R v Holtham HC Nelson CRI-2006-042-002569

[2007] NZHC 2153

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IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CRI-2006-042-002569

THE CROWN

v

GRANT SHANE HOLTHAM DOUGLAS GORDON HAY TIMOTHY COLIN KNAPP MARC PATRICK JOHNSON Accused

Hearing:         13 November 2007 (Heard at Blenheim) Counsel:      S Zindel and W Jones for Holtham

H Roose for Hay (and Knapp on instructions) I Koya for Johnson

J Bonifant and C Stevenson for Crown

Judgment:      21 December 2007

JUDGMENT OF SIMON FRANCE J

R V GRANT SHANE HOLTHAM And Ors HC NEL CRI-2006-042-002569 [21 December 2007]

Contents

Paragraph

Introduction  [1] Challenges by Grant Holtham  [10]

(a) (b)	The search warrants Unanswered text messages	[10] [17]
(c)	Admissibility of Mr Holtham’s statements	[54]
(d) (e) (f) (g)	Admissibility of Detective Sergeant Murton’s evidence Adequacy of evidence Stopping Mr Holtham’s car Application to release Mr Holtham’s car	[80] [92] [99] [103]

Challenges by Mr Hay  [106] (a)      Sufficiency of evidence  [108] (b)      Conspiracy and a specific charge?  [116]

Challenges by Mr Johnson  [120] Conclusion  [144]

Introduction

[1]       These proceedings allege a methamphetamine supply operation in the Nelson area.  The indictment contains 21 counts.

[2]       An (alleged) central player is Mr Holtham.  He faces 10 individual counts:

a)        6  of  supplying  methamphetamine  to  named  persons.    3  of  those named persons are being called by the Crown;

b)        one of supplying methamphetamine to persons unknown, at Motueka;

c)        one of possessing methamphetamine for supply;

d)       one of possessing cannabis for supply;

e)        one of cultivating cannabis.

[3]      Mr Hay, also from the Nelson/Motueka region, is charged with:

a)        supplying methamphetamine to persons unknown;

b)        supplying methamphetamine to Mr Holtham;

c)        possession of a precursor substance.

[4]      Mr Holtham and Mr Hay are then charged with conspiring with each other and a Mr Knapp, to supply methamphetamine.

[5]      Mr Hay is also charged with conspiracies to supply methamphetamine with:

a)        Mr Marc Johnson; and separately with b)        Ms Sheree McCallum

And further, Mr Hay is charged with a conspiracy with Mr Johnson, to manufacture

(as opposed to supply) methamphetamine.

[6]      Finally,  Mr  Johnson  is  charged  with  possessing  precursor  substances, possessing equipment able to be used in manufacture, and attempting to manufacture methamphetamine.

[7]      The Crown case is that Mr Holtham was dealing methamphetamine in the Motueka area.  Mr Hay was doing likewise, but was also the primary source of drugs for Mr Holtham.  It is alleged he regularly travelled to Auckland to obtain the drugs. There  he  met  with  an  associate,  Mr Johnson,  who  appears  elsewhere  in  the indictment.

[8]      These pre-trial proceedings mainly concern challenges to the admissibility of evidence, and to the sufficiency of evidence on many of the counts.  The Crown case is based around intercepted calls and text messages, supported by general evidence such as Mr Hay’s frequent travel, the use of TAB accounts, items and drugs found when search warrants were executed, and, concerning Mr Holtham, the evidence of

3 persons who will say they bought methamphetamine off him.

[9]      The  sufficiency of  evidence  challenges  focus  on  whether  the  material  is sufficient to point to dealing in a Class A drug, as opposed to dealing in cannabis. The admissibility challenges are fact specific and will be considered in turn.

Challenges by Grant Holtham

(a)      The search warrants

[10]     The  bulk  of  the  evidence  comes  from  interception  warrants  obtained  by Police, and subsequently from house and car search warrants obtained in part on the basis of information obtained from the earlier warrants.

[11]     The  initial  warrant  was  obtained  in  relation  to  Mr Holtham  only.    The application related to his known cell-phone, and was based on an allegation he was dealing in methamphetamine.

[12]     The application is based on informant information from several sources.  The information  on  which  the  warrant  is  based  has  largely  been  deleted  from  the disclosed copy, meaning defence counsel are at a considerable disadvantage in advancing this challenge.  I advised counsel at the hearing that I would peruse the affidavit to determine whether I considered it was appropriate for me to assess the challenge without assistance from counsel.  If it was not, I would discuss a process with counsel.

[13]     Having adjourned for that purpose, I returned to advise that I considered the basis for a warrant was so palpably present that it was not necessary for me to

organise an alternative process.  I realise the inherently unsatisfactory nature of such a situation, but at times it is inevitable that the assessment of the Court will need to be trusted.

[14]     The evidential basis for the warrant comes from 6 different sources of direct information, plus three further items of circumstantial evidence that reinforce an inference of dealing.  The basis for relying on each informant is set out.  One or two informants, if standing alone, might raise reliability issues in terms of double hearsay in one case and anonymity in another.  However if one treats these two instances as merely supporting other evidence, there remains ample primary material for a reasonable belief that Mr Holtham was drug dealing.

[15]     Accordingly in my view the issuing officer had reasonable grounds for the issue of the initial warrant.

[16]     Challenges  to  subsequent  warrants  were  contingent  on  there  being  an illegality as regards the initial warrant.  There being no such difficulty with the initial warrant, it is not necessary to consider them.

(b)      Unanswered text messages

[17]     The Crown seeks to lead in evidence a large number of text messages that were  sent  to  a  phone  operated  by  Mr Holtham.    The  defendant  challenges  the admissibility of any of those messages if they were not answered.  Two examples of such unanswered messages are:

1.        “Hows it mate R U up got a mate keen if u good he got the fold”

(For those readers unfamiliar with this new language, I understand a translation is something like: “How is it mate?  Are you up?  I have a mate who is keen if you are good?  He’s got the fold.”

“Good” will be alleged to be not a question as to Mr Holtham’s morals, but a common word in the drug world to describe a dealer who has product for sale.  “Fold” is obviously money.)

2.“Hows it mate.  I got a mate keen on a quarter of a chicken can u do or na can u let me no cheers”.

[18]     There are other text messages of a like kind that are answered.  For example,

Q        How much 4 a quarter of wait bait? A      30

[19]     The admissibility of unanswered text messages was a source of dispute in the High Court prior to the enactment of the Evidence Act 2006.  In R v Day HC HAM CRI 2005-019-434, 21 February 2006, Asher J held that unanswered text messages were inadmissible hearsay.  In R v Fung and Hohepa HC PMN CRI 2006-056-5024,

6 July 2007, Wild J, anticipating the imminent coming into force of the Act, ruled they were admissible hearsay, or alternatively not hearsay at all.

[20]     Underlying  the  dispute  is  a  topic  sometimes  referred  to  as  “implied assertions”,  and  whether  such  assertions  are  caught  by  the  hearsay  rule.    In R v Kearley [1992] 2 All ER 345 (H.L.), the police were present in the house of a suspected drug dealer. Whilst they were present, 10 people rang, and 7 people knocked on the door, all seeking drugs from the suspect. In a 3-2 decision the House of Lords ruled that evidence of what these 17 people did, none of whom were to be called, would be inadmissible hearsay.

[21]     Asher J  in Day essentially adopted the  majority’s  analysis  from  Kearley. However, he also took the view that such evidence was dangerously speculative, if introduced to support the inference that the recipient was a person dealing in drugs. Wild J differed in this regard.  He concluded that the lack of any intention on the part of the sender of the text message to assert the inference which the message was being used to establish meant that the traditional reliability concerns about hearsay were not present.

[22]     The Evidence Act 2006 in my view takes a clear stance on this debate and says,  as many have long argued, that questions such  as  “have  you  got  a  ¼  of chicken” are not to be seen as hearsay at all.  Rather they are items of circumstantial evidence from which one can draw such inferences as are appropriate.

[23]     It will be necessary to set out the reasons why I consider this is the effect of the Evidence Act 2006.   However, on further  reflection it is apparent that such

analysis, even if correct, is far from determinative because s8 of the Act still applies. Section 8 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.

[24]     It must still be asked then, it would seem, whether the concerns that saw such statements treated (by some) as inadmissible hearsay, equally demand an analysis that says they are unfairly prejudicial given their limited probative value, even if not now hearsay.

[25]     The concern is this.  All subtle analysis aside, the reality is that such evidence is being led primarily to boost the inference that Mr Holtham was willing to sell drugs.  That inference is drawn because Joe Bloggs sent him a text saying (arguably) “can you sell me ¼ gram of methamphetamine”.  (This is the alleged true meaning of Mr Holtham being asked whether he had a quarter of chicken).   It has never been permissible to call Joe Bloggs just to say “I am of the view that Mr Holtham will sell me drugs”.   Why then is there any more value in admitting a text message that carries that implied message?   Further, isn’t it even more dangerous than direct opinion evidence because Joe Bloggs is not even there to explain why he thinks that?

[26]     The contrary view is that these are risks always present with circumstantial evidence, with the so-called strands of a rope.  On their own, many strands will not support the alleged inference, and indeed it may be positively dangerous to use a single strand, standing alone, to draw that inference.   But when that strand is put together with many similar strands, the position changes.  And so it is with a single unanswered text.

[27]     To use one unanswered text message as a basis for inferring Mr Holtham is willing to sell drugs would be plainly illegitimate.   What though if 30 different people send similar text messages?  At that point does not the probability that they might all be wrong become so much more remote that one can legitimately use the texts to support the inference?

[28]     This is on its face, a compelling argument, but it is one that is still vulnerable to challenge.  Without the 30 people being on the stand, how do we know that all their messages are not explained by the same single event such as a hoax, or a set up?  The danger of them not being on the stand is still present.

[29]     Acknowledging  there  is  merit  in  that  concern,  I  nevertheless  prefer  the analysis adopted by Wild J.  In terms of the usual hearsay risks, the unanswered texts have two advantages.   Like all written hearsay, the chance of misreporting is diminished because the actual original statement is available.  Second, one need not usually have concerns about the sincerity of the maker of the statement because they had no intention to assert anything.  That does not mean they may not be mistaken. However, from a reliability viewpoint, one has the exact wording of a circumstantial act in circumstances where the person requesting had no wider motive or interest at all.

[30]     Further, in my view, it is impossible to ignore the increased reliability that can flow from the greater number of differently sourced requests.   The “numbers game” is not foreign to the laws of  evidence;  it has  long been  recognised,  for example, in the similar fact area as an indicia of probative value.  Indeed it is now enshrined in s43(3)(d) of the Act.

[31]     In the present case there is evidence that a large number of people have sent Mr Holtham text messages seeking to buy something.  The wording of the requests suggests that the “something” is seafood (or occasionally a white meat such as chicken, the alleged key being that it is white and therefore a request for methamphetamine).  The Crown say they can show the seafood requests are requests for drugs.  In terms of the probative/prejudicial discretion contained in s8 of the Act, the evidence should, in my view, be admitted because:

a)       it is relevant that a large number of people were wanting to buy drugs from Mr Holtham and so there was an opportunity for him to sell;

b)Mr Holtham had responded to some similarly worded text messages, so the possibility that similar unanswered text messages were sent to him in error is less;

c)       the  reliability  dangers  are  lessened  because  the  recipient  did  not intend to assert, and the actual text message is available for scrutiny;

d)it is ultimately legitimate to use the text message as a strand in the circumstantial rope of drug dealing that the Crown seeks to weave;

e)        the jury is fully capable of grasping the dangers of such evidence.

[32]     Therefore, if admissibility of the evidence turned solely on a s7/s8 analysis, I

would admit it. [33]      But,

a)        if it is hearsay; and being such

b)if it does not fall within the general exception to the hearsay rule contained in s18 of the Act,

the Act would prohibit admissibility.

[34]     I can say immediately that I do not think the evidence would fall within the general exception to the hearsay rule.   It is necessary under s18 for the person seeking to lead the evidence to show:

a)        either that the maker of the statement is unavailable; or

b)that the Judge considers undue expense or delay would be caused if the maker of the statement were required to be a witness.

[35]     I have not been pointed to any evidence that would satisfy me as to either of those limbs.  Therefore, the issue comes full circle – if it is hearsay it is inadmissible; if it is not hearsay, then in the exercise of my discretion under ss7 and 8 I would admit it.

[36]     There is no doubt that the Law Commission intended to exclude “implied assertions” from the ambit of the hearsay definition in the Act.  It says as much in its Law  of  Evidence  Report  (NZLC R55 1999,  Vol  I,  paragraph 51).  (Mahoney, McDonald et al Evidence Act 2006, (2007) take the view that the Commission has achieved its aim – see EV4.20.02).  However, in my view the definitions in the Act do not make it so clear that more detailed analysis can be avoided.

[37]     A hearsay statement is defined in s4 of the Act as a statement that:

a)        was made by a person other than a witness; and which b)       is offered in evidence to prove the truth of its contents.

[38]     A statement in turn is defined as:

a)        a spoken or written assertion by a person of any matter; or

b)non-verbal conduct of a person that is intended by that person as an assertion of any matter.

[39]     If paragraph (b), the non-verbal limb of the definition of statement, was the provision designed to give effect to the Commission’s intention to exclude implied assertions, it fails to do so.   It overlooks that the source of many or indeed most implied  assertions  is  not  conduct  but  is  words  alone,  or  words  and  conduct combined.  Kearley and the present case, illustrate this point.  The implied assertion being talked about in those situations is the message implicit in the questions – “is Chippie in, I want some drugs?” or “have you a ¼ of wait bait?”  The source of the implied assertion is accordingly verbal.

[40]     In my view it is not paragraph (b) but paragraph (a) of the definition of statement that has the effect of excluding implied assertions from the concept of hearsay.  The source of the exclusion is the use of the concept of assertion.

[41]     Assertion is not defined in the Act.  The Concise Oxford Dictionary defines it as:

“a confident statement of fact or belief”.

[42]     Funk  and  Wagnall’s  New  Standard  Dictionary  of  the  English  Language

(1924) states:

“assertion  :  the  act  of  asserting;  a  positive  or  definite  statement  or affirmation concerning some particular thing, advanced without accompanying proof; declaration.”

[43]     The New Zealand Oxford Dictionary states:

“assertion : a declaration; a forthright statement.”

[44]     The   consistent   inference   from   these   definitions   is   that   an   essential characteristic of an assertion is that the person asserting is intending to make a statement, or assert a fact or opinion.

[45]     If an intention to assert something is seen as an integral part of the concept of “assertion”, then plainly implied assertions are not statements within the meaning of the Act.  Once paragraph (a) of the definition is read in this way, paragraph (b) can be seen as inclusory.  Its role is to make it clear that conduct can also be a statement as  long  as  the  person  doing  the  conduct  is  intending  to  assert.    Paragraph (b) therefore confirms that the essence of a statement, be it verbal or by conduct, is the intention to assert.

[46]     Reading the definition of “statement” in this way does not seem to raise any difficulties with its use within the Act.

[47]     There are places where “statement” is used in the Act in a way that is totally divorced from its definition.   For example, in section 83 (ordinary way of giving evidence includes  reading  a written  statement)  and  s91  (editing of  inadmissible

statements) the term must refer to a written brief or an accused’s full statement rather than the narrow definition provided in s4.

[48]     In places where the word is used consistently with its s4 definition, some at least seem to support the idea that “statement” is limited to intentional assertions. For example,

a)        s32(1) refers to “answer a question put or respond to a statement made”;

b)        s80(5) refers to statements known to be false;

c)        s87(1) refers to “statement or remark”;

d)s48 refers to “statement to the effect that a person has committed an offence”.

[49]     Arguably each of these sections uses “statement” in a way that suggests its essence is an intentional assertion.  For example, in s32, “statement” is contrasted with a “question”, and in s87 it is contrasted with a “remark”.   What seems to differentiate statement from question or remark is that statement reflects that nuance of a statement of fact or belief.  At the least, my review of the Act suggests that there is no obvious place where interpreting statement to mean of “intentional assertion” would make the Act unworkable or unintelligible.

[50]     In England, the Criminal Justice Act 2003 has also altered the law to reverse

Kearley.  Section 115(2) and (3) of that Act provide:

(2)A statement is  any representation  of  fact or  opinion  made  by a person by whatever means; and it includes a representation made in a sketch, photofit, or other pictorial form.

(3)A matter stated is one to which this Chapter applies if (and only if) the purpose, or one of the purposes, of the person making the statement appears to the court to have been:

(a)     to cause another person to believe the matter, or

(b)to cause another person to act or a machine to operate on the basis that the matter is as stated.

[51]     In R v Singh [2006] 1 WLR 1564 (CA) it was held that the effect of the amendments is to make admissible almost all the utterances at issue in Kearley.  The Court observed (at p1569):

What was said by the callers in R v Kearley would now be admissible as direct evidence of the fact that there was a ready market for the supply of drugs from the premises, and from which could be inferred an intention by an occupier to supply drugs.  (my emphasis)

[52]     The emphasised part is of interest in that the previous debate as to the very relevance of this type of evidence seems also to have faded with the new legislation. The emphasised words recognise that it is legitimate to lead this type of evidence to prove the dealer’s intention.  In terms of the specific issue I am considering, there seems little merit in straining to read the New Zealand Act in a way that coincides with English authority (Kearley) that is now legislatively over-ruled.

[53]     It was an open issue prior to the Act as to whether Kearley did represent the law in New Zealand (see, for example, Police v Machirus [1977] 1 NZLR 288). However, for the reasons given I consider that the issue has been settled by the Evidence Act 2006. I accordingly rule that the unanswered text messages are relevant, are not hearsay, and are not in this case prohibited by s8 of the Act. They are therefore admissible.

(c)      Admissibility of Mr Holtham’s statements

[54]     Mr Holtham made statements on 9 August to Senior Constable Arnold, and on  10 August  to  Senior  Constable  Crawford.     The  admissibility  of  both  is challenged.

[55]     On 9 August the investigation which preceded these charges was terminated. A series of warrants were contemporaneously executed.   Mr Holtham’s car was stopped, and he was taken to Motueka Police Station, having been given his rights and advised that the Police wanted to speak to him about methamphetamine.

[56]     At around 2.40 p.m. Mr Holtham and Senior Constable Crawford began an interview.    Between  then  and  around  7 p.m.  the  interview  took  place.    It  was interrupted by various breaks, and all of it was videotaped.  At 7 p.m. Mr Holtham was  advised  that  police  searching  his  house  for  methamphetamine  had  found cannabis in a ceiling cavity and that the discovery had led to a further s18(2) Misuse of Drugs Act 1975 search of the house.   Mr Holtham said the cannabis was his personal stash.

[57]     There was next a discussion outside between the two men whilst Mr Holtham had a cigarette.   At that point, a Constable Lamont arrived to take Mr Holtham across to the Nelson police cells for the evening.

[58]     I was advised in submissions that what then happened was that upon arrival at  Nelson  Police  Station,  some  of  the  intercepted  conversations  were  played  to Mr Holtham in the presence of Detective McMorran and Senior Constable Arnold.

[59]     Following   those   tapes   being   played,   Senior   Constable   Arnold   took Mr Holtham to the cells.  It is the conversation that occurred at this point to which objection is taken.  Senior Constable Arnold records that the following occurred:

Mr Holtham said “Fuck mate that is so clear,  I could  even  hear static, everything is there”

Can I plead tomorrow?

I said “you can plead at the earliest opportunity”

He replied “yep, don’t worry about that I’m pleading guilty I’ll start my holiday now and get it out of the way.”

[60]     The next morning Senior Constable Crawford drove over to Nelson from Motueka to see Mr Holtham.   At 8.45  a.m. he  took  Mr  Holtham  outside  for  a cigarette, gave him his rights, and introduced the topic of the cannabis found the previous day.  Mr Holtham again admitted it was his.

[61]     While this was occurring Senior Constable Crawford received a phone call from Detective Nicholls who was searching Mr Holtham’s car.  Detective Nicholls

advised that 2 bags of meth, and some scales, had been found hidden in the steering column and dash of the car.

[62]     A   conversation   about   that   ensued   between   Constable   Crawford   and Mr Holtham.    This  is  the  second  statement  to  which  objection  is  taken.  In  the conversation, Mr Holtham confirms the methamphetamine is his, that he has a gram a day habit, and that he had stopped selling to a named person when he saw the effect the drug was having on that person.   Generally the tone is that Mr Holtham had been dealing, but was getting out of it and was finished.

[63]     There  was  next  a  conversation  about  what  personal  effects  Mr Holtham needed.  There was then a further caution, after which Mr Holtham is said to have admitted that:

The fish and whitebaiting, crayfish code was actually some kind of fish but other times it wasn’t.  I was out of this.  If you had come around today it would have been clean.”

[64]     This conversation was recorded in Constable Crawford’s notebook.   It was read out to Mr Holtham who signed it as a true account.

[65]     Before considering the challenges to these two statements, I note that neither party chose to lead evidence or require anyone for cross-examination.  The primary challenge to both statements is that they were obtained in breach of Rules 3, 7 and 9 of the original Judges’ Rules and were therefore improperly obtained in terms of s30(5)(c) of the Evidence Act 2006.

[66]     Rule 3 is that persons in custody should not be questioned without the usual caution first being administered.  Rule 7 is the prohibition on cross-examination and Rule 9 is that any conversation should be recorded and signed by the person in custody once it has been read back to the person and they have been given an opportunity to correct it.

[67]     Mr Zindel’s primary argument is that after the initial interviews in Motueka, at the end of which Mr Holtham was charged with dealing in methamphetamine, he

should  not  have  been  questioned  further.     He  relies  on  R  v  Haapu  (2002)

19 CRNZ 616 and Peart v R [2006] All ER (D) 171 (PC).

[68]     Haapu concerned an 18 year old arrested at his home for breaching bail.  The challenged confession was made after he had been in custody for 24 hours.   The circumstances seem far removed from this case.  Haapu was 18 years old, was told by an officer he would likely be sodomised if he went to jail, and told to sleep on that thought.   A formal interview was then conducted the next morning with no effort  being  made  to  video  it.    Some  notes  of  the  interview  were  written  up afterwards, but not shown to Mr Haapu.

[69]     Peart  focussed  on  Rule III(b)  of  the  Judges’  Rules 1964,  a  version  not adopted in New Zealand.  Rule III(b) provides:

“It is only in exceptional cases that questions relating to the offence should be put to the accused person after he has been charged or informed that he may be prosecuted…”.

[70]     Adams in its Evidence Chapter (EC 5.04(5)), records that Rule III(b) has not been adopted in New Zealand.   It notes that the Rule was applied by the Privy Council in Peart, and says that in New Zealand, without reference to a specific rule, the Court of Appeal have criticised police questioning after the accused has been charged.

[71]    That is the extent of the Adams commentary which clearly informs the defendant’s present challenge.   In my view it is not possible to suggest that questioning of persons in custody is not permitted in New Zealand.  Haapu certainly criticises what occurred in that case but does not purport to lay down any rule; Adams does not suggest it has wider effect than its facts.

[72]     The  reality  is  that  questioning  of  persons  in  custody  happens  regularly. Indeed the Rules are actually designed to regulate that, not prohibit it.  Of course in any given case it may be improper to question further.  Also, the type of questioning may be improper.  It all depends, but it is not the law that questioning cannot occur.

[73]     Section 30(6)  of  the  Evidence  Act 2006  provides  for  the  issuing  of  new guidelines concerning defendants’ statements obtained by police officers.   The ensuing  Practice  Note  issued  by  the  Chief  Justice  on  16 July 2007  expressly preserves the former case law surrounding the Judges’ Rules.   Rule 3 of the new guidelines states:

“Questions of a person in custody or in respect of whom there is sufficient evidence to lay a charge must not amount to cross-examination.”

[74]     Likewise, Rule 5 begins:

“Any  statement  made  by  a  person  in  custody  …  should  preferably  be recorded by video recording …”.

[75]     Both  rules  re-suppose  an  ability  to  question  in  custody.    The  general proposition that questioning of a person in custody is not permitted is unsustainable.

[76]     Turning to these two statements, as a general proposition it is to be noted that Mr Holtham has several times been advised of his rights.  He is an adult who makes no allegation of improper conduct, of oppression, of not understanding his rights, or of wanting but being denied a lawyer; nor does he complain about the conditions under which he was kept, or of his own physical condition.

[77]     The  statement  of  9 August  is  plainly  a  spontaneous  reaction  to  a  new awareness of the type and quality of evidence available to the police.  The absence of a contemporaneous record is not uncommon in circumstances such as these where it is  not  an  interview  situation,  but  an  unscripted  spontaneous  short  conversation. There is nothing about the circumstances that lead me to conclude it was an unfairly obtained statement.

[78]     Concerning the 10 August statement, Mr Zindel was critical of the cannabis discovery being raised only on that morning when its discovery was known to the Police the day before.   I apprehend that underlying this observation is some suggestion of improper ruse but in the absence of evidence there is nothing that can be made of the police speaking again to Mr Holtham.  (I note also it was mentioned to him the previous night.)

[79]     On the occasion of the 10th August statement, notes of the conversation were taken, and Mr Holtham had them read back to him.  He made an amendment.  There was no improper questioning and again I see no basis for an unfairness finding.  I rule that both challenged defendant’s statements may be led by the Crown.

(d)      Admissibility of Detective Sergeant Murton’s evidence

[80]     Detective Sergeant Murton is an experienced Police Officer, familiar with drug offending.  He is to be called as an expert to explain the Police case concerning the content of the text messages.  Mr Holtham’s objection to this evidence is joined by the other accused.

[81]     The  text  messaging,  if  about  drugs,  is  in  code.     The  most  common code-words, as the Crown will have it, are fish names.   That the fish names are a code is actually confirmed by Mr Holtham in the 10 August statement just ruled admissible.  Of more interest is the nature of the drug protected by the code.  Is it cannabis, or is it, as charged, the Class A drug methamphetamine?

[82]     Detective Sergeant Murton’s expertise and experience are not challenged. What is challenged is how far he can go in his evidence.  As background, however, in  terms  of  his  expertise,  it  should  be  noted  that  the  officer  details  over

28 investigations he has been involved in, the occasions on which he has given expert drug evidence, and the numerous speaking engagements he has fulfilled.

[83]     The principles attaching to the admissibility of such evidence are not difficult to set out.  Based on his expertise, the officer can give evidence about the practices of those engaged in drug activities, about the common use of code-words, and about what form such words take – e.g. food, fruit etc.  He can give evidence about words used in the present messages that are similar to, or the same as, code words he has encountered in other investigations.  Finally, in my view, he can say that based on his experience the use in this case of the fish theme is typical of the type of code system that is employed.

[84]     Before looking at the specific brief, two of the preceding propositions need some comment.   Identifying words as having similarly been used in previous investigations is, to a certain extent, self-fulfilling.   The absence of jury reasons means one does not actually know if a jury has accepted on the previous occasion that the Crown submission was correct that, for example, milo is a code word for methamphetamine.   The conviction may have been based on different evidence. That said, it is legitimate for the officer to point out that other persons convicted of dealing in the same drug were recipients or senders of messages of the same type and containing similar words.  The limits of how far that evidence takes you as regards the meaning of these text messages is a trial issue.

[85]     The second of my propositions that requires comment is that the officer may give his opinion that the fish theme is a code for methamphetamine.  That is, in a sense, a comment related to the ultimate issue, but there is no bar on that (see s25(2)(a) of the Act).   These cases involve potentially hundreds of messages and conversations.  It is in my view substantially helpful (the test in s25(1) of the Act) for a suitably qualified person to bring together the Crown case in relation to them. It is arguable that some of these opinions are more for submission than evidence, but it is a fine line and one should not lose sight of the ultimate goal which is to assist the jury with bringing together and evaluating all this material.  There is also thereby provided suitable opportunity for cross-examination, and for weaknesses to be brought into the open.

[86]     It is also in my view permissible for the officer to highlight words that are said to be examples of the general practice being alleged.  What is not needed, or permissible, is for the officer to troll through every message giving his view on what it means.  The general thesis, plus examples, will suffice to advance the case, whilst avoiding  speculation  or  undue  intrusion  into  the  jury’s  function.    Balance  is important if one is to avoid the dangers of opinion evidence overwhelming the jury.

[87]     These  general  rules  are  sufficient  to  provide  guidance  to  counsel  in determining the scope of Detective Murton’s brief.  Ms Bonifant accepted that some pruning is required of the too many statements that x = y.   Those opinions are

presently being given not as examples of the general thesis but as individual opinions on a particular text without an adequate base.

[88]     In addition to the general principles outlined, it is appropriate for the Court to comment on some specific challenges, and I will now do that.  However, disputes about the applicability of the general principles can be dealt with by the trial Judge.

[89]     The officer states that code-words often use the first letter of a drug – e.g. “Pork” can be methamphetamine because of the letter ‘P’ for pure.  Similarly colour can be the determinant – white, for methamphetamine, will see conversations involving “whitebait” and “white paint”.  Counsel challenged this evidence as being too broad and speculative to be legitimate.  It was said that on this basis, anything can   be   made  to   look   like   a   code-word.     However,   those   are   points   for cross-examination.    If defence  counsel  succeed  in  creating  an  impression  of  an approach that tries too hard to fit everything in, that is a matter the jury can take into account in assessing probative value.   The officer sources this opinion in his experience based on his involvement in so many investigations.   He is entitled to give it.

[90]     Likewise, the evidence about code-words for weight (half-time, half back) and  for  cannabis  (greenhouse,  green  paint)  is  linked  directly  to  the  expert’s experience and expertise.  The weight for such evidence is a jury matter.

[91]     Pages 25-31 of the brief involve specific examples.   As noted, I consider there are too many and it needs pruning.  Otherwise the limit is that if the code-word is something not encountered before, that must be made clear.  If the word fits the alleged pattern – e.g. fish – then that can be identified, but there is no basis to speculate on words not previously encountered and not within the alleged code.

(e)      Adequacy of evidence

[92]     Mr Holtham makes several s347 applications based on the sufficiency of evidence.   The common underlying theme is that it cannot be said whether the

conversations and messages relied upon by the Crown relate to the sale of cannabis or of methamphetamine.

[93]     R   v   Fonotia   [2007] 3 NZLR 338 analyses the different evidentiary requirements on the Crown depending upon the particular charge. The context is the effect of the different subsections of s6 of the Misuse of Drugs Act 1975. A summary of the judgment is that:

(a)where the charge is importation or manufacturing of a controlled drug, there is an option available to the Crown of alleging activity involving a prohibited but unknown drug.   This will arise where proof beyond reasonable doubt of the actual drug is not possible;

(b)however, where the charge is selling, or possessing for sale, the indictment must allege the particular class of drug.   There is no option of an unspecific controlled drug offence.

[94]     In the present case the Crown has alleged that the core drug activity was methamphetamine.    It  has  framed  the  counts  in  the  indictment  appropriately to reflect this.  It is common ground that as regards these charges the Crown must point to evidence on which an appropriately directed jury could conclude that it is beyond reasonable doubt Mr Holtham was both dealing in drugs and conspiring to deal in drugs, and that that drug was methamphetamine.

[95]     I consider it is appropriate to adopt a cautious approach.  It is not possible at this stage to do more than obtain a broad sense of the intercepted material.  I have not heard the tapes, and I have certainly only perused some of what is apparently 700 pages of text messages.

[96]     As regards Mr Holtham I do not consider the s347 application can succeed. The following may be pointed to:

a)        his admissions;

b)        the fact that 3 witnesses will testify he sold them methamphetamine;

c)        his acknowledgement that the fish theme was a code;

d)his possession of methamphetamine hidden in the steering wheel and dash of his car;

e)        the evidence of Detective Sergeant Murton that references to “white”

products is a common code for a reference to methamphetamine;

f)        the  attribution  evidence  that  links  various  phones  to  Mr Holtham which in turn make admissible against him various items of evidence consistent with dealing.

[97]     Essentially his possession, his admissions, and the direct evidence of sales is sufficient to make this a jury issue.

[98]     There is no need to assess the specific evidence on each count.  The strength of each count no doubt varies, but will be informed by general assessments as to the meaning of text messages and conversations.  There may be scope for applications at the end of the Crown case, but not presently.  I suppose one could finally observe on this application, that if the jury accept Senior Constable Arnold’s evidence about Mr Holtham’s  reaction  in  the  Nelson  Police  Station  to  hearing  some  of  the intercepted tapes, the evidence cannot be too deficient.

(f)      Stopping Mr Holtham’s car

[99]     Section  314B  of  the  Crimes  Act 1961  provides  a  general  power  to  stop vehicles.  Section 314B(4) requires:

(4)Every member of the Police exercising the stopping power conferred by subsection (1) must, immediately after the vehicle has stopped,-

(a)     Identify himself or herself to the driver of the vehicle; and

(b)Tell the driver  that the  stopping  power  is  being  exercised under this section for the purpose of exercising a statutory search power; and

(c)     Tell the driver the statutory search power in respect of which the stopping power is being exercised; and

(d)If not in uniform and if so required, produce evidence that he or she is a member of the Police.

[100]   In this case it seems that Mr Holtham, when stopped, was told that the search was pursuant to a warrant and was in relation to methamphetamine.   Mr Zindel submits that is insufficient compliance with paragraphs (b) and (c).  There needed to be information as to the particular statute involved, and probably the section under which  the  warrant  was  issued.     He  relies  on  passages  from  R  v  Williams [2007] 3 NZLR 207 which emphasise the importance of compliance with a statutory code (see particularly paragraphs [23] and [117]). In paragraph [23], non-compliance with s18(4) of the Misuse of Drugs Act 1975 was cited as a specific example of what is not likely to be a technical breach.

[101]   Section 18(4) contains an identification requirement such as is present in s314B(4)(a) and (d).  The last sentence of paragraph [23] can be noted:

“If the police, however, indicate the general source of the power or permit the suspect to contact a lawyer at the time of the search, this may allow the breach to be regarded as minor or trivial.”

[102]   In this instance I do not consider there was a breach at all.  Mr Holtham was told his vehicle had been stopped because the police had a warrant to search it, and that the focus of their search and the warrant was methamphetamine.  That is surely exactly what the Legislature wants; the person stopped is told squarely the basis for stopping and is thereby appraised of his or her situation.   Later review is made possible because the basis relied on for the stop has been articulated.  I venture to suggest formal references to sections of a statute, as an alternative communication, would   do   little   to   enhance   Mr Holtham’s   knowledge   or   awareness   of   his predicament.

(g)      Application to release Mr Holtham’s car

[103]   The police seized the car.   It has been photographed.   It is still detained. Requests for its return have been denied on the basis that it is an exhibit, although it is  accepted  that  no  other  work  or  investigation  in  relation  to  it  is  intended  or required.   Thankfully (or disappointingly depending on the extent to which one is

engrossed at the time by the proceedings) there seems to be no current intention to drive the car into the courtroom.

[104]   Ms Bonifant could identify no basis on which to hold the car other than it is an exhibit.  That is not enough given it is no longer needed for those purposes.

[105]   At the hearing I directed the car be set free.

Challenges by Mr Hay

[106]   Mr  Hay  is  charged  with  several  counts  involving  different  co-offenders. Several challenges have been resolved between counsel.  The charges left in issue are:

a)        Count 13 – supplying methamphetamine to persons unknown b)       Count 14 – supplying methamphetamine to Grant Holtham

c)        Count   12   –   conspiring   with   Holtham   and   Knapp   to   supply methamphetamine.

[107]   Mr Roose submits there is insufficient evidence to support the allegations in counts 13 and 14.   If unsuccessful in that, he submits count 14 and count 12 are based on the same evidence, and both are not permissible.  He submits that count 14 should be removed.

(a)      Sufficiency of evidence

[108]   The focus of this challenge, like Mr Holtham’s, is on whether there is a basis for  a  jury  to  infer  beyond  reasonable  doubt  that  whatever  Mr Hay  was  doing involved  methamphetamine.    Mr Roose  notes  that  none  of  the  text  messages identified by the Crown are methamphetamine specific.  Further, in his submission, some of the weights or monetary amounts that are mentioned in these texts are much more referable to the sale of cannabis than methamphetamine.  Generally Mr Roose

went through the items relied on by the Crown in its submission to highlight the ambiguity of the evidence.

[109]   The Crown case alleges that Hay was the major supplier of Holtham, and of other persons in the area, who then on-sold.  It is alleged that Mr Hay would contact Mr Holtham; the latter would in turn contact others who owed him money.  This was done to obtain the necessary funds to give to Hay to purchase drugs.  Mr Knapp’s role was at least to act as driver for Hay who did not have a licence.

[110]   It  is  said  that  Mr  Hay  would  then  travel  to  the  North Island,  usually Auckland,  to  obtain  drugs.    He  would  then  text  Holtham,  advising  what  was available and when it would come.   Mr Knapp was generally a go-between but is also alleged to have made on-sales.

[111]   The essential roles therefore alleged are that Hay would supply to Holtham who  would  then  on-sell.    It  is  alleged  Knapp  performed  various  roles  in  the operation.  A specific transaction around the end of July is alleged to be one such event between the three.  Hay is alleged also to have been involved in other dealing in Auckland, and in other sales in the Nelson/Motueka area.

[112]   There is ample evidence, and I do not take Mr Roose to contend otherwise, that suggests the involvement of Mr Hay in some illicit activity, most likely of a drug nature.   However, can it be identified, as required, as being dealing in methamphetamine?

[113]   A difficulty I have with the application is that no challenge is made to the legitimacy of  the  conspiracy count  that  alleges  Hay,  Knapp  and  Holtham  were conspiring to supply methamphetamine.  If that is so, why individual counts could be the subject of a s347 application, based on the lack of evidence as to the nature of the drugs, is not clear.  Further, as discussed, there is considerable evidence, if accepted, to suggest that Mr Holtham was dealing in methamphetamine.  Such evidence must be admissible in relation to a charge that Mr Hay was supplying Holtham with that methamphetamine.   If it can be shown that Hay was supplying Holtham with something,  then  the  evidence  that  points  to  Holtham  possessing  and  dealing  in

methamphetamine must be relevant to Hay’s charge.   Likewise, if that analysis is correct, the evidence must equally apply to the count alleging the same drug was being supplied to persons unknown.

[114]   Accordingly  at  this  pre-trial  stage  I  do  not  consider  it  is  possible  or appropriate to consider s347 dismissals where there is significant evidence of methamphetamine being an available drug that is being sold.  Whether that evidence sheets home methamphetamine dealing to Mr Hay can be far better assessed once it has been aired and tested, and seen in actual detail.

[115]   I accept Mr Roose’s point about the particular text message the Crown relies on at this stage.  But, again, whether the context of all the evidence adds probative value to what on their face are obscure or innocuous text message must await trial.

(b)      Conspiracy and a specific charge?

[116]   The argument concerning one or two counts has a somewhat different focus from the context in which it usually arises.   Normally the concern is the extra complications that a conspiracy count adds, when the evidence and culpability is adequately encompassed by a specific count.  Here, however, it is the specific count that is the focus of the application.

[117]   The  first  point  to  note  is  that  the  conspiracy  allegedly  also  involves Mr Knapp, whereas the specific count is limited to conduct between Messrs Hay and Holtham.   Second, it is not objectionable to charge a specific instance of a wider conspiracy.    There  is  no  doubt  that  the  alleged  relationship  of  supply  between Mr Holtham and Mr Hay is  also the essence of the  alleged conspiracy but as  I presently understand it, the allegations are not on all fours.

[118]   No specific prejudice is suggested as flowing from the two counts, and given it is accepted the specific evidence would legitimately be led as part of the “unobjected to” conspiracy count, I see no role for the Court’s intervention in the shape of the indictment.

[119]   Mr Hay’s applications are accordingly dismissed.

Challenges by Mr Johnson

[120]   In  addition  to  supporting  the  general  challenges  relevant  to  Mr Johnson, Mr Koya advanced a specific challenge in relation to count 20 which is an allegation of attempting to manufacture methamphetamine.  It is necessary to traverse the facts.

[121]   Generally, the process of manufacturing methamphetamine is described by

ESR witnesses as involving 3 steps:

a)        conversion of pseudoephedrine to methamphetamine;

b)        extraction of methamphetamine from reaction mixture;

c)        conversion  of  methamphetamine  to  crystalline  methamphetamine hydrochloride (which is the common useable form).

[122]   In this case a mixture was located that is consistent with the step 2 mixture that one commonly finds.   In  cross-examination  at  depositions,  the  ESR  expert accepted that by the time this mixture is produced, methamphetamine has already been produced and is present in the mixture.

[123]   Mr Johnson accepted the mixture was his.  He explained that earlier in the day he had been given a “purpley/fawn caustic goo” that was about a gram in weight. It was in effect methamphetamine but unusable so he set about to clear the rubbish out of it.  He put it in caustic water to cause the methamphetamine oil to separate out of it.  He was then going to add fresh water to clean it; finally he intended to lower the pH level by adding hydrochloric acid and evaporating it off.  He would be left with useable methamphetamine for his own use.

[124]   Dr Barker confirmed that this explanation generally approximated a process equivalent to steps 2 and 3.  The Crown has charged Mr Johnson with attempting to manufacture methamphetamine.

[125]   I understand the Crown’s position to be that, accepting as accurate what Mr Johnson says, what he is describing is the process of attempting to  manufacture methamphetamine.   It is an attempt because he was in the process of turning the unusable   methamphetamine   “goo”   into   useable   methamphetamine   but   was interrupted by the police search.   Mr Koya, however, says that since the “goo” already   contained   methamphetamine,   Mr Johnson   cannot   be   attempting   to manufacture that which he already has.

[126]   Section 6 of the Misuse of Drugs Act 1975 makes it an offence to produce or manufacture a controlled drug.   Manufacture is not defined; produce is defined to “include compound” which would appear to be a less common use of compound as a verb, namely “to mix or combine” or indeed “to make up”.

[127]   In  DPP  v  Nock  (1978)  67  Cr  App  R116,  the  accused  sought  to  extract cocaine from a substance believed to be a mixture of lignocaine and cocaine.  That process of separation was regarded by the Court of Appeal as coming within the concept of “produce”.  (The case was overturned on a separate point.)

[128]   In Re Parke (1991) 7 CRNZ 676 Roper J held that the drying and pulverising of magic mushrooms to make them more palatable for consumption did not equate to production.  He identified “produce” as meaning:

to bring forth, bring into being or existence.  To bring into existence from its raw materials or elements;

and compound as meaning:

made up by combination of elements or parts.

[129]   Roper J described the process as preparing, and arguably preserving, but not producing.

[130]   In Pirini v R CRI 2003-055-002914 HC AK 12 October 2004, Baragwanath J was   dealing   with   what   appeared   to   be   an   interrupted   methamphetamine manufacturing process.   There were mixtures found in containers that seemingly represented both the initial conversion stage, and the extraction process.   It was

common ground that the oily liquid was not in a useable form at that point and would require further treatment to become a powder able to be used.

[131] The charge in Pirini was that the accused had already manufactured methamphetamine.    The  defence  argument  presented  to  Baragwanath J  was  that because no useable quantity of the drug had yet been produced, the charge must be flawed.  Interestingly for present purposes, the Crown response to this is recorded as being:

“that the crime of manufacturing methamphetamine is complete when that drug has been created, whether or not it is in a useable form”.

That position is exactly the opposite of what the Crown alleges here. [132]   Baragwanath J identified two possible meanings of manufacture:

a)        to make from raw materials;

b)to make up or bring into a form suitable for use (the meaning relied on by the accused in that case).

[133]   His Honour concluded that s6 made sense if produce was regarded as  a description of the attainment of a result, and manufacture as the process by which it is attained.  Baragwanath J concluded that:

a)        manufacture had the meaning of to make from raw materials;

b)produce had the meaning of to bring into existence as the result of a process; to give rise to, bring about, effect …

[134]   Pirini discusses a decision of Heron J, R v Carroll, HC Palmerston North T 22/86 13 April 1987.   There, a person charged with manufacturing cannabis oil had only participated at the stage of putting the oil into capsules.  The accused had heated  the  already produced  oil  to  enable  it  to  be  more  easily  placed  into  the capsules.  Heron J ruled that such conduct could not be described as manufacturing.

[135]   Baragwanath J concluded on the facts of Pirini:

“Both on the plain language of this provision and on a functional test the process of manufacture must continue up to the stage when it has been “produced”   which   may   fairly   describe   the   “bringing   forth”   of   the impregnated LSD tabs for consumption.”

[136]   The latter  reference to  tabs  is  a reference to  R  v  Strange Hamilton  HC T 6/97 5 October 1998,  Penlington J.     There,  dipping  paper  tabs  into  an  LSD solution to allow for consumption was held to be part of manufacturing.

[137]  Pirini and the present case put in focus at what point manufacturing is complete.  A methamphetamine manufacturing trial usually focuses on the process through to producing a useable product.  Little analysis is devoted to when in that process methamphetamine is produced; that lack of focus is no doubt because the “post methamphetamine” stages are at least cogent evidence of both manufacture and intention, even if it could be said the offence was complete at an earlier point.

[138]   It is arguable there are three options:

a)       manufacturing  methamphetamine  is  complete  once  the  chemical product is produced, and ends at that stage.   Thereafter all the “cleansing” activity that goes to making it useable is not criminal.  A manufacture charge is suitable for those involved in producing the product; thereafter the charge is possession either simpliciter or for supply.   Applied to this case, Mr Johnson should be charged with a form of possession;

b)manufacturing  methamphetamine  is  complete  once  the  chemical product is produced, but also continues until a useable product is produced.    Involvement  at  any point  up  to  the  production  of  the useable  drug  is  manufacturing.    Applied  to  this  case  Mr Johnson should be charged with manufacturing and not an attempt;

c)       manufacturing methamphetamine is not complete until a useable form of the drug is produced.   Up to that point everything is an attempt.

Applied to this case, the present charge is correct.    This approach would produce a different outcome in Pirini.

[139]   I admit to having difficulties with option two.   The present facts highlight what it means; in relation to the same “goo” person A is guilty of manufacturing methamphetamine  for  producing  it,  and  person B  (Mr Johnson)  is  guilty  of manufacturing methamphetamine for using it to produce methamphetamine.   The idea  of  a  continuing  offence  does  not  sit  easily where  the  charge  involves  the production of a defined, finite product.

[140]   Nor  do  I  consider  option two  necessarily  best  captures  the  appropriate criminal justice concerns.   The mischief at which the Act is aimed is the use of prohibited drugs.  One attacks the use by attacking the sources – supply, manufacture and importation.   If that is correct, then the primary concern is a useable product, because it is only when one has that product that the primary mischief is engaged. On that analysis option three best reflects the criminal justice concerns – until a final useable product is produced, the correct assessment of culpability is attempting to manufacture it and thereby attempting to increase the pool or availability of the prohibited substance.

[141]   Consistent with a preference  for  this  analysis  is  rejection  of  option  one, although in my view option one is similarly preferable to option two.  Option two really involves methamphetamine having two meanings within the same process – the chemical product, and the useable form.

[142]   Coming back to this case, I conclude the charge is properly brought because manufacturing methamphetamine means making a useable product.   If wrong on that, then I would have heard submissions as to whether an alternative charge of possession in some form should be substituted.  For completeness, if I am wrong and option two is the correct analysis : i.e. a complete and continuing offence – I would have allowed amendment of the indictment to reflect that.

[143]   The application is dismissed.

Conclusion

[144]   With the exception of the application for the return of Mr Holtham’s motor vehicle, and the amendments required to make Detective Sergeant Murton’s brief

conform with the general principles identified, all applications are dismissed.

Simon France J

In accordance with r540(4) I direct the Registrar to endorse this judgment with the delivery time of

2.00 p.m. on the 21st day of December 2007.

Solicitors:

Zindels Barristers & Solicitors, PO Box 1023, Nelson
Herman Roose, Barrister, Phone [phone], Email: [email protected]

M I Koya, Barrister, PO Box 47 228, Ponsonby, Email:  [email protected]

R G Marshall, Crown Solicitor, PO Box 42, Nelson