McKelvy v United States of America
[2023] NZHC 3698
•15 December 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CRI-2023-404-000295
[2023] NZHC 3698
UNDER the Extradition Act 1999, Part 8 IN THE MATTER
of an appeal against the District Court Judge’s decision to grant the Respondent’s request for surrender
BETWEEN
MILES JOHN McKELVY
Appellant
AND
UNITED STATES OF AMERICA
Respondent
CIV-2023-404-001530
/cont
Hearing: 1 December 2023 Appearances:
R Mansfield KC and H Stuart for the Appellant/Plaintiff B Thompson for the Respondent/First Defendant
No appearance for the Second Defendant
Judgment:
15 December 2023
JUDGMENT OF GORDON J
This judgment was delivered by me on 15 December 2023 at 10 am,
Registrar/Deputy Registrar Date:
Solicitors/Counsel: Crown Law, Wellington
R Mansfield KC, Auckland B Gloyn, Auckland
H Stuart, Auckland
McKELVY v UNITED STATES OF AMERICA [2023] NZHC 3698 [15 December 2023]
UNDERthe Judicature Amendment Act 1971, Part 30 of the High Court Rules and s 27(2) of the New Zealand Bill of Rights Act 1990
BETWEEN MILES JOHN McKELVY
Plaintiff
AND UNITED STATES OF AMERICA
First Defendant
DISTRICT COURT AT AUCKLAND
Second Defendant
[1] This is an appeal on questions of law1 by Miles McKelvy against a decision of Judge P Winter finding Mr McKelvy eligible for surrender to the United States of America under s 24 of the Extradition Act 1999 (the Act).2 Mr McKelvy also seeks judicial review of Judge Winter’s decision. The appeal and application for judicial review were heard together.
[2] Mr McKelvy was indicted in the United States together with four co- defendants on a charge of conspiracy to import and export cocaine, and to manufacture and distribute cocaine, intending, knowing, and with reason to believe that the cocaine would be unlawfully imported into the United States.3
[3] Mr McKelvy was then arrested in New Zealand under a provisional warrant,4 following which the United States requested his surrender under the Treaty on Extradition between New Zealand and the United States5 (Treaty) and the Act.
[4] In brief, it is alleged that the conspiracy involved buying 400 kilograms (kg) of cocaine from Peru. It is further alleged that the shipment would travel from Peru to the United States and then be exported from there to the ultimate destinations: Romania and then New Zealand. It is alleged that Mr McKelvy played a central role in the conspiracy.
[5] There are a number of grounds in the notice of appeal but they can be distilled into three grounds as follows:6
(a)The Judge erred in his assessment of the double criminality requirement by holding that New Zealand law does not require New Zealand Customs Service (Customs) to be cleared for there to be an importation under the Misuse of Drugs Act 1975. In other words, the Judge erred in finding there is an importation if the drugs are present in
1 Extradition Act 1999, s 68.
2 The United States of America v McKelvy [2023] NZDC 10632.
3 In violation of 21 USC § 963 and 960(b)(1)(B).
4 Issued under the Extradition Act, s 20.
5 Treaty on Extradition between New Zealand and the United States of America [1970] NZTS 7 (signed 12 January 1970, entered into force 8 December 1970) (Treaty). The text of the Treaty is reproduced in sch 1 to the Extradition (United States of America) Order 1970.
6 The notice of appeal contains nine grounds; two (grounds 7 and 8) were not pursued.
New Zealand in transit to another country. As a consequence of that alleged error, the Judge erred in holding that the alleged offence is an “extradition offence”.7
(b)The Judge erred by considering the contents of the United States indictment which refers to discussions in a meeting between Mr McKelvy’s alleged co-conspirators (at which he was not present) where they discussed matters relating to the arrival of the cocaine into the United States and its export from there.
(c)The Judge erred in two respects when he analysed the Record of Case (ROC),8 finding a prima facie case because:
(i)there is no evidence of a plan to import cocaine onto United States soil; and
(ii)there is no evidence that Mr McKelvy knew of a plan for the cocaine to transit through the United States, let alone for it to enter onto United States soil.
[6] Although expressed as an error of law in the notice of appeal and in the written submissions, the position for Mr McKelvy in oral submissions was that the third ground of appeal does not involve a question of law. Accordingly, it was submitted that ground falls to be considered under the first cause of action in the judicial review application.
[7] The statement of claim in the judicial review has three causes of action. The first cause of action is: “the District Court erred”. It repeats eight of the nine grounds of appeal from the notice of appeal.9
7 Extradition Act, s 4.
8 Section 25 permits an “exempted country”, such as the United States (see Extradition (Exempted Country: United States of America) Order 1999) to submit a Record of Case (ROC) which provides a summary of the evidence relied on to support the request for surrender. Individual witness statements are not required when a ROC is utilised.
9 Grounds 1 to 7 and 9 of the notice of appeal.
[8]The second and third causes of action were abandoned at the hearing.10
[9] In the District Court Mr McKelvy did not raise any issues regarding the statutory regime for a United States request for extradition and the formal processes required.11 Nor did he argue that the processes were not followed in this case. Mr McKelvy further did not argue that any of the mandatory or discretionary restrictions on surrender applied.12 Accordingly, none of these issues form part of the appeal or judicial review.
[10] The United States opposes the appeal. It says the Judge did not err as alleged. The United States further says the first cause of action in the judicial review proceeding is entirely duplicative of Mr McKelvy’s grounds of appeal. Therefore, the application for review should be dismissed.
[11] The second defendant in the judicial review proceeding, the District Court at Auckland, abides the decision of the Court.
Background
Alleged offending
[12] The alleged offending is referred to in the first superseding indictment13 (Indictment) and the ROC, both of which are annexed as exhibits to the affidavit of Assistant United States Attorney Brittian A Featherston sworn 10 December 2020, in support of the request for the extradition of Mr McKelvy. The following summary is drawn exclusively from the ROC.
[13] On 31 May 2020 an undercover special agent (undercover agent) of the United States Drug Enforcement Administration (DEA), acting in his undercover capacity
10 The second cause of action was: “Procedural unfairness/breach of natural justice”. This cause of action related to the Judge’s decision during the hearing to allow the United States to file a Supplemental Record of Case (SROC). The third cause of action was: “Apparent bias”. This cause of action related to the Judge’s decision to adjourn the extradition hearing part-heard to allow the United States to file the SROC.
11 Now well-settled since Dotcom v United States of America [2014] NZSC 24, [2014] 1 NZLR 355.
12 Extradition Act, s 24(3) and (4), s 7 and s 8.
13 Dated 4 November 2020.
posing as a large-scale drug trafficker, received a message through Wickr14 from a person with the username “dmted”, later identified as co-defendant Wen Hui Cui. Mr Cui said he was interested in purchasing a large quantity of cocaine for shipment to New Zealand.
[14] Mr Cui explained that his partner, nicknamed “Angel” or “Angelo”, would contact the undercover agent and was available to meet him in person to arrange the cocaine deal. On that same day the undercover agent received a Wickr message from a person with the username “angelo3333”, who identified himself as the partner of “dmted” and who was later identified as the co-defendant Murray Matthews. Mr Matthews confirmed he was authorised to negotiate on behalf of Mr Cui and he was available for “whatever and whenever” he might be needed.
[15] On 6 July 2020, after further discussions on Wickr between the undercover agent, Mr Cui and Mr Matthews, a member of the scheme caused NZD $50,000 to be wired to a United States bank account. In their communications with the undercover agent, Mr Cui and Mr Matthews had said that the NZD $50,000 was partial payment for the cocaine they wished to purchase. Unbeknownst to Mr Cui and Mr Matthews, the bank account was controlled by the DEA and the funds were seized by the United States Government.
[16] During further discussions with Mr Cui and Mr Matthews, the undercover agent requested Mr Matthews to travel to Romania to meet in person before they completed the deal. He invited Mr Matthews to bring a companion if he wished and Mr Matthews agreed.
[17] In late July 2020 the undercover agent, in co-ordination with Romanian law enforcement officials, travelled to Bucharest, Romania, to meet with Mr Matthews. On 21 July 2020 the undercover agent met Mr Matthews and another man, later identified as co-defendant Marc Patrick Johnson (also known as “Rush”), whom Mr Matthews described as his partner and the financier of the planned drug transaction. Over the course of the meeting Mr Matthews and Mr Johnson discussed
14 Wickr is an application that can be installed on smart phones and used to send and receive instant communications, including text messages, multimedia files, and real-time audio calls.
the pending cocaine delivery, including the fact that the cocaine would be shipped from Peru to Beaumont, Texas in the United States, and from there to Romania and finally New Zealand. Mr Matthews and Mr Johnson both agreed to this plan and further agreed that the quantity of cocaine would be increased to 400 kg.
[18] While in Romania the undercover agent was also contacted by co-defendant Marius Lazar, an associate of Mr Matthews living in Romania. Mr Lazar requested an additional delivery of cocaine for himself and also requested that the undercover agent arrange the murder of one or more rival gang members and drug traffickers.
[19] Following the meeting in Romania, negotiations continued regarding the specifics of the 400 kg cocaine shipment. On 24 August 2020, members of the scheme made three additional transfers of money totalling approximately USD $629,182 into the bank account in the United States controlled by the DEA.
[20] On 16 September 2020 Mr Matthews contacted the undercover agent and stated that he had “details” to provide about the “freight forwarder” whose role it would be to accept the load of cocaine once it arrived in New Zealand on a container ship. In a subsequent conversation, Mr Matthews informed the undercover agent that the person who would be accepting the cocaine was named Miles John McKelvy, with the alias “Doc”.
[21] On 21 September 2020 the undercover agent contacted Mr Matthews and provided him with a password “kiwi [date redacted]” to pass on to Mr McKelvy for the purpose of initiating communication between the undercover agent and Mr McKelvy. The password (which contained Mr McKelvy’s birthdate) was so that Mr McKelvy would be able to verify his identity when communicating with the undercover agent via Wickr.
[22] On the following day, 22 September 2020, Mr Matthews provided the Wickr username “docnz1” for the purposes of the undercover agent contacting Mr McKelvy via Wickr. The undercover agent did so and when prompted, Mr McKelvy provided the undercover agent with the correct password “kiwi [date redacted]” and confirmed that the date in the password was his birthdate.
[23] In the course of that communication, when asked what he understood about the enterprise in which he was involved, Mr McKelvy stated: “there is a container coming and I’m to arrange a freight forwarder to receive it and a[n] A[d]dress for it to be dropped to … Then once it passes clearance I arrange with marc [Johnson] and Angelo [Matthews] to pickup. And when finished I get paid”.
[24] The undercover agent asked Mr McKelvy if he was aware that the shipment he was receiving consisted of 400 kg of cocaine. Mr McKelvy replied: “Yes I’m very clear but this will work if we get the paperwork bang on”.
[25] The two then went on to discuss the purity of the cocaine, its origin and production in Peru, and its sales potential in New Zealand, with Mr McKelvy stating: “I have been told by Marc [Johnson] it’s the best … That’s what everyone wants here screaming for it” and “I have been told this your product can go threw [sic] a scan and pass I have been told the dog can’t smell it”. The two also discussed prices of methamphetamine for a possible future transaction.
[26] Emphasising the importance of getting the “paperwork” done correctly, Mr McKelvy requested certain information from the undercover agent, including the contact information for the freight forwarder who was to facilitate the shipment. During the conversation, the undercover agent addressed Mr McKelvy by the name “McKelvy” multiple times and was never corrected. When asked what he preferred to be called, Mr McKelvy provided his first name “Miles”.
[27] On 23 September 2020, the undercover agent contacted Mr McKelvy via Wickr and asked whether this was Mr McKelvy’s “first time doing this”, explaining that it was important for him to be confident his “investment was in good hands”. Mr McKelvy then responded with his experience including that he had “brought in lots from China for many years”. Mr McKelvy explained this included methamphetamine and certain precursor chemicals which he said were used to “make crystal”.
[28] On 26 September 2020, Mr Matthews sent the undercover agent a photograph of Mr McKelvy’s driver licence bearing a photograph, date of birth and other
identifying details. A copy of the driver licence is exhibited to Mr Featherston’s affidavit.
[29] On 7 October 2020, the undercover agent communicated with Messrs Cui, Matthews, Johnson and Lazar, saying there was a need for another in-person meeting in Romania because (on the narrative created by the undercover agent) the United States bank had frozen the funds from the 24 August 2020 transfer.
[30] On 21 October 2020 the undercover agent requested Mr McKelvy to provide his phone number so that the two could hold a virtual “face-to-face” meeting via video chat. Mr McKelvy provided a New Zealand telephone number in response. Using the telephone number Mr McKelvy had provided, the undercover agent contacted him the next day. The undercover agent says that the person he spoke to was the same person pictured in the driver licence he had been sent by Mr Matthews. The two of them discussed the fact that there was to be a meeting between the undercover agent and the four co-defendants as referred to above. Mr McKelvy expressed his regret that he was unable to attend saying he would not be able to travel out of New Zealand until June the following year.
[31] On 17 November 2020, the undercover agent met with Mr Matthews and Mr Johnson in Bucharest, Romania as planned. They still owed money to the undercover agent for the planned cocaine purchase. Mr Matthews and Mr Johnson had been unable to collect sufficient cash to cover the price, and they requested instead to pay using Bitcoin digital currency. The undercover agent agreed and provided the Bitcoin “wallet” information they should use to make the transfer. Mr Johnson explained that “Doc” (Mr McKelvy) was on “standby” preparing to facilitate the Bitcoin transfer.
[32] On 18 November 2020 the undercover agent met again with Mr Matthews and Mr Johnson. After a brief discussion of the progress of the criminal scheme, officers of the Romanian National Police entered the location and arrested Mr Matthews and Mr Johnson pursuant to a provisional arrest request from the United States.
[33] Following the arrests, the undercover agent communicated with Mr Ciu about their sudden disappearance (which from Mr Ciu’s perspective, was unexplained). The undercover agent expressed concern that he was still owed money for the cocaine. In response, Mr Ciu said that “Doc” (Mr McKelvy) would work on getting the money and that “Doc” was in contact with their money laundering intermediary based in Hong Kong. Mr Ciu expressed reluctance to approach anyone else for the money, explaining “our circle is small. Other than me, rush [Johnson], angel [Matthews and,] doc [McKelvy]. No other people knows about what we doing”.
Arrest of Mr McKelvy and request for surrender
[34] On 17 November 2020, the United States applied for a provisional warrant for Mr McKelvy’s arrest.15 The warrant was issued by a District Court Judge and Mr McKelvy was arrested by New Zealand Police on 19 November 2020.
[35] On 18 December 2020, the New Zealand Ministry of Foreign Affairs (MFAT) and the Ministry of Justice received a formal request from the United States for Mr McKelvy’s surrender.
Evidence for eligibility hearing
[36] The United States filed the following affidavit evidence in advance of the hearing in the District Court:
(a)Affidavit of Christopher Hurd, a senior solicitor at the Ministry of Justice, giving evidence of steps taken in the extradition process. The affidavit formally exhibited the request for surrender documents from the United States.
(b)Affidavit of Samuel Taylor, a legal adviser at MFAT, giving evidence of the formal transmission of the United States’ request for surrender through the diplomatic channel.
15 Extradition Act, s 20.
(c)Affidavit of Assistant United States Attorney Brittian Featherston, which was included in the request for surrender materials. Mr Featherston’s affidavit annexes the following:
(i)Exhibit 1: the Indictment, together with a corresponding notice of penalty.
(ii)Exhibit 2: arrest warrant dated 4 November 2020 issued in the United States.
(iii)Exhibit 3: relevant provisions of United States law.
(iv)Exhibit 4: the Statement of Conduct constituting the offence.16
(v)Exhibit 5: the ROC certified by Mr Featherston and dated 10 December 2020.
[37] The ROC contains a summary of the evidence on which the United States relies to demonstrate a prima facie case as required under s 24(2)(d)(i) of the Act (discussed further below). There was no issue in the District Court as to the admissibility of the ROC under s 25 of the Act.17
Hearing and Supplemental ROC
[38] The hearing commenced in the District Court on 22 August 2022 before Judge Winter. One of the issues raised on behalf of Mr McKelvy was that the ROC did not state whether the undercover agent was located in the United States at the times he was communicating with Mr McKelvy and the other alleged co-conspirators. Accordingly, it was submitted on behalf of Mr McKelvy that it could not be shown there was any conspiracy formed in the United States. It was further submitted that such an extraterritorial conspiracy would not constitute an offence in New Zealand such that the double criminality requirement in the Act18 could not be satisfied.
16 A requirement of art X of the Treaty.
17 See fn 8 above.
18 Sections 24(2)(c) and 4(1)(a) and (2).
[39] Judge Winter adjourned the hearing part-heard and granted leave to the United States to “amend the ROC to confirm that the [undercover agent] was present in the US during the material term of the conspiracy”. A Supplemental ROC (SROC) was duly filed on 13 January 2023. The SROC was contained within an affidavit from an Assistant United States Attorney and it was appropriately certified. The SROC contained the following paragraph:
Location of the Undercover Agent
The Undercover Special Agent of the U.S. Drug Enforcement Administration referred to in the Record of the Case, who speaks with a clear American accent, is expected to testify that he was located in Texas, United States of America, at all relevant times, other than when he travelled to Romania, as set out in the Record of the Case.
[40] The hearing resumed in the District Court before Judge Winter on 21 February 2023. Judge Winter issued his decision finding Mr McKelvy eligible for surrender on 31 May 2023.
Determination of eligibility for surrender: statutory provisions
[41] Before setting out the relevant parts of the decision under appeal, I first set out s 24 of the Act and an explanation of the four-step process that an extradition court must follow under that section, in order to provide context for the Judge’s decision.
[42]Section 24 provides (in relevant part):
24 Determination of eligibility for surrender
(1)Subject to section 23(4),19 if a person is brought before a court under this Part, the court must determine whether the person is eligible for surrender in relation to the offence or offences for which surrender is sought.
(2)Subject to subsections (3) and (4),[20] the person is eligible for surrender in relation to an extradition offence for which surrender is sought if—
19 Section 23(4) sets out the procedure that must be followed before a hearing may proceed if the person whose surrender is sought was arrested on a provisional warrant. There was no issue regarding the procedure in this case.
20 Subsections (3) and (4) relate to the mandatory and discretionary restrictions on surrender under s 7 and s 8 of the Act respectively. They are not in issue in this appeal and judicial review.
(a)the supporting documents (as described in section 18(4)) in relation to the offence have been produced to the court; and
(b)if—
(i)this Act applies in relation to the extradition country subject to any limitations, conditions, exceptions, or qualifications that require the production to the court of any other documents; or
(ii)the terms of an extradition treaty in force between New Zealand and the extradition country require the production to the court of any other documents—
those documents have been produced to the court; and
(c)the court is satisfied that the offence is an extradition offence in relation to the extradition country; and
(d)the court is satisfied that the evidence produced or given at the hearing would, according to the law of New Zealand, but subject to this Act,—
(i)in the case of a person accused of an extradition offence, justify the person’s trial if the conduct constituting the offence had occurred within the jurisdiction of New Zealand; or
(ii)...
[43] To determine eligibility for surrender under s 24 the Court undertakes a four- step process:21
(a)Step 1: the supporting documents submitted with the diplomatic request for extradition must be produced to the extradition court,22 as well as any documents required under a relevant treaty.23
(b)Step 2: the court must decide that the offence is an extradition offence as defined in s 4 of the Act.24 This is what is referred to as the double criminality requirement. The conduct must constitute an offence in the country requesting extradition, punishable by at least 12 months’
21 Ortmann v United States of America [2018] NZCA 233, [2018] 3 NZLR 475 at [42] [Ortmann (CA)].
22 Extradition Act, s 24(2)(a).
23 Section 24(2)(b).
24 Section 24(2)(c).
imprisonment, and under New Zealand law, had the conduct occurred here, punishable by at least 12 months’ imprisonment.
(c)Step 3: the court must be satisfied that the evidence produced or given at the hearing would (in the case of a person accused of an extradition offence) justify the person’s trial if the conduct constituting the offence had occurred within the jurisdiction of New Zealand.25 The ROC and SROC form the basis of the step 3 inquiry in this case.
(d)Step 4: the court determines whether any mandatory or discretionary restrictions on surrender apply.26
[44] Steps 1 and 4 were not in issue in the District Court and accordingly are not in issue in the appeal or in the application for judicial review.
Decision of District Court Judge
[45] After a brief introduction Judge Winter summarised the conspiracy that Mr McKelvy was alleged to have been involved in and then referred to the relevant charge in the Indictment:27
… Mr McKelvy is not charged with the other counts in the indictment relating to money laundering, smuggling and unlawful violence including murder. Mr McKelvy is however alleged under that indictment, to have been a member of a small group of persons that have conspired between May 2020 to November 2020, to manufacture and then ship 400 kilograms of cocaine from Peru to the United States, then to Romania, and finally from there to New Zealand.
[4] Count 2 of that indictment relates to charges of conspiracy to import and export cocaine, and to manufacture and distribute cocaine intending, knowing, and with reason to believe that the cocaine will be unlawfully imported into the United States during the course of that criminal conspiracy.
[46] The Judge next reviewed and summarised the evidence in the ROC and then referred to and followed the four-step process for determining eligibility for surrender (as set out in [43] above of this judgment).
25 Section 24(2)(d)(i).
26 Section 24(3) and (4).
27 The United States of America v McKelvy, above n 2, from [3].
[47] As already noted, there was no challenge in the District Court to step 1 (that certain documents must be produced to the extradition court).
[48] In considering step 2, namely whether the offence was an extradition offence under s 24(2)(c), the Judge referred to Ortmann v United States of America and set out the three requirements for an “extradition offence”:28
(a)that the conduct relied upon is an offence contained in the extradition treaty (if there is one);
(b)that the conduct would constitute an offence in the requesting country punishable with a maximum penalty of not less than 12 months’ imprisonment (which we refer to as the requisite penalty); and
(c)that the conduct alleged to constitute the offence, had it occurred in New Zealand, would constitute an offence under New Zealand law, again punishable with a maximum penalty of not less than 12 months’ imprisonment (which we also refer to as the requisite penalty).
[49] The Judge was satisfied that the conduct alleged was an extradition offence contained in the Treaty. For completeness, he considered and held that the offence could also be a deemed offence under the United Nations Convention against Transnational Organised Crime 2003 (TOC Convention) by virtue of s 101B(1)(c)(i) of the Act.
[50] Mr McKelvy does not take issue with these two aspects of the Judge’s decision, namely that the offence with which Mr McKelvy is charged is a Treaty offence and a deemed offence under the TOC Convention.
[51] The Judge then went on to consider whether the offence was an offence under United States law punishable by at least 12 months’ imprisonment. The Judge stated that it is not the extradition court’s role to interpret the offence under the United States law. He noted the court’s limited role as set out by the Supreme Court in Ortmann:29
[155] As s 24(2)(c) of the Extradition Act makes clear, it is the task of the New Zealand court to satisfy itself that the alleged offence is punishable under the law of the requesting country with the level of penalty stipulated in s 4(1). The task imposed upon the court in this regard is, however, limited. It is not necessary for the requesting country to prove foreign law to satisfy the
28 Ortmann v United States of America [2020] NZSC 120, [2020] 1 NZLR 475 at [151] [Ortmann (SC)].
29 Ortmann (SC), above n 28, (footnotes omitted).
requirement that the conduct constituting an offence under its law attracts the requisite penalty. It is sufficient if there is a statement from a law officer of the requesting country covering this aspect of the definition of extradition offence.
[52] The Judge referred to Mr Featherston’s affidavit in which it is stated that Mr McKelvy is charged with violating 21 USC § 963 by conspiring to commit specified drug trafficking offences (involving five kg or more of cocaine) which carry a penalty of not less than 10 years’ imprisonment and up to life imprisonment. The Judge’s decision records that Mr Featherston describes in detail the conspiracy offence as an independent offence under United States law. The Judge noted that Mr Featherston also sets out the offence elements the United States must establish beyond reasonable doubt for a finding of guilt.
[53] The Judge was satisfied that Mr Featherston’s evidence was sufficient to establish that the offence in the extradition country is an offence which is punishable by a maximum penalty of no less than 12 months’ imprisonment. Again, there is no issue taken by Mr McKelvy regarding this aspect of the Judge’s decision regarding an “extradition offence”.
[54] The Judge then moved to the third requirement that needs to be satisfied to establish that the offence is an extradition offence: that the conduct alleged to constitute the offence, had it occurred in New Zealand, would constitute an offence under New Zealand law punishable with a maximum penalty of not less than 12 months’ imprisonment. It is the Judge’s decision on this third requirement that Mr McKelvy takes issue with in the first ground of appeal.
[55] The Judge discussed in detail the submissions for both parties, including, as relevant to this appeal and application for review, what is required to constitute an importation under New Zealand law. The Judge rejected the submission made on behalf of Mr McKelvy finding that New Zealand law does not require Customs to be cleared for there to be a drug importation. The Judge said:
[52] In my judgement the position under New Zealand law does not require Customs to be cleared for there to be a drug importation. It is sufficient that the drugs may only be present in transit to another country when they arrive within the New Zealand territorial jurisdiction. …
…
[57] I do not accept the argument that the cocaine was in transit and therefore the respondent cannot be said to have been “importing” the cocaine into the country. …
[58] The authorities support the proposition that goods in transit may be viewed as being imported into the country in the present case. That is so notwithstanding the Respondent’s contention that there was no evidence in the ROC as to whether the container holding the cocaine was to be stripped or not.
…
[56] The Judge considered that the domestic limb of the double criminality test was satisfied and accordingly held the offence was an “extradition offence”.
[57] The Judge then went on to consider the requirement in s 24(2)(d)(i), namely whether the evidence summarised in the ROC (and SROC) was sufficient to establish a prima facie case had the offence occurred within the jurisdiction of New Zealand.
[58] Relying on the Supreme Court decision in Ortmann, Judge Winter said that a prima facie case can be established by direct assertion or by inference from other evidence.30 The Judge again referred to Ortmann in relation to the Court’s task in the weighing of evidence, where the Supreme Court said:31
… The Judge is not required to assess the evidence to determine which inference is more plausible. The assessment is limited to whether the inference the requesting country seeks to draw is reasonably available. …
[59] The Judge referred to some of the evidence in the ROC relied on by the United States in support of its submission as to the existence of the alleged conspiracy and Mr McKelvy’s membership of it. The Judge then found as follows:
[68] I assess the ROC evidence as being highly compelling and incriminating of Mr McKelvy’s involvement in the conspiracy to import cocaine. The evidence provides a strong inference from Mr McKelvy’s conduct, that he was a member of an alleged transnational conspiracy to purchase and import cocaine into New Zealand via Romania and the United States. The direct evidence and the inferential evidence clearly link Mr McKelvy to that conspiracy. I am therefore reasonably satisfied that the United States has established a prima facie case against Mr McKelvy to the extent that the ROC
30 The United States of America v McKelvy, above n 2, at [64] citing Ortmann (SC), above n 28, at [424].
31 At [65] citing Ortmann (SC), above n 28, at [521] (footnote omitted).
would justify Mr McKelvy’s trial under the Misuse of Drugs Act, if the conduct constituting the offence had occurred in New Zealand. As I have previously stated, the elements of the “extradition offence” have been established in this proceeding.
[60] The Judge concluded that in his view, the evidence produced at the extradition hearing by the admission of the ROC was sufficient to justify Mr McKelvy’s trial if the conduct constituting the offence had occurred in New Zealand.
[61] Finally, the Judge recorded that he was not aware of any applicable mandatory or discretionary restrictions preventing the surrender of Mr McKelvy to the United States. Accordingly, the Judge determined that Mr McKelvy was eligible for surrender to the United States in relation to the offence for which surrender was sought.
First ground of appeal
[62] Mr McKelvy says the Judge erred in his consideration of the domestic limb of the double criminality requirement in s 24(2)(c) and s 4 of the Act when the Judge found that goods in transit may be viewed as being “imported” into New Zealand under the Misuse of Drugs Act without having cleared Customs in New Zealand and accordingly, without becoming available to individuals in New Zealand.
[63] Ms Stuart, junior counsel for Mr McKelvy, submits that of the cases referred to in the parties’ submissions, only two were referred to by the Judge in any detail: R v Barreiro-Teixeira and R v Smith (Donald).32 Both Ms Stuart and Mr Mansfield KC, senior counsel for Mr McKelvy who addressed the Court in reply submissions, say that significantly, the Judge did not analyse the key Court of Appeal authorities relied on by Mr McKelvy as to the nature and meaning of “importation” in the Misuse of Drugs Act: R v Hancox and R v Atias (No 2).33
32 R v Barreiro-Teixeira HC Auckland CRI-2005-092-4272, 11 May 2006 (Reasons for decision of Venning J); and R v Smith (Donald) [1973] QB 924.
33 R v Hancox [1989] 3 NZLR 60 (CA); and R v Atias (No 2) HC Auckland T025837, 26 September 2003.
[64] Under s 24(2)(c) the Court must be satisfied that the offence is an extradition offence in relation to the extradition country. “Extradition offence” is defined in s 4 which provides in relevant part:
4Meaning of extradition offence
(1)In this Act, extradition offence means, subject to an extradition treaty,—
(a)in relation to an extradition country, an offence punishable under the law of the extradition country for which the maximum penalty is imprisonment for not less than 12 months or any more severe penalty, and which satisfies the condition in subsection (2):
(b) ...
(2)The condition referred to in subsection (1)(a) is that if the conduct of the person constituting the offence in relation to the extradition country, or equivalent conduct, had occurred within the jurisdiction of New Zealand at the relevant time it would, if proved, have constituted an offence punishable under the law of New Zealand for which the maximum penalty is imprisonment for not less than 12 months or any more severe penalty.
(3)For the purposes of determining whether the condition in subsection
(2) is satisfied in relation to a particular application for surrender of a person, the relevant time referred to in subsection (2) is the time at which the conduct is alleged to have occurred.
(4) ...
[65] I repeat for ease of reference, in summary form, the paragraph from Ortmann (referred to in [48] above) in which the Supreme Court determined that s 24(2)(c) requires the extradition court to be satisfied that the conduct relied upon:
(a)is an offence in the treaty;
(b)would constitute an offence in the requesting country punishable by a maximum penalty of not less than 12 months’ imprisonment; and
(c)would constitute an offence under New Zealand law punishable by a maximum penalty of not less than 12 months’ imprisonment had the offence occurred within the jurisdiction of New Zealand.
[66] Accordingly, a combination of s 24(2)(c) and the definition of “extradition offence” in s 4 require what is referred to as double criminality. In other words, the alleged conduct must not only constitute an offence in the country making the request for surrender, but also under New Zealand law if the alleged conduct had occurred in the jurisdiction of New Zealand (the domestic limb).
[67] It is not in dispute that there does not need to be an exact match between the offence in the requesting country and the New Zealand offence. What the Court considers is the overall criminality of the alleged conduct. This is apparent from s 5 of the Act which provides:
5Interpretation provisions relating to offences
(1)A reference in this Act to conduct constituting an offence is a reference to the acts or omissions, or both, by virtue of which the offence has, or is alleged to have, been committed.
(2)In making a determination for the purposes of section 4(2), the totality of the acts or omissions alleged to have been committed by the person must be taken into account and it does not matter whether under the law of the extradition country and New Zealand—
(a)the acts or omissions are categorised or named differently; or
(b)the constituent elements of the offence differ.
…
[68] It is important to be clear that when the Court is considering whether the domestic limb of the double criminality requirement has been satisfied, the Court considers what is alleged against the person whose surrender is sought. This step (step 2 in the inquiry regarding eligibility for surrender) is concerned with the conduct that is alleged. The Court is not concerned with the sufficiency of evidence, which is step 3 under s 24(2)(d)(i) of the Act. That distinction is clear from Ortmann where the Supreme Court, when referring to s 24(2)(c) (step 2 in the inquiry), said:34
[160] This step is concerned with identifying a New Zealand offence which matches the alleged conduct. It is the necessary precondition to the s 24(2)(d)(i) task of assessing the prima facie case but, as we come to, is not to be confused with it.
34 Ortmann (SC), above n 28, (footnote omitted).
[69]The Court continued:
[161] The task for the court under s 24(2)(d)(i) is to assess whether the requesting country has made out a prima facie case that the conduct of the person accused of an extradition offence would justify the person’s trial if it had occurred within New Zealand.
[70]And on the same topic in another part of the judgment the Court said:35
… Section 24(2)(d) performs a different function [from the double criminality part of the definition of “extradition offence” in s 4] – it imposes on the court a requirement that it be satisfied there is sufficient evidence of the New Zealand side of the double criminality requirement. ...
[71] In his written submissions Mr Mansfield conflated the two steps: the domestic limb of the double criminality requirement for an “extradition offence” (s 24(2)(c) and s 4) and the requirement for a prima facie case (s 24(2)(d)(i)). In doing so, Mr Mansfield submitted the Court may only have regard to the ROC (the evidence) and cannot consider other materials before the Court when assessing the domestic limb of the double criminality requirement. Again, in the written submissions, Mr Mansfield submitted that the ROC does not expressly state whether it was intended that the cocaine would: be removed from the ship when it entered the United States; clear Customs; and be made available to anyone in the United States.
[72] However, in oral submissions Ms Stuart said she was prepared to accept that the Court may consider other materials beyond the ROC that form part of the United States’ formal request, including the United States Indictment, when the Court makes its assessment regarding the domestic limb of the s 24(2)(c) inquiry. This concession accords with the position of the United States in this hearing.
[73] I consider that is a proper acknowledgement on the part of Ms Stuart, and is consistent with the decision of the House of Lords in Norris v Government of the United States of America.36 In Norris, the House of Lords was considering, when assessing double criminality, whether the extradition court should adopt what it called the “offence test” or the “conduct test”. The judgment also addresses the issue of what
35 At [118].
36 Norris v Government of the United States of America [2008] UKHL 16, [2008] 1 AC 920.
materials the Court may consider in deciding if there is an extradition offence. It states:
[65] Before turning, as will be necessary, to a brief history of English extradition law prior to the Extradition Act 2003, particularly with regard to the so-called double criminality rule, it is useful to stand back from the detail and recognise the essential choice that the legislature makes in deciding just what the double criminality principle requires. It is possible to define the crimes for which extradition is to be sought and ordered (extradition crimes) in terms either of conduct or of the elements of the foreign offence. That is the fundamental choice. The court can be required to make the comparison and to look for the necessary correspondence either between the offence abroad (for which the accused’s extradition is sought) and an offence here, or between the conduct alleged against the accused abroad and an offence here. For convenience these may be called respectively the offence test and the conduct test. It need hardly be pointed out that if the offence test is adopted the requested state will invariably have to examine the legal ingredients of the foreign offence to ensure that there is no mismatch between it and the supposedly corresponding domestic offence. If, however, the conduct test is adopted, it will be necessary to decide, as a subsidiary question, where, within the documents emanating from the requesting state, the description of the relevant conduct is to be found.
[74] The House of Lords settled on the “conduct test” (which is the test in the New Zealand Act) and went on to comment on the “subsidiary question” referred to at the end of the paragraph quoted above, namely, where within the documents emanating from the requesting state, the description of the relevant conduct is to be found. The judgment says:37
[91] The committee has reached the conclusion that the wider construction should prevail. In short, the conduct test should be applied consistently throughout the 2003 Act, the conduct relevant under Part 2 of the Act being that described in the documents constituting the request (the equivalent of the arrest warrant under Part 1), ignoring in both cases mere narrative background but taking account of such allegations as are relevant to the description of the corresponding United Kingdom offence. Had Mr Norris’s appeal failed on the first issue the extradition order on count 1 would have stood.
[75] Mr Thompson, counsel for the United States, submits that when that approach is followed, the alleged conduct translates into a qualifying offence under New Zealand law: conspiring to import or export cocaine pursuant to s 6(2A)(a) of the Misuse of Drugs Act.
37 Emphasis added.
[76] Section 6(2A)(a) provides that it is an offence to conspire with any other person to commit an offence against s 6(1) of the Misuse of Drugs Act. Section 6(1) includes:
(a)importing into or exporting from New Zealand any controlled drug;38
(b)producing or manufacturing any controlled drug;39 and
(c)supplying any Class A or Class B controlled drug to any other person or otherwise dealing in any such controlled drug.40
[77] Cocaine is a Class A controlled drug.41 The maximum penalty for a conspiracy under s 6(2A)(a) to commit any of the above offences is 14 years’ imprisonment.
[78] In order to assess the domestic limb of the s 24(2)(c) inquiry, I start with the Indictment. Count Two (the only charge Mr McKelvy faces) is expressed as follows:42
That from sometime in or about May 2020, and continuing through the date of this First Superseding Indictment, in Peru, Romania, New Zealand, China, and the Eastern District of Texas and elsewhere,
Murray Michael Matthews, a/k/a “Angelo,” a/k/a “Marz,” Wen Hui Cui, a/k/a "Chuy," a/k/a "DD,"
Marius Lazar, a/k/a "Mario,"
Marc Patrick Johnson, a/k/a "Rush," and Miles John McKelvy,
defendants, did knowingly and intentionally combine, conspire, and agree with each other and other persons known and unknown to the United States Grand Jury, to commit the following offenses against the United States: (1) to knowingly and intentionally import at least five kilograms of a mixture or substance containing a detectable amount of cocaine, a Schedule II controlled substance, into the United States from Peru in violation of 21 USC §§ 952 and 960; (2) to knowingly and intentionally export at least five kilograms of mixture or substance containing a detectable amount of cocaine, a Schedule II controlled substance, from the United States to Romania and New Zealand, in violation of 21 USC §§ 953 and 960; and (3) to knowingly and intentionally manufacture and distribute at least five kilograms of a mixture and substance containing a detectable amount of cocaine, a Schedule II controlled substance, intending, knowing, and with reason to believe that such substance would be unlawfully imported into the United States, in violation of 21 USC §§ 959 and 960.
38 Section 6(1)(a).
39 Section 6(1)(b).
40 Section 6(1)(c).
41 Schedule 1.
42 Emphasis added.
[79]In his affidavit Mr Featherston says:43
… This evidence will establish that (1) McKelvy and others agreed with each other that cocaine would be imported from Peru to the United States; (2) McKelvy and others agreed with each other that cocaine would be exported from the United States to Romania and New Zealand; and (3) McKelvy and others agreed with each other that cocaine would be manufactured and distributed for the purpose of importation into the United States.
[80] Both the Indictment and Mr Featherston’s affidavit make it clear that the United States’ case alleges importation into the United States as well as exportation from there.
[81] While it is accordingly not necessary to consider any additional content from the Indictment, there is further detail set out in the list of overt acts for count one, a charge of racketeering, which is a charge faced by Mr McKelvy’s co-defendants. To be clear, this is not a conversation that applies only to the racketeering charge but it also relates to count two. The overt acts for count one include the following:44
On or about July 21, 2020, MATTHEWS and JOHNSON attended a dinner meeting in Bucharest, Romania, at which they discussed the pending cocaine purchase, including (1) the use of Beaumont, Texas as a base for receiving payment, fabricating industrial machinery in which to conceal the drugs, and exporting the drugs from the United States; (2) possible methods of transferring funds so as to evade law enforcement detection; and (3) their agreement to expand the 200-kilogram purchase by an additional 200 kilograms on consignment for 400 total kilograms of cocaine.
[82] Based on the above quoted documents, I am satisfied that the alleged conduct, had it occurred within the jurisdiction of New Zealand, would constitute the New Zealand offence of conspiring to import cocaine, a Class A drug for which the maximum penalty is imprisonment for not less than 12 months (as referred to in[75]–
[77] above). In other words the domestic limb of the double criminality requirement for an extradition offence is satisfied.
[83] For completeness, I record here that the conversation above in the overt acts for count one is also referred to in the ROC but there is not the same detail as to the use of Beaumont, Texas as there is in the list of overt acts in the Indictment. This more
43 Emphasis added.
44 Emphasis added.
limited detail becomes relevant in the third ground of appeal. The ROC refers to the conversation as follows:45
On July 21, 2020, at a restaurant in Bucharest, the Undercover Agent met with Matthews and another man, later identified as co-defendant Marc Patrick Johnson (“Johnson”), whom Matthews described as his partner and the financier of the planned drug transaction. Over the course of the meeting, Matthews and Johnson discussed the pending cocaine delivery, including the fact that the cocaine would be shipped from Peru to Beaumont, Texas, in the United States, and from there to Romania and finally New Zealand. Matthews and Johnson both agreed to this plan, and further agreed that the quantity of cocaine would be increased to 400 kilograms. A recording of this meeting will be available as evidence at trial.
[84] If the extradition court was required to assess the domestic limb of the double criminality requirement for an “extradition offence” simply on the basis of the ROC (without consideration of the Indictment and Mr Featherston’s affidavit) as was originally submitted on behalf of Mr McKelvy in written submissions, this raises the issue of whether the passage immediately above from the ROC establishes an importation under New Zealand law.
[85] Having regard to the concession on behalf of Mr McKelvy in oral submissions that the Court may consider documents beyond the ROC, this argument falls away in relation to the first ground of appeal. But as will become apparent, it will be necessary for the Court to consider the meaning of “import” under New Zealand law when addressing the third ground of appeal (whether there is a prima facie case), as the Court may only consider the ROC (and SROC) for that purpose.
[86] It is, therefore, convenient to consider the meaning of “import” under New Zealand law here as it forms part of the first ground of appeal. My decision on this issue will be applied in discussion of the third ground of appeal.
[87] The issue is whether the Judge was correct to hold that New Zealand law does not require Customs to be cleared for there to be a drug importation and that it is sufficient if the drugs are only present in transit when they arrive within the New Zealand territorial jurisdiction.
45 Emphasis added.
[88] Mr Mansfield submits the Judge was wrong in his decision on the meaning of “import”. Mr Thompson submits the Judge’s interpretation was correct.
[89] I start with a consideration of the two cases that Mr Mansfield relies on: R v Hancox and R v Atias (No 2).
[90] In Hancox the Court of Appeal considered an appeal by Ms Hancox, who had been charged with two counts of importing a Class B controlled drug (MDMA). Her role had been to retrieve a package from a Post Office box in Auckland. Two parcels containing tablets of the drug were found in the Post Office box by New Zealand Customs officers. The first parcel was collected by Customs officers and in relation to the second, the majority of tablets were seized by Customs officers with the remaining tablets left in the Post Office box. Ms Hancox collected the second parcel and was apprehended. She claimed she did not know what was in the parcel and she was simply delivering it to another individual.
[91] Ms Hancox applied to have the importation counts in the indictment quashed on the basis that the importing had ended by the time she became involved. The trial Judge refused the application and held that Ms Hancox’s act of uplifting the parcel from the Post Office box occurred at a time when the process of importation had not been completed. The issue on appeal was when did the process of importation end.
[92] The Court of Appeal noted that the word “import” is not defined in the Misuse of Drugs Act, nor is there any reference in the legislation to when the act or process of importation ends. The Court further noted the definition of importation under s 47(1) of the Customs Act 1966, which provided that:46
For all the purposes of this Act, goods shall, except where otherwise expressly provided, be deemed to be imported into New Zealand if and so soon as in any manner whatever, whether lawfully or unlawfully, they are brought or come within the territorial limits of New Zealand from any country outside those limits.
46 R v Hancox, above n 33, at 62.
[93] The Court said that the Customs Act “understandably fixes on the earliest time at which importation for that purpose [the levying of duty] could properly be considered to have occurred”.47
[94] The Court then considered that “import”, in the Misuse of Drugs context, should be “accorded its ordinary meaning of to introduce or bring in from abroad or to cause to be brought in from abroad”.48 The Court stated:49
“To import” involves active conduct; and the bringing of goods into the country or causing them to be brought into the country does not cease as the aircraft or vessel enters New Zealand territorial limits. Importing into New Zealand for the purposes of s 6(1)(a) is a process. It does not begin and end at a split second of time. The element of importing exists from the time the goods enter New Zealand until they reach their immediate destination. It follows that, as was the case in Saxton v Police, the importer may be convicted under s 6(1)(a) even though the goods are intercepted by customs and never reach the addressee – or are otherwise disposed of in transit. But the process does not end so long as the goods remain in transit, that is until any shipping and customs formalities are completed and the consignment is available to the consignee at its immediate destination. In Bell v R (1983) 8 CCC (3d) 97, 104, Dickson J expressed the concept in this way:
The elements of an offence of importing are present as soon as the goods cross the border, but the offence is not over and done with until the goods have reached their intended final destination within Canada. Accordingly, a charge could be laid relating to the point of entry or of destination or anywhere in between.
[95] On the facts, the Court found that the final step in the importation was the delivery of the package containing the drugs at the Post Office box. Accordingly, the importation was complete before Ms Hancox uplifted the package and her conviction on the importation count was quashed.
[96] The second case relied on by Mr McKelvy is R v Atias (No 2). In that case the High Court considered an application by the defendants, Messrs Atias and Ban-Abu, at the end of the Crown case trial to dismiss charges of importing a Class B controlled drug (MDMA) and possession of the drug for supply under s 347 of the Crimes Act 1961 (the predecessor of s 147 of the Criminal Procedure Act 2011).
47 At 62.
48 At 62.
49 At 62 (emphasis added).
[97] Another defendant, Ms Birak, brought a suitcase of MDMA tablets into New Zealand, arriving at Auckland International Airport from Amsterdam. She passed through Customs and Immigration New Zealand at Auckland Airport without incident and stayed in a hotel. Around a week later Mr Ban-Abu arrived at Auckland Airport from Thailand and Mr Atias arrived from Amsterdam. The group met up. They were later apprehended while Ms Birak walked with the suitcase of MDMA to Mr Ban-Abu’s room at a hotel.
[98] It was argued on behalf of Messrs Atias and Ban-Abu that the act of importation was complete by the time Ms Birak had cleared Customs, and at the latest, by the time she had arrived at her hotel, despite others being the intended ultimate consignees.
[99] The trial Judge, Harrison J, held that Hancox stands for the proposition, among others, that the process of importation lasts for the period between goods entering New Zealand territorial airspace and reaching their “immediate destination”. Further, that the concept of importing is concerned with those acts which are designed to bring goods from outside New Zealand to a point where they are available to the intended consignee, such that any involvement by the importer or a third party up to that point falls within the category of facilitating importation.50
[100] Like Hancox, Atias (No 2) was concerned with actions by the defendants which took place after the goods had cleared Customs, and whether the process of importation had ended before their acts. To that extent those cases do not assist Mr McKelvy.
[101] Mr Mansfield, however, refers to other statements of the Court of Appeal which the Court in Hancox said supported its interpretation of “import”. The Court referred to an earlier decision of the Court of Appeal in Saxton v Police, where the accused had posted a parcel containing hashish in England addressed to a named
50 R v Atias (No 2), above n 33, at [14].
person at a New Zealand address, and which on arrival in New Zealand was intercepted by Customs.51 The Court quoted from the judgment in Saxton:52
On the ordinary dictionary meaning of ‘import’, the appellant’s action in posting the parcel of drugs to New Zealand with the intention that it should be received by some person in this country whom he named as addressee was an act of importing within the meaning of the Misuse of Drugs Act 1975…
[102]Mr Mansfield also refers to the following passage from Hancox:53
We agree, [referring to the passage from Bell v R at [94] above] and add only that the goods have reached their immediate destination when they have ceased to be under the control of the appropriate authorities and have become available to the consignee or addressee.
That conclusion is reinforced by two further considerations. One is that the added words, import “into New Zealand”, connote bringing in goods to anywhere inside New Zealand. The other is that, in as much as the statutory focus is on the acts of individuals, importing is concerned with those acts designed to bring the goods from outside New Zealand to the point where they are available to the intended consignee. ...
[103] In reliance on both Hancox and Atias (No 2), Mr Mansfield makes the submission that the fundamental point is that the meaning of “importation” is to be interpreted in the context of the purpose of the Misuse of Drugs Act, which is to prevent the illicit use of drugs in New Zealand. Mr Mansfield says where drugs pass through in transit only, without being stripped, and without any intention that they attempt to pass through Customs, that purpose is not engaged. Mr Mansfield says the District Court Judge did not address this argument in his decision, and that was a fundamental flaw.
[104] In response, Mr Thompson submits that while the introduction into the New Zealand market of illegal drugs to be consumed here is certainly part of the mischief that the Misuse of Drugs Act is intended to address, it is not all of it. The Misuse of Drugs Act is also targeted towards offending which has international effects. Mr Thompson submits the most obvious example of this is the offence of exporting controlled drugs from New Zealand,54 which is plainly not offending which results in
51 Saxton v Police [1981] 2 NZLR 186 (CA).
52 R v Hancox, above n 33, at 62 citing Saxton v Police, above n 51, at 188.
53 R v Hancox, above n 33, at 63.
54 Misuse of Drugs Act, s 6(1)(a).
the use of illicit substances by people in New Zealand. He notes that s 10 of the Misuse of Drugs Act also makes it an offence to do acts in New Zealand to aid offences against a corresponding law of another country. Again, Mr Thompson says this is not offending that has its effects in New Zealand, which further demonstrates the international purposes of the Misuse of Drugs Act. He submits this is consistent with New Zealand’s obligations under the United Nations Single Convention on Narcotic Drugs 1961 (Single Convention) and the United Nations Convention on Psychotropic Substances 1971, which preceded the introduction of the Misuse of the Drugs Act.
[105] In the Canadian decision of R v Geesman the Court, in determining the meaning of “import” in the Narcotic Control Act 1970 (in which “import” was not defined), considered the dictionary meaning of “import” as well as drawing on Canada’s obligations under the Single Convention.55
[106] Defence counsel in Geesman argued that the defendant had brought hashish into Canada for the sole reason of carrying it across the country to transport it across the United States/Canadian border for sale in the United States. It was contended that the defendant was merely transporting the hashish in transit and had no intention of importing the drug into Canada.
[107] On the facts, I accept the “in transit” argument made by Mr Mansfield in this case is different as the defendant in Geesman had in fact passed through Customs. Nevertheless, it is interesting to note the Court’s consideration in that case of the Single Convention in determining the meaning of “import” in the Narcotic Control Act.
[108] The Court said that there is one central idea conveyed for the meaning of “import” and for that of importation, and that is the introduction or bringing into a country articles and merchandise from abroad or from an external source.56 The Court referred to the argument of defence counsel in general terms as follows:
[33] In the present case the argument of defence counsel, in its general terms, seeks to advance the proposition that, by what defence counsel conceives to be the correct application of the principle of strict construction, there was no importation by the prisoner into Canada of the narcotic in his possession for
55 R v Geesman (1970) 13 CRNS 240 (Que SP).
56 At [15].
the reason that, although he had brought the forbidden substance into Canada from an outside source, his intention in so doing was merely to carry it in transit through Canada for the purpose of exporting the narcotic to the United States and that, because he had no intention of using the hashish in his possession for disposal in Canada but merely to export the same from Canada, he therefore had no intention of importing into Canada the proscribed commodity in the sense in which the word "import" is used in the Narcotic Control Act.
[109]The Court then referred to the Single Convention and stated:57
… Accordingly Canada was committed, under her treaty obligations, to combat the pernicious evil born of the illicit traffic in narcotic drugs within her frontiers as well as to suppress the illegal importation into and the exportation from the limits of her national domain of the substances so interdicted.
[110] The Judge noted the definitions of “import” and “export” in the Single Convention:
[41] Article (1), s. (1)(M) of the "Single Convention" defines the words "import" and "export" in the following terms: "'Import' and 'export' mean in their respective connotations the physical transfer of drugs from one State to another State, or from one territory to another territory of the same State" and in this definition there is expressed the same general meaning as is given by the dictionaries to the words "import" and "export".
[111]The Judge then went on to say:58
… I conclude that the “Single Convention” provides a powerful assistance in determining the proper meaning to be ascribed to the words "import into Canada" as used in s. 5(1) of the Narcotic Control Act.
[112]In conclusion, the Judge said:
[46] I find that there is no ambiguity nor any equivacation in the words "import into Canada" set forth in s. 5(1) of the Act concerned and, on applying to them their ordinary and grammatical sense, it is made abundantly clear that the intent of Parliament is to prohibit the illegal bringing in of narcotics to Canada from an external source, no matter under what circumstances the illicit introduction into the country takes place and regardless of the means employed in the transporting across the national frontiers of the forbidden substance.
57 At [40].
58 At [45].
[113] The discussion in Geesman and the Court’s use of the Single Convention assists in deciding whether the definition of “import” should be narrowed in the way Mr Mansfield seeks to do. The decision supports Mr Thompson’s submission that the mischief the Misuse of Drugs Act is designed to address, is wider than the introduction of illegal drugs to be consumed in this country.
[114] There is a decision of this Court directly on point and which supports Judge Winter’s interpretation of “import”. In R v Barreiro-Teixeira the accused had flown into Auckland carrying drugs.59 He was in transit to his ultimate destination of Japan and his luggage was never to clear Customs. While it is not explicitly stated in the decision, it is clear from other related judgments that the charge the accused faced was a charge of importing.
[115] At the conclusion of the defence case, defence counsel submitted the charge should be taken away from the jury and the accused discharged under s 347 of the Crimes Act on the grounds there was insufficient evidence that the accused intended to bring the drugs into New Zealand. While the issue primarily turned on the accused’s knowledge that he would be stopping in Auckland en route to Japan, Venning J had no hesitation in holding:
[10] That the accused and the drugs were only in New Zealand in transit is sufficient: R v Smith (Donald) [1973] QB 924 and R v Geesman (1970) 13 CRNS 240 and US v Pentapati 484 F 2d 450 (1973) and R v Martin (1973) 21 CRNS 149, 153.
[116] Mr Mansfield is critical of the brevity of the reasoning in Barreiro-Teixeira. He also submits that in R v Smith (Donald), the charge was not brought under the English equivalent of the New Zealand Misuse of Drugs Act but under the English Customs and Excise Act 1952. He submits for this reason that decision does not assist. In relation to US v Pentapati, under the particular legislation considered in that case, Mr Mansfield says importation carried a different meaning to that which was adopted by the Court of Appeal in Hancox. As to R v Martin, in that case the Court adopted a purposive approach to interpreting the meaning of importation and found that when a stereo speaker (containing controlled drugs) crossed the territorial border of Canada
59 R v Barreiro-Teixeira, above n 32.
and came to rest at a customs warehouse, it had been “imported” for the purposes of the Narcotic Control Act.60 Mr Mansfield submits that case was different; the drugs were in fact intended for use in Canada.
[117] Regardless of the criticisms Mr Mansfield makes of the cases cited by Venning J, I consider the approach by Venning J is consistent with the ordinary meaning of import.
[118] I accept Mr Thompson’s submission that notwithstanding the reference to goods reaching an intended consignee in Hancox, that decision cannot be read as requiring goods to clear Customs in order for there to be an importation, or even requiring there to be an intention that the goods would clear Customs. The decision is simply that importation can be a continuing act, which only ends when the goods have been made available to their intended consignee. Any act of bringing the drugs within New Zealand’s territorial limits still constitutes an act of importation in accordance with Hancox. The word “import” is not qualified or limited by a requirement that the drugs are for use in this country.
[119] In summary on the first ground of appeal, Judge Winter did not err in holding that the offence for which Mr McKelvy’s surrender is sought is an “extradition offence”.
[120] The extradition court, in assessing the domestic limb of the double criminality requirement, is able to consider not just the ROC but all documents submitted by the United States as part of the formal request for surrender.
[121] Even if the extradition court is limited to considering the ROC when assessing the domestic limb of the double criminality requirement, there would nevertheless be an extradition offence in this case. If the statement in the ROC “that the cocaine would be shipped from Peru to Beaumont, Texas, in the United States, and from there …” is construed to mean the drugs would simply be in transit, for all the reasons discussed above, the domestic limb of the double criminality requirement would still be satisfied. The District Court Judge was correct when he held that under New Zealand law,
60 R v Martin [1973] OJ No 137 (ONHC).
Customs does not need to be cleared for there to be a drug importation. It is sufficient if the drugs are only present in transit to another country to constitute importation.
[122]The first ground of appeal fails.
Second ground of appeal
[123] Mr McKelvy’s second ground of appeal takes issue with Judge Winter having referred to the details of the 21 July 2020 meeting as set out in the Indictment. At the commencement of her oral submissions, Ms Stuart summarised this ground of appeal by submitting that the Judge erred in his reference to the United States Indictment in the context of deciding both:
(a)that there was an extradition offence (s 24(2)(c)); and
(b)that a prima facie case against Mr McKelvy was established (s 24(2)(d)(i)).
[124] As already noted, during the course of her oral submissions Ms Stuart conceded that the Judge could consider the United States Indictment in assessing whether there was an extradition offence. Paragraph (a) above therefore falls away with that concession. This ground of appeal, accordingly, only requires consideration in respect of (b) above.
[125]The part of the Judge’s decision complained about is as follows:61
[50] It is the Applicant’s position that the case against Mr McKelvy and his co-defendants is based on the conspiracy to actually import the cocaine into the United States and then export it to Romania and New Zealand. In support of this submission, counsel for the Applicant cites a passage from Mr Featherston’s affidavit wherein Mr Featherston refers to the evidence that will establish this. Counsel also refers to Count 1 of the US Indictment in the ROC, which describes a conversation at a dinner meeting in Romania on 21 July 2020 attended by Murray Matthews and Marc Patrick Johnson, where they discussed the use of Beaumont, Texas as a base for receiving payment, fabricating industrial machinery in Beaumont in which to conceal the drugs and then exporting the drugs from the United States. It is not alleged that the cocaine was to simply pass through United States waters, on its way to elsewhere.
61 The United States of America v McKelvy, above n 2.
[126] It is abundantly clear that this part of Judge Winter’s decision was concerned with the s 24(2)(c) step of the process where, as discussed above, the Judge’s task was to determine whether the conduct alleged constituted an extradition offence. The Judge was not considering whether or not the United States had established a prima facie case. On the face of the decision it is clear the Judge was not utilising the contents of the United States Indictment when undertaking the s 24(2)(d)(i) assessment. The Judge explicitly confined his reference to the Indictment to the s 24(2)(c) part of the process.
[127] Further, the Judge commenced the paragraph in his decision in which he found a prima facie case with the words “I assess the ROC evidence …”.62 It is clear from that paragraph that the Judge was considering evidence in the ROC and not other material before the Court, including the Indictment.
[128] Finally, the Judge concluded his assessment as regards a prima facie case by stating:
[71] In my view the evidence produced at the extradition hearing by the admission of the ROC is sufficient to justify Mr McKelvy’s trial if the conduct constituting the offence had occurred in New Zealand.
[129] Again, it is clear that the Judge was only utilising the ROC and not the Indictment for that aspect of his decision.
[130]The second ground of appeal fails.
Third ground of appeal
[131] Mr Mansfield accepts the evidence in the ROC establishes a conspiracy and that Mr McKelvy had joined the conspiracy by the time of the telephone conversation between Mr McKelvy and the undercover agent on 22 September 2020 (refer [22]–
[26] above). The written submissions on behalf of Mr McKelvy state “[t]he appellant has clearly entered the conspiracy at this point”.
62 At [68].
[132] But what Mr Mansfield submits is that the Judge failed to properly consider whether the elements of a conspiracy to import into the United States were established, as charged. As a second argument, Mr Mansfield submits there is no evidence that Mr McKelvy knew of a plan for cocaine to transit through the United States let alone for it to enter onto United States soil, or evidence from which such knowledge could be inferred.
[133] Mr Mansfield submits the United States was required to establish knowledge, agreement and intention63 on the part of Mr McKelvy to carry through with the common design of that conspiracy.
[134] Mr Mansfield submits it is insufficient Mr McKelvy was part of a conspiracy to import cocaine into New Zealand. That is a different issue. He submits that in order to secure a conviction, the Crown must prove the conspiracy charged, not some other conspiracy that is not charged.64
[135] Mr Mansfield submits the Judge did not consider the issue of whether Mr McKelvy actually knew that the cocaine would transit through (or enter) the United States. The Judge, therefore, did not assess whether a prima facie case had been established on the conspiracy charge, which is conspiracy to import into the United States and export from the United States. Rather, Mr Mansfield submits the Judge considered whether a prima facie case had been established of a conspiracy to “import cocaine into New Zealand via Romania and the United States” – a conspiracy that was not charged.
[136] Mr Mansfield submits that although it is clear that the cocaine was intended to be imported into New Zealand from Peru, that is insufficient evidence that Mr McKelvy joined a common design to import cocaine into the United States.
63 Citing in support R v Gemmell [1985] 2 NZLR 740 (CA) at [743]–[745].
64 Citing in support R v Beazley HC Auckland CRI-2006-004-3200, 18 May 2007 (Ruling No 14) at [27].
[137] The part of the Judge’s decision where he found a prima facie case is brief. I have already set it out at [59] above. I repeat it here for ease of reference:
[68] I assess the ROC evidence as being highly compelling and incriminating of Mr McKelvy’s involvement in the conspiracy to import cocaine. The evidence provides a strong inference from Mr McKelvy’s conduct, that he was a member of an alleged transnational conspiracy to purchase and import cocaine into New Zealand via Romania and the United States. The direct evidence and the inferential evidence clearly link Mr McKelvy to that conspiracy. I am therefore reasonably satisfied that the United States has established a prima facie case against Mr McKelvy to the extent that the ROC would justify Mr McKelvy’s trial under the Misuse of Drugs Act, if the conduct constituting the offence had occurred in New Zealand. As I have previously stated, the elements of the “extradition offence” have been established in this proceeding.
[138] Mr Mansfield’s first criticism focuses on the Judge’s finding as to what the conspiracy was. In the relevant part of the paragraph quoted above, the Judge said:65
The evidence provides a strong inference from Mr McKelvy’s conduct, that he was a member of an alleged transnational conspiracy to purchase and import cocaine into New Zealand via Romania and the United States.
[139] I agree with Mr Thompson’s submission that while the Judge’s finding is expressed imprecisely, there is a finding that the cocaine would be imported into the United States. The Judge found the conspiracy included the cocaine coming via the United States (and eventually to New Zealand). Even if the cocaine was only to be in transit, that was an import into the United States. I do not accept Mr Mansfield’s submission that the Judge found there was a prima facie case simply of conspiring to import cocaine into New Zealand.
[140] I now review the evidence that the United States says supports the finding of a prima facie case. I start with the approach to be taken by an extradition court when assessing whether there is a prima facie case for the purposes of s 24(2)(d)(i). The Court of Appeal discussed this issue in Ortmann v United States of America.66
65 Emphasis added.
66 Ortmann (CA), above n 21. The Supreme Court in Ortmann was not required to determine whether a prima facie case was established. Leave was refused on that question.
Summarising from the majority judgments of the Supreme Court in Dotcom v United States of America,67 the Court of Appeal said:68
The ROC procedure does not alter the test of eligibility under s 24. It allows the requesting state to rely on a summary of the evidence, rather than its detail, as the basis for a prima facie case. It was negotiated between states on a reciprocal basis, and is intended to accommodate differences in legal systems that can give rise to difficulties in extradition proceedings. Specifically, it excludes domestic admissibility rules. Reliance is placed on certification, which requires that a degree of trust be placed in a requesting state’s prosecutors.
[141] The Court of Appeal in Ortmann referred to and agreed with the principles set out in the judgment of the Supreme Court of Canada in MM v United States of America,69 which post-dated the decision of the New Zealand Supreme Court in Dotcom.
[142]The Court of Appeal then said:70
… The committal phase plays an important but carefully circumscribed role in protecting the rights of the person sought. The statutory question – whether there is evidence justifying committal for trial had the conduct happened in Canada – exhaustively defines the extradition judge’s role. The meaningful judicial assessment required under Ferras does not extend to assessing the likelihood of conviction and deciding, as the extradition judge had done, that no reasonable jury could conclude the mother intended to deprive the father of possession of the children. The extradition judge “is concerned only with the essential elements of the offence and any other conditions on which the prosecution bears the evidential burden of proof”, and the test is “whether there is any admissible evidence that would, if believed, result in a conviction”. Nor is the extradition judge to assess the “quality, credibility or reliability” of the evidence, beyond a limited weighing to determine whether there is a plausible case.
[143] As is apparent from the Court of Appeal judgment,71 the ROC is admissible not merely as to form but also as to content. Eligibility for surrender is determined on the ROC, even if it contains evidence that might not be admissible in a domestic trial such as hearsay.72 That position is supported in a decision of the Supreme Court of
67 Dotcom v United States of America, above n 11.
68 Ortmann (CA), above n 21, at [106(c)] (footnotes omitted).
69 MM v United States of America [2015] SCC 62, [2015] 3 SCR 973.
70 Ortmann (CA), above n 21, at [112] (footnotes omitted).
71 Refer Ortmann (CA), above n 21, at [106(c)].
72 See also Dotcom v United States of America, above n 11, at [244].
Canada in United States of America v Ferras, where the Court held that hearsay in a record of the case was unobjectionable.73
[144] The position of the United States, in accordance with the decision of the Court of Appeal in Ortmann and the Supreme Court in Dotcom, is that the ROC is admissible for all purposes and the Court does not need to enquire into the domestic admissibility of any of its content. However, Mr Thompson’s position is that to avoid unnecessary controversy, the submissions on behalf of the United States treat the evidence in accordance with the New Zealand law on co-conspirator’s hearsay.74
[145] Section 22 of the Evidence Act 2006 provides that hearsay statements are generally inadmissible. However, s 22A preserves the common law co-conspirators’ exception to the hearsay rule. It provides as follows:
22A Admissibility of hearsay statement against defendant
In a criminal proceeding, a hearsay statement is admissible against a defendant if—
(a)there is reasonable evidence of a conspiracy or joint enterprise; and
(b)there is reasonable evidence that the defendant was a member of the conspiracy or joint enterprise; and
(c)the hearsay statement was made in furtherance of the conspiracy or joint enterprise.
[146] As regards s 22A(a), the Court of Appeal in R v Messenger (applying the co- conspirator’s rule prior to the enactment of s 22A) said:75
… Statements made by other persons about what they are intending to do, against the background of their statements about what they have done, however, can be led as evidence of the state of mind of those other persons at the time of speaking. Such statements are led not to prove the truth of the participation of a person who is not a party to the conversation, but as facts from which the existence of the agreement or combination to engage in an illegal common enterprise may be inferred. The existence of a conspiracy can thus be shown by the statements of all alleged participants, including what they have said about the accused …
73 United States of America v Ferras [2006] SCC 33, [2006] 2 SCR 77.
74 Evidence Act 2006, s 22A.
75 R v Messenger [2008] NZCA 13, [2011] 3 NZLR 779 at [13].
[147] As to s 22A(b), it is well-established that a defendant’s membership of a conspiracy or joint enterprise must be proved to the requisite standard by evidence other than statements which have been made in the absence of the defendant. As the Court of Appeal said in Messenger:76
… It is necessary for the Crown, having shown that there is reasonable evidence of a conspiracy or joint enterprise, to prove the accused’s membership of it to the requisite standard by independent evidence, external to the statements which have been made in the absence of the accused.
[148] The requisite standard of “reasonable evidence” for both s 22A(a) and s 22A(b) is not a stringent standard, and the threshold is lower than the balance of probabilities.77 It is also not necessary for a defendant to know the identities of all the parties of a conspiracy or joint enterprise.78
[149]As regards s 22A(c), the Court of Appeal in Messenger stated:
[20] As noted at [11(c)], the third matter that must be shown is that the acts and statements sought to be admitted were made and done for the purpose of advancing the common design – see Morris (Lee) at [31]. ...
[21] A theory of ratification, however, may allow a statement made by a co- conspirator before a person joined the conspiracy to be admitted in order to prove the origin, character and object of the conspiracy but not the person’s participation in the conspiracy – see Phipson at [31]–[49]. As Chambers J said, in R v Mahutoto [2001] 2 NZLR 115 (HC) at [35], when a person decides to join a conspiracy after its inception, he or she is taken to have accepted the plan as it has developed and the steps that have already been taken towards arranging the intended unlawful acts. He or she is thus taken as impliedly ratifying the steps already taken by the co-conspirators in furtherance of the common purpose.
[150] The Court of Appeal has summarised the law of conspiracy in New Zealand as follows:79
… The essence of the conspiracy is an agreement to pursue a course of conduct which, if carried out, would amount to or involve the commission of an offence by one or more of the parties to the agreement. See R v Cuthbertson [1980] 2 All ER 401, 403. The offence turns on an agreement and does not necessitate any further involvement in the commission of the crime. The conspiracy is complete once the agreement has been made.
76 At [18].
77 Clausen v R [2021] NZCA 396 at [32] citing Kayrouz v R [2014] NZCA 139 at [22], which cited
R v Qiu [2007] 2 NZLR 433 (CA) and R v Qiu [2008] NZSC 51, [2008] 1 NZLR 1 at [28].
78 R v Messenger, above n 75, at [19] cited in Clausen v R, above n 77, at [36].
79 R v Greenfield CA322/01, 5 February 2002 at [18].
Evidence of the conspiracy
[151] I confine the Court’s consideration to the evidence in the ROC and SROC. There is the following:
(a)Mr Cui began contact with the undercover agent in May 2020, seeking to buy cocaine and have it brought to New Zealand. He was acting with another person.
(b)Mr Matthews joined the negotiations, contacting the undercover agent and confirming his relationship with Mr Cui.
(c)After further conversations between the undercover agent, Mr Cui and Mr Matthews, the sum of NZD $50,000 was paid into a United States bank account as a deposit for the drug purchase.
(d)To advance the proposed cocaine purchase, Mr Matthews and Mr Johnson travelled to Romania. Mr Johnson was introduced to the undercover agent as the partner of Mr Matthews and the financier of the transaction. At a meeting between the three men, it was discussed that the cocaine (400 kg) would be shipped from Peru to Beaumont, Texas, in the United States, and from there to Romania and finally New Zealand.
(e)Mr Lazar, a Romanian associate of Mr Matthews and Mr Johnson, made contact with the undercover agent and requested an additional delivery of cocaine for himself.
(f)Further sums amounting to USD $629,182 were transferred as payments towards the purchase of the 400 kg of cocaine.
(g)Arrangements were made for the receiving of the cocaine in New Zealand once it arrived by container ship. Mr Matthews advised the undercover agent of the name of the person who would accept the cocaine in New Zealand. Mr Matthews facilitated contact between the
undercover agent and the New Zealand receiver, Mr McKelvy, by providing Mr McKelvy’s name and passing on a password for him to verify his identity.
(h)Mr McKelvy then had communications with the undercover agent in which Mr McKelvy confirmed his identity, his connection to Mr Matthews and Mr Johnson, and his role in the plan as the New Zealand receiver. They discussed the origin and quality of the cocaine, and how it would be shipped. Mr McKelvy also sought to assure the undercover agent that he and his accomplices had successfully imported drugs into New Zealand before and confirmed his identity.
(i)The parties continued with the arrangement despite apparent difficulties with the funds. Mr Matthews and Mr Johnson met again with the undercover agent in Romania. They agreed the balance of the purchase price would be paid in Bitcoin, which Mr McKelvy was to arrange.
(j)Mr Matthews and Mr Johnson were arrested when attending a further meeting with the undercover agent.
(k)Mr Cui continued to communicate with the undercover agent. He indicated that the balance of the purchase price would be arranged through a Hong Kong money launderer, and that Mr McKelvy was organising this.
[152] The evidence in the ROC summarised above is reasonable evidence of a conspiracy to import cocaine into the United States (even if it was only in transit), and from there to export it to Romania and New Zealand.
Evidence that Mr McKelvy was a member of the conspiracy to import cocaine into, and export cocaine from, the United States
[153]As already noted, Mr McKelvy accepts the evidence establishes he was part of
a conspiracy with his alleged co-conspirators. However, his position is that there is
no evidence he knew the plan involved cocaine being shipped to, and then from, the United States, and there is no evidence from which such knowledge can be inferred.
[154] I start with what would be admissible evidence under New Zealand law (despite hearsay evidence being admissible in an extradition proceeding) to prove this aspect of a prima facie case.
[155] In his conversation on 22 September 2020 with the undercover agent, Mr McKelvy confirmed his role as the receiver in New Zealand. He said “there is a container coming and I’m to arrange a freight forwarder to receive it and a[n] A[d]dress for it to be dropped to … Then once it passes clearance I arrange with marc [Johnson] and Angelo [Matthews] to pickup. And when finished I get paid”. When he was asked by the undercover agent as to whether he was aware the shipment he was receiving consisted of 400 kg of cocaine, Mr McKelvy replied “Yes, I’m very clear but this will work if we get the paperwork bang on”.
[156] I consider this evidence shows that the role that Mr McKelvy was to carry out was an integral part of the overall plan to ship the cocaine from Peru, to import it into the United States, and from there export it to Romania and New Zealand.
[157] There is nothing that indicates that Mr McKelvy was other than a willing participant in the plan and was taking active steps towards its furtherance. Mr McKelvy emphasised the importance of getting the “paperwork” done correctly and requested information from the undercover agent to enable him to carry out his role, including the contact information for the freight forwarder who was to facilitate the shipment.
[158] There is further evidence, adopting the admissibility rules in an extradition hearing, of statements from Mr Cui, Mr Matthews and Mr Johnson in communications with the undercover agent. Each of them referred to Mr McKelvy when they were acting in furtherance of the conspiracy in their dealings with the undercover agent.
[159] Their hearsay evidence indicates that Mr McKelvy’s role in the conspiracy went beyond being simply the planned receiver of cocaine in New Zealand. He was
also involved in the financial arrangements. At the 17 November 2020 meeting when the undercover agent met Mr Matthews and Mr Johnson in Romania, Mr Johnson explained that “Doc” (Mr McKelvy) was on “standby” preparing to facilitate a Bitcoin transfer as part-payment for the cocaine.
[160] Then, after Mr Johnson and Mr Matthews had been arrested, Mr Cui, in response to the undercover agent’s expressed concern that he was still owed money for the cocaine, said that “Doc” (Mr McKelvy) would work on getting the money and that “Doc” was in contact with their money laundering intermediary based in Hong Kong. The evidence is that Mr Cui expressed a reluctance to approach any other person, explaining “Our circle is small. Other than me, rush [Johnson], angel [Matthews, and] doc [McKelvy]. No other people knows [sic] about what we doing”.
[161] As to Mr McKelvy’s knowledge that the cocaine was to be shipped to the United States and then from there to Romania and New Zealand, I consider that knowledge can be inferred from the evidence in the ROC which demonstrates, as Mr Thompson puts it, his “deeply embedded role” in the conspiracy. I have already referred to the relevant evidence: responsibility for sourcing Bitcoin digital currency to complete payment for the cocaine; making the payment; getting the freight paperwork “bang on”; and receiving the cocaine when it eventually reached New Zealand. Mr McKelvy emphasised to the undercover agent his experience in international drug importation. Also there was a very small circle of people involved.
[162] The fact that the cocaine was to be “shipped from Peru to Beaumont, Texas, in the United States and from there to Romania and finally New Zealand” was a central part of the overall conspiracy from at least 21 July 2020. As a core embedded member of the conspiracy, I consider it can be inferred that Mr McKelvy must have been aware of that. That inference is “reasonably available”.80 By his statements to the undercover agent it can be inferred as well, that Mr McKelvy agreed with and intended to achieve the common goal of importing the cocaine into the United States and exporting it to Romania and New Zealand.
80 Ortmann (SC), above n 28, at [521].
[163] Even if the cocaine was only in transit in the United States, if that conduct had occurred in New Zealand, the authorities discussed under ground one of the appeal enable the Court to find that goods in transit can be viewed as being imported into New Zealand.
[164] I acknowledge the Judge’s assessment of a prima facie case was brief and not as clearly worded as it might have been. But any error that the Judge may have made in making the assessment can be cured by the Court applying the proviso in s 73(3) of the Act which provides:
(3)Despite subsections (1) and (2), if an appeal is against a determination that a person is eligible for surrender, and the court determines that there has been an error of law, it may nevertheless decline to reverse or amend the determination in respect of which the case has been stated if it considers that no substantial wrong or miscarriage of justice has occurred and that the determination ought to be upheld.
[165] This Court has reviewed the evidence in the ROC and I am satisfied that the evidence would justify Mr McKelvy’s trial if the conduct constituting the offence had occurred within the jurisdiction of New Zealand. The evidence establishes a prima facie case on a charge under s 6(1) and (2A)(a) of the Misuse of Drugs Act of conspiring to import cocaine into New Zealand and export it to another country. The requirement in s 24(2)(d)(i) is satisfied.
[166]The third ground of appeal fails.
Judicial review application
[167] Despite initially framing the third ground of appeal on the basis of an error of law, both Ms Stuart and Mr Mansfield in their oral submissions say that the Judge’s finding of a prima facie case was an error of fact and does not involve a question of law. Accordingly, Mr Mansfield submits that Mr McKelvy needs to advance his case on the third ground by way of his judicial review application.
[168] Mr Thompson submits that the third alleged error does raise a question of law. Further, he says the judicial review application is entirely duplicative of the points on appeal and should be dismissed.
[169] I first address the issue of whether, what was initially styled as the third error of law, is instead an error of fact which does not involve a question of law.
[170] In Bryson v Three Foot Six Ltd, Blanchard J, giving the judgment of the Supreme Court, said:81
[26] An ultimate conclusion of a fact-finding body can sometimes be so insupportable – so clearly untenable – as to amount to an error of law: proper application of the law requires a different answer. That will be the position only in the rare case in which there has been, in the well-known words of Lord Radcliffe in Edwards v Bairstow, a state of affairs “in which there is no evidence to support the determination” or “one in which the evidence is inconsistent with and contradictory of the determination” or “one in which the true and only reasonable conclusion contradicts the determination”. Lord Radcliffe preferred the last of these three phrases but he said that each propounded the same test. …
[171] As already set out, Mr Mansfield’s submission on the third ground is, in summary, that the Judge erred in finding a prima facie case as there is no evidence of a conspiracy to import cocaine into the United States and export it from there, and no evidence that Mr McKelvy was a member of that conspiracy and knew part of the plan was to import cocaine into the United States and export it from there. Mr Mansfield also submits there is no evidence from which such inferences could be drawn.
[172] Adopting any of the formulations in Bryson v Three Foot Six above, that submission amounts to an allegation that the Judge erred in law. It is not an allegation of a factual error.
[173] In any event, reliance on the first cause of action in the statement of claim does not assist Mr McKelvy. That is because he pleads error of law rather than error of fact in the statement of claim. The relevant paragraph in the first cause of action reads as follows:
3.8The District Court contained errors in law in determining in respect of count 2 of the Superseding Indictment that the conduct alleged under count 2 would have constituted a prima facie case of an offender [sic] under s 6(1)(a) of the Misuse of Drugs Act 1975, had it occurred in New Zealand.
81 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 (footnote omitted).
[174] I turn to address Mr Thompson’s submission that the first cause of action is entirely duplicative of the appeal. In Ortmann the Supreme Court stated:82
[587] We accept that if there were complete overlap between the grounds of appeal and grounds of judicial review then it would be appropriate for the court to dismiss the judicial review claim without undertaking a full review of the duplicative grounds. …
[175] The first cause of action83 is headed “The District Court erred”. There are eight paragraphs. The first six paragraphs plead errors of law. Apart from some minor differences in wording which are not material, those six paragraphs mirror the first six grounds of appeal in the notice of appeal brought under s 68 of the Act.
[176] The seventh paragraph of the statement of claim mirrors ground seven in the notice of appeal. As already noted, at the commencement of the hearing Ms Stuart confirmed that appeal ground seven (and eight) were not advanced. There was no suggestion that appeal ground seven would be advanced through the statement of claim.
[177] The final paragraph in the first cause of action is paragraph eight, which is set out in [173] above. It duplicates the ninth ground of appeal in the notice of appeal.
[178] The first cause of action in the statement of claim is entirely duplicative of the appeal under s 68 of the Act and the second and third causes of action are not pursued. Accordingly, I will make an order dismissing the claim for judicial review.
Result/orders
[179] In accordance with the Court’s powers in s 72 of the Act, I confirm the determination by the District Court Judge84 that Mr McKelvy is eligible for surrender to the United States of America on the charge for which surrender is sought.
[180]The appeal is dismissed.
82 Ortmann (SC), above n 28.
83 The only cause of action now relied on, the second and third causes of action having been abandoned.
84 Section 72(1)(a).
[181] The application for judicial review is dismissed on the basis that it is entirely duplicative of the appeal.
Costs
[182] I reserve costs. If costs are sought, in the first instance counsel should confer. If agreement on costs is reached between the parties, a joint memorandum is to be filed within 25 working days of the date of this judgment. If there is no agreement on costs, the United States is to file and serve its memorandum within five working days of the date for the joint memorandum. Mr McKelvy is to respond by filing and serving his memorandum within five working days of the date of service of the United States’ memorandum.
[183] Costs memoranda should not exceed four pages (excluding attachments). I will determine costs on the papers.
Gordon J
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