The Queen v Karpavicius [2001] NZCA 171; [2001] 3 NZLR 41; (2001) 18 CRNZ 590 (24 May 2001)

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The Queen v Karpavicius [2001] NZCA 171 (24 May 2001); [2001] 3 NZLR 41; (2001) 18 CRNZ 590

Last Updated: 13 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 50/01 CA 51/01 CA 52/01 CA 53/01

THE QUEEN

V

ROKAS KARPAVICIUS
DAVID JOHN BLAIKIE
MICHAEL EDWARD PEARSON
GRANT ANTHONY MARTIN

Hearing:	10 May 2001
Coram:	Richardson P Thomas J Keith J Blanchard J Tipping J
Appearances:	A R Burns and S Mount for Crown J Haigh QC and K McDonald for Rokas Karpavicius G J Newell for Michael Edward Pearson C L Amery for Grant Anthony Martin No appearance for David John Blaikie
Judgment:	24 May 2001

JUDGMENT OF THE COURT DELIVERED BY RICHARDSON P

[1] In this appeal by way of case stated under s380 of the Crimes Act 1961 it is common ground that the evidence to be led at trial against the four accused of conspiring to import a controlled drug contrary to s6 of the Misuse of Drugs Act 1975 is sufficient to establish beyond reasonable doubt that the drug, the subject of the conspiracy, was either a Class A controlled drug or a Class B controlled drug but is insufficient to establish which class.
[2] In these circumstances the trial Judge directed a verdict of acquittal on the 2 counts which were founded on s6(1) and (2A) and reserved a question of law for this court.
[3] Section 6, so far as material, reads:

(1) Except as provided in section 8 of this Act, or pursuant to a licence under this Act, or as otherwise permitted by regulations made under this Act, no person shall—

(a) Import into or export from New Zealand any controlled drug, other than a controlled drug specified or described in Part 6 of the Third Schedule to this Act; or

(b) Produce or manufacture any controlled drug; or

(c) Supply or administer, or offer to supply or administer, any Class A controlled drug or Class B controlled drug to any other person, or otherwise deal in any such controlled drug; or

(d) Supply or administer, or offer to supply or administer, any Class C controlled drug to a person under 18 years of age; or

(e) Sell, or offer to sell, any Class C controlled drug to a person of or over 18 years of age; or

(f) Have any controlled drug in his possession for any of the purposes set out in paragraphs (c), (d), or (e) of this subsection.

(2) Every person who contravenes subsection (1) of this section commits an offence against this Act and is liable on conviction on indictment to—

(a) Imprisonment for life where a Class A controlled drug was the controlled drug or one of the controlled drugs in relation to which the offence was committed:

(b) Imprisonment for a term not exceeding 14 years where paragraph (a) of this subsection does not apply but a Class B controlled drug was the controlled drug or one of the controlled drugs in relation to which the offence was committed:

(c) Imprisonment for a term not exceeding 8 years in any other case.

(2A) Every person who conspires with any other person to commit an offence against subsection (1) of this section commits an offence against this Act and is liable on conviction on indictment to imprisonment for a term—

(a) Not exceeding 14 years where a Class A controlled drug was the controlled drug or one of the controlled drugs in relation to which the offence was committed:

(b) Not exceeding 10 years where paragraph (a) of this subsection does not apply but a Class B controlled drug was the controlled drug or one of the controlled drugs in relation to which the offence was committed:

(c) Not exceeding 7 years in any other case.

...

(4A) Without limiting anything in subsections (3) and (4) of this section or in Part 1, section 26, or section 72 of the Criminal Justice Act 1985, where any person is convicted of an offence relating to a Class A controlled drug or a Class B controlled drug against any of paragraphs (a), (b), (c), and (f) of subsection (1) of this section, the Judge or Court, if he or it decides to impose a full-time custodial sentence, shall consider whether or not he or it should also impose a fine.

[4] The first count charged the accused with conspiring together with others "to import into New Zealand a Class A controlled drug". The second count charged them with conspiring "to import into New Zealand a Class B controlled drug". There was no count directed to para (c) of s6(2A). The question posed by the High Court is in these terms:

Where a person is tried on an indictment alleging alternative counts of conspiring to import a Class A controlled drug or conspiring to import a Class B controlled drug, and where there is evidence which, if accepted, would prove beyond reasonable doubt that the person has conspired to import either a Class A controlled drug or a Class B controlled drug but the evidence is insufficient to prove which class, may that person properly be convicted on either count in the indictment?

[5] We should add that at the request of this court counsel made written and oral submissions on the possible argument that, if the evidence does not satisfy either s6(2A)(a) or (b), it may satisfy (c).

The background

[6] An undercover police officer discussed with Mr Karpavicius the supply of a quantity of a drug which the undercover officer believed was cocaine but was never actually identified as cocaine in the discussions which ensued. Over a period of months he kept in touch with Mr Karpavicius but the deal was never completed. It appears that the reason, as Anderson J said in his judgment on a s347 application, was that:

[T]he accused Martin, who was the money courier to Canada where the product was to be bought, lost the money. Martin had carried into Canada, concealed in a piano accordion, US$100,000 which had been passed onto him by the accused Blaikie as agent for Karpavicius. In all probability Martin lost the money gambling at a casino and because this left nothing to purchase product in Canada the transaction anticipated by [the undercover officer] could not be carried out. Pearson had been despatched by Karpavicius to Canada three days before Martin went there, obviously to facilitate the purchase of product. When difficulties arose through Martin's incompetence, Karpavicius despatched Blaikie.

[7] Anderson J concluded that the evidence adequately shows a conspiracy to supply the officer with a product which would be obtained in Canada and imported into New Zealand with Mr Karpavicius as the leader of the conspiracy and the other accused as his subordinates. And:

There is sufficient evidence of a conspiracy by the accused to import a controlled drug. It was a drug capable of being rendered into a block; it was one best supplied, or perhaps only capable of being supplied, in a valuable quantity by way of importation rather than domestically; it might be smelt by Customs dogs unless the smell were disguised with dog faeces; and the transaction price was to be 165 units of money per unit of weight or number. By making pragmatic assumptions, based on judicial experience, I take the view that the Crown could bring expert evidence to a trial that certain controlled drugs are rendered for convenience into blocks. These include the Class A controlled drugs cocaine and heroin as well as possibly Ecstasy, and the Class B controlled drugs morphine and hashish. Of course cannabis might be prepared in block form but it is unlikely that one would go to the lengths taken by Karpavicius to import a drug grown in huge quantities in New Zealand. In my view ... there is an adequate evidential basis for a finding by a jury that the accused were in a conspiracy to import a controlled drug, the same being either a Class A controlled drug or a Class B controlled drug.

[8] Anderson J ruled that, because of the different maximum penalties prescribed in s6(2A) in respect of different classes of drugs, the specified class is an essential ingredient of and not merely a particular of the charge and that a jury could only properly find that there was a conspiracy to import a drug which was either a Class A controlled drug or a Class B controlled drug. That would be insufficient to support a guilty verdict on the indictment.
[9] The Judge stated his intention to have the jury empanelled and a verdict of acquittal entered, reserving the question of law which was ultimately framed as set out in para [4] above. He went on to say that if the established law prevails that will be the end of the matter for the accused, but if the realities of modern criminal conduct in relation to prohibited or controlled substances warrant reconsideration of principles then this will be an opportunity for the Court of Appeal to do so. That course was followed, with the Crown presenting no evidence against the accused, and this case stated followed.

The submissions on appeal

[10] The respective submissions to which the question posed relates can be summarised quite shortly. The underlying assumption by counsel was that the subject matter of the conspiracy was either a Class A drug or a Class B drug. Mr Burns for the Crown submitted that there was nothing in law to prevent factually inconsistent alternative counts being put to the jury so long as there is sufficient evidence to support each count. He relied on the statement of principle in R v Bellman [1989] 1 AC 836, 851 that there is no rule of law that prevents the inclusion in one indictment of mutually exclusive counts and that if, at the end of the prosecution case, the evidence establishes a prima facie case on both counts, the matter should be left to the jury to determine the question of guilt.
[11] That proposition from Bellman was subject to the qualification in New Zealand, Mr Burns submitted, that to preclude the making of an order for discharge under s347 there must be evidence before the court which, if accepted, would as a matter of law be sufficient to prove the case - rather than speaking in terms of a "prima facie" case. In such a case it is for the jury to determine which, if either, count was proved on the evidence beyond reasonable doubt. And in Bellman the House of Lords observed (p847) that in rare situations it is clear that the accused has committed a crime but the state of the evidence is such that it is impossible to say which crime was committed. In such circumstances no prima facie case can be established to support either crime; and neither crime can be left to the jury. See also Tsang Ping-Nam v R [1981] 1 WLR 1462 and Attorney-General of Hong Kong v Yip Kai-Foon [1988] 1 AC 642.
[12] In the ultimate dilemma of proof situation where the jury is sure that one or other of the two alternatives is proved beyond reasonable doubt but cannot say which, Mr Burns submitted that, instead of directing the jury to acquit following Bellman and Yip Kai-Foon, the Judge should direct the jury to convict of the lesser offence following the approach of the majority in the High Court of Australia in Gilson v R [1991] HCA 24; (1991) 172 CLR 353. Mr Burns did not support the approach of the English Court of Appeal in R v Leeson [2000] 1 Cr App R 233 that the class of drug was not an element of the offence created by s5(3) of the Misuse of Drugs Act 1971 (UK) of possession for supply, but was relevant only to sentencing. He drew attention to the criticism of the reasoning in Leeson in [2000] Crim LR 195, 196-197 and Archbold 2001, para 26-21.
[13] In Gilson the majority (Mason CJ, Deane, Dawson and Toohey JJ) said at p363:

It is clearly unsatisfactory to require a jury to acquit an accused entirely when they are convinced beyond reasonable doubt that he was guilty of either theft or receiving, merely because, as a result of being required to apply the same standard of proof, they cannot determine which offence he committed. The law must surely be brought into disrepute if it is so bereft of answers that an accused who is clearly guilty of one offence or the other is allowed to escape conviction altogether.

Their answer was (p364):

The trial judge, rather than directing the jury to return a verdict of guilty of the offence which they consider to have been the more probable, should direct them that, if they are satisfied beyond reasonable doubt that the accused either stole the property or received it knowing it to have been stolen, but they are unable to say which, then they should return a verdict of guilty of the less serious offence.

[14] McHugh J, dissenting, responded (375):

In every case where the jury convict only because of the "less serious charge" direction, it means that the jury convict the accused in respect of a charge about which they have a reasonable doubt, since, ex hypothesi, they have not been convinced beyond reasonable doubt of his or her guilt on that charge. Moreover, unless the penalties set by the legislature are the criteria for determining which is the less serious charge, there will often be real difficulty in determining that issue. Evidence which is admissible on sentence but not at the trial of the offences may show that the offence for which the accused was convicted was the more serious offence. On the other hand, to use the legislative penalties as the criteria for determining the less serious charge means that the accused may be convicted of the charge which, in the circumstances of that case, is the more serious charge.

[15] The essential argument of counsel for the accused was that where the evidence is insufficient to prove which class drug was involved, neither count has been proved beyond reasonable doubt. If presented as equally balanced mutually exclusive alternatives, there is not even a prima facie case or even sufficient evidence to allow either count go to the jury. It is not a case of inability to distinguish between classes of drug, but simply a case of failure to prove the class alleged.
[16] It was submitted that there is no legal principle which allows for proof of two counts jointly where proof to the necessary standard is not available in respect of either count taken separately. Thus, to answer the question posed in the case stated in the affirmative involves creating a new offence, which is the role of the legislature, not the courts.
[17] Those submissions all necessarily presupposed that the legal answer in this case is not determined as a matter of construction of s6 in its statutory setting and by following the decision of this court in R v Koura [1996] 2 NZLR 9. We turn to consider the statutory provisions.

Section 6: discussion

[18] Section 6(1)(a) relevantly provides that "no person shall (a) import into ... New Zealand any controlled drug, other than a controlled drug specified or described in Part 6 of the Third Schedule to this Act".
[19] While paras (a) and (b) are directed to "any controlled drug", paras (c), (d) and (e) are directed to a particular class or particular classes of controlled drug (Class A or Class B under (c), and Class C under (d) and (e)). And paragraph (f) uses the expression "any controlled drug" although when read as required with (c), (d) or (e) that expression is necessary confined to a controlled drug of the particular class. Importantly, the subsection does not create any offence. That is the function of subs (2).
[20] Section 6(2A) is expressed to be directed to conspiracies to commit an offence against subs (1), although, as just noted, it is subs (2) rather than subs (1) which is the offence creating provision in respect of the completed substantive offences. Both subs (2) and subs (2A) then follow the same pattern. The penalty on conviction on indictment depends on the sequential answers to the statutory inquiries under paras (a), (b) and (c).
[21] Thus, subs (2A) contemplates that the first inquiry is whether para (a) is satisfied. That is so "where a Class A controlled drug was the controlled drug or one of the controlled drugs in relation to which the offence was committed". If the answer is no, the next inquiry is under para (b), that is "where paragraph (a) of this subsection does not apply" but "a Class B controlled drug was the controlled drug or one of the controlled drugs in relation to which the offence was committed". If that answer is also in the negative, the next step is to go to para (c), which makes the penalty "Not exceeding 7 years in any other case".
[22] On that analysis subs (2A) provides a comprehensive statement of liability for conspiracy offending in relation to controlled drugs. It is complete in its coverage because of the successive and exhaustive steps which may be required. The answer to (a) will be in the negative where it is not proved beyond reasonable doubt that a Class A controlled drug was a controlled drug "in relation to which the offence was committed". That language and its employment in that context is necessarily directed to proof that the offence was committed and there is no justification for reading "was" in any lesser sense. Unless there is proof beyond reasonable doubt, (a) is not satisfied. It follows that, where there is uncertainty as to whether the drug the subject of the conspiracy agreement was a Class A controlled drug, that uncertainty may also preclude a positive answer to the inquiry under (b), even where there is other evidence that it was a Class B controlled drug. In that situation, and also where there is no affirmative evidence that it was a Class B controlled drug, para (c) on its face applies and the maximum penalty for the offending is 7 years imprisonment.
[23] It is clear from the scheme and language of the offence creating provisions of s6(2A) that the legislature imposed different maximum penalties depending on which one of paras (a), (b) or (c) applied. As well, it is clear from the structure of the subsection that it intended to cover the field, leaving no gaps. The more serious the offence in the eyes of the legislation - here the need to distinguish from the less serious drug - the higher the maximum penalty to which an offender is liable. Section 6(4A) applying "where any person is convicted of an offence relating to a Class A controlled drug or a Class B controlled drug against any of paragraphs (a), (b), (c) and (f) of subsection (1)" also reflects that focus. And where it is not proved that the offending came within either of the more serious categories described in paras (a) and (b), para (c) is the residual provision which prescribes the lower maximum punishment for the offence which lacks those more serious features.
[24] The 1975 Act shows a consistent pattern in classifying offences according to whether or not the controlled drug proved to be involved is within a more serious category. Section 6(2), s6(2A) and s12(2) employ the same three-step categorisation and s10(2) and s23(6) employ a two-step categorisation with the residual para (b) under those latter provisions prescribing the penalty for being found liable on indictment "in any other case".
[25] The Crown must prove to the requisite criminal standard all elements of the offence charged. An offence is an act or omission for which a person may be punished under an enactment (Crimes Act 1961 s2(1)). It follows that it is the act or omission to which the prescribed penalty applies that constitutes the offence. In Koura Henry J for the court described as the fundamental concept of criminal law that there can only be one prescribed penalty for any one particular offence, and continued (p11):

Different penalties cannot in principle be prescribed for the one offence. If an offence renders a person liable to a stated penalty, then in the absence of clear legislation to the contrary it is incumbent on the prosecution to establish in the usual way the basic facts which found liability to that penalty.

[26] We pause to note that that fundamental principle is reflected in the general penalty provision of s27 of the Misuse of Drugs Act 1975, that "every person who commits an offence against this Act for which no penalty is provided elsewhere than in this section is liable to imprisonment for a term not exceeding 3 months or to a fine not exceeding $500 or to both".
[27] Koura concerned the theft of electricity. Section 227 of the Crimes Act prescribes the punishment for theft. Paragraphs (a), (b) and (c) apply to particular kinds of theft, objects of a particular nature or having a particular characteristic. Paragraph (ba) imposes a 7 year maximum where the object stolen exceeds $300 in value, and para (d) a 3 month maximum "if the theft is one for which no other punishment is prescribed by this Act, and if the object stolen does not exceed in value the sum of $100".
[28] The court described para (d) as a wrap-up provision applying to an offence of theft which is not one which the Crown contends is one specified in any of the preceding paragraphs and noted that the reference to a value not exceeding $100 is probably unnecessary, but does make it clear that if liability to a higher penalty is being invoked then the required value limit must be alleged specifically.
[29] In Koura the conviction could not stand because the jury had been directed not to make a determination which was necessary for a finding of guilt on the count as framed in the indictment which stated the value to be $1,163.85. The court concluded that the jury clearly were satisfied and were entitled to be satisfied that the appellant had stolen electricity but of a value undetermined. It amended the indictment by deleting the reference to $1,163.85, thus reducing the offence to one governed by s227(d), and went on to impose a fine of $750.
[30] The residual nature of s6(2A)(c) unencumbered by any qualification of the words "in any other case" is even clearer than under s227(d). Nevertheless, counsel for the accused submitted that it was intended to be confined to Class C drugs and referred to a brief statement by the Minister of Health moving the second reading of the Bill in 1975 (399 NZPD 3143-3144, referring to the clause which became s12(2)) that it increased the maximum penalty of imprisonment to 10 years for Class A drugs, 7 years for Class B drugs and 3 years for Class C drugs. We do not read that broad description as intending to read down the careful statutory sequence set out in s6(2), s6(2A), s10(2) and s23(6) as well as s12(2). Nor is there anything in s310 of the Crimes Act 1961 dealing with conspiracy on which some counsel relied bearing on that straightforward construction of s6. Section 310 does not apply where, as here, the punishment for the conspiracy is otherwise expressly prescribed by another enactment (s310(2)). And where s310 does apply, the liability to imprisonment is for a term not exceeding 7 years if the maximum punishment for the offence to which the conspiracy relates exceeds 7 years imprisonment, and in any other case to the same punishment as if he or she had committed that offence, again covering the field.
[31] Finally, we have not had our attention drawn to any procedural implications of this straightforward construction of s6(2A) which could justify revisiting these conclusions. There may be a difficulty where the drug is identified as Ecstasy and it is not clear whether it is a Class A, Class B or Class C drug and the prosecution is relying on intercepted communications. Under the present legislation interception warrants cannot extend to Class C Ecstasy. But that is a matter for the legislature to consider.
[32] Clearly, the prosecution will ordinarily specify the class of drug and nominate a particular drug within that class and it will only be in rare cases, such as the present, where given the degree of uncertainty as to the drug involved, the indictment will need to be directed to para (c) or by way of alternative counts to one or more of (a) and (b) and residually to (c).

Conclusion and result

[33] For the reasons given we are satisfied that as a matter of construction of s6 the Judge erred in confining his ruling to whether there was an adequate evidential basis for a finding by the jury that the conspiracy was to import either a Class A or a Class B controlled drug. It follows that Van Den Bogaard v R (1999) 16 CRNZ 328, applying the approach of the majority in Gilson to charges under s6 of the Misuse of Drugs Act, is over-ruled.
[34] Section 382(1) allows the court in its discretion to send back any case to the court by which it was stated to be amended or restated and s382(2)(b) empowers the court where, as here, it is of the opinion that the ruling was erroneous and that there has been a mistrial in consequence, to direct a new trial.
[35] If then a new trial is warranted it is appropriate to exercise that jurisdiction under s382(2)(b) and not take the extra step of sending the case stated back to the High Court for amendment and return to this court. It was submitted for the accused, however, that it would be an abuse of process in these circumstances to require them to stand trial again and that the court should exercise the power under s382(1)(f) to make such other order as justice requires.
[36] We cannot agree that justice does not require a new trial. The indictment charges the accused with major serious drug offending. The assumption underlying the question posed, to which the accused through their counsel agreed, is that the drug, the subject of the conspirators' agreement, was either a Class A or a Class B controlled drug. They have been on notice, since the directed acquittal with the question of law reserved, that following the decision of this court they might be required to stand trial. It cannot be argued that they ordered their affairs assuming that there was a lacuna in the law or that they have suffered any illegitimate prejudice.
[37] For these reasons we allow the appeal, quash the acquittals and direct a new trial. If no further evidence is available to the Crown it must follow that the new indictment will be confined to para (c) of s6(2A).

Solicitors
Crown Solicitor, Auckland.
Kevin McDonald, Auckland, for Rokas Karpavicius