Wisely v The Queen

[2019] NZHC 306

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CRI-2018-412-28

[2019] NZHC 306

BETWEEN

KELVIN BRUCE WISELY

Appellant

AND

THE QUEEN

Respondent

Hearing:	4 February 2019
Appearances:	A Stevens QC for Appellant C Ure for Respondent
Judgment:	1 March 2019

JUDGMENT OF MANDER J

[1]    Mr Kelvin Wisely was sentenced by Judge Crosbie to an effective term of seven years and 10 months’ imprisonment for dealing in methamphetamine and cultivating cannabis.  An order was also made for the  forfeiture of cash found at   Mr Wisely’s property. He appeals the sentence, alleging that it was manifestly excessive, and challenges the forfeiture on the grounds the Judge’s assessment of the evidence relating to that issue was wrong.

Background

Supply of methamphetamine - 29 g

[2]    During May 2017, Mr Wisely supplied an associate with 29 g of methamphetamine. An electronic surveillance operation was commenced regarding his activities which ran over the course of July. It provided evidence to support a further three charges of supplying methamphetamine, a charge of possessing

WISELY v R [2019] NZHC 306 [1 March 2019]

methamphetamine for supply, and a further charge of conspiring to supply methamphetamine.

Supply of methamphetamine – 1 g

[3]    On 11 July 2017, Mr Wisely supplied 1 g of methamphetamine to an associate for the sum of $500.

Supply of methamphetamine – one ounce

[4]    On 11 July, the defendant advised another associate that he would have at least one, but possibly two, ounces of methamphetamine which he would be able to supply to him over the weekend. The associate advised that the last ounce he had procured had been sold within 24 hours. Mr Wisely and his associate made arrangements to meet and the methamphetamine was supplied.

[5]    On 18 July, the same associate discussed procuring more methamphetamine from Mr Wisely. He advised Mr Wisely that he wanted one ounce of methamphetamine because the market where he was selling the drug was “flooded” at that time and it would be slower to sell. Mr Wisely told the associate that he would hold on to the other ounces of methamphetamine but needed to get rid of the remaining methamphetamine before a new shipment arrived.

Supply of methamphetamine – one ounce

[6]    On an earlier unknown date, Mr Wisely had supplied methamphetamine to a different associate who resided in Gore. On 11 July, during a conversation with a Dunedin associate, Mr Wisely advised that the Gore associate was coming to get methamphetamine from him later that day. Over the next two days Mr Wisely attempted to contact his Gore associate to inform him that the methamphetamine was ready to be picked up.

[7]    On 12 July, Mr Wisely spoke with the Gore associate, demanding that he bring the $8,200 that he was owed when he next visited. On 16 July, Mr Wisely again spoke with the Gore associate, pressuring him to visit him and bring the cash. Mr Wisely advised that if the money was not received by his supplier they would be shut down,

and Mr Wisely did not want that to happen. On 17 July, the Gore associate visited Mr Wisely with the cash.

[8]    On 19 July, an intercepted conversation between Mr Wisely and another associate recorded Mr Wisely advising that the Gore associate had gone through

$17,000 worth of methamphetamine in three weeks and still owed him nearly $10,000. It is apparent from the quantity of cash referred to that Mr Wisely was supplying the Gore associate with ounces of methamphetamine.

Conspiracy to supply – seven ounces

[9]    Mr Wisely had an arrangement with a Hamilton associate whereby the associate would, each week, courier ounces of methamphetamine to him concealed within a thermos flask. In the week following the shipment Mr Wisely would courier cash, being the proceeds of the sales of methamphetamine supplied to him, back to his Hamilton associate.

[10]   On 17 July, Mr Wisely sent a package to the Hamilton associate that was found to contain $39,500 in cash. This was payment for four ounces of methamphetamine previously sold by Mr Wisely. On 19 July, a package destined for Mr Wisely’s Milton address was intercepted by police. The package contained three ounces of methamphetamine.

[11]   Seven ounces of methamphetamine has a wholesale value of between $10,000 and $12,000 per ounce. If sold for $950 per gram, being a common sum that a gram of methamphetamine is sold for in Dunedin and the surrounding area, it would have a street value of almost $186,200.

[12]   Upon the termination of the electronic operation, police executed a search warrant at Mr Wisely’s Milton address on 19 July.

Possession for supply of methamphetamine – 26.5 g

[13]   The police found 26.5 g of methamphetamine stored in Mr Wisely’s freezer. This equates to approximately one ounce (28 g) of methamphetamine. If sold at $950

per gram, the value of the methamphetamine seized was approximately $25,000. Digital scales and bags associated with methamphetamine distribution were located in the kitchen. The scales were found to contain traces of methamphetamine.

[14]In the master bedroom, cash in the sum of $25,110 was located.

[15]   Four thermos flasks, two of which were identical to the one intercepted by police, were also located at the address. Analysis of two of the flasks indicated traces of methamphetamine, which suggests that at least two previous shipments had been undertaken. The flasks were capable of holding more than three ounces of methamphetamine.

Cultivation of cannabis (estimated yield 22 ounces)

[16]   Located on Mr Wisely’s property was a freestanding three bay barn. One bay within the barn was enclosed and secured by an access code locking mechanism. Within the locked bay was a workshop area with tools and a workbench. At the rear of the workshop area, Mr Wisely had constructed a false internal wall which hid a further room behind the workshop. Access to this hidden room was via a removable panel located within the false wall. Within this hidden room the police found an indoor cannabis growing operation.

[17]   Nutrients, rooting compound, and other products commonly found in the cloning and cultivation of cannabis plants were located. An old fridge had been converted into a cloning chamber for growing cannabis plants from clones. There was a fluorescent light on the top shelf and a heat pad on the bottom shelf. Within the room itself, Mr Wisely had erected an indoor growing tent complete with high density lights, a carbon filter and centrifugal fan. Nylon fishing line had been strung between the false wall and the rear of the wall of the barn for the drying of harvested cannabis plant material.

[18]   Between April and July 2017, Mr Wisely had planted 11 cannabis clones in polythene potting bags and soil within the growing tent. They had grown into cannabis plants, reaching a height of some 30-70 cm by the time of the search. Based on a conservative yield of two ounces per plant, the total yield from 11 bags was estimated

to be 22 ounces. On the basis of a market price of $400 per ounce, the potential value of the yield would have been $8,800.

Possession for the supply of cannabis – 214 g

[19]   During the search 214 g of dried cannabis head was located in a plastic bag in the wardrobe of Mr Wisely’s bedroom. This equates to over seven and a half ounces of cannabis, which has a value of over $3,000.

Possession of cocaine

[20]   When Mr Wisely’s person was searched a small bag containing 0.6 g of cocaine was located in his wallet.

Summary

[21]   In total, the investigation revealed that Mr Wisely had sold or was involved in the trafficking of 308.5 g of methamphetamine. This equates to some 11 ounces of methamphetamine which, if sold at wholesale value of between $10,000 and $12,000 per ounce, would have returned a sum in the range of $110,000 to $132,000. If sold by the gram at $950 per gram, the retail value of the methamphetamine would have totalled some $293,000.

District Court sentencing

[22]   In approaching the sentencing exercise, Judge Crosbie chose to take a global starting point in respect of the methamphetamine charges and adopted a reduced starting point to account for the lesser maximum penalty that applied to the conspiracy charge. The Judge canvassed relevant case law and determined the scale and gravity of the offending could be assessed by combining the quantity of the drugs actually supplied; the drugs found in the defendant’s possession and available for supply; and the methamphetamine that was the subject of the conspiracy to supply charge.

[23]   Both the Crown and the defence accepted that the offending fell within band three of the R v Fatu guidelines, which attracts a starting point of between eight to 11 years’  imprisonment  for  offending  that  involves  the  supply  of  large commercial

quantities of methamphetamine, between 250-500 g.1 However, they differed as to where within that band the appropriate starting point should have been set. The Crown argued that an appropriate starting point was nine to nine and a half years’ imprisonment with only a minor adjustment being required to reflect the conspiracy charge because of the advanced stage the conspiracy had reached. The defence argued the offending fell within the lower end of band three, requiring a starting point of no more than eight years’ imprisonment.

[24]   Judge Crosbie considered that had the total amount of the 308.5 g of methamphetamine represented the amount actually supplied, he would have been entitled to adopt a starting point of nine and a half years’ imprisonment. The amount actually supplied was 112.5 g. If that was the only offending before the Court the Judge observed that it would have fallen within band two, and a starting point of around seven years’ imprisonment would have been appropriate.

[25]   The Judge noted that where a conspiracy extended no further than the theoretical planning stage, a substantial discount from the Fatu guideline was appropriate. However, where the plan had developed to a point close to the completion of the substantive offence, the discount would be much reduced – in the vicinity of five to 10 per cent. In the present case, Judge Crosbie considered the conspiracy charge represented offending that extended much further than a theoretical plan.

[26]   Mr Wisely had sent a package containing cash to an associate in Hamilton, and a further package which contained methamphetamine had only failed to reach its destination because it had been intercepted by the police. The District Court considered a starting point of nine and a half years was appropriate based on the total amount of 308.5 g. The Judge modified that starting point by a six month reduction to reflect that the conspiracy charge was a component of the overall starting point.

[27]   In relation to the cannabis offending, Judge Crosbie considered that because the quantity of cannabis involved was more than incidental to the other dealing charges it was necessary to impose an uplift. The offending fell within band two of R v Terewi,

1      R v Fatu [2006] 2 NZLR 72, (2005) CRNZ 410 (CA) at [34].

representing, as it did, small scale cultivation for a commercial purpose.2 The Judge considered the nature and sophistication of the growing operation, if standing alone, would ordinarily have attracted a starting point of two and a half years’ imprisonment.

[28]   Having regard to the principle of totality, 18 months was added to the starting point to reflect the cannabis offending and the possession of cocaine charge. That resulted in an overall starting point of 10 and a half years’ imprisonment. A 25 per cent deduction was applied, primarily in recognition of Mr Wisely’s guilty pleas. This resulted in the final sentence of seven years and 10 months’ imprisonment.

The appeal

[29]Mr Wisely brings his appeal on three grounds, namely:

(a)that the starting point of nine years for the methamphetamine offending was too high;

(b)that the uplift of 18 months to that starting point for the cannabis offending and possession of cocaine was excessive; and

(c)that the order for forfeiture of $25,110 in cash ought not to have been made.

Jurisdiction

[30]   An appeal against sentence may only be allowed by this Court if it is satisfied there has been an error in the imposition of the sentence and that a different sentence should be imposed.3 An appellate Court will not intervene where the sentence is within range and can properly be justified by the relevant sentencing principles.4 This Court will only substitute its own views if the sentence is “manifestly excessive”.5 The focus must be on the end result and not the process by which the sentence was reached or its component parts. In the absence of a determination that the sentence is

2      R v Terewi [1999] 3 NZLR 62, (1999) 16 CRNZ 429.

3      Criminal Procedure Act 2011, ss 250(2) and (3).

4      Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [36].

5      Ripia v R [2011] NZCA 101 at [15].

manifestly excessive, an appellate Court should not interfere with the legitimate exercise of judicial discretion.6

Starting point for the methamphetamine offending

[31]   On behalf of Mr Wisely, Mrs Stevens QC submitted that the District Court had erred in its assessments. Firstly, the sentencing Judge had erred when gauging where the supply charges (112.5 g), if standing alone, sat across the range of sentence provided by band two of R v Fatu. Secondly, that even when taken together with the methamphetamine involved in the conspiracy charge, and even if treated as having been supplied (308.5 g), it would still have been at the lower end of band three.

[32]   Mrs Stevens submitted the starting point should have been no more than eight and a half years’ imprisonment which, when discounted to recognise that a component of the methamphetamine offending included a conspiracy charge, an even lesser starting point should have resulted. Accepting Judge Crosbie’s discount of 10 per cent in recognition of that feature, it was submitted a starting point of seven years and six months would have been appropriate for the methamphetamine dealing charges.

[33]   In support of her argument, Mrs Stevens referenced a number of earlier sentencing decisions. The Crown was critical of the comparative value of those cases and that they could be distinguished. I briefly refer to those cases and the Crown’s critique.

[34]   In R v Fraser, the sentencing Court adopted a nine year starting point in respect of 360 g of methamphetamine supplied over a two year period.7 The Crown noted that the decision followed a sentencing indication, the details of which were unknown, and that no reference was made to the identification of the relevant band in Fatu, nor to the defendant’s individual culpability which, it was submitted, made any comparison to the present case difficult to make.

6      Maihi v R [2013] NZCA 69 at [21].

7      R v Fraser [2014] NZHC 2061.

[35]   In Philip v R, a starting point of nine years was taken for the supply and possession of 376 g of methamphetamine.8 The Crown’s reposite was that the Court of Appeal’s upholding of that sentence did not indicate any inconsistency with the approach taken by the sentencing Court in the present case.

[36]   The appellant in R v Ashford was found in possession of 370 g of methamphetamine, in respect of which a starting point of eight and a half years was taken.9 The appellant also faced charges of possession of equipment, burglary and resisting. The Crown submitted that only the amount of methamphetamine bears any resemblance to Mr Wisely’s offending. The charge faced by the appellant in that case related to his possession of methamphetamine on a single occasion, rather than to ongoing dealing in large amounts.

[37]   In R v Mataki-Kaiaruna the defendant faced charges of possessing methamphetamine for supply, three charges of supplying methamphetamine, a charge of conspiracy to supply, and two charges of conspiring to manufacture methamphetamine. The total amount of methamphetamine relating to the dealing charges amounted to 413.8 g.10 The estimated amount of methamphetamine relating to the conspiracy to manufacture methamphetamine was estimated to be 240 g. In relation to the supply charges, a starting point of nine years was taken. A starting point of five years was viewed as appropriate in respect of the conspiracy to manufacture charges. However, the sentencing Court took an overall starting point of 10 years to reflect all the offending.

[38]   In seeking to distinguish that case, the Crown emphasised the defendant’s role in the offending. He was a gang “prospect” who was operating under the direction of senior members. The income derived from the dealing was provided to superiors in the gang, although he received some payment for his actions. The defendant traded in g and the total amount of methamphetamine supplied was the estimated aggregate of having sold some 7 g of methamphetamine per week over the course of the past year. In comparison, the Crown submitted Mr Wisely’s offending involved the regular

8      Philip v R [2017] NZCA 129.

9      R v Ashford [2017] NZDC 21254.

10     R v Mataki-Kaiaruna [2017] NZHC 1288.

distribution of ounces of methamphetamine and that he sat higher in the distribution pyramid.

Decision

[39]   The Court of Appeal, in R v Fatu, identified the following sentencing bands in cases involving the sale and supply of methamphetamine:11

(a)Band one - low level supply (less than five g) - two years to four years imprisonment.

(b)Band two - supplying commercial quantities (five g to 250 g) - three years to nine years imprisonment.

(c)Band three - supplying large commercial quantities (250 g to 500 g) - eight years to 11 years imprisonment.

(d)Band four - supplying very large commercial quantities (500 g or more) - ten years to life imprisonment.

[40]   Like many guideline sentencing decisions, there is an overlap in the range of sentences provided by each band. Relevantly, there is an overlap between band two and band three, which indicates that even for an amount less than 250 g a sentence of nine years could still be in range. Equally, for an amount in excess of 250 g a sentence of eight years might be appropriate. The overlap recognises the need for flexibility in sentencing, and that ultimately the imposition of the appropriate sentence involves the exercise of discretion based upon an assessment of the circumstances of the individual case.

[41]   The Court of Appeal has observed that reference to isolated sentencing decisions and argument based on those selected decisions that the sentence is excessive is not helpful. Each case must turn on its own facts, informed by the principles articulated in decided cases and guided by the Sentencing Act 2002.12

[42]   Inevitably, there will be differences between individual cases, particularly when analysed simply on the basis of the aggregate of the methamphetamine to which the charges are said to relate. For example, a case not referred to by counsel but relied

11     R v Fatu, above n 1, at [34].

12     R v Agu [2018] NZCA 147, citing R v Curry CA272/00, 28 September 2000 at [11].

upon by Judge Crosbie was that of Parata v R, which involved the supply and possession of 221 g of methamphetamine and a conspiracy charge relating to a further 28 g.13 In that case the Court of Appeal accepted that eight years’ imprisonment for the supply and possession, together with an uplift of six months for the conspiracy, was appropriate. In comparison, the nine year starting point for 308.5 g does not appear inconsistent. However, as I have observed, comparisons between cases can provide only partial assistance.

[43]   Mrs Stevens’ main point was that the bulk of the 308.5 g related to the conspiracy charge. However, I consider there is an artificiality in seeking to assess Mr Wisely’s culpability by attaching the greater amount of methamphetamine to a particular charge, particularly in the circumstances of a case like the present. What is required is an overall assessment of the nature and size of the offender’s dealing activity, which will include the level at which he was operating within the methamphetamine trade.

[44]   In Fatu, the Court of Appeal identified not only the quantity of the drug involved but the role of the offender as an important part of the assessment of the seriousness of the offending and the offender’s culpability. In that regard, the Court observed:14

Our sentencing ranges overlap between categories. Where an offender fits within any particular band will depend not just on the quantity and purity of the drugs involved but also the role played by the offender. Those who are primary offenders can expect starting point sentences towards the higher end of the relevant band with the converse applying to those whose role is less significant...

[45]   Mr Wisely’s methamphetamine offending was rightly described by the sentencing Judge as “a commercial operation of real scale”. He had in place a system of distribution that enabled him to access wholesale amounts from a different part of the country on a regular basis from his Hamilton supplier, which he was able to distribute to those lower in the chain of supply within the wider Dunedin area. I accept the Crown’s submission that the fact Mr Wisely only faced a conspiracy charge in

13     Parata v R [2017] NZCA 48.

14     R v Fatu, above n 1, at [31].

relation to a larger amount of methamphetamine does not greatly assist him in terms of his argument as to the appropriate level of sentence.

[46]   Sentences imposed for conspiracy have attracted significant starting points. The Crown cited the Court of Appeal’s decision in Hohipa v R, which concerned a sentence of six years’ imprisonment on a charge where the appellant conspired to supply 170 g of methamphetamine.15 The starting point was reduced on appeal to one of six years and six months from seven and a half years, largely in recognition of the appellant’s role in the conspiracy as being limited to one of a “foot soldier”.16

[47]   In R v Jarden, the Court of Appeal emphasised that a charge of conspiracy will not necessarily result in any distinction in the culpability of the individual offender:17

Mr Jarden is not, on the present facts, assisted by having been convicted on a charge of conspiracy to supply rather than supply itself. As the Court of Appeal pointed out in R v Te Rure, the seriousness of the offending may well increase as a conspiracy comes closer to execution. Indeed, upon execution, and while weight must be given to the higher available penalties for supply rather than conspiracy to supply, the element of conspiracy in some circumstances may be seen as aggravating the seriousness of the offending rather than mitigating it. In the present case, matters had plainly progressed well beyond the planning stage to the point where Mr Jarden had purchased methamphetamine for the purpose, at least in part, of on-supply.

[Footnotes omitted]

[48]   The conspiracy to supply charge in the present case, which involves some seven ounces of methamphetamine, reflected Mr Wisely’s wider engagement in the wholesale distribution of methamphetamine during the period of the police’s electronic surveillance. In some respects, the seven ounces of methamphetamine represented only a snapshot of his ongoing high level involvement in the trafficking of a Class A drug. This is borne out by the finding of some four thermos flasks at his address, two of which were identical to the one intercepted by the police and which contained traces of methamphetamine.

[49]   Having regard to the quantity of methamphetamine involved and the nature of Mr Wisely’s role in the offending, I do not consider the sentencing Judge erred in his

15     Hohipa v R [2015] NZCA 485.

16 At [16].

17     R v Jarden [2008] 3 NZLR 612 at [11].

approach to the setting of the appropriate starting point for the methamphetamine offending. Nor do I consider the starting point in respect of those charges was excessive. I consider the nine year term taken by Judge Crosbie was within the range available to him in the exercise of his sentencing discretion.

Uplift for cannabis offending

[50]   It is not  disputed  that  the  cannabis  offending  fell  into  category  two  of  R v Terewi, in respect of which a starting point of between two and four years’ imprisonment would have applied had the cultivation and possession for supply charges stood alone.18 Mrs Stevens’ submission was that only an uplift of one year was required to mark this ancillary drug offending on a totality basis. It was submitted that this other offending was connected in time and circumstance with the methamphetamine charges and was superseded by that more serious offending. It was argued that the cannabis was essentially a by-product of the execution of the search warrant upon the termination of the police’s methamphetamine investigation.

[51]   Because of the nature and circumstances of the cultivation operation and the amount of cannabis located, I do not consider the 18 month uplift for the cannabis offending was excessive. A relatively sophisticated growing set up had been established by Mr Wisely which had already resulted in the harvesting of a commercial amount of cannabis. Category two of R v Terewi encompasses small scale cultivation of cannabis plants for a commercial purpose. It was not disputed that Mr Wisely’s activity fell  into  that  category.  The  addition  of  18  months  in  recognition  of  Mr Wisely’s discrete commercial involvement with another form of drug which, by itself, would likely have attracted a term of imprisonment of two to four years was unremarkable.

[52]   Essentially, the argument made on behalf of Mr Wisely distilled to a submission that the sentencing Judge had failed to properly account for totality. I do not consider that to be the case. In determining the size of the uplift, Judge Crosbie also took into account the possession of cocaine charge, but was explicitly cognisant

18     R v Terewi, above n 2.

of the need to reduce the sentence that may otherwise have been imposed in recognition of the totality principle.

[53]   A sentencing Court when imposing sentences of imprisonment for two or more offences is required to ensure their combined effect reflects the seriousness of each offence, and that the total term is not wholly out of proportion to the gravity of the overall offending.19 Concurrent sentences were imposed in this case, but an allowance made to recognise Mr Wisely’s culpability for the separate cannabis offending. Standing back and reviewing the ultimate starting point arrived at, I do not consider the 18 month uplift, when combined with the nine year starting point for the methamphetamine charges, resulted in a disproportionate sentence for all Mr Wisely’s offending.

Forfeiture

[54]   When the police searched Mr Wisely’s house, $25,110 in cash was found in his bedroom. In the drawer of a clothes dresser, $24,500 was found inside a plastic food storage container. This comprised $13,200 in $100 notes and $11,300 in $50 notes. In a different drawer, $610 was found, comprising notes of various denominations. The cash was seized and its forfeiture sought by the Crown. Mr Wisely resisted confiscation, claiming that $21,000 represented the proceeds of the sale of two motorcycles.

[55]   Section 32(3) of the Misuse of Drugs Act 1975 provides that a Judge may order the forfeiture of money found in the possession of a person convicted of a drug-dealing offence if:

... the Judge or District Court Judge is satisfied that money found in the possession of that person was received by that person in the course of or consequent upon the commission of that offence, or was in the possession of that person for the purpose of facilitating the commission of an offence against [s 6 of the Misuse of Drugs Act] ...

[56]   Mr Wisely’s evidence was that he sold a 2001 Night Train Harley Davidson motorcycle (the Harley Davidson) to a Mr Barry Youngman for $9,200 which was

19     Sentencing Act 2002, s 85.

paid in instalments commencing on 7 September 2016, and a 2008 Victory Hammer motorcycle (the Victory Hammer) which he sold to a Mr Daryn Philips for $12,000 on 16 July 2017. Mr Youngman had also purchased three hoggets from Mr Wisely around this time for $600, and a further 16 sheep had in the previous two weeks been killed off and sold. The proceeds were said to represent $3,800 of the cash located in the food container.

[57]   Judge Crosbie did not accept Mr Wisely’s evidence, nor that of Mr Youngman called in support of Mr Wisely’s narrative of events. The Judge found that the motorcycle transactions had not occurred as alleged and that, even if the sales had legitimately taken place, the cash was available to Mr Wisely for the purpose of funding the purchase of methamphetamine or represented profit from the sale of that drug.   As a result, Judge Crosbie found that a purpose for which the cash was in    Mr Wisely’s possession was to facilitate his drug-dealing activities. Judge Crosbie made a series of findings which in combination led him to that conclusion:

(a)Mr Wisely, as part of his standing arrangement with the Hamilton supplier, was expecting to receive $31,500 worth of methamphetamine. Those drugs, four ounces of methamphetamine, were intercepted by police. It appeared unlikely that Mr Wisely would have sold and collected sufficient funds to pay for this supply without drawing on the large amount of cash located in his bedroom. He was still to collect payment for some of the earlier delivered consignment which he had distributed. In giving his evidence, Mr Wisely had provided no evidence of his profit expectations or details of when or how he might obtain payment for both the new and earlier supply.

(b)Mr Wisely provided no evidence about his dealing arrangements with the Hamilton supplier, nor of his selling practices when dealing with his own customers. The Judge considered it unlikely that the Hamilton supplier would provide him with methamphetamine on an open-ended basis.

(c)Mr Wisely provided no evidence of why he was not able to deposit the funds received through the motorcycle sales to his ANZ account if he truly wished to keep those funds separate from his drug-dealing money.

(d)Mr Wisely himself had accepted the cash could have been used for the purchase of methamphetamine to be on-sold by him or as a float for the purpose of funding his drug-dealing enterprise.

(e)The Judge was not satisfied Mr Youngman had purchased the Harley Davidson as claimed. The evidence irrefutably established that the Victory Hammer was the motorcycle that had earlier been transferred into Mr Youngman’s name in 2016. No plausible explanation was provided as to the basis on which Mr Youngman cancelled that transaction and decided to purchase the Harley Davidson instead.

(f)The Judge found Messrs Youngman and Wisely’s evidence to be “confusing and contradictory” about the ownership and sale of the two motorcycles. In rejecting their evidence, the Judge described both as lacking reliability and credibility.

[58]   Mrs Stevens argued that Judge Crosbie was not entitled to reach the conclusions he did regarding the purpose of the  cash.   She placed emphasis on     Mr Wisely’s personal circumstances at the time. He owned and lived on the property, which comprised a farmlet, near Milton upon which he stocked sheep. Mr Wisely, in June 2016, had been arrested for driving with excess breath alcohol, received an electronic sentence and been disqualified. Because he could no longer earn a living from being a long-haul truck driver, he decided to sell his motorcycles.

[59]   At the forfeiture hearing, the Crown had not challenged Mr Philips’ purchase of the Victory Hammer, nor Mr Youngman’s purchase of the hoggets. The Crown’s challenge to Mr Wisely’s claim centred on Mr Youngman’s payments for the Harley Davidson and its position that the cash should be confiscated because it provided a float for facilitating drug-dealing.

[60]   Mrs Stevens submitted that Mr Wisely’s account of events was consistent with details he had provided in his police interview at the time of his arrest. He informed the police of the sale of the Victory Hammer for $12,000 and also mentioned the hogget sales. While it was acknowledged that he did not mention the Night Train motorcycle sale, it was submitted that was because that deal had not been finalised by the date of the interview.

[61]   Mrs Stevens submitted that on the evidence provided to the Court, Judge Crosbie could not have been satisfied that the $25,110 was derived from drug-dealing or was possessed for the purpose of facilitating the commission of further such offending. She relied on a District Court decision, R v Taylor, where the Judge accepted the defendant’s explanation for seized cash located in her possession rebutted the inference that it was for the purpose of facilitating drug dealing.20 In that case, the defendant provided a corroborated explanation that $3,000 in cash had been received as koha to fund her late husband’s headstone. While the money in that case may have been mixed at times with the profits from drug-dealing, the Court was not satisfied that the money was in the defendant’s possession for the purposes of facilitating that type of offending.

[62]   Mrs Stevens submitted that the situation was the same in the present case, and that Mr Wisely funded his drug-dealing from cash sourced from sales to his purchasers. Circulation of that cash back to his own supplier meant there was no need for him to use his other cash as a float. Mr Wisely’s evidence was that there was no intermingling of the separate sources of monies. The cash was stored separately in the plastic food container. It was submitted that Mr Wisely had a steady market for his methamphetamine, which was borne out by the evidence collected by the police over the course of the electronic interception operation during July 2017. Because he had no need to draw on this “separate cash”, it was submitted that the Crown had not proved on the balance of probabilities that this money was being held by Mr Wisely for the purpose of facilitating the commission of future drug offending.

20     R v Taylor [2017] NZDC 25439.

Decision

[63]   I accept that the Crown’s forfeiture application proceeded on an apparent acceptance that Mr Philips’ motorcycle purchase was legitimate. He had provided a letter to the sentencing Court stating that he paid $12,000 in cash to Mr Wisely for the Victory Hammer on 17 July 2017. There appears to have been no objection to the letter being received and he was not required for cross-examination. The Crown’s case centred on the availability of the cash to fund Mr Wisely’s drug-dealing, and that on the known circumstances of his offending the Court could be satisfied that its purpose was to facilitate that illegal activity. That was the basis upon which the Crown sought to defend the forfeiture order before me, and I address the issue on that basis.

[64]   In Keen v R, the Court of Appeal considered the second limb of s 32(3).21 In relation to the issue of whether money is held for the purpose of facilitating the commission of future offences, the Court held that:

[15]      ... it is the availability of the money as the working capital of the enterprise that renders it liable to forfeiture. We do not consider the legislature envisaged detailed and inherently speculative analysis of how the money might be used in future offending.

[16]      The standard definition of “facilitate” is “to make easy or easier”. In the context of future drug offending, the ready availability of a pool of money able to be deployed to purchase product as the offender wishes comfortably comes within the concept. The emphasis must remain on the purpose of possession, but if it is established on the balance of probabilities to be a sum of money held at readiness to be used as needed, and to the extent desired, for the drug enterprise, we consider the entire sum is liable to be forfeited.

[Footnotes omitted]

[65]   I consider the cash in this case falls within the Court of Appeal’s definition of “facilitation”. At the time of Mr Wisely’s arrest, he was anticipating the arrival of his next methamphetamine order from his Hamilton supplier. It was to be provided “on tick” and would have required payment at a future date. That consignment was intercepted by police just as Mr Wisely’s delivery of $39,500 in cash to pay for the previous order was also intercepted by police. The amounts of money involved and the size and value of the methamphetamine trade in which Mr Wisely was engaged underscore his need to have large amounts of cash available to him.

21     Keen v R [2015] NZCA 221.

[66]   This case is not analogous to the situation in Taylor. Mr Wisely’s argument is dependent upon an acceptance that he would simply rely on prompt payment by his customers to repay the Hamilton “wholesaler”, and that the $25,110 in cash sitting at his address would remain isolated from any requirement to repay his supplier.

[67]   As noted by Judge Crosbie, Mr Wisely did not give evidence of his own dealing arrangements, nor those which he had entered into with his supplier. There was no evidence of the profit he was making from his methamphetamine trade, nor where that money had gone. Mr Wisely had only just sent away the sum of $39,500 for a previous purchase of methamphetamine, and the vagaries of the demands of his market and the recovery of debts owed to him by his customers bears out the need for him to have working capital to maintain his relationship with his Hamilton supplier. As Judge Crosbie observed, Mr Wisely was “his own banker” and, by his own admission, had the ability to source the cash for any purpose he chose. That included to finance his ongoing drug-dealing activities.

[68]   While there is no challenge to the motorcycle sale to Mr Philips, clearly Judge Crosbie found the transaction involving Mr Youngman was not credible. It was argued that Mr Youngman was originally going to buy that motorcycle, but that Mr Philips had come along and made a cash offer for the full amount of $12,000, and so that particular motorcycle  was  sold  to  him.  However,  there  were  difficulties  with Mr Youngman’s evidence relating to his involvement with the other motorcycle, the Harley Davidson.

[69]   The Victory Hammer was in fact registered in Mr Youngman’s name in September 2016, despite his evidence that in August 2016 he had arranged to purchase the Harley Davidson. This was sought to be explained on the basis that Mr Youngman was originally going to buy the Victory Hammer. Mr Wisely was asked why he would transfer ownership of the Victory Hammer to Mr Youngman when he had not completed paying for it. Mr Wisely’s response was that because Mr Youngman had started paying it off and he had lost his licence, he could not see the point of it remaining in his own name. Despite that, he retained possession of the motorcycle.

[70]   In an attempt to explain why these payments by Mr Youngman were not deposited into a bank, Mr Wisely stated that he lived four kilometres out of Milton with no licence, and that the ANZ Bank had been closed. There was no explanation, however, as to why Mr Youngman or, for that matter, Mr Philips could not have deposited money into Mr Wisely’s bank account if he was receiving regular instalments from Mr Youngman and wanted to keep that money separate from his drug dealing. However, what cast real doubt over Messrs Youngman and Wisely’s account was the evidence relating to the “receipt” book – an exercise book which purported to record the payments made by Mr Youngman.

[71]   Mr Youngman said he wrote the amounts that he paid down in the book, and that he sent the exercise book to Mr Wisely after his arrest. Mr Youngman also said he provided Mr Wisely with bank statements to show where the money he paid was coming from, which were provided to the Court and examined. Judge Crosbie found the dates of the withdrawals and the so-called “receipted payments” did not match and were inconsistent with each other. Moreover, the handwritten notebook was headed “Payments to Kelvin Wisely from Barry Youngman for Harley”.

[72]   Mr Youngman’s evidence was that he would have written that heading around the time of the first payment in September 2016. However, at that time, he was supposed to be purchasing the Victory Hammer not the Harley Davidson, and that remained the arrangement  for  some  10  months  until  Mr  Philips  came  along.  Mr Youngman’s attempt to explain the inconsistency is set out in Judge Crosbie’s judgment,  and   is   accurately   described   as   “vague,   if   not   disingenuous”.   Mr Youngman’s response included a reference to the paperwork being “redone” when his claimed purchase changed to the Harley Davidson. That explanation is unconvincing and undermines Mr Youngman’s earlier assertion, that the payments had always been for the Harley Davidson and his original evidence that the exercise book purported to be a receipt book or an ongoing record of payments he had made. This was one aspect of the evidence which led the Judge to conclude that the entries and payments from Mr Youngman were “part of a clumsy ruse” in an attempt to explain the substantial cash and why it was not connected to the methamphetamine.

[73]   Another aspect of Mr Youngman’s evidence which brings the narrative of his involvement with the purchase of the Victory Hammer into question, was described as “telling” by Judge Crosbie. In relation to what motorcycle Mr Youngman said he was going to originally purchase, his evidence was that:

Originally it was going to be the Victory Hammer, but after a while, Kelvin had an offer of some cash for the bike and he needed the cash at the time so we came to a separate arrangement where we changed from the Victory to the Harley.

[74]   There was no evidence about what the cash was needed for. When set against the circumstances of Mr Wisely’s drug-dealing activities and his high value methamphetamine trade, this unexplained need is highly suspicious. The offer of the cash for the Victory Hammer referred to in that part of Mr Youngman’s evidence could only have been from Mr Philips. There is no reference to any other interested buyer in the evidence. Mr Youngman was by that time the registered owner of the Victory Hammer and had paid some $9,000 over the course of 10 months. Mr Youngman and Mr Wisely would have it believed that despite the motorcycle having been sold to Mr Youngman it was simply made available to be sold to Mr Philips.

[75]   It is not necessary for me to come to any concluded view as to Judge Crosbie’s findings on the evidence that relates to the motorcycle transactions, particularly in respect of Mr Youngman’s involvement, although I consider the Judge was on firm ground to reject that evidence. More importantly, I consider the Judge was entitled to be satisfied on the  balance  of  probabilities  that  the  $25,110  in  cash  found  at  Mr Wisely’s address was possessed for the purpose of being deployed to finance his drug-dealing activities. That standard of proof was applied by the Court of Appeal in Keen v R. Even accepting, for the purposes of the present argument, Mrs Stevens’ submission that because of the substantial amount of money involved a sufficiently high standard of proof was required to be met proportionate to the gravity of the issue, I am satisfied that the cash was held by Mr Wisely for the purpose of facilitating his ongoing drug-dealing enterprise. It follows from this finding that this aspect of the appeal must also be dismissed.

Result

[76]The appeals against sentence and the forfeiture order are dismissed.

Solicitors:

Anne Stevens Queens Counsel, Dunedin RPB Law, Dunedin