CHAN v R [2018] NZCA 148

CHAN v R [2018] NZCA 148 [16 May 2018]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA637/2016[2018] NZCA 148BETWEEN KIN LONG CHANAppellantAND THE QUEENRespondentHearing: 22 March 2018Court: Winkelmann, Courtney and Mallon JJCounsel: R M Mansfield for AppellantA J Ewing for RespondentJudgment: 16 May 2018 at 10 amJUDGMENT OF THE COURTA The application for an extension of time to appeal is granted.B The appeal against conviction is dismissed.C The appeal against sentence allowed.D The sentence of 19 years and three months' imprisonment is quashed andsubstituted with a sentence of 15 years and three months' imprisonment.E The minimum period of imprisonment is quashed.____________________________________________________________________REASONS OF THE COURT(Given by Winkelmann and Courtney JJ)Introduction[1] Kin Long Chan was convicted following a jury trial before Brewer J on fourcharges of importing methamphetamine, two of supplying methamphetamine, one ofattempting to supply methamphetamine and two of possessing methamphetamine forsupply. He was sentenced to 19 years and three months' imprisonment on the leadcharge, which related to an importation of 60.9 kilograms of methamphetamine.1Brewer J also imposed a minimum period of imprisonment of seven years andeight months (40 per cent).2[2] Mr Chan appeals his sentence on the ground that it is manifestly excessive asa result of the sentencing Judge:(a) taking too high a starting point;(b) imposing too great an uplift to reflect the totality of the offending;(c) failing to properly recognise Mr Chan's personal mitigating factors; and(d) imposing a minimum period of imprisonment.[3] Mr Chan's counsel, Mr Mansfield, contended that an appropriate sentencewould have been 15 years and three months' imprisonment without a minimum periodof imprisonment.[4] The appeal was filed out of time on 13 December 2016. Neither partyaddressed this point but the delay was short and, given our conclusion in this appeal,it is in the interests of justice to grant an extension, which we do.[5] An appeal against conviction was also filed in this Court but no submissionswere advanced in support and the appeal was not pursued. Accordingly the appealagainst conviction is dismissed.1 R v Chan [2016] NZHC 2376.2 At [38].The offending[6] Mr Chan is now 25 years old but was 22 years old at the time of the offending.He was born in Hong Kong but came to New Zealand as an exchange student whenhe was 12 and remained. He lived with a home-stay family, but returned toHong Kong regularly to visit his own family.[7] In 2013, when Mr Chan was 21, he met a Hong Kong resident, Mr Ho Mak, atthe Sky City Casino. Mr Ho Mak was a senior member of a Hong Kong crimesyndicate. He recruited Mr Chan to participate in the importation and distribution ofmethamphetamine. Mr Chan took instructions from Mr Ho Mak and two other men,Mr Kam and Mr Yip. Like Mr Ho Mak, Mr Kam and Mr Yip were also resident inHong Kong but visited New Zealand specifically for the purposes of the importationand distribution of methamphetamine.[8] Between 5 February and 25 March 2015, four consignments ofmethamphetamine were delivered, or were intended to be delivered, to a Mt Edenstorage unit Mr Chan had rented. Specifically:(a) Two parcels were sent by post in February and March 2015. They wereintercepted and found to contain 2.2 kilograms and 1.2 kilograms ofgrey powder containing methamphetamine. The exact amount ofmethamphetamine was not finally established.(b) A third consignment was identified after the police operation had beenconcluded. Only traces of methamphetamine remained. Mr Chan'sfingerprints were on the parcel.(c) The fourth consignment, which contained 60.9 kilograms ofmethamphetamine hidden in garden hoses, arrived by ship on5 March 2015. It was intercepted and most of the methamphetaminereplaced with rock salt. That consignment was delivered to the storageunit that Mr Chan had rented. Mr Chan drove Mr Kam to the unit totake delivery. Mr Chan also messaged Mr Mak to advise him thatthe drugs had arrived.[9] On termination of the police operation, 18.8 kilograms of methamphetamine,which was in the process of being dried, was found at Mr Kam's flat. Remnants werealso found at the storage locker in Mount Eden.[10] The methamphetamine subject of the possession for supply charges was in theform of a black solid mass that had yet to be "dried". The charges of supply andattempted supply of the methamphetamine by Mr Chan were based on the following:(a) On 22 March 2015, Mr Chan drove Mr Kam and Mr Yip to a meetingplace where they supplied a sample of methamphetamine to a Mr Yau.(b) On 25 March 2015, Messrs Yip, Kam and Chan supplied an associate,Mr Hong, with 1.6 kilograms of rock salt, believing it to bemethamphetamine.(c) On 25 March 2015, Messrs Chan and Kam collected a box fromthe storage locker rented by Mr Chan and then met a Mr Yau andsupplied him with one kilogram of methamphetamine.Was the starting point and uplift too high?[11] The amount of methamphetamine involved in the lead importation charge(60.9 kilograms) brought the case within band 4 of R v Fatu, attracting a starting pointof between 12 years and life imprisonment.3 At the time, this importation wasthe second largest known importation of methamphetamine into New Zealand.In addition, the 18.8 kilograms of methamphetamine found in Mr Kam's flat andthe (estimated) three kilograms imported on the other occasions had to be taken intoaccount for the purposes of totality.[12] The co-offenders, Mr Kam and Mr Yip, pleaded guilty and were sentencedbefore Mr Chan. In sentencing them, Woodhouse J took a starting point of 25 years'imprisonment.43 R v Fatu [2006] 2 NZLR 72 (CA) at [36].4 R v Kam [2016] NZHC 110.[13] At sentencing, the Crown submitted that a starting point of 25 to 30 years'imprisonment was appropriate. Mr Chan's counsel (not Mr Mansfield) contended fora starting point of 16 years and eight months on the basis of Mr Chan's limited role inthe offending.[14] Brewer J found that Mr Chan's role was to help with the logistics of receivingand distributing the packages once they arrived in New Zealand. To this end he rentedthe storage unit, together with Mr Kam made enquiries of the self-storage facilityregarding the arrival of the packages and handled the package that had not beenintercepted by customs. In relation to the consignment of the 60.9 kilograms, Mr Chancommunicated with the freight company and the trucking company regarding delivery,helped to unload the 30 boxes and stack them in the storage unit, then photographedthe boxes and confirmed to Mr Ho Mak that the consignment had arrived. Mr Chan'sdetails were also used to obtain an Importer's Client Code but Brewer J accepted thatthis was done by other members of the syndicate using Mr Chan's email address andphoto identification.[15] Brewer J accepted that Mr Chan played a lesser role than Mr Kam and Mr Yip.He said:5 I accept you were not, as the Crown says, Ho Mak's right-hand-man. Youwere the local man, recruited for your ability to operate in New Zealand.Mr Yip and Mr Kam, although younger than you, were the Hong Kongsyndicate members who were here to organise the processing of the drugs andto distribute them into the New Zealand market. Of course, they also knew ofand helped with the importing. I accept that you had a lesser role than themoverall, but you certainly knew what you were doing.[16] On the basis of this assessment, Brewer J adopted a starting point of 20 years'imprisonment on the lead charge of the importation of 60.9 kilograms ofmethamphetamine, which he uplifted to 23 years to reflect the totality of the offending:[22] On charge 5, I adopt a starting point of 20 years' imprisonment. I haveto consider whether I should increase the starting point for the other charges.I think I must. There were other importations and you got involved, albeit asa driver, with supplying the drug. That offending was significant in itself.Having regard to the principle that the total sentence should be in keeping withyour overall offending, I increase the starting point by three years to 23 years.5 R v Chan, above n 1, at [21].[23] I have also looked at the starting point of 23 years to see whether it isconsistent with the 25 years imposed on Mr Yip and Mr Kam. Because I findthat your overall position in the organisation, particularly with regard tothe processing and distributing of the drug into the New Zealand market, wasless than theirs, I am satisfied that a 23 years starting point is consistent withtheir 25 years starting point.(Footnotes omitted.)Appellant's arguments[17] On appeal, Mr Mansfield argued that Brewer J placed excessive weight onthe starting points taken for Mr Kam and Mr Yip without adequately assessingthe differences between their roles and that of Mr Chan. If proper regard were had tothe different roles played by Messrs Yip, Kam and Chan, Mr Mansfield submitted,the appropriate starting point should have been no more than 18 years' imprisonment.[18] In relation to the uplift he submitted that, given the offences were a "connectedseries", close in time and in which Mr Chan played a relatively minor role, the upliftto reflect the other offending should have been no more than two years. In particular,he argued that the Judge's assessment did not recognise how much lower Mr Chanwas in the hierarchy of the Hong Kong drug syndicate than Mr Yip and Mr Kam, northe much more extensive and serious involvement they had in the importation andsupply.[19] Ms Ewing, for the Crown, submitted there was no significant differencebetween Mr Chan's role on one hand and that of Mr Kam and Mr Yip — they were all"catchers" of the drug in New Zealand. Mr Chan knew of and assisted in the supply,and so is culpable for all that entailed.Analysis: starting point[20] As Mr Mansfield submits, the role Mr Chan played was a critical considerationin setting the starting point. The amount of the drug imported or supplied is notthe only consideration. Those who control an operation, making the decisions andtaking the profits are more culpable than those, such as Mr Chan, who play a limitedand minor role. The different roles played by those involved in the same importationmay justify significantly different starting points. Those at the lower end ofthe operation are often vulnerable people used by those higher up in the hierarchy,preying on their vulnerability such as drug addiction or, as Brewer J recognised wasthe case with Mr Chan, gambling problems.6 They receive little financial reward forthe risks they take. Those higher in the hierarchy, the profit takers, will, in the usualcourse, receive substantially higher sentences.7 Unfortunately, in many cases the realprofit takers are not brought to account.[21] We agree with Brewer J's assessment that Mr Chan's involvement was lessculpable than that of Messrs Yip and Kam. Brewer J presided over Mr Chan's trialand had a good view of the role Mr Chan played in the offending. Where we differfrom the Judge is in our assessment of the differentiation in the starting point requiredto reflect the different roles played by the offenders.[22] Mr Kam and Mr Yip came into the jurisdiction as trusted representatives of thecriminal organisation to undertake the organisation of the importations and supply. Incontrast Mr Chan was recruited from within New Zealand to "catch" the drugs whenthey arrived and assist with logistics.[23] Mr Yip, although only 18 years of age, was the more senior of the three andgave instructions in New Zealand to both Mr Chan and Mr Kam. Mr Chan undertooktasks with Mr Kam, but the evidence supports the conclusion that Mr Kam and Mr Yipheld positions of greater responsibility and undertook a wider range of tasks tofacilitate the importation. Mr Kam and Mr Yip completed the paperwork in connectionwith the importation. Mr Chan had no role in that. Mr Kam and Mr Yip were involvedin the processing of the drug in New Zealand; "cleaning" or "drying" the drugs.Mr Chan played no role in that. Mr Kam and Mr Yip were involved in setting upsupply transactions, as evidenced by coded text communications. Mr Chan was notparty to coded drug communications, playing only a minor role in the supply.Although each of the three men communicated with Hong Kong direct, the evidenceas to the circumstances of the offending and the roles played supports the conclusionthat Messrs Kam and Yip were more closely tied to the Hong Kong-based criminal6 At [27].7 R v Fatu, above n 3, at [31].organisation behind the importations and were higher in the hierarchy of thatorganisation.[24] The Crown relied on R v Chen to support its submission that the starting pointwas appropriate.8 The offending in that case involved, among other things,the importation of 96 kilograms of methamphetamine on a single occasion. Severalmen were involved in the importation. One, Mr Fung, was described as a "middleman crucial to the success of [the] plan".9 He had come to New Zealand fromHong Kong specifically to make preparations for the importation, includingthe incorporation of a company to be used as the "front" for the importation, rentingoffice space, opening a bank account and applying for a client code to import goods.He returned to Hong Kong after concluding those tasks and returned again afterthe container had been shipped from Hong Kong. He then made the arrangements forthe hireage of storage units and oversaw the unloading of the container at the storageunits. The starting point taken by Stevens J in sentencing Mr Fung was 25 years'imprisonment. This Court affirmed that starting point, though observed that a life termwould have been within range.10[25] Another defendant in Chen, Mr Deng, had also come from Hong Kong to assistin the importation. He had collected the drugs and had taken them to an address setup for distribution. He was in direct contact with the syndicate in China and wassentenced on the basis of his intention to supply at least 90 kilograms of importeddrugs. On a Solicitor-General appeal, this Court increased the sentence imposed inthe High Court from 17 years to 25 years' imprisonment.11[26] On the basis of this decision, the Crown submits that Mr Chan's offendingcould even have attracted a starting point of 25 years' imprisonment. We disagree.The roles played by Messrs Deng and Fung were comparable to those played byMessrs Yip and Kam. Trusted managers in a criminal enterprise, dispatched to aforeign land to set up a criminal operation. Mr Chan in contrast performed limitedassigned tasks with no "managerial" responsibilities.8 R v Chen [2009] NZCA 445, [2010] 2 NZLR 158.9 At [5] and [212].10 At [213].11 At [203].[27] A starting point of 25 years was utilised by Woodhouse J when sentencingMr Kam and Mr Yip, capturing the criminality involved in all of their offending.Based on our assessment of the various roles played by those offenders, we agree withMr Mansfield's submission that a starting point of 20 years for the totality ofthe offending better reflects Mr Chan's culpability for the offending given his morelimited role in the importation and supply and his lower place in the criminalenterprise. We are satisfied that the Judge erred in making inadequate adjustment tothe starting point to reflect the lesser role.Did the Judge fail to properly recognise the appellant's personal mitigatingfactors?[28] There were a number of factors identified by Mr Chan's counsel at sentencingwhich the Judge accepted warranted recognition.12 These were that Mr Chan wasyoung and that his youth and his gambling habit made him vulnerable to Mr Ho Mak'srecruiting tactics. He also recognised that Mr Chan's good character warrantedrecognition; Mr Chan had put before the Court some 52 character references speakingto his good character and in particular his kindness and willingness to help others.[29] Brewer J did not allow a discount for remorse because he did not accept thatgenuine remorse had been shown.13 The Judge clearly had in mind the pre-sentencereport that recorded Mr Chan's continued denial of the offending. Nor did he acceptthat any reduction was warranted on the basis that being in prison would be a particularhardship, because Mr Chan was fluent in English.14[30] Mr Mansfield accepted that the reduction of three years was appropriate torecognise Mr Chan's youth and the part that played in making him a target forrecruitment. But he argued that an additional reduction of five per cent was warrantedfor his good character, efforts at rehabilitation, remorse and the fact that he was beingimprisoned overseas.12 R v Chan, above n 1, at [26]–[33].13 At [31].14 At [32].[31] The total discount given by Brewer J was 13 per cent. Although it is unclear,this may also have reflected previous good character since the Judge said he tookthe many character references into account. In our view, the discount for youth in acase such as this reflects not only the chronological age/development of the offender,but also the consequent vulnerability to recruitment by much more sophisticatedcriminals bent on targeting vulnerable youth. We also see Mr Chan's youth as relevantto the sentencing exercise in another way. The final sentence of 19 years andthree months' imprisonment was imposed by Brewer J after taking into accountmitigating factors. This represents more than three quarters of Mr Chan's life span todate. This Court has previously expressed concern that sentences should not beimposed that would have a crushing effect and become a barrier to rehabilitation.15In our view, a discount of up to 15 per cent to reflect Mr Chan's youth is appropriatein this case.[32] We also accept that some allowance ought to have been made for the particularhardship that Mr Chan will face in prison and for his good character. As to the issueof hardship, it is true that this Court has previously said that those who come toNew Zealand intent on the importation of drugs and willingly take the risk that theywill be imprisoned far from home ought not be shown leniency when that risk comesto pass.16 However, Mr Chan does not fall into this category of offenders. He is stilla young man and has lived nearly half his life in New Zealand. For all of that time hehas lived with a host family. The pre-sentence report indicated that the Department ofCorrections had no contact details for Mr Chan's home-stay family and did not knowwhat level of support, if any, existed for him from that quarter. He has no other supportnetwork in New Zealand. His only support will come from his Hong Kong-basedparents who will travel here to visit him. He cannot truly be described as someonewho has come here opportunistically to offend for commercial gain. Mr Chan's homehas been in New Zealand and the reality is he will be a young man with no localsupport network. That will make imprisonment very difficult and we consider that afurther allowance of five per cent should be made for that.15 R v Johansen (1997) 15 CRNZ 111 (CA) at 120.16 R v Chen, above n 8, at [174]–[175].[33] This would allow a reduction of twenty per cent to reflect personal mitigatingmatters. That on its own would take the sentence down to 16 years' imprisonment.From that however, is to be deducted the nine months' credit Brewer J gave Mr Chanfor time spent on electronically monitored bail. This results in an end sentence of15 years and three months' imprisonment.Minimum period of imprisonment[34] Brewer J imposed a 40 per cent minimum period of imprisonment.17 He didnot, however, express the reasons for fixing a minimum period. In particular, the Judgedid not refer to the statutory purpose in s 86(2) of the Sentencing Act 2002.[35] In support of this ground of appeal, Mr Mansfield relied on this Court'sstatement in R v Zhou that:18It would not be right to fetter judicial discretion by finding that an MPI shouldalways be imposed in the case of serious drug offending at the levels involvedin this case. The observations of this Court just mentioned do not go that far.But the pervasive and pernicious influence of methamphetamine inNew Zealand society is such that the usual MPI of one-third applicable underthe Parole Act 2002 will most often be insufficient to meet the statutorypurposes identified in s 86(2) in cases of large scale offending.[36] Mr Mansfield submitted that a long prison sentence imposed in this case willbe sufficient to act as a deterrent both personally and generally. Moreover, Mr Chanis liable for deportation upon release, so at least one of the statutory purposes will notbe fulfilled by a minimum period of imprisonment.[37] In comparison, Ms Ewing relied on this Court's decision in Mok v R that:19The mass importation and distribution of drugs depends for its success on theparticipation of those willing to be involved in low-level tasks for relativelymodest reward. The harm caused by such activity means that deterrence canfairly be viewed as paramount [I]t seems to us to be strongly arguable thatminimum periods should more routinely be in play in the context of veryserious, cross-border, high-volume drug offending, regardless of the endsentence.17 R v Chan, above n 1, at [38].18 R v Zhou [2009] NZCA 365 at [19].19 Mok v R [2017] NZCA 537 at [14].[38] We accept Mr Mansfield's submission that Brewer J did not address himself towhether a minimum period of imprisonment is necessary for any of the purposes setout in s 86(2) of the Sentencing Act 2002. We therefore consider the issue afresh.[39] Whilst minimum periods of imprisonment will frequently be justified in casesof drug importation on a commercial scale, the imposition of a minimum period ofimprisonment remains a matter that is to be determined case by case. We do notconsider that a minimum period of imprisonment was necessary in this case to meetany of the purposes of s 86(2) of the Sentencing Act 2002. A sentence of the lengthimposed on one so young is sufficient for each of those purposes.Result[40] The application for an extension of time to appeal is granted.[41] The appeal against conviction is dismissed.[42] The appeal against sentence is allowed.[43] The sentence of 19 years and three months' imprisonment is quashed andsubstituted with a sentence of 15 years and three months' imprisonment.[44] The minimum period of imprisonment is quashed.Solicitors:Crown Law Office, Wellington for Respondent.