R v Simpson

[2022] NZHC 1902

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CRI-2020-070-2302

[2022] NZHC 1902

THE QUEEN

v

CALEBH JESSE SIMPSON

Hearing:

5 August 2022

Appearances:

R W Jenson for Crown

P K Hamlin for Defendant

Judgment:

5 August 2022

SENTENCING REMARKS OF LANG J

Solicitors:

Crown Solicitor, Tauranga

R v SIMPSON [2022] NZHC 1902 [5 August 2022]

[1]                   Mr Simpson you appear for sentence having pleaded guilty in this Court to representative charges of manufacturing, supplying and being in possession of methamphetamine for supply. In addition, you have pleaded guilty to charges of being in possession of equipment, precursor substances and materials for use in the manufacture of methamphetamine.

[2]                   You have also pleaded guilty to being in possession of cannabis for the purpose of supply and being in unlawful possession of firearms and ammunition. Finally, you have pleaded guilty to a charge of money laundering. All these charges relate to offending that occurred in Whakatane between June 2019 and your ultimate arrest on 13 February 2020. I will therefore refer to them as the Whakatane charges.

[3]                   The maximum penalty applicable to the methamphetamine-related charges is life imprisonment. The maximum penalties on the remaining charges range between four and seven years imprisonment.

[4]                   In addition, you pleaded guilty to three charges in the Manukau District Court. These are charges of being in possession of methamphetamine for supply and being in unlawful possession of a firearm and ammunition. I will refer to these as the Manukau charges. They have been transferred to this Court so you can be sentenced on them in conjunction with the sentences to be imposed on the Whakatane charges.

Background

The Manukau charges

[5]                   The Manukau charges were laid as a result of an incident that occurred on the morning of 10 April 2019. On that date police officers in a patrol vehicle observed you using a cellphone whilst you were driving on State Highway 22 near Paerata. The police activated their red and blue flashing lights, and you stopped your vehicle. As you had no form of identification on you, the police searched your vehicle with your consent to locate any documentation that might confirm your identity.

[6]                   You then consented to the police searching a bag that they found behind the front passenger seat. Inside the bag the police found a small container with a white

crystalised substance inside. When the police asked you what was in the container you told them it contained methamphetamine. The police then conducted a warrantless drug search under the Search and Surveillance Act 2012. They then found 293 grams of methamphetamine, approximately $3,000 in cash and a white bucket containing iodine residue. Digital scales and approximately 100 small zip lock bags were also found.

[7]                   In addition, the police found a cut-down .30 calibre military style semi- automatic rifle, a collapsible shotgun stock and nine rounds of ammunition, including two 12-gauge shotgun cartridges and six .30 calibre rounds of ammunition.

[8]                   The police charged you with being in possession of the items found in your vehicle. You then remained in custody for approximately six weeks before being released on EM bail to your address in Whakatane.

The Whakatane charges

[9]                   The Whakatane charges were laid after the police executed a search warrant at your address on 13 February 2020. You were living in a large detached garage at the address. This had been substantially remodelled and was divided into four separate areas. The middle area was set up as a clandestine methamphetamine laboratory. This was not operational when the police arrived, but they found a substantial quantity of equipment and other items associated with the manufacture of methamphetamine. These included large quantities of equipment, precursor substances and materials. The police consider that the equipment found at the address was capable of manufacturing up to five kilograms of methamphetamine in a single cook.

[10]               A closed-circuit television system had been installed at the address. When the police analysed film stored on this, they observed you and others engaged in the manufacture of methamphetamine on an  ongoing  basis  between  May  2019  and 13 February 2020. Because you were unable to leave the address you would arrange for other persons to bring items needed for the manufacture of methamphetamine to the address.

[11]               The police found a black Nike bag inside a cupboard in your bedroom. Inside the bag was a one litre plastic container that held 491 grams of methamphetamine in five small round containers. The police also found the sum of $64,130 in cash in this bag.

[12]               The police also found methamphetamine in other areas. In total, they found approximately 625 grams of methamphetamine at the address. This had a value of between $50,000 and $100,000 if sold in bulk.

[13]               The police also found a safe in your bedroom containing cash totalling $98,590 and a black pouch containing four one-ounce gold bars, each having a value of approximately $3,000. In addition, the police found two rings in the safe, one of which was accompanied by a valuation certificate ascribing it a value of $136,000. The police also found cash totalling $2,420 in your wallet, and numerous silver coins inside another safe in the garage.

[14]               Two white buckets were also located by police in the garage at the address. Inside these were vacuum-packed and sealed plastic bags containing a total of 1.2 kilograms of cannabis head material. This had a value of more than $9,000 if sold in bulk. The police also found a plastic zip lock bag containing 32.68 grams of cannabis plant material in your bedroom. Also located in your bedroom was a set of digital scales and a CCTV monitoring screen connected to cameras depicting a view of the garage door and driveway of the address.

[15]               In addition, the police found several firearms at the address. These included a Bruni Mod 8 mm starter pistol that had been modified so it could fire live ammunition. The police also found a Polytech .22 long-range rifle, a Magnum .357 lever-action rifle and an ISSC MK22 military style rifle. A loaded ten round magazine for the ISSC military rifle was also found inside the bag that contained the rifle.

[16]               The police also located a Saiga MK03 military style rifle and magazine loaded with ten live rounds of ammunition. This is a prohibited firearm under the Arms Act 1983. Inside the same rifle case the police found a sawn-off shotgun. Substantial

quantities of ammunition were also discovered. Much of these were capable of being fired using the firearms found at the address.

[17]               The police arrested you after they searched the address. They subsequently analysed three cellphones they had found at the address and discovered that between

23 November 2019 and 13 February 2020 you had sold quantities of methamphetamine to several unknown persons. Some of the quantities supplied in these transactions are known whilst others are unknown.

[18]               Not surprisingly, you were remanded in custody following your arrest. At that point the police became aware that you were still in control of cash totalling more than

$1.5 million. You had concealed this in two suitcases you had hidden in a hydraulically operated compartment under your bed. These had not been discovered when the police searched your address on 13 February 2020. From prison, you arranged for your father to uplift the suitcases and to hand these were then held initially by your father and then by your partner and your mother. The object of this was to ensure the cash was not found by the police or stolen by others.

[19]               You then arranged for your mother and partner to use cash from one of the suitcases for a variety of purposes. You asked your partner to buy items of clothing and footwear for your use in prison. You also arranged for her to purchase a motor vehicle using cash and to pay cash into prison accounts in the names of your associates in prison. You arranged for your mother to pay a deposit on a ring for your partner and to pay outstanding legal fees owing both by yourself and one of your associates. Your mother also gave your partner cash for use on living expenses. Your mother and partner were both charged with money laundering as a result of these activities.

[20]               The police executed a further search warrant at your address on 9 April 2022. On this occasion they discovered the further sum of $77,860 hidden behind a dishwasher. This comprised proceeds of your offending that you had entrusted your father to look after on your behalf. He was subsequently charged with money laundering as a result of assisting you in this way.

[21]               Shortly before sentencing a dispute arose as to whether all the cash in the two suitcases belonged to you. I therefore conducted a disputed facts hearing at the commencement of the sentencing exercise. You gave evidence and said the suitcase that contained $1 million comprised proceeds of the sale of drugs that you were holding on behalf of gangs. You said that the sum of just over $500,000 that was found in the other suitcase represented the proceeds of sale of drugs that belonged to you. You also accepted that the other quantities of cash that the police found at the address belonged to you.

[22]               You said you sold drugs that you manufactured both on your own behalf and on behalf of gangs. You said you were required to retain the proceeds of the sale of drugs that you had sold for the gangs and that you did this by keeping the cash in the second suitcase. You also said that you regarded this as a form of insurance for you because, whilst you had control of the cash, the gangs were unlikely to take any punitive action against you.

[23]               I heard this evidence because the issue of whether or not all of the money belonged to you could have relevance to the sentence to be imposed on you. Having heard that evidence I am not sure the position is affected to any great degree. All the cash in both suitcases represented the proceeds of the sale of drugs you had manufactured. The only difference between you and the Crown is that you were to retain all of the proceeds of sale for your own benefit whereas, on your version of events, part of the proceeds was to be paid to the gangs.

[24]               You say that you were placed under pressure by the gangs to conduct manufacturing and distribution activities on their behalf. Your version of events is supported by a statement taken by the police from a person with whom you associated in prison following your arrest. He says you were being pursued by several gangs at that time for debts you allegedly owed them. He also says you originally agreed to provide him with quantities of methamphetamine in return for him providing you with protection in prison. He says this arrangement was later altered and you paid him the sum of $10,000 in return for protection.

[25]               This may be so, but the hold that the gangs had over you arose because you became indebted to them because you had purchased drugs and could not pay for them. This is different to where an innocent person is placed under duress by another to commit criminal offences. The answer to your dilemma was not to get involved in drugs in the first place and not to become indebted to gangs in the second.

[26]               Your explanation does not explain why you remained in exclusive control and possession over at least $700,000 in cash. You were also involved in supplying methamphetamine to others both on your account and for gangs. This means you derived significant profits from your offending and not all of it went to gangs.

[27]               I accept that the culpability of your offending is reduced slightly by the fact that you may well have been manufacturing and selling some of the drugs for other persons. Nevertheless, the evidence establishes that you were able to acquire a considerable sum of cash in your own right and you were also able to use funds you received from the sale of drugs to acquire other assets such as motor vehicles, jewellery and gold bars. On any view of events this was an undertaking that you engaged in to enrich yourself.

Approach

[28]               The sentencing process in your case is complicated by the fact that I need to take into account both the Manukau charges and the Whakatane charges, given that they relate to offences committed at different times. I proceed on the basis that the Whakatane charges are the most serious. I will therefore fix a starting point for those charges and then determine whether, and if so to what extent, this should be increased to reflect your culpability on the Manukau charges. This will involve consideration of totality principles to ensure I do not select a starting point that is out of all proportion to the overall gravity of your offending.

Starting point

The Whakatane charges

[29]               The lead, or most serious, of the Whakatane charges are those relating to the manufacture, supply and possession for supply of methamphetamine. You accept that you manufactured at least eight kilograms of methamphetamine between June 2019 and February 2020. It seems that you did so in batches of two kilograms each. As I have already observed, of this amount the police found a total of 625 grams of methamphetamine when they searched your address on 13 February 2020.

[30]               The quantity of methamphetamine that you manufactured and supplied places you firmly in band 5 identified by the Court of Appeal in a case called Zhang v R.1 This calls for a starting point of between ten years and life imprisonment.2 Assessment of where offending lies within a particular band depends on the role played by the offender. In Zhang, the Court of Appeal identified three roles, namely lesser, significant and leading.3 Those who play a leading role will direct or organise buying and selling on a commercial scale and have substantial links to, and influences on, others in the chain. They will also have expectation of substantial financial gain and close links to the original source of the drug.

[31]               I am satisfied you played a leading role in relation to the manufacturing operation you conducted from your address. You were in charge of all aspects of that operation and you also played a considerable role in distributing the product to others. You also, as I have already recorded, received a significant part of the profits for your own use. I consider a starting point of 14 years imprisonment is appropriate to reflect your role in this manufacturing and distribution network.

[32]               This does not, however, take into account the large quantities of equipment, precursor materials and substances the police found at your address. These gave you the ability to manufacture further significant quantities of methamphetamine over and

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

2 At [125].

3 At [126].

above  that  reflected  in  the other  charges.     I would add an uplift of two years imprisonment to reflect this factor.

[33]               I would not add a further uplift to reflect the charge relating to the cannabis found in your possession. The starting point I have selected in relation to the methamphetamine charges is sufficient to reflect your culpability in relation to the cannabis charge as well.

[34]               It is, however, necessary to add an uplift to reflect the fact that numerous firearms and quantities of ammunition were found at your address. These included the semi-automatic rifle that is a prohibited item under the Arms Act 1983. The presence of firearms in a drug-related context is always a matter of concern because experience has shown they will be used by persons who wish to protect drug-related assets. Standing alone, the unlawful possession of a single firearm may warrant a starting point of around 18 months imprisonment. Your culpability goes well beyond this because of the number of weapons and quantity of ammunition found in your possession. Taking into account totality principles, however, I agree with counsel that an uplift of two years is appropriate to reflect the firearms and ammunition charges.

[35]               I do not apply any uplift to reflect the money laundering charge. This involved the acquisition of seven motor vehicles prior to your arrest that you placed in the names of your family and friends. It also involved the acquisition of the silver coins and gold bars. These acts represent your efforts to turn the proceeds of your offending into different forms so they could be concealed from the authorities. This aspect of your offending would ordinarily justify a modest uplift, but this would run the risk of double counting because the value of the benefits you received from your offending is already reflected in the starting points I have selected on the methamphetamine charges.

[36]               It follows that I have selected an overall starting point of 18 years imprisonment on the Whakatane charges.

The Manukau charges

[37]               The incident giving rise to the Manukau charges appears to be a “one-off” event in which you were caught in possession of 293 grams of methamphetamine

together with other paraphernalia suggesting involvement in drug dealing activity at a retail level. This occurred two months before you began manufacturing methamphetamine at the address to which you were subsequently bailed. You were also found in possession of the .30 calibre military style semi-automatic rifle, the shotgun stock and quantities of ammunition.

[38]               The quantity of methamphetamine found on this occasion places the offending within Band 3 identified in Zhang.4 This calls for a starting point of between six and 12 years imprisonment.

[39]               The fact that you are also to be sentenced on the Whakatane charges means it is somewhat artificial to engage in any detailed analysis of your precise role in relation to the offending giving rise to the Manukau charges. You appear to have been involved, as I have said, at a retail level in a drug distribution network. If it was necessary to do so I would place you in the “lesser” category for this offending. However, the aggravating feature about it is that firearms and ammunition were also found in your possession.

[40]               Mr Hamlin initially submitted on your behalf that no uplift was warranted to reflect the Manukau charges because your culpability on these is largely reflected in the Whakatane charges. Having read the Crown’s submissions he contended an uplift of no more than three years was justified to reflect them.

[41]               An uplift is plainly required because the Manukau charges reflect the drug dealing activity in which you engaged before your supplier was sent to prison and you began to manufacture methamphetamine. It is entirely separate from the Whakatane offending and needs to be recognised by an uplift that takes into account totality principles.

[42]               During the hearing this morning the Crown acknowledged that an uplift of around two years might be appropriate to reflect the Manukau charges. This accords with the impression I had gained before the hearing began.

4      Zhang v R, above n 1, at [125].

[43]               On a standalone basis, the Manukau charges would attract a starting point of around six years imprisonment having regard to your role, the quantity of methamphetamine involved and the presence of firearms and ammunition. Applying totality principles, however, I consider an uplift of two years to be appropriate to reflect those charges. This means I have selected a sentence of 20 years imprisonment before taking into account aggravating and mitigating factors personal to you.

Aggravating factors

[44]               You have several previous convictions but none for drug-related offending. I therefore apply no uplift to reflect previous convictions.

[45]               The fact that you continued to offend after being remanded on EM bail on the Manukau charges is obviously an aggravating factor that would ordinarily justify an uplift to the starting point. The Crown has suggested today that I should apply an uplift of around two months to reflect this factor. However, given the overall starting point of 20 years imprisonment, I do not consider it appropriate to apply an uplift to reflect the fact that the Whakatane offending occurred whilst you were on EM bail. That said, it is a factor I will take into account when considering whether to impose a minimum term of imprisonment.

Mitigating factors

[46]               The first mitigating factor for which I can give you credit is your guilty pleas. These came late in the piece for both sets of charges, but I accept that considerable background work needed to be done by you and your counsel to reach resolution with the Crown regarding several issues in relation to the Whakatane charges. This factor was compounded by the pandemic which made it very difficult for counsel to gain access to clients who were in prison. In addition, disclosure was an ongoing process and was only completed relatively recently. So far as the Manukau charges are concerned you entered guilty pleas shortly after the Court of Appeal delivered a decision on 19 July 2021 upholding an earlier ruling in the District Court that the evidence discovered during the search of your vehicle was admissible at your trial.5

5      Simpson v R [2022] NZCA 323.

[47]                 I had originally decided to give you a credit of 20 per cent, or four years, to reflect your pleas on both sets of charges. The Crown contended you should only receive a discount of 15 per cent to reflect the approach taken in relation to other defendants. In some senses that is fair, but I need to bear in mind the fact that your guilty pleas saved the cost of what would have been a very lengthy jury trial. I propose to give you a credit of four years six months, or something over 20 per cent, to reflect your pleas on both sets of charges.

[48]               Your counsel has also provided me with a detailed report prepared by a psychiatrist, together with a cultural report tendered under s 27 of the Sentencing Act 2002. In addition, your counsel has provided me with a report prepared by a person who was formerly a police officer having expertise in drug-related matters. I do not find the latter report to be of any real assistance for present purposes because in dealing with drug-related issues it is largely general in nature. To the extent that it refers to your personal position and likely motivation for offending I consider the writer of the report not to be qualified to make many of the statements contained in the report.

[49]               You are now 31 years of age. The psychiatrist notes that you were initially diagnosed as suffering from a major depressive disorder, but she now considers you suffer from bi-polar disorder, as well as complex bereavement disorder, methamphetamine use disorder and paranoid personality disorder. The bipolar disorder has manifested itself for many years in the form of prolonged depressive episodes and, on occasions, in abnormally elevated moods. Your paranoid personality disorder causes you to believe others are talking about you or thinking ill of you when there is no rational basis to believe this is the case.

[50]               Members of your family have observed these symptoms for many years. They became particularly acute following the death of your brother in October 2016. You were profoundly depressed by this event. You also come from a family in which the consumption of alcohol and drugs was the norm. Your parents separated when you were just five years of age. Thereafter you would move between addresses and were often separated from your siblings. You began using drugs and alcohol in your adolescent years and started using methamphetamine when you were 19 years of age.

You left school at the age of 15 years when you were required to provide financial support for a child you had fathered at that time.

[51]               You had a brief period of abstinence from drugs following your brother’s death. From 2017, however, you began consuming methamphetamine regularly and in increasing quantities to assist you in dealing with your depression. Between 2017 and 2019 your use of methamphetamine escalated to the point where, at the time of this offending, you were consuming approximately two ounces of methamphetamine every week. On occasions you have become psychotic whilst intoxicated by methamphetamine. There is no evidence, however, that you suffer from an underlying psychotic disorder.

[52]               Like many others, you initially began dealing in methamphetamine to pay for your own drug habit. Inevitably, you became indebted to those who supplied you with methamphetamine. These included gangs, at whose hands you say you suffered physical violence on several occasions as a result of your indebtedness.

[53]               Your supplier was ultimately sent to prison and you say the gangs required you to begin manufacturing methamphetamine to replace the source of supply you had lost and to repay the debts owing to them. This led to you committing the offences that comprise the Whakatane charges.

[54]               As the reports demonstrate, your underlying mental health issues have been exacerbated by the consumption of large quantities of methamphetamine over many years. They have also contributed to the addiction issues that undoubtedly influenced your initial decision to deal in methamphetamine and then to engage in manufacturing it. However, I am satisfied that your underlying mental health issues were present before you began to consume and deal in methamphetamine. It is therefore likely that they contributed to the downward spiral that led you to commit the present offences. The same issues are also likely to make it more difficult for you to serve your sentence in prison. I propose to make an allowance of two years six months, or slightly under 15 per cent, to reflect the combined effect of your mental health and addiction issues.

[55]               You now express remorse and say you are determined to rehabilitate yourself whilst in prison. You also say you have been a model prisoner and intend to remain so. In addition, you have finally come to recognise and understand the grief you have caused others. These include your father, mother and partner, all of whom were charged as a result of assisting you in dealing with the proceeds of your offending.

[56]               Interestingly, the cultural report refers to observations made by one of the persons who now provides you with support in prison. She says you were initially obsessed with defending the charges and could not understand why you were locked up in prison. She had the distinct impression you had no appreciation that anyone had been affected by your drug related activities other than yourself. This changed when you learned your mother had been given a sentence indication that suggested a sentence of imprisonment was a possible outcome. She says she noticed a distinct change in you at that point. For the first time you appear to have realised how much your offending had hurt others. Fortunately, Mr Simpson, your mother ultimately received a sentence of community detention, as did your former partner. Although remorse and insight into your offending came very late, I propose to allow a discount of five per cent, or 12 months, to reflect your remorse and to encourage your rehabilitative efforts.

[57]                These factors reduce the starting point of 20 years imprisonment by eight years. It follows that the end sentence will be one of 12 years imprisonment.

Minimum term of imprisonment

[58]               In the ordinary course, offenders who are sentenced to more than two years imprisonment will be eligible to apply for parole after serving one-third of their sentence. However, the Court has the power to make an order that such persons serve longer than this before being eligible for parole.6 It may do so where the usual parole provisions are not sufficient to satisfy sentencing principles of denunciation, deterrence, the need to hold the offender accountable and the need to protect the community from future offending.7

6      Sentencing Act 2002, s 86(1).

7      Section 86(2).

[59]               The Court of Appeal confirmed in Zhang that the courts must not impose minimum terms of imprisonment as a matter of routine or in a mechanistic way.8   In a case called Tran v R the Court of Appeal also observed that minimum terms of imprisonment have recently been set aside in cases where the circumstances of appellants have fallen into one of three categories:9

(a)Those who are young and with good prospects of rehabilitation.10

(b)Those who have a low likelihood of reoffending.11

(c)Those whose personal circumstances weigh against the imposition on a minimum term of imprisonment.12

[60]               The Crown submits your offending justifies a minimum term of 50 per cent of your sentence. Mr Hamlin contends no minimum term of imprisonment is justified.

[61]               In the ordinary course you would be eligible for parole after serving four years of your sentence. This needs to be measured against the fact that you were prepared to become involved in manufacturing and dealing in methamphetamine in a major way soon after you were released on EM bail on other serious drug charges. You produced a significant quantity of methamphetamine and derived substantial profits from doing so. You retained at least some of that profit and acquired assets with it. You also allowed it to be used by your partner and mother to buy items for you and for themselves following your arrest. Furthermore, you had the ability through the items of equipment and material that you had accumulated to carry on making significant quantities of methamphetamine.

[62]               At 31 years of age you cannot claim credit for youth, and the level of insight that is crucial if there is to be any prospect of rehabilitation has only been evident in recent times. That prospect is still very much in the balance. Not do I consider the

8      Zhang v R, above n 1, at [169].

9      Tran v R [2021] NZCA 464 at [54]

10     Citing Fangupo v R [2020] NZCA 484.

11     Citing Prasad v R [2020] NZCA 483.

12     Citing Tang v R [2021] NZCA 266.

fact that the gangs may have been placing pressure on you to manufacture methamphetamine alters the position to any marked degree.

[63]               Had it not been for your addiction and associated mental health issues, I would have had no hesitation in imposing a minimum term of 50 per cent. However, I am satisfied these particular factors tip the balance to the extent that the minimum term of imprisonment must be reduced. I am satisfied that the sentencing principles of deterrence, denunciation and the need to hold you responsible, are all engaged in this case and that none of the factors to which I have referred and upon which Mr Hamlin relies, justify the non-imposition of such a term.

[64]               I therefore make an order under s 86(1) of the Sentencing Act 2002 requiring you to serve five years, or just over 40 per cent, of your sentence before being eligible to apply for parole.

Sentence

[65]               On the charges of manufacturing, supplying and being in possession of methamphetamine for supply in Whakatane you are sentenced to 12 years imprisonment and you are ordered to serve a minimum term of five years before being eligible to apply for parole.

[66]               On the charges of being in possession of equipment, precursor substances and materials for use in the manufacture of methamphetamine, you are sentenced to two years imprisonment. On the charge of being in possession of cannabis for supply you are sentenced to two years imprisonment.

[67]               On the charges of being in unlawful possession of firearms and ammunition in Whakatane you are sentenced to two years imprisonment.

[68]               On the money laundering charge you are sentenced to three years imprisonment.

[69]               On the charge laid in Manukau of being in possession of methamphetamine for supply you are sentenced to two years imprisonment. On the Manukau charges of

being in unlawful possession of firearms and ammunition you are sentenced to two years imprisonment.

[70]               All sentences are to be served concurrently. This means you will be required to serve an effective sentence of 12 years imprisonment with a minimum term of five years before being eligible for parole.

[71]               I make an order for the destruction of the drugs, equipment, materials, precursor substances, firearms and ammunition that were found in your possession.

Lang J