R v Cavanagh
[2015] NZHC 1908
•12 August 2015
ORDER PROHIBITING PUBLICATION OF THE JUDGMENT AND ANY PART OF THE PROCEEDINGS (INCLUDING THE RESULT0 IN NEWS MEDIA OR ON THE INTERNET OR OTHER PUBLICLY AVAILABLE DATABASE UNTIL FINAL DISPOSITION OF TRIAL. PUBLICATION IN LAW REPORT OR LAW DIGEST PERMITTED. IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI-2014-004-5509
[2015] NZHC 1908
THE QUEEN v
MICHAEL JOSEPH CAVANAGH SHANNON STEVENS
Hearing: 27 July 2015 Appearances:
D Johnstone for Crown
S J Bonnar QC for Cavanagh A G Speed for Stevens
Judgment:
12 August 2015
JUDGMENT OF WHATA J
[Propensity Evidence Application]
This judgment was delivered by Justice Whata on 12 August 2015 at 2.00 p.m., pursuant to
r 11.5 of the High Court Rules
Solicitors:
Registrar/Deputy Registrar Date:
Meredith Connell, Crown Solicitors, Auckland Copies to:
S J Bonnar QC, Auckland A G Speed, Auckland
R v CAVANAGH AND STEVENS [2015] NZHC 1908 [12 August 2015]
[1] This is my second judgment in relation to an application to adduce propensity evidence of the methamphetamine convictions of Mr Cavanagh and Ms Stevens. In my first judgment,1 I ruled the convictions per se as inadmissible, but foreshadowed that in combination with a broader narrative detailing the facts said to demonstrate the requisite propensity, the convictions may be admissible.
[2] The Crown has now produced a broader narrative that it says provides a proper basis for the admissibility of the conviction evidence. Mr Cavanagh and Ms Stevens oppose the application, maintaining that the prejudicial effect of the evidence outweighs its probative value.
Background
[3] The background to this matter is essayed in my first judgment. Save in one respect, it is not disputed so for ease of reference I repeat it here:
Background
The Crown’s narrative
Operation Illusion and Operation Genoa
[2] In August 2002 the Police terminated Operation Illusion. The investigation involved the manufacture of methamphetamine by Mr Cavanagh, Mr O’Carroll, Ms Stevens and Ms Henry. As a result they were charged and convicted of methamphetamine related charges. They were sentenced to terms of imprisonment. Mr Cavanagh was the last to receive parole on 17 May 2010.
[3] In 2013, a fresh investigation was commenced, Operation Genoa, centred on allegations that Mr Cavanagh, Ms Stevens, Mr O’Carroll and Mr Bowker were involved in the manufacture of methamphetamine and that Victoria Cavanagh, Ms Henry and Mr Ryan were assisting them by laundering money. The 47 charges in these proceedings are the product of Operation Genoa.
[4] The primary charges allege the manufacture of methamphetamine. Given their significance to the present applications, the Crown’s narrative of the offending is repeated here.
1 R v Cavanagh [2015] NZHC 1394.
Charge 2 – Cavanagh, Stevens and Cavanagh
[5] The central allegation is that despite having no known source of income Mr Cavanagh and Victoria Cavanagh amassed cash and other assets in excess of $3,000,000 in less than four years. Ms Stevens is also said to have acquired significant cash and other assets in excess of $200,000.
[6] During this period, Mr Shaw was Ms Stevens’ partner and her assistant, helping her and Mr Cavanagh with the manufacture of methamphetamine.
[7] Based on their accumulated unexplained wealth, the quantities of manufactured methamphetamine are assessed at well into the multiple kilograms.
Charge 12 – Stevens, Shaw, O’Carroll
[8] The Crown alleges that in early March 2014 Ms Stevens and Mr Shaw uplifted manufacturing equipment from a storage facility and left it at Mr Bowker’s address. Mr Bowker also uplifted from another self storage unit a trailer the syndicate used to store the vast majority of the manufacturing equipment. On 12 March 2014 Ms Stevens is said to have completed a methamphetamine manufacture in excess of 830 grams. A covert search of a chilly bin stored by Ms Stevens at another storage facility identified the 830 plus grams of methamphetamine. She would later uplift the methamphetamine and supplied it to unknown persons.
Charge 27 - Stevens, Shaw and O’Carroll
[9] The Crown claims that in April 2014 Ms Stevens and Mr O’Carroll discussed their next manufacture. Ms Stevens is said to have arranged for Mr Shaw to go to a storage unit and uplift 1.8 kilograms of class B controlled drug, ephedrine. There is then a message from Mr O’Carroll to Ms Stevens suggesting that the manufacture cannot take place and then rescheduling it to another day. Mr Shaw is involved again, uplifting a trailer described as a “mobile methamphetamine laboratory” and taking it to Mr Bowker’s property. It is estimated that one kilogram of methamphetamine was produced and Mr Shaw returned the trailer to the storage unit.
Charge 35 – Stevens, Shaw, O’Carroll and Bowker
[10] Video footage of a storage unit is claimed to show that there were ten entries/exits from the unit where the mobile methamphetamine laboratory is stored. The equipment was taken out twice by Mr Bowker. The only other occasion the trailer was taken out during the same period was on 9 April 2014 by Mr Shaw and returned the following day. Two later dates on which the trailer was taken out correspond with further methamphetamine manufacture at Mr O’Carroll’s property.
Charge 37 – O’Carroll and Bowker
[11] According to the summary of facts, the trailer was uplifted again by Mr Bowker on 4 May 2014. Mr Bowker and Mr Shaw are then said to have used the equipment to manufacture methamphetamine. A search warrant was executed the following morning, locating an extensive clandestine laboratory.
Large amounts of precursor substances were found, including approximately six kilograms of ephedrine. This is said to be capable of producing three kilograms of methamphetamine. 365 grams of damp methamphetamine was found in a shed and Mr O’Carroll ran from the police during their initial entry and was located a short distance away with approximately 200 grams of methamphetamine, which he attempted to destroy. 0
Other charges
[12] Michael Cavanagh and Victoria Cavanagh are also charged with supplying ephedrine and materials for the methamphetamine manufacture, including ephedrine and materials later located in the Nelson storage unit rented by Mr Shaw, Victoria’s brother. The summary of facts on these charges notes refer to a covert search of a storage unit located in the Panmure rented by Victoria Cavanagh under a false name. In the unit were found four plastic bags of ephedrine weighing approximately two kilograms. A subsequent search of the Nelson unit rented by Mr Shaw located the various material previously stored in Panmure unit. An intercepted communication is said to record a discussion between Victoria Cavanagh and Mr Cavanagh about the ephedrine.
[13] Mr Cavanagh, Victoria Cavanagh, Ms Stevens and Ms Henry also face various charges of false representation, using or obtaining documents and or other similar charges for the purpose of opening storage facilities associated with the manufacture and or safe deposit boxes for the storage of the profits of the manufacturing.
[4] The following charge should also have been included in the background narrative:2
CHARGE 17 – MANUFACTURING METHAMPHETAMINE (STEVENS)
On 17 March 2014, STEVENS and an unknown male arrived at the La Maison guest House in Dairy Flat and ‘checked-in’ under her false name of Ester STEELE.
STEVENS paid in cash for five night’s accommodation and was noted carrying a nine kilogram gas bottle into her room.
She then completed a methamphetamine manufacture before checking out a day early.
When her room was checked staff noticed all of the windows had been left wide open and there was a yellow residue in the bath. In addition, the lino floor tiles in the bathroom had been cut to remove what appeared to be burnt patches and a blind had been placed over the windows.
Swabs were subsequently taken by Police in the room and analysis by ESR located the presence of methamphetamine that was consistent with a manufacture having taken place in that location.
2 Taken from the police summary of facts.
Previous judgment
[5] In my previous judgment I observed that the production of the convictions per se were not admissible because they did not demonstrate a requisite propensity other than simply to show that Mr Cavanagh and Ms Stevens had previously engaged in methamphetamine offending. I was however satisfied that the broader narrative of offending was cogent propensity evidence. My reasoning is captured in the following passages:
[30] In the present case, the difficulty confronting the Crown is that it simply seeks to produce the evidence of conviction without the supporting narrative, so the jury will only be apprised of the fact that the defendants committed offences of the “kind alleged”. That is not enough and I am not prepared to admit the conviction evidence on that limited basis alone.
[31] Conversely, detailed contextual features of the prior manufacture offending appear in the alleged offending, including some of the same actors (Mr Cavanagh, Ms Stevens, Ms Henry), the very personal nature of their relationships with Mr Cavanagh centre stage, the use of large quantities of precursor substances surreptitiously stored (with the help of Mr Cavanagh’s current and former partners), the involvement of partners in the manufacture of methamphetamine (including in this case Ms Stevens’ then partner, Mr Shaw), and the possession of large quantities of unexplained cash and other liquid assets (gold and jewellery) in safety deposit boxes also surreptitiously stored (again with the help of Mr Cavanagh’s current and former partners). Individually and collectively these unusual points of coincidence support the inference that both Mr Cavanagh and Ms Steven were engaged not only in precursor offending, but also the manufacture of methamphetamine. As the Court put it in Leaitua, very few people are involved in conduct involving this pattern of unusual features.3
[32] In the result, the convictions by themselves are not strong propensity evidence. They are evidence simply of a propensity to commit a kind of offending. But the broader detailed features of the prior offending cogently support the inference of manufacturing offending in a particular way in relation to Mr Cavanagh and Ms Stevens. There is however nothing before me to suggest that the prior convictions should come in with or without a broader narrative in relation to Mr O’Carroll.
[6] I dismissed the Crown’s application to produce the convictions simpliciter, but I observed that the probative value of the broader narrative outweighed its prejudicial effect. I noted:
[34] As to prejudicial effect, the reasoning in Leaitua appears to me to apply with similar force in this case. I am satisfied that the probative value of the coincidence reasoning outweighs its illegitimate prejudicial effect.
3 Leaitua v R [2013] NZCA 365 at [35].
Mr Cavanagh’s and Ms Steven’s defence will be that they had nothing to do with the five alleged incidents of manufacture of methamphetamine. The Crown case is dependent on circumstantial evidence connecting Mr Cavanagh to the manufacture. The case against Ms Stevens appears to include evidence of direct connection to manufacture. In either case, the propensity evidence (depending on its final form) legitimately assists the jury. It is directly relevant to whether in the circumstances of this case, any proven methamphetamine manufacture occurred without Ms Stevens’ and or Mr Cavanagh’s involvement. If so, the re-occurrence of the detailed features of the previous offending noted at [31] would be coincidental. The probability of this occurring, by chance, will fall to be examined.
[35] For completeness, I am satisfied that the propensity evidence is not disproportionately prejudicial in relation to Mr Cavanagh. The balance of the case against him plausibly suggests that he is at least connected to the methamphetamine manufacture. The evidence of control and supply of precursors to Ms Stevens and indirectly to her activity is sufficient to raise an inference that he is engaged in methamphetamine manufacture having regard also to Mr Cavanagh’s surreptitiously stored and unexplained cash and other assets.
Present application
[7] Mr Johnstone now seeks leave to adduce the following narrative in light of my judgment:4
On 6 August 2002, Police terminated an operation known as Operation Illusion. When the Police searched the house shared by Mr Cavanagh and Ms Stevens on 6 August 2002, they found a pistol and ammunition, a small quantity of methamphetamine and approximately $30,000 in cash. Through documents found at the house and other information, they then proceeded to search units at storage facilities in East Tamaki and a safety deposit facility in Parnell.
In one of those units, Unit No.832 at the Safe Storage Public Storage facility in East Tamaki, the Police found all of the equipment needed for the manufacture of methamphetamine, in effect, a broken down clandestine methamphetamine laboratory, together with large quantities of chemicals and precursor substances capable of being used for the manufacture of methamphetamine. They included almost 700 grams of pseudoephedrine compounds. The Police also found in a number of different packages methamphetamine powders totalling 265 grams in weight.
At the other storage facility, the Police found additional equipment used in the manufacture of methamphetamine and a variety of solutions containing 8.2 grams of pseudoephedrine. There was also a semi-automatic rifle, a revolver and a pistol with a substantial amount of ammunition and $46,000 in cash.
In the three safe deposit boxes at the Parnell facility, the Police recovered over
$350,000 in cash, together with gold bullion, jewellery, bonus bond certificates and other valuables.
4 R v Cavanagh above n 1 at [6] – [11].
Mr Cavanagh, Ms Stevens and Ms Henry all had custody and control of what was found in Unit 832 at the Safe Storage facility. It had been opened on 6 August 2002, the date Operation Illusion terminated. Ms Stevens and Ms Henry had transferred most of what was found in Unit 832 from another unit.
A forensic accountant calculated that Mr Cavanagh had unexplained income of $964,000 and Ms Stevens unexplained income of $176,000.
On 5 November 2003 the home shared by Mr Cavanagh and Ms Stevens was again searched, together with another storage unit. At the storage unit the Police found two plastic bottles containing pseudoephedrine, together with a loaded pen gun and $64,000 in cash and other valuables. Almost $10,000 in cash, five gold bars and expensive watches were found at the home address.
[8] Mr Johnstone observed that my previous judgment does not properly characterise the Crown’s position in relation to the alleged methamphetamine offending. The Crown is not seeking to prove that Mr Cavanagh is connected to Ms Stevens’ methamphetamine charges. Rather, charge 2 is a representative charge covering a different period of offending, approximately from Mr Cavanagh’s release from prison in 2010 to February 2014. This may encompass the allegations of methamphetamine manufacture contained in charge 17, but Mr Cavanagh is not specifically charged in relation to that charge. The upshot of this is that the Crown does not identify a particular incident of methamphetamine manufacture and will not be adducing direct primary evidence of such a manufacture for the purpose of charge 2. Mr Johnstone nevertheless maintains that there is sufficient circumstantial evidence to demonstrate that Mr Cavanagh was involved in the methamphetamine manufacture over the relevant period, including:
(a)The level of Mr Cavanagh’s amassed wealth, notwithstanding his recent release from prison.
(b)The use of personal familiars – that is people that he has previously worked with for the purposes of manufacture of methamphetamine.
(c)Evidence of supply of pseudoephedrine to Ms Stevens.
(d)The use of storage facilities and safety deposit boxes in conjunction with Ms Stevens through the use of aliases.
[9] He submits that the probative value of the conviction evidence, and the attached narrative, arises from the unusual points of linkage between the previous offending and these matters. I apprehend him to be saying that the conviction evidence therefore shows a tendency not only to engage in the specified coincidental actions, but also in the manufacture of methamphetamine.
Mr Cavanagh/Ms Stevens
[10] Mr Cavanagh and Ms Stevens oppose the application on the same essential basis, namely that:
(a)There is no direct evidence of any methamphetamine manufacture, the other charges being irrelevant to charge 2.
(b)The jury is in effect being invited to reason from the prior convictions that Mr Cavanagh and Ms Stevens must have collaborated for the purposes of methamphetamine manufacture.
(c)Such reasoning is illegitimately prejudicial as stated in, among others,
Holtz v R5 and Mahomed v R.6
Assessment
[11] I propose to address the propensity application by reference to the specific charges in issue.
Charge 2
[12] The Crown cannot identify the facts of the alleged manufacture offending and has no primary evidence of the alleged manufacture of methamphetamine for the purpose of Charge 2. There is, for example, no evidence of a clan lab, possession of items used in the production of methamphetamine or the possession of methamphetamine that might be linked to either Mr Cavanagh or Ms Stevens.
5 R v Holtz [2003] 1 NZLR 667 (CA).
6 Mahomed v R [2011] NZSC 52, [2011] 3 NZLR 145.
[13] Against this background, (and contrary to the preliminary view I formed in my first judgment) I consider that the probative value of the conviction evidence is outweighed by the risk that the evidence may have an unfairly prejudicial effect. In reality, the evidence about the prior manufacture is necessary to support an inference that Mr Cavanagh and or Ms Steven’s manufactured methamphetamine as now alleged. It fills the yawning gap in the Crown’s case. But, in the absence of any direct evidence about the alleged manufacture, the level of coincidence and linkage between the alleged offending and the prior offending is manifestly weak on the key element of the offending. There is then the twofold risk that the jury will not appreciate the significance of this deficiency and then simplistically reason from the narrative of the prior manufacture that it must have occurred again.
[14] By contrast, the facts in Leaitua,7 cited by me in my first judgment, included with the narratives of the alleged and proven offending: (a) culpable acts (importation of drugs) and (b) clear linkages between the offender and those culpable acts (Mr Leaitua’s mother-in-law was the drug mule in the alleged importation). In that case therefore the probative value of the conviction evidence outweighed the risk of unfair prejudicial effect, because its significance rested on orthodox reoccurrence or coincidence reasoning, not as the primary evidence of the importation per se.
[15] Mr Johnstone was, unsurprisingly, unable to cite any authority where a propensity application was granted in respect of which the facts of the alleged offending is not identified and or for which there is no direct evidence of it having occurred at all. There are of course cases where there is only circumstantial evidence of the alleged offending. In Mahomed v R, William Young J referred to the well known case of R v Ball,8 where the defendants were charged with incest and the primary evidence against them was circumstantial – sharing a bedroom in which there was only one bed. The House of Lords held that the evidence of earlier sexual intercourse was admissible as the evidence went directly to prove the crime for which these parties were indicted.9 But the provenance of this authority, as William Young J explained, rests with the orthodox proposition that the prior misconduct revealed a tendency to
7 Leaitua, above n 3 commencing at [3].
8 R v Ball [1911] AC 47 (HL).
9 See discussion in Mahomed, above n 6 at [54] – [55].
think or act in a particular way about a person, for example the victim of murder. There also tends to be at least some evidence of the alleged crime, namely a victim or opportunity to commit it, as in Ball.10
[16] There are cases, also described by William Young J, where the propensity evidence reveals a particular trait or behaviour which points strongly to the defendant having committed the offending given the special or peculiar features of the offending. The absence of direct evidence is not fatal, given the inherent improbability of the specific type of offending having been committed by someone else. However, the key element, not present here, is the close similarity of the culpable acts of the previous and alleged offending.11
[17] Moreover, these fact scenarios are well removed from the present context where the propensity evidence is not being used to prove a tendency to manufacture methamphetamine in a particular way, but rather to prove an otherwise theoretical act of manufacture. In this regard, I consider that the cautionary note made by Gault J in Holtz is particularly apposite (albeit dealing with identification evidence):12
[36] … There must be something that points to both incidents having been the responsibility of the same person and that the accused was responsible for one of them before the evidence is probative.
[18] In my view there is nothing in the case for the Crown that directly points to both incidents of methamphetamine manufacture by Mr Cavanagh or Ms Stevens other than the propensity evidence itself. The prospect of improper reasoning is therefore very high and, in my view, incapable of remedy by direction. Accordingly, I refuse the propensity application in terms of charge 2.
Charges 12, 17 and 35
[19] I take a different view of the relevance and cogency of the propensity in relation to charges 12, 17 and 35 relating to Ms Stevens. Unlike charge 2, the alleged facts for each of these charges include specific acts said to reveal the manufacture of
10 Mahomed above n 6 at [56].
11 See discussion in Mahomed above n 6 at [85].
12 Holtz, above n 5 at [36].
methamphetamine. The evidence is therefore probative propensity evidence supporting the allegation of manufacture. In short, the combination of common features as between the narrative of convicted offending and the alleged offending, invites legitimate coincidence/plausibility reasoning: that is given Ms Steven’s propensity to manufacture methamphetamine in the way revealed by the narrative at [7] she is more likely to have committed the alleged manufactures given the similar circumstances of the alleged offending.
[20] From this general observation, I turn to the relevant applicable criteria at s 43 of the Evidence Act 2006:
(a)Frequency – I am not troubled by the singularity of the prior convictions.
(b)Connection in time – I do not consider that the elapse of time between the convicted offending and the alleged offending to be material. It is largely explained by the time served by Ms Stevens.
(c)Similarity – I accept the Crown’s submissions the detailed features of the convicted offending are common to alleged offending at including the manufacture with the assistance of personal familiars, use of aliases, including to obtain storage facilities and to manufacture, and the amassing of unexplained wealth.
(d)Unusual – the combination of features, including the fact of methamphetamine manufacture, are usual.
[21] In terms of prejudice, I consider that for the purposes of charges 12, 17 and 35, the probative value of the conviction offending is conterminous with its prejudicial effect for the reasons expressed in my first judgment and repeated here at [6].
[22] A residual issue is the prejudicial effect of the admission of the conviction evidence in relation to other charges against Ms Stevens. Save in respect of charge 2, I am satisfied that an appropriate direction as to the proper use of the propensity
evidence should be sufficient to offset any residual illegitimate prejudice for the following reasons:
(a)The conviction evidence is reliable;
(b)The narrative of prior offending coincides in most respects with the narrative of alleged offending – so the prejudice caused by it is legitimate for the reasons already explained; and
(c)To the extent that the narrative does not coincide, or signals more serious offending that the alleged offending, a properly directed jury as to the requirements for a particular pattern and the proper use of the conviction evidence should be well able to disregard, where necessary, the conviction evidence.
[23] I find therefore that the prior conviction evidence is admissible in respect of the charges 12, 17 and 35.
Other charges
[24] I have addressed the prejudicial effect of the conviction evidence in relation to other charges laid against Ms Stevens. I am also satisfied that general jury directions as to the proper use of that evidence in respect of the other accused, except Mr Cavanagh, should suffice to avoid unfair prejudice to them. Mr Cavanagh however sits in a special category, as the narrative prior offending includes him as a central figure. This aspect was not subject to detailed argument. But I understand from Mr Bonnar QC that Mr Cavanagh is likely to plead to the remaining charges if charge 2 is not pursued. That of course is a matter for the Mr Cavanagh and the Crown. But it is sufficient for present purposes to reserve my position on the effect of the conviction evidence in terms of the charges against Mr Cavanagh. In light of my ruling it may be that, if necessary, severance should be considered.
Result
[25] The proposed conviction evidence is inadmissible in relation to charge 2. It is otherwise admissible in the hearing of Ms Stevens in respect of charges 12, 17 and 35. I also see no unfair prejudice in relation to the production of the prior convictions in respect of the remaining charges, though if charge 2 is to be pursued against Mr Cavanagh, some consideration may need to be given to severance.
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