R v Zerna and Lipp

IN THE SUPREME COURT OF VICTORIA

Revised

AT MELBOURNE

CRIMINAL DIVISION

No. 1553E of 2006
No. 1553D of 2006

THE QUEEN

BRIAN ZERNA
GEORGE LIPP

---

JUDGE:	COGHLAN J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 March 2013
DATE OF SENTENCE:	27 March 2013
CASE MAY BE CITED AS:	R v Zerna & Lipp
MEDIUM NEUTRAL CITATION:	[2013] VSC 192

---

CRIMINAL LAW – Conspiring to traffick in a drug of dependence no less than a commercial quantity – Methylamphetamine - Plea of guilty following the order of a re-trial – Principal of the enterprise – Prior Reasonable prospects of rehabilitation – Six years with a non parole period of four years.

CRIMINAL LAW – Trafficking in a drug of dependence no less than a commercial quantity – 1 Phenyl 2 Nitropropene - Plea of guilty – Presently already undergoing a sentence of eight years six months with a non parole period of five years eight months – Principles of totality – Reasonable prospects of rehabilitation – Three years six months with a new non parole period of seven years three months.

---

APPEARANCES:	Counsel	Solicitors
For the Crown	Mr D. Brown with Mr S. Milesi	Office of Public Prosecutions
For the Accused Zerna	Mr J. O’Sullivan	Patrick W. Dwyer
For the Accused Lipp	Mr P. Morrissey SC with Ms M. Mykytowycz	Valos Black & Associates

HIS HONOUR:

Brian Zerna, on 14 November 2012 you pleaded guilty to a charge that you did, between 3 November 2004 and 22 August 2005, conspire with George Ernest Lipp, Simon Carpenter, Shane Francis Bugeja and Lance Craig Johnson to traffick a drug of dependence, namely methylamphetamine, in a quantity which is not less than a commercial quantity. I will refer to the offence as that of conspiring to traffick a commercial quantity of methylamphetamine.

You admitted one prior conviction for burglary on 19 October 1998. You were sentenced to be imprisoned for four years with a non-parole period of two years and six months.

You are now 50 years of age and have been at large on bail since shortly after 8 February 2011. You had been sentenced by Bell J in August 2008 on one count of conspiring to traffick a large commercial quantity of methylamphetamine to a term of imprisonment of 15 years with a non-parole period of 12 years after a trial which had concluded on 12 December 2007.

In February 2011, you successfully appealed against that conviction following a successful appeal by your co-accused Bugeja in November 2010.

There have been a number of unsuccessful attempts to try you since.

The former offences of which you were convicted carried life imprisonment and related to a quantity of not less than 750g and, on the allegation put, a number of kilograms of methylamphetamine.

You now fall to be sentenced for conspiring to traffick greater than 250g but less than 750g of methylamphetamine. I regard your case as being at the top of that quantity, that is, near 750g. The maximum term of imprisonment is 25 years.

The other important difference is that you are to be sentenced after a plea rather than after a trial.

The reasons for delay in this matter are complex; some of them are as results of your choices but others are not. You do now come to be sentenced for offending which ceased in August of 2005, that is, 7 ½ years ago. That delay has to be taken into account in your favour. You served 1190 days on your earlier sentence, that is, about three years and three months.

George Ernest Lipp, you pleaded guilty before me on 9 November 2012 to one charge that you did, between 11 May 2005 and 22 August 2005, traffick in a drug of dependence, namely, 1 Phenyl 2 Nitropropene (‘1P2N’) in a quantity that was not less than a commercial quantity of a drug of dependence. I will refer to that offence as trafficking in a commercial quantity of 1P2N. A commercial quantity is 2.0kgs

You had originally been arrested in August 2005 and were due to be tried with your co-accused on 31 October 2007, but you absconded whilst on bail. You were not re-arrested until 14 August 2009. At the time of your arrest, you were charged with a number of other offences for which you stood your trial in the County Court before His Honour Judge Lacava. You were convicted of four charges of being in possession of an unregistered firearm whilst being a prohibited person, one charge of being in possession of explosives without establishing lawful object, one charge of possession of substances, material or equipment for trafficking in a drug of dependence and two charges of the possession of precursor chemicals.

On 22 February 2013, you were sentenced to a total effective sentence of 8½ years’ imprisonment with a non-parole period of 5 years 8 months. Pre-sentence detention was declared to be 1289 days. That is approximately three years and seven months. You have been in custody continuously since 14 August 2009.

It follows that the question of delay, although relevant, does not carry as much weight in your case as that in the cases of your co-accused Zerna, Bugeja and Johnson.

You have a similar prior conviction to that of your co-accused, Zerna, but you were convicted of aggravated burglary and on 19 October 1998 you were sentenced in the County Court to be imprisoned for six years, six months with a non-parole period of four years. You have one other appearance in the County Court which was drug related but for which you were unconditionally discharged. It is of no relevance for present purposes.

You are now 50 years of age.

The plea against each of you was heard together and a single opening was provided by the prosecution. That opening will be attached to these reasons in Schedule A.

Stated briefly, between November 2004 and August 2008 you, Zerna, Johnson, Bugeja and Carpenter were involved in the setting up of a laboratory at Knowsley and gathered together the chemicals necessary for the manufacture of methylamphetamine.

It is unavoidable to say that you, Zerna, were either the principal or one of the principals in the enterprise.

The role said to have been played by you, Lipp, is that your part in the overall enterprise was to manufacture 1P2N. The substance is itself a drug of dependence, but for present purposes its importance is that it can be used in the manufacture of P2P. P2P is a precursor chemical for the manufacture of methylamphetamine, and that is why your role was important for your co-accused, who were conspiring to manufacture methylamphetamine.

Police conducted a covert operation between late 2004 and August 2005 using surveillance devices, telephone intercepts, physical surveillance and both covert and overt search warrants. Johnson was “a runner” who sourced chemicals which he picked up and delivered to Knowsley. He did so through Carpenter, who supplied large amounts of chemicals including 80 litres of Benzaldehyde. Shane Bugeja was involved in the actual laboratory and taking chemicals there. He was in regular contact with you, Zerna. You, Zerna, also gave instructions to Johnson in relation to dealings with Carpenter.

You, Lipp, were involved at Knowsley with Bugeja, your role is put as being responsible for the production up to the point that 1P2N was manufactured. You were in active discussion with others about the chemicals necessary to achieve that.

At the laboratory, the police located 2.183kgs of 1P2N with other chemicals. That quantity was capable, with other chemicals, of producing about 1kg of methylamphetamine. On the whole case, no methylamphetamine was actually produced, and the case against you, Lipp, is said to stop at the manufacturing of the 1P2N. It follows that yours is a lower place in the hierarchy of the offending.

In the first half of May 2005, there were detailed dealings between you, Zerna, and Johnson involving the placing of orders for chemicals with Carpenter on your, Zerna’s, instructions. You, Lipp, are seen to meet your co-accused Zerna and Bugeja on 5 May 2005.

In later discussion between both of you on 16 May 2005, the amount given to Johnson to give to Carpenter was discussed, including the return of further orders and the amounts which would be needed.

The two of you disagreed as to what chemicals were necessary and you, Lipp, said that you would do a stock take. There was discussion by you, Lipp, about toluene and hydrochloric acid and methanol, the former being necessary for the production of 1P2N and the latter in the following process to P2P and methanol to then produce methylamphetamine oil. In that discussion you, Lipp, appeared to challenge Johnson about his use of drugs. On 26 May 2005 and 7 June 2005, there were discussions about the supply of chemicals between you, Zerna, and Johnson. On 15 June there was a further conversation between Lipp and Johnson in which Johnson was heard to say “Look at the money”. There appeared to be a further conversation about drugs and money on 20 June 2005 between Zerna and Johnson.

In a further conversation on 28 June 2005 between all four of the accused, you, Lipp, told Bugeja he had brought the wrong vessel.

On 1 July, the police executed a covert warrant at your premises, Zerna, and there observed a number articles of glassware and other items capable of being used in the manufacturing of methylamphetamine.

On 14 July 2005, there were further discussions between the two of you and Johnson about stoppers for glassware and you, Lipp, directed Johnson to put pressure on Carpenter.

On 19 July 2005, you, Zerna, met with Carpenter at the Panton Hill Hotel and discussed the supply of chemicals involving benzaldehyde and P2P.

On 1 August 2005, you, Zerna, and Bugeja discussed acid, formaldehyde and iron, the chemicals necessary in the process between 1P2N and P2P. On that day, Bugeja’s car was tracked going to your house, Zerna, and then to Knowsley. Those movements and movements of Bugeja’s car to and from Knowsley occurred on at least six other occasions.

On 5 August 2005, you, Zerna, and Bugeja discussed your, Lipp’s, dissatisfaction with Bugeja. You, Lipp, were said to have sacked Bugeja and similar comments took place on 8 August 2005. You, Zerna, challenged Bugeja’s reliability.

On 16 August 2005, you, Lipp, and Bugeja went to Knowsley in Bugeja’s car where you remained for about five hours. You, Lipp, and Bugeja made a similar trip on 19 August 2005. You discussed police surveillance whilst in the car. You, Lipp, and Bugeja stayed at Knowsley for about 3½ hours. At about 10am, you, Lipp, and Bugeja were heard discussing about chemicals and laboratory equipment. You, Lipp, and Bugeja were seen later that day. You, Lipp, and Bugeja travelled to Zerna’s house. Whilst in the car, you discussed heating and cooling and producing powder. The two of you left Zerna’s premises after about 18 minutes and travelled to Knowsley, where you remained for about two hours.

On 21 August 2005, you, Lipp, arrived at Knowsley in Bugeja’s car at about 10.00am. You and Bugeja were seen to go into the shed where the laboratory was. You, Lipp, left about 3.00pm and headed to Melbourne.

You, Lipp, were arrested at about 6.00pm that evening. When the laboratory was searched, a large amount of chemicals was recovered. They were capable of being used in both the manufacturing of 1P2N and later methylamphetamine.

It is apparent in the transactions set out above that you, Zerna, were very actively involved in the management of the enterprise and in the management of what was being done by Bugeja and by Johnson.

When the matters came to a head on 21 August 2005, and by then there had been a number of observations of you, Lipp, being present at the laboratory and doing various things there, when the laboratory was searched and adding matters into totals, a little more than two kilograms of 1P2N was recovered and 707 grams of methylamphetamine.

On the next day, 1 litre of toluene was recovered from your house, Lipp.

When you were arrested, Zerna, at 3.45am on 22 August 2005, various items consistent with the manufacture of methylamphetamine were recovered, including text books which described some of the processes identical to the processes occurring at Knowsley.

When interviewed by the police, both of you declined to answer questions.

From all of the material, it appears that you, Zerna, were the leading instigator in the conspiracy to manufacture methylamphetamine. There can be no doubt that both Johnson and Bugeja were subordinate to you, and significantly so. You were the vigneron and they were the labourers in the vineyard.

The role played by you, Lipp, is also a significant one, but it is confined to the manufacture of 1P2N and in a quantity which might have been used by others to produce the better part of 1kg of methylamphetamine.

The matters set out above demonstrate that this was a careful and major operation which involved the scouring of chemicals to make methylamphetamine which, in your case, Zerna, goes back to 2004.

For different reasons, you each represent a difficult exercise in sentencing. You, Zerna, because of the time which has elapsed since your offending and the time which has elapsed since you were granted a retrial. You, Lipp, because I must be careful not to impose a crushing sentence on you.

Brian Zerna, on the plea a number of matters were put on your behalf. You are now 50 years of age and you have an unremarkable background. You are the third of four children. You completed Year 11 at Watsonia High School when you were about 17. You worked as an apprentice painter, a trainee metal worker and then completed an “apprenticeship as a bricklayer”. You were then about 24 years of age. You started your own business, and by that time you had married your wife Lisa and you now have three daughters aged 24, 22 and 20. You separated from your wife when you went to prison in 2008, but you have reconciled with her and she has been at Court on a number of occasions to support you.

Your bricklaying business, which was largely in domestic housing, was quite successful. That work was necessarily interrupted by the 2½ year prison sentence to which I referred earlier. You maintained that business until about 2003 when you started work as an excavator driver. When you were released on bail for this offending in 2005, you went back to bricklaying. When re-released after the Court of Appeal decision, you began work as a mechanic labourer at a motor dealership. You sustained a serious back injury which required surgery in 2011. You no longer can do the hard physical work which you did in the past, and you are now on a disability support pension.

Your wife continues to work as a case manager at Northern Health. Your three daughters have all completed their high schooling and are employed, one at least undertaking further study. They live at home.

Your arrest in 2005 was particularly difficult for your youngest daughter, who was then 13. She has on and off since then suffered from depression.

It was put on your behalf that you have been a hard worker and very good family man, and I accept that.

I was urged to have regard to delay, and of course I will do so. I should note that you have been reporting on bail three times a week and prior to that daily.

I will take into account the fragmentary way in which your sentence will be served from arrest to trial, to appeal and now to plea.

The offending in the prior conviction which you both have was a burglary at Sigma, which is a scientific instrument and supplies company. The purpose of the burglary appears to have been for the purpose of obtaining chemicals that might be used in the manufacture of methylamphetamine.

I observed on the plea that neither of you quite learned the lesson you should have from the sentences you served and your time on parole.

I accept that in your case, Zerna, because of your injury and because of your inability to give the support to your youngest daughter which you would wish, any term of imprisonment I call upon you to serve will be more onerous for you, and I have taken that into account.

Insofar as the law allows, I have taken into account the $100,000 which you paid to preserve your family home, which would otherwise have been forfeited.

I regard your prospects of rehabilitation as being at least reasonable. Your plea of guilty is valuable for utilitarian purposes, and I accept that it now shows at least some remorse for your conduct.

The plea is important because of the difficulties which the prosecution might face in now running the case so far down the track.

I regard the settlement of the case as being appropriate and sensible in the circumstances.

Although some sentencing statistics were referred to, I do not regard them as being of much assistance, particularly having regard to the role played by you and your prior conviction.

In your case, Brian Zerna, this was a serious ongoing case of conspiring to traffick a commercial quantity of methylamphetamine by manufacture. It was a course of conduct which continued from November 2004 until August 2005. The summary shows that you were either the major player, or at least a major player in the enterprise. This was at the higher end of commercial trafficking. You had, at the time of the offending, served a not insignificant term of imprisonment not all that long prior to this offending and, as I have already observed, you had not learnt your lesson.

I have been asked to impose a sentence which would allow for your immediate release. I am unable to accede to that request. In particular, the role that you played in this enterprise is just too serious to allow me to do otherwise than order a further term of imprisonment. I have had regard to just punishment and the principles of general and specific deterrence; in particular general deterrence.

I sentence you to be imprisoned for six years. I fix a non-parole period of four years and six months. I declare that you have already served 1190 days of pre-sentence detention; i.e. you will be eligible for parole in about 15 months’ time. Had it not been for your plea of guilty, I state that I would have sentenced you to be imprisoned for a period of 7½ years with a non-parole period of five years.

George Lipp, your position is somewhat more complicated. Although in relation to the crime to which you have pleaded guilty you are a principal, and in many ways more significant than both your co-offenders Bugeja and Johnson, you have pleaded to a charge relating to the manufacture of 1P2N. The quantity alleged is just over 2kgs, and a commercial quantity is 2kgs. Your offending is therefore at the lower end of seriousness.

I am, however, satisfied beyond reasonable doubt that the substance you had manufactured would have been used in the manufacture of methylamphetamine, and that is a matter in aggravation.

I accept that the decision by the prosecution to settle the case against you on these terms is a pragmatic one, but you must only be sentenced for the crime to which you have pleaded guilty.

You absconded in October 2007 and not much is known about what you did between then and March 20009 when you became the subject of a further police investigation which lead to your arrest in August 2009.

Your background is largely unremarkable. You are also 50. You have two sisters. Your father died when you were 11. You left school after Year 7 or 8 when you were 14 or 15.

You undertook an apprenticeship as a motor mechanic and by the age of 18 you were qualified, but you then chose to become a bricklayer’s labourer for a number of years and later worked as a stone mason. Later, you and your wife purchased a garden supply business which the two of you owned outright by the time you were 32. The business failed after you were arrested in 1996.

You have the support of your wife, your two daughters and your son, who suffers from cerebral palsy. Your inability to give assistance in his care to your wife will make the serving of your imprisonment more onerous.

You have one major prior conviction that I have already outlined. You were sentenced to 6½ years with a non-parole period of four years in 1998. You were released on parole in 2002. You reoffended in 2005. As I have already expressed to you and towards your co-accused, you did not learn much from that experience. I must say I regard four years as a non-parole period as being a pretty significant sentence to have served.

That offending was particularly relevant to this matter because it involved an aggravated burglary at Sigma for the purposes of stealing chemicals to manufacture drugs.

Delay does not operate in your case in quite the same way as it does for your co-accused because you absconded, but it is still a feature to which I have to have regard in sentencing.

What is more important is that you are undergoing a sentence of 8½ years with a non-parole period of five years, eight months, with you being first eligible for parole, as best as I can calculate it, in about April of 2015.

It follows also that principles of totality will apply.

I am obliged at the end of the day to fix a sentence which is appropriate for you in relation to the whole criminality for the two sets of offending. I therefore need to say something about the matters for which Judge Lacava sentenced you.

In his Honour’s written reasons, Judge Lacava in sentencing you, said:[1]
[1]Director of Public Prosections v George Lipp (Unreported, County Court of Victoria, Judge Lacava, 22 February 2013) [8]-[23]

In March 2009 investigating police from the Clandestine Laboratory Squad commenced a drug investigation codenamed “Hosted”. You were the target of that investigation.
By June 2009, police surveillance had observed you in the eastern suburbs of Melbourne. Police had been alerted to you by placing surveillance on your wife whom you were observed to meet.
By 9 July 2009. your identity had been confirmed. Subsequent surveillance of you led police to observe you entering and leaving a property at 20 Bardwell Drive, Mickleham. That is a property in a semi-rural location on small acreage and where the house is located some distance off the road with a relatively long driveway. The house is a typical three bedroom brick veneer type with a surrounding veranda.
After monitoring your movements for some time investigators decided to arrest you on the warrant on 14 August 2009. Surveillance of you at the Mickleham house observed you leave the house in a white Holden Rodeo utility. The registration of that vehicle is now known to have been falsified.
You were followed to Box Hill where you met your wife and a short time later police intercepted your car and you were arrested. A search of the vehicle located a loaded Ruger handgun (Charge 1), a loaded Ruger magazine and $1855 in cash. Both were located behind the passenger seat. There is no suggestion you reached for the pistol or made any attempt to use it at the time of your apprehension.
You were given the opportunity to answer questions of police at the scene of your arrest. You declined to answer questions. You were taken to the police complex in St Kilda Road for further questioning and processing.
In the afternoon of 14 August 2009, police executed a search warrant at the Mickleham property and you were taken by them back to the property where you were kept secure outside the house whilst police commenced their search.
During the course of the search police located further firearms and chemicals and equipment typical of that used in a clandestine amphetamine laboratory within the house. It is convenient to deal with the firearms first.
A 9 millimetre Owen sub-machine gun was located on a mattress in the lounge room. The gun was loaded when found. The police also located ammunition for this firearm in the house (Charge 2). A partial DNA profile, that indicated a mixture of DNA from at least two persons, was obtained from a swab taken by Mr Glaser from this firearm. A DNA profile of the major contributor to that DNA profile matched your DNA profile. The subsequent testing of this sub-machine gun by Mr Glaser demonstrated that this firearm was able to be discharged both manually and in automatic function. Exhibit 2 was a DVD demonstration of this being carried out by Mr Glaser.
A single barrel 12 gauge Stirling shotgun was located on the bottom shelf of a cupboard in the hallway of the house. This firearm was also loaded when found (Charge 3). Testing by Mr Glaser showed that this gun was able to be discharged.
Police also found an 8 millimetre calibre Mondial self-loading alarm pistol in a sports bag on the floor of the hallway cupboard in the house. This pistol was designed to discharge cartridges and/or teargas cartridges as a deterrent to others. The pistol was not capable of discharging a bullet or shot although it was altered to look as if it could. It was found by Mr Glaser to be able to discharge a gas cartridge as it was designed to do (Charge 4).
Wrapped in a blanket on the third shelf in the hallway cupboard police also found a 7.62 x 39 millimetre Soviet Six Corp rifle together with a loaded magazine. Mr Glaser also found this weapon to be in working order (Charge 5).
Mr Glaser gave evidence of examining the Ruger pistol found in your possession at the time of your arrest. He found it to also be in working order.
There was evidence of a deal of ammunition being found at the house and of magazines being taped together suggesting they were ready for use. None of the weapons were registered. It was not in dispute you were and are a prohibited person from possessing a firearm.
Police also found explosives at the house. Inside a large shed police located two sticks of power gel rigged with a safety fuse and detonators. Inside the hallway cupboard police located two and a half sticks of power gel and numerous bundles of electric detonators (Charge 6).
The weapons found and the explosives are all depicted in photo books presented to the jury and may be seen on videos taken of the search.

And then:[2]

Police located chemicals and laboratory equipment throughout the house and in a large shed located at the rear. When entered, the house emitted a strong chemical odour. A detailed log of everything that was found was prepared and everything located was videoed and photographed both in situ and after its removal. At the rear of the property was located a mobile work shed found to contain equipment for making drugs. That had been brought onto the property after rental (Charge 7).
Inside the house police located 183.8 grams of mercuric chloride. A prescribed quantity of this chemical is 0.1 gram (Charge 8). They also found 12.3 kilograms of phosphorous. A prescribed quantity of this chemical is 10 grams. Both chemicals are prescribed precursor chemicals (Charges 8 and 9).

[2]Idem [28]-[29].

I take into account your plea. I am satisfied that you do see this as your last real chance to make good. As with Mr Zerna, I am satisfied that you have a chance at 50 to do what you could not do at 40. I regard your prospects of rehabilitation as being at least reasonable, but I must have regard to general and specific deterrence and just punishment and, as I have already said, the principles of totality.

On the charge of trafficking a commercial quantity of 1P2N, you are sentenced to be imprisoned for 3½ years. I order that 18 months of that sentence be served cumulatively upon the sentence you are undergoing.

That is a head sentence of ten years and I fix a new non-parole period of seven years and three months. I declare that you have served 1589 days pursuant to this sentence. That would mean that you will be eligible for parole in about February 2016. That means, and what I intend is, that your head sentence has been increased by 18 months and your non-parole period by about a year. In saying that, I would say this is still quite serious offending.

Pursuant to s 6AAA of the Sentencing Act 1991, had it not been for your plea of guilty I state that I would have sentenced you to be imprisoned for 5½ years with a non-parole period of three years.

I direct that the above declarations and statements and their details be entered into the records of the Court.

- - -

Schedule A

DIRECTOR OF PUBLIC PROSECUTIONS

-v-

GEORGE ERNEST LIPP

And

BRIAN DAVID ZERNA

PROSECUTION OPENING ON PLEA

The accused, George Ernest Lipp, is charged with trafficking 1-Phenyl-2-Nitropropene (1P2N), a drug of dependence in a quantity not less than a commercial quantity. It is the prosecution case that the accused Lipp trafficked the drug by manufacturing between 1 May 2005 and 22 August 2005. A commercial quantity applicable to 1P2N at the relevant time was 2.0 kgs.
The accused, Brian David Zerna, is charged with conspiring to traffick Methylamphetamine in a quantity not less than a commercial quantity. It is the prosecution case that the accused Zerna conspired to traffick the drug through manufacturing with Lipp, Simon Carpenter, Shane Francis Bugeja and Lance Craig Johnson between 3 November 2004 and 22 August 2005. A commercial quantity applicable to methylamphetamine at the relevant time was 250 g of pure substance.

Background

It is alleged by the prosecution that between November 2004 and 22 August 2005 a number of people were involved in sourcing chemicals, setting up a clandestine laboratory at Knowsley and engaging in various steps in the process of manufacturing methylamphetamines. Those involved were Brian Zerna, Lance Johnson, Shane Bugeja and Simon Carpenter. The accused Lipp was an associate of Brian Zerna, and also became actively involved with the group in May 2005. Lipp became involved in the manufacture of 1P2N, a drug of dependence itself, but also a pre-curser that can be used in the manufacture of methylamphetamines.
A police operation was conducted from late 2004 until 22 August 2005. The operation involved the use of lawfully obtained listening devices, telephone intercepts, video surveillance devices, physical surveillance and vehicle tracking. Police also covertly executed search warrants during the operation and overtly at the conclusion.

The Role of each of the Accused

Lance Johnson was involved from late 2004 and his role was to procure chemicals for the purpose of the manufacture. He was actively involved with other members of the group and acted as a ‘runner’ for the organisation, placing orders for chemicals and picking up and delivering chemicals and equipment. In late 2004 Johnson contacted Simon Carpenter, a former employee of Science Supply Australia, in order to set up the supply of chemicals and equipment. It is alleged that the quantities of chemicals ordered and supplied from late 2004 to August 2005 were sufficient to have manufactured large quantities of methylamphetamine. The orders included 80 litres of benzaldehyde, a key ingredient in the manufacturing process, capable of being manufactured, with other chemicals, into methylamphetamine in the order of 30 kg. (See evidence of Perkal T934)
Telephone intercept and surveillance material showed Johnson and Carpenter communicating regularly from late 2004 to August 2005. There were numerous orders for chemicals made and supplied. Police discovered a laboratory had been set up in a shed at a farmhouse in Knowsley in central Victoria. Shane Bugeja was identified as a person who was involved with the laboratory at Knowsley. Telephone intercepts, listening device and surveillance material indicated that he attended the laboratory on numerous occasions. He was also involved in the delivery of chemicals and was in regular contact with the accused, Brian Zerna, as was Johnson.
It is alleged that Brian Zerna gave directions to Johnson regarding what chemicals to order from Carpenter and the quantities of those chemicals to be ordered.
It is alleged that the accused George Lipp was involved in and organised the ‘cooking’ process at the laboratory at Knowsley up to the production of 1P2N, and was actively involved in discussions regarding the supply of chemicals for that process.
Police ultimately located 2.183 kgs of 1P2N at the laboratory at Knowsley, among other chemicals. 1P2N is a drug of dependence but also a key precursor chemical in the manufacture of methylamphetamine.
The prosecution alleges that 1.0 kg of 1P2N is capable of being manufactured, with other chemicals, into 490 g of methylamphetamine. (See evidence of Perkal P972)

Lipp and Zerna

On 3 May 2005 a lawfully installed listening device at the home of Zerna recorded a conversation between Zerna and Johnson, where they mentioned drums, ordering stuff and using Styrofoam boxes to avoid smashing.
On 5 May 2005, police conducting surveillance on the group identified Lipp and Zerna at a meeting at a cafe in Diamond Creek with Bugeja. There they met up with Johnson.
On 13 May 2005 the listening device at Zerna’s property recorded a conversation between Zerna and Johnson where they mentioned ordering “4 bags” (p 3) and wanting some Mercury Chloride (Zerna p 4) Zerna said “That’s what we’re waiting on to go to work”, and “I thought we’d ordered it already”. Zerna said “We need some Mercury Chloride, write that down, ‘cause that wasn’t on the order”. (p 5). There was discussion of the price being “6,9” (p6). During that conversation a telephone call was intercepted between Johnson and Carpenter where Johnson asked Carpenter for four lots of 500 grams of the items he had previously enquired about and some “… chloride.”
On 16 May 2005, at 10.38 a.m., the listening device at Zerna’s property, recorded a conversation between Zerna, Johnson and Lipp. During the conversation they discussed chemicals and paying $10,000 to Simon Carpenter. Lipp was heard asking Zerna “how much did you give him” and Zerna replied “Four and a half”. At that point they are talking about how much money Johnson has been given to pass on to Carpenter and there appeared to be some uncertainty about the amount of money Johnson had been given for that purpose. After some further discussion Lipp told Zerna that he will leave it to Zerna and Zerna replied that he would sort it out. There was also discussion about 200 litres of hydrochloric and mercury chloride and that the ‘four and a half’ was to buy the next order (p3). There was discussion and disagreement between Lipp and Zerna about what chemicals they needed and Lipp said he would go up there and do a stocktake (p5). There was discussion by Lipp of toluene being stored in a tin, that hydrochloric and that methanol comes in plastic containers like formaldehyde and polyurethane (p7). Johnson said that he hadn’t had anything that morning and Lipp said “You’re supposed to sell it mate, not take it.”(p21)
On 26 May 2005 a further conversation between Johnson and Zerna was recorded where they mentioned mercury chloride, bute, ammonium chloride and n-butynol
On 6 June 2005, Police conducted a covert search at the clandestine laboratory at Knowsley. A number of samples of chemicals were taken. Listening devices and optical surveillance devices were also lawfully installed at the time of the search. Later analysis of the samples revealed the presence of 1P2N in the form of yellow crystals from a red bucket in a refrigerator.
On 7 June 2005 the listening device at Zerna’s property recorded a conversation between Johnson and Zerna where Zerna warned him not to talk on the phone
On 15 June 2005, a further discussion was recorded over the listening device installed at Zerna’s property. Zerna, Johnson and Lipp were heard in discussion. Johnson said “Look at the money.”
On 20 June 2005 a conversation between Johnson and Zerna was recorded by the listening device at Zerna’s property. Johnson wanted to know where he stood. Zerna told him there was money available and asked how much he had provided him. Zerna complained that Johnson was going through it faster than anyone. Zerna told him ”You’ve had fucking plenty mate and I dunno where it’s gone” (p4) Zerna told him “You took the gear that I gave you right, and you told George you didn’t want to sell it, now you sold it and I didn’t get the money”.(p5). Zerna said “Hang on, 15, 16, 17, 18, 19, car, this, that, that’s 30 without even thinking about it.”
On 28 June 2005, a further conversation was recorded over the listening device installed at Zerna’s property. Zerna, Johnson, Bugeja and Lipp were heard in discussion. Bugeja said “you told me the big 10 litre flask” Lipp told him he brought the wrong flask and the wrong stopper. Lipp said “that’s the stopper for the small separation flask”. There was discussion about a 50 litre pot. Lipp told Bugeja “the only reason we are not doing it here is because all the stuff is up there”.
On 1 July 2005, police covertly executed a search warrant at the address of Zerna. Police observed a condenser, funnels, a modified beer keg and large pot, capable of being used in the process of methylamphetamine manufacture.
On 14 July 2005 a further conversation was recorded over the listening device installed at Zerna’s property. Zerna, Johnson and Lipp were heard in discussions about stoppers for glassware and the possibility of Zerna buying a BMW for $37,000. Lipp told Johnson he wanted him to put some pressure on Simon to make sure things were delivered.
On 19 July 2005 Johnson arranged a meeting between Carpenter and Zerna. They meet at the Panton Hills Hotel and discussed Carpenter’s ongoing supply of chemicals. Zerna indicated that he did not want Carpenter selling chemicals to another syndicate and Zerna was seeking Benzaldehyde in 200 litre drums and also Phenyl-2-nitropropene (P2P), a precursor in the methylamphetamine making process.
On 1 August 2005 the listening device at Zerna’s property recorded a conversation between Zerna and Bugeja where they discussed acid, formaldehyde and iron. This day was one of a number where a tracking device in Bugeja’s vehicle recorded the vehicle either travelling to Zerna’s address and then to the Knowlsey laboratory, or from the Knowsley property to Zerna’s. (others 22/6/05, 8/8/05, 9/8/05, 10/8/05, 12/8/05, 19/8/05)
On 5 August 2005, at 2.50 p.m. a telephone call between Zerna and Bugeja was lawfully intercepted. Bugeja told Zerna he’d been running around. Zerna told him that “Boz” was waiting for him. Bugeja told him he’d come past. Zerna asked if he had forgotten something, Bugeja said he hadn’t forgotten anything. Zerna then said “Boz” said not to worry about it. Zerna then said that Boz said “you’re unemployed now”. Bugeja replied “tell him I’ve had it in me pocket for three days, that he’s not the fuckin octopus or the fantastic four”. The prosecution alleges that the name “Boz” is a nickname used by Zerna for George Lipp.
On 8 August 2005, at 9.37 a.m. a further conversation was recorded over the listening device installed at Zerna’s property. Zerna and Bugeja had a conversation. Zerna referred to “Boz” being unhappy because Bugeja didn’t show up when he was supposed to. Zerna said “You know when this was supposed to be cleaned up, April”. Bugeja told Zerna that he’s helping him fix his house. Zerna told Bugeja that George was angry. Zerna asked Bugeja if he picked up the mercury (p4) Bugeja said “No”. Zerna told him he was unreliable (p5) Bugeja apologised, saying it wouldn’t happen again (p6).
On 16 August 2005, the tracking device lawfully installed in the vehicle belonging to Bugeja recorded the vehicle travelling to Knowsley arriving at 8.48 a.m. The Surveillance video installed at the laboratory recorded Bugeja and Lipp in the car. When they arrived, Bugeja, Lipp and Ali (the owner of the farm) entered the shed and moved items about. Bugeja and Lipp departed in the vehicle at 1.57 p.m.
On 19 August 2005, at 9.23 a.m., a lawfully installed listening device in Bugeja’s car recorded a conversation between Bugeja & Lipp talking about possible police surveillance. The tracking device recorded the vehicle they were travelling in going to Knowsley. They arrived at 9.33 a.m. and left at 1.01 p.m.

On that day the listening device at Knowsley recorded Bugeja and Lipp at about 10 a.m. discussing Nitro amine, toluene, Buchner funnels. They described chemicals as having strong fumes. Bugeja asked Lipp if he wanted a mask p6, Lipp declined. They discussed mixing chemicals p7, separating chemicals, a magnetic stirrer, and there was the sound of liquid being poured p8.
That same day at 3.24 p.m. Bugeja & Lipp were observed by surveillance police at Valley Outdoor Supplies in Diamond Creek, Lipp was carrying a cardboard box. They were then observed travelling through Hurstbridge at 3.36 p.m. At 3.27 p.m the listening device in the vehicle recorded Bugeja & Lipp discussing heating and cooling, “keep going and going until you’ve got powder”. The tracking device recorded the vehicle going to Zerna’s address at 3.40 p.m. Bugeja and Lipp were seen again in the vehicle at 3.58 p.m. in Main Road Hurstbridge and then the tracker recorded them travelling to Knowsley arriving at 6.01 p.m. The vehicle left there again at 8.56 p.m. and travelled to Bugeja’s house arriving at 10.44 p.m.
On 21 August 2005, the tracking device and surveillance camera at Knowsley recorded Lipp returning to Knowsley in Bugeja’s car arriving at 9.49 a.m. Bugeja and Ali were already present. During that day Lipp and Bugeja involved themselves in activities in the shed. Lipp departed at 2.56 p.m. in Bugeja’s vehicle and headed towards Melbourne. At 3.05 p.m. he was observed driving in the Heathcote area, heading south.

Arrest and Search

At 5.54 p.m. on 21 August 2005 the vehicle being driven by Lipp was intercepted by police at Oaklands Junction and Lipp was arrested.
Arrests of the co-accused were made around the same time and a search was conducted of the property at Knowsley including the laboratory in the shed. A large quantity of chemicals and equipment consistent with the manufacture of 1P2N and methylamphetamine were located. The prosecution alleges that a number of key pre-curser chemicals are involved in the manufacture of 1P2N, including Benzaldehyde, Nitroethane, N-Butylamine and Toluene. These were all located in varying quantities at the laboratory, as well as many other chemicals which could be applied to the manufacture of methylamphetamine from 1P2N.
Among the chemicals seized from the laboratory at Knowsley, and later analysed, investigators discovered:
(i)    A 20 litre reaction vessel containing 8 litres of red/brown liquid and 399.7 gms of yellow crystal. On analysis the liquid and crystals were found to contain 1P2N with the purity in the liquid amounting to 1,234 gms of 1P2N and the purity in the crystals amounting to 375 gms of 1P2N.
(ii) A 5 Litre Duran flask containing approximately 270 ml of two layered liquid, the upper layer containing 1P2N and also toluene.
(iii)      A white plastic jug in a freezer in the shed containing solid, found on analysis to be 611 g of crystals containing 1P2N with a purity estimate of 574 gms of 1P2N.
(iv)      A blue 200 litre drum containing approximately 100 litres of green liquid and black sediment found on analysis to contain benzaldehyde and indications of 1P2N.
(v) Two large stainless steel condensers, washing from which contained methylamphetamine
(vi)      4 x 20 litre methanol drums each containing methanol and 2 of which contained methylamphetamine in solution. The purity of the methylamphetamine contained in the solution amounted to 347 grams.
(vii)     A 25 litre jerry can containing liquid containing methylamphetamine, the purity of which was estimated at approximately 120 grams.
(viii)    A 200 litre blue plastic drum containing a 2 layered orange and yellow liquid the upper layer of which contained methylamphetamine with a purity estimate of 240 grams.
(ix)      Funnels and glassware which contained traces of methylamphetamine
(x) Electronic kitchen scales bearing traces of methylamphetamine;
The total quantity of pure 1P2N able to be determined from the chemicals located amounted to 2.183 kgs. The presence of the 1P2N in the reaction vessel was indicative of an ongoing vacuum distillation process, which occurs to remove toluene during the manufacture of 1P2N, leaving a crystalline substance.
The total quantity of pure methylamphetamine able to be determined from the chemicals located amounted to 707 grams.
The following day, police also conducted a search at Lipp’s house at 9.20 a.m. They located a plastic bottle containing 1 litre of liquid analysed and found to be toluene together with a modified metal lid from an urn.
During a record of interview with Police Lipp declined to answer questions.
Zerna was arrested at his house at about 3.45 a.m. on 22 August 2005. A search was conducted of the property. In his garage police located a converted beer keg and other equipment capable of forming the basis of a methylamphetamine manufacturing laboratory. They also located a text book on the manufacture of amphetamine, which described some processes identical to those set up at Knowsley. On Zerna’s computer was a file in a folder headed “Boz” which contained extensive information (approximately 4000 pages) in respect of the manufacture of methylamphetamine and other illicit substances.
During a record of interview with police Zerna declined to answer questions.

Conclusions

The basis of Lipp’s liability is that he was actively involved in the manufacture of 2.183 kg of 1P2N, which was located at the Knowsley property.
Zerna’s liability is based on his agreement with others to engage in trafficking methylamphetamine by manufacture . The intention of the accused Zerna to conspire to traffick methylamphetamine in not less than a commercial quantity can be deduced from (but is not limited to):
(i)The nature and scale of the clandestine laboratory (eg see evidence of Perkal T942 in relation to the size of the condensers located “They’re much larger than what I normally come across”);
(ii)The presence of an ongoing reaction at the Knowsley property when raided by police, with 1P2N found in a reaction vessel part way through a vacuum distillation process;
(iii)The presence of traces of methylamphetamine in washings from equipment located at Knowsley;
(iv)The presence of in excess of 700 grams of methylamphetamine in solution in chemicals located at Knowsley;
(v)The location of 700 grams of mercuric salts heating on a hotplate upon police entering the Knowsley property, a chemical that can be utilised late in the process of methylamphetamine production;
(vi)The presence, type and volume of chemicals located at the Knowsley property including Methylamine, 1P2N, Phenyl-2-nitropropene (P2P), Toluene, N-Butylamine, Methylamphetamine washings from reaction vessels, Sodium Chloride, Methanol, Hydrochloric Acid, Nitroethane, Iron, Aluminium, Benzaldahyde, Caffeine and Sodium Hydroide (Many of which are included in the Methylamphetamine ingredients chart prepared by Perkal and Upton and detailed in Perkal’s evidence at T961 and T972);
(vii)The frequency of trips by Bugeja to the laboratory at Knowsley and the regular attendance at the property of Zerna either en route to or returning from Knowsley;
(viii)The regularity of communications between Carpenter and Johnson for the purpose of acquiring large quantities of chemicals between late 2004 and the conclusion of the police operation in August 2005;
(ix)A written list provided by Johnson to Carpenter comprising chemicals in varieties and quantities consistent with the production of methylamphetamine;
(x)The product of listening devices and telephone intercepts capturing conversations between each of the conspirators pertaining to the organisation of chemicals and preparation of methylamphetamine at the Knowsley laboratory;
(xi)Video surveillance of the setup and movements at Knowlsey showing Bugeja involved in the ‘cooking’ process with Lipp;
(xii)Methylamphetamine manufacturing equipment and instruction manuals and paraphernalia found at the home of Zerna.

[2013] VSC 192

27 March 2013