R v Baylis
[2021] NZHC 617
•25 March 2021
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CRI-2016-009-011988
[2021] NZHC 617
THE QUEEN v
DARREN STEPHEN BAYLIS MICHAEL GERARD KEVIN MURPHY
Hearing: 8, 9, 10, 11, 12, 15, 16, 17, 22 and 25 March 2021 Appearances:
B Hawes for Crown
J R Rapley QC and S M Grieve for Defendant Baylis J D Lucas and C G Nolan for Defendant Murphy
Judgment:
25 March 2021
VERDICT OF GENDALL J
In Judge Alone Trial
[1] Darrin Stephen Baylis and Michael Gerard Kevin Murphy, each of you is charged under s 98A of the Crimes Act 1961 with a single charge of participating in an organised criminal group. Generally, these charges arise out of an investigation into the activities of members and associates of the Headhunters Motorcycle Club (Headhunters) in Christchurch. The Crown says the organised criminal group had as its objective the obtaining of material benefits from the supply of methamphetamine.
[2] This is a Judge Alone trial and, as such, it is proper that I remind myself of the following matters on which I would have directed a jury. It is important that I too bear them in mind.
R v BAYLIS [2021] NZHC 617 [25 March 2021]
Presumption of innocence
[3] The first of these is that the starting point is a presumption of innocence. The Crown and the Crown alone must prove respectively relating to each of you, Mr Baylis and Mr Murphy, that you are guilty of the charge you face beyond reasonable doubt. The Crown must prove each element of the charge against you respectively beyond reasonable doubt before I may enter a verdict of guilty.
Burden and standard of proof
[4] Proof beyond reasonable doubt is a very high standard to meet. I must be sure, Mr Baylis and Mr Murphy, you are guilty of the charge you face. If I have an honest and reasonable uncertainty left in my mind about your guilt on the charge after thorough and impartial consideration given to all the evidence, I must enter a verdict of not guilty.
[5] The Crown is not bound to prove each factual contention beyond reasonable doubt. But it must prove each formal element of the charge to that standard. This Court, as with any jury, is entitled to draw inferences from individual parts of the evidence. Those individual items of evidence need not be proved to any particular standard. It is the cumulative weight that must prove the elements to the required standard of beyond reasonable doubt. As the Court of Appeal has said in R v Thomas,1 a series of coincidences might on their own prove little but may cumulatively carry significant weight.
The charge
[6] Turning to the charge against you. Each of you, Mr Baylis and Mr Murphy, face a single stated charge that between 22 August 2016 and 6 December 2016 at Christchurch you participated in an organised criminal group, knowing that three or more people shared the objective of obtaining material benefits from the supply of methamphetamine and knowing or being reckless as to whether your conduct contributed to the occurrence of criminal activity and further knowing or being
1 R v Thomas, [1972] NZLR 34 (CA).
reckless as to whether that criminal activity contributed to achieving the objective of the organised criminal group.
[7]Section 98A of the Crimes Act provides:
98A Participation in organised criminal group
(1)Every person commits an offence and is liable to imprisonment for a term not exceeding 10 years who participates in an organised criminal group—
(a)knowing that 3 or more people share any 1 or more of the objectives (the particular objective or particular objectives) described in paragraphs (a) to (d) of subsection (2) (whether or not the person himself or herself shares the particular objective or particular objectives); and
(b)either knowing that his or her conduct contributes, or being reckless as to whether his or her conduct may contribute, to the occurrence of any criminal activity; and
(c)either knowing that the criminal activity contributes, or being reckless as to whether the criminal activity may contribute, to achieving the particular objective or particular objectives of the organised criminal group.
(2)For the purposes of this Act, a group is an organised criminal group if it is a group of 3 or more people who have as their objective or one of their objectives—
(a)obtaining material benefits from the commission of offences that are punishable by imprisonment for a term of 4 years or more; or
(b)obtaining material benefits from conduct outside New Zealand that, if it occurred in New Zealand, would constitute the commission of offences that are punishable by imprisonment for a term of 4 years or more; or
(c)the commission of serious violent offences; or
(d)conduct outside New Zealand that, if it occurred in New Zealand, would constitute the commission of serious violent offences.
(3)A group of people is capable of being an organised criminal group for the purposes of this Act whether or not—
(a)some of them are subordinates or employees of others; or
(b)only some of the people involved in it at a particular time are involved in the planning, arrangement, or execution at that time of any particular action, activity, or transaction; or
(c)its membership changes from time to time.
[8] The essential elements which the Crown is required to prove against each of you here to substantiate this charge of participating in an organised criminal group are:
(a)The existence of a group of three or more persons who have as their objective the obtaining of material benefits from the commission of offences which carry a maximum penalty of four years’ imprisonment or more; namely in the circumstances of the present case the distribution and supply of methamphetamine.
(b)Knowledge on your part that at least three persons in the group share the objective of obtaining material benefits from dealing in methamphetamine. Where the Crown can prove the individual defendant, in this case you, Mr Baylis, and you, Mr Murphy, shared the objective of the group, you must know of at least two other persons who share the same objective. Where the Crown does not allege you shared the objective of the group, you must know of at least three other persons who shared the same objective.
(c)Participation by the individual defendant in the organised criminal group requires conduct which advances the interests or activities of the group or overtly appears to advance such activities. Although each of you, Mr Baylis and Mr Murphy, in doing so, does not need to share the objective of the group, you do need to know the group’s objective.2
(d)Either knowledge on your part that your conduct contributed to the occurrence of the criminal activity or recklessness as to whether this conduct may so contribute to that criminal activity, namely the dealing in methamphetamine.
2 R v Ngaheu (HC) Rotorua CRI-2009-063-102, 1 April 2010 at [25] – [29].
(e)Lastly, knowledge on your part that the criminal activity will or may contribute to achieving the objective of the organised criminal group or recklessness on your part as to whether it may so contribute.
[9] The last two elements, Elements four and five I have just described, refer to recklessness. Reckless in context here means that the Crown needs to prove that:
(a)The particular defendant concerned, in this case you, Mr Baylis and Mr Murphy, respectively in relation to the charge each of you is facing, recognised that there was a real possibility that you might be contributing to the supply of methamphetamine and, having regard to that possibility, your actions were unreasonable. Unreasonable actions are actions that a reasonable and prudent person would not have taken. This is what is proscribed in Element Four which I have described above; and
(b)That defendant recognised that there was a real possibility that the criminal activity might be contributing to the shared objective of obtaining material benefits from the supply of methamphetamine and, having regard to that possibility, your actions in each specific case were unreasonable. (That is Element Five that I have noted above.)
[10] And at this point I note too that, in order to constitute an organised criminal group, it is not necessary that there be any form of formal incorporation or any formality at all.3 Those engaged in the group need not have formally defined roles nor need there be a continuity of membership or a developed structure. However, what is required is that there is more than a chance or occasional grouping of individuals. Some permanence or regularity and some form of generic theme or label is required.4
[11] Turning to the requirement for “participation” in the organised criminal group, participation is to be given its normal meaning of “taking part” or “sharing”.5 To participate, a person needs to know the objectives of the group but does not need to
3 R v Robinson (HC) Auckland CRI-2004-004-10413, 23 June 2016 at [63].
4 Above n 3 at [66].
5 R v Ngaheu, above n 2 at [24].
share them.6 Keane J in Ngaheu and the Court of Appeal in R v Mitford7 adopted a broad definition of “participates” which, although noted as problematic, was generally along these lines:
[29] …In the context of the section, a person perhaps “participates” in an organised criminal group if a person either overtly associates with members of a group in their capacity as group members or engages in a course of conduct actually advancing the interests or activities of the group, or overtly appearing to advance such activities.
[12] As to the mens rea or mental element required here, the Court of Appeal in R v Mitford quoted a passage from the Select Committee report that amended s 98A of the Crimes Act as in the following way:8
We consider that the mental element appropriate to a particular offence has to be determined in the context of that offence and the conduct at which it is aimed. In this context, a person is liable for an offence who participates in an organised criminal group (as defined) knowing that it is an organised criminal group and either knowing that his or her participation contributes to the occurrence of criminal activity or is reckless as to whether his or her participation may contribute to the occurrence of criminal activity. We note that to be criminally liable for ‘reckless’ conduct requires proof beyond reasonable doubt that the accused deliberately ran a known risk when it was unreasonable in the circumstances to do so. This is a high threshold. This clearly excludes from liability any unwitting associates, such as a secretary of a company, or those who have good reasons, such as social contacts and family members.
Organised criminal group
[13] Turning now to the organised criminal group definition, an “organised criminal group” is defined in s 98A(2) to be a group of three or more people who have as their objective, or one of their objectives, either obtaining material benefits from certain serious offences, here being relevantly the allegation of methamphetamine dealing.
[14] Such an organised criminal group is capable of existing whether or not some of the group are subordinates or employees of others, and whether or not only some of the people involved in it at a particular time are involved in the planning, arrangement or execution of any particular action, activity or transaction. It is noted also that membership of the group may change from time to time.
6 Above n 2 at [26].
7 R v Mitford [2005] 1 NZLR 753.
8 Above n 7 at [38].
[15] In considering s 98A in relation to other substantive offences, the Court of Appeal in the Mitford decision9 observed:
[50] The gist of the present offence is knowingly taking part as a member of the group which has come together to commit the proscribed activity, whether or not any substantive offence has been committed. If it has there will be a further offence carrying a separate penalty within the limits of totality. Of course commission of the further offence, like the overt acts in a conspiracy, will often be powerful evidence of breach of s 98A.
[16] Here it is the Crown case that the charge against you, Mr Baylis, and against you, Mr Murphy, is made out because the circumstances here are such that members of the group have come together to commit the prescribed activity, being profiting from methamphetamine dealing (regardless of whether any substantive offences have been committed), and this constitutes the objective of the group. In this case the Crown notes the direct participants in the methamphetamine dealing can be and have been charged and pleaded, these being Mr Broadley and Mr Strickland who I will say more about later. The Crown says the drug dealing in this case shows this organised criminal group in operation.
[17] Lastly, I remind myself that separate verdicts are required here with respect to the one charge that each of you, Mr Baylis and Mr Murphy, faces. The case against each of you is to be considered in isolation and it is clear that in this case, where there is evidence that is admissible against one of you only that is not admissible against the other, then I must disregard that when considering the charge against the other of you.
The Crown’s case
[18] The Crown case here is that you, Mr Baylis, and you, Mr Murphy, were performing a financial role in relation to the Headhunters in Christchurch, comprising bookkeeping and holding “club money”. This “club money”, the Crown says, included funds which must be seen as material benefits from the supply of methamphetamine, the “club money” in question being an amalgamation of money from different sources. The allegation of participation in an organised criminal group against you, Mr Baylis, centres on what the Crown says is your role as the financial controller of the group. The Crown allegation is that you accounted for income and
9 R v Mitford, above n 7 at [50].
spending from the unlawful activities undertaken by the group. The Crown’s allegation against you, Mr Murphy, is that you participated in the organised criminal group but only during the period of Mr Baylis’ custodial remand from 27 August 2016 to 17 October 2016. It is said, Mr Murphy, that you took over from Mr Baylis in a caretaker role as the financial controller of the group while Mr Baylis was in this period of remand in prison. This, it seemed, occurred after Mr Baylis’ arrest on charges involving possessing methamphetamine for supply on which I understand he was acquitted.
[19] Although it is accepted that Mr Baylis is a prospect for the Headhunters organisation, Mr Murphy has no apparent formal standing within that organisation, and this is accepted by the Crown. Mr Murphy is not a patched member or prospect and you say, Mr Murphy, you became involved simply to assist your longstanding friend, Mr Baylis. Nevertheless, the Crown alleges that for the period 27 August 2016 to 17 October 2016 you, Mr Murphy, were responsible for accounting for income and expenditure not only of the group’s lawful but also its unlawful activities.
The Headhunters
[20] I turn to provide a few comments about the Headhunters generally. From evidence before me given by Detective Inspector McNaughton, it seems the Headhunters are described as a motorcycle club involving at the time in 2016 some 200 – 300 patched members. The Headhunters were based principally in Auckland. It had two chapters in Auckland with the Christchurch operation being linked to the Auckland West chapter. That Christchurch branch of the Headhunters, during this period, had three known patched members, Lyndon Richardson, Steven Strickland and Lyall Anderson, and possibly only two or three other patched members. Mr Richardson was involved with running the club pad in Christchurch which was at 31 Vickerys Road. During 2016 the pad was in the process of being substantially renovated and fixed up.
[21] So far as the use of the club’s pad in Christchurch is concerned, not only were there patched members present from time to time, but also a number of prospects, and
associates, others known as “hangers on” and other people who it is said just seemed to enjoy the motorcycle gang scene.
[22] The pad at Vickerys Road had a drinks area where people paid for drinks, often in cash, with the money kept in a cash tin found when the police searched the pad. The pad also had a drinks dispenser, a snack vending machine and a change dispenser, along with three working poker machines. There were, in addition, three further poker machines present, which did not seem to be operating at the time.
[23] The evidence before me indicated that the poker machines were bringing in something over $150 per day each, amounting to a weekly take from the three machines of something in excess of $3,000.
[24] It was indicated that overall a significant number of people came through the doors of the Vickerys Road pad and a significant amount of cash was generated through the poker machines, the bar and food machines.
[25] The Headhunters in New Zealand, it seems to be accepted, has a diverse membership. Subscriptions are paid by the members and the Christchurch group must pay the Auckland West chapter for the use of the Headhunters’ name.
[26] Mr Baylis, it seems to be accepted you were a prospect of the Headhunters and it is not disputed that you associated as such with the club and its members. Mr Murphy, as I have said, you are neither a patched member, nor a prospect, nor an associate of the Headhunters. Your connection is that you are and have been it seems for many years a close friend of Mr Baylis, it is said through a shared motorcycles interest and, from the evidence, it seems you know and associate in a social sense with some of the other Headhunters Christchurch group.
Other defendants
[27] Initially in this proceeding, the Crown brought charges against four others associated with the Headhunters. Those four pleaded guilty to a range of charges they faced. The first was Mr Lyndon Richardson who I have mentioned was a patched member. He was responsible for the Christchurch based members and reported to the
Auckland West chapter hierarchy. He pleaded guilty and was convicted on one charge of participating in an organised criminal group for the same period as you are both charged, that being between 22 August 2016 and 6 December 2016. The second was Mr Carrick Broadley, who it seems was neither a patched member nor a prospect for the Headhunters but simply an associate. Nevertheless, it seems he had a clear association with the Headhunters. He was convicted of participating in the same organised criminal group as Mr Richardson. He also pleaded guilty to and was convicted of conspiracy, along with a third defendant, Mr Steven Strickland, to supply methamphetamine. Mr Broadley also pleaded guilty to and was convicted of offering to supply and supplying methamphetamine and possession of firearms and explosives.
[28] The third, as I have noted, was Mr Steven Strickland. He was a patched Headhunter at the time. He pleaded guilty to charges of conspiracy with Mr Broadley to supply methamphetamine and the same charge as the others of participating in the organised criminal group.
[29] The fourth was Mr Benjamin Kney who was a Headhunters prospect. He pleaded guilty and was convicted on the one charge of participating in the same organised criminal group as the others.
[30]The Crown alleges the roles of these four were as follows:
(a)In relation to Mr Richardson, it is said that he participated as the leader, manager and co-ordinator of the organised criminal group’s activities.
(b)Mr Broadley’s role was to sell methamphetamine under the supervision and management of Mr Strickland, although on occasions he answered directly to Mr Richardson as the senior person in the hierarchy. It seems he also had contact with other defendants including Mr Kney and Mr Baylis.
(c)Mr Strickland is alleged to have participated in the role of managing Mr Broadley’s drug dealing activities. Further, the Crown says he acted
as Mr Broadley’s mentor with regard to aspirations Mr Broadley held to join the Headhunters organisation.
(d)Fourthly, in relation to Mr Kney’s participation, the Crown says this is based on his role as an “enforcer” of the group, who assisted with the collection of drug and other debts on behalf of Mr Broadley and others.
[31] To provide the complete picture, the Crown alleges that, Mr Baylis, your participation is focused on your role in dealing with the finances of the group, accounting for income and spending from the unlawful activities undertaken by it. As to Mr Murphy, again the Crown says your role was more limited in that it was confined to the period you took over in a caretaker role from Mr Baylis for the group’s finances while Mr Baylis was on remand in prison between 27 August 2016 and 17 October 2016.
The Crown case
[32] The Crown case before me relied to a significant extent on intercepted communications. Some five to six hours of audio and text messaging were provided, along with additional evidence provided from various police officers and several exhibits.
[33] Video evidence of a police interview with Mr Murphy for something over one hour, also comprised part of the evidence before me.
[34]The intercepted communications fell into two categories:
(a)first, communications alleged to involve you, Mr Baylis, and you,
Mr Murphy; and
(b)secondly, communications that do not involve either of you as a participant but which the Crown sought to use as a hearsay statement pursuant to s 22A of the Evidence Act 2006.
[35] As to these intercepted communications, they have been ruled as admissible evidence pursuant to s 22A of the Evidence Act relating to the application of the co- conspirators rule in earlier rulings given by Mander J and by myself. In those decisions it was found that the requirements of s 22A were met which allowed the interceptions in question to be admitted into evidence at trial.
[36] On this, the Crown has conceded throughout that a number of these intercepted communications which involved hearsay statements outside the dates of your alleged involvement, Mr Murphy, were not admissible against you. This was because there was no evidence you participated before the arrest of Mr Baylis in late August 2016, nor after his release on bail in mid October 2016.
[37] We are at the point in this trial where verdicts are required on the charges you face, Mr Baylis and Mr Murphy. The s 22A exercise now needs to be undertaken again for this purpose.
[38]Section 22A of the Evidence Act provides:
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.
[39] As will become apparent as this verdict decision unfolds, given the evidence which has been presented in this trial, real issues regarding admissibility of these hearsay statements arise, in particular relating to the requirements of s 22A(b) and (c) of the Evidence Act are concerned.
[40] Notwithstanding this, for present purposes I am prepared to proceed on the basis that, subject to the matter I have noted at the preceding para [36] above relating to Mr Baylis, the intercepted communication hearsay statements are notionally
accepted as admissible. I proceed accordingly. I do record, however, that this will not affect the outcome here.
[41] The Crown case against you, Mr Baylis, and you, Mr Murphy, is that each of the original six defendants referred to in this proceeding were either patched Headhunter members, these being Mr Richardson and Mr Strickland, or had an association with the Headhunters, that being Mr Broadley who had expressed aspirations with respect to the gang, and the Crown says you, Mr Baylis, who are alleged to be an associate, and Mr Kney, who was a self-described prospect. Lastly the Crown says, Mr Murphy, you do have a lesser association with the Headhunters and again, as I have said, became involved probably because of your friendship with Mr Baylis and his custodial remand in August 2016 where you are said to have stepped in as the financial caretaker.
[42] This Crown case against you both is that you were each performing a financial role in relation to the Headhunters in Christchurch which extended to the organised criminal group that had developed and that this comprised bookkeeping and holding and dealing with a range of finances loosely described as “club money”. The Crown alleges the “club money” included funds from the supply of methamphetamine. It says too that this “club money” was an amalgamation of money from different sources as I have already noted.
[43] The Crown accepts here that it is required to prove your “participation”, Mr Baylis and Mr Murphy, in the organised criminal group, and knowledge on your part that some funds were from drug sales in circumstances in which your participation contributed to that criminal activity.
[44] I will turn now to consider the cases against each of you separately. First, to you Mr Baylis.
[45] As I have already noted, the Crown must prove to the required standard the five s 98A elements of the charge each of you faces of participating in the organised criminal group.
Element One – Has the Crown made the Court sure that between 22 August 2016 and 6 December 2016 there existed a group of three or more persons who shared the common objective of obtaining material benefits from the supply of methamphetamine?
[46] So I turn first to Element one, and on this I must be sure that the Crown has established that between 22 August 2016 and 6 December 2016 there existed a group of three or more persons who shared the common objective of obtaining material benefits from the supply of methamphetamine.
[47] On this aspect, evidence of the convictions of Messrs Broadley, Strickland, Richardson and Kney of this s 98A offence was ruled admissible earlier to prove this element. Section 49 of the Evidence Act provides that evidence of the fact a person has been convicted of an offence, if admissible, is conclusive proof that the person committed the offence.
[48]The Crown acknowledges here, however, that this conviction evidence does not establish the roles played by either of you, Mr Baylis or Mr Murphy, in the organised criminal group.
[49]Nevertheless, the existence of this organised criminal group involving Messrs Broadley, Strickland, Richardson and Kney and their participation in the group, has been accepted by each of those defendants with their guilty pleas and their subsequent convictions. In addition, substantive drug dealing offences have been accepted by Messrs Broadley and Strickland, again with their appropriate guilty pleas. It is significant too, as I see it, that each of those four co-defendants with their guilty pleas has accepted the particular objectives of the organised criminal group specified as being in relation to dealing in methamphetamine.
[50]Before me, the Crown went on to submit that while that conviction evidence alone does not prove the role played by either you, Mr Baylis, or you, Mr Murphy, the intercepted communications and the wider evidence before the Court does prove those roles.
[51]For present purposes, I am prepared to accept this is the case and that in the circumstances here this Element One has been properly established by the Crown.
Element Two – Has the Crown made the Court sure that Mr Baylis participated in that organised criminal group by performing his alleged financial role?
[52] I now turn to the second element. And on this the question is, has the Crown made me sure that you, Mr Baylis, participated in that organised criminal group by performing your alleged financial role. That participation alleged by the Crown is control of money from the proceeds of drug dealing by the organised criminal group, and the bookkeeping, income and outgoings management related to this. The Crown says there is no distinction between club money and organised criminal group money, that is money from the poker machines, bar and perhaps from debt collection activities of the Headhunters, on the one hand, and any proceeds from drug dealing of the group, on the other.
[53] Mr Hawes for the Crown points to the intercepts and communications involving you, Mr Baylis which he contends show your alignment with the Headhunters gang. He refers to the frequent use in your messages, Mr Baylis, of the word “we” in terms of the Headhunters, demonstrating your alignment with the gang and the group. He says this is reinforced by your regular communication with other participants in the group including, in particular, Mr Strickland, Mr Richardson and Mr Kney. As to these aspects, however, what is important under the s 98A charge, is that you, Mr Baylis, did not simply have an alignment with the Headhunters gang itself, which does not seem to be disputed, but that you had a particular alignment with the organised criminal group and its goals. In the evidence before me, the Crown accepted and Mr Hawes confirmed that, for present purposes in this case, the Headhunters gang is not considered to be an organised criminal group. Proving an alignment on your part, Mr Baylis, with the Headhunters gang therefore, as I see it, is clearly not sufficient here.
[54] Evidence too of Mr Murphy visiting you, Mr Baylis, in prison and discussing business such as “club money”, keys and the like, is also pointed to by the Crown. In my view, however, all this is possibly explicable on the basis that it is a discussion
with Mr Murphy who is temporarily the Headhunters’ Christchurch bookkeeper, standing in for you relating to club activities, and not those of the organised criminal group.
[55] Next, the Crown suggested, Mr Baylis, that your standing with Mr Richardson and the communications with him in which you discuss Headhunters’ business also assist here. In my view, however, generally this is not the case. These discussions regarding day to day Headhunters’ business, including matters such as who might be prospecting, renovations to the club premises, issues over the club’s vehicle and chasing up members generally are not of great assistance to the Crown.
[56] Perhaps of more moment in this case is the fact that on 26 – 27 August 2016, Mr Baylis, you were driving your Range Rover vehicle with several others linked to the Headhunters in the car, and were pulled over by the police and a notebook and cash of about $26,000 seized. The items were located together in a plastic bag and the notebook, it seems, related to Headhunters’ finances generally. The Crown endeavours to make something of the notebook entries which refer to money totals never falling below $10,000 nor exceeding $13,000. References are made to amounts coming in and out, and to expenses being paid, all of which seem to be during the period 14 July 2016 to 26 August 2016.
[57] That notebook, however, records that it refers to poker machine proceeds only. No evidence was placed before me to otherwise contest this, and indeed Detective Sergeant Keane in his evidence agreed that the notebook was clearly not a tick list book.
[58] As to the $26,000 in cash which was seized from the car, however, it does not seem this was explained by the figures in the notebook but the presence of three other men in the car at the time and the absence of further evidence relating to this cash does need to be noted.
[59] A second amount of cash, $42,250, was located by the police in the safe at your business premises, Mr Baylis, at Gasson Street where you ran your business under the name Baylis Motor Company. This followed the police search on 6 December 2016.
You, Mr Baylis, told the police at the time the money was yours, saying “It’s from the car sales”.10 Although at one level these large cash amounts support a suspicion that something may be awry, that is that events may actually be sinister, I remind myself that suspicion on occasions can simply verge on guesswork and this is not enough to create a proper inference. And again, as to the $42,250, the Crown provided no further evidence relating to this amount seized from your business premises. Indeed, in cross- examination of the police officers who were concerned with the seizure, it was the defence who made available evidence as to the significant cash nature of your motor company business, Mr Baylis, including a number of regular car sales which occurred in the business, many of which involved significant payments in cash.
[60] Mr Rapley contends too that your explanation, Mr Baylis, that the $42,000 odd came from car sales is consistent with business records provided for your used car business and also for cash payments from your mechanics workshop. The records found in Gasson Street, he says, confirm this to be the case. To an extent this argument, in my view, may have some merit. I accept too that certain other factors related to cash issues may come into play here. The first is the club’s poker machine cash turnover of between $3,000 and $4,000 per week accepted in evidence before me. This, coupled with payments received secondly, for club subscriptions and pad liquor and food sales along with cash possibly generated, and thirdly, and particularly, from debt collection activities on behalf of the gang, in my view, place somewhat of a possible cloud over the inference the Crown is suggesting that the $26,000 cash in the car and the $40,000 in the safe must mean, Mr Baylis, you were participating in the organised criminal group relating to methamphetamine dealing. Indeed, in cross- examination on debt collection issues involving the Headhunters, Detective Sergeant Keane confirmed in evidence that Mr Richardson up to about 2016 operated an active debt collection business, Ironclad Securities, and used Headhunters people to carry out collections.
[61] Next, Mr Baylis, your home in Cashmere was searched by the police and a handwritten note was found in a rubbish bag on the outside patio area. This document (exhibit 30820) the Crown contends was a drug tick list referring to money, quantities
10 Notes of Evidence, p 127.
and various parties. The Crown says this note was associated with drug dealing and, on its face, there seems to be something in this contention. The author of the note, however, is unknown. It is accepted, too, that the note is not in your handwriting, Mr Baylis, nor does it carry your fingerprints. Police evidence before me also confirmed that when the note was seized, no attempts were made to have it DNA tested. It seems also that a number of different people had passed through your Cashmere home shortly before the police search occurred, and it is unclear too how long the rubbish bag may have been present on the patio before the note was discovered.
[62] Lastly, the Crown at some point referred to another handwritten note. This was located at the pad at Vickerys Road. It bore the fingerprints of Mr Kney, and it contained dollar amounts as financial indications of perhaps debt collection amounts. This note (exhibit 30071), as I see it, had no connection directly with you, Mr Baylis, and does not assist the Crown here. Nor is the Crown, in my view, assisted here by a one-page sheet of draft Headhunters insignia also found at your home, Mr Baylis, and produced in evidence. This shows only that you had a Headhunters interest, which is not in dispute. It is of little relevance to the organised criminal group charge you face.
[63] I remind myself again that the onus of proof in this case remains on the Crown here and to a high standard, that of beyond reasonable doubt. Mr Baylis, matters here are reasonably finely balanced, in my view, with respect to the question of your participation in the organised criminal group. They turn on the available inferences that can reasonably be drawn from what was limited evidence about the role you were performing and your state of knowledge of the drug dealing activities of the group. That you had a close association with the Headhunters and those involved in the group, the Crown, in my view, has clearly established here. But, association with and participation in the group are not the same, as the Court of Appeal made clear in its decision in R v Mitford.11 Suspicion is not enough. I must be sure of all the elements required by s 98A for any conviction to stand. If a finding here to support a conviction would involve a degree of guesswork, I cannot do that. Mr Baylis, overall I am satisfied here, but perhaps by a reasonably slim margin, that the Crown has not done
11 R v Mitford, above n 7.
sufficient to make the Court sure that in terms of this Element Two, that you participated in the organised criminal group by performing your alleged financial role there (as opposed to simply carrying out your Headhunters gang role to handle its generally legitimate financial and bookkeeping affairs).
[64] This is reinforced too, as I see it, by the fact that here there is something in the argument advanced by Mr Rapley that the Crown have not said exactly what overt acts of participation in the organised criminal group you have done, Mr Baylis. During the interception period in question there were only some six weeks, Mr Baylis, where you were not in prison. You were arrested and remanded in custody on 27 August 2016. Therefore, physically you were able to participate, if at all, for only five days in August. Further, Mr Rapley notes the restrictive nature of your bail when you were released from custody on 17 October 2016. He contends you had a limited ability to be involved in any sort of illegal activity at that time, especially given the police ability to carry out bail checks on a regular basis.
[65] Of the 49 days within the alleged organised criminal group period when you, Mr Baylis, were said to be in the community Mr Rapley suggests you were significantly restricted and monitored. There is something in that argument, as I see it.
[66] There is also, in my view, a paucity of suspicious intercept calls or messages all obtained during the period when you, Mr Baylis, and others were unaware you were being monitored. Over that interception period there were some 18,270 phone calls and text messages intercepted. On a statistical basis, only a handful are now referred to by the Crown in relation to you, Mr Baylis. Detective Weston accepted that there were only four phone calls and two series of text messages involving you, Mr Baylis, directly.
[67] None of the intercepted calls include mentions of cash or money by you. Nor is there any observation evidence concerning you that the Crown can point to here. This is despite the fact that you were under surveillance over the course of the operation, as I understand it.
[68] Instead, Mr Rapley contends on your behalf, Mr Baylis, that your role as treasurer or bookkeeper for the Headhunters club in Christchurch is simply an informal one and means that legitimate reasons exist for you to have money and make requests for or to be given money. There was no evidence before me of receipt by you, Mr Baylis, of money from Mr Broadley or Mr Strickland who were the only two members of the group charged with direct methamphetamine dealing offences. But in any event, I am satisfied the Crown here has failed to show that any monies you have received, Mr Baylis, were known by you directly to be for the organised criminal group and were not simply general Headhunters funds.
[69] I conclude, therefore, that the Crown has not established to the required standard that you, Mr Baylis, participated in the organised criminal group by performing your alleged financial role. This Element Two of the s 98A charge, therefore, has not been made out and the Crown case against you, Mr Baylis, therefore, must fail. A finding of not guilty is to follow but, for completeness at this stage, I turn briefly to address the remaining elements three, four and five of the charge against you.
Element Three – Has the Crown made the Court sure that when Mr Baylis performed the financial role, he knew that at least three other persons shared the objective of obtaining material benefits from the supply of methamphetamine?
[70] Element Three, requires me to be satisfied that the Crown has made me sure that when you, Mr Baylis, performed your financial role, you knew that at least three other persons shared the objective of obtaining material benefits from the supply of methamphetamine. On this, the Crown says that you, Mr Baylis, were in direct communication at times with Mr Richardson, Mr Strickland, Mr Kney and Mr Murphy. Your knowledge and interest in gang matters and your knowledge of the objectives of this group within the gang is an inference the Crown suggests is available on all the evidence here.
[71]The Crown says this is based upon evidence as to:
(a)Your communications and association, Mr Baylis, as I have said, with other members of the group.
(b)The note found at your address and the inferences drawn from it. This is on the basis that the Crown says it is a tick list recording drug sales and amounts owed by persons including, it is claimed, Mr Strickland and Mr Richardson.
(c)What the Crown says is your persistence, Mr Baylis, in trying to see Mr Strickland because it suggests money was still owed by him perhaps for drugs.
(d)The hearsay communication relating to you in a conversation between Mr Broadley and Mr Kney where Mr Broadley says he wants to catch up with you (Mag). A further text message from Mr Broadley to a third party saying he wanted to see you, Mr Baylis, “to talk business” and to “try and get a new hook” is submitted as a strong piece of evidence in context against you. The Crown says this represents a communication likely to be about drugs, and it is difficult to conceive what other business Mr Broadley would be wishing to discuss with you other than drug dealing.
[72] Although there is something in these suggestions advanced by the Crown, in my view, they are not sufficient in this case to establish even by clear inference that when you performed your financial role, Mr Baylis, you knew that at least three other persons shared the objective of obtaining material benefits from the methamphetamine supply.
Element four – Has the Crown made the Court sure that when Mr Baylis carried out his financial role, Mr Baylis either: (a) knew that in doing so he was contributing to the occurrence of criminal activity; or (b) was reckless as to whether he might be contributing to the occurrence of criminal activity?
[73] I turn now to Element Four, has the Crown made me sure that when you, Mr Baylis, carried out your financial role, Mr Baylis, you either first, knew that in doing so you were contributing to the occurrence of criminal activity or, secondly, you were reckless as to whether you might be contributing to the occurrence of criminal activity. As I have said above, I have found that Element Two here has not been proved and, therefore, Mr Baylis, it has not been established that you participated in the
organised criminal group by performing the financial role the Crown says you were undertaking. Had I found otherwise, then it is likely this knowledge or reckless aspect in Element Four might possibly have been satisfied in this case.
Element Five – Has the Crown made the Court sure that Mr Baylis either: knew that the criminal activity contributed to the shared objective of obtaining material benefits from the supply of methamphetamine; or (b) was reckless as to whether the criminal activity might contribute to the shared objective of obtaining material benefits from the supply of methamphetamine?
[74] Turning now to Element Five, which is whether the Crown has made me sure that you, Mr Baylis, either knew that the criminal activity contributed to the shared objective of obtaining material benefits from the supply of methamphetamine or you were reckless as to this. Again here, given the finding I have made relating to Element Two, this Element Five does not arise. Had I made a decision otherwise on Element Two then again it may well be that this knowledge or reckless aspect in Element Five might have been satisfied in these circumstances.
Conclusion
[75] In conclusion then, for all the reasons I have outlined above, I am not satisfied beyond reasonable doubt that you, Mr Baylis, participated in the organised criminal group in question and, therefore, I find you not guilty of the charge under s 98A of the Crimes Act you face.
[76]I now turn to the charge against you, Mr Murphy.
Mr Murphy
[77] The Crown case against you, Mr Murphy, is broadly that you took over from Mr Baylis in a caretaker role with respect to money matters as financial controller for the Headhunters in Christchurch and, in particular, for the organised criminal group while Mr Baylis was in custody between 27 August 2016 and 17 October 2016. Unlike Mr Baylis, as I have noted, it is accepted you are not a patched member nor a prospect, nor do you have any formal standing within the Headhunters gang.
Element One – Has the Crown made the Court sure that between 22 August 2016 and 6 December 2016 there existed a group of three or more persons who shared the common objective of obtaining material benefits from the supply of methamphetamine?
[78] I turn now to the five elements the Crown needs to establish for the s 98A participation in an organised criminal group charge you face, Mr Murphy, and I refer first to Element One. This was, that the Crown has made me sure that between the relevant dates there existed a group of three or more persons who shared the common objective of obtaining material benefits from the supply of methamphetamine. For all the reasons I have outlined above relating to the charge against Mr Baylis, I am satisfied this First Element is established here. No further comment on this element relating to you, Mr Murphy, is required.
Element Two – Has the Crown made the Court sure that Mr Murphy participated in that organised criminal group by performing his alleged financial role?
[79] I now move on to the second element which is whether the Crown has made me sure that you, Mr Murphy, participated in that organised criminal group by performing your alleged financial role. The Crown case here is that in addition to performing what it accepts was a financial role for the Headhunters whilst Mr Baylis was in custody you, Mr Murphy, performed a financial role for the organised criminal group.
[80] Mr Murphy, you have described in your police statement your financial role as one involving the poker and other machines at the gang pad in Vickerys Road and “just the general day to day money”.
[81] When arrested, Mr Baylis made contact with you, Mr Murphy, and the handover of books, keys and “club money” was discussed. Both of you have been friends, as I have said, for a long period of time. Mr Murphy, you have said you have known Mr Baylis for approximately 30 years. You acknowledged in your police statement that you were asked by Mr Baylis to take over looking after the poker machines, bar, drinks and food machines and the general finances for the Headhunters gang. You were given a PIN code to the gang pad gates and a book to balance the accounts.
[82] Within a short period of time after Mr Baylis’ incarceration in late August 2016, Mr Murphy, you were involved and reporting to Mr Richardson about a range of things. These included the status of the club books, its money and keys. Also, you acted as an intermediary between Mr Baylis, who was then in prison, and Mr Richardson. Clearly you were in a trusted position with the Headhunters club and also with Mr Baylis, given that you had the keys to his house and were in charge of general oversight.
[83] In what I see as your commendably open police interview with Detective Forrest, Mr Murphy, you confirmed that about $3,000 to $4,000 per week was going through the poker machines at the gang pad. You said you would clear them out and retain the money at your home until directed where it should be spent. Most of the money, you said, was spent on major renovations happening at the time to the club house. In that interview, you referred to maintaining the club finances. You also commented, however, that there was another side to the club business which you described as “debts they were collecting I suppose, anything to do with the club”. These were funds that you said were passed to you as well.
[84] Evidence before me showed, Mr Murphy, that Detective Forrest took you through the notebook which you had maintained. You agreed the amounts recorded in the book were correct and related to Headhunters poker machine and other revenue you had received and expenses you had paid. Further, you confirmed that an $11,000 payment received on 6 September 2016 from Mr Baylis’s ex-partner, Kathy, represented “club money” I understand previously held in the Baylis Motors’ safe.
[85] From intercepted telephone calls it became apparent that on 9 September 2016, Mr Murphy, you phoned Mr Richardson, who was then in Auckland. You were concerned and outlined that there had been an incident in Christchurch in which “H” who was thought to be another Headhunter member, wanted you to hand over a gun. This was supposedly “an order from the chief…[and that he] was supposed to drop it off at the club but he hadn’t”. You later clarified to Mr Richardson that the order to supply the gun had come from the national Headhunters’ president in Auckland.
[86] The evidence before me showed, Mr Murphy, you were agitated and upset in this call and, importantly, you told Mr Richardson that it’s “getting beyond what I am doing…”. Also, in that call you told Mr Richardson people are mistaking you for another chap by the name of “Smurf” (which was your nickname) who was an old Highway 61er.
[87] Mr Lucas suggested, Mr Murphy, that this exchange made in an unguarded conversation (given you did not know the police were listening) shows your limited involvement with anything nefarious involving the Headhunters such as sourcing a gun. He noted that later in the conversation you said, “I’m not going near it”. Effectively you told Mr Richardson that doing this kind of illegal stuff is not what you had signed up for and Mr Richardson agreed.
[88] Mr Lucas notes too that of the approximately 18,200 intercepted communications recorded by the police, only 0.1 per cent of them involved you, Mr Murphy, speaking at all. This obviously is a tiny number. Mr Lucas suggests that if, Mr Murphy, you had become an integral part of the organised criminal group, being essentially the money tin, then surely your voice would have been recorded many more times on phone calls and text messages to associated parties of that group. This simply did not occur. The limited intercepted communications before me, according to Mr Lucas, provide solid evidence, Mr Murphy, that you were not participating in the organised criminal group and were not assisting in dealing drugs. I tend to agree.
[89] The interceptions relating to you, Mr Murphy, and particularly your lengthy police statement, in my view, must show or at least lead to a reasonable inference that, you, Mr Murphy were involved in Mr Baylis’ absence largely if not exclusively in Headhunters business only. This involvement, however, from the evidence before me, related to collection of poker machine, drink and food monies and other legitimate money earned by the club from debt collecting and the like. It does not, as I see it, show, Mr Murphy, that you were heavily involved with the relatively small drug dealing ring conducted separately by the three also associated parties.
[90] The Crown at one point made something of a discussion about “paint” between Mr Murphy and Mr Richardson. It seems however, this is accepted as being a
legitimate discussion and one relating to genuine painting as part of the club house renovations. Payment for these renovations was a daily activity in which you, Mr Murphy, were involved.
[91] Lastly, the Crown endeavoured to make something of a discussion you, Mr Murphy, had reported, I understand, to Mr Richardson relating to how a number of patched Headhunter members had unsuccessfully searched Mr Baylis’s home address while Mr Baylis was in custody. This, you said, was a search looking for quantities of methamphetamine and cash they thought were stored there.
[92] The Crown suggested this had something to do with your role, Mr Murphy, in being aware of and participating in the organised criminal group by performing a financial role relating to methamphetamine dealing. This is a somewhat long bow to draw and I reject it. It is more likely, as I see it, simply a matter reported from you, Mr Murphy, regarding the house of your friend, Mr Baylis, whilst you had a supervision role when Mr Baylis was in prison. And, as I understand it, nothing of this type (methamphetamine or cash) was found despite a search warrant search of the Baylis home.
[93] At the outset, Mr Hawes confirmed that the Crown case in this trial is essentially a circumstantial case and is reliant on inferences. What is clear, however, is that a proper inference that can be drawn is a conclusion drawn from facts that a Court, in this case I, accept are reliably established. It is not a guess. A conviction cannot be based upon guesswork.
[94] Especially with regard to the charge against you, Mr Murphy, it might be suggested here that there is an element of guesswork on the part of the Crown as to your overall role. To an extent I agree. So far as this performance or participation element is concerned, the Crown has not satisfied me beyond reasonable doubt that you, Mr Murphy, participated in the organised criminal group activities by performing this alleged financial role. From the evidence before me, your caretaker role it appears related to the finances of the Headhunters gang. There was no evidence nor established inference of anything more than that to the required beyond reasonable doubt standard. As to the inference suggested by the Crown here, it is not possible, in
my view, from facts that have been reliably established in this case to reach the conclusion the Crown suggests. In fact, as I see it, a reasonable conclusion can be reached from each intercepted call or text message and from your generally uncontested police statement, Mr Murphy, that, as a credible possibility, an innocent explanation does exist for the messages the Crown suggests are suspicious or sinister. The Crown has not done enough here to show beyond reasonable doubt that your role, Mr Murphy, related to the organised criminal group or that indeed you had participated in that group.
[95] For these reasons this Element Two is not met and the Crown fails in its s 98A charge against you, Mr Murphy. A verdict of not guilty on this charge is to follow.
[96] But, again for completeness, I will go on to briefly consider elements three, four and five of the s 98A charge relating to you, Mr Murphy.
Element Three – Has the Crown made the Court sure that when Mr Murphy performed the financial role, he knew that at least three other persons shared the objective of obtaining material benefits from the supply of methamphetamine?
[97] As to Element Three which is whether the Crown has established that when you, Mr Murphy, performed the financial role, you knew that at least three other persons shared the objective of obtaining material benefits from the supply of methamphetamine. On this aspect, the Crown notes that at the operative time, Mr Murphy, you were in reasonably close communication with Mr Richardson and also with Mr Baylis. The Crown says you knew who Mr Broadley was, although you said you had little to do with him and you also knew who Mr Strickland and Mr Kney were. Given that, the Crown says, Mr Murphy, you knew the identity of others within the organised criminal group and that was enough in the circumstances here. You did not need to know there were others performing roles such as drug dealing or collecting debts from drug dealers.
[98] On these aspects, I am satisfied there is no real unchallenged evidence before me to establish, Mr Murphy, that you did know about the organised criminal group. You may have suspected generally that there was likely to be a drug dealer within the Headhunters organisation. Suspicion, however, is not enough. On the evidence here
the Crown has not been able to prove beyond reasonable doubt that you knew three or more other people shared the objective of deriving material benefits from the sale or supply of methamphetamine. This Element Three, if I needed to make a decision on it, in my view, is not met here.
Element four – Has the Crown made the Court sure that, when Mr Murphy carried out his financial role, Mr Murphy either: (a) knew that in doing so he was contributing to the occurrence of criminal activity; or (b) was reckless as whether he might be contributing to the occurrence of criminal activity?
[99] Turning to Element Four which is whether the Crown has established that when you carried out your financial role, Mr Murphy, you either knew that in doing so you were contributing to the occurrence of criminal activity or you were reckless as to this. I start by saying that given my findings as to Elements Two and Three above, I need not turn to address this element. But on the evidence before me, however, again there is little to show, Mr Murphy, you were carrying out your role other than for the Headhunters gang alone and that you knew in doing so you were contributing to the occurrence of methamphetamine dealing criminal activity by an organised criminal group or that you were reckless as to this.
Element Five – Has the Crown made the Court sure that Mr Murphy either: (a) knew that the criminal activity contributed to the shared objective of obtaining material benefits from the supply of methamphetamine; or (b) was reckless as to whether the criminal activity might contribute to the shared objective of obtaining material benefits from the supply of methamphetamine?
[100] Turning lastly to Element Five which is whether the Crown has made me sure that you, Mr Murphy, either knew the criminal activity contributed to the shared objective of obtaining profits from the supply of methamphetamine or you were reckless as to this, again, given my finding on the preceding elements, I need not address Element Five.
[101] Notwithstanding this, on the evidence which was before me, as I see it there is also nothing here to establish to the required standard that this Element Five is satisfied against you, Mr Murphy.
Conclusion
[102] In conclusion then, Mr Murphy, for all the reasons I have outlined above, I find the Crown has not been able to meet the high standard required of it to establish beyond reasonable doubt that you participated in an organised criminal group within the period specified by the Crown.
Result
[103]Mr Baylis and Mr Murphy, would you please stand.
[104] I turn now to the final result and my verdicts here. Mr Baylis, I find you not guilty of the charge you face of participating in an organised criminal group. You are free to go.
[105] Mr Murphy, I find you not guilty of the charge you face of participating in an organised criminal group. You are also free to go.
[106] I conclude by expressing my appreciation to counsel at this trial for all the helpful assistance you have provided throughout. I thank you all too, and I also wish to thank you, Mr Baylis, and you, Mr Murphy, particularly, for the dignified and creditable way you have conducted yourselves throughout this trial.
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Gendall J
Solicitors:
Raymond Donnelly & Co, Christchurch
Copies to:
James Rapley QC, Barrister, Christchurch Stephanie Grieve, Barrister, Christchurch Josh Lucas, Barrister, Christchurch
Christopher Nolan, Barrister, Christchurch
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