ZHANG v R [2018] NZCA 89

ZHANG v R [2018] NZCA 89 [13 April 2018]NOTE: HIGH COURT ORDER PROHIBITING PUBLICATION OF NAME,ADDRESS, OCCUPATION OR IDENTIFYING PARTICULARS OF CROWNWITNESS REMAINS IN FORCE.NOTE: HIGH COURT ORDER PROHIBITING PUBLICATION OF NAMEOR IDENTIFYING PARTICULARS OF RESTAURANT ASSOCIATEDWITH THE APPELLANT REMAINS IN FORCE.IN THE COURT OF APPEAL OF NEW ZEALANDCA608/2015[2018] NZCA 89BETWEEN HUI ZHANGAppellantAND THE QUEENRespondentHearing: 6 March 2018Court: Asher, Brewer and Collins JJCounsel: T A Simmonds and T M Cooper for AppellantJ E L Carruthers for RespondentJudgment: 13 April 2018 at 10 amJUDGMENT OF THE COURTA The appeal against convictions is dismissed.B The appeal against sentence is dismissed.____________________________________________________________________REASONS OF THE COURT(Given by Collins J)[1] Mr Zhang was charged with 38 offences relating to the importation andsupply of large quantities of pseudoephedrine, a class B controlled drug often used inthe manufacture of methamphetamine. He pleaded guilty to 33 charges of supplyingpseudoephedrine and one charge of possessing it for supply.[2] Mr Zhang pleaded not guilty to three charges of importing pseudoephedrineand another charge of possessing it for supply. He was convicted of two of thecharges of importing pseudoephedrine and the one charge he defended of possessingpseudoephedrine for supply. Those convictions followed a trial by jury conductedbefore Toogood J in the Auckland High Court between 15 June 2015 and14 August 2015. Mr Zhang was one of six defendants in the trial.[3] On 24 September 2015, Toogood J sentenced Mr Zhang to 20 years'imprisonment, with a minimum period of imprisonment (MPI) of 10 years.1[4] When sentencing Mr Zhang, Toogood J observed Mr Zhang had beenconvicted of importing around 390 kilograms of ContacNT, which had a street valueof approximately $14 million. The quantity of pseudoephedrine involved wascapable of producing between 78 kilograms and 116 kilograms of methamphetamine.The street values of those quantities of methamphetamine ranged between$78 million and $116 million.[5] Four grounds of appeal against convictions were set out in a memorandumdated 4 October 2016. These relate only to the three charges Mr Zhang was foundguilty of at trial. Mr Simmonds, counsel for Mr Zhang in this Court, confirmed to usthe grounds of appeal against convictions are now confined to two points, whichallege errors by Mr Zhang's trial counsel. The alleged errors claim Mr Mansfield,Mr Zhang's trial counsel:(a) failed to follow instructions; and(b) failed to provide "complete advice" on whether Mr Zhang shouldelect to give evidence.21 R v Zhang [2015] NZHC 2325.2 The other grounds of appeal that were abandoned alleged a failure by Mr Mansfield to provideMr Zhang with a full copy of the disclosed police file, and that the translation services during thetrial were inadequate.[6] Mr Zhang also appeals against sentence on the grounds that:(a) the sentence of 20 years' imprisonment was manifestly excessive; and(b) the MPI of 10 years was also manifestly excessive.Background[7] In October 2012, authorities in Auckland intercepted a water filter that hadbeen imported into New Zealand from Xiamen, in South East China. Inside thatfilter were 39 bags of ContacNT, comprising approximately 90 kilograms ofpseudoephedrine. Mr Zhang's fingerprints were found on the packaging holding theplastic bags inside the water filter. He was charged with importing pseudoephedrinein relation to this event but found not guilty. The interception of the water filter ledto further investigations into the activities of a group of persons thought to beinvolved in the importation, supply and distribution of pseudoephedrine andmethamphetamine. Mr Zhang was considered to be at the centre of the importationand supply of pseudoephedrine.[8] On 11 May 2013, authorities intercepted bags imported from Guangzhou inSouth East China that purported to contain breadcrumbs. In reality, the bagscontained a large quantity of ContacNT/pseudoephedrine. Over the ensuing monthspolice monitored and intercepted communications between Mr Zhang and others.[9] On 22 October 2013, the police executed a search warrant at138 Aviemore Drive in Highland Park, Auckland. At that address, police located47 sets of ContacNT and 89 empty breadcrumb bags containing remnants ofContacNT/pseudoephedrine. The police estimated these bags had containedpseudoephedrine worth approximately $5.48 million.[10] On 15 December 2013, a further shipment of what purported to bebreadcrumbs was intercepted at Auckland. That shipment, which also originated inGuangzhou and was destined for a company that belonged to Mr Zhang, containedpseudoephedrine worth approximately $8.43 million.[11] The Crown case was that, having imported the pseudoephedrine inMay 2013, Mr Zhang oversaw its storage and distribution. Orders ofpseudoephedrine were placed with Mr Zhang by persons using codes and he, in turn,would arrange for his associates, Mr Ma, Ms Zhang and another associate whosename is suppressed, to collect and distribute the drugs to a Mr Chen and a Mr Sharp.Mr Chen and Mr Sharp would then on-sell the drugs for a profit, which wasultimately conveyed back to Mr Zhang.Appeal against convictionsOverview[12] Mr Zhang denies having imported any pseudoephedrine into New Zealand.He maintains that the importations on 11 May and 15 December 2013, for which hewas convicted, were in fact made through an importation company calledCT Logistics International (CTLI), owned by a Mr Chan.3 Mr Zhang's instructionsto Mr Mansfield were that it was Mr Chan, and not Mr Zhang, who was responsiblefor the importation of the pseudoephedrine into New Zealand. Mr Zhang maintainsthat he purchased pseudoephedrine from Mr Chan in New Zealand and then on-soldit and that he acknowledged his guilt in relation to this offending when he pleadedguilty to the 33 charges of supplying pseudoephedrine.[13] As part of their investigations, the police obtained a witness statement fromMr Chan, in which he explained that in 2011 Mr Zhang approached him to importfood and equipment into New Zealand for use in a Chinese restaurant Mr Zhang hadestablished. Mr Chan said he assisted Mr Zhang with these imports and had noreason to doubt the goods were legitimate.[14] Mr Chan said in his witness statement that he subsequently had furtherdealings with Mr Zhang that caused him concerns and so he decided not to haveanything further to do with him. Although Mr Chan also said he did not knowinglyimport any further goods for Mr Zhang, he acknowledged meeting with him onoccasions and speaking to him on other occasions using a mobile phone.3 Also referred to as Mr Chen in some parts of the evidence, although he is a different Mr Chen tothe one referred to at [11] of this judgment, who was a co-defendant at Mr Zhang's trial.[15] According to Mr Chan's witness statement, in December 2013 CTLI wasused by Mr Zhang to import products into New Zealand. Mr Chan said that when herealised Mr Zhang was the consignee of the goods being imported, he made inquiriesand learnt that the consignment had been prepared when Mr Zhang was in China.[16] In comprehensive written advice dated 30 September 2014, Mr Mansfieldexplained to Mr Zhang that Mr Chan was an important Crown witness. It wasintended Mr Mansfield would cross-examine Mr Chan with the aim of casting doubton the Crown's case that Mr Zhang was responsible for the importations ofpseudoephedrine. Mr Mansfield hoped to lay a foundation for a submission to thejury that Mr Chan was responsible for the importations in issue.[17] A short time before trial, the Crown advised Mr Mansfield that it was notgoing to call Mr Chan as a witness for the prosecution and that Mr Chan would bemade available as a witness for the defence if required. There is a factual disputebetween Mr Mansfield and Mr Zhang as to exactly when Mr Zhang was informedthat Mr Chan would no longer be a Crown witness. It is, however, not necessary forus to resolve this particular factual dispute, because of our findings in [18] to [30].First ground of appeal against convictions: failure to follow instructions[18] Mr Simmonds submitted that Mr Mansfield failed to follow Mr Zhang'sinstructions by not taking steps to ensure Mr Chan was called as a witness at thetrial.[19] Mr Mansfield acknowledged that, although it was possible for him to havearranged for Mr Chan to give evidence, that strategy was fraught with difficulties asMr Chan was hardly likely to have said anything that could have deflectedresponsibility from Mr Zhang to himself for the importations of pseudoephedrine.[20] Mr Mansfield accordingly advised Mr Zhang that his defence would beenhanced without Mr Chan giving evidence. While Mr Zhang may have beendisappointed, Mr Mansfield said in his evidence that Mr Zhang neverthelessaccepted this advice. We return to this point in [26] to [30].[21] The Crown case concluded on 7 July 2015. On 10 July 2015, the day thedefence cases were to begin, Mr Zhang gave Mr Mansfield detailed signed writteninstructions that he did not wish to give evidence and that Mr Mansfield hadfollowed Mr Zhang's instructions. In particular, Mr Zhang said:I am happy with the way my counsel has advanced my defence to date.When we have met he listens to me and advances my instructions or explainswhy it is not in my interests to do so. After doing so I agree. I have nocomplaints.I confirm my instructions are being followed and I am happy with theprogress of the trial to date and the efforts of my counsel [22] Mr Zhang said to us that he "had no choice" but to sign the instructions hegave Mr Mansfield and that he was somehow acting under duress when he signed hisinstructions to Mr Mansfield. Mr Zhang's evidence on this point is not crediblebecause it conflicts markedly with the evidence of Mr Mansfield, Mr Wei (a lawyerand translator employed by Mr Zhang's defence team) and Mr Dobbs, junior counselto Mr Mansfield in the trial whose evidence refuting Mr Zhang's claims wassupported by contemporaneous records.[23] The written instructions from Mr Zhang contained the following handwrittenannotation from Mr Wei:I, Andy Wei, have translated and interpreted this document to the best of myknowledge and ability to the client Hui Zhang. I have taken him through thedocument line by line and offered him the opportunity to ask any questionshe might have. The client confirmed he has understood the content of thisdocument and does not have any questions or concerns [24] Mr Zhang's evidence that he did not agree with the written instructions hegave to Mr Mansfield on 10 July 2015 is also difficult to reconcile with theunchallenged evidence in this Court of Mr Dobbs. In his affidavit, Mr Dobbs hasexplained that he spoke to Mr Zhang on 5 August 2015 when the jury wasdeliberating. Mr Dobbs' file note reads:Andy Wei and I met with the client at 12:30pm in the cells by the courtroom.The client had been going through the summing up with the interpreter. Wediscussed the case. He was happy with the way the trial had gone and for thework [Mr Mansfield] had done. I asked whether he had any questions orconcerns he wanted to raise with [Mr Mansfield]. He did not have anythinghe wanted to raise. He said that he would refer other clients to[Mr Mansfield] in future and recommend him to people.[25] Having heard and observed Mr Zhang and Mr Mansfield give evidence, weprefer Mr Mansfield's account of events, particularly as it was supported bycontemporaneous records and was cogent. We did not find Mr Zhang to be abelievable witness. We conclude that while Mr Zhang's instructions prior to trialwere that Mr Mansfield was to cross-examine Mr Chan, those instructions changedwhen it became apparent Mr Chan would not be giving evidence. By the time theCrown case concluded, Mr Zhang agreed with Mr Mansfield's strategy not to requireMr Chan to be a witness.[26] The strategy Mr Mansfield pursued in relation to Mr Chan cannot be faulted.This is because, as Mr Mansfield explained to us in his evidence:Mr [Chan] clearly had a very adverse view of Mr Zhang and his criminalinvolvement and was clearly of the view that he was directly involved in theimportation.Mr Mansfield said he had no doubt that if he cross-examined Mr Chan in accordancewith the original instructions then it was likely the evidence Mr Chan would givewould be unhelpful to Mr Zhang. We observe that the evidence of Mr Zhang'sfingerprints on the package that came from Xiamen in October 2012, and the otherevidence that pointed to his involvement in the offending, would have made itdifficult to cross-examine Mr Chan without him further incriminating Mr Zhang.[27] As part of his trial strategy, Mr Mansfield persuaded the Crown to agree to amemorandum of admitted facts filed pursuant to s 9 of the Evidence Act 2006. Thatmemorandum demonstrated that at the time Mr Zhang was thought to have importedpseudoephedrine into New Zealand, other individuals, including a Mr Ma and aMr Tran, were also under investigation for using a freight forwarding company toimport pseudoephedrine into New Zealand.[28] Furthermore, in Mr Zhang's written instructions of 10 July 2015 he said:My counsel will close on the basis that there is no evidence that I have beeninvolved in the importation of pseudoephedrine, that others were involved inbringing this substance into the country from China, and that I do notinstigate, manage or control this process, which is controlled byMr Roger Chan. My counsel will accept that I had knowledge of the importsand may have seen samples, but this is not enough.Mr Chan is the director of a freight forwarding company, CT LogisticsInternational Ltd (NZ) and an associated company in China (Lower CostInternational Ltd), which has clearly been involved in the importations ofpseudoephedrine. A director or employee of such an entity is the onlyperson that could have had the capacity and opportunity to effect suchimportations and to ensure that they were not detected or seized by theNew Zealand Customs Service.[29] Mr Mansfield followed these instructions. His closing address contains anumber of references to CTLI being responsible for the importation of thepseudoephedrine into New Zealand.[30] The strategy that Mr Mansfield recommended to Mr Zhang was consistentwith the advice that an experienced and competent trial counsel would give to his orher client in the circumstances faced by Mr Zhang. This was the antithesis of a casein which trial counsel failed to follow instructions or erred in a way that couldpossibly have affected the outcome of the case.Second ground of appeal against convictions: failure to provide "complete advice"on whether Mr Zhang should give evidence[31] This ground of appeal can be dealt with succinctly because Mr Zhang'swritten instructions of 10 July 2015 contain a very detailed and comprehensiveexplanation as to why Mr Zhang elected not to give evidence.[32] The instructions state that Mr Zhang understood the decision whether or notto give evidence rested with him alone. The written instructions record:I have also been advised, and this has been stressed with me, that whether Igive evidence is my decision, that my counsel can and do only offer theiropinion. I know that the decision is mine. I know my decision is final andcannot be later changed if I regret it after verdict. Whilst I have listened toand accepted their advice, I have made my own decision.[33] The instructions given to Mr Mansfield by Mr Zhang make it abundantlyclear that Mr Zhang made a very conscious and well-informed decision not to giveevidence. For example, the written instructions record:I also know that if I give evidence I will be challenged on various aspects ofthe Crown case again, such as how my fingerprint came to be found on thedrug packaging in the first importation; why one of my former companies is named on the third import and my various telephone conversations with[associate whose name is suppressed], [Mr] Ma and others. I will also becross-examined on matters relating to my honesty or credit.If my explanations for these various pieces of evidence are not accepted bythe jury or the jury conclude that I have lied, then this will adversely affectmy defence. I know that by exposing myself to cross-examination, I will begiving the Crown the opportunity to parade its case before the jury and putaspects of the evidence to me that are difficult to explain or where the sameis unhelpful or not credible.[34] There is no basis for the complaint that Mr Mansfield failed to give"complete advice" to Mr Zhang on whether or not he should give evidence.[35] In these circumstances, neither ground for the appeal against convictions hasmerit. The appeal against convictions is therefore dismissed.Appeal against sentenceThe 20-year sentence of imprisonment[36] Toogood J treated the importation charges as the lead offences for thepurposes of sentencing Mr Zhang.[37] Following decisions of this Court, Toogood J focused upon the size and scaleof the organisation in which Mr Zhang was engaged and his role in the offending.4[38] The aggravating features of the importation offending were identified byToogood J in the following way:(a) The size of the importations, which involved in total approximately390 kilograms of ContacNT.4 R v Wallace [1993] 3 NZLR 159 (CA) at [30]–[32]; and R v Wang [2014] NZCA 409 at [22].(b) The substantial profit that Mr Zhang would have derived from hisoffending.(c) The fact that Mr Zhang was convicted of two separate importationsthat occurred seven months apart, each of which involved very largequantities of ContacNT.(d) The high level of sophistication and planning involved in theoffending.To these aggravating factors we would add the massive values of the drugs involvedin this offending.[39] Toogood J assessed Mr Zhang as being "an instigator" or "prime mover" ofthe importations, which "increased the stock of pseudoephedrine in this country by amassive amount".5 He accordingly fixed the starting point at 13 years' imprisonmentfor each of the importation charges, on the basis those sentences would beconcurrent. That analysis included "an uplift on account of [Mr Zhang] beinginvolved in more than one offence".6[40] In relation to the 33 supplying charges to which Mr Zhang pleaded guilty,Toogood J took into account what he described as a "degree of overlap" between theimportation and the supply charges, as the same drugs were involved in both types ofoffending. On this basis, Toogood J set the starting point for the supply charges ateight years for each charge, to be served concurrently with each other, butcumulatively with the importation charges. A discount of 20 per cent was thenadopted to reflect Mr Zhang's pleas of guilty, albeit at the commencement of thetrial. This reduced the sentences for the supply charges to six years and five months'imprisonment for each of those charges.[41] The charge of possession for supply, which Mr Zhang was found guilty of attrial, was assessed as meriting a sentence of seven years' imprisonment, to be served5 R v Zhang, above n 1, at [31].6 At [31].concurrently with the supply charges, but again cumulatively with the importationcharges.7[42] In assessing the overall starting point, Toogood J had regard to the nearestcomparable case, R v Tran, in which Venning J adopted a starting point of 18 years'imprisonment for an offender who pleaded guilty to importing 250 kilograms ofContacNT and who was also convicted of dealing in pseudoephedrine, but on a scalethat was less serious than Mr Zhang's offending.8[43] Toogood J examined Mr Zhang's personal circumstances, but concluded theydid not warrant a discount.[44] In concluding that Mr Zhang's offending required a sentence of 20 years'imprisonment, Toogood J observed:9That is a long sentence for pseudoephedrine dealing; it is at a level whichexceeds many sentences for dealing in methamphetamine for which themaximum penalty is life imprisonment. But the massive scale of[Mr Zhang's] offending has no precedent — [he was] a prime mover in theintroduction into New Zealand of around 390 kg of ContacNT containingapproximately 156 kg of pseudoephedrine, seriously undermining theauthorities' efforts to keep that drug out of this country that volume wascapable of producing around 95 kg of methamphetamine, worth $95 millionat street level. The misery and harm likely to result from such quantities of apernicious and highly destructive drug is incalculable.MPI[45] In determining the MPI of ten years, Toogood J noted that this Court has saidon numerous occasions:10 that in cases of very serious drug offending it will almost be invariablethat the criteria for a minimum period of imprisonment, particularly the needfor deterrence and denunciation, will be made out.7 Mr Zhang was initially not sentenced on the possession for supply charge that he had pleadedguilty to, but was recalled on 21 October 2015 and sentenced to six years and five months'imprisonment on that charge, to be served concurrently with the supply charges andcumulatively with the importation charges: R v Zhang [2015] NZHC 2591.8 R v Tran [2015] NZHC 1545.9 R v Zhang, above n 1, at [37].10 At [45], citing R v Anslow CA182/05, 18 November 2005; R v Aram [2007] NZCA 328; andR v Wong [2009] NZCA 332.The Judge was satisfied that an MPI was required in Mr Zhang's case, which heassessed by imposing an MPI of four years for the possession of pseudoephedrine forsupply charge and an MPI of six years for the importation charges.11Analysis[46] We are satisfied the sentence of 20 years' imprisonment was within thebounds of what was reasonably appropriate in the circumstances of this case.[47] The importation offending involved bringing into New Zealand anunprecedented quantity of pseudoephedrine. A consequence of the volumes ofpseudoephedrine involved in Mr Zhang's offending was that he made very largeprofits from his criminal activities.[48] Mr Zhang was assessed as being the instigator of the importations. Nothingpresented to us causes us to doubt the accuracy of that assessment.[49] Although Toogood J adopted a starting point that was close to the 14-yearmaximum sentence available for the importation charges, he treated those sentencesas being concurrent. The approach that Toogood J took when sentencing Mr Zhangin relation to the importation charges cannot be impeached.[50] Similarly, we find nothing wrong with the sentences of Toogood J in relationto the charges of supplying pseudoephedrine and the one charge for which Mr Zhangwas convicted in relation to possessing pseudoephedrine for the purposes of supply.Arguably, Toogood J should not have given a discount for the "overlap" between theimportation and supply charges, as both sets of charges involved discrete criminalwrongdoing in different places and at different times. Also, arguably, a discountlower than 20 per cent for the late guilty pleas could have been imposed for the33 supplying charges that Mr Zhang pleaded guilty to. Although the approach takenby Toogood J to the supply charges may have contained some elements that wereoverly generous to Mr Zhang, the end result was one with which we agree.11 R v Zhang, above n 1, at [120].[51] We also agree with the assessment that Toogood J made of the totality ofMr Zhang's offending given the maximum sentences and the total number of chargesinvolved. We also agree with the conclusion that there was nothing in Mr Zhang'spersonal circumstances to justify a discount on these grounds.[52] We have considered whether the MPI of 10 years was excessive in thecircumstances of this case. We are, however, satisfied that Toogood J was entirelycorrect when he concluded that an MPI was justified. Mr Zhang was the primemover of a massive operation involving very large quantities of pseudoephedrinewith significant commercial value. The evidence before Toogood J led him toconclude that Mr Zhang was a manipulative man, who fully appreciated the scale ofhis offending. In these circumstances, there was no reason to depart from the normalapproach when sentencing offenders for serious drug offending. An MPI was clearlyjustified in order to deter others from offending in a similar way and to denounceMr Zhang's conduct.[53] In the hearing before us, Mr Simmonds questioned the methodology adoptedby Toogood J when setting the MPI. That submission was, however, misconceivedand failed to take account of the four-year and six-year split that underpinned the10-year MPI which provided a logical basis for Toogood J to conclude that a 10-yearMPI was appropriate.[54] In our assessment, an MPI of 50 per cent of the end sentence was well withinthe range that was reasonably available.[55] For these reasons, the appeal against sentence is dismissed.Result[56] The appeal against convictions is dismissed.[57] The appeal against sentence is dismissed.Solicitors:Tucker & Co, Auckland for AppellantCrown Law Office, Wellington for Respondent