Ho v R [2015] NZCA 320 (22 July 2015)

Last Updated: 31 July 2015

IN THE COURT OF APPEAL OF NEW ZEALAND
CA512/2014 [2015] NZCA 320
BETWEEN	TUAN ANH HO Appellant
AND	THE QUEEN Respondent
CA518/2014
BETWEEN	LEIGHTON KENNETH HOE Appellant
AND	THE QUEEN Respondent
CA535/2014
BETWEEN	ANDREI MIKOYAN KUPKOVIC Appellant
AND	THE QUEEN Respondent

Hearing:	6 July 2015
Court:	White, Keane and Kós JJ
Counsel:	P K Hamlin for Appellant Ho A G Speed for Appellant Hoe M A Edgar for Appellant Kupkovic J M O’Sullivan for Respondent
Judgment:	22 July 2015 at 2.30 pm

JUDGMENT OF THE COURT

1. The applications for extensions of time within which to appeal are granted.
2. The appeals against sentence are dismissed.

____________________________________________________________________

REASONS OF THE COURT

(Given by White J)

[1] The three appellants appeal against their sentences for drug offending imposed by Brewer J in the High Court at Auckland.^[1]
[2] Mr Kupkovic was sentenced to 15 years’ imprisonment with a minimum period of imprisonment (MPI) of seven and a half years after he pleaded guilty to two charges of manufacturing methamphetamine, one being a representative charge, one representative charge of supplying methamphetamine, one charge of possession of methamphetamine for supply, one charge of possession of a precursor substance, one charge of possession of equipment and one charge of possession of materials.^[2]
[3] Mr Ho was sentenced to 12 and a half years’ imprisonment after he pleaded guilty to one representative charge of manufacturing methamphetamine, one representative charge of supplying methamphetamine and one charge of receiving stolen property.^[3]
[4] Mr Hoe was sentenced to seven years’ imprisonment after he pleaded guilty to one representative charge of manufacturing methamphetamine.^[4]
[5] The sentences were imposed after a five-day disputed facts hearing under s 24(2) of the Sentencing Act 2002 to determine the quantities of methamphetamine manufactured by the appellants. In a comprehensive judgment Brewer J concluded he would sentence the appellants on the representative charges of manufacturing methamphetamine on the following basis:^[5]

• (a) Mr Kupkovic: 2,025 grams.
• (b) Mr Ho: 1,552 grams.
• (c) Mr Hoe: 607 grams.

[6] Each of the appellants challenges his sentence on the ground that it was manifestly excessive. Mr Kupkovic’s challenge to his MPI was not pursued on appeal, but he challenges the Judge’s factual findings relating to the 2025 grams. The other appellants do not challenge the amounts the Judge found in respect of their involvement.
[7] The appeals were filed out of time. Applications for extensions of time within which to appeal are granted without opposition from the Crown.
[8] It is common ground that the approach to sentencing for methamphetamine offending is settled by the judgment of this Court in R v Fatu where four bands were identified:^[6]

[42] Where the Crown can establish that large quantities of methamphetamine have been manufactured, the Court may regard the criminality in gearing up to manufacture as being absorbed by the culpability of the primary offending. In other cases, where the evidence as to how much was manufactured is uncertain, the position is different. Nonetheless it is right to recognise that methamphetamine manufacture is always (or almost always) going to involve significant commerciality. We say this because the difficulties, expense and risks involved in manufacturing methamphetamine make it inherently unlikely that such an operation would be set up to produce drugs for purely personal consumption.

[43] In those circumstances we consider that appropriate sentencing bands for those who are the primary offenders in methamphetamine manufacturing operations should be based on uplifts of 10 per cent – 20 per cent on those applicable in the case of importers:

(a) Band one — not applicable for reasons given in para [42].

(b) Band two — manufacturing up to 250 g — four years’ to 11 years’ imprisonment.

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

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

The sentence imposed must reflect not only the quantity of the drug involved, but also the role of the particular offender in the manufacturing ring in question. Findings of fact in this area must, of course, be made in accordance with s 24(2)(c) of the Sentencing Act.

[9] It is convenient to deal with the three appellants separately.

Mr Kupkovic

[10] Finding that Mr Kupkovic’s offending was “deep within” band four of Fatu, Brewer J adopted a starting point of 16 years’ imprisonment for the lead charges of manufacturing methamphetamine.^[7] The finding was based on the following factors:

• (a) Mr Kupkovic was the “ringleader” who had instigated most of the manufacturing.^[8]
• (b) He had the manufacturing skills and equipment as well as the supply networks.^[9]
• (c) He manufactured at least 2,025 grams on 30 occasions, using significant quantities of precursor substances.^[10]
• (d) When the police executed a search warrant at his home address, they found Mr Kupkovic in the process of manufacturing methamphetamine and in possession of precursor substances and $27,000 in cash.^[11]
• (e) Mr Kupkovic also personally supplied methamphetamine on a retail basis: 130 grams over seven identified transactions to a total value of $130,000.^[12]

[11] The Judge then uplifted the starting point by one year for the other offences which Mr Kupkovic was charged with making a combined starting point of 17 years’ imprisonment.^[13] At the same time, however, the Judge decided not to uplift the sentence further for Mr Kupkovic’s previous methamphetamine convictions in 2008 and 2009, which included another manufacturing conviction.^[14] This decision reflected totality concerns and the Judge’s view that Mr Kupkovic was not the sort of hard-hearted, commercially-motivated career criminal for whom the prospects of rehabilitation and reintegration must be minimal.
[12] Finally, the Judge allowed a discount of approximately 10 per cent for Mr Kupkovic’s guilty pleas and rounded the sentence down to 15 years’ imprisonment.^[15] In limiting the discount to 10 per cent, the Judge took into account the fact that Mr Kupkovic had conceded manufacturing only a total of 349 grams, which required the lengthy and detailed disputed facts hearing to establish the extent of his offending.
[13] The MPI, which is no longer challenged, was also imposed.
[14] For Mr Kupkovic, Mr Edgar submits: there was no proper basis from the evidence and/or insufficient evidence at the disputed facts hearing to support the Judge’s finding as to the likely yield; the combined starting point was too high; there was no credit for efforts at rehabilitation; and there was insufficient credit for the guilty plea. Mr Edgar was particularly critical of the Judge’s finding as to yield, which he submitted was based on unreliable evidence, speculation and inappropriate inferences that did not support the six key points relied on by the Crown to establish a pattern of manufacturing using sets of Contac NT.^[16] Contac NT is a source of pseudoephedrine, which is converted to methamphetamine in the manufacturing process.
[15] In the course of argument, however, Mr Edgar accepted that:

• (a) it was for the Judge at the disputed facts hearing to be satisfied beyond reasonable doubt that the prosecutor had proved the yield;^[17]
• (b) it was open to the Judge to accept the prosecution evidence, especially in the absence of any evidence called for the defence;
• (c) it was open to the Judge to make findings based on inferences logically drawn from proven facts as long as they were not mere speculation or guesswork;^[18]
• (d) it is clear from the disputed facts judgment that the Judge was careful to draw only appropriate inferences from the text messages between the appellants relating to the quantities involved in their methamphetamine manufacturing that were logically able to be drawn;^[19] and
• (e) the fact that methamphetamine manufacturing had been proved on some occasions meant that it was open to the Judge to infer from the evidence that it had occurred on other occasions as well.

[16] We therefore accept Ms O’Sullivan’s submission for the Crown that Brewer J’s assessment of the yield and scale of offending was accurate. As Ms O’Sullivan pointed out, Mr Kupkovic’s submissions did not analyse the evidence from the disputed facts hearing or indicate what finding as to yield the Judge should have made. Brewer J made a conservative estimate of the amount manufactured based on evidence of the quantities of precursor substances received, the amounts of Contac NT and cash located at the scene, and the intercepted communications relating to Mr Kupkovic.
[17] This conclusion is also reinforced by the following factors:

• (a) The text messages and intercepted communications were reliable evidence. There was no challenge to their attribution or reliability at the disputed facts hearing.
• (b) The Judge’s decision about the meaning of the expression “going to work” as referring to a completed manufacture was based on other evidence including the timing of supply afterwards.^[20] The Judge identified each occasion on which there was a completed manufacture.^[21]
• (c) The Judge’s inference as to the amount of methamphetamine manufactured from a set of Contac NT was not only conservative but was also based on an expert report, the amounts of other precursors purchased, and the scale on which methamphetamine was sold.^[22]

[18] Once the Judge’s finding that Mr Kupkovic had been involved in the manufacture of at least 2,025 grams of methamphetamine is upheld, there is little doubt that the manufacturing was correctly described by the Judge as being “deep within” band four of Fatu. On this basis the starting point of 16 years’ imprisonment was well within range.^[23] A starting point of 18 years might have been taken, especially as Mr Kupkovic was the ringleader.^[24]
[19] The uplift of one year for the other charges was lenient as, on its own, the supply charge could have resulted in a starting point of around six years’ imprisonment.^[25]
[20] We do not accept Mr Edgar’s submission that the Judge erred in not giving Mr Kupkovic a discount for his personal circumstances. In a case involving offending of this nature, such circumstances are of secondary importance to the need for deterrence.^[26] Furthermore, the Judge could have, but did not, impose an uplift for Mr Kupkovic’s relevant and recent methamphetamine convictions.
[21] The Judge’s discount of about 10 per cent for Mr Kupkovic’s guilty plea was fully justified in our view because the prosecution case was strong and because Mr Kupkovic did not accept guilt for the full extent of his offending. The Supreme Court has recognised in Hessell v R that both of these factors may warrant a reduction in the discount.^[27]
[22] For these reasons, we are not persuaded that any of Mr Kupkovic’s challenges to the sentencing process has been established or that his final sentence was manifestly excessive.

Mr Tuan Ho

[23] In sentencing Mr Ho, Brewer J took into account the following factors:

• (a) Mr Ho was Mr Kupkovic’s “assistant” who played important roles in sourcing material needed to manufacture methamphetamine and in helping Mr Kupkovic manufacture methamphetamine.^[28]
• (b) Mr Ho participated in the manufacture of at least 1,552 grams of methamphetamine on 23 occasions and, in return, was supplied with methamphetamine for personal use and for sale on a commission basis.^[29]
• (c) At the same time Mr Ho was also supplying methamphetamine on a retail basis: a total of between 100 and 150 grams worth between $100,000 and $150,000.^[30]
• (d) When Mr Ho’s property was searched, the police found $2,800 cash, two stolen iPhones and a stolen iPad.^[31]

[24] Taking into account the amount of drugs involved and Mr Ho’s secondary role as an active assistant, the Judge adopted a starting point of 14 years’ imprisonment at the lower end of band four of Fatu.^[32]
[25] The Judge then uplifted the sentence by one year for the supply charges, but made no further uplift for the separate charge of receiving stolen property.^[33]
[26] Notwithstanding Mr Ho’s minor previous convictions for dishonesty, the Judge treated him as a first offender and applied no uplift for his previous offending.^[34]
[27] While the Judge did not consider that remorse had any real role to play, he gave a discount of 10 per cent for the guilty plea.^[35] This reflected the fact that Mr Ho’s position prior to the disputed facts hearing was that he had participated in the manufacture of only 600 grams.^[36]
[28] Taking into account Mr Ho’s personal circumstances, namely his addiction, his lack of money or assets, his efforts to rehabilitate himself and his candour with the police, the Judge allowed a further reduction of 12 months, giving an end sentence of 12 and a half years’ imprisonment.^[37]
[29] For Mr Ho, Mr Hamlin submits: the starting point was too high and did not adequately reflect Mr Ho’s much lesser role in the offending; a discount should have been given for Mr Ho’s personal circumstances; and the discount for the guilty plea was insufficient because the scale of offending alleged by the Crown (1,080–2,160 grams) was not proved at the disputed facts hearing and Mr Ho co-operated with the police from an early stage. Mr Hamlin stressed in particular Mr Ho’s lesser role as an “assistant” to Mr Kupkovic.
[30] We do not agree that Mr Ho’s starting point was too high:

• (a) The quantity of methamphetamine involved in his manufacturing (1,552 grams), which is no longer disputed, takes him well within band four of Fatu.
• (b) There is no reason to interfere with the Judge’s finding that Mr Ho was an active assistant to Mr Kupkovic: he was more than a mere “foot soldier”.^[38]
• (c) A starting point of two years below that of Mr Kupkovic was therefore appropriate.

[31] Nor do we agree that the Judge erred in having only minor regard to Mr Ho’s personal circumstances. The Judge gave Mr Ho a significant discount of 12 months (seven per cent) for these factors, including his rehabilitation efforts. Mr Ho’s previous convictions for shoplifting and theft meant that he was not entitled to a discount for previous good character.^[39]
[32] The guilty plea discount was appropriate in view of the strength of the prosecution case and the fact that Mr Ho did not accept guilt for the full extent of his offending until after the disputed facts hearing and decision.^[40]
[33] We are therefore not persuaded that any of Mr Ho’s challenges to the sentencing process has been established or that his final sentence was manifestly excessive.

Mr Leighton Hoe

[34] In sentencing Mr Hoe, Brewer J took into account the following factors:

• (a) Mr Hoe was a party to the manufacture of at least 607 grams of methamphetamine produced over nine occasions.^[41] This was less than the Crown allegation of 495 to 990 grams.^[42]
• (b) Prior to the disputed facts hearing, Mr Hoe denied any direct involvement with manufacturing methamphetamine at all.^[43]
• (c) Mr Hoe’s main involvement was delivering caustic soda to the other appellants.^[44] He also stayed at the property where the methamphetamine was manufactured and assisted or encouraged the manufacture.
• (d) Mr Hoe was not as blameworthy as either Mr Kupkovic or Mr Ho.^[45]

[35] On the basis of these factors, Brewer J adopted a starting point of 10 years’ imprisonment, within band three of Fatu.^[46] He then added an uplift of six months for Mr Hoe’s previous drug offending (three prior convictions for cultivating cannabis, one conviction for possession of cannabis, and another for possession of cannabis for supply).^[47]
[36] The Judge reduced the sentence by 18 months (from 10 and a half years’ down to nine years’ imprisonment) to recognise Mr Hoe’s personal factors: work in stable employment; steps taken to address his addiction; and restrictive bail conditions between charge and sentence.^[48]
[37] The Judge gave Mr Hoe a 15 per cent discount for his guilty plea, which was greater than the discounts for the other appellants, because he had asked for a sentencing indication at the first opportunity and the disputed facts hearing was not resolved solely in the Crown’s favour.^[49]
[38] The Judge then reduced the sentence by a further eight months from seven years and eight months’ to seven years’ imprisonment. The Judge explained this reduction:^[50]

Standing back and looking at your offending in the round, you did not benefit financially from the manufacturing. You obtained methamphetamine as your principal reward. However, you were more actively involved in the operation than someone who did odd jobs for a bit of meth. And you have served three terms of imprisonment before for drug offending. On a totality basis, I will impose a final sentence of seven years’ imprisonment. There will be no minimum period of imprisonment.

[39] For Mr Hoe, Mr Speed submits: the starting point was too high; the discount for rehabilitation efforts should have been higher; a 25 per cent discount for the guilty plea should have been allowed; and there should not have been any uplift for the previous cannabis offending. Mr Speed relied in particular on the decision of this Court in Cave v R to support a greater discount (or lower starting point) for Mr Hoe’s lesser role in the offending.^[51]
[40] We do not agree that Mr Hoe’s starting point was too high:

• (a) Involvement with the manufacture of more than 600 grams of methamphetamine, which is no longer disputed, placed the offending on yield alone into band four of Fatu.
• (b) There is no reason to interfere with the Judge’s assessment of Mr Hoe’s role and overall culpability in comparison with the other appellants as a significant secondary offender.
• (c) The decision in Cave v R may be distinguished on the grounds that Mr Cave’s role was much more limited than Mr Hoe’s.
• (d) A starting point of 10 years, between bands two and three of Fatu, was therefore appropriate.

[41] Nor do we agree that the Judge erred in the six-month uplift for Mr Hoe’s previous drug offending. An uplift for those convictions was available.^[52] The fact that they involved cannabis rather than methamphetamine offending is not material.^[53]
[42] The Judge’s discount for Mr Hoe’s rehabilitation efforts was not insufficient. The Judge’s discount of 18 months (15 per cent) for Mr Hoe’s personal factors and final sentence reduction of eight months (nine per cent) gave more than adequate recognition to all of Mr Hoe’s relevant personal mitigating factors.
[43] The guilty plea discount was appropriate in view of the strength of the prosecution case and the fact that Mr Hoe did not accept guilt for the full extent of his offending until after the disputed facts hearing and decision.^[54] The fact that the disputed facts hearing was not resolved entirely in the Crown’s favour was reflected in the greater discount given to Mr Hoe in comparison to the discounts given to the other appellants.
[44] We are therefore not persuaded that any of Mr Hoe’s challenges to the sentencing process has been established or that his final sentence was manifestly excessive.

Result

[45] Accordingly, the applications for extension of time within which to appeal are granted, but the appeals are dismissed.

Solicitors:
Legal Services Commissioner, Auckland for Appellant Ho
Crown Solicitor, Wellington for Respondent

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^[1] R v Kupkovic [2014] NZHC 1946 [sentencing notes].

^[2] At [60].

^[3] At [61].

^[4] At [62].

^[5] R v Kupkovic [2014] NZHC 1645 [disputed facts judgment] at [333].

^[6] R v Fatu [2005] NZCA 278; [2006] 2 NZLR 72 (CA).

^[7] Sentencing notes, above n 1, at [34].

^[8] At [8].

^[9] At [8].

^[10] At [11].

^[11] At [11].

^[12] At [14].

^[13] At [34]–[35].

^[14] At [36].

^[15] At [37].

^[16] Disputed facts judgment, above n 5, at [262]–[269].

^[17] Sentencing Act 2002, s 24(2)(c).

^[18] R v Puttick (1985) 1 CRNZ 644 (CA) at 647 and R v Kinghorn [2014] NZCA 168 at [20].

^[19] Disputed facts judgment, above n 5, at [270]–[312].

^[20] For example see disputed facts judgment, above n 5, at [79], [95], [104], [163], [228], [239], [243]–[244], [250] and [255].

^[21] At [48], [53], [60], [66], [72], [79], [90], [96], [101], [105], [112], [117], [122], [133], [139], [147], [151], [158], [165], [172], [182], [188], [200], [212], [222], [230], [240], [245], [251] and [256].

^[22] At [316].

^[23] R v Rhodes [2009] NZCA 486 at [100]–[108] where a starting point of 16 years was upheld in a case involving the manufacture of 1,400 grams of methamphetamine.

^[24] R v Mehrtens [2013] NZCA 275 at [19]–[21] where a starting point of 18 years was upheld for a principal offender who manufactured over 2,000 grams.

^[25] Mr Kupkovic supplied 130 grams which falls within band two of Fatu for supply offending (five grams to 250 grams) and attracts a starting point of three to nine years imprisonment; see R v Fatu, above n 6, at [34].

^[26] R v Jarden [2008] NZSC 69, [2008] 3 NZLR 612 at [12].

^[27] Hessell v R [2010] NZSC 135, [2011] 1 NZLR 607 at [61] and [74].

^[28] Sentencing notes, above n 1, at [9].

^[29] At [12].

^[30] At [14].

^[31] At [12].

^[32] At [41]–[42].

^[33] At [43]–[44].

^[34] At [20].

^[35] At [45]–[46].

^[36] At [46].

^[37] At [47]–[48].

^[38] Compare Peters v R [2012] NZCA 252 at [3]–[8] and R v MacFarlane [2012] NZCA 317 at [29]–[30].

^[39] Edri v R [2013] NZCA 264 at [33].

^[40] Hessell v R, above n 27, at [61].

^[41] Sentencing notes, above n 1, at [7] and [13].

^[42] The Crown originally alleged 700 to 1,500 grams, but reduced this to 495 to 990 grams at the disputed facts hearing.

^[43] Sentencing notes, above n 1, at [52].

^[44] At [13] and [49].

^[45] At [53].

^[46] At [53]–[54].

^[47] At [55].

^[48] At [56].

^[49] At [57].

^[50] At [58].

^[51] Cave v R [2013] NZCA 236.

^[52] Sentencing Act 2002, s 9(1)(j).

^[53] See R v Crompton [2014] NZHC 1563 at [104]–[106] where the Judge imposed an uplift for previous convictions for cultivation of cannabis in sentencing for the manufacture of methamphetamine. This uplift was not challenged on appeal: Crompton v R [2015] NZCA 277 at [4] and [7].

^[54] Hessell v R, above n 27, at [61].