R v Rolston
[2008] NZCA 431
•22 October 2008
IN THE COURT OF APPEAL OF NEW ZEALAND
CA375/07
CA405/07
CA411/07
[2008] NZCA 431THE QUEEN
v
GREGORY PHILIP ROLSTON
SARA EMMA LYNCH
KENNY LESLIE MCMILLANHearing:19 August 2008
Court:William Young P, Hammond and O'Regan JJ
Counsel:P S Coles for Rolston
R J Stevens for Lynch
D L Stevens QC for McMillan
S K Barr for Crown
Judgment:22 October 2008 at 11.30 am
JUDGMENT OF THE COURT
AWe allow each appellant’s appeal against conviction in part. The convictions of all appellants on count 15 are quashed and we direct that acquittals be entered on that count.
B In all other respects the appeals against conviction are dismissed.
CThe appeals against sentence are dismissed and the sentences of all appellants remain unchanged.
REASONS OF THE COURT
(Given by O’Regan J)
Table of Contents
Para No
Introduction [1]
Convictions [2]
Summary of the offending [3]
Sentencing [4]
Grounds of appeal [5]
Issues [14]Were the verdicts on the methamphetamine charges
unreasonable? [16]
Should the statements of Mrs Vining have been edited? [39]Should the “crack dealer” text message have been
excluded? [67]
Should the appellants’ trial have been severed from that
of Mrs Vining? [72]
Did the Judge misdirect the jury on the ingredients of the
offence of money laundering? [77]
Was the verdict on count 15 unreasonable? [111]
Was the verdict on count 2 unreasonable? [112]
Was the verdict on count 4 unreasonable? [117]
Was the verdict on count 10 unreasonable? [122]Was the verdict on count 11 unreasonable? [127]
Was the verdict on count 13 unreasonable? [133]
Sentence appeals [136]
Result [140]Introduction
[1] The appellants appeal against conviction and sentence in relation to a number of counts on which they were convicted after a High Court jury trial. The Crown case was that the appellants were engaged in a conspiracy to supply methamphetamine but each appellant also faced charges in relation to activities in which they engaged independently of the conspiracy.
Convictions
[2] The charges on which the appellants and their co-accused Vanessa Vining were convicted are set out in convenient form in the sentencing notes of the trial Judge, Miller J, as follows:
Accused Convicted Offence Section McMillan, Lynch, Rolston Count 1: Conspiracy to supply a Class A drug (meth) ss 6(1)(c) and 6(2A)(a) Misuse of Drugs Act 1975 Lynch Count 2: Supplying a Class A drug (meth) ss 6(1)(c) and 6(2)(a) Misuse of Drugs Act 1975 McMillan Count 3: Money laundering [Not appealed] s 12B(2) Misuse of Drugs Act 1975 Lynch Count 4: Supplying a Class B drug (ecstasy) ss 6(1)(c) and 6(2)(b) Misuse of Drugs Act McMillan Count 5: Supplying a Class A drug (meth) ss 6(1)(c) and 6(2)(a) Misuse of Drugs Act 1975 Lynch Count 6: Possessing a Class A drug (MDA) ss 7(1)(a) and 7(2)(a) Misuse of Drugs Act 1975 McMillan Count 7: Supplying a Class A drug (meth) ss 6(1)(c) and 6(2)(a) Misuse of Drugs Act 1975 McMillan, Lynch Count 8: Supplying a Class A drug (meth) ss 6(1)(c) and 6(2)(a) Misuse of Drugs Act 1975 Rolston Count 9: Possessing a Class A drug (meth) for the purpose of supply ss 6(1)(f) and 6(2)(a) Misuse of Drugs Act 1975 Lynch Count 10: Supplying a Class B drug (GBL) ss 6(1)(c) and 6(2)(b) Misuse of Drugs Act 1975 Lynch Count 11: Possessing a Class B drug (GBL) for the purpose of supply ss 6(1)(f) and 6(2)(b) Misuse of Drugs Act 1975 Lynch Count 13: Supplying a Class B drug (GBL) ss 6(1)(c) and 6(2)(b) Misuse of Drugs Act 1975 McMillan, Lynch, Rolston, Vining Count 15: Money laundering s 12B(2) Misuse of Drugs Act and s 66(1) Crimes Act 1961 Lynch Count 18: Supplying a Class A drug (meth) ss 6(1)(c) and 6(2)(a) Misuse of Drugs Act 1975 Lynch Count 19: Possessing a Class A drug (meth) ss 7(1)(a) and 7(2)(a) Misuse of Drugs Act 1975 Vining Count 20: Possessing a Class A drug (meth) [Not appealed] ss 7(1)(a) and 7(2)(a) Misuse of Drugs Act 1975 McMillan Count 21: Possessing a Class A drug (meth) [Pleaded guilty-not appealed] ss 7(1)(a) and 7(2)(a) Misuse of Drugs Act 1975 McMillan Count 22: Possessing a Class A drug (meth) [Pleaded guilty-not appealed] ss 7(1)(a) and 7(2)(a) Misuse of Drugs Act 1975 McMillan Count 23: Possessing a Class C drug (cannabis) for the purpose of supply [Pleaded guilty-not appealed] ss 6(1)(f) and 6(2)(c) Misuse of Drugs Act 1975 McMillan Count 26: Possession of equipment [Not appealed] ss 12A(2)(a) and 12A(3) Misuse of Drugs Act 1975 Rolston Count 27: Receiving stolen property (8 rifles) the value of which exceeds $1,000 [Not appealed] ss 246(1) and 247(a) Crimes Act 1961 Rolston Count 28: Possessing a Class A drug (meth) for the purpose of supply ss 6(1)(f) and 6(2)(a) Misuse of Drugs Act 1975 Summary of the offending
[3] In his sentencing notes, the Judge described the offending in these terms:
[4] The charges stem from a police operation during which text messages were intercepted over a three month period ending on 28 July 2005. Voice communications were also intercepted towards the end of that period. Count 1 alleged a conspiracy to supply methamphetamine between 1 January 2005 and 29 July, when the operation was terminated with your arrests. The conspiracy involved a supply chain; Mr McMillan sourced the drug from other unknown associates and Miss Lynch acted as a go-between who delivered the drug to Mr Rolston, who appears to have retailed it or sold it to other dealers. Counts 5, and 7-9 illustrated the conspiracy in action. For example McMillan and Lynch met late on 17 July 2005. He supplied her with an unknown quantity of methamphetamine which she took to Waikanae, there meeting Rolston and delivering the drug to him. It appears that there were some 13 occasions between 8 April and 27 July when Miss Lynch met Mr Rolston, although some may have involved payments rather than deliveries, and it is evident that the frequency of the meetings increased as time went on.
[5] The conspiracy was a disciplined operation, with care taken to avoid detection. It is a notable feature that McMillan never dealt directly with Rolston. He seems to have gone to great efforts to avoid disclosing his identity as Miss Lynch’s supplier, although he did accompany her to one meeting with Rolston.
[6] On 28 July the police moved in, having learned that a large sum of cash, representing the proceeds of drug sales, was to be paid by Rolston. Miss Lynch was to pick up the cash from his property in Palmerston North, but her car was impounded. She asked Mrs Vining, her sister, to pick up the money and some methamphetamine, which Rolston was to take off what he owed. The jury acquitted Mrs Vining of supplying that methamphetamine to Miss Lynch, presumably because they were not satisfied that she knew she was carrying the drug as well as the cash. When Mrs Vining arrived at Miss Lynch’s flat at Eastbourne, McMillan called to collect the cash, or most of it. Arrests were made. He was found in possession of $39,000, of which about $3,000 was in his wallet, and Miss Lynch had $10,500. All of this money was in cash. The delivery of the money was the subject of count 15. There is evidence that payments had earlier been made on 30 June ($12,000) and 14 July ($10,000), indicating that this payment was for drugs supplied on one date, 17 July. The evidence of the money seized confirms that the operation was a substantial one; apart from that, and contrary to the Crowns written submissions, the money laundering does not add to the overall criminality since the substance of what was happening was that Rolston was paying for drugs supplied. I note that Mr McMillan says that part of the money may have been cash that he had intended to take with him as he fled, as he talked of doing in intercepted conversations. Miss Lynch’s position is that only $24,000 of the money seized on 28 July was brought from Palmerston North. I do not accept these submissions. I prefer to draw the inference that Miss Lynch was paid her share on receipt and the money found in Mr McMillan’s possession, except arguably that in his wallet, was the balance.
[7] On arrest, McMillan, Lynch and Vining were all found in possession of small amounts of methamphetamine, consistent with personal use; those are the subject of counts 19, 20 and 21. Lynch was found guilty of having supplied that to Mrs Vining; count 18. The jury must have accepted, as I have said, that Mrs Vining did deliver methamphetamine to Miss Lynch along with the money, and that Miss Lynch supplied her with some of it by way of a reward.
[8] The arrests led to a number of other charges resulting from property searches. At Mr McMillan’s Upper Hutt home the police found a small amount of methamphetamine, again consistent with personal use; count 22. In his lock up at Seaview the police found a total of approximately 1kg of cannabis, packaged in one large bag and a number of smaller deal bags; count 23. He pleaded guilty to that count at the end of the Crown case. The cannabis had a street value of about $8,300. A firearm was found but there is no evidence as to its provenance, and a charge of unlawfully possessing it is to be tried separately, so I do not take it into account.
[9] Count 26 concerned a large quantity of hydroponic equipment found at a property at Waikanae that is owned by the McMillan family. It is consistent with a large scale cannabis growing operation. The equipment was not in use; it appears to have been warehoused at the property. McMillan’s defence was that there was no evidence that he intended that it be used to grow cannabis.
[10] The search of Rolston’s property at Palmerston North on 29 July resulted in the discovery of stolen firearms which he was found guilty of receiving; count 27. Also found were cash of $2,440, digital scales, cellphones and SIM cards, and snaplock bags, along with a surveillance system.
[11] No commercial quantities of methamphetamine were found, and faced with compelling evidence of a conspiracy, the defence at trial was that the conspiracy involved not methamphetamine but cannabis. Mr McMillan, Miss Lynch and Mr Rolston still maintain that stance. The jury were plainly satisfied beyond reasonable doubt that the drug involved was indeed methamphetamine. In my view, that conclusion was open to them.
[12] The intercepted communications also led to a number of charges against McMillan and Lynch relating to offences committed before their arrests. Count 3, a charge of money laundering, related to two paintings, a Louise Henderson and a Ralph Hotere, which McMillan bought using cash on 28 April 2005.
[13] The intercepted communications, and a covert search of Miss Lynch’s property earlier in July, revealed that Miss Lynch was a frequent user of a number of drugs, and was also supplying drugs to others, independently of the conspiracy and her relationship with McMillan. Counts 2, 4, 6 and 10-11 and 13 involve supply of methamphetamine, supply of ecstasy, possession of MDA, supply of GBL and possession of GBL for supply. The methamphetamine was supplied to her sisters the previous Christmas, while I accept that the MDA was for personal use. The supply and possession for supply charges relate to GBL that she procured from her supplier, Mr Antonopolous, and shared with a friend, Mr Mihos. The supply of ecstasy was a commercial transaction. There is evidence that the buyer paid her about $7,000 over a period of three months, although some of it appears to have been for transactions other than those charged.
[14] Mr Rolston was on bail for other offences following the search of his property on 29 July, and there was a further search of his property on 18 August. There he was found with 12.4g of P, with a purity of 80%, and $5,000 in cash, together with electronic scales and other drug dealing paraphernalia. The jury – in my view, inevitably – rejected his defence that he had the drug to feed a raging addiction to methamphetamine. I accept that this charge was independent of the conspiracy and so does not reflect on the other prisoners.
Sentencing
[4] Mr McMillan was sentenced to a total of six and a half years imprisonment, Ms Lynch to four years three months and Mr Rolston to six years three months. Mrs Vining was sentenced to 150 hours community work with supervision. She does not appeal against conviction or sentence.
Grounds of appeal
[5] All of the appellants appeal against conviction in relation to the counts which are referable to the alleged methamphetamine selling conspiracy. In the case of Mr McMillan, those are counts 1, 5, 7 and 8. In the case of Ms Lynch they are counts 1 and 8 and in the case of Mr Rolston they are counts 1 and 9. These appeals are founded on two separate but related grounds, namely:
(a)That the verdict of the jury was unreasonable, because the jury could not have been satisfied on the admissible evidence that the conspiracy related to methamphetamine, rather than to cannabis;
(b)That a miscarriage of justice occurred because the Judge refused to edit two out of court statements made by Mrs Vining in which she indicated that she believed that Mr McMillan, Ms Lynch and Mr Rolston were involved in a methamphetamine dealing conspiracy. Those statements were admissible against Mrs Vining but not admissible against the three appellants. They allege that the Judge erred in concluding that the prejudice to them from its admission did not outweigh its probative value against Mrs Vining and that the prejudice could be prevented by judicial directions to the jury. The Judge should therefore have ordered the Crown to edit out references which were damaging to the appellants’ defences.
[6] Mr McMillan makes a similar argument in relation to a text message by Ms Lynch to him, in which she describes Mr McMillan as a “crack dealer”. That message was admissible against her but not against him, and Mr McMillan argues that editing of this ought to have occurred on the same basis as outlined above.
[7] Ms Lynch pursues the same arguments in her appeals against two counts of supplying methamphetamine which are outside the alleged conspiracy. These are counts 2 and 18. Mr Rolston also faced a count of possession of methamphetamine for supply (count 28). His appeal on this count is based on the ground set out at [5](b) but he does not dispute that the substance to which this count related was methamphetamine.
[8] In a related argument, Mr Rolston argues that Mrs Vining’s trial should have been severed from that of Mr Rolston in relation to counts 1, 9, 15 and 28. The reasons for this are essentially the same as those put forward in support of the argument that Mrs Vining’s statement should have been edited. No application for severance was made before the trial or during the trial.
[9] All of the appellants appeal against their convictions on count 15 (money laundering) on the basis that the Judge misdirected the jury on the legal ingredients of the offence of money laundering. Ms Lynch also appealed against the conviction on count 15, on the grounds that the verdict was unreasonable having regard to the evidence and that the Judge erred in failing to grant an application for discharge under s 347 of the Crimes Act 1961.
[10] In addition, Mr Rolston’s appeal on count 15 is also founded on the failure to edit Mrs Vining’s statement.
[11] Ms Lynch appeals against her convictions on count 2 (supplying methamphetamine) and count 4 (supplying ecstasy) on the basis that the jury’s verdict was unreasonable, and that the admissible evidence did not prove that what was supplied was methampethamine or ecstasy respectively. She also appeals against her convictions on counts 10 and 13 (supplying gamma-butyrolactone, known as GBL) on a similar basis, and against her conviction on count 11 (supplying GBL) on the basis that the evidence does not disclose whether she was the seller or the buyer in relation to that supply, and that the jury’s verdict is therefore unreasonable. Ms Lynch also appeals against her convictions on counts 2, 4, 10, 11 and 13 on the basis that the Judge erred in failing to grant applications for discharge in respect of these counts under s 347 of the Crimes Act.
[12] Counsel for Ms Lynch, Mr R Stevens, accepted there was no right of appeal against a failure to discharge an accused person under s 347 of the Crimes Act. We therefore say no more about that aspect of Ms Lynch’s appeal. The arguments made in support of that ground also supported the unreasonable verdicts ground of appeal.
[13] The sentence appeals are dependant to some extent on the outcome of the conviction appeal. We will address these after our discussion of the conviction appeals.
Issues
[14] The issues for determination in respect of the conviction appeals are:
(a)Was the jury’s verdict in relation to the charge of conspiracy to supply methamphetamine and the counts of supplying methamphetamine unreasonable, in that the admissible evidence did not establish that the drug being supplied was methamphetamine rather than cannabis?
(b)Was there a miscarriage of justice because the Judge did not order the Crown to edit Mrs Vining’s out of court statements?
(c)Was there a miscarriage of justice because the Judge did not exclude the evidence relating to Ms Lynch’s text message to Mr McMillan calling him a “crack dealer”?
(d)Was there a miscarriage of justice because Mrs Vining’s trial was not severed from the trial of Mr Rolston in relation to the methamphetamine conspiracy counts?
(e)Did the Judge misdirect the jury on the ingredients of the offence of money laundering, thus rendering the convictions on count 15 unsafe?
(f)Was the verdict of the jury on count 15 (money laundering) unreasonable?
(g)Was the verdict on count 2 (supply of methamphetamine by Ms Lynch) unreasonable?
(h)Was the verdict on count 4 (supply of ecstasy by Ms Lynch) unreasonable?
(i)Was the verdict on count 10 (supply of GBL by Ms Lynch) unreasonable?
(j)Was the verdict on count 11 (supply of GBL by Ms Lynch) unreasonable?
(k)Was the verdict on count 13 (supply of GBL by Ms Lynch) unreasonable?
[15] We will deal with these issues in the order set out above.
Were the verdicts on the methamphetamine charges unreasonable?
[16] All appellants argued that the convictions on the counts referable to the alleged methamphetamine selling conspiracy were unreasonable (s 385(1)(a) of the Crimes Act). The test to be applied in these circumstances was recently confirmed in R v Owen [2008] 2 NZLR 37 at [5](SC) as follows:
A verdict will be unreasonable if, having regard to all the evidence, the jury could not reasonably have been satisfied to the required standard that the accused was guilty.
[17] At the trial, Mr Rolston and Mr McMillan accepted that there was a conspiracy involving them and Ms Lynch to sell drugs, but claimed that the drug involved cannabis not methamphetamine. Ms Lynch did not admit the existence of a conspiracy but realistically accepted that the evidence supported some illicit activity between her and Mr Rolston and Mr McMillan. In this Court all three argued that the verdict was unreasonable because, although there was evidence which established the existence of a drug-selling conspiracy, the Crown had not proved beyond reasonable doubt that the drug involved was methamphetamine, rather than cannabis as maintained by the appellants.
[18] Counsel for Mr McMillan, Dr D Stevens QC, addressed this ground of appeal and, with some minor additions, his argument was adopted by counsel for Mr Rolston and Ms Lynch.
[19] Dr Stevens said that the evidence gave a stronger basis for concluding that the conspiracy related to cannabis than to methamphetamine. Even if that were not so, the Crown had not excluded the possibility that the conspiracy related to methamphetamine, so that the jury should have found that there was a reasonable doubt about that.
[20] There was no dispute that Mr McMillan and Mr Rolston dealt in cannabis and, in Mr McMillan’s case, he pleaded guilty to a charge relating to possession of cannabis for the purpose of supply (count 23). The Crown’s position was that evidence relating to cannabis dealing reflected the fact that both Mr Rolston and Mr McMillan dealt in cannabis separately from the conspiracy, but that they also dealt in methamphetamine, and that this was the drug to which the conspiracy related.
[21] When Mr Rolston’s property was searched on 28 July 2005, no methamphetamine was found. However, cannabis and indicia of drug dealing, such as electronic scales and snaplock bags, were found. This was said to support the case that the dealing between the appellants involved cannabis not methamphetamine. The Crown disputed that the absence of methamphetamine at Mr Rolston’s property on 28 July 2005 should lead to that conclusion. As Mr Barr pointed out, the termination of the police operation on 28 July 2005 coincided with a payment made by Mr Rolston for a supply from Ms Lynch that had occurred ten days before. So if that supply had been methamphetamine, it was not necessarily significant that Mr Rolston had already onsold that methamphetamine before the termination of the police operation and therefore did not have any of it in his possession.
[22] Mr McMillan was found in possession of hydroponic plant growing equipment, and was convicted of possessing that equipment with the intention of cultivating cannabis (count 26). A magazine about cannabis was also found at his property.
[23] In addition, Mr McMillan had a secure storage facility at Seaview, which was the subject of two separate police searches. The first was a covert search on 21 July 2005, some days before the termination of the police operation. The second was on 28 July 2005, when the operation was terminated. On both occasions no methamphetamine was found, but significant quantities of cannabis were found: a pound-weight bag, seven snaplock bags containing an ounce of cannabis and 206 grams of cannabis.
[24] Those factors support the (undisputed) proposition that Mr McMillan was a cannabis dealer. But that was not inconsistent with the Crown case (see [20] above).
[25] Dr Stevens pointed to two matters which linked cannabis dealing to the conspiracy more directly. The first was that the type of snaplock bags found in Mr Rolston’s property were the same as the type of snaplock bags found at Mr McMillan’s storage facility. It was argued that this increased the likelihood that the cannabis found at Mr Rolston’s property was supplied by Mr McMillan. We agree this provides some support for the defence theory.
[26] The second was there was evidence that, approximately an hour before the supply from Mr McMillan to Ms Lynch on 11 June 2005, Mr McMillan had visited the storage facility at Seaview. Counsel submitted that this provided a basis to infer that Mr McMillan retrieved the substance which he supplied to Ms Lynch from the storage facility. He submitted that, because the police found only cannabis in the storage facility on 21 July 2005 and 28 July 2005, the substance supplied by Mr McMillan to Ms Lynch must have been cannabis.
[27] We accept that is one possibility, but it is by no means the only one. The fact that the police did not find methamphetamine when they searched the storage facility in late July does not provide any basis for concluding that there was no methamphetamine at the facility one month earlier on 11 June 2005. And although it could be inferred that Mr McMillan’s visit to the storage facility prior to making a supply to Ms Lynch was to retrieve the substance that he was to supply to her, it was not a necessary inference.
[28] The Crown case was largely founded on evidence from intercepted telephone conversations and text messages. As is customary in drug dealing cases, the conversations and messages featured the use of code language rather than language expressly referring to drugs. Expert evidence was led by the Crown from Detective Sergeant Hansen, a police officer with extensive experience in investigating drug offending. He gave evidence as to the use of code. In particular he said that:
(a)Methamphetamine was commonly known as P, ice, and pure;
(b)The codes used by drug dealers to describe drugs are often either the first letter of the word (e.g. “H” for heroin) or a word beginning with the same first letter (e.g. “hammer” for heroin). He gave an example of an operation where the term “pork” had been used as code for pure methamphetamine. He said codes were also used to describe weights for methamphetamine – “G” or “G bag” for a gram and “O” for an ounce. He also said that the term “quarter pounder” was used to denote a quarter of a gram of methamphetamine.
[29] The Crown relied on a number of references in the text messages to words beginning with “p” which the Crown said denoted pure methamphetamine. We do not intend to set out the text messages on which the Crown relied, but the words which were used in those messages included pictures, Peter, Phil, policies, petrol, papers and photos. In some cases the word used may have had its natural meaning: for example Mr Rolston had an insurance business so that in some contexts “policies” could conceivably have been referring to insurance policies. And Mr McMillan had purchased art works as a method of money laundering (which led to his conviction in count 3), which could account for some of the references to “pictures”. Nevertheless, it was clear that in a number of cases these words beginning with “p” referred to the substance in which the appellants were dealing. The Crown contended that, based on the evidence of Detective Sergeant Hansen, the jury should conclude that the reference was to pure methamphetamine.
[30] Dr Stevens argued that references to words beginning with “p” could have been to cannabis, because cannabis is sometimes known as “pot” and so the abbreviation may have referred to that. He also suggested they could have referred to “product”. Alternatively he argued that the words beginning with “p” could have referred to pounds, and said that cannabis is the only drug which is traded in pounds rather than grams or ounces. It is notable, however, that it was not put to Detective Sergeant Hansen that pot or product were words which were in current use among drug dealers to describe cannabis, or that words beginning with “p” were commonly used as substitutes for pounds. There was, therefore, no evidence before the jury on these points, but rather they were asked to deduce this from common knowledge as to the use of the term pot to describe cannabis. Dr Stevens suggested that if “g” meant grams and “o” meant ounces, then the jury could deduce that “p” meant pounds. That deduction may have been open, but in this case there were no references to the letter “p” on its own in the intercepted communications. Rather the code involved words beginning with “p”. There was no evidence that words beginning with “o” meant ounces, but rather that the initial “o” did.
[31] In our view the jury was entitled to infer, based on the evidence of Detective Sergeant Hansen, that the coded references to words beginning with “p” were to pure methamphetamine. Dr Stevens argued that the possibility that it was pot was equally likely, and that the jury could not infer that it was methamphetamine because that involved speculating between those two possibilities. We do not accept that submission. The evidence led at trial supported the inference that the words beginning with “p” denoted pure methamphetamine, and this was one of the matters which the jury could take into account in assessing the Crown case.
[32] There were a number of other aspects of the Crown case which it argued demonstrated that the substance was methamphetamine. We will refer to these briefly.
[33] The Crown relied on an intercepted conversation between Mrs Vining and Ms Lynch which was recorded just prior to the termination of the police operation, after Mrs Vining had delivered money and methamphetamine from Mr Rolston to Ms Lynch. There are references in the discussion to “a quarter” which, on the basis of Detective Sergeant Hansen’s evidence, the Crown said was a reference to a quarter gram of pure methamphetamine. The evidence was that Ms Lynch had sought to purchase a quarter gram of methamphetamine from Mr Rolston and that Mrs Vining was to deliver from Mr Rolston to Ms Lynch, which she did. The Crown case was that Ms Lynch was supplying Mr Rolston with methamphetamine in the course of the conspiracy, but on that occasion sought to source a small amount of methamphetamine from Mr Rolston. This was a reverse of the order of transactions within the conspiracy as alleged by the Crown, in which the principal was Mr McMillan, Ms Lynch was the go between and Mr Rolston was the purchaser.
[34] During the discussion between Mrs Vining and Ms Lynch, Mrs Vining recounted her discussion with Mr Rolston. Ms Lynch asked Mrs Vining:
Did you say um take it off the …
To this Mrs Vining replied:
… and I said take it off what you owe.
[35] The Crown said this indicated that the product being purchased by Ms Lynch from Mr Rolston (methamphetamine) was the same product as that which she had supplied him: otherwise it would have been necessary to agree to a price for the methamphetamine to be supplied so that that agreed price could be deducted from the amount of money Mr Rolston owed to Ms Lynch. There was no other evidence of an agreed price for the methamphetamine. That was a possible inference, but by no means an irresistible one.
[36] The Crown said that the amounts of money found at the termination of the operation indicate dealing in a high-priced drug, rather than cannabis which is a comparatively low-priced drug. Crown counsel pointed to the circumstances of the dealing between Ms Lynch and Mr Rolston under the conspiracy, which involved handing over of drugs in a service station. If the drug was methamphetamine, the volume would be small – one or two ounce-weight snaplock bags. On the other hand, if the drug supplied was cannabis, the amount involved would have to have been several supermarket bags full of cannabis. The Crown submitted that this was an implausible scenario and the jury was entitled to conclude that Ms Lynch and Mr Rolston would not have handled such large quantities of drugs in a semi-public environment. In an intercepted conversation just before the supply by Mr McMillan to Ms Lynch on 17 July 2005 (just preceding her on-supply to Mr Rolston at the service station), Mr McMillan told Ms Lynch that he would deliver the “pictures” to her on a “bike”. Again this suggests a large quantity of cannabis was not what was being delivered.
[37] It was common ground that the appellants were users of methamphetamine. Ms Lynch and Mrs Vining were found in possession of small amounts of methamphetamine on 28 July 2005, which appeared to have been the methamphetamine delivered by Mrs Vining from Mr Rolston to Ms Lynch. Mr McMillan was also found in possession of two small amounts of methamphetamine on 28 July 2005. Mr Rolston accepted that the drug which was the subject of count 28 was methamphetamine. However, that count related to Mr Rolston being in possession of 12.4 grams of methamphetamine on 18 August 2005 which was three weeks after the termination of the police operation and clearly did not involve Ms Lynch or Mr McMillan.
[38] In our view the evidence for the Crown supporting the proposition that the conspiracy related to methamphetamine was a sufficient basis for a reasonable jury to accept that the Crown had proved beyond reasonable doubt that the substance involved was methamphetamine. The defence case that it was cannabis was properly explained to the jury by Miller J, and there was no dispute that the summary he gave of the defence case was fair. Ultimately it was for the jury to determine whether they accepted the Crown case that the text message references to coded words referred to methamphetamine, on the basis of the expert evidence, and in the light of the other aspects of the Crown case which indicated methamphetamine dealing. We agree with the assessment of Miller J at [11] of his sentencing notes (quoted at [3] above) that the jury’s conclusion that the Crown had proved beyond reasonable doubt that the conspiracy related to methamphetamine was a finding that was open to them. This ground of appeal therefore fails.
Should the statements of Mrs Vining have been edited?
[39] As noted earlier, Mrs Vining was charged only in relation to the events that occurred on the last day of the police operation, and the Crown did not charge her with being a party to the conspiracy. Mrs Vining was interviewed by a police officer at the termination of the police operation and the questions and answers were recorded in writing. She also agreed to a video interview with the police at the time of her arrest. The police officer gave evidence of the questions and answers at the initial interview and the videotaped interview was played to the jury in the course of the Crown case against her. In the course of the video interview, she made a number of comments about the existence of the conspiracy between Mr Rolston, Ms Lynch and Mr McMillan and indicated to the police that the conspiracy involved dealing in methamphetamine. In particular she said that:
(a)Mr Rolston dealt in drugs, and specified marijuana and methamphetamine;
(b)Mr Rolston and Ms Lynch did business together, and that this involved dealing in “meth”;
(c)Ms Lynch also dealt with Mr McMillan (Ms Lynch’s former partner) and that “the deal between [Ms Lynch] and [Mr Rolston] is happening because of [Mr McMillan]”;
(d)All three of Mr Rolston, Ms Lynch and Mr McMillan were involved, though Mr McMillan and Mr Rolston did not actually deal or interact with each other;
(e)Mr McMillan was “at the top of the chain” and that both Mr Rolston and Mr McMillan were “bigger fishes” than Ms Lynch;
(f)The drugs come from Mr McMillan to Ms Lynch who on-sold them to Mr Rolston.
[40] She also made statements about Ms Lynch’s use of methamphetamine.
[41] The Crown applied for a ruling before the trial that Mrs Vining’s responses in her video interview were admissible evidence against Mr McMillan, Ms Lynch and Mr Rolston. Miller J rejected the Crown’s argument, based on R v Hayter [2005] 1 WLR 605 (HL). He ruled that the video interview answers were admissible only against Mrs Vining herself.
[42] Counsel for Mr McMillan, Ms Lynch and Mr Rolston applied for an order requiring the Crown to edit out of Mrs Vining’s video interview material which was prejudicial to the defences of Mr McMillan, Ms Lynch and Mr Rolston. These applications were dealt with together, though the excisions sought by each applicant differed in some respects and, in some cases were conflicting in that one party wanted material excised which another wanted left in. Taken together, the proposed excisions were extensive.
[43] The Crown resisted the applications. It submitted that all of Mrs Vining’s interview was admissible against her and it should not be stopped from putting that evidence before the jury. The material which the appellants sought to excise was relevant to the Crown’s case against Mrs Vining on the money laundering charge, because it demonstrated that she knew that the package which she delivered from Mr Rolston to Ms Lynch contained money derived from drug dealing. The Judge accepted that was so, and that the appellants accept that the Judge was correct to do so.
[44] The Crown argued that there was no discretion for a trial Judge to exclude statements that were admissible against an accused person at the instance of a co-accused. In his judgment on this application, (HC WN CRI 2005-085-5104 10 May 2007) the Judge said:
[50] I am prepared to assume that the trial Judge might excise part of the statements of an accused over the Crown’s opposition, but it is difficult to envisage circumstances in which that would be done where the evidence was genuinely probative of the Crown’s case. If the Crown was unwilling to excise the offending passages and their inclusion resulted in a significant degree of prejudice to other accused, the remedy would lie in the Court’s discretion to award a severance. This case would not meet the test for severance. The Crown case is that the accused were engaged in a joint enterprise, and the evidence is clearly interwoven, while the risk of prejudice to other accused is not in my view substantial. Mrs Vining’s statements about their roles are mostly, as the transcript makes clear, speculative or second hand, and I do not think that the nature of the statement is such that the jury would be unable to put it to one side when considering the other accused.
[45] In this Court, all counsel argued that the Judge had been wrong in his assessment of the degree of prejudice to Mrs Vining’s co-accused. They said this led to the Judge underestimating the need for the editing of Mrs Vining’s statement. They argued that there was sufficient probative evidence in the remainder of the statement (after excisions were made) to enable the Crown to establish that Mrs Vining knew that the package she carried from Mr Rolston to Ms Lynch was the proceeds of drug dealing. They argued that the Judge was wrong to see severance as the primary remedy for such prejudice, although counsel for Mr Rolston separately argued that severance ought to have occurred in this case, even though none of the appellants sought it. We will deal with that ground of appeal later.
[46] Dr Stevens said the Judge was wrong to conclude that directions to the jury would adequately deal with any prejudice to Mrs Vining’s co-accused at the trial. He accepted that the directions given by the Judge in his summing up were clear and had no complaint about the form of the direction. We record that the Judge directed the jury as follows:
I told you at the beginning of the trial that a statement made by one accused to the police out of court is admissible against that accused only. In particular, the statement made by Mrs Vining to the police is evidence against her and her alone. What she said about the other accused in her statement is relevant to her own state of mind but it is not admissible against them. The reason for that, as I explained, is one of simple fairness. The other accused were not present when she made her statement, and they were in no position to challenge it. So when you consider the case against them you must put it to one side. If you fail to do that the accused will not receive a fair trial and it is your job and mine, as judges of the facts and the law respectively, to see to it that they do.
[47] The Judge had already directed the jury that Mrs Vining’s evidence was admissible only against her before evidence was given of her first interview with the police and again before her video interview was played to the jury.
[48] Later, when summarising Mr McMillan’s defence case, the Judge referred to the fact that Dr Stevens had told the jury that what Mrs Vining said in the interview was not only inadmissible against Mr McMillan but also guesswork on her part. The Judge added “again, he was right to say it is inadmissible, as I have already explained”.
[49] The Judge also marshalled for the jury the admissible evidence for the Crown in relation to each charge against each accused, in a way which highlighted for the jury the admissible evidence which was available in relation to each charge.
[50] Although counsel for the Crown, Mr Barr, argued there was no jurisdiction to edit a statement of an accused at the instance of a co-accused, we are satisfied that there is such a discretion as Miller J also found. Dr Stevens relied in particular on the clear indication given by Lord Steyn in Lobban v The Queen [1995] 1 WLR 877 at 886 (PC) that the discretion of a trial Judge to cause part of a written statement made by a defendant, which is adduced in evidence by the prosecution, to be edited in the interest of justice is wide enough to deal with the present situation. Lord Steyn said that there was no discretion to edit a statement if the accused person who made the statement objects, but that was not a problem in the present case as Mrs Vining (not surprisingly) was content to have the statement edited.
[51] The possibility of editing a statement in a similar situation was mentioned by this Court in R v Smith [2007] NZCA 26 at [10]. In earlier cases, the possibility of editing in these circumstances has been countenanced by this Court: R v McCallum and Woodhouse (1988) 3 CRNZ 376 (CA) and R v Genet CA146/83 10 April 1984. In the former case, Hardie Boys J said the discretion was to be exercised sparingly, and in the latter case the Court said it would be used only “in rare cases”. Dr Stevens also relied on the decision of Eichelbaum J in Re an Application by Clarke and Ors (1985) 1 CRNZ 683 (HC) and the decision of Penlington J in R v Hanifah [2002] 3 NZLR 555 at 556 (HC).
[52] We accept that the jurisdiction exists, and the question is therefore whether it ought to have been exercised in this case.
[53] Dr Stevens argued that the prejudice was far greater than the Judge said it was. He went so far as to say that the verdicts on the charges relating to the methamphetamine conspiracy were able to be explained only by concluding that the jury must have taken Mrs Vining’s statement into account when considering the case against Mr McMillan. If that were so, of course, the ground of appeal that the verdicts were unreasonable having regard to the evidence would succeed, and the present discussion, would be academic.
[54] We accept that the evidence of Mrs Vining was, however, unhelpful to the defence which was being run by the other accused, that the conspiracy related to cannabis not methamphetamine. It is notable, however, that the excisions which the appellants sought went far beyond the references in Mrs Vining’s statements to methamphetamine, and included any reference to the nature of the conspiracy, who was selling drugs to whom and so on. Dr Stevens said that it was unrealistic to conclude that, given the nature of Mrs Vining’s statements relating to the other accused, the jury would have been able to put them to one side as the Judge directed them to do. He said the Crown would not have been disadvantaged if the excisions sought by the appellants had been made.
[55] Dr Stevens addressed us extensively on the effectiveness of directions given to juries to disregard inadmissible evidence and, indeed, the ability of juries to follow directions generally, particularly directions not to make enquiries outside the courtroom. He presented material to the Court which he said established that it could not be assumed that a judicial direction to a jury would overcome the prejudice that the jury may feel towards the appellants in allowing them to hear Mrs Vining’s statements.
[56] The material which Dr Stevens put in front of us in this regard can be summarised as follows:
(a)Acknowledgments that jury directions may not successfully overcome prejudice of disclosure of inadmissible evidence in Arthurton v The Queen [2005] 1 WLR 949 at [30] (PC), Murphy v The Queen (1989) 167 CLR 94 at 98-99 and 101 (HCA), R v Sims [1946] KB 531 at 536 and DPP v Boardman [1975] AC 421 at 459 (HL). The possibility that jury directions would not be effective was also countenanced in the decision of this Court in R v Fenton CA223/00, CA299/00 14 September 2000 at [26];
(b)The decision of the Supreme Court of the United States in Bruton v United States 391 US 123 (1968) which recognised that “there are some contexts in which the risk that the jury will not, or cannot, follow instructions is so great, and the consequences of failure so vital to the defendant, that the practical and human limitations of the jury system cannot be ignored” (at 484 – 485);
(c)The contrary conclusion reached in the New Zealand Law Commission Juries in Criminal Trials (NZLC PP37 vol 2 1999) at [7.11] that jury decision making in New Zealand was “characterised by a very high level of consciousness in following the instructions the jurors were given”. Dr Stevens submitted that this conclusion was questionable because, in the 48 jury trials which were the subject of the Law Commission study, there were five cases in which the jury had made external enquires about factual matters despite the trial judge’s direction not to do so;
(d)A New South Wales study, Chesterman, Chan and Hampton Managing Prejudicial Publicity: An Empirical Study of Criminal Jury Trials in New South Wales (Law and Justice Foundation of NSW, 2000). That involved a study of 41 jury trials, and in five of those jurors had made out of court enquiries, disregarding the Judge’s directions to the contrary;
(e)An affidavit from Professor Maryanne Garry of the School of Psychology, Victoria University of Wellington, in which she concludes that what she describes as “limiting instructions” (a direction to a jury to ignore information) sometimes work but sometimes do not. She opines that any assumption that limiting instructions work reliably is ill-founded. That conclusion is based in part on an unpublished study “In Search of a an Anti-Elephant: Confronting the Human Inability to Forget Inadmissible Evidence” by Linda Demaine, Associate Professor of Law, Affiliate Professor of Psychology, Arizona State University, a copy of which is appended to Professor Garry’s affidavit. That article calls into question the effectiveness of directions to juries to disregard information which has been placed before them, and suggests that a more effective way of dealing with this problem is to “neutralise” the information by instructing jurors to adjust their perceptions to account for the fact that they have been exposed to biasing information. In essence, this would involve a judge directing jurors that they be aware that information which has been heard, but which is inadmissible and to be disregarded, may bias judgement. The jurors would be told that there was a very real danger that the inadmissible information could lead the jury to the wrong verdict unless they account for its improper influence on their judgement by adjusting their verdict accordingly. An experimental study carried out at Arizona State University indicated that a neutralising instruction in these forms, or an elaborate instruction to disregard the evidence (which instructs jurors that they must disregard it in very clear terms and to put the information out of their minds completely and not give it another thought) were more effective in negating the impact on inadmissible evidence on verdicts than a direction lacking these elements;
(f)Anecdotal accounts of instances in New Zealand and other jurisdictions where jurors did not comply with judicial directions, or where commentators or judges indicated that they thought such directions had been or could be disregarded.
[57] If taken to its logical conclusion, the effect of Dr Stevens’ submission would be that jury trials are unfair because the integrity of the decision making process relies on jurors accepting judges’ directions, including those on fundamental matters such as the onus and burden of proof. However, Dr Stevens did not seek to challenge the jury system itself, but rather to support the proposition that no assumption can be made that a judicial direction to disregard inadmissible evidence will be effective and that a judge must consider “whether there is a real risk that it might not be effective”.
[58] In the present case he said that the jury would have “found it impossible to resist being influenced by Mrs Vining’s statement that [Mr McMillan] dealt in methamphetamine and by the other incriminating assertions that the appellants were involved in a system of drug dealing methamphetamine of which Mr McMillan was the top of the chain”.
[59] We have considered the information cited by Dr Stevens (summarised above), and concluded that it does not advance the position from that outlined in R v Fenton where Tipping J summarised the law as follows (at [25] – [26]):
When given proper directions juries are to be regarded as capable in most cases of understanding and applying the distinction between admissible and inadmissible evidence.
There may, however, be occasions when the weight of the inadmissible evidence, against that of the admissible, makes it unfair to an accused, notwithstanding the trial Judge’s directions, to expect the jury to act only on the evidence which is admissible. Similarly, there may be cases in which the difficulties in isolating the admissible from the inadmissible make it unfair to expect the jury to undertake that exercise.
[60] Fenton was a severance case, so the alternatives being considered there were the possible prejudice of inadmissible evidence being heard by the jury and the possibility of holding separate trials for the accused. In this case the issue is whether statements should be edited, thus depriving the Crown of the ability to put before the Court otherwise probative and admissible evidence against one accused. Nevertheless Fenton is a clear statement by a Full Court in a recent case about the effectiveness of jury directions, and we do not see any proper reason to depart from it on the basis of the material put before us in this case.
[61] The first issue in the present case is: is this a case where the weight of the inadmissible evidence against that of the admissible made it unfair to expect the jury to act only on the admissible evidence? If the answer is “yes”, the question on appeal is whether a miscarriage of justice resulted. For a trial judge, the next issue would be whether editing the offending material out of the video interview or severance of Mrs Vining’s trial would be the appropriate response.
[62] An example of a case where the potential prejudice was held to be so great that directions could not cure it is R v Brown (1987) 3 CRNZ 132 (CA). Recent examples where the reverse was the case is R v Peters and Southon CA430/05 and CA431/05, 29 March 2006 (pre-trial) and [2007] NZCA 180 (post-trial) and R v Smith and Viliamu [2008] NZCA 266. It is notable, however, that one of the reasons for granting severance in Brown was the Court’s view that the evidence of the co-accused which was said to be prejudicial could still be placed before the Court at a separate trial of Mr Brown because the co-offender could be dealt with first, and then called as a Crown witness at Mr Brown’s trial. However, this had the benefit that the co-offender could be subject to cross-examination at the separate trial, which would not be likely to be possible at a joint trial. In Smith and Viliamu, this Court rejected arguments that were very similar to those put forward by Dr Stevens in the present case.
[63] We do not see any reason to differ from the Judge’s assessment of the prejudicial effect of Mrs Vining’s statements about the conspiracy. As the summary of the defence case by the Judge in his summing up makes clear, neither Mr Rolston nor Mr McMillan disputed that a drug selling conspiracy existed, and it appears that Ms Lynch’s case involved only a faint resistance to that proposition. In those circumstances it can hardly be said that statements made by Mrs Vining about the existence of a conspiracy were substantially prejudicial. Yet the preponderance of the excisions which the appellants sought related to comments about the existence of the conspiracy and the actual drug dealing which took place between the appellants. The Crown case establishing the existence of the conspiracy and the dealing which occurred (which has already been canvassed earlier in this judgment) was strong, leading to the effective admission of the existence of conspiracy by Mr McMillan and Mr Rolston. In those circumstances we do not see the aspects of the statement relating to the existence of a conspiracy as unduly prejudicial.
[64] In this Court the complaints focused on the fact that, in more than one place in the video interview, Mrs Vining referred to the conspiracy as involving both cannabis and methamphetamine, and referred to the appellants dealing in methamphetamine. They said this unfairly prejudiced their ability to pursue their defence that the conspiracy which existed between them related only to cannabis, not to methamphetamine. This is a different (and far more confined) argument from that which was put before the Judge. He was asked to remove extensive extracts relating to the existence of a conspiracy, but the complaints raised in this Court could have been met by less extensive excisions relating to references to methamphetamine. It is unclear what Miller J would have done if he had been asked only to excise several references to methamphetamine. (He could not have required the removal of all the references to methamphetamine as the foundation of the charge of supply of methamphetamine against Mrs Vining was that she had delivered it from Mr Rolston to Ms Lynch.)
[65] While we accept that the statements which were made by Mrs Vining were prejudicial to the defence which was run at the appellants’ trial, we are satisfied that the judicial directions made by the Judge were sufficient to deal with the prejudice. As we have noted earlier, the case for the appellants was put to us on the basis that the verdicts were explicable only on the basis that the jury improperly took into account Mrs Vining’s evidence in determining the verdicts in relation to the appellants. We have already concluded that that proposition is incorrect.
[66] For reasons which are substantially similar to those of the Judge, we conclude that the Judge was right not to direct the editing of the video interview of Mrs Vining.
Should the “crack dealer” text message have been excluded?
[67] This issue raises essentially the same matters as the previous issue. It concerns the following exchange of text messages between Mr McMillan and Ms Lynch on 24 July 2005. Mr McMillan sent a text message to Ms Lynch saying:
And its not like there is a shortage of crackhores (sic)… you always said I would suit a younger one; I think yr right don’t you.
[68] Ms Lynch replied to this message as follows:
There you go… you all over. Crack dealer and a thick crack whore. Perfect for you…! At least you might be able to be on the same wave length.. Ha.
[69] Mr Stevens sought a ruling from the Judge excluding Ms Lynch’s text message on the basis that it was highly prejudicial against Mr McMillan but of little probative value against Ms Lynch. Mr Stevens accepted that the text message was relevant to the Crown case against Ms Lynch in relation to count 1 and therefore admissible against her. However, he said its probative value in relation to the Crown case against Ms Lynch was minimal in contrast to its significant prejudicial effect against Mr McMillan.
[70] The Judge rejected a similar submission in a ruling given during the trial. He said the text message was probative against Ms Lynch because it went to her belief in the existence of a business relationship with Mr McMillan involving dealing in methamphetamine. He said that there was no suggestion that crack referred to anything other than methamphetamine. He indicated that he would instruct the jury not to take it into account against Mr McMillan.
[71] We do not share his view that there was no suggestion that crack was a reference to methamphetamine. But, even so, we uphold the Judge’s finding, for the reasons which we have already given in relation to the previous appeal point. In our view the directions given by the Judge were adequate to meet the situation and any prejudice to Mr McMillan was sufficiently dealt with by those directions.
Should the appellants’ trial have been severed from that of Mrs Vining?
[72] This point of appeal was pursued only by Mr Rolston. No application for severance was made to the trial Judge. Counsel for all of the appellants took the approach at trial that their concern about the statement of Mrs Vining being before the jury was better dealt with by editing of that statement, rather than by the severance of her trial from that of the appellants. This may have been because, if severance had been granted, the comparatively straightforward trial for Mrs Vining would probably have been dealt with before the commencement of the appellants’ trial and she could then have been called as a Crown witness at the appellants’ trial.
[73] There was no suggestion that there was any oversight by trial counsel in not seeking severance: it was a deliberate strategy. In those circumstances an appeal based on a failure to make a severance order which was never sought is not a compelling proposition.
[74] Counsel for Mr Rolston, Mr Coles, argued that the complexity of the issues relating to admissibility of Mrs Vining’s evidence against the other accused in relation to specific counts was such that severance of the counts against Mrs Vining should have occurred. He accepted that the Judge had given comprehensive and correct directions on these admissibility issues, but said that the complexity of these directions were such that the jury may not have followed them. He said that the complexity was increased when the trial Judge discharged Mr Rolston under s 347 of the Crimes Act on counts 16 and 17 in the indictment (count 16 alleged the supply of methamphetamine by Mr Rolston to Mrs Vining and count 17 alleged the supply of methamphetamine by Mr Rolston and Mrs Vining to Ms Lynch) and made various rulings on the admissibility of evidence against Mr Rolston.
[75] Counsel for the Crown argued that the discharge of Mr Rolston on counts 16 and 17 would have decreased rather than increased any prejudice arising from the jury hearing Mrs Vining’s statement, and pointed out that, in any event, no application for severance was made after this ruling was given.
[76] We see this issue as very similar to the previous two issues: Mrs Vining’s statement was prejudicial but the prejudice was appropriately dealt with by the Judge in his jury directions. Applying the law as set out in this Court’s decisions in R v Fenton and R v Peters and Southon, an application for severance would not have succeeded if made. This ground of appeal therefore fails.
Did the Judge misdirect the jury on the ingredients of the offence of money laundering?
[77] The money laundering count involved all three appellants, as well as Mrs Vining. The Crown case was that Ms Lynch had made arrangements with Mr Rolston to pay the money which he owed to her for methamphetamine supplies so that she could, in turn, hand it over to Mr McMillan. The arrangements had to be changed because Ms Lynch’s car was impounded by the police on the day before the proposed handover of the money was due to occur. It was for this reason that Ms Lynch asked Mrs Vining to collect the money from Mr Rolston’s place and bring it to her in Eastbourne. Once Ms Lynch received it, she then handed over money to Mr McMillan.
[78] When summing up, the Judge summarised the Crown case as follows:
The Crown says that the money laundering took the form of transferring the cash from Mr Rolston to Mr McMillan via Miss Lynch. It says that each of the accused actually dealt with the money by handing over possession of it, or in Mr McMillan’s case by asserting possession of it, and that each assisted the others in the ultimate object of getting it to Mr McMillan. The whole transfer took place in a covert way. The money was disguised by being wrapped up and the texts discussing it were coded; all of this was done to disguise the source of the money and its destination; that is, to conceal it. As I have explained, it is enough that the accused intended to disguise, or to help someone else to disguise, where the money came from or what its destination was. It may be that the accused were repaying a debt owed to Mr McMillan, rather than converting cash to some other asset. But that can still be money laundering, it they intended to disguise the source of the money. The Crown says that was indeed their purpose, because they wanted to disguise the fact that it was the proceeds of drug dealing, and that involved disguising both the source of the payment and its destination.
[79] Although Ms Lynch appeals against her conviction for money laundering on the basis that the verdict was unreasonable, the focus of the submissions from all parties on this count was on the Judge’s directions, and whether the elements of the offence as described by the Judge correctly described the elements which the Crown is required to prove in a case of money laundering. This Court must therefore examine the elements of money laundering and assess whether the Judge adequately described them to the jury.
Ingredients of money laundering identified at trial
[80] Count 15 alleged a breach of s 12B of the Misuse of Drugs Act 1975, which relevantly provides:
12B Laundering proceeds of drug offences
(1) In this section,—
conceal, in relation to property,—
(a) Means to conceal or disguise the property; and
(b) Includes (without limitation)—
(i) To convert the property from one form to another:
(ii)To conceal or disguise the nature, source, location, disposition, or ownership of the property or of any interest in the property:
deal with, in relation to property,—
(a) Means to deal with the property in any manner and by any means; and
(b) Includes (without limitation)—
(i)To dispose of the property, whether by way of sale, purchase, gift, or otherwise:
(ii) To transfer possession of the property:
(iii) To bring the property into New Zealand:
(iv) To remove property from New Zealand:
…
(2) Subject to subsections (6) to (8), every person commits an offence and is liable on conviction on indictment to imprisonment for a term not exceeding 7 years who, in respect of any property that is the proceeds of a specified drug offence, engages in a money laundering transaction, knowing or believing that all or part of the property is the proceeds of a specified drug offence, or being reckless as to whether or not the property is the proceeds of a specified drug offence.
…
(4) For the purposes of this section, a person engages in a money laundering transaction if that person—
(a) Deals with any property; or
(b) Assists any other person, whether directly or indirectly, to deal with any property—
for the purpose of—
(c) Concealing that property; or
(d) Enabling another person to conceal that property.
…
[81] Section 12B is materially identical to the money laundering provision in s 243 of the Crimes Act (which was previously s 257A of the Crimes Act). Much of the case law to which we were referred relates to the Crimes Act provisions, but applies equally to the present case.
[82] In a written direction to the jury, Miller J said that there were the following four elements to the offence of money laundering under s 12B:
(a)The accused whose position you are considering dealt with cash, or assisted another to do so.
(b) The cash was the proceeds of dealing in controlled drugs.
(c)The accused whose position you are considering knew at the time that the cash was the proceeds of dealing in controlled drugs, or was reckless about that.
(d)He or she acted for the purpose of concealing the cash or assisting another to do so.
[83] These elements are effectively a reordering of the statutory words. The Crown case against each of the appellants, using these elements, is summarised in the following table:
Rolston Lynch McMillan (a) Dealing
with cashPaid/transferred cash to Vining (to be delivered to McMillan) Transferred the money from Vining to McMillan. Transferred possession of the cash from Lynch by putting it in a bag and into his vehicle. (b) Cash being the proceeds of drug dealing Yes Yes Yes (c) Knowing the cash was the proceeds of drug dealing Yes Yes Yes (d) For the purpose of concealment Evidenced by coded references to the cash in text messages and wrapping cash in plastic and advertising leaflets. Evidenced by coded references to the cash in text messages to “make up bag”. Inference that he meant to conceal the money from his covert actions in picking up the money and toward the dealing. Text messages demanding the money were coded. [84] There was no dispute that elements (a) – (c) were correctly described by the Judge. So the focus of this part of the appeal is on element (d). The Judge directed the jury on this element as follows in his jury memorandum:
[52] The fourth element is that the accused whose position you are considering acted (that is, dealt with the cash, or assisted someone else to do so) for the purpose of concealing it or enabling someone else to do so. Concealing just means concealing or disguising the property. It includes disguising or concealing the nature, source, location, disposition or ownership of the property. That is, concealing cash does not have to involve exchanging it for some other sort of property; it can mean disguising the source or location or disposition of the cash. The Crown must show that the accused whose position you are considering intended that what he or she did would conceal the cash in one of those ways, or would assist someone else to do so, in one of those ways.
[85] The Judge expanded on this in his summing up (see [78] above).
[86] The appellants submit that the Judge failed to emphasise that it is the purpose of the dealing, not the dealing itself, that is important in element (d). Mr Stevens submitted that under s 12B the purpose of the dealing must be to conceal the “status of the proceeds of a drug dealing offence”. Mere concealment of the property itself is not enough: the concealment must be of the property’s illegal origins. The appellants state that while they may have dealt with property that is the proceeds of drug offending, by transferring possession of the cash, the purpose of that dealing was not to conceal the fact that the property was illicitly obtained, but to use the property to complete the drug transaction.
[87] The Crown’s submission on this point is that Miller J correctly explained the law in his summing up and memorandum, using language that mirrors the statutory wording. Mr Barr argued that while the purpose of the money laundering provision is to conceal the status of the money as the proceeds from drug offending, this purpose is achieved through the requirement that the person knows or believes that the property is the proceeds of a drug offence. This is satisfied by element (c) in Miller J’s list of jury questions.
[88] The parties are in agreement that there is a mens rea requirement of dealing with the property for the purpose of concealing it. The issue is whether “conceal” should be read as concealing the status of the property as derived from a drug offence, or whether any concealment of property is sufficient.
Legislative history and the Vienna Convention
[89] Section 12B was first introduced as part of the Statutes Amendment Bill (No 2) 1998 (which was later divided and became the Misuse of Drugs Amendment Act 1998). The Bill contained a number of reforms to the Misuse of Drugs Act which were necessary to enable New Zealand to ratify the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (20 December 1988) E/CONF.82/15 1988 (the Vienna Convention). Criminalising money laundering from drug offending is one of the obligations set out in the Vienna Convention.
[90] The Vienna Convention was aimed to promote international co-operation in reducing drug trafficking. Article 3 sets out the behaviours to be criminalised under the Convention:
1. Each Party shall adopt such measures as may be necessary to establish as criminal offences under its domestic law, when committed intentionally:
(a) [Drug offences]
…
(b) (i) The conversion or transfer of property, knowing that such property is derived from any offence or offences established in accordance with subparagraph (a) of this paragraph, or from an act of participation in such offence or offences, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an offence or offences to evade the legal consequences of his actions;
(ii) The concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from an offence or offences established in accordance with subparagraph (a) of this paragraph or from an act of participation in such an offence or offences;
(c) Subject to its constitutional principles and the basic concepts of its legal system:
(i)The acquisition, possession or use of property, knowing, at the time of receipt, that such property was derived from an offence or offences established in accordance with subparagraph (a) of this paragraph or from an act of participation in such offence or offences;
…
(Emphasis added.)
[91] Both the offences specified in Art 3(1)(b) appear to be encompassed within s 12B. The wording in Art 3(1)(b)(ii) is almost identical to paragraph (b) of the definition of “conceal” in s 12B(1). The thrust of Art 3(1)(b)(i), which covers conversion and transfer of property, is also captured by the definitions in s 12B(1), which include conversion (in the definition of conceal) and transfer (in the definition of deal).
[92] However, the wording of s 12B appears to be wider than that of Art 3(1)(b). Article 3(1)(b) identifies particular types of concealment: either of the origins of the property, or of the true “nature, source, location, disposition, movement, rights with respect to, or ownership of property”. By comparison, s 12B criminalises dealing “for the purpose of concealing” property, without adding the specific nature of what has to be concealed. To the contrary, it broadly defines “conceal” as just to conceal or disguise the property, and then goes on to “include” these more specific concealment purposes.
[93] The apparently broad wording of s 12B (and the equivalent provisions in the Crimes Act) means that it is unclear how broadly the offence should be defined in New Zealand. We consider the competing approaches below, before setting out our views.
Early case law
[94] The first case to consider money laundering was R v Liava’a (1998) 15 CRNZ 524. In that case, Laurenson J provided the following analysis of ‘conceal’ in the Act (at 528):
The definition of ‘conceal’ is a statutory definition and cannot be read in isolation. It must be read in the context of concealing or disguising in relation to property known to the accused to be the proceeds of serious offences. Therefore, if a person has this knowledge, then the Legislature has decreed that the property is concealed if it is converted from one form to another. That by itself is enough. Thus, in the present case, if the accused, with the knowledge that the New Zealand dollars were proceeds of a serious offence, dealt with the property by exchanging it into US dollars, the purpose of the dealing, i.e. the exchange, was to convert the property (the New Zealand dollars) from one form to another, namely US dollars. In other words it is sufficient for the Crown to prove an intent to convert the dollars against the background of the accused’s knowledge that these were the proceeds of serious offences. In addition, by giving false names on at least some of the occasions, the accused are deemed to have concealed or disguised the property by disguising the source, or perhaps more precisely, the ownership of the property. Either way I am satisfied that the Crown is able to prove that the two accused engaged in a money laundering transaction because firstly they dealt with the property, namely by exchanging the New Zealand dollars to US dollars, and secondly they did so for the purpose of concealing the property as defined in the Act, namely by (i) converting it from one form to another, and (ii) by disguising the ownership of the property.
(Emphasis added.)
[95] Shortly after this decision, Giles J considered the definition of money laundering in R v Wallace HC AK T139/98 27 August 1998. Giles J determined that a literal interpretation of the relevant provision (s 257A in that case) was required. He said (at 30):
In my view s 257A has to be applied according to its plain words. I prefer Mr Burns’ [counsel for the Crown] approach [that any purchase of goods with money that was the proceeds of crime would be done with the intention of converting money into goods and would therefore be money laundering, so the Crown does not need to prove intention to conceal the money]. It reflects Parliamentary intention to impose a criminal sanction on any person who deals with criminal proceeds. There is no requirement in the first limb of the definition of “conceal” for the Crown to prove an intent to conceal. In order to attract liability an accused has merely to “convert” property, knowing or believing that all or part of the property is the proceeds of a serious offence. The mere expenditure or consumption of tainted money, with no ulterior motive of concealment or any intention to the money again, is caught by the statutory definitions contained in the section. It leads inexorably to the conclusion that the intention of Parliament was to attract criminal liability to such conduct.
[96] As a result, Giles J defined the offence in these terms (at 32):
Despite the accepted conceptions of the of the term “money laundering”, I conclude that Parliament intended s 257A to impose criminal sanctions on persons who derive any benefit from dealing with criminal proceeds, whether or not they intended that the proceeds to be “cleansed” for future use. Mere spending of money suffices.
R v O and R v Toman
[97] Heath J in R v O HC HAM CRI 2004-019-3992 28 April 2006 and Ellen France J in a ruling in R v Toman HC WN T3106/01 12 August 2002 have both taken issue with the approach in Wallace.
[98] In R v Toman Ellen France J had to resolve whether an element of money laundering in the Misuse of Drugs Act included a purposive mens rea element in relation to money that was used to purchase boats. She said:
[6] In reliance on R v Liava’a (1998) 15 CRNZ 524 and R v Wallace & Ors T139/98 High Court Auckland Giles J 27/8/98, Mr Mander [Crown counsel] submitted that it was sufficient for the Crown to prove conversion i.e. there was no purposive element in that respect. In this regard, Mr Mander submitted that s 12B encompassed two different situations of property transfer. One, where the property is concealed/hidden by a change of ownership and the other where there is simply a transfer/conversion. He said any other approach would render one limb redundant.
[7] Mr King [defence counsel] argued that the key is the reference in s 12B(4) to “for the purpose of” concealing. He submitted the section did not make any spending of “drug” money drug laundering e.g. buying a pie with $30 acquired from the sale of cannabis. He also noted that his approach fitted in with the Proceeds of Crime Act 1991.
[8] I prefer Mr King’s approach. In my view, Mr Mander’s approach requires reading “for the purpose of” as “in order to”. That interpretation does not fit well with either the “laundering” title to s 12B or with Article 3(1)(b) of the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988 to which New Zealand is a party. That Article refers to the “conversion or transfer of property … for the purposes of concealing or disguising the origin of the property …”.
[99] Similarly, in R v O Heath J examined whether an intention to conceal expected illegal proceeds was required, or whether the conspiracy merely to deal with them was sufficient. In very general terms the facts in R v O were that a group of people sought to acquire an interest in a farm, at a price below market value, by defrauding the interests of the registered proprietors and caveators. O was charged with conspiring to engage in a money laundering transaction. O sought a s 347 discharge.
[100] The Crown submitted that, following Liava’a and Wallace, the conversion of the proceeds of a serious criminal offence from one form into another was sufficient. No intention was required. Reviewing the case law on the point, Heath J said:
[67] With respect, I disagree with Giles J’s approach [in Wallace] and decline to follow it.
[68] First, the interpretation favoured by the Judge, namely that an accused has merely to convert property knowing or believing it to be the proceeds of a serious offence, ignores the need to prove a purpose to conceal: s257A(4).
[69] Second, reliance on the definitions of “conceal” and “property” alone, produces a result that is inconsistent with the intention of the section. … the section is aimed at capturing those who deliberately disguise or conceal the original proceeds of a serious offence, knowing or believing the proceeds to be derived from that offence. The act of concealment or disguise is achieved by converting the property comprising the proceeds from one form into another.
[70] Third, the Judge appears to have overlooked Laurenson J’s acceptance of the need to prove a purpose of concealing [in Liava’a]. Because Gendall J’s judgment in Burch also emphasises the need to prove a purpose to conceal (at para [40]), it is clear that Wallace is out of step with other decisions of this Court.
[101] Consequently, Heath J held that it must be proven that O agreed to convert the expected proceeds of the intended fraud into another form of property for the purpose of concealing or disguising the proceeds. On the facts, he considered that while the transfer of expected interest from the mortgagee to the purchaser of the freehold title would be a conversion which would fall within the definition of “conceal” in s 257A, no jury could find that this was O’s purpose, as other purposes behind the transaction were equally plausible.
[102] In R v Burch HC WN CRI-2004-085-2446 21 April 2005 Gendall J also made comments to the effect that “conceal” implicitly requires an intention to conceal the illicit origins of the property (at [40]):
The money laundering transaction includes the dealing with, or assisting another in dealing, directly or indirectly in respect of, property, the proceeds of a serious offence for the purpose of concealing or enabling another person to conceal its true origins.
[103] And later (at [41]):
Converting the property from one form into another for the purpose of concealing or disguising its origin or ownership may occur through a number of separate transactions.
[104] In Wong v R [2008] NZSC 5 the Supreme Court was required to determine whether gambling was money laundering under s 243 of the Crimes Act. Concealment was at issue:
[6] Counsel’s principal submission is that money laundering involves dealing with the proceeds of offending for the purpose of concealing it in some manner. The proposed argument is that the gambling away of money in public does not involve concealment of the money in question. We accept that there must be a purpose of concealment. Section 243(4) makes that plain enough. But the definition of “conceal” in s 243(1) includes the conversion of property from one form to another. Gambling involves the exchange of money for gambling chips and, if the gambler wins, reconversion of the chips back to money again.
[7] Accordingly, if gambling is undertaken in order to carry out such a conversion of property with the purpose of concealing the money which is gambled and thereby concealing its source, that will constitute money laundering in terms of s 243. It would be very surprising if that were not so. As the Crown said in its submissions, gambling is a well-recognised money laundering technique.
[8] As the Crown also says, it is the intention of the gambler, not the effectiveness of the gambling as a technique for laundering in the particular case, which is required to be proved…
(Emphasis added.)
Conclusions on the elements of money laundering
[105] Drawing these threads together, we consider that the intention of Parliament in enacting s 12B and its equivalents was not to criminalise all dealing with criminal proceeds. Miller J accurately set out the four elements of the offence in the extract quoted at [82] above. The crucial factor is that element (d) stipulates the purpose for which the dealing in the proceeds occurred: the section does not make it an offence to conceal proceeds, but rather to deal in proceeds with the purpose of concealment. Nor does it make it an offence to deal with proceeds in a way which happens to involve concealment (such as wrapping up a pile of banknotes or using coded messages). Concealment must be the purpose of the dealing.
[106] The direction which the Judge gave in his written jury directions (see [84] above) accurately refers to the purpose element of the offence. But in our view his explanation in the oral summing up (see [78] above) does not adequately deal with the purpose aspect. The Judge refers to the appellants having an intention to disguise the money and this being achieved by wrapping it up and using coded text messages. It may well be true that they had that intention but disguising the money was simply a feature of the method of carrying out the dealing with the money, not the purpose of the dealing. The evidence was clear that the purpose of the dealing in the money was to pay for drugs already supplied by Mr McMillan to Ms Lynch and by Ms Lynch to Mr Rolston.
[107] It seems to us that the criminality involved in the events which founded count 15 was reflected in the count of conspiracy to supply methamphetamine. The transfer of cash from Mr Rolston to Ms Lynch was an element of one or more sales of methamphetamine by Mr Rolston to Ms Lynch. Payment for the drugs supplied was a part of the supply transaction, rather than an additional criminal offence. We agree with counsel for the appellants that if this were not the case, then handing over of cash in payment for drugs in a covert manner (as one would expect would be the case where a criminal transaction is taking place) would also be money laundering. And if the recipient put the cash in his or her pocket or otherwise out of sight that could be said to exhibit a purpose of concealment. We do not think that Parliament intended s 12B to apply in such cases.
[108] We conclude therefore that the Judge's direction in this case did not provide the jury with a correct statement of the element of the offence relating to the purpose of concealment, and that the verdicts on count 15 in relation to the appellants are therefore unsafe. We therefore allow the appeals in relation to count 15.
[109] In his sentencing notes, the Judge made it clear that he did not believe that the money laundering counts added to the overall criminality of the appellant’s offending. That confirms our view that the activity which constituted money laundering on the basis of the Crown’s case was, in effect, part and parcel of the drug dealing which was undertaken by the parties to the conspiracy. It also confirms that there is no need to adjust the sentences of the appellants in relation to the remaining counts on which they were convicted.
[110] In those circumstances we can see no point in directing a retrial on the money laundering counts. In any event, we do not consider that the conduct of any of the appellants amounted to a breach of s 12B as we interpret it. In our view it is clear that element (d) is not satisfied here: the purpose of the dealing was payment for drugs, not concealment. We therefore direct that acquittals be entered in respect of each of the appellants on count 15.
Was the verdict on count 15 unreasonable?
[111] It is unnecessary to address this issue.
Was the verdict on count 2 unreasonable?
[112] This ground of appeal relates to Ms Lynch only. Under count 2, she was charged with supplying methamphetamine.
[113] Mr Stevens accepted that Ms Lynch intended to supply methamphetamine to her sisters in Auckland. However he said that there was no evidence that what was supplied was actually methamphetamine. He indicated the following in support of this:
(a)Comments made by Ms Lynch in a conversation with a man named Mr Mihos where she referred to the substance stating that it “didn’t do anything”, “didn’t work”, “was shit” and “was crap”;
(b)Evidence from an ESR scientist, which was confirmed by a police officer, that on numerous occasions substances which have the appearance of a controlled drug have turned out not to contain that controlled drug once tested.
[114] However the comments in Ms Lynch’s conversation with Mr Mihos could be interpreted as indicating that the substance supplied was poor quality methamphetamine. This is supported by the other comments made by Ms Lynch that, “I bought a gram of that shit for what eight hundred dollars and I gave it to my sisters before I left Auckland” and “I bought a gram I couldn’t believe it and I left it with my sisters I said ‘I don’t want it I can’t even smoke this…’”. Ms Lynch’s case appears to be that she supplied what she thought was methamphetamine but that she must have been mistaken and it must have been something else that looked like methamphetamine. However, the supply to her sisters occurred after her concerns about quality came to light. It may be seen as unlikely she would supply her sisters with a substance which she considered was not methamphetamine at all. The jury was entitled to conclude that what was supplied was methamphetamine of low quality, not a different substance.
[115] At the end of the Crown case Ms Lynch sought a s 347 discharge on this count. Miller J declined this. He said that the price ($800), quantity (one gram) and method of consumption (smoking), together permit the inference that the drug supplied was methamphetamine.
[116] On appeal the test is whether the verdict was unreasonable having regard to the evidence. We are clear that it was not. There was sufficient evidence from which the jury could infer that Ms Lynch’s intention to supply methamphetamine to her sisters was achieved. This ground of appeal fails.
Was the verdict on count 4 unreasonable?
[117] This ground of appeal also relates to Ms Lynch only. Under count 4, she was charged with supplying ecstasy.
[118] Mr Stevens accepted that Ms Lynch intended to supply ecstasy to an associate called Matt with whom she had exchanged text messages which referred to “Eric”, which on the Crown case was a slang word for ecstasy. However, he said that after the supply was made, Matt expressed concerns about the quality of the substance supplied which called into question whether the substance actually was ecstasy. In particular, he pointed to the following:
(a)A text message from Matt which referred to “a lot of fake car parts going around”, which he said was a reference to the fact that fake ecstasy tablets were being supplied as real ones;
(b)Ms Lynch’s response which indicated that she could not comment on whether the tablets she had supplied were real or not: her text message said “I told you that I hadn’t tried it so couldn’t say what the album was like”, which Mr Stevens said was confirmation that Ms Lynch had not herself tried the substance believed to be ecstasy and could not therefore certify its genuineness;
(c)Evidence that the police located 15 pink tablets during a cohort search of Ms Lynch’s address, which both the police officers concerned and an ESR scientist agreed had the appearance of being ecstasy tablets. However, upon analysis they were found not to be ecstasy tablets but a form of party pill that did not contain any ecstasy.
[119] However, the ongoing exchange of text messages between Ms Lynch and Matt could be interpreted as indicating that the substance supplied to Matt was ecstasy, but that, as in relation to count 2, the quality of the drug was not high. For example:
(a)Ms Lynch sent a text message to Matt indicating that she had asked others who “hung out with Eric and they all said he was sweet and on good form” and later says in a text message “no-one has complained in fact the opposite”;
(b)In a later text message Ms Lynch says “its okay to hang out with Peter but it has to be after Eric does his speech”. This was apparently a reference to the need to take ecstasy before taking P;
(c)A few days later Matt texts to Ms Lynch “sorry bout getting angry… I tried again and it was okay. Honestly think there were some good and some bad. But I would go again if they were like that”.
[120] Ms Lynch also sought a s 347 discharge on this count, which Miller J declined. He said that the text messages between Ms Lynch and Matt were such that the jury might properly infer that the drug which was supplied to Matt by Ms Lynch was ecstasy.
[121] We agree with the submissions of Mr Barr, and the ruling of Miller J, that there was sufficient evidence for the jury to infer that the substance was methamphetamine. This ground of appeal fails.
Was the verdict on count 10 unreasonable?
[122] This ground of appeal also concerns Ms Lynch only. Count 10 was a charge of supplying GBL on 22 July 2005. The Crown case was that Ms Lynch had provided Mr Mihos with a “drink” of GBL while he was at her address.
[123] Mr Stevens submitted that the verdict was unreasonable because on the evidence before the jury it was not possible to determine whether Ms Lynch had supplied the GBL to Mr Mihos or vice versa. He said that it was clear that Mr Mihos had provided Ms Lynch with GBL in the week preceding 22 July 2005, and there was doubt as to whether Ms Lynch’s other supplier, Mr Antonopolous, had been able to supply her with GBL in the days prior to 22 July 2005. Thus, he argued, there was an available inference that it was Mr Mihos who supplied the GBL on the occasion of this count, and that this was an inference which was at least as supportable as the inference which the Crown asked the jury to draw, namely that Ms Lynch was the supplier.
[124] Miller J rejected a s 347 application in respect of this count. He rejected the proposition that the jury could not accept the Crown’s interpretation of the evidence. He said that there was evidence that Mr Antonopolous had supplied Ms Lynch as recently as 18 July 2005, and although there was evidence that Mr Mihos supplied her on other occasions, the jury could infer that Ms Lynch was the supplier on 22 July 2005.
[125] Mr Barr supported that conclusion by reference to a number of statements made by Ms Lynch to Mr Mihos and vice versa, which were intercepted.
[126] In one exchange she refers to the fact that its “all I’ve got left” to which Mr Mihos replies “you shouldn’t have given it to me”. In another she responds to Mr Mihos’ suggestion that she should “pull out the reserves” by saying that it is hard to get and that she had none “apart from I got this and I got 20 mils”. We accept Mr Barr’s submission that this evidence provides a proper foundation for the jury’s verdict that Ms Lynch was the supplier of GBL in this instance. This ground of appeal therefore fails.
Was the verdict on count 11 unreasonable?
[127] This ground of appeal also applies only to Ms Lynch. Count 11 was a charge of possessing GBL for supply on 23 July 2005. The Crown case was that Ms Lynch had obtained some GBL from Mr Antonopolous, which she then took home. The Crown case was based on intercepted conversations that indicated that Ms Lynch had gone to Wellington to meet Mr Antonopolous and, after she returned home, had shared GBL with Mr Mihos.
[128] Mr Stevens accepted that the evidence established that Ms Lynch had arranged to meet with Mr Antonopolous for the purpose of obtaining GBL, but argued that there was no basis for the jury to conclude that she was successful in this, or that if she was successful that she had the GBL for the purpose of supply.
[129] Mr Stevens said that the evidence relating to the meeting with Mr Antonopolous was equivocal, in that the witness, Detective Sergeant Hansen, witnessed activities that may or may not have involved any supply of GBL being made by Mr Antonopolous to Ms Lynch.
[130] In our view the jury was entitled to infer that the purpose of the meeting between Ms Lynch and Mr Antonopolous was for her to obtain GBL, and that her possession of GBL the following day (when she consumed the GBL with Mr Mihos) provides a proper basis for an inference that she obtained the GBL during the meeting with Mr Antonopolous.
[131] The fact that Ms Lynch did supply some GBL to Mr Mihos was a proper basis for inferring that her purpose in obtaining the GBL from Mr Antonopolous was to make such supply: the evidence established that she sought to obtain 30 ml of GBL from Mr Antonopolous, and that she was told to “bring a bottle” by Mr Antonopolous. The jury was entitled to infer that this amount was significant, and that at least some of it was intended to be supplied to Mr Mihos.
[132] Mr Stevens also argued that, even if there was evidence to show that Ms Lynch had acquired what she thought was GBL from Mr Antonopolous, it may not, in fact, have been GBL. He accepted that the evidence established that Ms Lynch and Mr Mihos were using a substance that they believed to be GBL, but said there was no evidence that what had been supplied by Mr Antonopolous was actually GBL. In circumstances where there was no reason to doubt the correctness of Ms Lynch and Mr Mihos’ assessment we can see no basis for allowing the appeal on this ground: R v Cruse [1989] 2 NZLR 279 (CA).
Was the verdict on count 13 unreasonable?
[133] This ground of appeal also relates to Ms Lynch. Count 13 charged her with supplying GBL on 24 July 2005. This count relates to the incident in which she shared GBL with Mr Mihos at her Eastbourne home. It follows on from count 11: the Crown case was that the GBL that was shared with Mr Mihos was the GBL that she had obtained from Mr Antonopolous the day before.
[134] There was no dispute that the evidence based on intercepted conversations established that Ms Lynch and Mr Mihos were apparently drinking a substance that they thought was GBL. However, Mr Stevens argued that there were a number of indications which supported the proposition that they were wrong in this regard, and that the substance was not in fact GBL at all. In particular:
(a)Ms Lynch and Mr Mihos are recorded as commenting on the taste of the substance, and then expressing their doubts about its quality and nature;
(b)The following day there was a text message exchange between Ms Lynch and Mr Mihos in which Mr Mihos complains that “tina was masquerading as gina yesterday”. Gina was slang for GBL, and the meaning of this text was that some other substance was masquerading as GBL. Ms Lynch replied that she thought so too;
(c)There was evidence that the police had located a substance at Mr Mihos’ home which both the police and Mr Mihos believed was GBL, but a subsequent analysis of it proved that it was not.
[135] Mr Barr said that the fact that the substance located in Mr Mihos’ home was not GBL was of little significance, because the seizure of the substance occurred on 18 August, which was almost a month after the events which founded count 13. We agree. He also argued that the fact that Ms Lynch had sought to obtain more GBL from Mr Antonopolous on the day after the incident which founded count 13 was a basis for inferring that there was no concern on her part as to the nature of the substance she had obtained from Mr Antonopolous the day before. We agree with that submission as well. In our view there was an adequate evidential basis for the jury’s verdict.
Sentence appeals
[136] Mr McMillan’s appeal against sentence related only to count 15, in respect of which his appeal against conviction has been successful.
[137] Ms Lynch also appealed against sentence in respect of count 15, and this is also resolved by the success of her appeal against conviction on that count.
[138] In addition, Ms Lynch appealed against sentence in respect of counts 2, 4, 6, 10, 11, 13, 18 and 19, but that appeal was subject to her appeal against convictions in relation to counts 1, 8 and 15 being successful. As it happens, her appeal against convictions on counts 1 and 8 were unsuccessful, and the success of her appeal against conviction on count 15 does not affect her overall sentence because the Judge made it clear in his sentencing notes that the money laundering count did not add to the overall criminality.
[139] Mr Rolston did not appeal against sentence.
Result
[140] We allow each appellant’s appeal against conviction on count 15. In all other respects the appeals are dismissed. The sentences remain unchanged.
Solicitors:
Fanselows, Wellington for Lynch
Philippa Sullivan, Mana, Wellington for McMillan
Crown Law Office, Wellington
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