R v Shao

[2016] NZHC 1000

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2014-004-11052 [2016] NZHC 1000

THE QUEEN

v

DA WEN SHAO

Hearing:	17 May 2016
Appearances:	S McColgan for Crown A D Couchman for Defendant
Sentence:	17 May 2016

SENTENCING REMARKS OF LANG J

R v SHAO [2016] NZHC 1000 [17 May 2016]

[1]      Mr Shao, you appear for sentence today having pleaded guilty to a charge of being in possession of pseudoephedrine for supply and a representative charge of supplying pseudoephedrine.   The maximum penalty for both offences is 14 years imprisonment.

The facts

[2]      The facts of your offending are set out in a very detailed summary of facts, with which you take no issue.

[3]      Your offending was discovered  as part of a very large and sophisticated police operation that had several different aspects.   The police uncovered the offending through a mix of investigation techniques, including both visual and electronic surveillance.

[4]      The  supply  charge  relates  to  three  separate  supplies  of  ContacNT  that occurred between  23 August and 2  October 2013.   The surveillance techniques employed by the police established that you had supplied a total of 4.5 kilograms of ContacNT to others during this period.  With the assistance of associates, you sent coded cellphone messages to those with whom you were dealing.  You then met with them at pre-arranged times in public places such as supermarket carparks.   You would then hand over the ContacNT in return for an agreed quantity of cash.

[5]      The supply of 4.5 kilograms of ContacNT would produce in excess of 1.8 kilograms of pure pseudoephedrine.   That could be synthesised into between 900 grams and 1.35 kilograms of pure methamphetamine.   Given the market price of ContacNT at that time, the Crown estimates that these supplies would have produced revenue of around $160,000.

[6]      The charge of being in possession of pseudoephedrine for supply was laid as a result of events that occurred between 3 and 22 October 2013.  During that period you were an integral member of a complicated scheme by which ContacNT that had been imported into New Zealand was made available to a distribution network.  The

plan involved the substitution of ContacNT for potato starch at a freight forwarders premises at Auckland Airport.  This required Mr Uele, the freight forwarder, to be part of the plan.

[7]      Your involvement began when you were contacted by a Ms Gan, whom the Crown alleges was the ringleader of the operation.  You then contacted an associate and said that you needed a van.  The van was then supplied, and was left in a place for the freight forwarder to pick up.  You were involved in organising that process. The freight forwarder then took the van to his premises at the airport, where it remained for several days.  During that period ContacNT that had previously been imported into New Zealand was placed in the van in boxes labelled as containing potato starch.   Once this process was complete, the van was left at a public place where it was later uplifted by your network.   When the police terminated the operation a short time later, they found approximately 205 kilograms of ContacNT in boxes labelled potato starch in a cupboard at your address.

[8]      The Crown estimates that the 250 kilograms of ContacNT contained over 100 kilograms of pure pseudoephedrine.  This could be used to produce between 50 and

75 kilograms of pure methamphetamine having a value of around $7 million.

[9]      As the Crown acknowledges, it is difficult to accurately describe the role that you played within the network.  I take you to be a senior leader of the distribution side of the network.   You took your instructions directly from the ringleader, Ms Gan.  You then issued instructions to others lower down in the network to perform the tasks necessary to provide and remove the vehicle and the pseudoephedrine. You were therefore operating at one level below that of the ringleader of the network.

[10]     You later told police that you had become involved in this operation because you needed money to pay gambling debts.  You said you had a gambling addiction, and this required you to become part of the network in order to feed your habit.  I proceed on the basis that you must have received significant sums of money for your role in the operation.

Starting point

[11]     The first stage of the sentencing process is to fix a starting point having regard to the overall seriousness of your offending.  The guideline judgment of the Court of Appeal in classes involving Class B offending of this type is R v Wallace.1

In that case the Court of Appeal identified bands of Class B drug offending and suggested starting points to be selected in respect of those bands.  Both counsel agree that the scale of your offending was such that you easily fall within the top category identified in R v Wallace.   This calls for a starting point of between eight and 14 years imprisonment.

[12]     The Crown considers that a starting point of around 11 years imprisonment is appropriate in respect of the lead charge of being in possession of pseudoephedrine for supply.   It suggests an uplift of one to two years to reflect the supply charge, leading to an end starting point of between 11 and 13 years imprisonment.

[13]     Your counsel says that the supply charge should attract a starting point of ten years imprisonment, but agrees that an uplift of one to two years is appropriate to reflect the supply charge.

[14]     By any standards this was Class B drug offending at the top end.  It enabled those behind the scheme to derive very significant profits and to make payments to those below.  The sophistication of the scheme was such that it could not have been detected if the police had not used the highly technical surveillance methods they employed in this case.  It is a credit to the skill and tenacity of the police that they used these methods to expose your network.

[15]     I  propose  to  select  a  starting  point  of  11  years  imprisonment  on  the possession charge.  Standing alone, the supply charge would easily warrant a starting point of at least four years imprisonment.  To reflect totality principles, I propose to increase the starting point by 18 months to reflect the supply charge.  This produces an end starting point of 12 years six months imprisonment.

Mitigating factors

[16]     It is now necessary to reduce that starting point to reflect mitigating factors personal to you.  By way of background, you are 46 years of age.  You arrived in New Zealand in 1989. You have a daughter living in this country.

[17]     Your counsel suggests that I should reduce the starting point to reflect two factors.  The first of these is remorse.  Your counsel has provided me today with a letter you have written in prison in which you express your remorse.  That is to be contrasted with the comment made in the pre-sentence report to the effect that the only remorse you could offer was that you have left your daughter alone in the community with little support.  The writer of the pre-sentence report says that you failed to acknowledge the impact that drugs would have on the people to whom they were sold.

[18]     Genuine remorse is a matter that must be taken into account in mitigation.2

In your case, however, I consider it is too little and too late.   I do not propose to make any reduction for remorse.

[19]     You are, however, entitled to credit for your guilty pleas.  They did not come at the earliest stage, because you left New Zealand at or about the time the police terminated the operation in 2013.  You remained in China until July 2015, when you returned to New Zealand. You were arrested on your return. The Crown accepts that your counsel then immediately began negotiating resolution of the charges that you faced.

[20]     I am prepared to give you full credit of 25 per cent to reflect your guilty pleas.   This amounts to a reduction of three years two months, leaving an end sentence of nine years four months.

Minimum term of imprisonment

[21]     In  any case  where  a  Court  imposes  a  sentence  of  more  than  two  years imprisonment it may impose a minimum term of imprisonment.3    This is an order

that the offender must serve a minimum term in prison before being permitted to apply for parole.

[22]     The Court may make such an order when it is satisfied that the usual parole provisions do not adequately recognise one or more of four factors.  These are the sentencing principles  of  deterrence,  denunciation,  the need  to  hold  the  offender accountable  and  the  need  to  protect  the  public.    In  cases  of  very serious  drug offending, minimum terms of imprisonment are often, although not invariably, imposed.  This reflects the fact that serious drug offending virtually always engages all of the principles entitling the Court to impose a minimum term of imprisonment.

[23]     In  the  ordinary course  of  events,  you  would  be  eligible  for  parole  after serving a little more than three years in prison.   I consider that to be manifestly inadequate to  meet  sentencing principles  of denunciation,  the need  to  hold  you accountable and deterrence.   Those who engage at the top level of serious drug offending pose a risk to society, and that factor is engaged as well.

[24]     Your  counsel  points  out  that  not  all  defendants  arrested  in  this  police operation have received minimum terms of imprisonment.   That is correct, but it probably reflects the fact that all defendants have different personal circumstances. In your case you were prepared to become involved at the top of this organization for a sustained period, and in circumstances where huge quantities of drugs were involved.

[25]   I am therefore satisfied that it is appropriate for a minimum term of imprisonment to be imposed.

[26]     Mr Couchman submits that a minimum term of no more than 40 per cent should be imposed.  In most cases in this field, minimum terms of 50 per cent of the end sentence are imposed.  I consider that a minimum term of just 40 per cent would not adequately recognise the sentencing principles to which I have referred.   An increase of just seven per cent over the statutory minimum would not provide any

deterrent effect, and would also fail to engage the other factors set out in s 86 of the

Sentencing Act 2002.

[27]     For that reason I propose to order that you serve one-half of your sentence before being eligible for parole.

Sentence

[28]     On the charge of being in possession of pseudoephedrine for supply, you are sentenced  to  nine  years  four  months  imprisonment.    On that  sentence,  you  are ordered to serve a minimum term of four years eight months imprisonment before being eligible to apply for parole.  On the charge of supplying pseudoephedrine, you are sentenced to four years imprisonment.  That sentence is to be served concurrently with the sentence imposed on the supply charge.

[29]     Thank you.  Stand down.

Lang J

Solicitors:

Crown Solicitor, Auckland