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Robinson v R [2017] NZCA 347 (14 August 2017)

Last Updated: 24 August 2017

IN THE COURT OF APPEAL OF NEW ZEALAND
BETWEEN
 Appellant
AND
 Respondent
Hearing:
26 July 2017
Court:
French, Simon France and Toogood JJ
Counsel:
R W Maze and E Huda for Appellant I R Murray for Respondent
Judgment:


JUDGMENT OF THE COURT

The appeal is dismissed.
____________________________________________________________________

REASONS OF THE COURT

(Given by Toogood J)

Introduction

[1] Mr Hugh Robinson was found guilty at trial in the Christchurch District Court and convicted on 19 October 2016 of seven charges: four counts of possession of a class C controlled drug Benzylpiperazine (BZP) for supply; conspiracy to sell the class C controlled drug BZP; unlawful possession of a firearm; and unlawful possession of explosives.
[2] He appeals his convictions on the basis that a miscarriage of justice occurred because:
[3] Mr Robinson seeks orders quashing his convictions and remitting the matter to the District Court for a retrial.

Background facts

[4] At all material times, Mr Robinson was the sole director and shareholder of High Performance Health (HPH), a health food and supplement business. The premises were located in Christchurch and comprised a warehouse/factory which included a small retail shop. HPH manufactured various supplements and stimulants. Prior to the criminalisation of BZP, HPH manufactured and sold BZP.
[5] After a police investigation into the distribution of BZP in New Zealand, police came to believe that Mr Robinson and his son Jamie Robinson were supplying Clint Helmbright with BZP pills which Mr Helmbright was distributing throughout New Zealand. The police executed search warrants on HPH’s business premises, Mr Robinson’s vehicle, and his home. Powder or residue was located in the factory and his motor vehicle. Also found were a bag containing five smaller bags with a total of 491 BZP pills in his home garage, and a bag containing two smaller bags with a total of 100 pills in his desk drawer at HPH. Additionally, a warrantless search was carried out on a storage unit in Mr Robinson’s name. In it were found a firearm, ammunition and 2,287 BZP pills.
[6] Jamie Robinson pleaded guilty to 16 charges related to the supply of BZP and methamphetamine that resulted from the police operation. He gave evidence exonerating his father.
[7] Mr Robinson claimed the pills in his house were put there by Jamie. He said he had found them when preparing to move and planned to destroy five of the seven bags found. He said he had taken the remaining two bags into work to identify them and to keep them for his own use. He accepted knowing about the drugs found in his truck but said they were for personal use as a pre-workout formula. Mr Robinson denied knowledge of the drugs, firearm or ammunition at the Russley Road storage unit and the bag of powder found at the factory.

Pre-trial issue over expert evidence

Evidence of large unexplained cash sums and alleged money laundering

[8] Ms van der Pol’s evidence about the financial dealings of Mr Robinson and HPH was proffered to support an inference by the jury that the large quantity of cash which, it was alleged, could not be accounted for by legitimate sales activity through the HPH store represented the proceeds of illegal sales of BZP by Mr Robinson. It was adduced to rebut the defence propositions that the drugs seized were simply forgotten leftovers from previously legal manufacture and that Mr Robinson did not know about the BZP and firearms recovered in the search of the storage unit which, he claimed, belonged to his son Jamie.
[9] The evidence related to Mr Robinson’s and HPH’s finances over the period of 1 January 2009 to 23 October 2013. It comprised a mixture of factual analysis of financial records obtained by the police, including bank records and information held by Mr Robinson or his companies, and opinion as to the inferences which might be drawn from the analysis. The thrust of her evidence was to demonstrate that Mr Robinson set out to disguise, or “launder”, cash generated by the illegal sale of BZP through his business and other bank accounts, and the purchase of property.
[10] Ms van der Pol made an assessment of the cash sales through HPH, based on daily sales sheets, in October 2010 and January 2011 and during a six-month period from April 2013 to September 2013. In some of those months, cash was used for purchases for the business. Ms van der Pol could not locate all of the daily sales records among the seized documents, but she assessed the monthly cash sales at commonly less than $5,000 per month. During the period under review, cash deposits to the accounts averaged $12,511.46 per month and totalled $713,153.45. The witness concluded that the overall net amount of cash generated from legitimate cash sales was insufficient to account for the frequent banking of large amounts of cash that were deposited into six bank accounts operated by Mr Robinson and his associated entities at two different banks, and a credit card account in Mr Robinson’s name.
[11] The available monthly deposits between September 2011 and March 2013 ranged from $7,030 to $50,300. The cash deposits were described in the deposit book butts seized as either “Shop” (which Ms van der Pol inferred to be an assertion the funds were from shop sales) or loans from “Svet” or “Svetlana” (Mr Robinson’s wife), for the latter of which there were 19 deposits totalling $115,220. Ms van der Pol said that none of the cash deposits described as loans could be sourced from any of Mrs Robinson’s three bank accounts. In her view, over $260,000 in cash was banked from unknown sources during the review period.
[12] The evidence established that cash deposits of amounts under the $10,000 threshold for reporting under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 were made at various bank branches around Christchurch, often on the same day, and at banks as far from Christchurch as Lower Hutt, Porirua and Matamata. On occasions, teller and self-service drop boxes were used at the same bank branch on the same day. Ms van der Pol’s opinion was that the large volume of unexplained cash and the banking methods were indicative of money laundering.
[13] Mr Robinson and his son Jamie Robinson purchased a property in April 2013 at Stanley Road, Sydenham for $430,000. The deposit of $40,000 was provided by cash received from a variety of sources, including $8,000 from an HPH employee named Murray Coates; a company named Sputnik Tours Ltd, and a Mr Sasha Radujko. The balance of the purchase price was provided by a vendor mortgage of $300,000; $35,000 from Jamie Robinson; a shareholder advance of $50,000 from Mr Robinson; and $8,000 attributed to Mr Robinson. The payments totalling $93,000 made by the defendant and Jamie Robinson did not come from their bank accounts or any bank account of Mrs Robinson.
[14] The factual evidence referred to by Ms van der Pol included evidence of the establishment of a company, Roading Consultants & Applicators Ltd, which was apparently set up to be the vehicle for the purchase of the Stanley Road property. There was no evidence that it had a bank account or ever traded, and it was struck off the Companies Register in November 2014.
[15] Ms van der Pol’s conclusion, adduced as expert opinion evidence, was that money laundering methodologies had been used by Mr Robinson to disguise the illegitimate source of the cash deposits in order to prevent detection by banks and avoid reporting to authorities.

The objection to the evidence

[16] In support of the pre-trial objection, the evidence was challenged under ss 7 and 8 of the Evidence Act 2006 on the basis it lacked relevance and was unfairly prejudicial. On appeal, Mr Maze’s submissions for Mr Robinson focused on an argument under s 25 of the Act that the evidence of expert opinion should not have been admitted as it was not substantially helpful. There is a crossover between the two arguments, as the substantial helpfulness threshold is to be assessed in terms of relevance, reliability and probative value.[3]
[17] Mr Maze argued that Ms van der Pol’s assumptions as to the volume of legitimate cash sales through the business were highly speculative and unreliable because they were based on a paucity of information. In the period of her analysis there were no months when information about both the cash sales and bank deposits was available. Further, counsel argued there was no evidence of any investigation having been carried out into the nature of HPH’s business; whether there had been any change in product lines and no investigation into the marketplace. Mr Maze also argued Ms van der Pol had not researched possible innocent explanations for the allegedly unexplained deposits, nor had she examined the possibility Mrs Robinson may have had funds in Russia. For all those reasons he submitted that the opinion evidence was not substantially helpful so as to be admissible.

Discussion

[18] Although the alleged offending period was limited to 1 October 2012 to 23 October 2013, we consider the Crown was entitled to invite the jury to look at the cash sales and cash deposits over the whole of the review period from January 2009 to 23 October 2013, so far as that information was available. As Mr Murray submitted, it was a reasonable inference that the drug manufacturing operations had not commenced precisely at the time the police began their investigation in October 2012. The issues of the sufficiency of the evidence about cash sales and the timing of it in relation to the cash deposits were addressed in cross-examination and the defence closing, as was Ms van der Pol’s conclusion about how much of the cash was “unexplained”. Whether the evidence was sufficient to enable the drawing of the inferences the Crown asserted was a matter of weight for the assessment of the jury.
[19] So far as the handling of cash is concerned, the unusual features of the evidence were:
[20] In our view, the Crown was entitled to rely on Ms van der Pol’s expertise to express the opinion that those unusual features could be characterised as money laundering techniques or methodologies. The evidence upon which Ms van der Pol’s evidence was based was relevant to an allegation that Mr Robinson had indulged in the cash business of drug dealing. Ms van der Pol’s expert opinion that the handling of cash was consistent with money laundering was likely to be of substantial assistance to the jury in drawing their own conclusions on the strength of the Crown’s circumstantial case. We have not been persuaded there were lines of inquiry Mrs van der Pol should have pursued but did not.

The admissibility of evidence obtained in the warrantless search

[21] The warrantless search of the storage unit at Russley Road was carried out because text messages between Jamie and Mr Helmbright indicated that Jamie had a large number of pills stored somewhere. There were two suspected storage facilities that were frequented by Jamie Robinson. As a search of Jamie Robinson’s address did not divulge a large stash of drugs, and one storage unit known to be used by him was empty, the possible significance of the Russley Road storage facility increased. Detective Senior Sergeant Ferguson and Detective Sweetman travelled to Russley Road and talked to the owner of the facility. He told them that neither Mr Helmbright nor Jamie had a storage unit, but that Mr Robinson had had one for a number of years. Detective Senior Sergeant Ferguson then considered whether he had sufficient grounds to conduct a warrantless search under the Search and Surveillance Act 2012.
[22] He decided because he had credible grounds for believing drugs were inside, and because of the limited availability of police resources to stand guard over the premises while a warrant was obtained, a warrantless search was justified. The BZP pills, firearm and ammunition were located inside. In response to the pre-trial challenge to the search, Judge Garland ruled that Detective Senior Sergeant Fergusson did not have reasonable grounds under s 20 of the Search and Surveillance Act to believe it was not practicable to obtain a search warrant, and that if the search was not carried out immediately evidential material would be compromised.[4] The Crown does not dispute that finding on appeal.
[23] Having decided that the evidence was improperly obtained, Judge Garland conducted the balancing test under s 30 of the Evidence Act. He concluded:[5]
[24] The Judge decided that the balance under s 30 came down clearly in favour of admission of the evidence.

Discussion

[25] Regarding the unlawful search of the storage unit, Mr Maze argued that Judge Garland understated or gave insufficient weight to the importance of the privacy interests inherent in the lock-up which, he submitted, were close to those of a private dwelling. Unlike a house, however, private activities deserving of particular protection are not usually conducted in a lock-up; in our estimation a better analogy may be with a detached garage on a residential property.
[26] The Judge’s approach to the balancing exercise was orthodox, in our view. The real difficulties for the appellant’s challenge to the evidence from the search are that it was accepted a warrant would have been granted if it had been applied for and the evidence was reliable and highly probative. Those factors weigh heavily in favour of admission despite the impropriety of the search.

Outcome

[27] We are satisfied that the financial evidence and the evidence obtained in the search were properly admitted and there was no miscarriage of justice.
[28] We dismiss the appeal.



Solicitors:
SB Law, Christchurch for Appellant
Crown Law Office, Wellington for Respondent

[1] R v Robinson [2016] NZDC 3771.

[2] Police v Robinson [2016] NZDC 18377.

[3] Mahomed v R [2010] NZCA 419 at [35]; applied in Pora v R [2015] UKPC 9, [2016] 1 NZLR 277 at [41].

[4] Police v Robinson, above n 2, at [75].

[5] At [65] and [77].

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