Galloway v The King

[2024] NZHC 40

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2023-404-418 CRI-2023-404-419

CRI-2023-404-420 [2024] NZHC 40

BETWEEN

DANIEL MALCOLM GALLOWAY

Appellant

AND

THE KING

Respondent

Hearings:	4 December 2023 and 30 January 2024
Appearances:	M J Taylor-Cyphers for Appellant S L Vreeburg for Respondent
Judgment:	31 January 2024

JUDGMENT OF O’GORMAN J

This judgment was delivered by me on 31 January 2024 at 10 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

M J Taylor-Cyphers, Barrister, Auckland Meredith Connell, Auckland

GALLOWAY v R [2024] NZHC 40 [31 January 2024]

[1]                 Mr Galloway (the appellant) appeals against the sentence imposed on him after he pleaded guilty following a sentence indication.

[2]                 On 20 July 2023, Judge A M Skellern imposed a sentence of four years and 10 months’ imprisonment in relation to a number of charges:

(a)The first set were drugs and receiving charges, and the second were violence and threatening charges.

(b)While on electronically  monitored  (EM)  bail  awaiting  sentence,  Mr Galloway absconded and reoffended, resulting in two new sets of charges including manufacturing methamphetamine, possession of a firearm and possession of ammunition.

(c)There was also another single charge of unlawfully getting into a motor vehicle.

[3]                 The appellant initially appealed the sentence on the grounds that it was too high, due to a failure to take into account a discount that should be applied in respect of the $78,170 forfeiture order.

[4]                 At the resumed hearing of this appeal, the appellant contended that the entire issue of sentencing should be remitted to the District Court, given that the legal basis for the forfeiture order was not expressly stated, nor were there any factual findings necessary to support a proper forfeiture order.

District Court process

[5]                 The sentencing indication was given on 1 June 2023. Mr Rhodes represented the defendant at that hearing, and at the subsequent sentencing hearing. As recorded at [30] of the sentencing indication notes, it was accepted on behalf of the defendant that an inference can be drawn as to some degree of commerciality from the cash located, but the sentencing indication proceeded on the basis of a summary of facts that could not specify the amount of methamphetamine manufactured. It was not

accepted by the defence that the cash located was solely or even predominantly from the sale of methamphetamine.

[6]                 Subsequently, at the sentencing that occurred on 20 July 2023, this issue is touched on in a transcript of the legal discussion that took place before sentencing. On page three of the transcript, the Judge asked about the question of forfeiture and asked if that had been the subject of discussion with the Crown. Mr Rhodes responded that he had not specifically taken instructions and needed time to do so. However, he certainly could not concede that the cash was the proceeds of sale, “but it would be hard to escape a conclusion that it was, I think the other part of the test is whether it was for the purpose of further purchases…”. On page four, Mr Rhodes repeated the same point, saying “… which I imagine would not trouble your Honour in terms of the finding, so I’d be surprised if it was opposed but I can’t take it further than that without specific instructions”.

[7]                 The matter was then adjourned to enable Mr Rhodes to take instructions from his client. When the hearing resumed, he advised the Court:

Thank you for that opportunity your Honour, the short version is forfeiture is not opposed. Mr Galloway wants me to pass on that he doesn’t accept it was from the sale of drugs, he does have a legitimate source of that money but accepts my advice about that the test under the Act and what your Honour would need to be satisfied of, but is concerned more about it being used as an aggravating feature against him. I hope it’s to his credit that the forfeiture is not being opposed despite what might have otherwise been a challenge.

Legal principles

[8]                 The Court must allow an appeal against sentence if it is satisfied that there has been an error in the imposition of the sentence and that a different sentence should be imposed.1 Generally, the sentence must be shown to be manifestly excessive or wrong in principle.2 The focus is on the end sentence imposed, rather than the process by which it is reached.3

1      Criminal Procedure Act 2011, s 250.

2      Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [26]–[27] and [31]–[35].

3 At [36].

[9]                 The claim that a sentence is manifestly excessive (or inadequate) is inevitably premised on the contention of prior error, which may include questions of whether the starting point was too high given the facts, or of incorrect discounts.4

[10]            Appellate courts do not indulge in mere tinkering with a sentence.5 The Court generally will not intervene where the sentence is within the range that can properly be justified by accepted sentencing principles.

[11]            Under s 10B of the Sentencing Act 2002, a sentencing judge must take into account whether any “instrument forfeiture order” was made in respect of property, in which the Court must take into account the value of the property forfeited and the nature and extent of the offender’s interest in that property. The provision under which “instrument forfeiture” orders are granted is s 142N of the Sentencing Act. That provides for “an instrument of crime” to be forfeited. That phrase is defined in s 4(1) to mean property used (wholly or in part) to commit or facilitate the commission of a qualifying instrument forfeiture offence.

[12]            Such orders are different from the imposition of forfeiture under s 32(3) of the Misuse of Drugs Act 1975. That enables the court to order that money be forfeited to the Crown if the Judge is satisfied that “money found in the possession of that person” was received by that person in the course of, or consequent upon, the commission of that offence or was in the possession of that person for the purposes of facilitating the commission of an offence against s 6 of the Act.

Appellant’s submissions

[13]            In the written submissions, counsel for the appellant referred to the Court of Appeal case Duthie v R which sets out the relevant factors to be taken into account in determining a discount for an instrument forfeiture order, namely:6

(a)the value of the property that is subject to the forfeiture order;7

4 At [32].

5      R v Boyd (2004) 21 CRNZ 169 at [38].

6      Duthie v R [2023] NZCA 312.

7      Sentencing Act 2002, s 10B(2)(a).

(b)the impact of the forfeiture order on the offender;8

(c)the extent to which the property was used in the offending;9

(d)whether the property’s maintenance or improvement was funded by the proceeds of crime;10 and

(e)the gravity of the offending.11

[14]            In Duthie, the Court considered that a 35 per cent discount was appropriate to reflect the penalty impact of the instrument forfeiture order,12 which resulted in a house that had been acquired through legitimate means being forfeited.

[15]            As discussed in R v Brazendale, the reason that a discount is provided is to reflect the penalty impact of seizing valuable property legitimately owned by the defendant. In particular, it reflects:13

…a legislative intent that such orders are part of the means by which the offender before the Court and other potential offenders are deterred from committing offences. In other words, the instrument forfeiture order is doing part of the work that would otherwise need to be performed in responding to s 7(1)(f) of the Sentencing Act.

[16]            The appellant says that the proportion of the $78,180 that came from the manufacture of methamphetamine was disputed. The sentencing Judge stated that she could not determine how much methamphetamine had been manufactured, so this supports an implication accepted by the sentencing Judge that there may be legitimate and illegitimate funds mixed together. While the appellant should not be entitled to the most favourable inference on the evidence, counsel for the appellant says that it is unfair to draw the least favourable inference. Mr Galloway ought to receive a discount for a proportion of the funds that can be inferred to have arisen from legitimate sources. In the written submissions, counsel for the appellant contended that a

8      Duthie v R, above n 6, at [56].

9 At [55].

10 At [54].

11 At [59].

12 At [60].

13     R v Brazendale HC Auckland CRI-2009-092-17133, 20 August 2010 at [20] (footnote omitted).

discount of 30 per cent was appropriate in the circumstances and this would result in an overall sentence that better reflected that the gravity of the offending falling at the lower end of the spectrum.

[17]            At the resumed appeal hearing on 30 January 2024, the relief sought was remission of the entire question of sentencing to the District Court, because of the concerns about the forfeiture order. The argument was that the High Court should require a clear reference to the statutory provision under which any forfeiture order is made, supported by appropriate factual findings that establish the basis for any such orders being made.

Analysis

[18]            I do not consider there is any realistic doubt about the statutory provision under which the forfeiture order was made.14 The transcript of the legal discussion refers to the substance of the legal requirements under s 32(3) of the Misuse of Drugs Act. Given those exchanges, it cannot reasonably be argued that anyone at the sentencing hearing was contemplating the quite different requirements of s 10B of the Sentencing Act (for which an entirely different process is involved). The lack of express reference to the particular section in the sentencing decision seems to have been inadvertent because the forfeiture order was unopposed after an express discussion about the legal tests under “the Act”.

[19]            Given that s 10B is confined to instrument forfeiture orders, whereas this was a forfeiture order made under s 32 of the Misuse of Drugs Act, there was no error on the part of the sentencing Judge in failing to take into account the forfeiture order.15

[20]            In any event, Judge Skellern was entitled to conclude that there was no proportion that could fairly be inferred on the evidence as derived from legitimate sources so as to justify a discount for punitive consequences. This is consistent with the forfeiture order being unopposed.

14     Porter v New Zealand Police [2022] NZHC 415 at [31].

15     McKechnie v R [2018] NZHC 1811 at [20], referencing Henderson v R [2017] NZCA 605 at [32];

Porter v New Zealand Police above n 14 at [31].

[21]            Since early 2020, when Mr Galloway was first arrested, there has only been a short period of time when the terms of EM bail permitted him to work. The purpose of that exception was so that he could work to repay an Inland Revenue Department debt. Otherwise, Mr Galloway has either been in custody or on EM bail conditions with a 24-hour curfew, without any condition permitting him to engage in paid employment.

[22]            The cash was found on 18 August 2022 when police searched the EM bail address. It was in $20 and $50 denominations, which is consistent with drug offending. The funds were scattered around the property and were either vacuum sealed and/or concealed. For example, a sum of $34,700 was found inside a black 20-litre dry bag in the bush area behind the garden shed. The garden shed itself showed excessive levels of methamphetamine and the presence of ephedrine/pseudoephedrine. Other materials and substances linked to the manufacture of methamphetamine were scattered across all parts of the property.

[23]            In the above circumstances, I do not see any factual basis for inferring that the cash found at the property had in part been obtained through legitimate sources. Accordingly, I see no error by the District Court in not affording a discount in respect of the forfeiture order.

[24]            I do not consider the forfeiture order to be defective either. It was made unopposed, after a discussion of the two grounds under s 32(3). Counsel for the defendant acknowledged that even without any admission that the cash constituted proceeds of drug sales, it would be hard to escape a conclusion that the cash was going to be used for the purpose of facilitating the commission of an offence of dealing with controlled drugs. In granting the forfeiture order unopposed, the Judge was satisfied that one or other jurisdictional basis existed.16 That appears to be amply supported on the facts described above.

[25]            Finally, stepping back, I do not consider that the sentence of four years and 10 months’ imprisonment was manifestly excessive. It was imposed as a global sentence in respect of all charges. The starting point was well within range considering

16     Porter v New Zealand Police above n 14 at [32].

the offending was in the lower band two of Zhang v R.17 There are other instances where starting points in the range of four years’ imprisonment for manufacturing unknown quantities of methamphetamine involving low levels of commerciality have been imposed.18 Other uplifts and discounts applied were explained in detail in the sentencing notes. The overall outcome was well within range.

Result

[26]Accordingly, I dismiss the appeal.

O’Gorman J

17     Zhang v R [2019] NZCA 507, [2019] 3 NZLR 648 at [19].

18     See R v Fitzpatrick CRI-2019-044-2149; and R v Heemi [2020] NZDC 15315.