ZHU v NEW ZEALAND CUSTOMS [2022] NZHC 1122

ZHU v NEW ZEALAND CUSTOMS [2022] NZHC 1122 [20 May 2022]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECRI-2022-404-53[2022] NZHC 1122BETWEEN HUA YI ZHUAppellantAND NEW ZEALAND CUSTOMSRespondentHearing: 26 April 2022Appearances: D M Cross for AppellantD B Dow for RespondentJudgment: 20 May 2022JUDGMENT OF PAUL DAVISON JThis judgment was delivered by me on 20 May 2022 at 2pmRegistrar/Deputy RegistrarSolicitors:Meredith Connell, AucklandIntroduction[1] Hua Yi Zhu (the appellant) appeals against her sentence of three years'imprisonment imposed by Judge EM Thomas in the Auckland District Court on20 January 2022 in respect of charges of defrauding the revenue of the New ZealandCustoms Service (Customs) and possession of uncustomed goods relating to the illegalimportation into New Zealand of a large quantity of cigarettes over a period ofapproximately three years between 2015 and 2018.1 The appellant says that the Judgeerred in adopting a starting point of six years in relation to her sentence, and as aconsequence, the sentence she received was manifestly excessive.[2] The Crown on behalf of Customs as respondent opposes the appeal. It saysthat the sentence imposed was not manifestly excessive and the appeal should bedismissed.The charges[3] The appellant was charged with:(a) 28 charges alleging that together with Wei Yi (Charles) Hu, and ZhongZe Group New Zealand Limited, she knowingly imported cigarettesfrom China into New Zealand, intending to evade the payment of anyduty on the cigarettes, and contrary to s 211(1)(a) and (3)(a) of theCustoms and Excise Act 1996;2(b) seven charges alleging that together with Wei Yi (Charles) Hu, andZhong Ze Group New Zealand Limited, she knowingly importedcigarettes from China into New Zealand, intending to evade thepayment of any duty on the cigarettes, and contrary to s 371(1)(a) and(4)(a) of the Customs and Excise Act 2018;3 and1 New Zealand Customs Service v Zhu [2022] NZDC 785 [Sentencing decision].2 Customs and Excise Act 1996, s 211(1)(a) and (3)(a): carrying a maximum penalty of six months'imprisonment or a fine not exceeding $20,000 or both.3 Customs and Excise Act 2018, s 371(1)(a) and (4)(a): carrying a maximum penalty of five years'imprisonment or a fine not exceeding $20,000 or both.(c) four charges alleging that together with Wei Yi (Charles) Hu, andZhong Ze Group New Zealand Limited, she knowingly and withoutlawful justification had in their possession imported tobacco cigarettes,knowing that they were uncustomed goods, and contrary to s 372(1)and (3)(a) of the Customs and Excise Act 2018.4[4] The appellant's co-defendant, Wei Yi (Charles) Hu, is her husband. Theappellant denied the charges and they were heard by Judge EM Thomas at ajudge-alone trial between 17 and 19 February 2021. In a decision dated 24 February2021, Judge Thomas found the appellant not guilty of one charge relating to animportation of cigarettes in 2015, and guilty of all of the other 28 charges relating tothe importation of tobacco cigarettes between 2016 and 2018, and also of the fourcharges relating to possession of uncustomed cigarettes located by Customs in fourseparate locations on 20 November 2018.5Background[5] The appellant's offending related to the large-scale importation of tobaccocigarettes into New Zealand by the appellant's husband (Mr Hu), and Zhong Ze GroupNew Zealand Ltd (the Zhong Ze Group) while avoiding the payment of import dutyand GST on the cigarettes. Once imported into New Zealand the cigarettes were soldby Mr Hu to distributors who then on-sold them within the community.[6] The Zhong Ze Group operated in New Zealand as a furniture importingbusiness. The offending involved the concealment of cigarettes within metal cabinetswhich were packed behind legitimate furniture goods in shipping containers sent tothe Zhong Ze Group from China. Neither the cigarettes nor the metal containers theywere concealed within were declared to Customs by Mr Hu on import documentationand declarations completed by Mr Hu on behalf of Zhong Ze Group.[7] The scale and quantum of the offending was determined by Judge Fitzgeraldin a proof of facts hearing prior to the sentencing of Mr Hu. His Honour found the4 Customs and Excise Act 2018, s 372(1) and (3)(a): carrying a maximum penalty of six months'imprisonment or a fine not exceeding $20,000 or both.5 R v Zhu [2021] NZDC 4127.offending to have involved the importation of 19,419,400 cigarettes, and the totalrevenue evaded to be $18,732,767. This quantum was an agreed fact at the appellant'strial.[8] The offending by the appellant and her husband was detected by Customsfollowing a covert investigation into the sale of uncustomed cigarettes in Auckland.Upon the execution of search warrants on 20 November 2018, Customs locatedapproximately 60,000 cigarettes, and approximately $65,000 cash at the residentialaddress of the appellant and her husband, and 1,000 cigarettes and approximately$1,000 cash in the appellant's vehicle. In Kennards storage units rented by Mr Hu,Customs located 214 metal cabinets; 1,455,257 cigarettes; $841,225 cash; and amoney counting machine. And in Safestore storage units also rented by Mr Hu theylocated: 465 metal cabinets; 400 cigarettes; and $3,255,550 cash stored in rubbishsacks.[9] In his decision finding the appellant guilty of all but one of the charges shefaced, Judge Thomas found that the prosecution had proved beyond reasonable doubtthat the appellant was knowingly involved in the importation operation from 2016until November 2018 when the Customs operation was terminated and the appellantand her husband were arrested and charged. Judge Thomas found that the appellant'sinvolvement in the importation operation included:6(a) acting as an intermediary between Mr Hu, the Chinese based exporterknown as Caicai (who is the appellant's brother), and the cigarettesupplier in China (Ms Zhou);(b) conducting market research on the prices of cigarettes in China;(c) discussing the method of concealment of the cigarettes within theshipping containers;(d) handling Customs documentation and passing it to Mr Hu;6 At [41]–[46].(e) on at least one occasion remitting money to Ms Zhou to pay for an orderof cigarettes;(f) physically moving cabinets containing the cigarettes into the Aucklandstorage units following devanning from the shipping containers;(g) continuing to operate and run the legitimate furniture importationbusiness in order to provide a method of importing the cigarettes; and(h) on-selling the cabinets which had been used for the importation of thecigarettes as a front for the importation of the cigarettes.[10] Judge Thomas summarised these aspects of the appellant's offending in thefollowing terms:[41] The messaging data seen in that light then demonstrates yourinvolvement. From April 2016 you assisted with various differentarrangements relating to the shipment of the containers, the metal cabinets andthe cigarettes within them. You passed messages regarding shipments, orders,brands, quantities and processes between Ms Zhou and Mr Hu. You dealtdirectly with Ms Zhou regarding orders and shipments and with Caicai,usually on the instructions of Mr Hu. That included passing some of thenecessary importation documentation from or to Mr Hu from Ms Zhou,organising some payments to Ms Zhou and Caicai again on the instructions ofMr Hu, conducting market research, ordering metal containers or metalcabinets, selling them once they had been emptied, managing the storage, andacting as a link between Ms Zhou and Caicai.[11] As the appellant's and her associates' chat data regarding their electronicmessages during the period prior to 2018 was deleted it was not possible for Customsto identify exact dates, specific containers used, and the quantities of cigarettesshipped to New Zealand prior to 2018, however records for 2018 showed that theoffenders imported 30 containers with cigarettes concealed within them during thatyear. And on average 332,800 cigarettes were imported in each of these containers.[12] During the period of the offending significant sums of money were remittedback to China, mostly by Mr Hu. This included:(a) 138 transactions sent to bank accounts associated with Ms Zhoutotalling $2,981,315;(b) 180 transactions sent to the appellant's brother totalling $2,152,106;and(c) 72 transactions sent to the appellant's bank account in China, totalling$1,326,382.SubmissionsThe appellant[13] Ms Cross for the appellant submits that the appellant's role in the operationand her culpability should be assessed as being significantly lower than that of herhusband Mr Hu, who she says was "the undoubted mastermind and principal offenderin this offending". Ms Cross notes that Mr Hu's leading role in the importationoperation is evident from the additional charges he faced compared to the appellant,and for which he pleaded guilty. The further offences relating only to Mr Hu and notthe appellant were: a charge of defrauding the revenue of Customs relating to the firstyear of the cigarette importations during 2015; 27 charges of making erroneous entriesunder the Customs and Excise Act 2018; four representative charges of the sale ofuncustomed goods under the Customs and Excise Act 1996; and four representativecharges of the sale of uncustomed goods under the Customs and Excise Act 2018.[14] Having pleaded guilty to the charges, Mr Hu and Zhong Ze Group weresentenced in the District Court at Auckland by Judge A J Fitzgerald on 4 June 2020.Mr Hu was sentenced to five years and three months' imprisonment,7 and Zhong ZeGroup was fined on each of the charges.[15] Ms Cross says that Ms Zhu's appeal is brought on the grounds that thesentencing Judge made a material error in determining the sentence imposed on theappellant resulting in a sentence of three years' imprisonment that was manifestlyexcessive. She submits that:(a) The sentencing Judge erred in setting the sentencing starting point ofsix years' imprisonment. Specifically by his erroneous assessment of7 New Zealand Customs Service v Hu [2020] NZDC 10296.the appellant's level of culpability, by failing to take proper account ofthe cultural background and context in which her offending occurred,and by failing to take proper account of the imbalance of power in theappellant's relationship with her husband and the pressures on her byreason of the family and cultural dynamic that led to her becominginvolved in the illegal importation venture.(b) The Judge also failed in his consideration and assessment of theappropriate starting point by failing to take proper account of theappellant's personal mitigating factors, including the psychologicalsituation of both of her sons, and the basis on which Mr Hu was grantedparole.(c) The Judge also failed to have proper regard to the uncontested evidencebefore the Court relevant to the appellant's culpability and personalmitigating circumstances.[16] In support of the appeal the appellant relies on the following reports anddecision:(a) A report by Dr Zhixiong Liao, Senior Lecturer in Law at the Universityof Waikato, regarding the cultural circumstances relevant to theappellant and her offending.(b) A report/assessment prepared by Ingalise Jensen, Clinical Psychologist,which addresses the impact of a sentence of imprisonment imposed onthe appellant upon her two teenage sons.(c) The decision of the Parole Board dated 8 September 2021 regarding theproposed release of Mr Hu to enable him to reside with the appellantand their two children.[17] Relying on Zhang v R,8 Ms Cross submits that the role played by an offenderis an important consideration for the sentencing court to take into account when settingthe sentencing starting point, as the role played by the offender informs an assessmentof the seriousness of their criminality and culpability. Referring to the categories of"leading", "significant", and "lesser" explained in Zhang to the present case and theappellant's offending, Ms Cross submits that the appellant's offending is appropriatelyassessed as either falling within the "lesser" category, where the offender performs alimited function under direction and may have been engaged by duress, naivety orother vulnerability, or at most at the bottom cusp of the "significant" category. Counselnotes that the United Kingdom sentencing guideline referred to in Zhang identifies thestarting point in each category for a lesser role as being approximately half the startingpoint for offending found to be in the leading category.9[18] Ms Cross submits that the sentencing Judge failed to have proper regard forthe appellant's role in the illegal enterprise, by not taking account of the appellant'scultural background and circumstances which placed her in a position of vulnerability,inferiority, and submission as regards her husband who was the mastermind of theoperation. Counsel submits that as a result of the Judge's failure to take those mattersinto account, the sentencing process was undertaken in a manner that was erroneouslyrigid, and precluded a proper assessment of the appellant's criminality, leading to theJudge failing to take account of factors which were highly relevant to his assessmentof the appropriate starting point and resulting in the adoption of a materially higherstarting point than was justified.[19] Ms Cross says that although the Judge accepted that Mr Hu was themastermind of the operation and found that the appellant had played a less significantrole, he considered that the appellant had nevertheless played an active, willing andknowing role, which informed his six year starting point. However, the Judge did notconsider the reasons why the appellant became involved and participated in the illegalimportation enterprise, and those factors being relevant to an assessment of theappellant's role and culpability, were not taken into account. Ms Cross submits that8 Zhang v R [2019] NZCA 507, [2019] 3 NZLR 648.9 At [117].had the relevant features of the appellant's offending been taken into account by theJudge a starting point appreciably less than the six years would have resulted.[20] Mr Cross also notes that the six year starting point fixed by the Judge is 75 percent of the starting point adopted in Mr Hu's case. Counsel submits that compared toMr Hu, the appellant is materially less culpable. Counsel submits that the appropriatestarting point for the appellant's offending would be approximately 50–60 per cent ofthe starting point adopted for Mr Hu which would put her starting point in the rangeof four years to approximately four years and nine months.[21] Counsel submits that it is evident from the reports referred to above that asMr Hu's wife, there was a cultural duty on the appellant to comply with her husband'sdirections and requests to undertake the various actions by which she participated inthe illegal operation. She further submits that Mr Hu had applied pressure on theappellant to participate which also affected her mental health. Ms Cross submits thatas a result of the power imbalance between the appellant and her husband, theappellant was not self-directed or independent in her decisions to participate in theenterprise to the extent that Mr Hu was. Counsel submits that this resulted in theappellant participating in the enterprise as a result of her subservience to her husbandand at his direction.[22] Ms Cross submits that it is also relevant to note that the appellant's main rolewas that of mother and looking after the family household before becoming involvedat the request of her husband in the illegal importation enterprise that he initiated.Counsel says that the appellant thereafter stayed in the marriage for family reasons,particularly in the interests of her two teenaged sons for whose care she was principallyresponsible. Ms Cross says that while the appellant benefited financially from themoney coming into the family from the cigarette importation and sales, she was notresponsible for creating and setting up the scheme - motivated by greed as was Mr Hu.[23] Turning to the appellant's personal mitigating factors to be taken into accountin the second stage of the sentencing process, Ms Cross submits that the Judge erredby failing to take appropriate account of the effect that imprisonment of the appellantwould have on her two teenaged children. Ms Cross says that while the Judge notedthat it was appropriate to consider the impact of the sentence upon the children, hesaid that as they had both finished their secondary schooling they were "no longerchildren" and were living with their father in the family home since he had beenreleased on parole.10 Ms Cross submits that the vulnerability of young adults does notsuddenly change when they finish secondary school, and the foreseeable and adverseeffects of the appellant's imprisonment was a factor that ought properly to have beentaken into account and justifies a reduction of the sentence imposed on her.[24] Ms Cross acknowledges that the Judge allowed discounts totalling two and ahalf years which he deducted from the starting point, which represented just over 40per cent. However, Ms Cross says that without engaging in an overly mechanisticprocess, an end sentence between "just over two years and that of two years and fivemonths imprisonment" was appropriate.The respondent[25] In opposing the appeal and supporting the sentence imposed by the DistrictCourt Judge, Mr Dow for the respondent says that the illegal cigarette importationoperation in which the appellant was actively involved was a highly sophisticated andcarefully planned and executed enterprise which was conducted on a massive scale.He says that the appellant and her husband co-ordinated the activities of a number ofpeople internationally over a lengthy period, including those persons from whom theysourced the cigarettes, associates whose addresses they used in the operation, andcustomers who they sold to.[26] Referring to the categories of offending described in Zhang relating to drugoffending, Mr Dow says that the categories of "leading", "significant" and "lesser" arealso helpful regarding the assessment of culpability according to the role played bythe offenders. The respondent submits that the appellant's role in the illegal enterprisefalls within the "leading" category identified in Zhang, or at the very least on the cuspof the "significant" and "leading" categories.10 Sentencing decision, above n 1, at [11].[27] The respondent submits that the appellant's role in the operation satisfies mostof the factors set out in the "significant" category as well as some of the factors in the"leading" category. Mr Dow says that contrary to the appellant's submission, she doesnot satisfy most of the criteria in the "lesser" category. The respondent submits thatthere is limited evidence that the appellant became involved in the enterprise as a resultof pressure from her husband. Mr Dow says that although the s 27 report relied on bythe appellant refers to the cultural pressure on Chinese wives to co-operate with theirhusbands, the only evidence of pressure being placed on the appellant by Mr Hu comesfrom the appellant herself in comments made to the authors of the s 27 and pre-sentence reports.[28] Mr Dow notes that in the pre-sentence report the appellant describes herself ashaving only "minimal involvement with the business" and presented herself as beinga naïve party in the offending. The respondent also notes that the appellant'sinvolvement in the operation was motivated by the prospect of substantial financialgain, which she expected and received. She was fully aware of the scale of theoperation. Mr Dow says that an indication of the appellant's level of involvement inthe operation can be seen from the fact that over the period of approximately fivemonths commencing 1 July 2018 until termination of the Customs investigation,during which the offenders' visits to the storage units were recorded on CCTV, theyvisited 133 times and the appellant was either present with her husband or on her own20 times.[29] The respondent submits that while a lower starting point is appropriate for theappellant than was adopted in relation to Mr Hu to reflect her role and the fact that heplayed a greater role and was the "mastermind" behind the operation, the differencesin their roles were not so significant as to justify a substantially lower starting pointfor the appellant. Mr Dow says that the additional charges faced by Mr Hu relating tohim making false customs entries and selling uncustomed cigarettes does not elevatehis offending to any significant extent above the appellant's, but rather represents thedivision of responsibilities that they each undertook in connection with the operationof the enterprise in a manner that was "more akin to a partnership" than a relationshipin which the appellant was carrying out her role as the result of directions and pressurefrom Mr Hu.[30] The respondent submits that the appellant's offending is properly seen as beingat the very high end of Customs and Excise Act offending, and consequently shouldattract the maximum available penalties for those offences. Mr Dow notes that thefraud on the customs revenue represents the most serious offending involving theillegal importation of goods into New Zealand that has come before the courts to date.Referring by analogy to the case of R v Dhillon in which the defendant was sentencedon 50 charges of tax evasion, and the tax evaded was approximately $3.3 million,Mr Dow notes that the sentencing Judge had adopted a starting point of seven years'imprisonment which was upheld on appeal, as was the end sentence imposed of sixyears and six months' imprisonment.11 The respondent says that the illegal operationin which the appellant was engaged together with her husband, was offending on amuch larger scale than that in Dhillon, which indicates that the adoption of a startingpoint less than that adopted in Dhillon was not excessive.[31] In reply to the appellant's submission that the Judge failed to give her asufficient discount in recognition of the adverse effect that a sentence of imprisonmentwould have on her two teenaged children, the respondent notes that the Judge gave hera discount of two and a half years' imprisonment (42 per cent) in recognition of herprevious good character, the cultural pressure on her and the mental health impact onboth the appellant and her children of her imprisonment. The respondent notes thatthe appellant's children are now aged 20 and 18 years respectively and submits thatthe discount allowed by the Judge in recognition of these personal factors wasappropriate if not generous. The respondent accordingly submits that the discountsallowed by the Judge did not involve any error and should not be disturbed on appeal.[32] Finally, the respondent also notes that the Judge allowed a discount of sixmonths to take account of the amount recovered by the Crown as a result of forfeitureproceedings. The sum recovered following the settlement of proceedings commencedby the Commissioner of Police was $5,478,368. The respondent says that the Judgeerred by giving a discount for that factor. Mr Dow notes that the Court of Appeal inHenderson v R held that as a general rule forfeiture proceedings should not be takeninto account as a mitigating factor when determining the appropriate sentence in11 R v Dhillon [2009] NZCA 597, (2010) 24 NZTC 24,030.criminal proceedings.12 The respondent does not seek to have what it submits was anerror by the Judge corrected on appeal, but says that the "windfall discount" of sixmonths given to the appellant is something that the Court can also take into accountwhen considering whether the end sentence imposed on the appellant was manifestlyexcessive.Appeal against sentenceRelevant law[33] Section 250(2) of the Criminal Procedure Act 2011 states that the court mustallow the appeal if satisfied that:(a) for any reason, there is an error in the sentence imposed on conviction;and(b) a different sentence should be imposed.[34] In any other case, the court must dismiss the appeal.13[35] The Court of Appeal in Tutakangahau v R confirmed that s 250(2) was notintended to change the previous approach taken by the courts under the SummaryProceedings Act 1957.14 Further, despite s 250 making no express reference to"manifestly excessive", this principle is "well-engrained" in the court's approach tosentence appeals.15[36] The approach taken under the former Summary Proceedings Act was set out inR v Shipton:16(a) There must be an error vitiating the lower court's original sentencingdiscretion: the appeal must proceed on an "error principle".12 Henderson v R [2017] NZCA 605 at [42]–[43].13 Criminal Procedure Act 2011, s 250(3).14 Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [26]–[27].15 At [33] and [35].16 R v Shipton [2007] 2 NZLR 218 (CA) at [138]–[140].(b) To establish an error in sentencing it must be shown that the Judge inthe lower court made an error whether intrinsically or as a result ofadditional material submitted to the appeal court.(c) It is only if an error of that character is involved that the appeal courtshould re-exercise the sentencing discretion.[37] The High Court will not intervene where the sentence is within the range whichcan properly be justified by accepted sentencing principles. Whether a sentence ismanifestly excessive is to be examined in terms of the sentence given, rather than theprocess by which the sentence is reached.17Discussion[38] In my view it is quite clear that the appellant played an active, central, andsignificant role in the illegal operation, and did so over an extended period ofapproximately three years. The appellant's operation of her furniture importingbusiness provided the appearance of a legitimate business through which to carry outthe illegal importation of cigarettes. This was obviously a vital part of the illegalenterprise. The appellant was actively involved in making arrangements with sourcesand associates in China to procure the cigarettes and arrange for them to be concealedin the shipping containers in which her furniture imports were sent to New Zealand.The appellant well knew the scale of the operation and obtained a substantial financialbenefit from her participation in it. I agree with the respondent's characterisation ofher and Mr Hu's involvement in the operation as being in effect a partnership.[39] It is also clear that the appellant and Mr Hu were responsible for differentaspects of the operation, with the appellant's role including her being involved inarranging the purchase and shipment of the cigarettes from China, and Mr Hu's roleincluding responsibility for the sale and distribution of the cigarettes in New Zealand.While it appears that Mr Hu was the instigator and mastermind behind the operation,I consider the active and willing involvement of the appellant and her readiness to17 Ripia v R [2011] NZCA 101 at [15].share the proceeds of the enterprise puts her level of culpability only slightly belowthat of Mr Hu.[40] An assessment of the appellant's level of culpability with reference to thecriteria set out in Zhang in relation to drug offending is in my view an appropriatemeans of gauging her level of criminality as the factors set out in Zhang relating to thevarious roles of individuals involved in drug importation and distribution, readilycorrelate to the roles played by offenders involved in the illegal importation anddistribution of the uncustomed cigarettes in the present case.[41] I consider that the appellant satisfies all but one of the Zhang criteria relatingto offenders playing a "leading" role. The appellant was involved in organising andbuying the cigarettes on a commercial scale (with her husband responsible for theirsale and distribution); she had substantial links to and influence over others in theoperation (her brother arranged the loading and concealment of the cigarettes incabinets sent with her furniture in containers shipped to New Zealand); she had closelinks to the original source of the cigarettes in China (she dealt directly with Ms Zhouwho supplied the cigarettes and undertook market research regarding prices); she hadan expectation of receiving a substantial financial gain from her involvement and therole she played (that she received a substantial financial benefit is evident from theamounts she remitted to China and the enormous quantity of cash located by Customson termination of the investigation operation); she also used her legitimate furnitureimportation business as a cover for the illegal operation; she was also motivatedprimarily by greed; she directed others as to what they were to do; and she was fullyaware of the scale of the operation.[42] That analysis justifies the adoption of a starting point only slightly below theeight year starting point adopted by Judge Fitzgerald in the sentencing of Mr Hu. AndI agree with the respondent's submission that the case of Dhillon provides a usefulcomparison and further support for the six year starting point adopted by the Judge.[43] I also agree with the respondent's submission that there is no independentevidence to show that the appellant was ever put under pressure by her husband.Although Dr Liao, the author of the appellant's s 27 report, has set out and explainedthe Chinese culture and its relevance to the role and authority of Mr Hu within thefamily, and the appellant's wish to maintain the marriage despite relationshipdifficulties and her consequent compliance and co-operation with him including inrelation to the illegal importation operation, those factors including the appellant'sdesire to avoid the stigma of divorce and to maintain the family unit, do not explain orjustify her actions of actively and willingly participating in the operation of the illegalenterprise. There is no independent evidence that the appellant was in fact instructedor ordered to carry out her role in the operation and that she was effectively compelledto do so and as a consequence reducing the level of her criminal culpability.[44] I therefore do not consider the influence of the Chinese culture on the appellantto be a factor warranting a reduction of the starting point. In my view it is a factormore appropriately taken into account as a personal mitigating factor as indeed it wasby Judge Thomas.[45] I consider that having regard to the scale of the illegal importation operation,the volume of cigarettes imported and sold in New Zealand, the very significantamount of money obtained from the enterprise, and the central and leading role playedby the appellant, the starting point of six years, being two years below that adopted forMr Hu, was appropriate, if not generous.[46] I agree with Judge Thomas that although the imposition of a term ofimprisonment will undoubtedly have an adverse effect upon the appellant's sons whowill no doubt miss the support and affection of their mother while she remains inprison, having regard to their ages of 20 and 18, and to the fact that they are livingwith and being cared for by Mr Hu following his release from prison on parole, that isnot a factor that requires recognition by way of a further discount over and above thatalready allowed by Judge Thomas. The two and a half year discount allowed by theJudge to take account of the appellant's previous good character, the matters set outand explained in Dr Liao's s 27 cultural report, and to take account of the interests andthe effect of the prison sentence on the appellant's sons, was also appropriate if notgenerous. The additional six month discount allowed by the Judge on account of therecovery achieved by the Commissioner of Police in the Criminal Proceeds(Recovery) Act 2009 proceedings, was also generous and favourable to the appellant,as in my view it was not a factor that warranted recognition as a mitigating factor.[47] For these reasons, I am satisfied that the sentence of three years' imprisonmentimposed on the appellant by Judge Thomas, was not manifestly excessive.Result[48] The appeal is dismissed._____________Paul Davison J