Thompson v R [2016] NZHC 2753 (18 November 2016)

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ORDER PROHIBITING PUBLICATION OF THE JUDGMENT AND ANY PART OF THE PROCEEDINGS (INCLUDING THE RESULT) IN NEWS MEDIA OR ON THE INTERNET OR OTHER PUBLICLY AVAILABLE DATABASE UNTIL FINAL DISPOSITION OF TRIAL. PUBLICATION IN LAW REPORT OR LAW DIGEST PERMITTED.

This judgment was delivered by me on 18 November 2016 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

[1] Ms Thompson faces charges of money laundering and participating in an organised criminal group. She seeks discharge pursuant to s 147 of the Criminal Procedure Act 2011 on two grounds:

(a) The money laundering charge laid pursuant to s 12B of the Misuse of Drugs Act 1975 is a nullity, that section having been repealed prior to the alleged offending; and

(b) There is insufficient evidence to substantiate that she knew about the alleged organised criminal group or that her conduct contributed to the group.

[2] Ms Thompson is also jointly charged with her boyfriend, Miguel Martin, for possession of 0.6 grams of methamphetamine following the execution of a search at her address. She does not seek to have that charge dismissed.

[3] Ms Thompson is charged as part of Operation Atlas, an investigation into the source of Methamphetamine supply in the greater Northland area. The primary focus has been the investigation into members of the Headhunters Motorcycle Gang and their associates, who were identified as responsible for the manufacture and distribution of methamphetamine. During the course of Operation Atlas numerous production orders were applied for and received in the Whangarei District Court. A large amount of cellular content was examined by the investigation team which resulted in the identification of prominent Northland Headhunters and associates.

[4] On 23 October 2015, a Surveillance Device Warrant was issued by Asher J. Regimen Martin and Tony Britton were identified and named in the warrant. Tony Mataki-Kaiaruna, Corey Uren and Tawaiti Snowden were identified during the course of the operation as heavily involved in the manufacture and supply of methamphetamine. Intercepted phone conversations have also identified Philip Housham and Bronson Broughton as involved in the supply of methamphetamine. Ms

Thompson and Katrina Britton were also identified in the course of the operation as the girlfriend and wife of Mr Martin and Mr Britton respectively.

[5] The Crown alleges that on 4 December 2015, Ms Thompson is recorded as talking to her partner, Mr Martin, about handling money derived from the sale of methamphetamine. Mr Martin is recorded as telling her “not to go spending” and she replies, “I’m not it’s going away”. This is said to show that she was money laundering.

[6] Ms Thompson is also said to have participated in a syndicate which manufactured and distributed methamphetamine. Various recordings of telephone conversations between Ms Thompson and Mr Martin are said to show this participation. I set out the transcript of these calls below at [21], [22] and [33].

(1) The court may dismiss a charge at any time before or during the trial, but before the defendant is found guilty or not guilty, or enters a plea of guilty.

(2) The court may dismiss the charge on its own motion or on the application of the prosecutor or the defendant.

(3) A decision to dismiss a charge may be made on the basis of any formal statements, any oral evidence taken in accordance with an order made under section 92, and any other evidence and information that is provided by the prosecutor or the defendant.

(4) Without limiting subsection (1), the court may dismiss a charge if— (a) the prosecutor has not offered evidence at trial; or

(b) in relation to a charge for which the trial procedure is the Judge-alone procedure, the court is satisfied that there is no case to answer; or

(c) in relation to a charge to be tried, or being tried, by a jury, the Judge is satisfied that, as a matter of law, a properly directed jury could not reasonably convict the defendant.

(6) If a charge is dismissed under this section the defendant is deemed to be acquitted on that charge.

(7) Nothing in this section affects the power of the court to convict and discharge any person.

There should be a ... discharge when, on the state of the evidence at the stage in question, it is clear either that a properly directed jury could not reasonably convict, or that any such conviction would not be supported by the evidence. In most cases these two propositions are likely to amount to much the same thing.

It is vital, however, to appreciate the proper compass of the word ‘reasonably’ in this context. The test must be administered pre-trial or during trial on the basis that in all but the most unusual or extreme circumstances questions of credibility and weight must be determined by the jury. The issue is not what the Judge may or may not consider to be a reasonable outcome. Rather, and crucially, it is whether as a matter of law a properly directed jury could reasonably convict. Unless the case is clear-cut in favour of the accused, it should be left for the jury to decide. If there is a conviction this Court on appeal has the reserve power to intervene on evidentiary grounds. The constitutional divide between trial Judge (law) and jury (fact) mandates that trial Judges intervene in the factual area only when, as a matter of law, the evidence is clearly such that the jury could not reasonably convict or any such conviction would not be supported by the evidence.

I, JOSHUA FINN LAUTOGO of the New Zealand Police, NORTHLAND, have good cause to suspect that RACHAEL PATRICIA ANNE THOMPSON has committed the offence specified below.

Offence Description: DID HAVE IN HER POSSESSION PROPERTY WITH INTENT TO ENGAGE IN A MONEY LAUNDERING TRANSACTION CONCERNING THAT PROPERTY AND KNOWING OR

BELIEVING THAT ALL OR PART OF THE PROPERTY IS THE PROCEEDS OF A SPECIFIED DRUG OFFENCE OR BEING RECKLESS AS TO WHETHER OR NOT THE PROPERTY IS THE PROCEEDS OF A SPECIFIED DRUG OFFENCE.

(a) First, the money laundering charge is a nullity because s 12B was no longer in force on 4 December 2015; and

(b) Second, there is insufficient evidence for a properly directed jury to reasonably convict.

[11] A charge may be so gravely defective that it is a nullity.²That will be rare and usually a flawed charging document will be saved by s 379 of the Criminal Procedure Act:

No charging document, summons, conviction, sentence, order, bond, warrant, or other document, and no process or proceeding may be dismissed, set aside, or held invalid by any court by reason only of any defect, irregularity, omission, or want of form unless the court is satisfied that there has been a miscarriage of justice.

[12] The Crown submits that while s 12B was not operative as at 4 December 2015, a near identical money laundering provision can be found at s 243 of the Crimes Act

(4) For the purposes of this section, a person engages in a money laundering transaction if that person—

(b) Assists any other person, whether directly or indirectly, to deal with any property—

(4) For the purposes of this section, a person engages in a money laundering transaction if, in concealing any property or by enabling any person to conceal any property, that person—

(b) assists any other person, whether directly or indirectly, to deal with that property.

(4A) Despite anything in subsection (4), the prosecution is not required to prove that the defendant had an intent to—

[15] As a result of this, the requirement in s 12B to show that the concealment was intended is no longer required in s 243.³

[16] Nevertheless, quite plainly, the defect was a pleading error only, with no material consequence for Ms Thompson, save that the correct statutory provision will now apply. Any prejudice to her is simply a corollary of the application of the law as it applied at the time of the alleged offending. The proper course is to amend the charge given that no miscarriage of justice will arise from doing so.

[17] The s 147 application on this ground is therefore dismissed and the Crown’s corresponding application to amend the charge to record the correct provision is

³The Explanatory Note to the Organised Crime and Anti-corruption Legislation Bill (219-1), which repealed s 12B and amended s 243 of the Crimes Act, provides (at 2): “T he money laundering offences in the Crimes Act 1961 and the Misuse of Drugs Act 1975 are amended to ensure they are effective and compliant with New Zealand’s international obligations. The Bill clarifies that intent to conceal is not a necessary element of the offence and removes the requirement that the property laundered must be the proceeds of an offence punishable by at least 5 years’ imprisonment.” (Emphasis added). See also the commentary in Don Mathias Misuse of Drugs (online ed, Brookers) at [18.8].

[18] Had it been necessary to do so I would have also dismissed the s 147 application had I resolved that the charge was a nullity. If there is nothing to correct pursuant to s 379, there is nothing to dismiss pursuant to s 147. Instead, I would have been minded to direct the Crown to withdraw the purported charge and relay it pursuant to the correct provision. I am reinforced in this view by the approach suggested by Mahon J in the seminal decision on nullity, Police v Walker.⁴The learned Judge there noted:⁵

...I am satisfied that the terms of the information were so unintelligible as to constitute that document a nullity and consequently there was no process of amendment which would cure it. The prosecutor would have been entitled, upon hearing Mr Mitchell's application, to ask for the information to be dismissed without prejudice and then lay the charge again in proper form.

In the result the information was at all times a nullity, was not amenable to amendment because it was a nullity, and was not saved by s 204. The appellant was never in jeopardy of valid conviction on that information and could not have been convicted of any charge under s 243 on it. In those circumstances the plea of previous acquittal cannot be sustained.

[20] Mr Leader conceded that there is sufficient evidence to show that Ms Thompson knew about the methamphetamine dealing and that the cash she was handling derived from that dealing. He says that the issue for the jury at trial will be whether Ms Thompson knowingly intended to engage in money laundering; that is that she intended, in concealing the cash, to deal with proceeds of an offence.

[21] Ms Dore submits that the Crown case against Ms Thompson on this central issue will essentially rest on two transcripts of a conversation between Mr Martin and Ms Thompson. The first transcript is of a phone call from Ms Thompson to Mr Martin

MARTIN	Hello.
THOMPSON	Hi. Sorry.
MARTIN	Yeah.
THOMPSON	Ha how I must have miscounted that money yesterday.
MARTIN	Why?
THOMPSON	Well cause theres only 1500.
MARTIN	Ah no there wasn’t. I know how much I had. I had two eight?
THOMPSON	Well did you. Then well.
MARTIN	I only had eight fifty.
THOMPSON	Yeah I know, I gave you eight fifty. And then in the twenties I thought I counted 2000 so when I took all that money I just grabbed all the twenties out.
MARTIN	You counted it and then you gave me eight fifty Rachael.
THOMPSON	Yeah I know that.
MARTIN	You counted it all.
THOMPSON	Yeah I counted it once. (Cut Over)
MARTIN	(Inaudible)
THOMPSON	Yeah and in the twenties I thought I counted 2000 and so when I took it out of my wallet, I just grabbed all the twenties ‘cause that was 2000.
MARTIN	Ah, musta been --
THOMPSON	Well I counted it and its 1500. I haven’t – I have not spent $500.00.
MARTIN	You said 1600.
THOMPSON	15. Plus the two hundred that you just gave me in my car, so 15, 16, 17.
MARTIN	You just said you gave me. You had 16.
THOMPSON	I said 15.
_MARTIN	_{Hold on ring back.}

[22] There is then a second call at 9:29 pm between Mr Martin and Ms Thompson. At 9:32 pm, the parties have the following conversation:

THOMSON	How much did you take?
MARTIN	Why?
THOMPSON	Well I just don’t know what I had.
MARTIN	Well you had the majority.
THOMPSON	Yeah but what was it?
MARTIN	I don’t really know. Why? How much have you spent already?
THOMPSON	Nothing I just gave Dante the money.
MARTIN	One two, I’m just counting mine now. (Inaudible) 10, 11, 12 13, 14. 15. Um yeah.
THOMPSON	Yeah
MARTIN	I took only one.
THOMPSON	How much was there?
MARTIN	One thousand and twenty. There was two thousand, five hundred or something.
THOMPSON	How much?
MARTIN	Two thousand five hundred or something.
THOMPSON	OK so um are you done that room yet.
MARTIN	I do I have to pay it now?
THOMPSON	Well can you pay it out of your lot?
MARTIN	Whoa I just paid the bro. Yeah cause I can.
THOMPSON	Right thank you.
MARTIN	Don’t go spending Rachael.
_THOMPSON	_{I’m not. It’s going away.}

[23] Ms Dore submits that it will be available to the jury to infer from this second conversation that Ms Thompson intended to engage in a transaction to conceal the cash by spending it and/or when she said “it’s going away”.

[24] I have been unable to find any authorities that consider the elements of the offence in s 243(3) (or its predecessor s 12B(3) of the Misuse of Drugs Act 1975). The Crown submits that s 243(3) requires the proof the following elements:

(d) Knowing or believing that all or part of the property is the proceeds of an offence or being reckless as to whether or not the property is the proceeds of an offence.

(b) The defendant knew or believed that all or part of the property was the proceeds of an offence, or was reckless as to whether or not the property was the proceeds of an offence; and

(d) The defendant dealt with the property, or assisted any other person, whether directly or indirectly, to deal with the property.

[26] Having considered these two formulations against the statute, I am of the view that the elements that the Crown must prove are:

(a) The defendant was in possession of property that was the proceeds of an offence; and

(b) The defendant knew or believed that all or part of the property was the proceeds of an offence, or was reckless as to whether or not the property was the proceeds of an offence; and

(d) The defendant did so with the intention to deal with the property, or to assist any other person, whether directly or indirectly, to deal with the property, in any manner and by any means.

[27] Mr Leader accepts that there is sufficient evidence to prove that the cash is the proceeds of a qualifying offence and that Ms Thompson knew this. This satisfies the first and second elements. The telephone call evidence shows that Ms Thompson was disposing of the cash – either spending it or ensuring it was “going away”. The juxtaposition of those facts logically leads to an inference that she, in concealing (in the sense of disposing of) the cash (the third element), was intentionally dealing with the proceeds of Mr Martin’s offending (the fourth element). It may be that the jury prefers an innocent explanation. It may be that jury considers these available inferences are competing inferences of equal weight as suggested by Mr Leader. But as Parris emphasises, provided there is a proper basis for the inference, the weight to be afforded to it, including among competing inferences, is properly for the jury.

[28] Ms Thompson faces one charge of participating in an organised criminal group.

(1) Every person commits an offence and is liable to imprisonment for a term not exceeding 10 years who participates in an organised criminal group—

(a) knowing that 3 or more people share any 1 or more of the objectives (the particular objective or particular objectives) described in paragraphs (a) to (d) of subsection (2) (whether or not the person himself or herself shares the particular objective or particular objectives); and

(b) either knowing that his or her conduct contributes, or being reckless as to whether his or her conduct may contribute, to the occurrence of any criminal activity; and

(c) either knowing that the criminal activity contributes, or being reckless as to whether the criminal activity may contribute, to achieving the particular objective or particular objectives of the organised criminal group.

(2) For the purposes of this Act, a group is an organised criminal group if it is a group of 3 or more people who have as their objective or one of their objectives—

(a) obtaining material benefits from the commission of offences that are punishable by imprisonment for a term of 4 years or more; or

(3) A group of people is capable of being an organised criminal group for the purposes of this Act whether or not—

(b) only some of the people involved in it at a particular time are involved in the planning, arrangement, or execution at that time of any particular action, activity, or transaction; or

[30] In Te Kahu v R, the Court of Appeal set out the elements of the offence:⁷

(b) Knowledge that at least three of the people in the group share at least one of a number of specified objectives (set out in s 98A(2)(a)—(d)). Such objectives include the commission of serious violent offences, or obtaining material benefits from the commission of offences that are punishable by imprisonment for a term of 4 years or more.

(c) Either knowledge that the accused's conduct contributes to the occurrence of any criminal activity, or recklessness as to whether his or her conduct may so contribute.

(d) Either knowledge that such criminal activity contributes to achieving the objectives of the organised criminal group, or recklessness as to whether it so contributes.

[25] To prove the actus reas of the offence the Crown must prove that the accused “participated in” ... (the) organised criminal group contended for. “Participate” is not a term of art. Principal and party liability under s 66 has no part to play. Section 98A is a code. “Participate” has its natural meaning. That is, as the Oxford English Dictionary defines it, “to take part; to have a part or share with ... ”. In that sense this case is analogous to Janaway v Salford Area Heath Authority.

[26] To “participate” does not mean “to associate”, which the Oxford English Dictionary defines to be “to join (persons, or one person with another), in common purpose ... ”. The Select Committee on the Bill assumed that the two are not synonymous. So, to “participate” in an unlawful criminal group does not mean to join it. And, to anticipate, s 98(1)(a), which describes the first mental element required, makes this clear. To participate a person needs to know the objectives of the group. He or she does not need to share them.

[27] To “participate” does call for something overt. It calls, to anticipate the second mental element of the offence, for “conduct” that contributes, or might contribute, to “any criminal activity” whatsoever that the participant either knows will contribute in that way or is reckless that it might. To “participate”, to anticipate the third mental element, calls for more. It calls for the participant to know that this “criminal activity” in turn will or might contribute to the group's identifying objective, the category of offence that defines it; or is reckless as to the possibility.

[32] Mr Leader concedes that there is evidence that Ms Thompson knew of a organised criminal group, but that that there is no evidence that:

(a) she knew her conduct contributes to the occurrence of criminal activity or was reckless about it; or

(b) she knew that the criminal activity contributes to achieving an objective of the group or was reckless about it.

(c) Agreeing to communicate with another defendant about equipment used to manufacture methamphetamine at 1:54 pm on 8 November

MARTIN	Hey um can you ring Tony’s number? I’m just trying to get a hold of him.
THOMPSON	Um I don’t have his number.
MARTIN	Oh Can I read it out for you?
THOMPSON	Mmmm Yeah I need a pen.
MARTIN	And can you please ring him it’s urgent.
THOMPSON	Yeah hang on a minute, I need to go get a pen, hang on.
	...
MARTIN	Can you just tell him to ring me or stop wherever he is and then tell me where he is.
THOMPSON	Yeah okay.
_MARTIN	_{and um he’s gotta bring the dive bottles back}

(d) Receiving an instruction at 12:51 pm on 16 November 2015 to change the registration of a car used by the group into her name so that Mr Martin can avoid being harassed by the police:

MARTIN	Hey babe, um what’s the details for this?
THOMPSON	What do you mean?
MARTIN	For the registration.
THOMPSON	Why?
MARTIN	To get the rego done.
THOMPSON	Um, ..... what do you need?
MARTIN	Well don’t you need to put your name and shit down?
THOMPSON	Mmm, I’m not sure, I haven’t got a registration for ages. Um--
_MARTIN	_Yeah.

THOMPSON	What does it say on the papers?
MARTIN	What do you mean, what papers?
THOMPSON	Well you gotta go in to the Post Shop to do it.
MARTIN	Who’s the car under?
THOMPSON	Me.
MARTIN	Yeah, what did you put it under, do you have to put address and that?
THOMPSON	Just Rachael THOMPSON.
MARTIN	Or do you just chuck the name?
THOMPSON	Just.
MARTIN	Oh Rachael THOMPSON?
THOMPSON	Yeah.
	[Ms Thompson spells out her name].
THOMPSON	Why, who are you talking to?
MARTIN	The bro’s driving us.
THOMPSON	Oh okay.
MARTIN	‘Cause I don’t know how to do it. What should I give, you reckon?
THOMPSON	Three months.
MARTIN	Wha?
MARTIN	(Inaudible) the rego.
THOMPSON	Oh okay.
	(MARTIN speaks to Unknown male in the background)
MARTIN	Oh yeah no oh na we fuckin .... Just in cae, so we’re not getting harassed.
THOMPSON	Just um – did you get pulled over?
MARTIN	Yeah.
THOMPSON	Oh okay.
_MARTIN	_{Oh, the bro did but they didn’t – they just said ‘Get it done’,}

THOMPSON	Hello.
MARTIN	Babe.
THOMPSON	Hi.
MARTIN	Did you give them my number?
THOMPSON	Your other one.
MARTIN	Oh yeah.
THOMPSON	Um Andrea. Her man.
MARTIN	Yeah not this one though ah?
THOMPSON	Na the other phone.
MARTIN	Well that’s gone.
_THOMPSON	_{Oh ah.}

[34] Active involvement of the kind suggested by this evidence provides a basis for an inference (in light of the concession made about knowledge of the methamphetamine business) that Ms Thompson contributed to the occurrence of the criminal activity and knew or was reckless about whether it achieved the obvious objective of the group, namely to engage in the production and sale of methamphetamine.

[35] Accordingly, based on the material before me, the assessment of the weight to be afforded to the material relied upon by the Crown must go to the jury. I record

nevertheless that the Crown case is not obviously strong. How the key interchanges fit within the full context may well favour reconsideration of the application at trial.

(a) CRN 15088004946 is amended to an offence pursuant to s 243(3) of the Crimes Act 1961;

On the 17^thday of December 2015 at Whangarei (jointly offended with Regimen Miguel Martin) did have in her possession a Class A controlled drug, namely methamphetamine. Maximum penalty: 6 months and a $1,000.00 fine.

BETWEEN	RACHAEL PATRICIA ANNE THOMPSON Applicant
AND	CROWN Respondent

Hearing:	18 October 2016
Counsel:	N S Leader for Applicant N J Dore for Respondent
_Judgment:	_{18 November 2016}

	to him.
THOMPSON	Oh okay, yep.
MARTIN	So yeah (Cut Over)
THOMPSON	Just go in to the Post Shop.
MARTIN	Yeah, he’s gonna do it now.
_THOMPSON	_{And yeah, that should be all you need.}

High Court of New Zealand Decisions

Thompson v R [2016] NZHC 2753 (18 November 2016)