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CHICOINE v R [2005] NZCA 132 (24 February 2005)

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CHICOINE v R [2005] NZCA 132 (24 February 2005)

Last Updated: 29 June 2005

IN THE COURT OF APPEAL OF NEW ZEALAND

CA220/04

THE QUEEN

v

URBAN CHICOINE

Hearing: 21 September 2004
24 February 2005

Court: McGrath, Goddard and Salmon JJ

Counsel: R J Stevens for Appellant
A Markham for Crown

Judgment: 24 February 2005

Reasons: 21 March 2005

REASONS FOR JUDGMENT OF THE COURT
(Given by Goddard J)

Introduction

[1] The appellant pleaded guilty to a charge of manufacturing the controlled drug methamphetamine and to a further charge of possession of a firearm. At the time of his offending methamphetamine was classified as a class B controlled drug and its manufacture carried a maximum penalty of 14 years imprisonment. By the time the appellant was sentenced methamphetamine had been reclassified as a class A controlled drug and now carries a maximum penalty of life imprisonment. He was of course entitled to be sentenced in the context of the lower maximum penalty (s 6 Sentencing Act 2002) and sentence was imposed on that basis. An effective term of three years imprisonment was imposed on the charge of manufacturing methamphetamine, with a concurrent sentence of two months imprisonment for possession of the .38 rifle.
[2] Following the hearing on 24 February 2005 we allowed the appeal against the sentence of three years imprisonment for manufacturing methamphetamine and substituted a sentence of two years and three months imprisonment.

The facts

[3] The facts are that around 1.30am on 17 December 2002 the police executed a search warrant at the appellant’s address under the Misuse of Drugs Act 1975. They found the appellant in the garage carrying out a methamphetamine ‘cook’. He was holding a ‘Parr Bomb’, a reaction vessel used to heat precursor chemicals. On subsequent analysis this was found to contain 14.9g of pseudoephedrine and ephedrine, which would have yielded an estimated 5g of pure methamphetamine with a street value of around $5,000-$7,000. Various chemicals, precursor chemicals, glassware, cookware and other equipment associated with the manufacture of methamphetamine were also located in and around the work bench area in the garage. Traces of methamphetamine were found on the work bench itself, inside a metal bowl and on a set of electronic scales. Twenty tablets of decongestant medicine containing the precursor substance psuedoephedrine were located in the appellant’s utility vehicle. A .38 rifle and 93 live rounds of ammunition were also found in the garage.
[4] The appellant appealed against the sentence of three years imprisonment imposed on the charge of manufacturing methamphetamine on the grounds that a remark attributed to him by the probation officer who wrote the pre-sentence report was in dispute and did not support the Crown’s assertion that there was a commercial element to his offending. It was submitted that the sentencing Judge, MacKenzie J, had failed to consider the application of s 24 of the Sentencing Act 2002 to that disputed remark and had also given weight to further factors that did not support a finding of commercial dealing.
[5] A further and related ground of appeal was that the sentence imposed was manifestly excessive.

Sentencing remarks

[6] MacKenzie J began by traversing the undisputed facts and then turned to deal specifically with whether the appellant had been manufacturing the methamphetamine entirely for his own use, or whether it had been intended by him for supply to others for their use, or whether it had been intended for commercial dealing by way of sales. He said:

... I must look at the facts which are admitted or established to determine whether the Crown has satisfied me to the standard required by s24(2)(c) of the Sentencing Act 2002 that commercial dealing or use by others was intended and whether I should draw that inference. I must consider the facts and what inferences I can properly draw from them.

[7] Four factors led MacKenzie J to a reasonable inference that the methamphetamine being manufactured by the appellant was not intended entirely for his own use. The first was the disputed statement, reported in quote form by the probation officer who interviewed the appellant. That statement was as follows:

In relation to the charge of manufacturing a class B controlled drug methamphetamine, Urban Chicoine said he "enjoyed getting stoned and sharing the meths with his friends".

[8] MacKenzie J was satisfied that he should accept that statement as having been made by the appellant, in preference to the appellant’s denial through counsel that he had made the statement.
[9] The three further factors that led MacKenzie J to draw, as a reasonable inference, that the methamphetamine being produced was not intended solely for the appellant’s own use, were the apparent sophistication of the operation (evidenced by the amount of equipment and precursor substances assembled reflecting a considerable amount of planning), the quantities of precursor materials found and the appellant’s financial situation. In relation to the latter, the appellant was recorded as having been in receipt of an unemployment benefit at the time of his offending, with no visible means of other support. This factor led MacKenzie J to conclude that he could not have sustained his manufacturing operation "without some recompense from others by way of sale or in some other manner".
[10] On the basis of all four of those factors, MacKenzie J rejected the appellant’s submission that the methamphetamine was solely for his own use, but did accept that the evidence did not enable him to draw any inference other than that any intended supply was to the appellant’s friends only. Nevertheless, he considered that a disposal of that nature brought the offending within the third category of R v Wallace and Christie [1999] 3 NZLR 159.
[11] In determining the appropriate length of sentence, MacKenzie J took into account, as relevant aggravating factors, the appellant’s prior convictions for possession of cannabis in 1990 and 1997 and for possession of drug instruments in 2001, the level of premeditation involved in the manufacture of methamphetamine and the growing prevalence of clandestine drug laboratories. He identified a starting point of four years imprisonment and from that made a 25% deduction for the appellant’s guilty plea, which he found to be the only real mitigating factor. An end sentence of three years imprisonment was reached.

The appeal

[12] The appeal focussed on MacKenzie J’s finding that there was "an element of commercial dealing" in the appellant’s offending, which categorised it as within the third category in Wallace and Christie.
[13] Mr Stevens submitted that this approach was wrong in fact and in law. In terms of fact, he submitted that there was no basis upon which MacKenzie J could have accepted that any commercial element was proved. The appellant had disputed both the statement attributed to him in the pre-sentence report and the Crown’s assertion that this reflected a commercial element, and McKenzie J should have had regard to s 24(1) of the Sentencing Act 2002 and not determined the issue simply by drawing inferences from the circumstances of the offending and the disputed remark in the pre-sentence report. Mr Stevens further argued that, even if the Judge had been entitled to disregard the procedure provided by s 24(2), the inferences that he drew were not reasonably available to him on the evidence. In particular, he was not entitled to make an adverse finding of credibility as a result of the disputed remark, without hearing evidence from either the appellant or the probation officer who wrote the report.
[14] Mr Stevens was also critical of the other factors taken into account by the Judge. He said that it was not correct that the appellant was in receipt of an unemployment benefit at the time of his arrest; rather he had been employed in casual labouring as noted in various documentation on the Court file. Nor did the quantities of precursor materials actually found (which included a 20 litre drum four-fifths full of toluene and a 20 litre drum containing ethanol), or the fact that the manufacture of methamphetamine requires a considerable assemblage of equipment and volume of precursor materials, render its manufacture "inherently unlikely" to be undertaken solely for personal use. He said:

If the Judge’s reasoning is accepted then everyone who manufactures methamphetamine is doing so for a commercial purpose. This cannot be correct. Each case must be determined on its own facts. In addition, the Police did not locate a "considerable amount of equipment" at the appellant’s address. The items of equipment located, apart from the ‘Parr Bomb’ itself, were largely household items. There as no suggestion that the process of manufacturing being undertaken by the appellant was sophisticated. Nor was there any suggestion that there was a sophisticated or well-equipped laboratory set up in the appellant’s garage. Furthermore, the Judge was in error in stating that ethanol is a precursor material. Ethanol is not listed in the Schedule to the Misuse of Drugs Act 1975, and there was no evidence to establish that it is a "salt" of any of the listed substances.

[15] In relation to the sentence of three years imprisonment imposed from a starting point of four years, Mr Stevens submitted that in the absence of proof of any commercial dealing - or even if the Judge was entitled to find that the drug was not manufactured solely for the appellant’s use, the offending in question should have been regarded as within the following range, referred to in paragraph [26] of Wallace:

Even for a first offender apparently making small quantities for personal use only, we would regard a sentence of up to six months imprisonment as generally appropriate at the present time. A year would not necessarily be excessive.

Disputed facts

[16] The application of s 24 of the Sentencing Act 2002 was considered in
R v Dunsmuir CA439/02 23 July 2003. In that case the Court noted that s 24 "codifies the process by which facts are established for sentencing purposes".
[17] Section 24 provides as follows:

24 Proof of facts

(1) In determining a sentence or other disposition of the case, a court--

(a) may accept as proved any fact that was disclosed by evidence at the hearing or trial and any facts agreed on by the prosecutor and the offender; and
(b) must accept as proved all facts, express or implied, that are essential to a plea of guilty or a finding of guilt.

(2) If a fact that is relevant to the determination of a sentence or other disposition of the case is asserted by one party and disputed by the other,--

(a) the court must indicate to the parties the weight that it would be likely to attach to the disputed fact if it were found to exist, and its significance to the sentence or other disposition of the case:
(b) if a party wishes the court to rely on that fact, the parties may adduce evidence as to its existence unless the court is satisfied that sufficient evidence was adduced at the hearing or trial:
(c) the prosecutor must prove beyond a reasonable doubt the existence of any disputed aggravating fact, and must negate [beyond a reasonable doubt] any disputed mitigating fact raised by the defence (other than a mitigating fact referred to in paragraph (d)) that is not wholly implausible or manifestly false:
(d) the offender must prove on the balance of probabilities the existence of any disputed mitigating fact that is not related to the nature of the offence or to the offender's part in the offence:
(e) either party may cross-examine any witness called by the other party.

(3) For the purposes of this section,--

aggravating fact means any fact that--

(a) the prosecutor asserts as a fact that justifies a greater penalty or other outcome than might otherwise be appropriate for the offence; and
(b) the court accepts is a fact that may, if established, have that effect on the sentence or other disposition of the case

mitigating fact means any fact that--

(a) the offender asserts as a fact that justifies a lesser penalty or other outcome than might otherwise be appropriate for the offence; and
(b) the court accepts is a fact that may, if established, have that effect on the sentence or other disposition of the case.

[emphasis added]

[18] At paragraph [15] of Dunsmuir, this Court referred to disputed matters in pre-sentence reports in the following way:

In broad terms, the facts to which s 24 is directed will be those relating to the circumstances of the offence whereas the facts and opinions in a pre-sentence report will relate to the circumstances of the offender. There will often be overlap however. Matters disclosed in a pre-sentence report may well be aggravating facts or mitigating facts as defined in s 24. When they are, to the extent that they are facts asserted by one party and disputed by the other, the processes set out in s 24(2) are to be used. On the other hand, matters of information and assessment provided to the court by a probation officer, if challenged, may be the subject of evidence in accordance with s 28(3). That will be the appropriate process when issues arise concerning the accuracy of what is reported as having been told to the probation officer by the offender and of any opinion proffered on the basis of it. [emphasis added]

[19] Section 28(3) of the Sentencing Act provides:

28 Disclosure of reports

...
(3) The offender or his or her counsel may tender evidence on any matter referred to in any report, whether written or oral, that is submitted to a court under section 26 or section 33.

Events since the hearing

[20] After hearing from Ms Markham and Mr Stevens, the Court concluded that three possible courses were open to resolve the dispute relating to the appellant’s reported statement in the pre-sentence report: to adjourn the appeal for a hearing under s 24(2); to refer the matter back to the High Court for a disputed fact hearing in relation to both the reported statement and the Crown’s contention that the offending was in the commercial category; or for the appeal to proceed on the basis that the appellant’s reported statement not be relied upon and a decision made on the remaining evidence.
[21] As a starting point the Court sought an affidavit from Mr Snijder, the probation officer who wrote the report, as to the circumstances and the statements made in the course of preparing the report which gave rise to the disputed passage, and similar advice in relation to two further passages under the headings "Criminal Associates" and "Motivation and Readiness to Change". These further passages recorded:

Urban Chicoine was associating with friends and associates prior to and during a visit on the evening of the offence period. He was smoking cannabis with them. He was socially influenced by his friends and associates in committing the offence of manufacturing ‘P’ in that they were actively endorsing his offending as they were procuring the ‘P’ from Urban Chicoine and sharing in its use, which increased the likelihood of his offending to occur.
...
Urban Chicoine said he strongly agreed that Offence Related Thoughts and Feelings, Drugs, Offence Related Risk Taking Arousal, and Criminal Associates were all factors that contributed towards his offending. ...

[22] Mr Snijder filed an affidavit as requested, annexing to it his notes of interview with the appellant. These notes record that the disputed passage was elicited as part of a standard question and answer format. The first part of the formatted question was:

From the day before through to the end of the offence, did you think about what you stood to gain from committing the offence?

[23] Mr Snijder recorded the appellant as having answered "yes" to this question. The next question was then asked:

(If yes) Please describe what you were thinking and how that left you feeling. When exactly did these thoughts and feelings occur?

[24] The answer given by the appellant and as recorded by Mr Snijder is:

getting stoned & sharing the meths with my mates

[25] After receiving Mr Snijder’s affidavit, the appellant also swore and filed an affidavit. In it he acknowledged that Mr Snijder had used the formatted questionnaire during the interview and made notes on it. He stated:

He did read some of his notes to me but I am sure he did not read the part about "Getting stoned and sharing the meths with my mates" on page 17 of the Booklet. I did not say that I was going to share the meths with my mates.

[26] The appellant also commented on the fact that the word "enjoyed" is not actually recorded in the questionnaire as part of his response, but is used in the report as part of his response. He says "this may not seem like a big change but I think it shows that Mr Snijder was changing what I said".
[27] In relation to drug use prior to committing the offence, the appellant stated:

I did not tell him that I had used "P" and cannabis. I had used the "P" earlier in the day. I went to see my friends at about 10.00pm. I smoked the cannabis with my friends before going home and trying to make the "P". When Mr Snijder asked me if I had shared the drugs with anyone I said "yes" because I had smoked the cannabis with my friends. They were not "whanau members". I had not shared the "P" with anyone and I did not mean that I had, when I answered "yes" to the questions about sharing the drugs.

[28] The appellant then suggested that Mr Snijder had put a number of his responses into his own words when subsequently writing the report. He said:

I am not sure where Mr Snijder got the bit about "getting stoned and sharing the meths with my mates". Before I tried to make the "P" I had been to a friend’s house. We smoked cannabis together. We had a couple of joints between 3 of us. I then went home. I was feeling pretty stoned when I decided to try and make some "P". I did not give any thought to what I was going to do with the "P" apart from using it to get fried (which is my word for "high" on methamphetamine). I didn’t think about anything else. ... I did not think about sharing it with my mates and I did not tell Mr Snijder that I was think about "sharing the meths with my mates". I do not even use the word "meths" when talking about "P". I call it either "P" or "evil". I do not use the word "stoned" when talking about getting high on "P". I always use the word "fried". You get "stoned" when you use cannabis, not "P". "Getting stoned and sharing the meths with my mates" is not something I would say.

[29] In relation to the statement that he was "socially influenced by his friends and associates in committing the offence of manufacturing P in that they were actively endorsing his offending as they were procuring the P from [him] and sharing in its use", the appellant said:

I don’t know why Mr Snijder has written this. I did not say this and my lawyer has told me that this does not appear anywhere in the notes that Mr Snijder made in the Booklet.

[30] Given the clear conflict in the two affidavits, as to whether the appellant told Mr Snijder that he was going to "share the meths" with his friends and whether his answer to the question of what he stood to gain from manufacturing the morphine had been misinterpreted by Mr Snijder, the Court determined that the proper course was to convene a hearing under s 24(2) to enable cross-examination of both deponents.

The further hearing

[31] Cross-examination of Mr Snijder by Mr Stevens and of the appellant by
Ms Markham proved helpful and enabled the Court to reach a firm conclusion about the disputed matters. In the result, we were satisfied that although Mr Snijder had not recorded verbatim all of the appellant’s answers to the formatted questions, he had correctly interpreted the answers the appellant gave when noting them in narrative form on the questionnaire. Mr Snijder was firm that he could clearly remember the appellant giving the disputed answer in response to a direct question of what "he stood to gain from committing the offence" and further said that he and the appellant well understood what each was saying. In this regard it is relevant to note that their professional relationship preceded this interview and that they were familiar with each other’s style. The questionnaire that was completed at that interview subsequently formed the basis of the probation report Mr Snijder wrote for the Court.
[32] We were impressed by Mr Snijder’s frankness in conceding that he had not recorded all of the appellant’s answers to the questionnaire verbatim but had recorded the essence in terms relevant to the criminogenic needs assessment he was completing. That frankness did not detract from our conclusion that his record of the appellant’s answers was in essence correct but, rather, enhanced it. Mr Snijder is clearly an experienced probation officer and this was reflected in the manner in which he had taken the appellant through the required questions, recorded his answers and subsequently encapsulated them in the pre-sentence report.
[33] The appellant was however adamant under cross-examination that he did not intimate to Mr Snijder that any of the methamphetamine that he was manufacturing was intended for his associates, and that Mr Snijder had misinterpreted his answers to critical questions. He was also adamant that the manufacture he was in the process of carrying out, at the time the police executed the search warrant at his address, was the first occasion on which he had carried out such a manufacture himself. In explanation as to where he had obtained all of the necessary articles of equipment assembled in his garage, including the laboratory equipment, the appellant said this had been given to him by a friend who was "on the run". He similarly said that the precursor substances found had also been supplied by the same friend, as well as instruction on the manufacturing process. In answer to questioning about the presence of methamphetamine on the electronic scales and the metal bowl found in the garage, the appellant said this must have been on those items at the time they were given to him. He did not however have a ready explanation as to how further traces of methamphetamine had got onto the work bench in his garage but simply said they must have got there on some occasion when he had been in the garage using methamphetamine he had obtained from others.
[34] The amount of equipment assembled in the appellant’s clandestine methamphetamine laboratory, the quantities of precursor material found, the amount of drug being manufactured and the presence of traces of methamphetamine indicating previous manufacture, render implausible the appellant’s explanation that this was the first occasion on which he had attempted to manufacture methamphetamine and that no others had been involved in the supply of chemicals and precursor substances on any sort of reciprocal or co-operative basis. It is well established that the quantity of chemicals and precursor substances required for the manufacture of methamphetamine involve a degree of organisation and the participation of a number of persons is required to achieve sufficient purchases of pseudoephedrine based medication.
[35] The parr bomb being used by the appellant was found to contain 14.9g of pseudoephedrine and ephedrine. This would have yielded an estimated 5g of pure methamphetamine with a street value of $5,000-7,000. At that time the minimum amount of drug which a person was deemed to be in possession of for the purpose of supply was 56g but on reclassification of methamphetamine as a class A drug the presumption became 5g. Five grams, sold commercially, would be marketed in point bags, each containing one-tenth of a gram. Therefore, even though the amount the appellant was in the process of manufacturing was under the presumption as at that time, it was a saleable quantity.
[36] The appellant claimed to have been using 21/2 grams of methamphetamine per day at the time of his offending and advised the counsellor who assessed him for alcohol and drug addiction that he had been using P in this quantity for about six years. He said he had been supporting this habit by casual labouring and "wheeling and dealing" in second hand cars. He was not in receipt of an unemployment benefit at the time. His self-history of level of addiction and the means he claimed were available to him to support that addiction require to be considered against the unlikelihood that this was the first occasion he had tried to manufacture methamphetamine and was doing so without the involvement of others. In this regard, we agree with MacKenzie J that the scale of his operation and its nature point to production for use other than for simply his own use and an element of dealing by way of supply to others was the reasonable and available inference.
[37] In conclusion, having heard from both Mr Snijder and the appellant, we are satisfied, as was MacKenzie J, that the only available inference is that the appellant had sufficient knowledge to set up a rudimentary laboratory and to carry out the manufacturing process and intended to supply at least part of the methamphetamine he was manufacturing to friends, even though any such intended supply may not have been for financial reward.

The sentence

[38] Mr Stevens submitted that even if the Court were satisfied that MacKenzie J had correctly found an element of supply implicit in the appellant’s manufacturing operation, that did not necessarily bring his offending within the third category in Wallace and Christie and a lesser sentence than that imposed was merited. He referred to the passage in paragraph [26] in Wallace and Christie as set out in [15] above.
[39] The suggested categories in Wallace and Christie for class B drug trafficing are intended as guidance only for a sentencing Court, with recognition that circumstances do vary from case to case and that there is a need for flexibility in applying such guidelines. The third category (identified by MacKenzie J as the appropriate category for the "element of commercial dealing" he found inherent in the appellant’s offending) is described as follows:

For small operations, but representing commercial dealing, starting points of up to five years are appropriate. This necessarily must be a broad category to enable sentences to reflect the many varied circumstances that can arise.

[40] Proceeding on the basis that the appellant had acquired sufficient knowledge to set up a rudimentary laboratory and to carry out the manufacturing process, and that at least some of the methamphetamine he was manufacturing was intended for supply to associates, we are satisfied that the offending was correctly categorised as within the third category of Wallace and Christie although meriting a starting point lower than that identified by MacKenzie J.
[41] In R v Andrell CA69/02 29 August 2002, a case that also involved a claim of high personal use, this Court described the setting up of a methamphetamine laboratory as:

... the conscious assembling of a variety of chemicals, including dangerous chemicals, and the conducting of a relatively sophisticated chemical procedure ...

[42] Mr Andrell was sentenced to cumulative terms of three years imprisonment on two counts of manufacturing methamphetamine (whilst classified a class B controlled drug) on two separate occasions at different venues. He had pleaded guilty to those charges. There were clear commercial overtones to his offending. On appeal this Court took the view that Mr Andrell’s case had features of both the third and second category in Wallace and Christie but that his manufacturing operation could be regarded as continuous rather than two separate operations, and that a total sentence rather than a cumulative sentence should have been imposed. In any event, the Court reduced the overall sentence to one of five years imprisonment after taking account of the guilty pleas.
[43] Although the appellant’s case differs from that of Mr Andrell, the statements of this Court in paragraph [18] are increasingly relevant:

It may be pertinent for us to observe that although this Court's decision in Wallace was delivered only a little over three years ago, the experience of trial Judges in relation to methamphetamine over that period has shown two things. The first is that methamphetamine is a pernicious and highly dangerous drug both in its manufacture and in its effect on those who take it. Even if it is not an offence faced by an accused, it features as a factor in a growing number of serious and violent crimes. The second is that from being a drug only infrequently encountered in the criminal work of the Courts, it is now commonplace and ubiquitous. Police caption summaries regularly inveigh against its prevalence.

[44] The appellant’s offending was not limited to the manufacture of a small quantity for personal use only but is properly to be categorised as a small operation with intended supply of at least part of the product manufactured to associates. As such, a starting point of three rather than four years seems appropriate with a commensurate reduction for the guilty plea. On that basis an end sentence of two years and three months imprisonment is appropriate.

Conclusion

[45] For these reasons the appeal was allowed. The total term of three years imprisonment is quashed and in lieu a sentence of two years and three months imprisonment imposed.

Solicitors:
Fanshaws, Wellington, for Appellant
Crown Law Office, Wellington

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[3]	The facts are that around 1.30am on 17 December 2002 the police executed a search warrant at the appellant’s address under the Misuse of Drugs Act 1975. They found the appellant in the garage carrying out a methamphetamine ‘cook’. He was holding a ‘Parr Bomb’, a reaction vessel used to heat precursor chemicals. On subsequent analysis this was found to contain 14.9g of pseudoephedrine and ephedrine, which would have yielded an estimated 5g of pure methamphetamine with a street value of around $5,000-$7,000. Various chemicals, precursor chemicals, glassware, cookware and other equipment associated with the manufacture of methamphetamine were also located in and around the work bench area in the garage. Traces of methamphetamine were found on the work bench itself, inside a metal bowl and on a set of electronic scales. Twenty tablets of decongestant medicine containing the precursor substance psuedoephedrine were located in the appellant’s utility vehicle. A .38 rifle and 93 live rounds of ammunition were also found in the garage.
[4]	The appellant appealed against the sentence of three years imprisonment imposed on the charge of manufacturing methamphetamine on the grounds that a remark attributed to him by the probation officer who wrote the pre-sentence report was in dispute and did not support the Crown’s assertion that there was a commercial element to his offending. It was submitted that the sentencing Judge, MacKenzie J, had failed to consider the application of s 24 of the Sentencing Act 2002 to that disputed remark and had also given weight to further factors that did not support a finding of commercial dealing.
[5]	A further and related ground of appeal was that the sentence imposed was manifestly excessive.

[8]	MacKenzie J was satisfied that he should accept that statement as having been made by the appellant, in preference to the appellant’s denial through counsel that he had made the statement.
[9]	The three further factors that led MacKenzie J to draw, as a reasonable inference, that the methamphetamine being produced was not intended solely for the appellant’s own use, were the apparent sophistication of the operation (evidenced by the amount of equipment and precursor substances assembled reflecting a considerable amount of planning), the quantities of precursor materials found and the appellant’s financial situation. In relation to the latter, the appellant was recorded as having been in receipt of an unemployment benefit at the time of his offending, with no visible means of other support. This factor led MacKenzie J to conclude that he could not have sustained his manufacturing operation "without some recompense from others by way of sale or in some other manner".
[10]	On the basis of all four of those factors, MacKenzie J rejected the appellant’s submission that the methamphetamine was solely for his own use, but did accept that the evidence did not enable him to draw any inference other than that any intended supply was to the appellant’s friends only. Nevertheless, he considered that a disposal of that nature brought the offending within the third category of R v Wallace and Christie [1999] 3 NZLR 159.
[11]	In determining the appropriate length of sentence, MacKenzie J took into account, as relevant aggravating factors, the appellant’s prior convictions for possession of cannabis in 1990 and 1997 and for possession of drug instruments in 2001, the level of premeditation involved in the manufacture of methamphetamine and the growing prevalence of clandestine drug laboratories. He identified a starting point of four years imprisonment and from that made a 25% deduction for the appellant’s guilty plea, which he found to be the only real mitigating factor. An end sentence of three years imprisonment was reached.

[12]	The appeal focussed on MacKenzie J’s finding that there was "an element of commercial dealing" in the appellant’s offending, which categorised it as within the third category in Wallace and Christie.
[13]	Mr Stevens submitted that this approach was wrong in fact and in law. In terms of fact, he submitted that there was no basis upon which MacKenzie J could have accepted that any commercial element was proved. The appellant had disputed both the statement attributed to him in the pre-sentence report and the Crown’s assertion that this reflected a commercial element, and McKenzie J should have had regard to s 24(1) of the Sentencing Act 2002 and not determined the issue simply by drawing inferences from the circumstances of the offending and the disputed remark in the pre-sentence report. Mr Stevens further argued that, even if the Judge had been entitled to disregard the procedure provided by s 24(2), the inferences that he drew were not reasonably available to him on the evidence. In particular, he was not entitled to make an adverse finding of credibility as a result of the disputed remark, without hearing evidence from either the appellant or the probation officer who wrote the report.
[14]	Mr Stevens was also critical of the other factors taken into account by the Judge. He said that it was not correct that the appellant was in receipt of an unemployment benefit at the time of his arrest; rather he had been employed in casual labouring as noted in various documentation on the Court file. Nor did the quantities of precursor materials actually found (which included a 20 litre drum four-fifths full of toluene and a 20 litre drum containing ethanol), or the fact that the manufacture of methamphetamine requires a considerable assemblage of equipment and volume of precursor materials, render its manufacture "inherently unlikely" to be undertaken solely for personal use. He said:

[16]	The application of s 24 of the Sentencing Act 2002 was considered in R v Dunsmuir CA439/02 23 July 2003. In that case the Court noted that s 24 "codifies the process by which facts are established for sentencing purposes".
[17]	Section 24 provides as follows:

[26]	The appellant also commented on the fact that the word "enjoyed" is not actually recorded in the questionnaire as part of his response, but is used in the report as part of his response. He says "this may not seem like a big change but I think it shows that Mr Snijder was changing what I said".
[27]	In relation to drug use prior to committing the offence, the appellant stated:

[31]	Cross-examination of Mr Snijder by Mr Stevens and of the appellant by Ms Markham proved helpful and enabled the Court to reach a firm conclusion about the disputed matters. In the result, we were satisfied that although Mr Snijder had not recorded verbatim all of the appellant’s answers to the formatted questions, he had correctly interpreted the answers the appellant gave when noting them in narrative form on the questionnaire. Mr Snijder was firm that he could clearly remember the appellant giving the disputed answer in response to a direct question of what "he stood to gain from committing the offence" and further said that he and the appellant well understood what each was saying. In this regard it is relevant to note that their professional relationship preceded this interview and that they were familiar with each other’s style. The questionnaire that was completed at that interview subsequently formed the basis of the probation report Mr Snijder wrote for the Court.
[32]	We were impressed by Mr Snijder’s frankness in conceding that he had not recorded all of the appellant’s answers to the questionnaire verbatim but had recorded the essence in terms relevant to the criminogenic needs assessment he was completing. That frankness did not detract from our conclusion that his record of the appellant’s answers was in essence correct but, rather, enhanced it. Mr Snijder is clearly an experienced probation officer and this was reflected in the manner in which he had taken the appellant through the required questions, recorded his answers and subsequently encapsulated them in the pre-sentence report.
[33]	The appellant was however adamant under cross-examination that he did not intimate to Mr Snijder that any of the methamphetamine that he was manufacturing was intended for his associates, and that Mr Snijder had misinterpreted his answers to critical questions. He was also adamant that the manufacture he was in the process of carrying out, at the time the police executed the search warrant at his address, was the first occasion on which he had carried out such a manufacture himself. In explanation as to where he had obtained all of the necessary articles of equipment assembled in his garage, including the laboratory equipment, the appellant said this had been given to him by a friend who was "on the run". He similarly said that the precursor substances found had also been supplied by the same friend, as well as instruction on the manufacturing process. In answer to questioning about the presence of methamphetamine on the electronic scales and the metal bowl found in the garage, the appellant said this must have been on those items at the time they were given to him. He did not however have a ready explanation as to how further traces of methamphetamine had got onto the work bench in his garage but simply said they must have got there on some occasion when he had been in the garage using methamphetamine he had obtained from others.
[34]	The amount of equipment assembled in the appellant’s clandestine methamphetamine laboratory, the quantities of precursor material found, the amount of drug being manufactured and the presence of traces of methamphetamine indicating previous manufacture, render implausible the appellant’s explanation that this was the first occasion on which he had attempted to manufacture methamphetamine and that no others had been involved in the supply of chemicals and precursor substances on any sort of reciprocal or co-operative basis. It is well established that the quantity of chemicals and precursor substances required for the manufacture of methamphetamine involve a degree of organisation and the participation of a number of persons is required to achieve sufficient purchases of pseudoephedrine based medication.
[35]	The parr bomb being used by the appellant was found to contain 14.9g of pseudoephedrine and ephedrine. This would have yielded an estimated 5g of pure methamphetamine with a street value of $5,000-7,000. At that time the minimum amount of drug which a person was deemed to be in possession of for the purpose of supply was 56g but on reclassification of methamphetamine as a class A drug the presumption became 5g. Five grams, sold commercially, would be marketed in point bags, each containing one-tenth of a gram. Therefore, even though the amount the appellant was in the process of manufacturing was under the presumption as at that time, it was a saleable quantity.
[36]	The appellant claimed to have been using 21/2 grams of methamphetamine per day at the time of his offending and advised the counsellor who assessed him for alcohol and drug addiction that he had been using P in this quantity for about six years. He said he had been supporting this habit by casual labouring and "wheeling and dealing" in second hand cars. He was not in receipt of an unemployment benefit at the time. His self-history of level of addiction and the means he claimed were available to him to support that addiction require to be considered against the unlikelihood that this was the first occasion he had tried to manufacture methamphetamine and was doing so without the involvement of others. In this regard, we agree with MacKenzie J that the scale of his operation and its nature point to production for use other than for simply his own use and an element of dealing by way of supply to others was the reasonable and available inference.
[37]	In conclusion, having heard from both Mr Snijder and the appellant, we are satisfied, as was MacKenzie J, that the only available inference is that the appellant had sufficient knowledge to set up a rudimentary laboratory and to carry out the manufacturing process and intended to supply at least part of the methamphetamine he was manufacturing to friends, even though any such intended supply may not have been for financial reward.