LEZHANG TANG AND THE KING

[2024] NZHC 2693

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2024-404-412

[2024] NZHC 2693

BETWEEN

LEZHANG TANG

Appellant

AND

THE KING

Respondent

Hearing:	16 September 2024
Appearances:	G Newell and L Qian for Appellant D Becker for Respondent
Judgment:	18 September 2024

JUDGMENT OF WILKINSON-SMITH J

[Appeal against sentence]

This judgment was delivered by me on 18/09/2024 at 12pm.

………………………… Registrar/Deputy Registrar

Solicitors:

G Newell, Auckland

Meredith Connell, Auckland

TANG v R [2024] NZHC 2693 [18 September 2024]

Introduction

[1]    Mr Tang appeals an end sentence of three years and five months’ imprisonment on the following charges:1

(a)23 charges of money laundering;

(b)one charge of conspiracy to supply the Class B controlled drug MDMA; and

(c)one charge of possession for supply of the Class A controlled drug cocaine.

The offending

[2]    The charges arose from a police operation codenamed Operation Worthington which focused on the activities of an organised criminal group involved in the laundering of money obtained from the importation and supply of controlled drugs. The amount of money laundered was in the millions.

[3]    Mr Tang and two associates set up cash exchanges and arranged for drivers to collect the cash. To maintain a degree of anonymity between the group dropping off the cash and the group collecting it, a “token” system was used. The token was typically a picture or text message of a serial number. This was sent to both parties through a third party enabling them to verify each other. The exchanges occurred in public spaces such as carparks, and occurred between people who did not know each other. Once the cash was obtained, it was then entered into legitimate financial systems using other associates and a multitude of bank accounts operated by them.

[4]On 23 separate occasions Mr Tang was involved in laundering a total of

$3,386,730. Mr Tang also conspired to supply one kilogram of MDMA and was in possession of an unknown amount of cocaine for the purpose of supply.

1      R v Tang [2024] NZDC 16693.

[5]    Following his arrest Mr Tang was interviewed by police and largely minimised his involvement in the money laundering activity. However, after discussions with his lawyer he made a formal statement where he outlined in some detail his role within the syndicate and the operation of the syndicate. Police advise that this this statement provided an interesting overview of how Chinese money laundering syndicates operate in New Zealand and the use of cash generally in some communities.

[6]    One of Mr Tang’s co-defendants pleaded guilty prior to Mr Tang signing his statement, and another is overseas and unlikely to face prosecution.

The sentencing decision

[7]    The sentencing Judge set out the facts relating to the charges and noted that Crown and defence were reasonably close on the appropriate starting point for the money   laundering   charges.    The   Crown   submitted   a   starting   point   of     six years’ imprisonment  and  defence  counsel  submitted  a   starting   point   of  five years’ imprisonment. The sentencing Judge noted that the amount of money involved was substantial, and the number of money laundering transactions significant.

[8]    The amount of  drugs  involved  in  the  separate  Class  B  offending  was one kilogram of MDMA and described as “not insignificant”. The Judge proceeded on the basis that the charge of possession of a Class A controlled drug for supply related to 56 grams of methamphetamine. It is agreed that the reference to 56 grams of methamphetamine was an error because the actual drug was cocaine, and the amount was unspecified.

[9]    The sentencing Judge identified the lead charge as the money laundering charges and took a starting point of five years’ imprisonment. There was an uplift of two years for the two additional drug dealing charges, leading to an end starting point of seven years’ imprisonment.

[10]   Both Crown and defence agreed that the 25 per cent guilty plea discount was appropriate although the plea did come late. A further 10 per cent was allowed for previous good character. There was an issue as to what should be allowed for matters

raised in the  joint  memorandum  of  counsel.  Defence  counsel  sought  a  further 25 per cent discount while the Crown submitted that 10 per cent would be appropriate. The Judge arrived at an additional discount of 15 per cent. That lead to an overall discount from the starting point of seven years of 50 per cent.

[11]   The Judge considered Mr Tang’s situation while on bail and noted that he was not electronically monitored but was on a 24-hour curfew. His Honour declined to give any discount for time spent on bail. The end sentence was therefore three years and five months’ imprisonment.

The approach on sentence appeals

[12]   An appellant may appeal against sentence as of right under s 244 the Criminal Procedure Act 2011.

[13]   An appeal against sentence must be allowed if an appellate court is satisfied that for any reason there is an error in the sentence imposed and that a different sentence should be imposed.2 In any other case the appellate court must dismiss the appeal.3 Sentencing is not a science, and an appellate court will not intervene unless the end sentence is outside the range available to the sentencing Judge.4 An appellate decision is focused on the end result rather than the process by which the sentence was reached.5

[14]   When allowing an appeal on the basis that there was an error in the sentence imposed the appellate court may: set aside the sentence and impose another sentence (whether more or less severe) that it considers appropriate; vary the sentence or any part of the sentence or any condition of sentence; or remit the sentence to the court that imposed it.

2      Criminal Procedure Act 2011, s 250(2).

3      Section 250(3).

4      Palmer v R [2016] NZCA 541 at [17]; and Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [30].

5      Kumar v R [2015] NZCA 460 at [81].

Submissions

[15]Counsel for Mr Tang advanced four grounds of appeal:

(a)The two-year uplift for the drug related offending was too high. The conspiracy charges amounted to no more than a discussion of price and did not proceed further than making a theoretical plan to supply the drugs.  The  Judge  erroneously  found   that   Mr  Tang  possessed two ounces of methamphetamine rather than a relatively small amount of cocaine. Mr Newell submitted that the appropriate and proportionate uplift for the additional drug offending was nine month’s imprisonment.

(b)The 15 per cent reduction for the matters in the joint memorandum was insufficient. Mr Newell said the Court ought to have recognised the matters set out with a reduction of 25 per cent.

(c)The Judge failed to recognise the impact of a sentence of imprisonment on Mr Tang’s  young children, aged five and eight years.  A further   10 per cent reduction was appropriate in Mr Newell’s submission.

(d)The sentencing Judge failed to apply a discount for the time spent on restrictive bail conditions. Although Mr Tang was not electronically monitored, his compliance with a curfew over a lengthy period deserved a further reduction of four months.

[16]   Mr Newell submitted that the additional discounts would result in a short sentence of imprisonment and the appropriate sentence would be one of home detention.

[17]   The Crown submitted that the two-year uplift for conspiracy to supply one kilogram of MDMA and possessing an unknown amount of the Class A controlled drug cocaine was not excessive. It was said that the conspiracy charge would attract a sentence of close to three years’ imprisonment on a standalone basis, and the possession of cocaine for supply a starting point of around 12 months’ imprisonment. The Crown submitted that the additional reduction of 15 per cent was sufficient given

the limited utility of the matters set out in the joint memorandum. The Crown further said that the Judge did not err by failing to apply a reduction to account for the impact of Mr Tang’s imprisonment on his children. The Crown said that Mr Tang’s case was quite different to cases cited, particularly Sweeney v R where Mr Sweeney had an important presence in his young children’s lives, primarily because his partner had died leaving him as the primary caregiver.6

[18]   Finally, the Crown submitted that the Judge did not err by failing to apply a reduction for the time spent on 24-hour and nightly curfew. The Crown submitted that there is no set rule for applying a reduction for time spent on curfew,7 but generally a nightly curfew is not considered restrictive.8 Equally, a 24-hour curfew is not as restrictive as electronically monitored bail. The Court has routinely refused to apply discounts for time spent on a 24-hour curfew.

Discussion

[19]   No issue was taken with the starting point of five years adopted in respect of the 23 charges of money laundering. Issue was taken with the two-year uplift applied in respect of Charges 16 and 17.

[20]   Charge 16 involved Mr Tang contacting co-defendants to facilitate the potential supply of MDMA. Mr Tang was communicating on an encrypted messaging service and sent messages including “someone is asking about MDMA” and when asked how much the prospective purchaser wanted, Mr Tang replied, “starting from 1k”, “going 1k for the first time” and “I feel the actual situation is, the more the better”. In further messages Mr Tang confirmed the reference to “1k” meant one kilogram and referred to the MDMA as “McDonalds”. Between 21 April 2021 and 10 May 2021, Mr Tang continued to attempt to facilitate the supply of MDMA. He was advised that the price was $4,000 an ounce and told that there wasn’t much on the market. Mr Tang confirmed he would ask his buyer and queried whether the price included their profit.

6      Sweeney v R [2023] NZCA 417.

7      Rangi v R [2014] NZCA 524 at [10].

8      Alexander-Roberts v New Zealand Police [2024] NZHC 1535 at [37].

[21]   Charge 17 involved possession of a Class A controlled drug, namely cocaine, for supply. In the sentencing decision this was erroneously referred to as methamphetamine. That is apparently because the sentence indication submissions originally filed referred to the drug as methamphetamine. There is no dispute that it was in fact cocaine. As the Crown pointed out both cocaine and methamphetamine are Class A controlled drugs, although methamphetamine is generally regarded as a drug with more wide-ranging negative social impacts than cocaine. Sentences for dealing in methamphetamine are generally slightly higher than sentences for dealing in cocaine.

[22]   On 10 May 2021, one of Mr Tang’s co-defendants messaged him saying “and there are also two cans of coke $6 each”. This is a code for two ounces of cocaine at

$6,000. Two ounces equals very close to  56 grams which explains the reference to 56 grams in the Judge’s sentencing notes. It is accepted however that Mr Tang asked his co-defendant if the “coke” had any “tasting packs” (samples). It was the sample pack that Mr Tang supplied. The conversations between Mr Tang and his co-defendant in respect of the cocaine referenced the supply of larger amounts over and above the sample. Mr Tang confirmed that he would take “both cans” being two ounces if the “tasting packs taste good”. Mr Tang asked if he should get a driver to collect the sample packs and asked that it be disguised so that the driver would not know what it was. The co-defendant advised Mr Tang that it would be disguised in a pack of cigarettes. Mr Tang confirmed that his customer would purchase an ounce if the sample was suitable. Mr Tang subsequently asked the price of 10 ounces of cocaine and confirmed that his buyer had tried the sample and would be interested in buying.

[23]    That deal did not go further because Mr Tang advised that the price his co- defendant was quoting was too high. Mr Tang then messaged his co-defendant saying his customer was interested in the prices of “ice” which is a common name for methamphetamine. There was then further discussion about other drugs. Mr Tang confirmed with his co-defendant that he had provided the price of methamphetamine to his buyers but that was too expensive.

[24]   The charges of conspiracy to supply MDMA and possession for supply of cocaine were somewhat subsumed by the numerous charges of money laundering and

the amount of money involved in that being over $3.3 million. It should not be overlooked, however, that Charges 16 and 17 reveal that Mr Tang was not merely involved in money laundering associated with the drug trade. He was actively involved in trying to facilitate the actual sale of Class A and B drugs, and the sales which he was discussing involved significant quantities.

[25]   Given the amounts involved, a starting point for Charges 16 and 17 on a stand‑alone basis would likely be between three and four years’ imprisonment. From that starting point, a discount for guilty plea and other discounts would apply if the matter were dealt with on a stand-alone basis. In the circumstances of Mr Tang’s actual involvement, I do not regard the uplift of two years as excessive. Nor do I consider that the overall starting point of seven years was manifestly excessive for the offending overall.

[26]   The totality principal operates to ensure that the total sentence is proportionate to the gravity of the offending as a whole. Mr Tang was involved in laundering a very large amount of money which was the proceeds of significant drug offending. He attempted to minimise his knowledge of the source of the funds, but that minimisation is completely debunked by his actual involvement in attempting to arrange drug deals involving different types of drugs and very significant amounts of money. Drug offending of this nature is instrumental offending. It is not committed in the heat of the moment. Mr Tang’s offending was not motivated by addiction or deprivation. It was motivated by financial gain available as evidenced by Mr Tang making reference to profit in the messages. The significant financial gain available from such offending must be countered by sentences that deter people from risking their liberty by engaging in it. If the sentence for drug offending such as this, which is highly profitable, is a period of home detention, the deterrent effect of sentencing would be reduced. A sentence of home detention is not an easy option but it does not carry the same level of deterrent effect as a full time custodial sentence.

[27]   Turning to the further grounds of appeal, namely the lack of credit for the impact on the children, time spent on bail and the matters in the joint memorandum, I note that the overall discount to the starting point of seven years was 50 per cent. In FF v R the Court of Appeal noted that where significant credit is available in

circumstances such as those arising in this case due to the joint memorandum, the usual approach to discounts is often not adopted.9 Courts have tended to amalgamate discounts in such situations. In R v Hadfield the Court of Appeal suggested that an all-up discount of up to 60 per cent may be appropriate in cases where a defendant enters a guilty plea at the first reasonable opportunity and the Hadfield factors are considerable.10 The 60 per cent discount was described as warranted only where the guilty plea is given at the first reasonable opportunity and the other matters raised have a substantial impact. In situations such as the present case, a mathematical approach to credits is not appropriate. The question is whether the overall credit adequately recognises the situation.

[28]   Mr Newell sought a 10 per cent reduction for the fact that Mr Tang has young children, but acknowledged there was nothing particular about Mr Tang’s circumstances apart from the bare fact that he is the father of young children and was involved as one of their caregivers prior to his incarceration. It was acknowledged that if a reduction were justified in this case, it would apply to any father of young children who had a positive impact in their lives. The Crown distinguished this case from cases cited by Mr Newell including Philip v R and Sweeney where the defendant was a sole-caregiver and where the children’s living situation would be considerably affected by their father’s incarceration.11

[29]   In the present case, Mr Tang’s wife is able to look after his children and the impact on them will not be as great as in the cases cited. Again, it is necessary to stand back and look at the credits applied as a whole. Although the Judge did not make any overt reference to a discrete discount to recognise the impact upon Mr Tang’s children, that matter was referred to in the submissions. I do not assume that the Judge failed to consider it. Rather I think that the Judge came to the view that a 50 per cent discount overall adequately reflected the various factors justifying discount while also recognising the seriousness of this offending and the need for deterrence and denunciation.

9      FF (CA383/2016) v R [2017] NZCA 294 at [15].

10     R v Hadfield CA337/06, 14 December 2006 at [30]–[31].

11     Philip v R [2022] NZSC 149; and Sweeney v R, above n 6.

[30]   The final ground of appeal related to the period of time spent on restrictive bail conditions. Mr Tang was on a 24-hour curfew for 12 months. He was not electronically monitored, and the Crown suggested that this reduced the impact upon him. I do not accept that whether a person is electronically monitored is determinative. The restriction on movement created by a 24-hour curfew is the determinative factor. A person who is compliant and does not need electronic monitoring should not be in a worse position than a person who complied only because they were monitored.

[31]   The Crown cited Murray-MacGregor v R where the Court of Appeal dismissed an appeal based on a failure to apply credit for a period of seven months spent on restrictive bail including a 24-hour curfew.12 Mr Murray-MacGregor had a poor bail history and offended while on bail. In the present case, the defendant had an exemplary bail history with no breaches. In Murray-MacGregor, the Court of Appeal reached the conclusion that the sentence imposed was in fact lenient and declined the appeal.

[32]   Credit for time spent on electronically monitored or strict bail conditions are in a different category to credits given for other matters. The credit for time spent on restrictive bail conditions is similar to a credit for time served by a defendant who is in custody and whose period in custody is taken into account as part of the sentence when the sentence end date is calculated. Often it will be appropriate to recognise time spent on restrictive bail conditions, not as any sort of discount on sentence, but simply as an acknowledgement that a defendant’s liberty was curtailed, and that period should effectively be recognised as part of the sentence. Failure to recognise time on restrictive bail conditions can lead to inconsistencies between defendants depending upon how quickly a matter is reached. Bail conditions are not imposed for any punitive reason. They simply exist to manage risk and in this case no doubt reflected the seriousness of the charges faced by the appellant and the risks identified in s 8 of the Bail Act 2000. It is not incumbent on a sentencing Judge to reduce the end sentence for time spent on restrictive bail conditions. Sentencing is a matter of discretion and the question for this Court is whether the sentence imposed was manifestly excessive and outside the range available to the sentencing Judge.

12     Murray-MacGregor v R [2011] NZCA 66.

[33]   In my view, this sentence could potentially have been structured differently possibly with a higher starting point for the money laundering charges and some differences in the way discounts were applied. But that would simply be for the purpose of avoiding argument about whether a particular discount is warranted. It would be an unnecessarily formulaic approach to sentencing. Given the level of offending and the fact that Mr Tang was involved not only in laundering a very significant sum of money, but also in attempting to facilitate the sale of large quantities of drugs himself, I cannot say that the end sentence was manifestly excessive.

[34]   Standing back and looking at the overall level of discount, I regard the level of overall discount as adequate given the 60 per cent indicated in Hadfield. The Hadfield type matters raised by Mr Newell suggest that an overall credit of 50 per cent for all matters which is 10 per cent below that indicated in Hadfield is appropriate.

[35]   Sentencing is not a mathematical exercise, and it is not a situation where discounts are simply piled up. The most important consideration is whether the end sentence is manifestly excessive and outside the available range. This case does not fall into that category.

[36]The appeal is dismissed.

Wilkinson-Smith J