R v Scott
[2020] NZHC 68
•4 February 2020
ORDER PROHIBITING PUBLICATION OF NAME(S), ADDRESS(ES), OCCUPATION(S) OR IDENTIFYING PARTICULARS OF WITNESS/VICTIM/CONNECTED PERSON(S) PURSUANT TO S 202 CRIMINAL PROCEDURE ACT 2011. SEE
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CRI-2017-070-004480
[2020] NZHC 68
THE QUEEN v
MATTHEW JOHN SCOTT MARIO HABULIN
BENJAMIN JOHN NORTHWAY DENI CAVALLO
Hearing: 4 February 2020 (Heard at Rotorua) Appearances:
A Pollett and O M Salt for the Crown R Mansfield for Mr Scott
M McCarty for Mr Habulin B Hesketh for Mr Northway M Pecotic for Mr Cavallo
Judgment:
4 February 2020
SENTENCING NOTES OF POWELL J
R v SCOTT [2020] NZHC 68 [4 February 2020]
Contents Paragraph Number The offending
[5]
Approach to Sentencing [16] Assessment of starting point generally [23] Starting point –Habulin [34] Discussion [38] Starting point – Scott [42] Discussion [45] Starting point –Cavallo [52] Discussion [55] Starting point – Northway [60] Discussion [62] Summary [64] Personal circumstances [65] Personal circumstances – Habulin [66] Personal circumstances [69] Discussion [72] Personal circumstances – Scott [80] Personal circumstances [81] Discussion [84] Personal circumstances –Cavallo [90] The section 27 report [91] The psychological assessment [93] Discussion [94] Personal circumstances –Northway [101] Guilty plea [106] End Sentence [111] Minimum period of imprisonment [113] Discussion [114] Sentence [116] Schedule [Annexed]
[1] Matthew Scott, Benjamin Northway, Mario Habulin and Deni Cavallo you have come up for sentence today some seven months after pleading guilty to a range of charges arising out of the importation of a substantial quantity of the Class A drug cocaine.
[2] The delay was necessary for a range of reasons and in particular to enable each of you to place all relevant material before the Court before this sentencing took place.
[3] The charges to which you have pleaded included pleading guilty to participating in an organised criminal group1 whereby each of you has accepted:
…between 10 March 2017 and 1 November 2017 and around New Zealand did participate in an organised criminal group, knowing that three or more people shared the objective of obtaining material benefits from the commission of offences against section 6 of the Misuse of Drugs Act 1975 and knowing that [each of your] conduct contributed to the occurrence of any criminal activity being the importation, possession and supply of the Class A controlled drug cocaine and knowing that the criminal activity contributed to achieving the particular objective or particular objectives of the organised criminal group.
[4] Likewise, each of you has pleaded guilty to importing cocaine.2 As I will detail in Mr Habulin’s case, this involved a total of 76 kg of cocaine in the course of three shipments, with the rest of you pleading guilty to importing 46 kg on the last of those shipments. In addition, Mr Scott and Mr Habulin have also pleaded guilty to two charges of supplying cocaine,3 and charges of possessing cocaine for supply4 and money laundering.5 Mr Northway has pleaded guilty to one additional charge of possessing cocaine for the purposes of supply.6
The offending
[5] In August 2017, the National Organised Crime Group began an investigation into the importation of drugs by members of an international organised crime group.
1 Crimes Act 1961, s 98A. Maximum penalty 10 years’ imprisonment.
2 Misuse of Drugs Act 1975, s 6(1)(a). Maximum penalty of life imprisonment.
3 Section 6(1)(c). Maximum penalty of life imprisonment.
4 Section 6(1)(f). Maximum penalty of life imprisonment.
5 Crimes Act 1961, s 243(2). Maximum penalty of seven years’ imprisonment.
6 Misuse of Drugs Act 1975, s 6(1)(f). Maximum penalty of life imprisonment.
This investigation, known as Operation Heracles, targeted the actions of a number of individuals, including ultimately all of you.
[6] As the investigation unfolded it became clear that the organised criminal group to which each of you were a part had already been responsible for two shipments of cocaine through the port of Tauranga, which had been effected in June and July 2017. In addition, it subsequently became clear that preparations were underway to receive a further shipment of cocaine in October/November 2017. Following intense surveillance of Mr Scott and Mr Northway, and after their arrival in New Zealand, Mr Habulin and Mr Cavallo, you were all arrested on 1 November 2017 following your recovery of that third shipment.
[7] As you are all aware, the importation was able to be effected as the result of a specific design feature of particular container ships operated by the Maersk line on what was called the “Southern Express Route” between South America (including Mexico, Colombia, Peru and Chile) and Tauranga. These ships possessed a small compartment immediately forward of the rudder in which the cocaine could be placed and then retrieved from outside, without the knowledge of the crew. Using this method cocaine obtained in South America and placed aboard the ship could be retrieved after the ship had berthed in Tauranga.
[8] The first importation occurred when the Maersk Antares arrived in Tauranga on 1 June 2017. Mr Habulin, together with an associate, had entered New Zealand shortly prior to this date and Mr Habulin carried out the retrieval before leaving New Zealand shortly thereafter. Mr Habulin subsequently returned to New Zealand and, by now receiving assistance from Mr Scott, retrieved the second shipment on 18 July 2017. With regard to these two importations it is now accepted that a total of 30 kgs of cocaine was imported. Mr Habulin and Mr Scott went on to supply 25 kg of cocaine from the first two shipments, giving rise to your respective supply charges.
[9] Likewise, following both the June and July importations, both Mr Scott and Mr Habulin participated in significant money laundering operations. In Mr Scott’s case these involved provision of some $1,192,000 in June and July 2017 to representatives of an Asian money laundering ring, while after the July importation in
August-September 2017, Mr Habulin provided some $1,498,500 before leaving New Zealand.7
[10] With regard to the third and final importation, Police were alerted when Mr Habulin and Mr Cavallo both arrived in New Zealand on 27 October 2017 under the cover of carrying out tourism-based work. Extensive preparations for the retrieval included Mr Scott purchasing a “Seabob” submersible sled in Australia for Mr Habulin to use to retrieve the cocaine. When this was not going to arrive in time, despite Mr Scott arranging for the Seabob to be air freighted to New Zealand, Mr Scott arranged to charter a small power boat, The Boston, to provide transport for Mr Habulin to enable the drugs to be recovered.
[11] On the evening of 31 October 2017, Mr Scott, Mr Habulin and Mr Northway, went out on Tauranga Harbour in The Boston in anticipation of the arrival of the Maersk Antares which arrived sometime after 11 pm. The Boston made its way toward the Maersk Antares, and stopped near the rear of the ship. Mr Habulin, wearing a wetsuit, got into the water, swam to the ship and climbed on board to locate and extract the cocaine.
[12] Sometime later, following a signal from Mr Habulin, The Boston received two large bags containing cocaine from Mr Habulin, recovered Mr Habulin and made their way back out of the harbour.
[13] The three of you involved in the retrieval then made your way back to Mr Scott and Mr Northway’s Tauranga address, emptying and storing the contents of the bags in the garage. Once the cocaine was safely stored Mr Northway and Mr Scott returned Mr Habulin to his hotel and disposed of the now empty bags.
[14] Later that morning Police executed search warrants at Mr Scott and Mr Northway’s Tauranga address and 46 kilograms of cocaine was recovered, providing the basis for the importation charges against Mr Scott, Mr Northway and Mr Cavallo, as well as the balance of the importation charge against Mr Habulin.
7 The co-offenders who received the monies from Mr Scott and Mr Habulin have been sentenced: see R v Yang [2019] NZHC 1437 and R v Le [2018] NZHC 2199. In addition Xiaolan Xiao was also sentenced in the District Court but [his] sentencing notes are not available.
[15] Subsequently, a search warrant was also executed at Mr Scott and Mr Northway’s Auckland address. During this search the Police located five one kg bags of cocaine, and this formed the basis of the possession charges against Mr Scott and Mr Northway. In addition, various bundles of cash totalling some $623,627.10 were also recovered.
Approach to Sentencing
[16] The Sentencing Act 2002 sets out the purposes and principles of sentencing. The primary purposes of sentencing in this case are to hold each of you accountable for the harm that you have done,8 to denounce the conduct that each of you has been involved in,9 and to deter you and importantly others from committing similar offences in the future.10
[17] There can be no doubt that the third purpose, deterrence, is of particular importance in this case. As Ms Pollett noted on behalf of the Crown, New Zealand has been identified as a desirable target market for cocaine and it is important that New Zealand not be seen by international drug syndicates as a soft touch. Indeed, having read through the intercepted transcripts, I note that you, Mr Habulin, were recorded as being somewhat disparaging at the level of law enforcement in New Zealand and it must have come as some shock when you were apprehended.11 It is to discourage that sort of thinking that deterrent sentences are imposed.
[18] The Court of Appeal has recently reaffirmed the importance of deterrence in the type of commercial drug dealing present here, noting in particular the “enormous profitability” of (in that case, but applying equally here) the methamphetamine trade.12 The Court also observed that any “failure to impose appropriate, but not unduly severe, sentences of imprisonment can only encourage the pernicious trade in human misery which dealing in [cocaine] is”, while any suggestion that because “those who lead the trade” are unlikely to be punished deterrence is ineffective and “should then be
8 Sentencing Act 2002, s 7(1)(a).
9 Section 7(1)(e).
10 Section 7(1)(f).
11 Photographic Exhibits at page 1108 “here [in New Zealand], they’re completely clueless, so you need to take advantage”.
12 Zhang v R [2019] NZCA 507 at [90].
rewarded by moderate sentencing does not appeal”.13 Finally, the Court noted that deterrent sentences are appropriate where there has been a “rational choice” made by an offender,14 and also that the Courts must otherwise apply the sentencing scale as set by the New Zealand Parliament.15 In relation to the importation, supply and possession of cocaine (as for other Class A drugs like methamphetamine), the maximum penalty is life imprisonment and to this end the New Zealand Parliament has specifically directed that Courts must impose the maximum or near to the maximum penalty prescribed for an offence if the offending is within the most serious or near to the most serious of cases for which that penalty is prescribed, unless circumstances relating to the offender make that inappropriate.16
[19] Other principles of sentencing that are of particular relevance in this case are the need to achieve consistency with the levels that have been imposed on other offenders17 and to impose the least restrictive outcome that is appropriate in the circumstances, 18 although I note that s 6(4) of the Misuse of Drugs Act 1975 makes it clear that in a case like this imprisonment is required unless there are particular circumstances that mean an offender should not be so sentenced.
[20] Finally, as Ms Pecotic in particular has noted, s 8(h) of the Sentencing Act is relevant. This section requires me to “take into account any particular circumstances of [an] offender that mean that a sentence or other means of dealing with the offender that would otherwise be appropriate would, in the particular instance, be disproportionately severe”, and I will come back to that later on in these notes.
[21] Determining an appropriate sentence for each of you involves three steps.19 First, I must determine what is known as a “starting point” and you will have heard me discuss with counsel in the course of the day the appropriate starting point for each of you. The starting point is a term of imprisonment reflecting the seriousness of the offending for which each of you has pleaded guilty. Once I have calculated the starting
13 At [91].
14 At [92].
15 At [93].
16 Sentencing Act 2002, s 8(c).
17 Section 8(e).
18 Section 8(g).
19 Hessell v R [2010] NZSC, [2011] 1 NZLR 607 at [72].
point I then move onto the second stage which involves adjusting that starting point to take into account relevant personal circumstances for each of you. Finally, I must consider whether a discount is appropriate for your guilty pleas, and, if so, how much. After the end sentence is determined I will then consider whether to impose a minimum period of imprisonment beyond your normal eligibility for parole which as you have heard, kicks in after one third of an imprisonment term has been served.
[22] Now before I begin my analysis I must just explain that sentencing serves many functions. The most important today is to explain to each of you the basis for the sentences that are imposed. I am also required to speak to the public and to the media who are here today and also to the lawyers, so that they can understand in a legal sense, why the sentences have been imposed. As you would appreciate, no doubt having seen your counsel’s submissions, the calculation of the starting point involves a considerable amount of legal analysis. In the interests of not losing you entirely as I take you through these steps, as much as possible I have summarised the conclusions I have reached with regard to that legal analysis. My actual legal analysis will be set out in the footnotes to the written version of these notes. By that method I hope to get through the sentencing in a way that enables you to understand what has occurred but without getting you bogged down with references to a large number of cases.
Assessment of starting point generally
[23] I now turn to assessing the starting point generally. As you have heard when I went through the summary of the offending to which you are being sentenced today, the offending as a whole was large-scale, highly commercial, extremely well-planned and relatively sophisticated, particularly through the use of the Maersk Antares and, importantly, was intended to continue on an ongoing basis.
[24] The large scale of the operation is illustrated by the multiple importations carried out over several months, the quantity of cocaine involved (which at the time, and according to the Crown today, still is the largest recorded), and the amount of money either laundered or otherwise recovered in the course of the various Police operations. The operation was however not limited simply to the importation of cocaine, but (as you have heard) extended to supply and distribution, evidenced by the
significant amounts of money sought to be laundered. The extent of the planning involved is evident from the arrangements necessary to bring in overseas based personnel and to coordinate the arrangements necessary, including acquiring watercraft and diving equipment, to retrieve the cocaine when it arrived in Tauranga.
[25] Despite some of the submissions you have heard from counsel today, it is beyond any question that this was drug offending at the highest level. The Crown is clearly correct in submitting that this offending is at the top of the scale of cocaine- related offending in New Zealand.
[26] Notwithstanding these comments, setting a starting point in cocaine-related offending is not straightforward. This is partly due to the limited number of other cocaine sentences, and the absence of a separate guideline judgment on cocaine offending of this type. There is, however, a guideline judgment recently issued for methamphetamine offending – the case of Zhang v R,20to which all counsel have referred in their submissions and you will have heard numerous references to that decision today. This decision of the New Zealand Court of Appeal recently replaced an earlier guideline judgment in R v Fatu.21 It largely confirmed the approach to be taken in respect of large-scale commercial drug offending. Although both Zhang and Fatu deal with methamphetamine they are, as all counsel have acknowledged, directly relevant to cocaine offending as during the period for which Fatu was the authoritative guideline judgment, the Court of Appeal adopted the approach of utilising the bands in Fatu as a cross-check on cocaine-related sentencing,22 and it is clearly appropriate, as you have heard counsel submit, to use the Zhang decision in the same way.
[27] Specifically, the Court in Zhang, identified five bands of offending based on the quantity of the drug involved in the offending, with band five being the most serious. Band five applies to offending where the quantity of the drug exceeds two kilograms and specifies that an appropriate starting point for each offender will generally range between 10 years’ and life imprisonment. Given the quantities of
20 Zhang v R [2019] NZCA 507.
21 R v Fatu [2006] 2 NZLR 72 (CA).
22 Clarke v R [2013] NZCA 473 at [25] adopted the approach of utilising Fatu as a cross-check. This approach has since been applied in other High Court decisions, including R v Dixon [2017] NZHC 920 at [31] – [33].
cocaine in issue in this case, it is not in dispute that on the lead charge of importation each of you falls within band five of Zhang. While quantity is an important measure of culpability,23 as you have heard counsel submit, the Court of Appeal also noted that quantity alone will not be sufficient to determine culpability. Rather, setting the starting point involves a full evaluation of the role of the offender; with more limited engagement in the offending warranting a less severe starting point than a significant or leading role. 24 This means it is necessary to look carefully at the role that each of you played in the offending as a whole, and to compare that with the conclusions reached by the courts in other cases in order to determine an appropriate starting point for each of you.
[28] Before turning to my analysis of your individual involvement in the offending, as you have heard both Crown and defence counsel have provided me with a number of cases which they have submitted are relevant in order to assist in establishing a starting point that is consistent with previous cocaine-related sentences. 25
[29] As previously stated, there are only a limited number of prior sentences imposed for cocaine-related offending, and an even smaller number of those involve cocaine of a quantity similar to that involved in the current offending. In fact, there is only really one case where the quantities of cocaine involved are even remotely comparable to current offending, that of R v Cook,26 where 35 kg of cocaine was in
23 Zhang v R [2019] NZCA 507 at [104].
24 At [104].
25 Agwu v R [2015] NZCA 619: In Agwu the defendant, Mr Agwu, was convicted of importing and supplying 4.5 kilograms of cocaine. The cocaine was imported by way of mail and the operation was said to be a well organised commercial money-making venture. Mr Agwu was not the mastermind of the operation but was deemed to be the head of the operation in New Zealand. A starting point of 18 years’ imprisonment was adopted. The Court of Appeal found this starting point to be stern but nevertheless within range.
R v Cai CA357/05, 17 November 2006: In Cai the defendant, Mr Cai, along with another co- defendant, Mr Ali, imported 2.5 kilograms of cocaine. Mr Cai was described by the Court as running the operation in New Zealand and his co-offender was described as Mr Cai’s his right- hand man. Mr Cai received a starting point of 15 years’ imprisonment.
R v Davis CA440/04, 20 October 2005: In Davis, Mr Davis pleaded guilty to possessing 2.8 kilograms of cocaine for supply and to conspiring to export cocaine. Mr Davis was described as the supervisor in New Zealand. On a successful Solicitor-General’s appeal the Court of Appeal held that the starting point of 10 years’ imprisonment was inadequate and substituted this for a starting point of between 13 to 14 years’ imprisonment.
26 R v Cook [2017] NZHC 2034: In Cook the offenders, Mr Suarez and Mr Cook were sentenced for their role in possessing 35 kilograms of cocaine following its importation inside a giant bronze horse sculpture. Mr Suarez was found to have communicated with the masterminds of the operation, was a senior operative and was responsible for distribution of the cocaine. He was essentially the man at the top of the tree in Aotearoa. For his role Mr Suarez received a starting
issue. However, the present case differs significantly in a number of substantial respects. Most importantly, apart from the differences in quantity, it involved only a single importation, and the offenders were not found guilty of being part of an organised criminal group and its implication of knowledge of the operation as is the case here.
[30] Likewise, the distinctions sought to be drawn by defence counsel to the roles of the offenders in a number of large-scale importations of methamphetamine cannot be maintained as the offending differs significantly to that in the present case.27
point of 20 years’ imprisonment. Mr Cook, having adopted the role of Mr Suarez’s right-hand mand, received a starting point of 19 years’ imprisonment.
27 Chen v R [2009] NZCA 445, [2010] 2 NZLR 158: In Chen four defendants imported 96 kilograms of methamphetamine and 154 kilograms of pseudoephedrine. In assessing the various roles of the offenders, the Court of Appeal described Mr Deng as being in charge of collecting the methamphetamine and then transporting it to a warehouse from which it would be packaged and distributed. He was also in regular contact with the suppliers. On appeal the Court increased his starting point from 17 to 25 years’ imprisonment and stated that life imprisonment would have been within the available range.
Mr Pan, a co-offender of Mr Deng, carried out a much different role providing logistical assistance by carrying out tasks like booking accommodation, setting up bank accounts and assisting with travel. While not a mastermind of the operation he was a critical player. On appeal, a sentence of life imprisonment was upheld (one of only two instances where a sentence of life imprisonment has been handed down for drug-related offending).
R v Cheung [2017] NZHC 914: Mr Cheung was convicted on one charge of importing 176 kilograms of methamphetamine. Mr Cheung’s role in the offending was to follow orders and to carry out the risky tasks. The Court described Mr Cheung as a “young man seduced by the lure of wealth in a highly sophisticated drug syndicate run by older associates”. For his role in the offending Mr Cheung received a starting point of 25 years’ imprisonment.
R v Fangupo [2019] NZHC 2896: Mr Fangupo and his co-offender Mr Kulu were convicted of among other charges, importing approximately 20 kilograms of methamphetamine and conspiring to import a further 21 kilograms. Both were deemed to have played equal roles in the offending and received staring points of 19 and 20 years’ imprisonment respectively.
R v Fonua [2017] NZHC 718: Mr Fonua pleaded guilty to importing methamphetamine, possessing methamphetamine for supply, and participating in an organised criminal group. In total 501 kilograms of methamphetamine was imported into New Zealand. Mr Fonua was described as a trusted lieutenant and as possessing lesser culpability than his co-offenders. The Court adopted a starting point of 30 years’ imprisonment.
R v Wan [2017] NZHC 1255: Mr Wan was a co-offender of Mr Fonua and was also involved in the importation of 501 kilograms of methamphetamine. Mr Wan was trusted to collect the drugs upon their arrival and also had some communication with those higher up in the organisation. Mr Wan received a starting point of 32 years’ imprisonment.
R v Tuilotolava [2017] NZHC 2621: Mr Tuilotolava was another of Mr Fonua’s co-offenders. Mr Tuilotolava was required to oversee the arrival of the methamphetamine and to ready it for distribution. His culpability was determined to be equivalent to that of Mr Wan and he also received a starting point of 32 years’ imprisonment.
R v Cullen [2019] NZHC 2088: Mr Cullen, a further of Mr Fonua’s co-offenders, was deemed to have occupied the role of a trusted lieutenant who was required to carry out the tasks he was ordered to do by others, he was assessed as possessing equal culpability to that of Mr Fonua and received a starting point of 30 years’ imprisonment.R v Fakaosilea [2018] NZHC 3362: Mr Fakaosilea, the final co-defendant of Mr Fonua, was part of the operation for a shorter duration and provided only logistical support. For his lesser role he received a starting point of 29 years’ imprisonment.
[31] In particular, many of the cases to which counsel have referred involve a single importation and/or did not involve subsequent supply and distribution.28 Such cases cannot be said to provide an adequate comparator and are relatively easy to distinguish. On the contrary, in this case the presence of multiple importations, three over a period of months, illustrates a level of organisation and commerciality that is generally not present in a single importation. On the other hand, in the cases that counsel have referred me to that involved multiple importations, much higher starting points have been appropriate, for example the cases of Leung and Chen where starting points of life imprisonment for the principal offenders were adopted.29
[32] The cases to which counsel have referred have also provided little guidance as to the threshold at which a starting point of life imprisonment, which as you have heard the Crown has sought for Mr Habulin and Mr Scott, becomes appropriate. As I have discussed with counsel, it is difficult to see any justification for adopting a starting point for finite sentences over 30 years’ imprisonment rather than specifying a sentence of life imprisonment. It cannot be the case that life is reserved for only the most serious cases, because, as the Court of Appeal observed in R v Chen “logic and history tell us that there will always be a bigger importation in the future”.30 On the contrary, a life sentence in cases other than murder would appear to represent a wide band of imprisonment, with the relative seriousness of individual cases regulated by minimum periods of imprisonment, with the release date of an offender ultimately determined by the parole board. Normally, a prisoner is eligible for parole after serving one third of a sentence; where that end sentence is over two years imprisonment.31 Where life imprisonment is ordered other than for murder, a minimum period of imprisonment of 10 years is imposed unless the court orders
R v Leung [2019] NZHC 3299: In this case six offenders were sentenced for their roles in the importation of 267 kilograms of methamphetamine. Mr Leung, a senior figure in the operation received a starting point of 30 years’ imprisonment. The remaining offenders played lesser roles and received lesser starting points.
28 In fact, many of the cases counsel have referred to relate to a single set of offending involving eight co-offenders who were involved in a single importation of 500 kilograms of methamphetamine. See for example R v Fonua [2017] NZHC 718; R v Tuilotolava [2017] NZHC 2621; R v Wan [2017] NZHC 1255; R v Cullen [2019] NZHC 2088.
Reference is also made to R v Cheung [2017] NZHC 914: Mr Cheung was sentenced on a single importation.
29 R v Leung [2019] NZHC 3299; Chen v R [2009] NZCA 445, [2010] 2 NZLR 158.
30 Chen v R [2009] NZCA 445, [2010] 2 NZLR 158 at [187]
31 Parole Act 2002, s 84(1).
otherwise.32 This suggests that the threshold for life imprisonment is around 30 years and there appears no policy reason why life imprisonment should not be imposed as opposed to the imposition of longer finite sentences in excess of 30 years.
[33] With these general comments in mind, I will now address the role of each of you in turn. As I have noted, the ultimate starting point for each of you will depend on the extent of your individual involvement in the offending.
Starting point – Habulin
[34]Mr Habulin, I turn first to you.
[35] The position of the Crown, as you have heard, is that you were the head of the organised criminal group on the ground in New Zealand, and this is supported by the fact that you are the only offender to have been directly involved in all three importations. Ms Pollett submits that you were involved throughout every phase of the operation; the importation, distribution, and money laundering. As a result, the Crown seeks a starting point of life imprisonment.
[36] On your behalf, Ms McCarty has challenged the Crown analysis of your involvement. With particular reference to the intercept transcripts of the conversations that took place between you and the other defendants,33 Ms McCarty submits that you merely served an operational function as part of a much larger chain, that you played the role of “catcher”, ensuring that the drugs were retrieved safely.
[37] As you have heard, Ms McCarty has referred to a number of cases relating to methamphetamine offending to submit that when your role is properly analysed a starting point of life imprisonment cannot be maintained, as such a sentence has only
32 Section 84(3).
33 These were set out in the “Photographic Exhibits” in two volumes. See r 5A.5(2)(b)(i) of the Criminal Procedure Rules 2012 which requires the defendant to refer to information that it relies on to dispute any information contained in the Crown sentencing memoranda. See also s 24 (2)(b) of the Sentencing Act 2002. Defence counsel for Mr Cavallo and Mr Habulin, through their written submissions put before the Court specifically referred to and relied upon the written transcripts contained in the photographic exhibits volume. In the circumstances it was then necessary to consider the transcripts to determine if the submissions made on behalf of Mr Habulin, and also by Ms Pecotic for Mr Cavallo were well founded.
been appropriate with regard to much larger quantities of methamphetamine.34 Instead, Ms McCarty has submitted that a starting point of 20 years’ imprisonment, and certainly no more than 22, is appropriate.
Discussion
[38] Mr Habulin, there can be no doubt that you were the principal operative on the ground in New Zealand. It is clear from the intercepted transcripts that you had considerable autonomy with a broad scope across a wide range of activities. You were the only offender directly involved in all three importations. You travelled to New Zealand on each occasion using a cover story and you have admitted retrieving a total of 76 kg of cocaine as it arrived by sea.
[39] I have absolutely no doubt that your role was not merely that of a catcher. You played a significant role liaising with Mr Scott to ensure the cocaine was looked after, and you also clearly liaised with him with regard to distribution, before playing a significant role in the money laundering aspect of the overall operation.
[40] There is also no doubt that throughout you maintained close contact with other senior members of the syndicate, having accompanied another senior associate to New Zealand for the first importation and being accompanied by Mr Cavallo for the third importation. Far from showing that you were subordinate to either of those associates I conclude the transcripts indicate that you and Mr Cavallo were at a similar senior level in the organisation. There is indeed no indication in the transcripts that you were any form of low-level operative. Instead, those off-shore clearly trusted you to play a key role in organising each phase of the operation and your substantial role and indeed particular skills, rendered you critical and indeed almost indispensable, to the overall success of the operation.
[41] Although the charge of importing cocaine is clearly the lead offence it is appropriate to uplift the starting point to recognise your participation in the organised criminal group as well as the money laundering charges to reflect the totality of your
34 R v Rhodes [2009] NZCA 486; Chen v R [2009] NZCA 445, [2010] 2 NZLR 158; R v Fonua
[2017] NZHC 718; R v Leung [2019] NZHC 3299.
offending and the different roles that you have played across the overall scope of the offending that has been uncovered.35 Overall I am satisfied that your total responsibility for the offending is at an extremely high level36 which I consider far exceeds those in the majority of the cases that have been referred to me, 37 and certainly well in excess of 30 years’ imprisonment. As such, I adopt a starting point for you, Mr Habulin, of life imprisonment.
Starting point – Scott
[42] Mr Scott, as you have heard, the Crown submits that you also played a critical role in this offending and likewise seeks a starting point of life imprisonment.
[43] Your counsel, Mr Mansfield, submitted that a starting point of life imprisonment would however be excessive as your primary role was best described as being “hired help”. He has submitted with reference to a number of cases involving methamphetamine-related offending that your role was less than the offenders in those cases, each of which involved the importation of much larger quantities and/or offenders who adopted leading roles.38 In those cases the offenders received starting points between 19 and 32 years’ imprisonment.
[44] It is Mr Mansfield’s submission to me that the Crown has taken an extreme position and that an appropriate starting point to reflect the totality of all your drug- related offending would be 20 to 22 years’ imprisonment, although he conceded that
35 It is noted that the two charges of supplying cocaine effectively already included within the importation charge and I give no uplift for these charges.
36 With regard to the roles and responsibilities set out in the United Kingdom Sentencing Counsel’s Roles and Responsibilities table set out in Zhang at [126], I note that all the leading roles are present to a greater or lesser degree other than breach of trust.
37 To spare the defendants a lengthy legal analysis I reserve my comparisons to the footnotes throughout. The Crown submitted that Mr Habulin’s role was comparable to that of Mr Suarez in Cook, and Mr Pan and Mr Deng in Chen, where starting points of 20 years’, life imprisonment and 25 years’ imprisonment were adopted respectively. Ms McCarty, however, contended that Mr Habulin’s culpability ought to be pegged at a far lower level as his role was much like that of Mr Zhang in the new tariff case. I agree with the submissions put forth by the Crown. The position adopted by Ms McCarty is entirely inconsistent with the evidence before the Court, and I cannot accept that Mr Habulin played a purely operational or supportive role. With regard to similar cases Mr Habulin’s role is most analogous to the of Mr Deng, however, the presence of the guilty plea to the charge of participating in an organised criminal group and the money laundering lifts his culpability beyond that of Mr Deng.
38 R v Fangupo [2019] NZHC 2896; R v Cheung [2017] NZHC 914; R v Fonua [2017] NZHC 718;
R v Wan [2017] NZHC 1255; R v Tuilotolava [2017] NZHC 2621; R v Leung [2019] NZHC 3299.
there were grounds for a higher starting point towards the end of his submissions. He submits that no uplift is required to reflect the money laundering charge or your participation in an organised criminal group, as both charges were merely extensions of your role in the importation which he defined as being your role in the supply and possession as well as your role in the third importation.
Discussion
[45] I do not accept Mr Mansfield’s characterisation of your role as “hired help”. Mr Scott, your role within the operation as a whole is better described as multifaceted. It did include playing a key supporting role. The phrase used was “gatekeeper and protector” of the cocaine imported in the first two operations. This cocaine was stored in your home in Auckland for which you were paid a significant fee, $5,000 per kilogram. You were trusted to look after the drugs and to hold large sums of money on behalf of those who initiated the importation. More significantly, it is clear that you played a role in distributing the imported cocaine given that you accepted that you yourself supplied at least 25 kg, and you also played a significant role in laundering the monies received from the sale of that cocaine. I do accept Mr Mansfield’s submission that the details of your exact role in the distribution and money laundering are somewhat unclear, with Mr Mansfield submitting that you were acting under instructions.
[46] Having played a critical role therefore in the distribution of the cocaine from the first two importations you sought out a much greater involvement in the third and final importation. Not only did you arrange for the purchase and delivery of the Seabob sled from Australia, when that did not arrive you arranged for the charter of The Boston, and towed it from Auckland to Tauranga to enable Mr Habulin to recover the cocaine. Along with Mr Northway, you were the crew on The Boston when Mr Habulin recovered the drugs from the Maersk Antares. The ongoing expansion of your role led to you renegotiating what you would get out of the third importation, which you subsequently agreed with Mr Habulin would be two kgs of cocaine.
[47] In addition to your own roles it is also clear that you brought Mr Northway into the operation and utilised him as your right-hand man throughout; his actions were carried out at your behest.
[48] Overall, I am satisfied that not only did you provide key support to those initiating the importation and distribution of cocaine in the present offending – reflected by your pleading guilty to participating in an organised criminal group – but you also had a significant and increasing role in your own right, essentially as an independent contractor, seeking financial grain on your own behalf.
[49] Against this background, in assessing your responsibility in the offending, I do not find Mr Mansfield’s case analysis to be entirely helpful. As I have previously noted more generally, these cases all appear to be distinguishable. In a number of the cases referred to, the offender faced a single charge of importation or possession, and more importantly the offender only played a minor or supportive role in the offending.39 I also do not find force in Mr Mansfield’s submission that your culpability must be lower than that of the offenders in other cases where the quantum of methamphetamine imported far exceeded the 76 kilograms involved in your offending. Although quantum is important, it is as I have said, not the only indicator and indeed at the disputed facts hearing Mr Mansfield and the other counsel involved in that case all accepted that it would make no difference to your sentence as to whether at least 76 kg had been imported or no more than 76 kg had been imported given the substantial quantities that were not in dispute.40 As the Court of Appeal emphasised in Zhang, an offender’s culpability is to be determined by a full evaluation of all the circumstances and in particular the role taken.41
[50] Although the charge of importing cocaine is clearly the lead offence, as discussed with Mr Mansfield I consider it appropriate to uplift for your guilty pleas on the supply charges, and your participation in an organised criminal group, as well as your involvement in the money laundering so as to appropriately reflect the totality of your offending and in particular the different roles that you have played throughout as
39 See for example R v Fonua [2017] NZHC 718; R v Wan [2017] NZHC 1255; R v Tuilotolava
[2017] NZHC 2621.
40 R v Scott [2019] NZHC 1805 at [2]-[4].
41 Zhang at [120].
I have detailed. It is clear that none of this other offending is specifically covered by the importation charge alone. Instead, the supply charges, and the money laundering charges clearly relate to quantities of cocaine from the first and second importations, rather than the 46 kg that is the subject of the importation charge to which you have pleaded guilty. As you have heard when I discussed it with Mr Mansfield, I do not take Mr Mansfield from saying that the supply and possession quantities were not relevant to your offending but he seems to have packaged it in a different way.
[51] Overall, I conclude that while the different roles you played in the offending were significantly different from those undertaken by Mr Habulin, I am nonetheless satisfied that your total responsibility for the offending was also at a very high level.42 Notwithstanding Mr Mansfield’s submission to the contrary I am satisfied that a number of the roles that you fulfilled fell into what is termed the “leading” category in terms of the United Kingdom Sentencing Counsel Table of Roles and Responsibilities.43 Despite that, I ultimately accept that your offending does not quite reach the level of life imprisonment and I therefore instead adopt a starting point for you, Mr Scott, of 28 years’ imprisonment.
Starting point – Cavallo
[52] Mr Cavallo, the Crown alleges that you were a significant contributor to the operation and that your role as a facilitator ought not to be underestimated. Ms Pollett has submitted that you arranged the export of the cocaine from South America, had ongoing communication with senior members of the syndicate, orchestrated cover stories and arranged logistics. As a result, the Crown seeks a starting point of 30 years’ imprisonment.
42 In regard to Mr Scott, Counsel for the Crown allege that his role is comparable to that of Mr Suarez in Cook, whereas defence counsel contends his offending is comparable to that of Mr Cook who acted as Mr Suarez’s right-hand man. I however, agree with the Crown, Mr Scott’s role resembles that of Mr Suarez, where a starting point of 20 years’ imprisonment was adopted. However, having regard to the further charge of supplying 25 kilograms of cocaine, which alone would warrant a starting point upwards of 20 years’ imprisonment as well as the charges of possession, participating in a criminal group and money laundering, an uplift is warranted to encapsulate the true gravity of his offending.
43 Namely those factors listed at 1, 2 and 4 of the “leading” category.
[53] Your counsel, Ms Pecotic, as you have heard, has submitted forcefully that the Crown’s characterisation of your role is not accurate. Rather, she has pointed out that you did not arrive in New Zealand until October 2017, and with reference to the intercept transcripts you were not aware of what was planned, were not with your co- offenders when they retrieved the cocaine from the Maersk Antares, nor were you with them when they unpacked the cocaine.
[54] Ms Pecotic submits that any involvement you had was due to your naivety and the fact that you were in New Zealand at all was because you were acting under the direction of your employer for whom you worked as the finance director in Serbia. Ms Pecotic describes your offending as falling within the category of a “lesser” role in terms of the table I have referred to. In Ms Pecotic’s submission, a starting point of 17 years’ imprisonment is appropriate.
Discussion
[55] As you would have heard, Mr Cavallo, when I was discussing the issue with Ms Pecotic, I can not accept your counsel’s submissions with regard to your role. I have no doubt that you, like Mr Habulin were senior amongst those instigating the offending. Although you only arrived in New Zealand immediately before the third importation, it is clear that you had a significant earlier involvement, including arranging Mr Habulin’s cover story, which you subsequently resurrected for both you and him prior to your own arrival in New Zealand.44
[56] Likewise, as I discussed in some detail with Ms Pecotic, the intercept transcripts, far from showing that you were unaware of what was proposed, instead make it clear that you were aware of the quantity of cocaine expected.45 It is also clear that while you did not ultimately play an active role in relation to the third importation, you saw your role as being there to support Mr Habulin as he received the cocaine and to this end not only offered to support him on the water if that was necessary,46 but when it appeared that there would be difficulties either obtaining the Seabob or a
44 Photographic Exhibits 758-782.
45 Photographic Exhibits 936-937 and also actively discussed the pricing of cocaine with Mr Habulin.
46 Photographic Exhibits 951-957 and 939-940.
suitable boat that you would obtain one so the retrieval could be completed.47 In this regard you discussed your own experiences retrieving drugs in Malta.48 Likewise, throughout you discussed the operation with Mr Habulin as an equal, including Mr Scott’s role and his request for a share of the cocaine payment,49 and the sourcing of cocaine from South America which you had recently visited.50 Like Mr Habulin, you too communicated with other senior members of the syndicate further confirming the significance of your role in the offending51 and as I have mentioned, indeed directly referred at least in passing, to the possibility of significant financial gain if the third importation was successful.52
[57] Notwithstanding the significance of your role you did not undertake the same range of tasks and responsibilities that characterised Mr Habulin and Mr Scott’s involvement.
[58] The charge of importing cocaine in October 2017 is clearly the lead offence, and as with the other defendants it is appropriate to uplift the starting point on that offence to recognise your participation in an organised criminal group in order to properly reflect the totality of your offending and in particular the role you played prior to your arrival in New Zealand.
[59] Overall, I am satisfied that your total responsibility while substantial is not at the highest level but in terms of s 8(d) of the Sentencing Act is however near to it and I note that again consistent with the United Kingdom Sentencing Guidelines Roles and Responsibilities a number of the leading roles are present with 1-5 present to a greater or lesser extent. Taking these matters into consideration with regard to your offending I adopt a starting point for you Mr Cavallo of 27 years’ imprisonment.
47 Photographic Exhibits 1034-1045.
48 Photographic Exhibits 1034-1045.
49 Photographic Exhibits 978-982.
50 Photographic Exhibit 909.
51 The Crown compares Mr Cavallo’s role to that of Mr Pan in Chen, alleging a senior and significant role. Ms Pecotic does not draw a comparison to other cases but contends that Mr Cavallo’s role is appropriately described as “lesser”. On the evidence before me I cannot accept Ms Pecotic’s submission. Like the Crown, I see similarities with Mr Pan in Chen and I note that in pleading guilty to participation in a criminal group Mr Cavallo waved goodbye to a chance of ever falling within a designation of “lesser”, a role that is reserved for those engaged by pressure or naivety and who remain unaware of the scale of the operation.
52 Photographic Exhibit 1077 “ … with God’s help will be gaining some weight in millions”.
Starting point – Northway
[60] Mr Northway, as you have heard, the Crown accepts that you are the least culpable member of the group given your primary role of assisting Mr Scott providing encrypted cell phones and security for the cocaine at the property in Auckland. However, the Crown also submits that you provided such assistance knowing about the prior importations and having some knowledge of the extent of the operation. Overall, the Crown as you are aware, has sought a starting point of 20 years’ imprisonment.
[61] Your counsel, Mr Hesketh, has submitted that you had a very limited role in the offending and that you were simply an operational assistant. Despite this, Mr Hesketh still accepts that given the quantities involved, band five of Zhang is applicable, and your role was significant. As a result he submits that a starting point of 17 years’ imprisonment is appropriate.
Discussion
[62] Mr Northway, there is no dispute your role was to assist Mr Scott. In that role you provided security at Mr Scott’s address whilst he stored the cocaine, you helped provide the operation with a means of encrypted communication and assisted in retrieving the third importation of cocaine. Although you were not involved in the earlier importation you must have been aware of it given your role in protecting significant amounts of cocaine. It is clear you were familiar with the method of importation. On the other hand, it is clear you had no significant dealings with Mr Habulin or Mr Cavallo or indeed anybody else based out of New Zealand. As I discussed with Mr Hesketh, it is clear that your role in fact expanded as Mr Scott’s role expanded in the course of the offending.
[63] Overall, I accept the submissions of counsel that your responsibility is significantly less than that of your co-offenders notwithstanding the significant quantities of cocaine involved and this is reflected when the Roles and Responsibilities Table of the United Kingdom Sentencing Guidelines is looked at with only a limited
number of your roles even falling into the significant category.53 The importation charge is clearly the lead offence and given your otherwise more limited role I am satisfied that no significant uplift is required for your other offending.54 In the circumstances I adopt a starting point of 19 years’ imprisonment.
Summary
[64]In summary, the starting point adopted for each of you are as follows:
(a)Mr Habulin, life imprisonment;
(b)Mr Scott, 28 years imprisonment;
(c)Mr Cavallo, 27 years’ imprisonment; and
(d)Mr Northway, 19 years’ imprisonment.
Personal circumstances
[65] I now reach the second stage of the sentencing exercise; this involves determining whether each of the starting points I have adopted require adjustment to reflect either aggravating or mitigating factors personal to you. As counsel have submitted it is well established that the Court has a wide discretion to increase or discount the starting point for a number of different reasons.55
Personal circumstances – Habulin
[66]Mr Habulin, I turn first to you.
[67] On your behalf Ms McCarty has sought a deduction of 20 per cent to reflect your background circumstances, your isolation from family support, and your genuine remorse.
53 Being 1 and perhaps 3 with the remainder being ‘lesser’ in terms of the table.
54 Counsel for the Crown argued that Mr Northway’s offending is similar to that of Mr Cook, who was also described as the hired help. Mr Hesketh also compared Mr Northway’s offending to that of Mr Cook but says his role was even less active that that of Mr Cook. Again, I agree with these submissions.
55 Zhang at [134].
[68] Ms McCarty has relied in particular on a cultural background report prepared pursuant to s 27 of the Sentencing Act (which is known generally as a s 27 report). It is this report which details your upbringing and life experiences. In sentencing you I am required to take this report into consideration. I have also had the opportunity to read a letter from your partner confirming her love for you and a letter you have written apologising for your actions.
Personal circumstances
[69] The information that I have before me, including the s 27 report, details that you are a 48-year-old Croatian national who first arrived in New Zealand in 2017. It is clear that your family and long-term partner reside in Croatia, and that you otherwise have no friends or family in New Zealand.
[70] The s 27 report details your upbringing in Croatia which at that time formed a part of Yugoslavia. It details your family upbringing and schooling before moving on to your compulsory military service in the Yugoslavian army before you deserted and joined the new Croatian army whereupon you fought in the wars that ultimately lead to Croatian independence. The report details that in the course of your service you were wounded twice. The s 27 report goes on to detail your experience after the war, leaving Croatia, moving to the Czech Republic, then to Germany and eventually to France, struggling to find work in each location.
[71] Whilst in France you picked up odd jobs but eventually participated in an armed robbery that resulted in you being sent to prison for some nine years. You were released from prison in 2011, were prohibited from remaining in France and were ultimately deported back to Croatia. It is at this point in the s 27 report that it records you started to feel lost as you had become disconnected from your people and your culture. Due to your military experience and criminal history, you were eventually offered a proposition to engage in the current offending. It is a proposition you accepted. The s 27 report writer, Ms Turner, notes that your background means that you were targeted to join this criminal group and that your sense of being lost and your past trauma impaired your rational decision-making abilities, ultimately diminishing your culpability.
Discussion
[72] As you have heard today, I have carefully considered the material that has been put forward in the s 27 report. Although I may provide a discount on the starting point for social, cultural or economic deprivation this is only available where it can be demonstrated that there is a nexus between the deprivation and the offending.56 I have read as I say, the s 27 report and while I accept that you have certainly experienced some very difficult periods in your life it is however difficult to see any substantive nexus either direct or indirect between the experiences you have had and your involvement in this offending.
[73] On the contrary, it is difficult for me to reconcile the clearly very capable and independent family man with the lost individual identified in the s 27 report. This is particularly the case given in the report much is made of the significant opportunities that were offered to you while in prison in France including, as I have noted earlier today, additional study, pursuing your art interests with some success and your involvement with marathons and ultra-Marathons.
[74] Given those circumstances and my analysis of your role in the offending, I conclude your involvement in the offending appears to have been a rational and calculated decision unconnected to any difficulties with regard to deprivation. A decision made with hope of significant financial gain, and given that position, I decline any discount on this basis.
[75] I now turn to the deduction sought on account of the fact that you are a foreign national who will be serving a substantial term of imprisonment in New Zealand, isolated from your family and support system. As you have heard, such a factor may be treated as a mitigating factor where it makes the sentence harder than usual to bear.57 Whether credit ought to be given and how much is at the Judge’s discretion.58 As you have heard, I have found this a particularly difficult matter to consider, not just in your case, but in respect of each of your fellow offenders as well. As I have noted, I must take into account the fact that your sole reason to visit New Zealand on no less
56 Zhang v R [2019] NZCA 507 at [162].
57 At [163].
58 R v Yung [2017] NZHC 895 at [6]; and R v Yuen [2016] NZHC 571 at [15].
than three occasions was to commit extremely serious crimes with long-term consequences for the New Zealand community. As you heard me say to counsel, in such circumstances given the calculated risk that you were prepared to take in coming to New Zealand it was difficult to see on what principled basis there should be a reduction in what would otherwise be the appropriate sentence. Indeed, as I discussed, in many ways I find the submission somewhat arrogant. That comment was not directed at you personally but at the conceptual level. As I stated to Ms McCarty, it appeared to be “enabling behaviour” for those in your position who seek to carry out serious drug offending in this country. Nonetheless, after discussing the matter in detail with all counsel, I accept there is a principled basis for a discount which is effectively set out, as Ms Pecotic submitted, in s 8(h) of the Sentencing Act, and perhaps is best summarised that a discount may be warranted where the sentence is otherwise appropriate but will be genuinely more difficult for somebody to complete. I accept in your case and indeed for Mr Cavallo that you are separated from family and your support networks and also have the additional burden of English not being your first language. On the other hand, I must take into account that there is a need for a stern sentence in relation to this offending which necessarily impacts on the hardship that you may experience. In the circumstances I am satisfied that a discrete discount equivalent to 5 per cent of the starting point is appropriate and I will discuss what that means in relation to the starting point of life imprisonment in due course.
[76] Finally, as noted, you have sought a deduction for remorse. Such a discount is available where a sentencing judge is satisfied expressed remorse is genuine and goes further than that reflected by mere acceptance of your responsibility through the guilty pleas that you have entered.59
[77] Again, in your case I found this a difficult issue. While you have written a letter to the Court expressing remorse it appeared somewhat inconsistent with some of the statements referred to in both the s 27 report and the Provision of Advice to Courts Report (“PAC report”) the probation officer completed, with both of those reports suggesting that you continued to minimise your role in the offending as somebody simply following orders. However, having had the opportunity to read the
59 Hessel v R [2010] NZSC 135, [2011] 1 NZLR 607 at [64].
intercept transcripts as I was invited to do by Ms McCarty, I am satisfied that the wording in your letter more properly reflects a genuine indication of remorse, with perhaps the approach taken before the probation officer in the s 27 report reflecting what in English we refer to as a somewhat phlegmatic personality.
[78] In the circumstances I consider a further discount of 5 per cent is appropriate for the remorse that you have shown.
[79] Notwithstanding my conclusions with regard to the deductions available I nonetheless conclude, having considered your personal circumstances, that your sentence remains life imprisonment subject to taking into account the effect of your guilty plea.
Personal circumstances – Scott
[80] Turning now to your personal circumstances Mr Scott, as you are aware Mr Mansfield sought a deduction of 20 per cent on your behalf from the starting point. Mr Mansfield submitted that the discount was sought to reflect reduced culpability due to your childhood experiences, your capacity for rehabilitation, your positive employment prospects, your lack of familial support and your previous good character. In support of this submission you too have relied on a s 27 report, as well as supportive and informative letters from your mother, your fiancé and other close friends, and other information provided about your time in prison to date.
Personal circumstances
[81] The information before me confirms that you are a 46-year-old Australian national, who moved to New Zealand with your fiancé in 2017. It appears that this was only slightly before the offending took place. Your fiancé has since returned to live in Australia having struggled to support herself in New Zealand following your arrest. You remain close with a previous partner with whom you have a child and both she and your daughter reside in Australia. So too does your mother. It is very clear that, as with the other defendants, your support system and family network are overseas, in this case Australia.
[82] The s 27 report details a childhood marred with deprivation and punctuated by a series of traumatic events. During your childhood your father was incarcerated for drug offending and you say the first time you met him was when he escaped from prison. Despite this you spent a considerable time with your father notwithstanding his continued heroin addiction. The report goes on to note that moving into adolescence and adulthood you experienced multiple tragedies, including losing a number of people who were very close to you, including your father, your grandmother and various friends. The report writer, Ms Turner, noted that the deprivation you have experienced is relevant to your offending but does not go as far as saying that the deprivation you have experienced was causative of that offending.
[83] The s 27 report goes on to detail that you have gone on to have a successful career in a number of fields including as an electrician, electrical engineer, cafe owner and the owner and operator of a health supplements store in Perth. It also records a significant degree of success as a gambler, often winning large sums of money. Your criminal history shows that your current offending represents your first serious offending, with otherwise only driving-related convictions in Australia.
Discussion
[84] As I have previously explained, and Mr Mansfield submitted, discounts can be provided where trauma is causally connected to the offending. There is no doubt that some of the matters that occurred in your upbringing which are identified in the s 27 report and the other correspondence that I have before me would have been deeply traumatic. However, the s 27 report fails to draw a causal connection between those events and your current offending. On the contrary, and notwithstanding the submissions of Mr Mansfield regarding “risk taking behaviour”, the report and the other correspondence illustrates that you did manage to recover from these events, to find pro-social relationships and good employment. Indeed, it is difficult to reconcile the trauma recorded in the s 27 report with the obvious success that you have otherwise asserted and which your friends and family have confirmed. It is clear from your mother’s letter that notwithstanding difficulties with your father you at all times received good support from your mother and stepfather and even at an early age showed a real aptitude for sports. Looking at the s 27 report, your mother’s letter and
the remainder of the supporting correspondence as a whole, I am satisfied that there is ultimately no basis for concluding that your upbringing and/or personal circumstances entitle you to a discount on the basis of reduced culpability. I therefore decline to provide any deduction for those traumatic issues that have been identified.
[85] I turn now to the discount sought for your good character. In assessing whether a deduction is warranted for good character it is relevant not just to assess the absence of convictions, but also the positive contributions made by an individual to society.60 It is well established that even where there is an absence of convictions without any positive contribution to the community any credit will be limited.61 In your case you have a number of prior convictions, albeit, apart from a couple of drink drive convictions, relatively minor. But more importantly, there is no real evidence of a positive contribution to your community. In those circumstances I accept the Crown submission that there is no basis for any discount for good character.
[86] I also decline to give a discount for positive employment prospects or rehabilitation prospects. What you are in fact seeking is a discount on your sentence so that you can return to your previous life as it was prior to the present offending when it is apparent you have made a calculated decision to participate in the offending in the manner that I have detailed.
[87] Like Mr Habulin, you have also sought a deduction to reflect that you are a foreign national, and that as a result a long-term sentence will be unduly harsh for you. I have set out my reasons why I consider a discount on that basis is warranted but I do consider that you and Mr Northway are in a slightly different category to Mr Habulin and Mr Cavallo on this issue. Specifically, as Australians you speak English and you are clearly more familiar with New Zealand than Mr Habulin or Mr Cavallo. I also take into account the fact that you, according to your own accounts, both moved here prior to your offending and so the New Zealand environment should not be considered as alien as it is for the Europeans. Nonetheless I agree that a discount is warranted, and I fix that at 3 per cent.
60 Manawaiti v R [2013] NZCA 88 at [19].
61 R v Hockley [2009] NZCA 74 at [30] and [32]; Jeon v R [2019] NZHC 3279 at [27] – [29].
[88] Finally, I do not accept that there should be any specific discount for remorse. In this regard I note that the PAC Report records that you have expressed remorse for your offending, but it notes that that remorse relates largely to the impact that your offending will have on your family. More generally, it does seem that you have sought to minimise the extent of your offending by blaming your offending on “misguided loyalty to childhood friends”. In addition, and significantly, the PAC report also notes that you continue to deny that any of the money found at your address was linked to drugs, maintaining it was from the sale of encrypted cell phones and your own gambling winnings.
[89] Taking into account the 3 per cent deduction that I have allowed with regard to your personal circumstances this takes your sentence to 27 years’ prior to taking into account the effect of the guilty plea.
Personal circumstances – Cavallo
[90] Mr Cavallo, I now turn to consider your personal circumstances. On your behalf Ms Pecotic has sought discounts for your upbringing, rehabilitation, hardship as a foreign national serving a term of imprisonment in New Zealand, and remorse. Ms Pecotic has also relied on a s 27 report, a recent psychological assessment and letters of support from family and friends.
The section 27 report
[91] The information that I have before me confirms that you are a 48-year-old Serbian national who entered New Zealand in 2017. You have five children, each of whom is based in Europe, and until recently you were engaged to your fiancé who lives in Serbia.
[92] The s 27 report details that you were born in Austria and were raised by your adoptive parents. During adolescence you resided with your biological grandfather in Yugoslavia and during that time you experienced some physical punishment. Subsequently you were reunited with your biological mother and moved to Switzerland, but this was not a happy time for you and you soon moved out to a boy’s home. When you turned 18 you enrolled in the then Yugoslavian army and were
required to serve in the wars that led to the breakup of Yugoslavia. You indicated that your experiences were difficult and in particular you have asserted that you were shot for being a deserter. Later in life you married three times and each time the relationship ended you struggled to cope, on one occasion attempting to take your own life. After the end of your last marriage you moved back to Serbia and secured employment where you made good money. The report records, as Ms Pecotic has also submitted, that it was this job that bought you to New Zealand.
The psychological assessment
[93] The psychological assessment was commissioned after you advised the probation officer who wrote your PAC report that you were considering suicide if the sentence imposed was too long. The psychological assessment was undertaken by Dr Duncan Thomson. His report recorded that you again stated that you were unaware of the cocaine-related offending and that you believed that you were smuggling cigarettes. Dr Thomson noted that you were finding it difficult to be separated from your daughters and that you again had said that if you had to remain in prison for more than 10 years you would end your life. Dr Thomson however, found these statements were delivered pragmatically rather than impulsively, and determined that you were not an imminent risk of suicide.
Discussion
[94] Mr Cavallo, I begin my analysis of your personal circumstances by considering the matters raised in the s 27 report. I decline to give any discount for your upbringing. You have asserted that you have struggled at times in your life with particular reference to your experiences in the conflict that took place in the former Yugoslavia. I have a number of reservations with regard to how certain of the incidents have been recorded in the s 27 report, for example the plausibility of the account that you were shot for being a deserter and have lived to tell the tale. It is in any event difficult to see any connection between your history, even if it is accepted, and the present offending. It is clear that you are highly intelligent and at the time of your offending you appear to have been in a happy and stable relationship and employed at a well-paying job, and seemingly having found a way to cope with any tragedies in your past. This does not appear to be a situation where any form of developmental, economic or social
deprivation had any form of causal link to your offending, rather, instead you appear to have made a rational and calculated decision to assist with the importation into New Zealand.
[95] There is equally no basis for any discount based on your rehabilitation efforts to date including engagement in te reo classes, attending church services and engaging in alcohol and drug-related courses. In other situations, such courses may indeed be relevant but in the context of your offending such participation is effectively meaningless or otherwise unnecessary; for example, there is no suggestion that you had any alcohol or other drug related issues for which rehabilitation programmes were required or appropriate.
[96] As with your co-offenders you have sought a deduction to reflect that you are a foreign national, and that as a result a long-term sentence will be unduly harsh for you. For the same reasons as I have earlier explained, I accept that that is a legitimate discount in this case, and again, for the reasons I have explained, I consider a 5 per cent discount is appropriate.
[97] I have also not ignored your recorded statement that if your sentence is too long you will end your life. This is obviously a serious statement that ought not to be taken lightly where there is evidence to suggest it is true. However, having considered carefully Dr Thomson’s report I am satisfied there is no objective evidential basis before the Court on which I can conclude that you are at risk of taking your own life nor any basis upon which I can conclude that mental health concerns were otherwise causative of your offending or will render prison more difficult for you than your co- offenders. Accordingly, I also decline to grant any discount for mental health issues however categorised.
[98] You have also sought a discrete deduction for remorse, but I do not believe one is appropriate. Although you have written a letter to the Court expressing your remorse, I do not believe that remorse to be at all genuine given that you continue to deny your true involvement in the offending. Specifically, it is evident from the PAC report, the psychological report and the s 27 report, and was further echoed in Ms Pecotic’s submissions, that you have not accepted your role in the offending other
than through pleading guilty. Instead you have continued to assert that you were entirely unaware of any plans for cocaine importation, that you had come to the view that you were helping smuggle cigarettes and by the time you realised you were involved in cocaine smuggling it was too late.
[99] As you are aware the Crown raised your apparent non-acceptance of responsibility as soon as the PAC report was released and noted that if such protestations of innocence were genuine the appropriate course would be for you to apply to vacate your guilty pleas. Notwithstanding this, your counsel at the time confirmed that there had been no error and no application to vacate your guilty pleas was ever made. As I have already detailed I am satisfied you were in fact a senior member of the group instigating the importation and to continue to assert otherwise is utterly inconsistent with any genuine remorse with regard to your offending.
[100] Given my conclusions with regard to your personal circumstances, after deducting 5 per cent from a starting point of 27 years this takes you to a sentence of 25 years and 6 months’ imprisonment subject to taking into account the effect of your guilty plea.
Personal circumstances – Northway
[101] Mr Northway, as you have heard, Mr Hesketh submits you should receive discounts both to reflect your remorse, and to take account of the fact that serving a lengthy prison sentence in a foreign country, isolated from family, will be disproportionately severe.
[102] It is apparent from the PAC report that you are a 36-year-old Australian national who came to New Zealand in 2017 at the instigation of Mr Scott. When you moved to New Zealand you began residing with Mr Scott, and you say you often helped him with his businesses, and this help involved transporting bags of money. You appear to have looked up to Mr Scott as a successful business person and as a good friend who helped support you when you decided to leave Australia. All of your family remain in Australia, and while in New Zealand Mr Scott was the sole member of your support network. With a sentence of incarceration it is inevitable you will remain isolated from your support network.
[103] While I note that the pre-sentence report records you have expressed only minimal remorse for your offending, it appears that this is largely based on the perception of the probation officer that you were minimising your offending by saying “I didn’t know the scale of it [of the offending], I was at the bottom of the pile” and “my involvement was minimal”. As you have heard, in fact the Crown accepts that that is a relatively accurate assessment of your involvement and as such I am satisfied that your comments to the probation officer were not in fact an attempt to minimise your involvement in the offending. On the contrary, as Mr Hesketh has submitted, I found your statement of remorse to be compelling, not only signifying that you have accepted responsibility but noting that you are prepared to take whatever sentence is imposed by the Court. In those circumstances I am satisfied that a discount for remorse of 10 per cent is appropriate.
[104] I have also noted that the information before me did refer to daily drug use, but as you have heard from Mr Hesketh and indeed as set out in your letter of remorse, you do not seek to rely on that as a basis for a discount and I decline to give any discount as it is clearly not causally connected to your involvement in the offending. Finally, for the reasons that I have previously set out, I agree that a discount for the hardship that you will experience in prison as a foreign national in prison is warranted, and, like Mr Scott, I award a discount of 3 per cent for that.
[105] Given my calculations with regard to your personal circumstances, applying the total discounts of 13 per cent to the starting point of 19 years by my calculation this leads to a sentence of 16 and half years’ imprisonment subject to taking into account the effect of your guilty plea.
Guilty plea
[106] At this point I now turn to the consideration of the guilty plea and the deduction that is available. As you are all aware defence counsel have sought on your respective behalf’s deductions of between 10 and 20 percent while the Crown argues that no discount at all should be provided and if that one is provided it should not exceed 5 per cent.
[107] In a case called Hessell, the Court upheld that a reduction of up to 25 per cent will be available for an early guilty plea.62 On the other hand the orthodox response to a guilty plea given on the morning of trial is generally 10 per cent.63 There is no dispute that an appropriate deduction is to be assessed in light of all the circumstances, including the timing of the plea and the strength of the prosecution case.64
[108] Mr Scott and Mr Northway pleaded guilty at the beginning of the trial, prior to the hearing of the remaining pre-trial issues which were meant to have been concluded the previous week. Mr Habulin and Mr Cavallo you pleaded guilty on 27 June 2019, at the conclusion of those pre-trial hearings. I am satisfied that the difference in timing between the four of you is not material, although in all cases these pleas were made on the basis of an overwhelming Crown case.
[109] In particular, while defence counsel have pointed out there were some deletions and/or amendments to charges following resolution discussions that took place immediately before the trial was meant to commence, I accept the submission of Ms Pollett, that all four of you have to a very large degree accepted the majority of the Crown case against each of you. I note in particular that while all the conspiracy charges were dropped, this was to a large degree because these were picked up by the participation in the organised criminal group charge to which each of you has pleaded guilty.
[110] More significantly, as I mentioned to counsel, in considering an appropriate discount for your guilty pleas I must also keep in mind the notion of parity as Mr Yang, another of your co-offenders involved in money laundering, pleaded guilty in response to a sentencing indication given in May 2019 and at sentencing received a guilty plea deduction of 15 per cent.65 Given that, and the other surrounding circumstances, covered by counsel, I conclude a deduction of 10 per cent is appropriate for your guilty pleas.
62 Hessell v R [2010] NZSC, [2011] 1 NZLR 607 at [75].
63 Harris v R [2018] NZCA 632 at [43].
64 Hessel at [77].
65 R v Yang [2019] NZHC 1437.
End Sentence
[111] I now apply that 10 percent discount. In undertaking my calculations, I have concluded that the effect of the guilty plea discount with regard to Mr Habulin is to take his sentence from that of life imprisonment to a finite sentence of 27 years and six months.
[112] Applying the discount of 10 per cent to the already finite sentences of the other three offenders the end sentence for Mr Scott is 24 years, for Mr Cavallo 23 years, and for Mr Northway 14 years and nine months. In summary:
(a)Mr Habulin, 27 years and six months’ imprisonment;
(b)Mr Scott, 24 years’ imprisonment;
(c)Mr Cavallo, 23 years’ imprisonment; and
(d)Mr Northway, 14 years and nine months’ imprisonment.
Minimum period of imprisonment
[113] The final part of the sentencing exercise is to determine whether a mandatory period of imprisonment is necessary for any of you. As in the end none of you were sentenced to life imprisonment the mandatory minimum period of imprisonment that applies in those cases is not relevant. Instead, pursuant to s 84(1) of the Parole Act 2002, each of you will be eligible for parole after serving one third of your respective sentences, being 9 years and 2 months for Mr Habulin; 8 years for Mr Scott; just under 8 years for Mr Cavallo and just under 5 years for Mr Northway. As you have heard me discuss with counsel throughout the day the Court may impose an minimum period of imprisonment beyond that prescribed in the Parole Act where it is satisfied that the sentence imposed is otherwise insufficient for the purposes of accountability, deterrence, denunciation or to otherwise protect the community.66 The Court of Appeal in Chan v R has confirmed that while “minimum periods of imprisonment will frequently be justified in cases of drug importation of commercial scale, the imposition
66 Sentencing Act 2002, s 86(2).
of a minimum period of imprisonment remains a matter that is to be determined case by case”,67 and only where it “is necessary for any of the purposes set out in s 86(2) of the Sentencing Act 2002”.68
Discussion
[114] As you have heard, in the course of Crown submissions the extent of the minimum periods of imprisonment sought by the Crown changed significantly with the result that detailed submissions with regard to appropriate minimum periods of imprisonment were not made.
[115] Having discussed the issue at length with counsel and notwithstanding the serious nature of each of your offending and the substantive roles that you have each played, as I have detailed throughout these sentencing notes, I nevertheless do not consider that the sentences imposed in any case are insufficient to hold you accountable, to denounce your conduct, to deter you or others from committing similar offending and/or to protect the community. I therefore, in each case, decline to order any additional minimum period of imprisonment beyond that effectively prescribed by the Parole Act.
Sentence
[116] Having completed the sentencing exercise and appreciating how long it has taken and the hour, I would now ask all four of you to please stand.
[117] Mario Habulin, on the charge of importing cocaine I sentence you to 27 years and six months’ imprisonment. On the remaining five charges to which you have pleaded guilty and been convicted: supplying cocaine (x2), possessing cocaine, money laundering, and participating in an organised criminal group, you are sentenced in accordance with the schedule annexed to the written version of the sentencing notes. The sentences will be served concurrently. The maximum sentence is the 27 years and six months.
67 [2018] NZCA 148 at [39]
68 At [38]
[118] Matthew Scott, on the charge of importing cocaine I sentence you to 24 years’ imprisonment. On the remaining five charges to which you have pleaded guilty and been convicted: supplying cocaine (x2), possessing cocaine, money laundering, and participating in an organised criminal group, you are sentenced in accordance with the schedule annexed to the written version these sentencing notes. As with Mr Habulin, these sentences are served concurrently which means the maximum sentence is 24 years.
[119] Deni Cavallo, on the charge of importing cocaine I sentence you to 23 years’ imprisonment. On the remaining charge of participating in an organised criminal group you are sentenced to 6 years’ imprisonment, with that sentence to be served concurrently.
[120] Benjamin Northway, on the charge of importing cocaine I sentence you to 14 years and 9 months’ imprisonment. On the remaining two charges of possessing cocaine and participating in a criminal group, you are sentenced in accordance with the schedule annexed to the written version of these sentencing notes. The sentences are to be served concurrently which means the maximum sentence is the 14 years and 9 months.
[121] As I have discussed with counsel leave is reserved for defence counsel to discuss with each of you the Schedule that was provided by the Crown yesterday as to which items are sought to be forfeited or whether there are any issues arising. Each counsel is to report to me within seven days of today’s hearing setting out your position and I will issue further directions once those responses have been received.
[122]You may stand down.
Powell J
Schedule
Mario Habulin – Other charges.
Code Charge 3131 Sell/Give/Supply/Administer/Deal Co 12 years’ imprisonment (concurrent on
Charge 3111)
3131 Sell/Give/Supply/Administer/Deal Co 12 years’ imprisonment (concurrent on
3111)
3141 Possess for Supply Cocaine 8 years’ imprisonment (concurrent on 3111) 1853 Participates in Organised Criminal
Group
6 years’ imprisonment (concurrent on 3111) 4431 Engages in Money Laundering
Transaction
5 years and 6 months’ imprisonment
(concurrent on 3111)
Matthew Scott – Other charges.
Code Charge 3131 Sell/Give/Supply/Administer/Deal
Co
12 years’ imprisonment (concurrent on
Charge 3111)
3131 Sell/Give/Supply/Administer/Deal
Co
12 years’ imprisonment (concurrent on 3111) 3141 Possess for Supply Cocaine 8 years’ imprisonment (concurrent on 3111) 1853 Participates in Organised Criminal
Group
6 years’ imprisonment (concurrent on 3111) 4431 Engages in Money Laundering
Transaction
5 years’ imprisonment (concurrent on 3111)
Benjamin Northway – Other charges.
Code Charge 3141 Possess for Supply Cocaine 13 years’ imprisonment (concurrent on 3111) 1853 Participates in Organised Criminal
Group
5 years’ imprisonment (concurrent on 3111)
5
19
0