The Queen v Stephen Warren Daley [1999] NZCA 297; (1999) 17 CRNZ 388 (9 December 1999)

Last Updated: 29 November 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 335/99 336/99 337/99

THE QUEEN

V

STEPHEN WARREN DALEY
CHRISTOPHER STEVEN DALEY
MICHAEL CRAIG CONN

Hearing:	29 November 1999 (At Auckland)
Coram:	Gault J Blanchard J
	Panckhurst J
Appearances:	M T Davies for Crown D L Bates for Respondents S W & C S Daley P G Mabey for Respondent Conn
Judgment:	9 December 1999

JUDGMENT OF THE COURT DELIVERED BY PANCKHURST J

Introduction

[1] These are Solicitor General applications for leave to appeal against effective sentences of five years, four years and two years, respectively. On 13 August 1999 the respondents were sentenced in the High Court at Tauranga in relation to offences of cultivating cannabis, possession of cannabis for supply, and selling cannabis. The Daleys, father and son, were sentenced to four and three years for cultivating cannabis, respectively, with a cumulative one year term for selling that drug. They also received concurrent terms of two and a half years and one year upon the charges of possession of cannabis for supply. Mr Conn was sentenced to two years imprisonment for cannabis cultivation, with concurrent terms of one year upon the possession for supply and selling charges.
[2] The Solicitor General does not challenge the relativity as between offenders, rather the adequacy of the head sentence imposed on Stephen Daley, the principal offender. Such sentence was criticised as manifestly inadequate, with the result that each individual received an unduly lenient sentence.

Background

[3] On 30 March 1999 the police executed a search warrant at a farm property off State Highway 1 south of Kaikoura. In a recently constructed shed, supposedly a deer shed, they uncovered a highly sophisticated hydroponic cannabis growing operation. In July 1998 Stephen Daley had entered into an agreement to purchase the farm on a “lease to buy” arrangement for $650,000. A deposit of $65,000 was immediately payable with settlement delayed to August 1999. Prior to conclusion of the agreement a building consent had been obtained to erect a deer shed. It contained ground and mezzanine floors, with a total area over 1,000 square metres. Construction of the shed was completed in late September 1998. It was situated in a paddock which was deer-fenced and some distance away from other farm buildings.
[4] Inspection of the shed under warrant revealed the details of the cannabis growing operation. The building was obviously purpose built for hydroponic growing. It was divided into a generator shed, a propagation section, two growing areas (at ground and mezzanine levels) and a drying/storage area. Two generators had been commissioned. These cost about $47,000 and between October 1998 and March 1999 had consumed over 69,000 litres of diesel at a cost of $26,000. The building was also fitted with automated hydroponic growing beds, large purpose built extractor fans, and an irrigation/nutrient system. Construction and outfitting of the shed cost at least $300,000 and possibly considerably more.
[5] In excess of 3,300 maturing plants were under cultivation. In the propagation area a further 3,780 seedlings were found. In the processing area the police located a further 2,325 mature plants or portions of plants which were being dried. Processed cannabis head which weighed 23.3 pounds was also recovered.
[6] The hydroponic beds were capable of growing 8,215 plants at one time. This was exclusive of mother plants and seedlings in the propagation section. The quality of the plants was described as extremely good. Cloning had occurred. Many of the plants exhibited multiple heads. Calculations based upon the yield from plants harvested shortly before execution of the search warrant suggested a potential return of about $500,000 per crop, if the growing shed was in full production. The ultimate return on a per annum basis would likely reflect the demand for cannabis, rather than the capacity of the growing shed to produce it. The crop value calculation was in part based upon an admission from Stephen Daley that he had already disposed of forty to fifty pounds of cannabis at $5,000 per pound. The police considered that this wholesale figure would double by the time the cannabis was sold at street level.

Personal Circumstances

[7] Stephen Daley was aged 49 years and a first offender. He owned a deer farm at Te Puke. Following the break up of his marriage he encountered financial problems which culminated in mounting debt secured against the Te Puke property. He acknowledged that he entered into cannabis cultivation in an endeavour to solve his financial problems. He accepted that he was the driving force behind the offending and that his assets were essential to the establishment of the illegal venture.
[8] His son Christopher Daley was aged 25 years. He too was a first offender. He managed his father’s Te Puke farm, but was also actively involved in the management of the cultivation operation and sale of cannabis from Kaikoura.
[9] Michael Conn, aged 24 years, was likewise from the Te Puke area. However, for several months prior to execution of the search warrant he was resident on the Kaikoura farm and largely responsible for tending the crop. He was on the property on 30 March 1999 when the police visited. At interview Mr Conn said he was paid $250 per week and also received accommodation and food, for his services. He also was a first offender.
[10] The three entered pleas of guilty on request on 24 May 1999 in the District Court and were committed to the High Court for sentence. It was accepted that such pleas were entered promptly. The three charges against each individual were in common form, save for some variance in the dates. Stephen Daley was charged with both cultivation and possession of cannabis for supply between April 1998 and 30 March 1999. The charge against him of selling cannabis referred to the period October 1998 to the end of March 1999. As against Christopher Daley and Mr Conn the commencement of involvement was fixed variously at the beginning of October or the beginning of December 1998. However it was common ground that the cultivation operation began in about October, when construction of the growing shed was complete, and the selling of cannabis followed the first harvest about two months later. Importantly, the Crown accepted that Mr Conn was a secondary party with reference to selling cannabis. He assisted with the packaging of the plant for sale, whereas Stephen and Christopher Daley were involved in its disposal on a wholesale basis to dealers in the central North Island.
[11] All three offenders were co-operative with the police once the growing operation was uncovered. However, Stephen Daley declined to supply information concerning the persons to whom the forty or fifty pounds of cannabis were sold.

The Sentencing

[12] The sentencing Judge noted at the outset the scale and sophistication of the hydroponic growing operation. He referred to affidavits from the officer in charge of the Christchurch Drug Squad and from a detective sergeant from the National Drug Intelligence Bureau in Wellington which spoke of the size of the operation, being the largest in the experience of the officers. Reference was then made to the recent decision of this Court in R v Terewi [1999] 3 NZLR 62, in terms of which the offending plainly fell within category 3.
[13] The Judge next turned to the assessment of penalty. He noted that cultivation carried a maximum penalty of seven years, whereas the possession for supply and selling charges carried maxima of eight years. This situation was noted as anomalous in both R v Dutch [1981] 1 NZLR 304 (CA) and Terewi. With reference to the different offences the Judge said:

In my view, a correct analysis in accord with the totality principle is to look at the offending overall. I feel constrained in doing that, however, by the fact that there is this difference in maximum penalty. I believe that I cannot ignore that, anomalous though it may be. I have therefore decided that the correct approach is to look at the cultivation separately from the other two offences which carry a higher penalty.

[14] In relation to Stephen Daley he considered that the starting point for the cultivation should be five and a half years. From this one and a half years was deducted to reflect the guilty pleas and the circumstance that the prisoner was a first offender. On the possession of cannabis for supply charge a concurrent sentence of two and a half years imprisonment was imposed. But with reference to the sale of cannabis a cumulative term of one year was considered appropriate, producing the effective sentence of five years imprisonment. The Judge added that his preference would have been to reach this result by a different route. He felt “constrained” by the different maximum penalties. But for that factor he would have viewed each offence as warranting concurrent terms of six and a half years imprisonment, from which the same allowance of one and a half years would have been made. In any event the five year term became the lead sentence, against which the relative culpability of the co-offenders was measured.
[15] Christopher Daley, the Judge considered was influenced by his father. Nevertheless he immersed himself in the activity as a “co-manager” and stood to benefit financially from it. Some distinction between father and son was considered necessary and accordingly an effective sentence of four years imprisonment was imposed made up of : three years for cultivation (after deduction of one year for the early plea and the prisoner’s previous good record), one year concurrent for possession for supply and one year cumulative for selling cannabis.
[16] Mr Conn was viewed as in a significantly different position to that of his co-offenders. He was described as a co-manager of the operation with Christopher Daley, but on the available evidence he was only to receive wages of $250 a week. Further his involvement in the selling aspect was restricted to preparation of the cannabis for sale. The same mitigating factors prompted an allowance of one year. The Judge therefore adopted four years as the starting point for the cultivation offence, deducted the one year and a further one year to “achieve fairness” since Mr Conn was not to participate in the profits from the activity. Concurrent terms of one year were imposed on the possession for supply and selling offences, to produce an effective sentence of two years imprisonment.

Solicitor General’s Submissions

[17] The internal relativity of the sentences imposed and the allowances made for the pleas and good past records were accepted by counsel as appropriate. Rather, it was submitted this cultivation operation was of the very highest magnitude, it warranted the maximum penalty as the starting point in relation to the principal offender, and the possession for supply and sale of cannabis charges represented significant offending in its own right which required a significant additional penalty. In the result, it was argued, each of the sentences imposed was manifestly inadequate. Moreover, the sentencing result was out of line in terms of the established tariff for cannabis cultivation and sale.

Resolution

[18] We are in no doubt that the present sentences are manifestly inadequate and out of line with those imposed in comparable cases. The latter conclusion is demonstrated by reference to three representative cases, two of which were gathered in the schedule to the Terewi decision. In R v McNab CA 141/78, 1 May 1979, a non-hydroponic cultivation in a converted wool shed which involved 1350 plants attracted a sentence of five years imprisonment which was not disturbed on appeal. R v Jeffries [1992] 1 NZLR 134 (CA) involved a sophisticated outdoor growing operation of in excess of 8000 plants. For this cultivation a sentence of six and a half years resulted, to which was added a two year sentence for a further much smaller cultivation activity which was embarked upon after the appellant absconded on bail. The effective sentence of eight and a half years was upheld. Finally in R v McCormick CA 180/94, 21/12/94 a sentence of four years imprisonment, coupled with a fine of $200,000, was imposed following offending over an eight year period, where at the point of apprehension significant quantities of dried cannabis were recovered together with over 500 plants spread over separate plots on a farm property. This Court noted that but for the substantial fine the term of imprisonment may have been inadequate.
[19] We accept that this hydroponic cannabis growing operation was sophisticated, intensive, and on a very large scale. These factors position the case as an example of the most serious kind of cannabis cultivation. In that regard it is to be borne in mind that the maximum penalty is not to be reserved for the worst imaginable case, rather the issue is whether the case falls within the broad band of most serious cases : R v Beri [1987] 1 NZLR 46, 48 (CA). In our view only in one respect is this not an example of a worst case of cannabis cultivation, namely that the cultivation activity occurred over a relatively short time before apprehension by the police intervened. Whilst this circumstance is entirely fortuitous and reflects no credit on the offenders, the fact remains that the hydroponic growing operation never attained its full potential. Otherwise there are no redeeming features. Giving recognition for this aspect we consider that in relation to Stephen Daley the necessary starting point is six and a half years imprisonment for the cultivation offence.
[20] The next issue is the appropriate sentence for the related possession for supply and selling charges. The Crown contended that a cumulative sentence of the order of two years was necessary to capture the additional criminality involved in this aspect of the activity. Counsel for Mr Conn in particular resisted this contention. Based upon Terewi he advanced the proposition that since category 3 captured “large scale commercial growing” operations, sale of the crop was an inherent incident of the offence of cultivation itself. He submitted that to add to the sentence imposed for cultivation a cumulative term for selling cannabis was wrong in principle, as an aggravating feature of the cultivation was thereby twice visited. Before the sentencing Judge this same argument was made on the footing that seven years imprisonment should be viewed as the maximum available penalty. In short, counsel argued, the possession for supply and selling charges should attract only concurrent terms.
[21] We reject this submission. In some cultivation cases it will be appropriate that accompanying possession for supply and selling charges attract concurrent sentences. However, in any given case the sentencing Judge must ultimately assess whether the totality of the criminality involved in the offending is captured by an appropriate lead sentence for cultivation, or whether cumulative sentences are required. Where the sale activity truly constitutes a separate and additional dimension to the offending, then a cumulative term will be necessary.
[22] The required approach is well illustrated by reference to the facts of the present case. The principal offender Stephen Daley was not involved in the day to day management of the crop. He retained his son and others to manage the production aspects. That indeed was an aggravating feature, because offending on this scale demanded the involvement of a principal who had the resources to finance the set up of the operation and the experience to ensure that it was properly managed. The sale of the crop, on a wholesale basis, was a quite separate and further dimension. The aspects of cultivation and sale were geographically discrete : one in the South and one in the North Island. Cultivation and selling were in fact in separate hands. Stephen Daley was ultimately the principal in relation to both. Other circumstances, rather less graphic than these, may similarly demand separate recognition of the sale aspect.
[23] His son was likewise centrally involved in both cultivation and sale, but at a slightly lesser level. Mr Conn, on the other hand, essentially managed the cultivation aspect which extended to preparation of cannabis plant for sale, but he had no direct involvement in the wholesale distribution activity. In these circumstances we agree with the approach of the sentencing Judge in imposing cumulative terms in relation to Stephen and Christopher Daley, but a concurrent term in relation to Mr Conn.
[24] We differ however, in relation to the assessment of the cumulative terms. In our view, applying the totality principle, a cumulative sentence of two years imprisonment was the minimum appropriate in the case of Stephen Daley. That produces a total sentence of eight and a half years which reflects the totality of this criminal offending, but from which we make an allowance of one and a half years for the mitigating factors properly recognised at sentencing. Thus the effective sentence is seven years imprisonment. The concurrent term of two and a half years imprisonment for possession for supply remains undisturbed.
[25] In the case of Christopher Daley we consider that the appropriate sentence for cultivation is five and a half years imprisonment and for selling cannabis one and a half years imprisonment, cumulative. These terms preserve the relativity as between father and son correctly recognised by the sentencing Judge. From the total term of seven years imprisonment we allow a reduction of one and a half years on account of the mitigating factors. That is a slightly greater allowance than previously, but as against that our starting point was somewhat higher. This results in an effective sentence of five and a half years imprisonment, which in our view appropriately reflects the total criminality involved and the appropriate relativity as between co-offenders. Again the concurrent one year term for possession for supply shall remain.
[26] We turn to the case of Mr Conn. We consider that the lead sentence for cultivation of four years represented a correct assessment of this offender’s part. From it we make the same reduction of one year for the guilty plea and the prisoner’s past good record, to produce an effective term of three years imprisonment. Unlike the sentencing Judge we make no separate allowance for the circumstance that Mr Conn was only to receive wages. That factor is already reflected in the lesser starting point. The concurrent sentences of one years imprisonment upon the possession for supply and selling charges, remain.
[27] Accordingly leave to appeal is granted in each case. The appeals are allowed with the result that effective terms of seven years, five and a half years and three years imprisonment respectively are substituted, made up as described above.

Solicitors:
Crown Law Office, Wellington