In the Court Of Appeal of New Zealand
CA130/2010
[2010] NZCA 308

BETWEEN	DAVID JOHN VERNON
Appellant

AND	THE QUEEN
Respondent

Hearing:	1 June 2010

Court:	Arnold, Wild and Simon France JJ

Counsel:	J C Gwilliam for Appellant
M J Inwood and S M McClean for Respondent

Judgment:	19 July 2010 at 9.30 am 

JUDGMENT OF THE COURT	

A	The appeal is allowed to the extent that the sentence of five and a half years imprisonment for possession of equipment to cultivate cannabis is quashed and replaced by a sentence of three and a half years imprisonment, to be served concurrently with the sentences for the other offending.  
B	In all other respects the appeal is dismissed.

REASONS OF THE COURT
(Given by Arnold J)

Introduction
[1]	The appellant was charged with cultivation of cannabis, possession of cannabis for sale, sale of cannabis, possession of equipment to cultivate cannabis, possession of LSD for supply and theft of electricity.  He entered guilty pleas to cultivation of cannabis and possession of equipment to cultivate cannabis on the morning of trial.  Following a jury trial before Miller J he was convicted of possession of cannabis for sale, selling cannabis and theft of electricity.  He was acquitted of the charge of possessing LSD.
[2]	A co-offender, Mr Campbell, faced similar charges. On the morning of trial, he entered guilty pleas in relation to all the charges except that involving possession of LSD, of which he was also acquitted having been jointly tried with the appellant.
[3]	Miller J sentenced the appellant to an effective sentence of five and a half years imprisonment and Mr Campbell to an effective sentence of three years imprisonment.  Both men were ordered to pay reparation of $6,500 to Genesis Energy Ltd in respect of the stolen electricity.
[4]	The appellant appeals against his sentence on five grounds:
	(a)	The starting point of four and a half years was too high;
	(b)	The uplift of 12 months for aggravating features was too high;
	(c)	There is an unjustified disparity between the appellant’s sentence and that imposed on Mr Campbell;
	(d)	The Judge should have sentenced the appellant as a party; and
	(e)	The Judge erred in imposing a sentence of five and a half years in relation to the possession of equipment charge.
[5]	Ms Inwood for the Crown accepted that the appeal had to succeed on the final point as the maximum penalty for the possession of equipment offence was five years imprisonment, which the Judge had exceeded.  She submitted that the appropriate sentence on that offending was three and a half years, to be served concurrently with the sentences imposed on the remaining offending.  We accept that.
Background
[6]	In 2007 the appellant and Mr Campbell set up an elaborate hydroponic cannabis operation in rented commercial premises, the annual rent for which was $25,000.  The operation allowed for several cycles of cannabis plants at varying stages of development to be cultivated at once, with separate rooms for seedlings, mother plants and mature plants.  There were automated feeding and climate control systems, powered through a bypassed electricity meter.  The climate control system was run by a computer programme.  As the Judge said, “All in all, the set-up was impressive for its professionalism.”  A children’s play area was also set up onsite for the appellant’s young daughter, of whom he had custody.
[7]	The police executed search warrants on the premises and the offenders’ shared home and found:
	(a)	34 plants at varying stages of growth, comprising 10 mature producing plants, eight mature mother plants to produce clones and 16 seedling plants;	
	(b)	21 pounds of high quality dried cannabis head, having a value of between $73,000 and $105,000; and
	(c)	paraphernalia associated with the sale of drugs, including multiple cell phones, scales, point bags and cash.
[8]	The Judge found that, based on a cycle of three harvests per annum, the operation would produce revenues in the region of $190,000 to $270,000 annually.
Sentencing
[9]	The Judge considered that, in terms of R v Terewi, this was large-scale commercial growing, with considerable sophistication and planning.  It fell into band three of Terewi, which generally has a starting point of four years or more.  He rejected the appellant’s claim that his was a secondary role and the prime mover was Mr Campbell.  Rather, the Judge said, the appellant “supplied the knowhow, the necessary construction skills, and the drive and initiative”.  Having considered a range of cases he adopted a starting point of four and a half years. 
[10]	In terms of personal aggravating features, the Judge noted that the appellant had previous convictions for serious drug dealing offences and was on parole for drug offending when he committed the present offences.  That led to his recall to serve the remaining 14 months of his sentence for the relevant offending, for which he would receive no credit administratively (as he would have for time served on remand).  The Judge accepted that some account needed to be taken of this and so reduced the uplift that he would otherwise have imposed, namely 18 months, to 12 months.  Miller J gave the appellant no credit for his guilty pleas given that the appellant denied responsibility for the overall operation and there was no saving in trial time.  This produced an end sentence of five and a half years.
Discussion
[11]	We will deal with the appeal under three heads – the starting point, the uplift and disparity.
(a)	Starting point
[12]	For the appellant, Mr Gwilliam accepted that this offending was at the top end of band two or bottom end of band three of Terewi, given that it was a sophisticated commercial operation.  However, he noted the relatively small number of plants involved and challenged the Judge’s assessment of the potential income that could be derived from the operation.  He also argued that the Judge should have treated the appellant as a secondary party rather than as a principal.  Mr Gwilliam submitted that the starting point should not have exceeded four years. 
[13]	We consider that the Judge was entitled to adopt a starting point of four and a half years.  This was a highly sophisticated commercial operation, with the potential to produce a substantial annual income.  That was the significant feature, not the precise number of plants involved.  We note that in Terewi the Court said that, using 1999 values, a cultivation operation producing income of $100,000 annually would clearly be in band three.  Moreover, we consider that the Judge was entitled to reach the view that he did as to the appellant’s participation in the operation.  It was open to him on the evidence.
(b)	Uplift
[14]	Mr Gwilliam accepted that as a result of s 9 of the Sentencing Act 2002, the appellant’s previous convictions and the fact that he offended while on parole were aggravating factors.  However, he submitted that they had been adequately taken account of because, as a result of offending while on parole, the appellant was recalled to serve out his previous sentence.  To impose an uplift in the sentence for the present offending would be to impose double punishment on the appellant.
[15]	This Court has acknowledged that there is a risk of double punishment in such circumstances, for example in R v Paul.  However, that does not mean that no account should be taken in subsequent sentencing of the fact that the further offending was committed while on parole.  In the present case, the Judge reduced the uplift from 18 to 12 months to reflect the fact that the appellant had been recalled to serve out his earlier sentence as a result of the present offending.  As Ms Inwood noted, this was an equivalent allowance to that made by this Court in similar circumstances in R v Repia.  
[16]	We consider that Miller J made a sufficient allowance, although we accept that some judges may have allowed a little more.  We do not accept that a “one for one” reduction was required, that is, a reduction of 14 months to reflect the time actually spent on recall.  Previous convictions and the commission of offences while on parole are, as a matter of statute, aggravating features in subsequent sentencing.
(c)	Disparity
[17]	To succeed in an unjustified disparity claim an appellant must show that a reasonably minded independent observer, aware of all the circumstances, would think that something had gone wrong with the administration of justice given the disparity.
[18]	In the present case there were clear grounds to distinguish between the position of Mr Campbell and the appellant.  In particular:
	(a)	There were no aggravating features in relation to Mr Campbell comparable to those in relation to the appellant.
	(b)	Mr Campbell contested only one charge and that was for possession of LSD for supply of which both he and the appellant were acquitted.  Unlike the appellant, he entered guilty pleas in respect of the remainder, for which he was entitled to receive credit.
[19]	There is, then, a rational basis for the differentiation between the two end sentences.
Decision
[20]	The appeal is allowed to the extent that the sentence of five and a half years imprisonment for possession of equipment to cultivate cannabis is quashed and replaced by a sentence of three and a half years imprisonment, to be served concurrently with the sentences for the other offending.  Otherwise, the appeal against sentence is dismissed.

Solicitors: 
Crown Law Office, Wellington for Respondent