R v Cavanagh
[2015] NZHC 1394
•19 June 2015
ORDER PROHIBITING PUBLICATION OF THE JUDGMENT AND ANY PART OF THE PROCEEDINGS (INCLUDING THE RESULT) 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 1394
THE QUEEN v
MICHAEL JOSEPH CAVANAGH DEBORAH ANNE HENRY
SHANNON STEVENS DAVID GERRARD O'CARROLL
Hearing: 10 June 2015 Appearances:
R M A McCoubrey for Crown S J Bonnar QC for Cavanagh B Sellars for Henry
A G Speed for Stevens
R M Mansfield for O'CarrollJudgment:
19 June 2015
JUDGMENT OF WHATA J
This judgment was delivered by Justice Whata on 19 June 2015 at 11.00 a.m., pursuant to
r 11.5 of the High Court Rules
Solicitors:
Meredith Connell, Auckland Copies to:
S J Bonnar QC, Auckland B Sellars, Auckland
A G Speed, Auckland
R M Mansfield, Auckland
Registrar/Deputy Registrar Date:
R v CAVANAGH, HENRY, STEVENS , O'CARROLL [2015] NZHC 1394 [19 June 2015]
[1]This judgment concerns an application by the Crown for the following orders:
(a)The previous convictions of Michael Joseph Cavanagh, Shannon Stevens, Deborah Anne Henry and David O’Carroll for methamphetamine offending be admissible at trial;
(b)Portions of the book “The Devil’s Dandruff” to be led at trial; and
(c)A direction that the convictions of Peter Shaw may be led at trial as conclusive proof that he committed those offences.
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.
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.
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.
The propensity application
Crown submissions
[14]The Crown submits:
(a)The convictions show a propensity to manufacture methamphetamine;
(b)Mr Cavanagh, Ms Stevens and Ms Henry were engaged in methamphetamine dealing together;
(c)In relation to Mr Cavanagh and Ms Stevens, the offending is similar to the present offending, referring to the following passages of the sentencing notes of Rodney Hansen J:1
[7] In one of those units, unit number 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 which, according to the evidence given at trial, would have yielded between 343 and 515 grams of methamphetamine. The police also found in a number of different packages methamphetamine powders totalling 265 grams in weight.
…
[10] There was compelling evidence that all three of you had custody and control of what was found in unit 832 at the Safe Storage facility, even though it had only been opened on 6 August, following your arrest Mr Cavanagh. The jury obviously accepted that most of what was found in unit 832 had been transferred from another unit, 834, by Ms Stevens and Ms Henry following Mr Cavanagh’s arrest. The fingerprints of all three of you were found on one container which contained a number of incriminating items and there was other evidence to connect all three of you with what had been stored in unit
1 R v Cavanagh HC Auckland CRI-2002-004-206137, 20 May 2005.
834. There was, however, no evidence that you, Ms Henry, were in possession of the contents of the other storage unit and you did not face charges in relation to that.
[11] In support of the charges of manufacturing and supplying methamphetamine, the Crown also relied on the unexplained wealth which each of you were alleged to have accumulated. The forensic accountant’s conclusion for you, Mr Cavanagh, and you, Ms Stevens, showed unexplained income of $964,000 and $176,000 respectively. It is realistic to add to these figures the sum of $331,000 which you used to purchase a house in Howick in October/November of that year and to further cash found later in November 2003.
(d)In relation to Mr O’Carroll, the alleged offending is similar to the previous offending as illustrated by the following passages of the Court of Appeal judgment:2
[1] David Gerrard O'Carroll was convicted in the District Court at Auckland, following trial by jury, of conspiring both to manufacture and supply methamphetamine, then a Class 'B' controlled drug. He was further found guilty of manufacturing methamphetamine and being in possession of ammunition other than for a lawful, proper and sufficient purpose. Those convictions occurred at the end of a five week trial in which co-accused by the names of Lawrence Schwalger, Desmond Loke and Phillipa Toni Williams were also convicted of the conspiracy offences. Judge Bouchier, the trial Judge, subsequently sentenced the appellant to six and a half years imprisonment for the drug offences and to six months imprisonment, concurrent, for the Arms Act offence.
...
[5] The appellant was found at his home in possession of equipment for the manufacture of methamphetamine, digital scales, 100 point bags, $70,000 in cash, four boxes of ammunition, 51 grams of pseudoephedrine crystals, just under an ounce of pure methamphetamine together with smaller personal amounts and a quantity of crushed tablet material soaked in methanol. He had a film canister containing 27 grams of methamphetamine hidden between his buttocks. The pseudoephedrine could have been converted into between 25 and 38 grams of pure methamphetamine. There was evidence consistent with the manufacture of methamphetamine at the premises. There were communications between the alleged conspirators from which the jury could determine the appellant was a party to the conspiracies.
[6] The trial Judge took the view on sentencing that the jury in convicting the appellant in respect of the drug charges must have accepted the Crown case in respect of those charges. Correspondingly the jury must have rejected the appellant's explanations for the various items of damning evidence relating to him. The Judge was satisfied
2 R v O’Carroll CA3/05, 24 August 2005.
that the jury accepted that the appellant was involved in the manufacture of methamphetamine with a Mr Clegg and that he was also involved in supplying the drug. The Judge took the view that such decisions were clearly open to the jury on the incontrovertible facts relating to what was found in the appellant's possession. The Judge was further of the view that the jury were entitled to accept the Crown case that the appellant was taking over Mr Clegg as a cook. The Judge refers in her sentencing remarks to the last of some six recorded conversations between the appellant and Mr Clegg. The Judge notes that it is not the words that were the telling thing but the tone of the conversation. From it the Judge was clear that the appellant was in command of the operation relating to the manufacture and supply of methamphetamine albeit for a relatively brief period.
[15] At my request Mr McCoubrey identified the specific aspects of the prior offending said to demonstrate the requisite coincidence and linkages namely:
(a)Manufacturing methamphetamine on a commercial scale is an unusual activity and the present methamphetamine offending is on a vast scale;
(b)Manufacturing methamphetamine on this scale with the same group of people is even more unusual;
(c)Mr Cavanagh made vast sums of money from the methamphetamine dealing for which he was convicted and from his present alleged offending;
(d)The use of storage units to conceal materials for the manufacture of methamphetamine, referring to among other things:
(i)The opening of storage facilities under false names;
(ii)The storage of precursor and other substances in order to manufacture methamphetamine;
(e)The use of safety deposit boxes, opened under false identities;
(f)The storage of items, such as gold bullion, jewellery, bonus bonds, cash and in one instance, pistols and ammunition.
[16] Mr McCoubrey submits that taken together, a clear pattern of conduct is discernible involving the same central players engaged in the business of methamphetamine production.
[17] Responding to arguments made on behalf of Mr Cavanagh, Mr O’Carroll and Ms Stevens, the Crown contends:
(a)The Crown evidence is sufficient for an inference to be drawn that during Operation Genoa, Mr Cavanagh, Ms Stevens and Mr O’Carroll were involved in the production of methamphetamine. Particularly relevant are the following facts:
(i)The vast levels of unexplained liquid wealth held by Mr Cavanagh in safety deposit boxes;
(ii)Evidence about his storage of precursor substances including ephedrine and the supply of the same substances to Ms Stevens;
(iii)Evidence associating Ms Stevens with a clandestine lab in Nelson and the manufacture of methamphetamine in association with others, including Messrs Bowker and Shaw; and
(iv)Evidence about the active involvement of Mr O’Carroll in the manufacture of methamphetamine, including on one occasion where he was caught running form a clandestine lab with methamphetamine falling from his pockets.
(b)The absence of direct evidence such as fingerprint or other communication evidence implicating Mr Cavanagh directly in methamphetamine production is not fatal, there being at least some correspondence between Mr Cavanagh and Ms Stevens suggesting that they were involved in the manufacture of methamphetamine.3
3 I was not taken to the specific texts or other evidence in this regard, so I rely on the submission of counsel.
Argument for Defendants
[18]Mr Bonnar QC for Mr Cavanagh submitted:
(a)The Crown does not seek to adduce the propensity evidence for any specific purpose or object, for example identity. Rather it simply seeks to use the prior convictions to support an inference that Mr Cavanagh manufactured methamphetamine.
(b)There is no direct evidence of Mr Cavanagh having been involved in the five specified alleged methamphetamine manufactures, so the evidence of prior offending will be a major plank in the Crown case.
(c)Citing Holtz,4 where there is scant primary evidence of the alleged offending, the conviction evidence will assume disproportionate significance and should be excluded.
(d)The alleged points of coincidence or linkage are weak:
(i)The use of storage facilities or safety deposit boxes is not unusual and does not prove methamphetamine manufacture;
(ii)The connection to the other accused Stevens, Henry and Shaw is simply a reflection of long standing (and at times fractured) relationships and it would be wrong for the jury to infer, simplistically, that it is evidence of propensity to engage in methamphetamine manufacture together.
(e)In these circumstances there must be a high and disproportionate risk of improper reasoning, namely that because they manufactured methamphetamine once before, Mr Cavanagh manufactured methamphetamine on this occasion. There is no direct evidence to support that inference.
4 R v Holtz [2003] 1 NZLR 667 (CA).
(f)The parole dates are not relevant to any particular issue of moment and are unnecessary to produce in any event, as forensic accounting evidence will suffice.
[19]Mr Mansfield for Mr O’Carroll submitted:
(a)The Crown needs to identify clearly how it proposes to produce the propensity evidence as no draft brief or admission has been disclosed.
(b)The evidence of a prior conviction for methamphetamine offending has only weak probative value in terms of the key trial issue affecting Mr O’Carroll, namely whether any manufacture occurred at his property and hence whether he knew about and was involved in the manufacturing.
(c)The frequency (a single previous set of offending), the similarity and unusualness of the prior offending is low – it is simply another incident of methamphetamine offending.
(d)The identified points of linkage do not apply to Mr O’Carroll (this was conceded by Mr McCoubrey).
[20]Mr Speed, for Ms Stevens, also submitted:
(a)Closer examination of the sentencing notes reveals that she was just a foot soldier5 not a manufacturer of methamphetamine, and does not support an inference that she was previously involved in methamphetamine production on a vast scale, as the Crown now alleges.
(b)Production of her convictions for her prior methamphetamine offending paints a potentially misleading picture with the result that its probative value is greatly exceeded by it prejudicial effect.
5 R v Cavanagh, above n 1, at [53].
(c)The alleged points of linkage (the use of safety deposit boxes and storage facilities) provide only a weak connection to the alleged manufacture of methamphetamine in this case.
Assessment
[21] The relevant threshold tests for propensity evidence are stated at s 43 of the Evidence Act 2006:
(a)The probative value of the evidence must outweigh the risk of unfair prejudicial effect on the defendant;
(b)The nature of the issue in dispute must be taken into account;
(c)Relevant factors to the weighing exercise in this case include the frequency of the acts, any connection in time between them and the alleged offending, and the similarities and unusualness of the acts.
[22]In Mahomed v R the Supreme Court stated: 6
[3] The rationale for the admission of propensity evidence rests largely, as William Young J says, on the concepts of linkage and coincidence. The greater the linkage or coincidence provided by the propensity evidence, the greater the probative value that evidence is likely to have. It is important to note, however, that the definition of propensity evidence refers to a tendency to act in a particular way or to have a particular state of mind. It is necessary, therefore, that the propensity have some specificity about it. That specificity, in order to be probative, must be able to be linked in some way with the conduct or mental state alleged to constitute the offence for which the person is being tried.
[23]And further:
[5] Section 43 deals with cases like the present where propensity evidence is offered by the prosecution about defendants. The prosecution may do this only if the evidence has a probative value, in relation to an issue in dispute, which outweighs the risk that the evidence may have an unfairly prejudicial effect on the defendant. In s 43 cases the prosecution must satisfy the court that the criterion for admissibility is demonstrated. If that is shown there cannot be any basis for exclusion under s 8 which deals in general and materially similar terms with a similar issue.
6 Mahomed v R [2011] NZSC 52, [2011] 3 NZLR 145. (Footnotes omitted.)
…
[7] In order to make the necessary assessment the court must carefully identify how and to what extent the propensity evidence has sufficient particularity to be probative, and how and to what extent it risks being unfairly prejudicial. Obviously any evidence that is probative will be prejudicial to the accused but not normally unfairly so. Unfairness is generally found when and to the extent the evidence carries with it a risk that the jury will use it for an improper purpose or in support of an impermissible process of reasoning. In assessing the probative value/unfair prejudice balance, the court may need to take into account the extent to which it considers a “proper use” direction in the trial judge’s summing-up is likely to guard against the risk of improper use. With those introductory remarks, we turn to the circumstances of the present case.
[24]In light of this frame, the application raises the following key issues;
(a)Are the convictions propensity evidence?
(b)What is the probative value of the convictions?
(c)Does the probative value of the convictions outweigh the risk of unfair prejudicial effect (if any)?
Propensity evidence?
[25] The Crown’s case against Mr Cavanagh and Ms Stevens is that the convictions for manufacturing methamphetamine as part of the same ring, show a tendency to engage in the specific or particular act of manufacture as required by Mahomed.7 By contrast, the defendants’ case is that the mere fact of the convictions is not admissible as it does not address a specific matter in issue, for example identity.
[26] A majority of the Court of Appeal in Rei v R8 and the Court in Leaitua v R9 stated that a conviction offered as propensity evidence of a tendency to commit a particular type of offense is sufficiently particular. The Crown says that the
7 Mahomed v R, above n 6..
8 Rei v R [2012] NZCA 398 at [24], [31], [35] and [42]. This is to be compared with Fogarty J in the minority at [67] who observed that for convictions that reveal no more than a propensity to commit offences of the kind alleged, the threshold requirement of s 40(1) is not satisfied as there is no evidence the offences were committed in a relevant way.
9 Leaitua v R [2013] NZCA 365 at [28].
convictions show a propensity for Mr Cavanagh and Ms Stevens to manufacture methamphetamine together. Applying Rei and Leaitua, this basic threshold is met.
Probative value?
[27] The Court of Appeal in Rei, however, rejected the propensity claim in that case because: 10
…the convictions reveal nothing more than offending of the kind alleged.
[28] But whether conviction evidence shows a mere tendency to commit the alleged kind of offending or a tendency to do a particular act in issue depends on the detailed features of the convicted offending and the alleged offending. If, for example, the detailed features of the convicted offending are unusual and bear striking similarities to the alleged offending, the former is probative evidence of the act of offending in a fact specific way, rather than a generic type or kind of offending.
[29] Leaitua v R11 provides an example of fact specific conviction evidence. Leaitua sought to isolate himself from an international drug mule (his mother in law) having previously been convicted of international cocaine trafficking. The Court of Appeal had little trouble finding that the conviction evidence was relevant to resolving whether his mother in law was acting independently of him given common features including the South American start point, the drug smuggled being cocaine, the commercial quantities of the drug (as opposed to a quantity for personal use), and the use of international passenger airline travel as the mode of transportation. The very high risk nature of the offending was also considered unusual.
[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.
10 Rei v R, above n 8, at [45].
11 Leaitua v R, above n 9.
[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.12
[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.
Probative value versus prejudicial effect?
[33] If the Crown wishes to adduce the broader narrative relating to the prior offending it will need to renew its application as it did not proceed on the basis that the facts of the previous offending are to be admitted. I am not minded to turn to the s 43 weighing exercise without a detailed narrative. I simply make some initial observations:
(a)I am not concerned about the singularity of the prior offending. The repetition of an unusual pattern of conduct is sufficient in this case.
12 Leaitua, above n 9, at [35].
(b)The acts are separated, for the most part, by Mr Cavanagh’s term of imprisonment.
(c)I have already commented on the similarities and unusualness of the acts at [31].
[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. 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.
The parole dates
[36] The Crown also seeks to adduce the parole dates to show that Mr Cavanagh accumulated unexplained wealth very quickly. This is said to show that Mr Cavanagh was involved in methamphetamine manufacture. Defence counsel object on the basis that the parole dates are prejudicial as they indicate or suggest the severity of the prior offending.
[37] This evidence could only be admitted if I allow the conviction evidence to be produced. If so, I am not satisfied that the probative value of the parole dates is commensurate or greater than its prejudicial effect for the purposes of ss 8 or 43 respectively. It would as defence counsel suggest leave an impression with the jury as to the severity of Mr Cavanagh’s offending which is not readily amenable to a mitigating jury direction. It also erroneously presupposes that a person in prison cannot earn money. But passive investments can accumulate significant earning without the involvement of the investor. Moreover, the Crown can adduce evidence as to reported earnings via the usual forensic accounting techniques.
The Devil’s Dandruff
Argument
[38] The Crown submits that Mr Cavanagh authored a document entitled “The Devil’s Dandruff” found in one of the safety deposit boxes. It purportedly recounts Mr Cavanagh’s involvement in the methamphetamine scene. Mr McCoubrey submits that it is relevant because:
(a)It shows that Mr Cavanagh knew that more money is made from manufacture of methamphetamine;
(b)It responds to the suggestion that Mr Cavanagh was only involved in ephedrine supply.
(c)It meets the submission that the extent of the wealth found was not necessarily explained by methamphetamine manufacture.
[39]The following passages provide an insight into its contents:
The Devil’s Dandruff Introduction
This book is a true account of a young boy born into what can only be considered a crazy life. It will cover many aspects of my unorthodox upbringing, which follows thru into the introduction into New Zealand’s most powerful underworld connections. As well as the wicked world of Methamphetamine or commonly known as P. I however prefer to call it the
Devil’s Dandruff. I will take you on a Rolla coaster ride of sex, violence and a multi million dollar drug empire, which at the age of 27yrs old I made my first million, right thru to my demise and the day the NZ organized crime squad led by the notorious Daryl Brazier launched operation illusion on November 2002 …
Chapter 8
… I received a visit from a well known gangster, who informed me he had just kidnapped a cook and that he was going to make him teach me, if I was interested in learning. I was keen as but at the same time I had to be very careful what the deal was as this guy was well known for severe standovers and I didn’t want to end up being his slave or worse. …
My mate took me to the place where he had the cook, when I met the guy I felt very sorry for him, as he seemed like a nice enough guy. The deal with him was he had got into some shit with another gang and they were going to tax him hard, so my mate stepped in and took him for himself that way the other gang could no longer do anything to him, but now he was controlled by the devil himself. …
I named him Agent Orange, or orange for short. The poor guy had a wife and four kids who had already witnessed some serious beatings at their family home, so much so that his wife had to go to therapy to get over it. …
I freaked out at how little equipment he needed, the first step was the extraction process, We started with ten packets of pills and within about an hour he had shown me how to pull the Ephedrine out of it. I was truly amazed and excited as I got a grasp of how to do it very quickly. …
More than two weeks had passed and in the meantime I was feeding orange with pills and he was doing the cooks himself and giving us our share back, but I felt he was stalling on showing me the rest of the process because he was making good on the deal. I didn’t want to mention this to my mate as I knew he would come down hard on him, and after meeting his wife and four lovely kids I didn’t want this happening just yet, so I decided to just go with the flow.
…
When he arrived he was very apologetic about the whole situation and told me we would start next week. I told him if he taught me the whole thing by the following week and supplied me with all the equipment plus chemicals I would give him half of the first cook, which was the equivalent to sixty thousand dollars, …
We managed to make about eight ounces of pure Methamphetamine, I gave orange three for the deal we previously arranged and the rest were all mine, minus a little for my mate. …
Chapter 9
The year started off well and continued to do so. My business was pumping and with me cooking my own stuff made all the difference to my profits. I still worked very closely with Orange as there was always a few problems that I needed his help with and thank god I did, because one day I went to visit him
and he was working on a new type of pill, it contained Paracetamol, which up until that time could not easily extract the ephedrine out of. …
There is an old joke that goes like this “what’s the best thing about P, There’s only two more sleeps till Christmas” and that’s pretty much what it was like.
…
I was now making clean profit of over $75,000 pew [sic] seek, not bad for a kid that never went to school. …
I decided I was running out of options to stash my money so I planned to fly to Australia to open a few dodgy bank accounts to stash the money in. Shannon and I booked our tickets business class as she had never flown that way before and it sure beat the hell out of economy class. Debbie still didn’t really know we were together so she made sure she booked us a place with two rooms. …
That year alone I estimated over five and a half million would have crossed over my coffee table. Not bad I thought for the small crew I had put together, I knew of many of the big boys that weren’t making that much.
[40] Mr Bonnar submits that it is not probative of the elements of the alleged offending, namely that there was a manufacture on the five alleged occasions and or that Mr Cavanagh was involved in any of them.
Assessment
[41]Section 8 of the Evidence Act 2006 states:
8 General exclusion
(1)In any proceeding, the Judge must exclude evidence if its probative value is outweighed by the risk that the evidence will—
(a)have an unfairly prejudicial effect on the proceeding; or
(b)needlessly prolong the proceeding.
(2)In determining whether the probative value of evidence is outweighed by the risk that the evidence will have an unfairly prejudicial effect on a criminal proceeding, the Judge must take into account the right of the defendant to offer an effective defence.
[42] While “Devil’s Dandruff” makes interesting reading, I agree with Mr Bonnar that its probative value is weak. At most it suggests that Mr Cavanagh knew about and was actively involved the methamphetamine scene. But there is nothing in it directly relating to the present alleged offending. By contrast its prejudicial effect is
obviously significant notwithstanding its novel like caricatures — the villainous gangster, the drug addicted slave meth cook and the rise and fall of the young rogue. In short, there is substantial risk of improper jury reasoning that given this evidence, Mr Cavanagh’s presence in the narrative of alleged offending cannot be coincidental and that in fact he was the lead actor. It does not pass the s 8 test.
[43] If the matters alleged in the document are found to be true and attributable to Mr Cavanagh, it could be said to support an inference that Mr Cavanagh has a tendency to engage in methamphetamine offending. But I place this in the category of propensity evidence excluded by the Court in Rei, namely evidence simply about offending of a general kind, the probative value of which does not exceed its illegitimate prejudicial effect for the purpose of s 43.
[44]This application is dismissed.
The Shaw Convictions
[45]Mr Shaw recently pleaded guilty to the following charges (among others):
Manufacturing a Class A controlled drug (methamphetamine) – Misuse of Drugs Act 1975, s 6(1)(b) & (2)(a)
Possession for supply of a Class A controlled drug (methamphetamine) – Misuse of Drugs Act 1975, s 6(1)(f) & (2)(a)
Forgery – Crimes Act 1961, s 256(2)
Supplying a Class B controlled drug (ephedrine) – Misuse of Drugs Act 1975, s 6(1)(c) & (2)(b)
Possession for supply of a Class A controlled drug (methamphetamine) – Misuse of Drugs Act 1975, s 6(1)(f) & (2)(a)
Unlawful possession of a firearm – Arms Act 1983, s 45(1)
[46] These convictions are said by the Crown to be conclusive proof that the offences were committed by Mr Shaw in respect of the following charges:
(a)Charge 12 & 13 — manufacturing methamphetamine with Stevens, O’Carroll and Bowker on or about 12 March 2014.
(b)Charge 26 & 27 — supplying class B drug and manufacturing methamphetamine with Stevens, Shaw and O’Carroll in the period 2 April 2014 to 16 April 2014.
(c)Charge 35 — manufacturing methamphetamine with Stevens, O’Carroll and Bowker in the period 9 April 2014 to 10 April 2014.
(d)Charge 38 — possession for supply of the class a controlled drug methamphetamine with Stevens and Jones on or about 28 April 2014.
[47] The Crown submits Mr Shaw’s convictions are admissible pursuant to s 49(1) because:
(a)The convictions prove key elements of the offending, namely the possession of precursor substances and the manufacture of methamphetamine at the specified times;
(b)Citing R v Taniwha,13 there is no unfair prejudice to the remaining defendants even though the conviction evidence may close off an available defence.
[48]Mr Mansfield submits that:
(a)The conviction evidence is unfairly prejudicial in a general sense as it will deprive the affected defendants of the capacity to deny the fact of the manufacture of methamphetamine at the relevant times.
(b)Taniwha is not authority for the proposition that closing off a defence is irrelevant. Rather, that effect is confirmed by the Court as a relevant consideration in the weighing exercise.
(c)In Taniwha the convictions were only concerned with ancillary facts. By contrast, Mr Shaw’s convictions address a central issue of fact in
13 R v Taniwha [2012] NZCA 605.
these proceedings, namely whether there was a manufacture, supply or possession of illicit drugs at the specified times. They are therefore highly prejudicial.
(d)The Court cannot approach convictions by way of guilty plea with the same surety as a conviction after trial. The guilty plea may have been made based on factors that are not directly relevant to culpability. Their probative value is therefore not clear.
(e)Furthermore, the central issue in Mr O’Carroll’s trial is whether the first three manufactures occurred at his property and whether he was a party to it. Mr Shaw’s convictions are only weakly probative in terms of this specific issue, but nevertheless highly prejudicial given the de facto removal of one line of defence.
[49]Mr Speed opposes their admission for different reasons, namely:
(a)On the summary of facts Mr Shaw was only a party to manufacture of methamphetamine and his convictions are not probative evidence of Ms Stevens engaging in methamphetamine manufacture.
(b)If the Crown wishes to go beyond the summary of facts, it should call Mr Shaw, and if so, there is no need to produce the convictions.
(c)There is a significant risk that the jury will simplistically reason that because of her association with Mr Shaw, that Ms Stevens manufactured methamphetamine.
Assessment
[50]The leading authority on s 49 is the decision of the Court of Appeal in
Taniwha.14 The Court stated:
[44] … what emerges from these cases, albeit that many of the comments are obiter, is that unfair prejudice will not necessarily result from allowing the
14 R v Taniwha, above n 13.
conviction of a co-accused to be adduced where the effect is to close off some live issue that might otherwise have been relied on as part of a defence.
[51]And further:
[46] Finally, we do not consider that the fact that the convictions resulted from guilty pleas makes a significant difference, at least in this case. There could not, realistically, be unfair prejudice because the Crown would have been entitled in any event at trial to adduce the primary evidence of Mr Hughes’ methamphetamine dealing, which he would not be defending, as circumstantial evidence against Ms Taniwha based on the connection in time and place between his dealings and his communications with her. Given the strength of the evidence, his guilt would undoubtedly be proven. It cannot reasonably be suggested that evidence of Mr Hughes’ guilt could be more prejudicial if established through evidence of his convictions as opposed to proof through primary evidence.
[52] I agree with Mr Mansfield that the Court was not laying down a rule that the effect of conviction on a co-defendant is irrelevant. It was simply disposing of the suggestion that the convictions must be excluded in circumstances where a defence might be removed.
[53] The central issue remains whether the probative value of the proposed evidence is outweighed by the risk that the evidence will have an unfairly prejudicial effect on the proceedings and having particular regard to the right of the defendant to present an effective defence. I have come to the conclusion that the probative value is not outweighed by the risk of unfair prejudice for the following reasons.
[54] First, as the Crown suggests, Mr Shaw’s culpability is probative of key facts of the alleged offending including:
(a)That methamphetamine was manufactured on 12 March 2014;
(b)That methamphetamine was in the self-storage unit in East Tamaki on 12 March 2014;
(c)That on or about 3 April Mr Shaw supplied 1.8 kilograms of ephedrine to Shannon Stevens;
(d)That methamphetamine was manufactured on 9 April 2014;
(e)That methamphetamine was manufactured on 28 February 2014.
[55] Second, in broad brush terms, the prejudicial effect of this evidence is coterminous with its probative value because the effect on any defence is simply a corollary of the production of reliable evidence about those facts.
[56] Third, in terms of Ms Stevens’ trial, the facts sought to be established by the Shaw conviction evidence are relevant but ancillary to the elements of her alleged offending. They conclusively show that one part of the Crown’s narrative has been established, but do not, by themselves, establish that Ms Stevens manufactured, supplied and or was in possession of illicit drugs at the specified times. The Crown will still need to prove the facts necessary to show Ms Stevens’ connection to Mr Shaw’s offending. It may be difficult for Ms Stevens to rebut the connection (given for example video footage placing them together at for example one of the storage units) but she is not being deprived of an effective defence on the key elements because of it. Furthermore I do not accept the concern that the jury might illegitimately reason from her close personal association with Mr Shaw that she committed the alleged offending. The jury will be well able to weigh the significance of their association in terms of the specific elements of the offending.
[57] Fourth, I reach a similar conclusion in relation to Mr O’Carroll’s trial. The fact that Mr Shaw has been convicted of methamphetamine manufacture at the specified times is an ancillary fact to Mr O’Carroll’s offending. The Crown must still prove Mr O’Carroll’s connection to Mr Shaw’s criminal acts.
[58] Fifth, I also do not accept that the conviction evidence will unfairly deprive Mr O’Carroll of the capacity to challenge whether there was a manufacture at all at the specified times. Section 49 evinces a statutory policy in favour of the production of relevant conviction evidence. That policy would be undermined if the inherent prejudice arising from such conviction evidence were a reason to exclude it. There must in my view be something more to trigger the Court’s intervention, for example a heightened risk of improper jury reasoning, as is sometimes the case in relation to propensity evidence in sexual violation cases. There is nothing like this in the present case where the evidence simply supports the Crown’s narrative of offending.
Result
[59]Accordingly, I make the following orders:
(a)The prior convictions and parole dates are inadmissible;
(b)The “Devil’s Dandruff” extracts are inadmissible; and
(c)The convictions of Mr Shaw are admissible.
[60] For reasons stated at [31]—[32] the broader narrative of the prior offending appears to be cogent propensity evidence. It is a matter for the Crown, but my tentative view is that a properly constructed narrative dealing with the prior convictions may be admissible.