R v McMillan

[2021] NZHC 2118

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CRI-2019-085-001094

[2021] NZHC 2118

THE QUEEN

v

KENNY LESLIE McMILLAN

Hearing:	13 August 2021
Appearances:	G J Burston for the Crown M Pecotic for Mr McMillan
Sentencing:	13 August 2021

SENTENCING NOTES OF GWYN J

Introduction

[1]    Kenny Leslie McMillan, you appear for sentence on nine charges in total: four charges of possession of methamphetamine for supply;1 four charges of supplying methamphetamine;2 and one charge of failing to carry out obligations in relation to a computer system search.3

[2]    In sentencing you today, I apply the Sentencing Act, which sets out the purposes and principles of sentencing. The purpose of sentencing in your case is to hold you accountable for the harm you have done to the community through your offending; to promote a sense of responsibility for, and acknowledgment of, that harm;

1      Misuse of Drugs Act 1975, s 6(1)(f) and (2)(a); maximum penalty life imprisonment.

2      Section 6(1)(c) and (2)(a); maximum penalty life imprisonment.

3      Search and Surveillance Act 2012, s 178; maximum penalty three months’ imprisonment.

R v McMILLAN [2021] NZHC 2118 [13 August 2021]

to denounce and deter the criminal conduct; to protect the community; and to assist in your rehabilitation and reintegration into society.4

[3]    I will first set out your offending, explain your personal circumstances, and set out counsel’s submissions. I will then calculate a sentence by adopting a two-step approach: first, I set a starting point based on the offending. At that stage I will talk about a case called Zhang v R, which is what we call a “guideline” judgment for offences involving methamphetamine,5 and other cases which are similar. Second, I will apply uplifts and discounts to reflect your personal aggravating and mitigating circumstances. Finally, I will consider whether to impose a minimum period of imprisonment.

The offending

[4]    All nine charges result from two police investigations into an operation that supplied  methamphetamine  in  the  Auckland  and  Wellington  regions   – Operation Superdry in relation to Wellington-based offending, and Operation Maddale in relation to Auckland-based offending. You were the main individual targeted in the Wellington-based offending. Mr James was the principal Auckland-based individual targeted by Operation Maddale and was your primary supplier.

[5]    Following a disputed facts hearing, I found the eight methamphetamine charges involved a total of 10.37 kilograms of methamphetamine.6 These charges can be broken down into three categories: the Auckland transportation phase, the carpark building phase, and the termination phase.

Auckland transportation phase

[6]    Two of the charges arise from the Auckland transportation phase – offending that occurred between December 2018 and March 2019, when you arranged for the transportation of bulk quantities of methamphetamine to Wellington from Mr James in Auckland.

4      Sentencing Act 2002, s 7.

5      Zhang v R [2019] NZCA 507, [2019] 3 NZLR 648.

6      R v McMillan [2021] NZHC 1993 at [67].

[7]    In March 2019, your co-defendants, Mr Philip, Ms Hayman and Mr Minns transported a shipment of two kilograms of methamphetamine from Mr James in Auckland to you in Wellington.7 The methamphetamine was concealed within a hidden compartment in a purpose-modified Nissan Tiida, and Mr Minns then started to drive it back to Wellington. He was stopped by Police along the way, and the car was impounded in Taupō for an unrelated driving offence. The methamphetamine was subsequently discovered by Police on 15 March 2019. This gave rise to a charge of possession for supply.

[8]    You were also charged with a representative charge of supplying methamphetamine during this period, of methamphetamine supplied after you had purchased it from Mr James by way of directing your co-defendants to make similar trips from Auckland to Wellington in purpose-modified cars, the Nissan Tiida and a Mitsubishi Lancer. I found you directed seven other similar trips between 1 December 2018 and 9 March 2019, resulting in you purchasing and then supplying a total of seven kilograms of methamphetamine.8

The carpark building phase

[9]    Five of the charges (three of supply, and two of possession for supply) arise from the carpark building phase. This is offending that occurred between March and May 2019, when you exchanged methamphetamine for cash, primarily with your co-defendant Mr Taui, in carpark buildings in Wellington (some of this was sourced from Mr James, and some was sourced from Mr O). Following a disputed facts hearing, I found you were in possession for supply, or supplied, a total of 1.352 kilograms of methamphetamine during this period.9

Termination phase

[10]   One charge of possession for supply arises from the termination phase of Operation Superdry – when executing search warrants on 2 May 2019, Police found you in possession of 18 grams of methamphetamine.10

7 At [15].

8 At [57].

9      At [62]-[63].

10 At [66].

[11]   The charge of failing to carry out obligations in relation to a computer system search also arises from the termination phase. You were arrested and the Police seized your cell phone. The Police requested you provide your passcode pursuant to s 130 of the Search and Surveillance Act 2012, but you declined to do so.

Personal circumstances

[12]   I turn now to consider your personal circumstances, based primarily on a s 27 cultural report from Dr Gilbert dated December 2020, a Department of Corrections provision of advice to courts report (PAC report) dated 9 April 2021, and an alcohol and drug assessment from Mr Nawalowalo dated 19 April 2021.

[13]   Your s 27 report notes you are of Tainui descent but have little connection to your Māori roots. You told the PAC report writer that you had a relatively stable childhood, but you told Mr Nawalowalo that you did not have a good upbringing. You were raised by both of your parents, although you report that your father was away for work a lot, and both of your parents drank heavily and were sometimes abusive.

[14]   You were sent to boarding school at age 13 because you were getting into “a little bit of trouble”. You told Mr Nawalowalo you had attention deficit hyperactivity disorder. Dr Gilbert records that you were “savagely bullied” and violence was an everyday occurrence at school, and you said there was sexual abuse but you were unable to talk to Dr Gilbert about it. Dr Gilbert explained that bullying is linked to elevated substance abuse. You told Mr Nawalowalo your time at boarding school traumatised you. It appears you became involved in sourcing drugs for older children, perhaps as a means of avoiding victimisation, which Mr Nawalowalo explained may have been the start of you developing “survival skills.”

[15]   After you left school, you began working on the Interislander ferry. During this time, drugs became a regular part of your life, and you report that by your 20s you were addicted to methamphetamine.

[16]   Your criminal history reveals you have been involved in drug dealing for nearly two decades. In 2005, you were sentenced to six years and six months’ imprisonment on a range of charges, including supplying methamphetamine as the head of a supply

chain in a disciplined operation. In 2015 you were sentenced to three years and two months’ imprisonment for drug offending in Australia, which involved possession and sale of GBL after you stepped in to do a pick-up of the drug when someone else became unavailable.

[17]   You explained to the report writers that you were drawn back into methamphetamine use following your return from Australia, and this resulted in your current offending. In terms of your addiction, the PAC report writer found your “authenticity questionable”, noting in particular that when asked how you felt when physically “coming down” off methamphetamine when first remanded in custody you stated “yeah fine”. Mr Nawalowalo also noted that although you had access to vast amounts of methamphetamine, you did not increase your level of drug use – although powerless to stop yourself dealing drugs, you did not lose control of your addiction. Mr Nawalowalo reported that “this theory is tenuous at best”. Mr Nawalowalo found that while your drug use may have precipitated your offending, the motivation to continue appears to be the money you gained. Mr Nawalowalo found your drug use was intertwined with your offending, but “probably only to a minor extent”.

[18]   You did not discuss your lifestyle prior to your arrest with the PAC report writer. With both report writers, you minimised your role in the offending, claiming that it was not on the scale that has been established, and you have been “set up” by the Police and the justice system. It is clear from the evidence that your lifestyle was lavish in the period prior to your arrest. When describing your overseas trips and accumulation of wealth to Mr Nawalowalo, you explained that you are “just very good at doing business”. Given you described yourself as a “money man”, Mr Nawalowalo said it appears you were addicted to your lifestyle, as much as to drugs.

[19]   You told Dr Gilbert you are ashamed of your offending, and you accept responsibility for it. You told the PAC report writer you feel you have let your parents down, and you did express some remorse and insight into the harm caused by your offending. However, the PAC report writer noted this remorse appeared to be more towards yourself and your predicament, rather than looking at the bigger picture of the consequences for others of your offending. They found that your “attitude appeared

to be superficial when interviewed”, you minimised your offending, it was difficult to gauge your genuineness, and you presented with a sense of entitlement.

[20]   You told Mr Nawalowalo that you wish to engage in rehabilitative programmes to help you to continue not using drugs, and you would like to do study in addiction in order to help others. Dr Gilbert also recorded that your desire to change is genuine, and you are in a strong position to make lasting changes in your life.

Submissions

[21]   I will now summarise what each of Mr Burston for the Crown, and Ms Pecotic on your behalf have said to me about how I should sentence you.

[22]Mr Burston, counsel for the Crown, submitted:

(a)a starting point for the eight methamphetamine charges of 18 years’ imprisonment is appropriate;

(b)an uplift of two years is warranted for your previous convictions;

(c)no discount for your guilty plea is available;

(d)no discount for your personal mitigating factors is available; and

(e)a minimum period of imprisonment (MPI) should be imposed.

[23]Your counsel, Ms Pecotic, submitted:

(a)a starting point for the four methamphetamine charges of 10 years’ imprisonment is appropriate;

(b)a 15 per cent discount for your guilty plea is available;

(c)a discount of 15-20 per cent is available to reflect your remorse, rehabilitation prospects, and personal circumstances; and

(d)an MPI is not necessary.

Starting point

[24]   The Court of Appeal decision in Zhang provides guidance on sentencing in methamphetamine-related cases, by establishing five sentencing bands by reference to the quantity of drugs involved.11 Based on quantity alone, your offending falls in band five, where over two kilograms attracts a sentence of between 10 years’ and life imprisonment.12  However, quantity alone does not determine the appropriate sentence

– the role you played in the operation also affects the calculation of the starting point.

[25]Ms Pecotic accepted that you played a “leading” role” in the operation:13

(a)You directed or organised the buying and selling of methamphetamine on a commercial scale. You arranged to bring commercial quantities of methamphetamine from Auckland to Wellington using others as drivers in purpose-modified cars. Your organisation was sophisticated and involved the regular use of encrypted methods of communication to avoid detection.

(b)You had substantial links to, and influence over, others in the chain of distribution. Mr Philip and Ms Hayman, sometimes with assistance from Mr Minns, undertook numerous significant car journeys between Auckland and Wellington to collect methamphetamine on your behalf. You also regularly directed others, such as Mr Stone, who acted as a driver for you and your associates and looked after your money. You continued to give orders from prison, such as requiring Mr Stone to create a timeline of events and pass on messages for you.

(c)You had close links to the original source of the methamphetamine, which  mostly  came  from  Mr James.  You  worked  closely  with   Mr James, and phone records show that you remained in contact with

11     Zhang v R, above n 5.

12 At [125].

13 At [126].

him after your arrest and his subsequent flight from New Zealand. After the cessation of supply from Mr James, you independently sourced another supplier.

(d)You expected to (and did in fact) profit substantially from your operation. The Police note that, given the amount of methamphetamine involved and its estimated sale value, your income from this offending would be in the hundreds of thousands of dollars. You owned a variety of luxury cars, a 42-foot launch, high-end watches, and you had nearly

$100,000 in cash in a safety deposit box, among other assets. You lived in a high-end apartment in central Wellington. The financial profit you appear to have made is further indication of you leading the operation, because it appears you financially benefitted from it far more than anyone else who was involved.

(e)You used a business as a cover for your methamphetamine organisation. You also used a variety of associates to obscure your assets and activities. For example, you were “loaned” the use of a bank account that belonged to someone else, to avoid detection.

[26]   I now turn to adopting an appropriate starting point. For the sake of parity, I note the starting points adopted for your co-offenders (although I emphasise that none of them had a role comparable to yours).

(a)Mr Paulo was sentenced in July 2020 on a single charge of supplying methamphetamine as a party, and Cooke J adopted a starting point of three years’ imprisonment.14

(b)Mr Stone was sentenced in March 2021 for a single charge of supplying methamphetamine, and I adopted a starting point of three years, six months’ imprisonment.15

14     R v Paulo [2020] NZHC 1797.

15     R v Stone [2021] NZHC 636.

(c)Mr Minns was sentenced in March 2021 for his role in transporting two kilograms of methamphetamine from Auckland to Wellington, and I adopted a starting point of four years, six months’ imprisonment.16

(d)Ms Hayman was sentenced in March 2021 for her role in transporting six kilograms of methamphetamine from Auckland to Wellington, and I adopted a starting point of six years’ imprisonment.17

[27]   I have also considered a number of other cases involving methamphetamine offending;18    I  consider  the  case  of  Thompson  v  R  most  similar  to  yours.19    Mr Thompson was a principal offender in an extensive and very sophisticated methamphetamine distributing network he had established. Mr Thompson was involved in supplying methamphetamine at both wholesale and retail level over a 10 month period. He arranged for others to make deliveries and receive payments, and he was constantly fielding calls or texts from lower level suppliers. The quantity of methamphetamine involved was 6.8 kilograms. The Court of Appeal upheld an 18-year starting point.

[28]   Mr Burston submitted your case is so similar to Thompson that the same starting point should be adopted for you. In particular, he noted you arranged for others to transport methamphetamine from Auckland. You used highly sophisticated methods to evade detection, including the purpose-modified cars, hiding your assets in companies and associates, and possessing identification documents (including a passport) under aliases.  You also had a high turnover rate: in the 10 weeks between

10 December 2018 and 21 February 2019 you sold seven kilograms of methamphetamine, which the Crown submitted would yield a profit of approximately
$150,000 per week; and during the seven weeks from 10 March 2019 to 2 May 2019 the Crown submitted you would have made a profit of approximately $40,000 per week.

16     R v Minns [2021] NZHC 638.

17     R v Hayman [2021] NZHC 642.

18     Berkland v R [2020] NZCA 150; Fangupo v R [2020] NZCA 484; Smith v R [2020] NZCA 221;

Chai v R [2020] NZCA 202; Prasad v R [2020] NZCA 483; R v Lidder [2020] NZHC 1738.

19     Thomson v R in Zhang v R, above n 5.

[29]   Balanced against the case of Thompson, I note the case of Fangupo v R.20    Mr Fangupo played a “moderately leading role” in a methamphetamine-dealing organisation that imported 20 kilograms of methamphetamine into New Zealand,21 for which he would have received “a lot of money”.22   The Court of Appeal lowered   Mr Fangupo’s starting point from 19 years to 17 years. The Court also referred to Berkland v R, where a 16 and a half year starting point was adopted for supplying at least 15 kilograms of methamphetamine over a six-month period in a significant role within a larger operation.23

[30]In light of these authorities, I adopt a starting point of 17 years’ imprisonment.

Personal aggravating and mitigating factors

[31]I turn now to your personal aggravating and mitigating factors.

Previous convictions

[32]   I am able to impose an uplift for your previous convictions,24 because they “are relevant as an indicator of character and culpability, or because they show the need for a greater deterrent response, or as an indicator of risk of reoffending.”25

[33]   Given the repetitive nature of this type of offending throughout your history, in particular your pattern of re-offending shortly after release from prison in 2005 and 2015, I consider an uplift is warranted. I impose an uplift of one year (just over 5 per cent) to reflect your previous convictions.

Guilty plea

[34]   I turn now to your guilty pleas.26 The Supreme Court has held that when considering discounts for guilty pleas, the Court should have regard to the degree to

20     Fangupo v R, above n 18.

21 At [42].

22 At [8].

23     Berkland v R, above n 18.

24     Sentencing Act, s 9(1)(j).

25     Orchard v R [2019] NZCA 529 at [39].

26     Sentencing Act, s 9(2)(b); Hessell v R [2010] NZSC 135, [2011] 1 NZLR 607 at [75].

which the plea facilitated the administration of justice,27 and the circumstances in which the plea was made (in particular, the timing) and what they indicate about acceptance of responsibility for the offending.28

[35]   Your trial was set to commence on 9 February 2021, and you pleaded guilty to seven of the charges on that date. You went to trial on the remaining two charges, which were the two charges related to the Auckland transportation phase – the most serious charges. Following your convictions, you disputed the quantity of methamphetamine involved, initially conceding a total amount of only 552 grams (approximately five per cent of the total amount I found was involved). I found that the evidence you gave at the disputed facts hearing was not credible.

[36]   Your pleas were at the very last moment and did not shorten the trial time required. They did little to facilitate the administration of justice. Nor did they demonstrate an acceptance of responsibility for the magnitude and seriousness of your offending. I do not consider a discount for your guilty pleas is warranted.

Personal mitigating factors

[37]    In sentencing you today, I must take into account your personal, family, community, and cultural background.29 As I have already noted,30 you experienced some instability in your childhood and report having recurring problems with methamphetamine addiction. However, there is no strong evidence of the extent of these struggles, or a causal connection between them and your offending. In particular, both the PAC report writer and Mr Nawalowalo questioned your credibility in self-reporting your drug dependency. At your disputed facts hearing, you admitted to lying in previous affidavits filed in this proceeding, and I did not find you to be a credible witness.31

[38]    I do not consider any discount for your personal mitigating factors is appropriate.

27 At [57].

28     At [57], [65].

29     Sentencing Act, s 8(i).

30     See above at [12]-[20].

31     R v McMillan, above n 6, at [38]-[44].

End sentence

[39]That results in an end sentence of 18 years’ imprionsment.

Minimum period of imprisonment

[40]   Finally, I come to the issue of whether or not to impose a minimum period of imprisonment or “MPI”. Ordinarily a defendant who is sentenced to a term of imprisonment of more than two years will be eligible to apply for parole after they have served one-third of that sentence. However, s 86 of the Sentencing Act gives the Court power to order a defendant to serve a longer minimum period of imprisonment where the possibility of parole after the normal period would mean that the sentencing principles of deterrence, denunciation and accountability, or protection of the community from the offender would not be adequately met. The Court of Appeal has confirmed an MPI may be expected in cases of recidivist or commercial methamphetamine dealing.32 The maximum MPI I can impose in your case is 10 years.33

[41]   The Crown seeks the maximum MPI given your very serious offending, the premeditation involved, the scale of your operation, the significant personal profit you made, and your history of similar offending.

[42]   There are two main factors that convince me an MPI is appropriate in your case. The first is the high degree of harm done to the community by significant methamphetamine dealing. The need for deterrence and denunciation is particularly great in that context. A significant role and knowing participation in substantial commercial scale drug offending, with the accompanying serious societal consequences, will often justify an MPI.34

[43]   Second, your previous convictions for drug dealing show a persistent pattern of dealing which is of concern to me. As I have already said, you have served two jail sentences for drug dealing, yet returned to offending very shortly after your release. I

32     Chai v R [2020] NZCA 202 at [39].

33     Sentencing Act, s 86(4).

34     Smith v R [2020] NZCA 221 at [28].

am concerned a regular imprisonment sentence would be insufficient to deter you and therefore also insufficient to protect the community from your drug dealing in the future.

[44]   On that basis I conclude that an MPI of seven years, two months (approximately 40 per cent) is appropriate given your leading role, the substantial quantities of methamphetamine involved, the fact you were motivated for profit, and your conviction history which suggests a pattern of offending.

Result

[45]   On four charges of possession of methamphetamine for supply and four charges of supplying methamphetamine, I sentence you to 18 years’ imprisonment.

[46]   On one charge of failing to carry out obligations in relation to a computer system search, I sentence you to two months’ imprisonment, concurrent.

[47]I impose a minimum period of imprisonment of seven years, two months.

[48]On the Crown’s application, I order the destruction of:

(a)all drug related utensils and paraphernalia and items including cell phones used to facilitate the drug offending; and

(b)all controlled drugs seized.

Gwyn J

Solicitors:

Crown Solicitor, Wellington