] The text referred to a customer Shannon Rewi. A total of $14,320 in payments from Mr Rewi had been made into Mr Musson’s Westpac account between

9 October 2012 and 5 November 2012, $3,000 into Mrs Hammill’s Westpac account between 31 August 2012 and 20 September 2012, and $4,420 into Mr Bailey’s account between 11 June 2012 and 25 February 2013.

[74] Mr Musson and Mr Bailey were involved in further communications and activities in connection with prescription medicines until search warrants were executed at various addresses associated with both of them on 26 February 2013.

[75] Search warrants were executed on 26 February 2013 at 40 Breens Road, Mr Musson’s storage facility and vehicle and at Mr Bailey’s home address, storage facility and vehicle. During execution of those search warrants, prescription medicines with a street value of $121,765 were seized. At Breens Road, Police found bottles of Phoenix medicines, other prescription medicines, various documentation, including a fake driver licence bearing Mrs Musson’s photograph, and six cell phones. Located in the storage unit were 27 white bottles and 50 black caps. Following that search, Mr Musson faced additional charges. He was remanded in custody.

[76] Under cross-examination, Mr Musson confirmed that in 2005, around the time he had won a bodybuilding title, Police had searched his home and had found steroids that he had unlawfully imported. He said this had generated discussion within the household with both his wife and mother-in-law and they knew he had been importing steroids. He said that his income from his business had reduced to “zero overnight” as a result of the Christchurch earthquakes. He could not recall any instance where he had gone to a gym to train people after the September 2010 earthquake. Mr Musson said that at his home he would “always be on the lookout for the mail”, that couriers would come to the place and he would be out there “first

thing in the morning” and “the dogs would alert us to when the courier pulled up”. He said that people ordering steroids from him would send cash in a bag to his home address and that the payments could have been addressed to other occupants at his home. He also said money was paid into bank accounts of his wife and his mother- in-law. Mr Musson said that, with his offending, he “was out of control”.

[77] Mr Musson said his wife and mother-in-law did ask him questions about what he was doing. He acknowledged that the questions could have touched on his criminal activity but, if they did, he would respond in a joking way by saying that “if I told you that I’d have to kill you”. He described it as a sort of a joke which he used to avoid divulging information about clients he was supplying steroids to. He said that, if they did ask questions and he responded in that way, they would then drop their questions.

[78] In an affidavit, Mrs Musson said she married Phillip Musson in 1987. They have one daughter who in March 2015 was aged 24.

[79] Mrs Musson says she has suffered from anxiety and depression most of her life. She says her condition worsened after the February 2011 earthquake and that she became ill with “depression, anxiety and psychosis”. A clinical psychologist’s report, addressed to her general practitioner and dated 12 June 2014, referred to her diagnosis being one of “social phobia” in early remission. The report mentioned that she had been assessed on 30 April 2013 as presenting with symptoms consistent with social phobia which was limiting her ability to cope by herself. The psychologist had worked with her since May 2013 and reported on the progress she had made in becoming more active. At the time of her report, the psychologist stated that Mrs Musson still reported “some anxiety in social situations, she no longer avoids situations due to this reaction”. The report indicated that she had the support of her mother and her daughter, and that she anticipated having the support of her husband on his returning to the family after release from prison.

[80] Mrs Musson said she relied on her husband until the time of his imprisonment to support her and to take care of both their daily needs, such as

grocery shopping, paying bills and managing their finances. She said she had “no awareness that my husband was involved in anything illegal and doubt that I would have been in any position to stop him even if I had known at the time”.

[81] In his affidavit, Mr Musson said that at the time of his offending his wife

Although I had told Lesley that I intended to sell a few steroids to help pay bills after the Christchurch earthquakes, I did not tell her of the level of criminal activity I was involved in.

[82] He also said “as far as I am aware, Lesley was not aware of the extent of my offending until I was charged”. He referred to the way her anxiety and agoraphobia worsened after the earthquakes, her reluctance to leave the home, answer the telephone and the great difficulty she had in making decisions.

After the first search warrant was executed at our home, no further offending occurred from 40 Breens Road. After this, any further offending by me took place away from 40 Breens Road.

[84] I infer from this that Mr Musson acknowledges that before 23 May 2012 his criminal activity had taken place at the home. Mrs Musson rarely left the home over this period after the Canterbury earthquakes. I infer that she must, at least in a general sense, have been aware of the criminal activity he was involved in, as acknowledged at his home.

[85] When Mrs Musson was interviewed by a probation officer for Mr Musson’s pre-sentence report dated 21 June 2013, she advised that the income received from her husband’s offending was “how we lived for 12 months”.

[86] Mrs Musson had income of only $3,118.33 from Work and Income benefits over the period 1 April 2010 to 31 March 2013. Located in the spare bedroom of her home, when the search warrant was executed on 23 May 2012, were numerous cash receipts for purchases totalling $87,781.81. The spending was categorised by a Police witness as follows:

Apparel and accessories	$58,219.23
Appliances	$711
Books and stationery	$283.30
Department stores	$1,871.49
Household	$7,211.30
Leisure	$2,390
Pharmacy and medical	$1,612.80
Post Shop expenses	$11.50
Silver purchases	$5,100
Western Union purchases	$10,669.50

[87] Of the $58,219.23 spent on apparel and accessories, $55,605.13 was spent on female clothing. This included purchases for high-end designer wear and accessories including Trelise Cooper clothing and jewellery ($10,190.71) and at least $6,378.40 on lingerie and $4,086.90 on footwear. The majority of clothes purchased were located in the master bedroom and the spare room next to the master bedroom. The spare room was packed with clothing, shoes and haberdashery and was difficult to walk around.

[88] Spending in the leisure category included $1,440 spent on 19 August 2011 at Select Braemar Lodge and Spa, a high-end luxurious retreat on the outskirts of Hanmer.

[89] In his affidavit and in evidence, Mr Musson said he used to take his wife shopping as a way of getting her out of the home and encouraging her to engage with people.

2012, Detective Chesterman assisted with the search. He spoke with Mrs Musson at

8.11 am. He made notes of the conversation in his notebook which Mrs Musson signed. Detective Chesterman acknowledged the conversation was about steroids.

The conversation indicated that Mrs Musson was comfortable with using steroids for health benefits, that she knew the use of steroids was illegal and that she was not concerned about going to prison but acknowledged “Phil will”. She told the detective that her income was from her husband and that she wanted to get into the fashion industry. She told the detective that boots in boxes had been bought with money from her mother.

[91] I have regard to all the circumstances associated with Mr Musson’s offending: the way in which he must have been conducting himself around the home in the period after the Christchurch earthquakes and the extent to which he would have been leaving the home in connection with his criminal activities; the receipt of significant amounts of cash, either at the home or into the bank accounts including at least one with which Mrs Musson was associated; and the way in which significant cash was spent on non-essential luxury goods. She must have known he had been involved in some criminal activity as a result of the charge he faced in 2005. She must have known of the execution of the search warrants and the seizure of items from the property in February 2012 and of the charges brought after that. All those circumstances must have caused Mrs Musson to be suspicious as to whether Mr Musson was engaged in significant criminal activity relating not just to the importation and sale of steroids but also the dealing in party pills. The evidence from Mr Musson as to her asking him questions and the way he responded also satisfies me that her suspicions were aroused to the extent that she did ask questions but chose not to seek answers when Mr Musson responded in a way that indicated it would be better for her not to receive further information.

[92] I thus find Mrs Musson did knowingly benefit from Mr Musson’s significant

74 years of age. She moved to Christchurch from Picton in 2003 after her husband died in 2001. She moved to Christchurch to live with her daughter, Mrs Musson, and Mr Musson. She initially lived in a sleep-out at 40 Breens Road but then built,

at her cost, the two bedroom dwelling on the property. She said she paid for this from a combination of personal savings and cashed-in bonus bonds. In March 2015, her only income was from her fortnightly New Zealand superannuation payments. She said she had no savings, investments or assets other than the interest in her dwelling.

[94] In her affidavit, Detective Robinson said Mr Musson had employed Mrs Hammill to help package the prescription medicines and that if the order was in liquid format he would provide the order (generally by text message) to Mrs Hammill who would fill the vials with the required substance.

[95] When interviewed by another detective on 23 May 2012, Mrs Hammill said she had packaged and wrapped Mr Musson’s “body building stuff”, that she did not know the drugs were illegal but she had taken no steps to find out whether they were legal or not. She indicated that she had been doing this over the period which would have followed the September 2010 earthquakes. She confirmed she had been paid

$2 per vial. The Police identified payments totalling $3,885 for packaging vials between 1 April 2010 and 31 March 2013.

Westpac account over the period 1 April 2010 to 31 March 2013. Of this, a total of

$98,350 was described as being directly attributable to Mr Musson’s party pill and prescription medicine business. There were the payments for the packaging of prescription medicines, payments of $67,000 between 28 March 2012 and 10 April

2012 for party pill orders and $27,475 between 7 August 2012 and 23 October 2012 being payment for prescription medicine orders. Detective Robinson and Ms van der Pol’s affidavits identify vial packaging payments of $2,885 following execution of the May 2012 search warrant.

[97] Although Mrs Hammill said in one affidavit the payments of $250 into her account were for filling the vials, at the hearing she said payments were made at that rate to cover the rental of the storage unit. On either basis, she must have known the payments were for her benefit and were from his criminal activity. Although any payments made into her account to cover the rental may have been matched by

debits against her accounts, it is the gross payment she received, rather than any net profit she retained from those payments, which I must be concerned with.¹²

[98] Mr Musson began using Mrs Hammill’s Westpac account on 28 March 2012 after he had been interviewed by a Medsafe investigator. Significant sums were transferred from Mrs Hammill’s account. On 10 April 2012, $30,000 was transferred into an account of one of Mr Musson’s associates and $20,000 was withdrawn in cash. Between 7 August 2012 and 31 March 2013, $27,475 was paid into the account in 24 separate payments. A number of these were identified as coming from particular individuals. Approximately nine were cash deposits. The individuals were identified as regular purchasers of prescription medicines from Mr Musson. Beginning on 8 August 2012, $17,050 was transferred into Mr Musson’s accounts in a number of separate payments.

[99] In April 2012, Mr Musson sent a text to his co-offender in the North Island,

$20,000 from many years back when she won big on bonus bonds”. In their evidence, the Police witnesses accepted this payment had been made and as being a repayment of a loan, despite the fact that Mr Musson had referred to an original payment from Mrs Hammill as a gift. When interviewed by Detective Grainger on

[100] The storage unit at Unit 301, Wairakei Road Storage Units was rented in Mrs Hammill’s name from 4 February 2011. The unit was used by Mr Musson. Payments for the unit were made by an automatic payment from Mr Musson’s bank accounts. From 6 January 2012, the payments were made from Mrs Hammill’s bank account.

[101] On 27 March 2012, an investigator approached Mr Musson and interviewed him about parcels he was collecting from a Courier Post depot. Following that interview, Mr Musson immediately texted people he was dealing with in connection

_{with drugs or medicines and told them not to send anything further to
him. On 27}

8051”. On 27 March 2012, another asked for 1,500 green and 1,000 yellow party pills and said he had cash to pay. Mr Musson told this person he was serious that he had been “busted by Medsafe” and responded “send to Anne Hammill, 40B Breens Road, Bishopdale, Christchurch 8051”. Deposits were made into Mrs Hammill’s bank account following those texts.

[102] On execution of the search warrant at 40 Breens Road on 23 May 2012, located in Mrs Hammill’s rooms were prescription medicines, anabolic steroids and human growth hormones.

[103] When asked by Detective Grainger on 23 May 2012 what her son-in-law did for a job, she said “I think he just looks after her” (referring to Mrs Musson). When asked what she knew as to how he made his income she said “I don’t know, I presume he is on the dole. I don’t ask him.” When asked what she put in the vials she said “whatever he asks for or whatever people order from him I suppose”. When asked how Phil tells her what he wants in the vials she said “he tells me or texts the order to me”. She said Mr Musson paid her $2 to fill each vial but volunteered “yeah, I don’t do the pills though”. She told the detective that she did not know “that stuff was illegal”. She said she did not ask Mr Musson about its legality but that Mr Musson “just said it’s cool”. When asked as to what steps she had taken to check if Mr Musson’s operation was legal, she responded “I haven’t. I just presumed it was ok.” She told the detective she thought she was dealing with “a natural thing body builders use”. She knew Mr Musson had a pill press in the garage for 6 to 12 months before the interview.

[104] Mrs Hammill was asked about her financial situation. She received $692.70 per fortnight from her pension. She referred to the $2 a vial she was paid by Mr Musson. She had $7,000 in a holiday fund which a friend also contributed to, about

$10,000 in a cheque account. She was asked how much money she had given away in the last 10 years and said the only thing she paid was $50 a month off her son’s credit card. When asked about winnings, she said initially the only money she had won in Lotto was $600 approximately. Later she said she had won $100,000 from

bonus bonds but said she had spent that on the flat that she had built. She said she had lent the Mussons about $30,000 after selling a house in 2003 or 2004, that it had been paid back in dribs and drabs and that she had not been worried about it. She said she had given them the money when they were facing threats of repossession.

[105] Mr Musson said that he was standing next to his mother-in-law when she withdrew $20,000 in cash from her bank account for him.

[106] Mrs Hammill said she did not understand the text messages that had been forwarded to her by Mr Musson and that she assumed that he had sent those messages to her to remind himself of the orders he needed to fill. She said he told her verbally what he wanted in the vials. She said Mr Musson made all the arrangements and controlled the use of her bank account, he had arranged for the rental of the storage unit which he used in her name and that he arranged for the automatic payment of this from her account. She said that he had full access to her bank account because she had little ability to manage her finances. She said that she thought “that all illegal activity stopped after 23 May 2012 when the first of the two warrants was executed”. She said that she did not think that what she was doing was illegal and that it was part of Mr Musson’s legal business as a personal trainer.

[107] Mrs Hammill also said she was involved in Mr Musson’s offending “to the extent that he paid me $250 per month to package customer orders for him”. She said this related to her putting liquid substances into containers for customers but she did not know the substances were illegal. She said:

When Phil Musson asked if he could use my bank account I did not think anything of it. I did not look at the amount of money going into or out of my account as I let my son-in-law do this. I thought this was simply part of him operating a legitimate business.

[109] Under cross-examination, Mrs Hammill said she was aware of Mr Musson getting into trouble when the Police came and searched 40 Breens Road around the time he won a bodybuilding competition. This referred to the events which had led to him being charged around 2005. She confirmed that she received statements for

her bank account, that they came monthly, that she looked through the statements briefly and kept them. She confirmed she was able to tell the Police the approximate balance in her bank account at the time of their search in May 2013. She said she just let Mr Musson use her bank account, that she gave him her numbers, her “bank number and stuff”. She said she had let him use the account to pay her bills. She said she was aware of times he had used the account because she went to the bank and withdrew money for him. She said that she knew he had money transferred into her bank account and asked her to take it out for him. She did not ask him how that had happened but said she did not know why she did not ask. Although she had not asked, she said that she understood that he had arranged for someone else to pay

$20,000 into her bank account, that she just thought it was for “his body building stuff”. I asked her, if it was part of his business, had she ever wondered why the money got paid into her bank account. She responded “he never said and I never asked”. She acknowledged she had probably seen the withdrawal of $20,000 on her bank account statement after it had happened.

[110] Under cross-examination, Mrs Hammill said that, after the Police search on

23 May 2012, she had talked to Mr Musson and her daughter about the search. Mrs Musson had been very upset and it was at that time Mrs Hammill realised that what had been happening was illegal. Despite that, she said the search had not caused her to question the $20,000 that had been withdrawn from her account or to reflect on whether or not Mr Musson should have access to her account.

[111] Under cross-examination, Mrs Hammill initially said that she had not been aware of $27,500 being deposited in her account between August 2012 and 23

October 2012 but, when it was put to her that she had known full well what was happening with her accounts and turned a blind eye to it, she responded “I probably did but I don’t remember what, you know, I don’t remember. I didn’t think anything of him using my bank.”

[112] As far as the text messages were concerned, she confirmed that, although she did not read well, she could read and she could text. She nevertheless said that Mr Musson told her verbally what orders she had to fill as far as filling vials was concerned. She confirmed that, at the time the Police executed a search warrant on

23 May 2012, she thought Mr Musson was on the dole. She thought that at the time he had got $20,000 or $30,000 from a business, he had been on the dole. She confirmed that she had never asked Mr Musson about the business he was operating but said that probably she had asked him questions that resulted in him answering to the effect that if he told her then he would have to kill her, that this was a joke and “we always say that to one another”.

[113] Against the background of that evidence, conscious of the burden of proof which is on the Commissioner and the standard to which allegations have to be proved, I am satisfied Mrs Hammill did knowingly benefit from the payments which were made into her bank account and which she retained as a result of Mr Musson’s significant criminal activity with regard to both the prescription medicines and Class C drugs. I am satisfied that she knew that Mr Musson was using her account for his business activities, not just for transactions for her benefit. Given the fact that she understood him to be receiving a benefit at the time, I find she must have been and was suspicious of the activities which he was involved in that enabled him to pay

$20,000 to her, whether it was truly a repayment of a loan or simply a payment made to her for her benefit. I consider she was aware of the extent to which he was using her bank account to receive payments for drugs he was supplying and that she must have been aware that this happened after the Police search of 23 May 2012 when she was aware of the illegal activity he was involved in.

[114] While Mrs Hammill may not have been aware of the full extent of his criminal offending, I find this was because, although she was suspicious, she refrained from requiring a response to questions she did ask arising out of her suspicions. Given both her and Mr Musson’s evidence, I find that she was suspicious to the extent that she did ask questions but that she permitted him to deflect her enquiries with the joking response already referred to. I thus find that, to the extent she was not aware of the full extent of Mr Musson’s offending, this was because she was “wilfully blind” to what was happening.

[115] As discussed in para [36], I am dealing with this application on the basis advanced for the Commissioner so that the value of the benefits which Mr and Mrs Musson obtained have to take into account what the Commissioner might recover from a profit forfeiture order made in relation to Mrs Hammill’s equitable interest in

40 Breens Road. Any order against Mrs Hammill must also be satisfied from her equitable interest in 40 Breens Road. I must thus determine what that equitable interest is.

$510,000. There is a debt secured over the property by way of mortgage to third parties. There is no dispute that, at the date of the application for profit forfeiture order, $39,550 was owed on that mortgage. The property is owned jointly by Mr and Mrs Musson but subject to the equitable interest of Mrs Hammill.

[117] Mrs Hammill, in an affidavit said that in 2005 she built a two bedroom dwelling on the property at a cost of between $118,000 and $120,000. The Commissioner said $120,000 was 23.5 per cent of the 2013 ratings value for the property of $510,000. On that basis, the Commissioner was willing to accept that Mrs Hammill’s interest in the property was 23.5 per cent of the equity.

[118] At the hearing, counsel for the respondents submitted that the value of the property at the time Mrs Hammill spent $120,000 on the two bedroom dwelling was likely to have been less than its 2013 rating valuation, thus entitling her to a greater share in the property.

[119] Counsel for the Commissioner agreed to arrange for a valuation of the property to be obtained with an assessment of the value which the two bedroom dwelling now adds to the property. That information has been provided to the Court with the agreement of all counsel.

Breens Road, as at 16 October 2015, at $495,000. The valuation indicates that Mrs

[121] The parties could not agree on the extent of Mrs Hammill’s equitable interest in the property given this further information. There was a further brief hearing in which I received some submissions on the issue. Mrs Bell, for the Commissioner, was not able to give me examples of how courts had assessed the extent of an equitable interest in similar circumstances. Ms Aickin said that Mrs Hammill had expected that she would be able to live in her flat on the property until her death and that eventually it would pass from her estate to her family, but also suggested there was understanding within the family that she would also be entitled to be repaid the amount she had spent on the sleep out. Such an arrangement would, however, have been more consistent with her making a loan to Mr and Mrs Musson rather than having an equitable interest in the property. Ms Aickin acknowledged that there was no evidence before the Court as to any understanding or agreement the parties may have had as to how Mrs Hammill’s contribution to the property would be recognised. The case proceeded on the basis that Mrs Hammill did have an equitable interest in the property as a result of her having spent $120,000 on building a flat on the property.

[122] Mrs Hammill’s equitable interest in the property must be commensurate with the interest which a Court would require Mr and Mrs Musson to recognise as a result of the funds Mrs Hammill spent on improving the property through the addition of her flat. When Mrs Hammill spent $120,000 on the property, it was already subject to the mortgage to Mr Musson’s parents. Any interest she acquired in the property was thus always going to be subject to that mortgage.

[123] In all the circumstances of this case, the basis on which the case initially proceeded and the evidence which was before me as a result, I consider Mrs Hammill’s equitable interest in the property should remain at 23.5 per cent of the equity in the property.

[124] With the property having a current value of $495,000 and after allowing for the mortgage debt of $39,550 and Mrs Hammill’s equitable interest, the value of Mr and Mrs Musson’s joint interest in the property is thus $348,419. The value of Mrs Hammill’s interest in the property is worth $107,030.75. The actual value that will

be recovered by the Commissioner will depend on what is obtained on its sale, taking into account the costs of sale.

[125] Neither Mr Musson nor Mrs Musson have, through submissions by their counsel or through evidence, disputed the value of the benefit which the Commissioner says they derived from Mr Musson’s offending. The value of that benefit is presumed to be the value stated in the Commissioner’s application, unless rebutted by the respondents on the balance of probabilities.¹³The value of $795,958 was derived from the evidence given by Detective Robinson and Ms van der Pol for the Commissioner. The value of the benefit in relation to Mr and Mrs Musson is

$795,958 but, because of the basis on which the application was brought, this must be reduced by the $152,667.83 obtained from orders in respect of Mr Wisker, and the value of the forfeiture order made in respect of Mrs Hammill.

[126] I find the value of the benefit obtained by Mrs Hammill, as stated in the Commissioner’s application, is $99,907.70. This was derived from the evidence of the detectives as to the monies she had received from Mr Musson or which were paid into her bank account.

[127] As discussed in para [36], in relation to Mr and Mrs Musson, this will ultimately be the value of the benefit they obtained, namely $795,958, less the amount of the assets and profit forfeiture orders of $152,667.83 made against Mr Wisker, and the amount recoverable pursuant to a profits forfeiture order against Mrs Hammill, and the further $5,000 obtained through the assets forfeiture order against Mr Musson.

$99,907.70. I do not take into account the value of the order which has been obtained against Mr Wisker in determining the maximum recoverable amount

obtainable against Mrs Hammill. Nor do I take into account the value of the assets or profit forfeiture orders the Commissioner is obtaining against the Mussons.

Step three: determining whether any property should be excluded from the profit forfeiture order on grounds of undue hardship.

[129] The third step requires the Court to consider whether any property should be excluded from the application because of undue hardship. An application for such exclusion has been made in respect of the property at 40 Breens Road. The Commissioner acknowledges that, if Mrs Hammill is successful in having her interest in Breens Road removed, there will be no property against which a profit forfeiture order could be attached and the application for profit forfeiture order against her would thus fail.

[130] Mr Musson is now aged 47. He has recently completed a prison sentence for his offending. He says that, prior to his offending, he had been successful in work and business although this does not appear to be consistent with his financial position before his offending or the fact that he was in receipt of benefits for significant periods. He has said he is a qualified consulting environment engineer, specialising in waste-water treatment and disposal. In May 2015, he hoped to recommence earning an income from working in this area once he was released. Although he gave evidence at the hearing of this application, there was no updating evidence from him as to his current employment or financial situation.

[131] Mrs Musson is now aged 49. She has depended on benefits from Work and Income for her support over significant periods in the past and during Mr Musson’s imprisonment. I accept that she suffers from a high level of anxiety which will limit her ability to obtain an income from employment, although her problems with anxiety were, in my view, likely to have been aggravated by reason of Mr Musson’s offending, the criminal proceedings he subsequently faced and his imprisonment. In

[132] Mrs Hammill is now aged 74. Her only income is National Superannuation of $692.70 per fortnight.

[133] None of these respondents have the income or capital which would enable them to purchase another home. Mrs Hammill would not be able to raise the finance she would require to purchase from the Commissioner the interest which the Commissioner would have in Breens Road if a profit forfeiture order were to be made in respect of either or both of Mr and Mrs Musson’s interests in Breens Road. Mrs Musson would not be able to borrow and pay to the Commissioner the amount required to retain either Mrs Hammill or Mr Musson’s interest in the property.

[134] I am satisfied that, if a profit forfeiture order is made in respect of all or any of the respondents’ interests in Breens Road, the property will have to be sold. The issue is whether this is sufficient to amount to undue hardship so as to permit the Court to exercise its discretion under s 56(1) to exclude all or part of their interest in Breens Road from a profit forfeiture order on the grounds that, having regard to all of the circumstances, undue hardship is reasonably likely to be caused to the respondents if the property is included in the profit forfeiture order.

... recognise that a regime which allows the Crown to seize all the equity in a property, when only a fraction of that has been built up by unlawful means, is harsh and effectively operates as an additional punishment to that already imposed through the criminal justice system.

(1) The High Court may, on an application made by the respondent before a profit forfeiture order is made, exclude certain property from being able to be realised under section 55(2)(c) if it considers that, having regard to all of the circumstances, undue hardship is reasonably likely to be caused to the respondent if the property were realised.

(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

(3) After a profit forfeiture order is made, nothing in this section prohibits a respondent from realising the property that was excluded from being able to be realised under section 55(2)(c) if—

(a) after realising other property under that section there is still a debt owed to the Crown under section 55(4); and

(b) the respondent agrees to realise the excluded property in order to pay all or part of that debt.

[137] In assessing whether any of the respondents are entitled to relief on the basis of undue hardship, I have regard to the following principles:

(a) The respondents do not have the burden of proving that hardship is reasonably likely. The evidence adduced, however, must be sufficient to satisfy me that undue hardship is reasonably likely.¹⁵

(b) Undue hardship must be assessed in light of the legislative policy. I must recognise that a primary purpose of the Act is “to establish a regime for the forfeiture of property ... that represents the value of a person’s unlawfully derived income”.¹⁶The purpose of the forfeiture regime established under the Act is to:

(a) eliminate the chances for persons to profit from undertaking or being associated with significant criminal activity; and

¹⁵Bruce Robertson (ed) Adams on Criminal Law (online looseleaf ed, Thomson Reuters) at

(c) Given the purpose and specific provisions of the Act, a person who knowingly benefits from significant criminal activity has to accept that, in receiving those benefits, they are putting their ownership of property, to the extent of those benefits, at risk.

(d) Under the current Act, as under the previous legislation dealing with the forfeiture of tainted property, there will always be some hardship to a person associated with an offender when a forfeiture order is made in relation to property owned by that associate to recover any benefit they obtained from the principal’s offending. That hardship “stems from the

(e) The word “undue” must mean something more than the ordinary hardship arising as a consequence of the execution of the forfeiture order. This will always be a matter of fact and degree.¹⁸

(f) The applicant for relief must show not merely inconvenience or difficulty but that the hardship would be grossly disproportionate or an extreme and undue want or privation.¹⁹

(g) Although the extent to which a respondent’s equity in property has been acquired or built up from legitimate sources may be taken into account when assessing undue hardship, the loss of such equity in the home will not, of itself, constitute undue hardship.²⁰Such inevitable hardship is what the Act contemplates with a profits forfeiture order that is based on recovery of the benefit a respondent has obtained from significant criminal activity, rather than property acquired out of such significant

¹⁷Lyall v Solicitor-General [1997] NZCA 73; [1997] 2 NZLR 641 (CA), at 646, cited with approval in relation to the current Act in Commissioner of Police v Nelson HC Auckland CIV-2010-404-989, 30 July 2010 at [73].

¹⁸Adams on Criminal Law (online looseleaf ed, Thomson Reuters) at [CP51.01]; Duncan v

(h) The fact that a respondent will thus lose his or her share in a home and become dependent on the State to be able to rent a new home, will thus not normally constitute undue hardship because it is a consequence which the Act contemplates.²¹

(i) It is appropriate to assess the extent of any disproportion between the value of the property sought to be forfeited and the benefit which the respondent obtained from the offending. In Lyall v Solicitor General, the Court of Appeal held that under the Proceeds of Crimes Act 1991 (the precursor to the 2009 Act) it was appropriate to make such an assessment where relief was sought in relation to the forfeiture of

respondent and the value of the property sought to be forfeited must be gross or severe before relief can be justified.²³

(j) In considering whether there is gross or severe disproportion between the benefit obtained and the value of the property sought to be forfeited, it is appropriate to have regard to any other punishment inflicted on the offender.²⁴

[138] I have had regard to the fact that 40 Breens Road is and was ordinarily used as the home for Mr and Mrs Musson and the flat out the back also as the home of Mrs Hammill. I have had regard to the way Mr and Mrs Musson acquired the property and to their joint ownership of it. I have had regard to the significant capital investment which Mrs Hammill made in the property and thus the equitable

²¹At [45], citing Commissioner of Police v Doorman HC Nelson CRI-2010-442-169, 15 December

²²_{Lyall v Solicitor-General, above n 17;
Commissioner of New Zealand Police v Ranga, above n 4.}

²³Lyall v Solicitor-General, above n 17, at 646-647; Commissioner of New Zealand Police v

Nelson, above n 17, at [75]. While I note this statement of principle, this is likely to be less of an issue under the current legislation and in relation to an application for a profits forfeiture order because there is now a maximum amount which the Commissioner may retain or recover from forfeited property. That amount can be no more than the value of the benefit obtained (Criminal Proceeds (Recovery) Act 2009, s 54(1). It is, however, appropriate to weigh the loss of a home as the result of a forfeiture order against the respondent’s involvement in the criminal offending.

[139] This is not a case where the home was used for significant criminal activity in the sense of being drug-dealing premises, as was the case in Lyall v Solicitor- General. It was not a property used for the manufacture of methamphetamine. It was, nevertheless, a base for Mr Musson’s criminal activity. Paraphernalia associated with his criminal offending was found at the address when the search warrants were executed on both 23 May 2012 and 26 February 2013. A significant value of prescription medicines were found at the address on both occasions.

[140] On the basis of a current valuation, Mr and Mrs Musson’s interests in the equity in their home is worth some $348,419. That sum is significantly less than the benefit they both obtained from Mr Musson’s significant criminal activity. The purpose of the Act is to ensure that people cannot retain the benefits of significant criminal activity, including their association with such activity.

[141] With his significant criminal offending, Mr Musson was putting his interest in assets he retained, to the extent of the benefits he was obtaining from his criminal activity, at risk of forfeiture.

[142] I have found that Mrs Musson had knowledge of what he was doing. There is no evidence that she took any steps to try and bring what he was doing to an end. In terms of the way they lived off the proceeds of his criminal activity and to the extent of the significant discretionary spending on clothes and other fashion items, Mrs Musson personally took benefits from his criminal activity. In these ways, she was putting her interest in 40 Breens Road at risk of forfeiture.

[143] I have found that Mrs Hammill also knew of Mr Musson’s significant criminal activity. She allowed herself to benefit directly from what he was doing through the payments she received for helping him fill the prescribed medicine vials and as a result of other payments which were made to her or into her account. She allowed Mr Musson to use her bank account for significant financial transactions when she knew that what he was doing was illegal. In all these ways, to the extent that she was benefitting from his significant criminal activity, Mrs Hammill was putting her interest in the property at risk of forfeiture to the extent that interest reflected the value of the benefits that she had obtained.

[144] Mrs Hammill’s interest in the equity in the home at 23.5 per cent of the equity, based on a current valuation of the property, is worth some $107,030.75. That exceeds the maximum recoverable amount which the Commissioner is entitled from her, which is also $99,907.70. Because a profit forfeiture order is being made in respect of Mrs Hammill’s interest in the home, the Commissioner will be able to sell the home to recover what is due to her. I have taken this into account when considering whether she has established undue hardship. The reality is that, with Mr and Mrs Musson’s interests in the home being subject to forfeiture, Mrs Hammill would not be able to continue living at the property. To the extent the Commissioner may recover from 23.5 per cent of the net proceeds of sale an amount which is more than the maximum recoverable amount which Mrs Hammill must forfeit to the Commissioner, that excess will be payable to Mrs Hammill and will be capital for her to use as she sees fit. She will thus not be losing that excess capital.

[145] Neither Mr or Mrs Musson, nor Mrs Hammill has satisfied me that any of them would suffer undue hardship if their interests in 40 Breens Road are subject to a profit forfeiture order in favour of the Commissioner.

[146] Despite the initial reference to hardship to their daughter in notices of opposition, this was not relied upon by either Mr or Mrs Musson or Mrs Hammill as a basis for relief under s 56. The daughter was 24 years of age and living away from Breens Road in March 2015. While the forced sale of her original family home will mean she cannot return to her home, this potential detriment cannot amount to undue hardship to her.

[147] With the respondents not being entitled to relief under s 56 and the Commissioner having otherwise established that she is entitled to the forfeiture orders sought, I must make such orders.

[148] Accordingly, I make a profit forfeiture order in respect of Mr and Mrs Musson’s interest in the property at 40 Breens Road, Christchurch on the following basis:

(a) the value of the benefit for both of them, determined in accordance with s 53, is $795,958 less the $152,667 forfeited to the Crown as a result of the forfeiture order made against Mr Wisker, and the amount recovered by the Commissioner in respect of the profit forfeiture order against Mrs Hammill;

(b) the maximum recoverable amount that applies in respect of both of them is the sum referred to in (a) less the $5,000 recovered from the assets forfeiture order made in respect of Mr Musson’s property;

(c) the property that is to be disposed of in accordance with s 83(1) is their interest in the property at 40 Breens Road, Christchurch, subject to the mortgage over that property to the extent of $39,550 in favour of James David Musson and Jeanette Irene Wallace, and Mrs Hammill’s equitable interest in the property.

[149] I make a profit forfeiture order in respect of Mrs Hammill’s equitable interest

(b) the maximum recoverable amount determined in accordance with s 54 is $99,907.70;

(c) the property that is to be disposed of in accordance with s 83(1) is her equitable interest in 40 Breens Road, Christchurch which I find to be a

23.5 per cent share in that property subject to a debt of $39,550 due to James David Musson and Jeanette Irene Wallace on the mortgage secured over the property.

[150] Leave is given to the parties to file any memoranda they may wish to file in relation to any issues that arise as a result of my judgment.

High Court of New Zealand Decisions

Commissioner of Police v Musson [2016] NZHC 43 (2 February 2016)

High Court of New Zealand

Commissioner of Police v Musson [2016] NZHC 43 (2 February 2016)