McKenzie v R - My Law Society

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19 Aug 2013 ... J H M Eaton QC and H C Coutts for Appellant McKenzie. R G Glover for .... R v McKenzie [2012] NZHC 2862; R v McKenzie HC Christchurch ...
IN THE COURT OF APPEAL OF NEW ZEALAND CA795/2012 [2013] NZCA 378

BETWEEN

JOHN DOUGLAS MCKENZIE Appellant

AND

THE QUEEN Respondent CA731/2012

BETWEEN

ADAM JOHN MILES Appellant

AND

THE QUEEN Respondent

Hearing:

16 May 2013

Court:

French, Goddard and Ronald Young JJ

Counsel:

J H M Eaton QC and H C Coutts for Appellant McKenzie R G Glover for Appellant Miles C J Lange and B Hawes for Respondent

Judgment:

19 August 2013 at 10.00 am

JUDGMENT OF THE COURT

A

Mr McKenzie’s appeal against conviction is dismissed.

B

Mr Miles’ appeals against conviction and sentence are dismissed.

____________________________________________________________________ REASONS OF THE COURT (Given by Ronald Young J)

MCKENZIE AND MILES V R CA795/2012 and CA731/2012 [2013] NZCA 378 [19 August 2013]

Table of Contents Para No Introduction [1] McKenzie appeal [4] Facts [6] Grounds of appeal [16] The admissibility of the note [18] Section 27 of the Evidence Act – the co-defendants rule [18] Section 12A of the Evidence Act – the co-conspirators rule [27] Was the note an inadmissible hearsay statement? [34] Section 8 of the Evidence Act [42] Unreasonable verdict [48] Summary [51] Miles appeal [52] Background facts [53] Appeal against conviction [60] Consistency of verdicts and adequacy of evidence [61] Time for deliberation [66] Intention [70] Appeal against sentence [77] Was the sentence manifestly excessive? [80] Was the sentence unfairly higher than comparable co-offenders? [87] Summary [96]

Introduction [1]

Twelve accused originally faced an indictment with over 80 counts relating to

drug offending, possession of firearms and other miscellaneous offending. By trial only five accused were left (including the two appellants Mr McKenzie and Mr Miles). The five accused faced an indictment of 25 counts broadly alleging conspiracy to manufacture methamphetamine, manufacture of methamphetamine, supply of methamphetamine and possession of precursor substances and equipment to manufacture methamphetamine. Some accused also faced firearms charges. [2]

The conspiracy alleged Mr Miles and Mr McKenzie, along with a number of

others, conspired to manufacture methamphetamine between 30 April 2010 and 9 June 2010 (count one).

Mr Miles was also individually charged with

manufacturing methamphetamine (count 10), possession of precursor substances with the intention to manufacture methamphetamine (count 11) and possession of equipment intended to be used to manufacture methamphetamine (count 12), all between 30 April and 9 June 2010.

[3]

Mr McKenzie was convicted of conspiracy; Mr Miles was acquitted of

conspiracy but convicted of the three other offences. Mr Miles had also earlier pleaded guilty to three firearms charges. Both appeal their convictions and Mr Miles appeals his sentence of five years, five months’ imprisonment as manifestly excessive.1 McKenzie appeal The Crown case was that Mr McKenzie financed Mr Matthew Newton’s

[4]

(another accused) manufacture of methamphetamine to the tune of $180,000 by way of a loan to him. The pivotal issue in Mr McKenzie’s appeal is the admissibility of a note

[5]

written by Mr Newton and the use (if any) to which the note could be put in the case against Mr McKenzie.

If the note is inadmissible, then the Crown accepts

Mr McKenzie should not have been convicted.

Mr McKenzie says the Judge,

Whata J, was wrong to admit the note as evidence against him. Even if the note is admissible, Mr McKenzie’s case is that the jury’s verdict was unreasonable.2 Facts [6]

On 9 June 2010 the police executed a search warrant at Mr McKenzie’s

home. They contemporaneously executed search warrants at other homes relating to a number of co-accused. [7]

At Mr McKenzie’s home, they found a loan agreement between him and

Mr Newton. The loan agreement, dated 29 January 2010, said: Agreement between John McKenzie and Matthew Allan Newton John McKenzie (lendor) agrees to loan Matthew Allan Newton in conjunction with High Street Finance Limited the total sum of Two hundred thousand dollars only ($200,000) at a fixed interest rate of 80% over a three month period starting from the execution of this contract on the condition that the balance is returned to him in full on or before Tuesday the 1st day of June 2010, and Matthew Allan Newton (borrower) agrees to pay back the total 1 2

R v Miles [2012] NZHC 3038. Crimes Act 1961, s 385(1)(a).

monies borrowed at the agreed terms as stated above in full either on or before Tuesday the 1st day of June 2010.

[8]

The agreement was amended in writing changing the amount of the loan to

$180,000. The agreement was signed by both parties and witnessed by a person called Ying Mao.3 A few days later, it seems Mr McKenzie advanced the money. A cheque

stub

for

$180,000

was

in

Mr McKenzie’s

cheque

book

dated

3 February 2010. Although the payee of the cheque was recorded as “Yingnan Mao”, the Crown case was that Mr Newton was the recipient of the money. The loan of $180,000 was said to be for three months but the agreement also specified the balance was not repayable until 1 June 2010 (approximately four months after the advance). [9]

In the same search, the police found a handwritten note on Mr McKenzie’s

kitchen table, together with a number of items of correspondence addressed to him. The note said: Ive got 50k here for you I lost out 436 12 An Product I’ve got in the the boot 900 gram for to be turned 1.2 kg Payd for And a 100 grams finished Here as well and 60 x 20 Rits for you if you want.

[10]

At trial, a handwriting expert said the writing was Mr Newton’s. The police

also found $38,000 in cash in Mr McKenzie’s house, tied in a similar fashion to money found in Mr Newton’s house. [11]

The Crown case was that the jury could infer that the note from Mr Newton

had been read by Mr McKenzie. As to the meaning of the note, the Crown adduced evidence from an expert in drug terminology. The Crown alleged that in the note Mr Newton was telling Mr McKenzie why he could not repay the loan in full. He had lost $436,000 in a police drugs raid, hence the reference in the note to 436. There was Crown evidence this had happened.

The other references were to

methamphetamine manufactured or to be manufactured and the supply of Ritalin. 3

Using another name by which he is known, Evan Yao.

[12]

The Crown contended that the logical inference from the note was that

Mr McKenzie had knowingly financed the manufacture. The manufacturer was reporting to Mr McKenzie why he could not repay the loan on the due date and what he was doing (further manufacture) to obtain the money to repay the loan. [13]

After his final address to the jury, counsel for Mr McKenzie raised two new

issues with the trial Judge: whether the note was admissible against Mr McKenzie; and whether there was evidence Mr McKenzie could have committed the crime given the alleged advance to fund the manufacture was in January/February 2010 and the charge alleged conspiracy (by funding manufacture) in April to June 2010. [14]

Whata J ruled the note was admissible against Mr McKenzie as long as the

jury was satisfied that Mr McKenzie knew about it.4 He summed up accordingly. As to the second issue, the Judge told the jury they could convict Mr McKenzie if they were satisfied he had knowingly agreed to finance Mr Newton’s drug manufacture in January/February 2010 and that agreement (the conspiracy) continued during the April to June period.5 [15]

After the guilty verdict, Mr McKenzie renewed an application under s 347 of

the Crimes Act 1961 that had been made at the conclusion of the Crown case. The Judge refused the application but deferred sentence on the basis that the case would be heard on appeal in this Court.6

Mr McKenzie was formally convicted on

15 November 2012. Grounds of appeal [16]

As indicated above, Mr McKenzie advances two grounds of appeal. First, he

contends that the Judge was wrong to admit the note as evidence against him. In support of this ground, Mr McKenzie says: (a)

4 5 6

The note is inadmissible under s 27 of the Evidence Act 2006.

R v McKenzie [2012] NZHC 2456 at [32]. See R v McKenzie, above n 4, at [13]. R v McKenzie [2012] NZHC 2862; R v McKenzie HC Christchurch CRI-2010-009-8952, 12 November 2012.

(b)

The co-conspirators exception to s 27 does not apply.

(c)

Alternatively, the note is inadmissible hearsay.

(d)

In any event, admission of the note is ultimately prohibited by s 8 of the Evidence Act.

[17]

Secondly, Mr McKenzie argues that even if the note was correctly admitted,

the jury’s verdict was nevertheless unreasonable. The admissibility of the note Section 27 of the Evidence Act – the co-defendants rule [18]

[19]

Section 27 states: 27

Defendants’ statements offered by prosecution

(1)

Evidence offered by the prosecution in a criminal proceeding of a statement made by a defendant is admissible against that defendant, but not against a co-defendant in the proceeding.

(2)

However, evidence offered under subsection (1) is not admissible against that defendant if it is excluded under section 28, 29, or 30.

(3)

Subpart 1 (hearsay evidence), subpart 2 (opinion evidence and expert evidence), and section 35 (previous consistent statements rule) do not apply to evidence offered under subsection (1).

(4)

To avoid doubt, this section is subject to section 12A.

Section 27 only applies to a statement made by a defendant. Therefore the

first issue to be determined is whether the note was a statement. We pause here to record that this was not an argument raised in the High Court. [20]

A statement is defined in the Evidence Act in this way: 4

Interpretation

(1)

In this Act, unless the context otherwise requires,— ...

statement means—

[21]

(a)

a spoken or written assertion by a person of any matter; or

(b)

non-verbal conduct of a person that is intended by that person as an assertion of any matter

Mr McKenzie submits that Mr Newton’s note is a statement by a defendant

(Mr Newton) to be used against a co-defendant, Mr McKenzie. That is, it is a written assertion of a series of facts by Mr Newton. Thus, Mr McKenzie says, the note is inadmissible under s 27. [22]

We disagree. In our view, the circumstances here are on all fours with this

Court’s observations in Hitchinson v R (approving Simon France J’s analysis in R v Holtham).7 Simon France J was considering the admissibility of unanswered text messages to the defendant’s phone. He concluded that the essence of the definition of a statement was the intention by the author to assert something. The Crown wanted to use the text messages to invite the jury to infer the appellant was a drug dealer. This inference was not intended by the sender of the texts, but was an unintended assertion arising from the content of the texts. [23]

As this Court emphasised in Hitchinson:8 In Holtham ... there was no assertion, implied or otherwise, by the author of the text that the text recipient was a drug dealer. That was merely an inference available to be drawn from the communication, because it was an underlying assumption informing it.

[24]

In this case, the note was not produced to establish that Mr Newton had in

fact lost $436,000 or that he was repaying $50,000 or that he was going to make up the loss of money through further production of methamphetamine. The Crown produced the note to establish that Mr McKenzie knew what Mr Newton was referring to in the note; that is, Mr McKenzie knew that his money was being used to finance drug manufacture. The Crown did not produce the note to establish what the note said on its face. It did not, therefore, produce the note to establish that, in terms of the definition of a statement, any person (in this case Mr Newton) had made an assertion. 7 8

Hitchinson v R [2010] NZCA 388 at [31]–[34]; R v Holtham [2008] 2 NZLR 759 (CA). At [34].

[25]

The Crown’s contention that Mr McKenzie intended and knew his money

was to be used to fund drug manufacture was neither intended nor implied by Mr Newton in the note. It was an unintended assertion available to the jury from the circumstances and content of the note. The note was not a written assertion by Mr Newton that Mr McKenzie would understand the references in the note because he had funded the manufacture. Section 27 does not, therefore, apply. [26]

Our conclusion that the note was not a statement renders it unnecessary to

consider whether the note was within the co-conspirators rule.

However, for

completeness, we have gone on to consider that issue as well. Section 12A of the Evidence Act – the co-conspirators rule [27]

Section 27 is expressed to be subject to s 12A. Section 12A preserves what is

known as the common law co-conspirators rule. The rule was described by the Supreme Court in the following terms:9 [I]n some circumstances involving an alleged criminal combination, including but not limited to criminal conspiracies, statements made by one or more alleged offenders in the absence of another [in furtherance of the common design], implicating that other, are admissible as evidence of their truth, notwithstanding their hearsay nature.

[28]

In R v Messenger, this Court identified three pre-requisites to the admission

of a co-conspirators’ statement.10 One of these was the fact that the accused must be a member of the conspiracy. It was also said in Messenger that in establishing this pre-requisite the Crown could not rely on statements made by co-conspirators in the absence of the accused. [29]

Mr McKenzie submits that the note is not admissible under s 12A for two

reasons. First, he says the only reasonable inference is that the note was written in his absence. The content of the note therefore cannot be used to establish his part in the conspiracy. Mr McKenzie argues that without the note there is no evidence of his membership of the conspiracy, and thus that pre-requisite for the application of s 12A cannot be satisfied. 9 10

R v Qiu [2007] NZSC 51, [2008] 1 NZLR 1 at [15]. R v Messenger [2008] NZCA 13, [2011] 3 NZLR 779.

[30]

Secondly, Mr McKenzie submits that by the time the note was left at his

house, the conspiracy was finished and therefore the note could not be in furtherance of it. The note was a report by Mr Newton to Mr McKenzie about what had happened and what he hoped would happen regarding repayment. [31]

We do not accept those arguments. Addressing the first point, the Crown

does not have to establish the accused’s membership of the conspiracy beyond reasonable doubt at the stage of considering the admissibility of the co-conspirator’s statement. All that is required is “reasonable evidence” of membership.11 Here there was reasonable evidence of Mr McKenzie’s membership of the conspiracy, including the advancement of the $180,000 at 80 per cent interest by Mr McKenzie to Mr Newton, who was identified as a manufacturer of methamphetamine.

We

consider that this was sufficient to satisfy the pre-requisite for application of the co-conspirators rule. [32]

We are also satisfied the note by Mr Newton was written to further the

common purpose of the conspiracy, here the manufacture of methamphetamine. The Crown alleged Mr McKenzie’s role in the conspiracy involved financing the manufacture of methamphetamine. That role had not finished at the time the note was written. Mr Newton told Mr McKenzie in the note that he could pay some, but not all, of the money that was due to be repaid. The remaining sum due, therefore, was continuing to fund the manufacture of methamphetamine. Mr Newton also told Mr McKenzie how he proposed to repay what was still owed. That is, that he would continue to manufacture methamphetamine to produce further money to repay the advance. [33]

We conclude that even if we are wrong as to whether the note is a statement,

the note is nevertheless admissible by virtue of s 12A, the co-conspirators rule. Was the note an inadmissible hearsay statement? [34]

11 12

A hearsay statement is defined in the Evidence Act as:12

R v Qiu, above n 9, at [24] and [28], citing R v Buckton [1985] 2 NZLR 257 (CA) at 263. Evidence Act 2006, s 4.

... a statement that—

[35]

(a)

was made by a person other than a witness; and

(b)

is offered in evidence at the proceeding to prove the truth of its contents.

Section 17 provides: 17

Hearsay rule

A hearsay statement is not admissible except—

[36]

(a)

as provided by this subpart or by the provisions of any other Act; or

(b)

in cases where— this Act provides that this subpart does not apply; and

(ii)

the hearsay statement is inadmissible under this Act.

relevant

and

not

otherwise

Section 18 provides: 18

General admissibility of hearsay

(1)

A hearsay statement is admissible in any proceeding if—

(2)

[37]

(i)

(a)

the circumstances relating to the statement provide reasonable assurance that the statement is reliable; and

(b)

either— (i)

the maker of the statement is unavailable as a witness; or

(ii)

the Judge considers that undue expense or delay would be caused if the maker of the statement were required to be a witness.

This section is subject to sections 20 and 22.

Mr McKenzie submits that the note is an inadmissible hearsay statement

because it was made by Mr Newton, who was not a witness at trial, and was offered in evidence as to the truth of its contents. He argues that the Crown wished to establish that what Mr Newton said about repaying $50,000 and the further manufacture of drugs was true. [38]

As with s 27, it is a pre-requisite under s 17 that the communication must first

qualify as a statement. For the reasons already traversed in our s 27 analysis, in our view the note was not a statement. [39]

For the same reasons, we consider the note was not produced to establish the

truth of its contents. It did not matter for this purpose whether in fact Mr Newton was repaying $50,000 or whether he was being truthful about his plans to

manufacture methamphetamine to repay the loan. What mattered was whether the note could be used to establish Mr McKenzie’s knowledge that the loan was being used to manufacture methamphetamine. [40]

Further, even if we are wrong and the note is a hearsay statement, we

consider that s 17 must be subject to s 12A and the co-conspirators rule. We say that because the common law co-conspirators rule preserved by s 12A was an exception to the hearsay rule. [41]

In summary, we are satisfied the note was not a statement for the purposes of

the case against Mr McKenzie and it was therefore outside the scope of the hearsay and co-defendants rules. If it was a statement, then the note was admissible under the co-conspirators rule (an exception to both the hearsay and co-defendants rules). Finally, the note was not hearsay in any event because it was not produced to establish the truth of its contents. Section 8 of the Evidence Act [42]

This section provides as follows: 8

General exclusion

(1)

In any proceeding, the Judge must exclude evidence if its probative value is outweighed by the risk that the evidence will—

(2)

[43]

(a)

have an unfairly prejudicial effect on the proceeding; or

(b)

needlessly prolong the proceeding.

In determining whether the probative value of evidence is outweighed by the risk that the evidence will have an unfairly prejudicial effect on a criminal proceeding, the Judge must take into account the right of the defendant to offer an effective defence.

Counsel for Mr McKenzie says s 8 provides the ultimate filter to

admissibility, requiring an assessment of the probative value of the note against its unfair prejudice. [44]

The probative value of the note is high.

Without the note, the Crown

admitted it does not have a case which could be left to a jury. There is no reason to

doubt the authenticity and accuracy of the note.

It was very much against

Mr Newton’s interest to write it. It was, as far as he was concerned, a form of confession to manufacturing methamphetamine for commercial purposes. [45]

The value of the note to the Crown is, as we have already mentioned, the

unintended assertion about Mr McKenzie’s knowledge which goes to the heart of the Crown case. This is also relevant to prejudice. Mr McKenzie says that significant prejudice arises from the inability to cross-examine Mr Newton about the note. We accept there is some prejudice, but the Crown is not asserting Mr Newton said that Mr McKenzie was a co-conspirator, either expressly or by implication through the note. It is the note’s unintended assertion that is at the core of its probative value. Given nothing that Mr Newton has said directly asserts or directly implicates Mr McKenzie in the offending, there was little loss in being unable to cross-examine him. [46]

Nor is this a case where concerns may arise that a co-conspirator is

attempting to shift responsibility from himself to another, casting doubt on what he has said or done. The note was written by Mr Newton without any sense that it would be found and in circumstances where no motive to falsely compromise Mr McKenzie was present. [47]

We are, therefore, satisfied that the probative value of the note is high and

significantly outweighs any prejudice to Mr McKenzie. Section 8 is in our view no impediment to the admissibility of the note. Unreasonable verdict13 [48]

The trial Judge in his summing up told the jury that for there to be a verdict

of guilty the Crown would have to prove a continuing conspiracy from its beginning in January/February 2010 (when the money was first advanced) through until at least the end of April 2010 (the indictment alleged a conspiracy between 30 April and 9 June).

13

Crimes Act, s 385(1)(a); Owen v R [2007] NZSC 102, [2008] 2 NZLR 37 at [12] and [17].

[49]

Mr McKenzie says a jury properly instructed could not reasonably have

found he was guilty because: (a)

the agreement to lend the money was made three months prior to the alleged conspiracy in the charge;

(b)

while the interest rate was high, it was not much different than previous loans made to Mr Paul Newton (the father of Matthew Newton);

(c)

there was no actual evidence that Matthew Newton received any advance from Mr McKenzie given the advance was to a Yingnan Mao;

(d)

the note from Mr Newton did not establish the inference that Mr McKenzie knew and agreed that his money was being used to finance drug manufacturing; and

(e)

there was another reasonably available inference consistent with lack of knowledge, that Mr Newton was simply telling Mr McKenzie why he could not pay.

[50]

We are satisfied there was sufficient evidence on which the jury properly

directed could convict and the verdict cannot, therefore, be said to be unreasonable. The jury were entitled to infer that the loan, with an interest rate of 80 per cent for a four month advance, was indicative of some unlawful activity. The note from Mr Newton could be used by the jury to infer that Mr Newton was reporting to Mr McKenzie about the progress of their agreed manufacture of methamphetamine and the reason the repayment of the loan was delayed. As we have said above, we consider that the conspiracy was clearly ongoing at that time. With the addition of the evidence from the January/February loan document, there is sufficient evidence of an agreement to manufacture methamphetamine, with Mr McKenzie playing the part of financier. We reject this ground of appeal.

Summary [51]

We are satisfied that the note written by Mr Newton was admissible in the

case against Mr McKenzie. The note was not caught by the co-defendants rule, it was admissible by virtue of the co-conspirators rule, it was not hearsay, and s 8 of the Evidence Act did not prevent its admission.

The verdict was also not

unreasonable. Mr McKenzie’s appeal against conviction is dismissed. Miles appeal [52]

Mr Miles was convicted of manufacturing methamphetamine and of the

possession of precursor materials and equipment but acquitted of the conspiracy count. He had pleaded guilty to three firearms charges prior to trial. Background facts [53]

Mr Miles lived in Lyttleton.

On 9 June 2010 the police executed a

search warrant. What they found at his premises and the inferences available from it form the evidence against Mr Miles. [54]

Ms Mayo, a forensic scientist, gave evidence about her inspection of the

property and her analysis of the items seized at that property.

She said that

methamphetamine had been manufactured at the property and that there was a range of chemicals and equipment found at the property sufficient to manufacture methamphetamine. Ms Mayo detailed each step in the process of manufacture of methamphetamine and identified chemicals at Mr Miles’ address that could be used to undertake each particular step. [55]

She found at Mr Miles’ house a jar with a two layered liquid consistent with

the methamphetamine extraction process. A bottle was found which contained a caustic liquid containing methamphetamine. At trial, counsel for Mr Miles conceded that all of the ingredients needed to manufacture methamphetamine were present at Mr Miles’ house, as were small quantities of methamphetamine. [56] several

Part of the analysis undertaken by Ms Mayo involved swabs taken from places

in

Mr Miles’ house.

These swabs

tested positive for

methamphetamine. While Ms Mayo accepted that she could not exclude a positive test from heavy smoking of methamphetamine, she considered that this was unlikely. [57]

Various items of equipment for methamphetamine manufacture were found

with Mr Miles’ fingerprints on them, including a bottle labelled isopropyl alcohol containing mainly ethanol and pseudoephedrine, and a large plastic container containing phosphoric acid. In addition, within the house, the police and ESR found methamphetamine, pipes used for smoking methamphetamine, snap lock point bags and digital scales. [58]

The key defence at trial was that the Crown could not establish beyond

reasonable doubt that any methamphetamine had been manufactured at the house during the period 30 April 2010 to 9 June 2010 (as alleged in the count). Counsel similarly stressed that the jury could not be satisfied Mr Miles intended to manufacture methamphetamine with the chemicals or the equipment during the April to June period. [59]

As to the conspiracy charge, the Crown alleged that documents found in

Mr Miles’ residence were from Mr Newton. It was said that the documents referred to methamphetamine. The Crown case was that one of the documents was an offer by Mr Newton to Mr Miles to manufacture methamphetamine and invited an inference that Mr Miles had accepted the offer. Appeal against conviction [60]

Mr Miles advances three grounds of appeal against his conviction: (a)

The guilty verdicts on counts 10, 11 and 12 were “... incompatible with a not guilty verdict on the count of conspiring to manufacture methamphetamine” and were “so against the weight of evidence that they could not be reconciled” with the not guilty verdict on the count of conspiring to manufacture methamphetamine, particularly given the allegations were within “a tightly defined timeframe”.

(b)

The jury did not properly consider or consider with due diligence the counts in the indictment and the verdict was therefore unsafe. There was a 23 count indictment.14 The jury deliberation was six hours including lunch. On an averaging analysis, each count received a total deliberation of about 15 minutes, which meant that of the 11 jurors considering the verdict (one juror was discharged during the trial) each juror had less than a minute and a half to express his view on each individual count.

(c)

The Judge gave an incomplete direction relating to intention and the period of the alleged offending.15

Consistency of verdicts and adequacy of evidence [61]

We reject Mr Miles’ proposition that the acquittal on the conspiracy count

somehow compromised the jury’s verdict with respect to the three counts of manufacturing and possession of equipment and chemicals. We consider there is nothing incompatible between the verdicts. [62]

The conspiracy charge was based on a specific allegation by the Crown

alleging an agreement between Mr Miles and Mr Newton as to the manufacture of methamphetamine arising from the contents of a note.

If the jury were not

convinced that the note referred to methamphetamine or were not convinced that Mr Miles had agreed with Mr Newton to manufacture methamphetamine, then Mr Miles was entitled to be acquitted. This acquittal was not in any way connected with the Crown case relating to counts 10, 11 and 12, which primarily relied upon the physical evidence found at Mr Miles’ house. [63]

The other aspect of this ground of appeal was the submission that there was

insufficient evidence upon which the jury could convict Mr Miles of manufacturing and possession of the chemicals and equipment with the relevant intent between 30 April and 9 June. 14

15

This was the number recorded in Mr Miles’ submissions and used for his calculations. As noted above, however, the indictment actually contained 25 counts. At [187] of the Judge’s summing up, which is set out at [70] of this judgment.

[64]

When the police executed the search warrant at the property, most of the

equipment and chemicals were immediately seen in the rear of the house. There were a number of containers which held mixtures of chemicals. The steam distiller, as

Ms Mayo

said,

contained

“solid

material

and

damp

sludge

with

methamphetamine”. The hot plate and steam distiller were still plugged into an electrical multi-board.

Surface swabbing in the house showed levels of

methamphetamine indicative of manufacture. [65]

This evidence pointed toward recent manufacture and an available inference

of possession of the equipment and chemicals with an intention to manufacture methamphetamine at the time the search warrant was executed. We are satisfied, therefore, there was evidence upon which the jury could have convicted Mr Miles on these three counts relating to the April to June period. Time for deliberation [66]

Mr Miles submits that the jury could not possibly have adequately considered

all the counts in the six hour period of retirement. Mr Miles says that this retirement period meant each juror could only have spoken for a minute and a half on each count. [67]

We reject this argument. There is no rule as to how long a jury should

consider the evidence in an individual count. Jurors are told by the trial Judge they must make up their own minds about whether there is sufficient evidence for conviction. They are told they must do so on the basis of the evidence they hear in Court. It is, therefore, perfectly possible for a jury immediately after retiring to take a vote on one or more counts. If there is then unanimity, then verdicts can be immediately reached. This illustrates the fallacy of undertaking an averaging of time for jury discussion on each count. Consideration of some counts may have resulted in virtually immediate unanimity, other counts may have taken quite some discussion before unanimity could be reached. [68]

The second point is that the jury are not restricted to discussion with each

other about the evidence after retirement. Juries are told that they should not make up their minds about any count until after the evidence and the addresses are

finished. What they are entitled to do, however, is discuss the trial and the evidence as it proceeds. This is designed to help them form their ultimate view of the evidence. In this case there were a number of significant breaks during the course of the trial when the jury would have had time to discuss amongst themselves the evidence they had heard. [69]

We reject this ground of appeal.

Intention [70]

In his summing up, the Judge said: [187] I want to make only one point about Mr Glover’s submission. I remind you that it is for you to determine, from all of the information, whether the offending occurred in the key period. Mr Glover is correct that in relation to all charges you must be sure the offending occurred between 30 April 2010 and 9 June 2010. That is a question to be resolved by drawing inferences from all of the reliable evidence. Mr Glover points to what he says is a lack of evidence dating the use of items. If you accept that is so, then you must add that to the mix of information. But as I say you must weigh all the evidence pointing for and against a finding on the period of use, and not simply deduce from one part of that available evidence. And in relation to the conspiracy and possession charges, the key issues are whether there was a conspiracy or agreement or that the items were possessed in the key period. You do not have to be satisfied that manufacturing in fact occurred in that period for the purposes of those charges.

[71]

This ground of appeal is based on Mr Miles’ claim that the Judge made an

error when directing the jury in the last two sentences of [187]. Mr Miles says that the Judge could have been understood to wrongly direct the jury that they did not have to be satisfied that the manufacturing occurred in the April to June period of the charges. Thus, Mr Miles says, the jury may have been misled into thinking that as long as possession of the various items was established, they could infer that the manufacturing had occurred in the relevant period. [72]

We accept that the final sentence of [187] was ambiguous. It could be read as

saying the Crown, in alleging that Mr Miles had manufactured methamphetamine, did not have to prove methamphetamine was manufactured during the April to June period. The trial, however, proceeded on the basis that the Crown was required to prove that fact.

[73]

In reading the whole of the paragraph, it is apparent that the Judge meant to

refer to the charges of possession of equipment and chemicals intended to be used to manufacture methamphetamine in his final sentence of [187]. [74]

The Judge was telling the jury that the Crown did not have to prove as an

element of the possession charges that the intention was to manufacture during the April to June period. That proposition is correct in law, as counsel for Mr Miles recognised. What had to be proved by the Crown was possession of the items with an accompanying intention to use them in the manufacture of methamphetamine. The possession and intention must have existed in the April to June period. But the intention to use the items to manufacture methamphetamine had only to be an intention to do so at some future date. The Crown did not have to prove Mr Miles was planning the actual manufacture would occur during the April to June period for the purposes of the two counts alleging possession of equipment and chemicals. [75]

The Judge provided a question trail for the jury, which counsel for Mr Miles

accepted accurately described what the Crown had to prove before a verdict of guilty on the manufacturing and possession charges could be reached. This question trail required the jury to be sure that between the relevant dates, methamphetamine was intentionally produced by Mr Miles and that precursor substances and equipment were, also during the relevant period, possessed by Mr Miles with an intention to use them at some future unspecified date to manufacture methamphetamine.

The

question trail, therefore, made it explicitly clear that before conviction, the jury had to be sure manufacturing had taken place in the April to June period. [76]

When the Judge summarised the defence case, he repeated a submission

made by counsel for Mr Miles (with approval), namely that the Crown had to establish that the offending occurred between the April and June dates. We are, therefore, satisfied the jury would not have been misled by the Judge’s observations at [187] of his summing up and that no miscarriage has occurred. We reject this ground of appeal.

Appeal against sentence [77]

Mr Miles complains about two aspects of his sentence of five years and five

months’ imprisonment: that it was manifestly excessive and that it was disproportionately greater than that of his co-offenders, in particular Mr Smith. [78]

In addition to his convictions for manufacturing methamphetamine,

possession of precursor substances, and possession of materials and equipment with intent to manufacture, Mr Miles had previously pleaded guilty to possession of firearms, possession of explosives, and possession of a pistol. [79]

The Judge sentenced Mr Miles to five years’ imprisonment (also the starting

sentence) on the manufacturing charge and three years on each of the possession of precursor substances and possession of materials with intent to manufacture charges, concurrent with the five year imprisonment sentence.

On the possession of

explosives and firearms charges, Mr Miles was sentenced to five months’ imprisonment cumulatively, with a starting point of six months and a reduction of one month for his plea of guilty. There were no other relevant aggravating or mitigating features of the sentence. Was the sentence manifestly excessive? [80]

The basis of Mr Miles’ claim that his sentence was manifestly excessive is

that the Judge wrongly found his manufacture had a commercial element. Mr Miles’ case is that he was a heavy user of methamphetamine and only a small amount of methamphetamine was found in his house. There was no evidence of manufacture for sale. The charge of manufacture of methamphetamine covered only a limited period from late April to early June. Mr Miles says these factors support his claim that the manufacture of methamphetamine was only for his own use. [81]

Mr Miles says that where it is clear there was no commercial element in the

manufacture, the High Court at sentencing has often adopted starting points of around three years or lower.16 16

Thus, the Judge’s starting point of five years’

See, for example, R v Ethelstone HC Auckland CRI-2007-057-251, 11 April 2008; R v Vowell HC Whangarei CRI-2006-088-3782, 4 May 2007.

imprisonment was well beyond the appropriate starting point here and resulted in a manifestly excessive final sentence. [82]

In R v Fatu, this Court said:17 [42] Where the Crown can establish that large quantities of methamphetamine have been manufactured, the Court may regard the criminality in gearing up to manufacture as being absorbed by the culpability of the primary offending. In other cases, where the evidence as to how much was manufactured is uncertain, the position is different. Nonetheless it is right to recognise that methamphetamine manufacture is always (or almost always) going to involve significant commerciality. We say this because the difficulties, expense and risks involved in manufacturing methamphetamine make it inherently unlikely that such an operation would be set up to produce drugs for purely personal consumption. [43] In those circumstances we consider that appropriate sentencing bands for those who are the primary offenders in methamphetamine manufacturing operations should be based on uplifts of 10 per cent – 20 per cent on those applicable in the case of importers:

[83]

(a)

Band one – not applicable for reasons given in [42].

(b)

Band two – manufacturing up to 250 g – four years’ to 11 years’ imprisonment.

(c)

Band three – manufacturing large commercial quantities (250 g to 500 g) – ten years’ to 15 years’ imprisonment.

(d)

Band four – manufacturing very large commercial quantities (500 g or more) – 13 years’ to life imprisonment.

While there have been cases in the High Court with starting points for

manufacturing methamphetamine below four years’ imprisonment, the lowest starting point for band two, those cases are exceptional. They are cases where it is clearly established that there is no commercial element in the manufacture at all.18 That is not the case here. [84]

At sentencing the Judge said: [23] While there is no direct evidence of the scale of the manufacture, it is quite plain to me that given the evidence about the items found at your premises, you were involved in a commercial level of manufacture of methamphetamine. I cannot say however that the level of manufacturing was large or very large. I therefore proceed on the basis that your offending

17 18

R v Fatu [2006] 2 NZLR 72 (CA). Szucs v R [2012] NZCA 424 at [21]; R v Kawerau [2009] NZCA 75 at [12].

falls within Band 2 of Fatu where a starting point in the range of 4–11 years is identified as a guide. [24] I am also assisted however by the scientific evidence of the level of traces of methamphetamine left at your property. I do not consider it plausible to suggest that traces simply reflect heavy personal use although I accept there is evidence of that. Also, balance against this, as you were not found guilty on the conspiracy charges, I disregard the wider implications of Mr Newton’s larger methamphetamine enterprise for the purpose of your sentence. While there is evidence of connection between you and him, it would not be appropriate in the circumstances for me to find that you were part of a wider enterprise. [25] Given all of the above, I therefore proceed on the basis that the appropriate starting point is five years reflecting direct, although limited evidence of commercial level manufacture of methamphetamine. This also appears consistent with the range of sentences imposed in other similar cases.

[85]

We consider that there was also further direct evidence of commerciality. A

set of scales and a number of snap lock point bags were found at Mr Miles’ house. Both are indications of commerciality. [86]

The Judge’s starting point of five years’ imprisonment was near the bottom of

band two of Fatu. Given the Judge’s conclusions about commerciality and given the additional evidence we have pointed to, we are satisfied that the start sentence was well within the range available to the Judge and that the final sentence based on this assessment could not be said to be manifestly excessive. Was the sentence unfairly higher than comparable co-offenders? [87]

Mr Miles submits that his offending was similar to Michael Smith’s, one of

Mr Miles’ co-offenders. Mr Smith was sentenced to three years and 10 months’ imprisonment for manufacture, possession of equipment and precursors, and possession of firearms.19 Mr Miles says in neither his case nor Mr Smith’s was substantial methamphetamine found at the place of manufacture. Mr Smith’s start sentence was four years’ imprisonment and the penalty for his firearms charges was only an additional three months’ imprisonment.

19

R v Smith [2012] NZHC 3003.

[88]

In R v Lawson, this Court identified the approach to disparity claims when it

said:20 But the test of intervention by an appellate Court is not merely whether an offender feels a sense of grievance over the sentence imposed on him compared with that imposed on his fellow offender but whether the disparity is such as not to be consonant with the appearance of justice. ... It is not merely whether the offender thinks he has been unfairly treated but whether there is real justification for that grievance; whether a reasonably minded independent observer aware of all the circumstances of the offence and of the offenders would think that something had gone wrong with the administration of justice.

[89]

Mr Smith and Mr Miles were not involved in the same alleged manufacture.

Mr Smith’s offending was with another co-accused, Mr Harris.

The Judge

acknowledged at sentencing that the evidence about the scale of activity at Mr Smith’s residence was “sparse”.21

The background material showed that

Mr Smith was remorseful for his actions and was at a low risk of reoffending. The Crown submitted the appropriate starting point was between four and six years’ imprisonment. [90]

The Judge when sentencing Mr Smith explicitly contrasted his facts with

those of Mr Miles. The Judge considered there was clear evidence of substantial methamphetamine residue indicative of substantial production in Mr Miles’ case. The Judge considered that Mr Smith was involved in a commercial operation at some level but was prepared to accept that it was at the lowest level. In those circumstances he imposed the lowest starting point in band two of Fatu. The Judge considered that there were mitigating circumstances justifying a 10 per cent deduction from the four year starting sentence for Mr Smith. [91]

There was, therefore, a clear justification for the different start sentences of

Mr Miles and Mr Smith for manufacturing methamphetamine, based on an assessment of the amount of methamphetamine produced. We therefore reject the claim of any unfair disparity.

20 21

R v Lawson [1982] 2 NZLR 219 (CA) at 223. R v Smith, above n 19, at [6].

[92]

As to the firearms charges, Mr Miles received a cumulative sentence of five

months’ imprisonment whereas Mr Smith received a three month increase in sentence. [93]

There were distinguishing features between the two respective cases

regarding the firearms. In Mr Smith’s case, the firearms were found in a secured lock-up away from

the house where there had been manufacture of

methamphetamine. [94]

Mr Miles’ position was different. His firearms were found in the house

where he was manufacturing methamphetamine. They were not secured. Their presence was a seriously aggravating feature of Mr Miles’ offending. A five month cumulative prison sentence compared with a three month cumulative sentence for Mr Smith could easily be justified in the circumstances. [95]

The appeal against sentence is therefore dismissed.

Summary [96]

The appeals against conviction and sentence with respect to Mr Miles are

dismissed.

Solicitors: Crown Solicitor, Christchurch for Respondent