Mackie v R [2012] NZCA 588 (14 December 2012)

Last Updated: 19 December 2012

IN THE COURT OF APPEAL OF NEW ZEALAND

CA196/2012 [2012] NZCA 588

BETWEEN CHARLES ALEXANDER MACKIE Appellant

AND THE QUEEN Respondent

Hearing: 19 November 2012

Court: White, Miller and Asher JJ

Counsel: S N Hewson for Appellant P D Marshall for Respondent

Judgment: 14 December 2012 at 11.30am

JUDGMENT OF THE COURT

A The appeal against sentence is allowed.

2. The order for forfeiture to the Crown of 100 per cent of the appellant’s interest in the property at 40 Sarah Street, Waikawa Beach, is quashed and replaced with an order for forfeiture of 50 per cent of such interest.

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REASONS OF THE COURT

(Given by White J)

[1] Mr Mackie appeals against his sentence on one charge of cultivating cannabis on the ground that an order for the forfeiture of his property where the cannabis was cultivated ought not to have been made or was manifestly excessive when the seven months that he had been in prison on remand is taken into account.
[2] The single charge of cultivating cannabis, to which Mr Mackie pleaded guilty, was brought following a police search of his property at 40 Sarah Street, Waikawa Beach. The search revealed that Mr Mackie was making extensive use of his property for cultivating cannabis:

(a) One bedroom was used as a vegetative growing room. It was completely lined with polythene, lit by two high-powered growing lights, and contained fans, heaters and numerous fertilisers. Twenty-six large “mother plants” and 575 cuttings or rooted clones were found in this room.

(b) The garage was used as the flowering room. It was lit by six height-adjustable growing lamps attached to timers, and utilised ventilation ducting and fans. A hygrometer monitored temperature and humidity levels. The room housed 108 cannabis plants: 82 of them about 30 cm in height and 26 approximately one metre tall.

(c) The master bedroom was used to dry cannabis. Twenty-six plants were found drying in a wardrobe along with two dehydrators. Police also located three zip-lock bags, holding a total of 69 grams of dried cannabis head.

[3] Scales, various drug paraphernalia and a firearm were found in the house, as well as $490.70 in Mr Mackie’s wallet. He accepted that there was “a commercial component” to his offending. An ESR report on the growing operation assessed its sophistication level as “fair to average” but was unable to estimate yield. There was evidence of at least one previous crop.
[4] The police estimated that Mr Mackie’s 26 flowering plants would produce between one and three ounces of head, with six harvests each year. Assuming sales by the ounce, it was estimated that the operation was capable of generating an annual income of between $46,800 and $140,000.
[5] A forensic accountant analysed Mr Mackie’s financial affairs for the five year period between 31 October 2006 and 31 October 2011. He concluded that Mr Mackie “must have had access to funds outside his financial system [his bank accounts], because crucial expenditure items were too low or missing”.
[6] At sentencing in the High Court at Palmerston North on 3 April 2012, Ronald Young J ordered that Mr Mackie’s property be forfeited to the Crown and that he be convicted and discharged.[1]
[7] Forfeiture of the property was ordered because: there had been extensive use of the property for the cultivation of cannabis; Mr Mackie had previously been convicted of cultivating cannabis from the same house and had been warned that he was vulnerable to forfeiture; there was evidence of at least one previous harvest and future cannabis cultivation was clearly planned; and the cannabis involved was worth tens of thousands of dollars.[2]
[8] The Judge did not accept Mr Mackie’s claim that there would be undue hardship to him and his son from forfeiture of the property.[3] The Judge accepted that forfeiture would make it difficult for Mr Mackie, aged 52, to re-establish himself, but it was not impossible and forfeiture was the proper order when repetitive offending involving a large amount of cannabis was involved. The Judge was sympathetic to the position of Mr Mackie’s 22 year old son who had apparently been diagnosed with a mental illness and had an inheritance expectation in respect of the property. But the Judge considered that Mr Mackie and his son would be able to rent accommodation in the same area and be able to be together with their own family.
[9] Considering an appropriate term of imprisonment for the offence,[4] the Judge selected a starting point of three years six months, which he uplifted by three months for the previous convictions. The Judge indicated he would have deducted one year (27 per cent) for the guilty plea so that the final period of imprisonment would have been two years nine months (33 months).[5]
[10] Recognising that Mr Mackie had spent seven months in custody awaiting sentencing and that he would probably have been released on parole after serving at least 50 per cent of his sentence because of his past offending, and taking into account Mr Mackie’s equity in the property being forfeited (about $100,000), the Judge concluded that no further imprisonment was required.[6] Mr Mackie was accordingly convicted and discharged. The Judge therefore effectively imposed a sentence of forfeiture and 14 months’ imprisonment.
[11] The Crown did not dispute that the reasons why Mr Mackie had remained in custody on remand for seven months before being sentenced were: first, because having been advised by his lawyer that a prison sentence was inevitable, he did not seek bail after he pleaded guilty on 7 September 2011; second, the Crown did not file its application for a restraining order relating to the property until 7 December 2011; third, sentencing was adjourned to enable the forfeiture application to be considered as a component of sentencing as required by s 10B of the Sentencing Act 2002; and fourth, through no fault of Mr Mackie, sentencing did not occur until 3 April 2012.
[12] The issue on this appeal therefore is whether, when the effective sentence of 14 months’ imprisonment is taken into account, the order for forfeiture of 100 per cent of Mr Mackie’s interest in the property was manifestly excessive.
[13] The relevant statutory provisions are ss 10B and 142N of the Sentencing Act, which were enacted by ss 7 and 10 of the Sentencing Amendment Act 2009 for the purpose of making it clear that a forfeiture order should be taken into account as part of the sentencing process and not treated separately from the process.[7] At the same time it was not intended that the courts should be prevented from imposing appropriate sentences on culpable criminals. It was still intended that penalties for committing crime would be consistent and proportionate. The importance of a proportionate response in this context has been recognised recently by the United Kingdom Supreme Court.[8]
[14] Implementing these purposes, s 10B(1) provides that a sentencing court must take into account a forfeiture order and s 10B(2) provides that in doing so the court must have regard to the value of the property and the nature and extent of the offender’s interest in it. Then the court is given a discretionary power to make a forfeiture order by s 142N(1) taking into account if relevant the factors referred to in s 142N(2), which provides:

(2) In considering whether or not to make an instrument forfeiture order under subsection (1) in respect of particular property, the court may have regard to—

(a) any matter raised in an application for relief under section 142J; and

(b) the use that is ordinarily made, or was intended to be made, of the instrument of crime; and

(c) any undue hardship that is reasonably likely to be caused to any person by the operation of such an order; and

(d) the nature and extent of the offender’s interest in the instrument of crime (if any), and the nature and extent of any other person’s interest in it (if any); and

(e) in addition to the matters referred to in section 77(1) of the Criminal Proceeds (Recovery) Act 2009, any other matter relating to the nature and circumstances of the qualifying instrument forfeiture offence or the offender, including the gravity of the qualifying instrument forfeiture offence.

[15] The focus on “undue hardship” reflects the fact that hardship is an inevitable consequence of a forfeiture order and will only be “undue” where there is:[9]

... gross or severe disproportion between the gravity of the offending and the value of the property sought to be forfeited coupled with other punishment inflicted on the offender.

[16] As the cases show, “hardship” may occur in a wide range of different circumstances. Relevant factors may include the age, health and financial circumstances of the offender and any partner or relative of the offender likely to be affected by the order as well as the nature and consequences of an order for the offender and such persons.
[17] The fact that an exercise in proportionality is involved is also recognised by the decision of this Court in Elliot v R where it was held that the new legislation altered the previous law and enabled a forfeiture order of part of the property.[10] As both this Court[11] and the Supreme Court[12] have recognised, the question whether there should be total or partial forfeiture requires a factual assessment rather than the application of any legal principle. This means that, apart from the need to ensure consistency of sentencing in broad terms,[13] examination of forfeiture orders in other cases is unlikely to be of much assistance. The variations from case to case in levels of criminal culpability and the application of the matters referred to in s 142N(2), especially the differences in “hardship”, are likely to make comparisons of relatively limited assistance.
[18] In the present case we are satisfied essentially for the reasons given by Ronald Young J that an order for the forfeiture of Mr Mackie’s property at 40 Sarah Street, Waikawa Beach, was warranted. We agree with the Judge that Mr Mackie’s previous conviction for cultivating cannabis from the same house, the nature and extent of the cultivation on this occasion, the value of the crop and the absence of “undue hardship” grossly or severely disproportionate to forfeiture itself meant that an order was inevitable.
[19] But the Judge did not consider, at least expressly, the separate question whether the order should have been for 100 per cent of Mr Mackie’s interest in his property or a lesser percentage.
[20] For the following reasons we are satisfied that an order for forfeiture of 100 per cent of Mr Mackie’s interest in the property was not justified:

(a) The house was purchased in 1989, with a significant contribution from Mr Mackie’s grandmother. It has been used as a family home for 23 years.

(b) While Mr Mackie’s cannabis cultivation operation involved “a commercial component”, its level of sophistication was only “fair to average” and was not part of a larger enterprise, such as one involving a gang. We note that apart from the scale of the operation there were no significant indicia of commerciality in the sense of large sums of cash or tick lists, or an enhanced lifestyle. He has a back injury and is a heavy user of cannabis, and claims that it gives him pain relief.

(c) His previous convictions were also taken into account in the three month uplift.

(d) A plea of guilty was entered.

(e) His $100,000 equity in the property valued at $170,000 was his only significant asset (unlike the offender in Brazendale he did not have a second property).

(f) He only manages to obtain spasmodic employment, and his earning capabilities are limited.

(g) At the age of 52 and with a son with a mental illness any opportunity for Mr Mackie to re-establish himself was severely reduced. At his age and with his employment prospects he is unlikely to recover any of the capital lost through forfeiture.

[21] A sentence of an effective term of imprisonment of 14 months and forfeiture of 100 per cent of his interest in the property was therefore severely disproportionate to his culpability and personal circumstances, which warranted a more modest penalty.

[22] Accordingly, in our view the sentence was manifestly excessive and an order for forfeiture of 50 per cent of Mr Mackie’s interest in the property should be made. This order will still probably force the sale of the property because Mr Mackie is unlikely to be able to afford a mortgage, but it should leave him with some limited capital for the rest of his life.
[23] We have considered the decisions in the other recent cases cited to us by Crown counsel, as well as the decision of this Court in Macpherson v R,[14] but do not consider that any of them leads to either a forfeiture order of 100 per cent or some different lower percentage in the particular circumstances of Mr Mackie’s case.
[24] The appeal against sentence is therefore allowed. The order for forfeiture to the Crown of 100 per cent of the Mr Mackie’s interest in the property at 40 Sarah Street, Waikawa Beach, is quashed and replaced with an order for forfeiture of 50 per cent of such interest.

Solicitors:
Ord Legal, Wellington for Appellant
Crown Law Office, Wellington for Respondent

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[1] R v Mackie [2012] NZHC 637.
[2] At [10]–[11].
[3] At [12]–[19].
[4] At [26]–[28].

[5] At [28]–[29], the Judge records the deduction as equating to 30 months, which is a miscalculation.
[6] At [28]–[30].

[7] Criminal Proceeds (Recovery) Bill 2007 (81–1) (explanatory note) at 4; and introductory speech by Minister of Justice: (20 March 2007) 638 NZPD 8121.
[8] R v Waya [2012] UKSC 51.

[9] Lyall v Solicitor-General [1997] 2 NZLR 641 (CA) at 647; and Brazendale v R [2011] NZCA 494, (2011) 25 CRNZ 580 at [35]–[36] (application for leave to appeal to Supreme Court dismissed: Brazendale v R [2011] NZSC 149).

[10] Elliot v R [2011] NZCA 386 [2011] 3 NZLR 811 at [54] (cited with apparent approval by the Supreme Court when dismissing the application for leave to appeal in Brazendale v R, above n 9, at [2]).

[11] Elliot v R, above n 10, at [54]; Brazendale v R, above n 9 at [45]–[50] (CA); and Macpherson v R [2012] NZCA 552 at [64].
[12] Brazendale v R, above n 9, at [2].
[13] Sentencing Act 2002, s 8(e).
[14] Macpherson v R, above n 11.