IN THE Court of appeal OF new Zealand
	
CA655/2014
[2015] NZCA 174

BETWEEN	
KARL RODNEY GOLDSBURY
Appellant	

AND	
THE QUEEN
Respondent	

CA179/2015

BETWEEN	
DAVID RYAN CARROLL
Appellant	

AND	
THE QUEEN
Respondent	

Hearing:	
12 May 2015	

Court:	
Randerson, Courtney and Kós JJ	

Counsel:	
P G Mabey QC for Appellant Goldsbury
W T Nabney for Appellant Carroll
B F Fenton for Respondent	

Judgment:	
15 May 2015 at 2:30pm	

JUDGMENT OF THE COURT

A	An extension of time to appeal in CA179/2015 is granted.

B	The appeals by Mr Goldsbury and Mr Carroll against sentence are both dismissed.
____________________________________________________________________

REASONS OF THE COURT

(Given by Randerson J)
Introduction
[1]	The appellants along with two others were tried in the High Court at Rotorua before Keane J and a jury on an indictment alleging methamphetamine-related offences. 
[2]	The principal charge was one of conspiracy to manufacture methamphetamine at Katikati between 7 and 9 December 2012.  Both appellants were found guilty of that charge along with two others (Mr Jones and Ms Farrow).  In addition, Mr Goldsbury was convicted on one count of supplying methamphetamine, two counts of supply or possession of precursor substances (hypophosphorous acid and iodine), and one count of attempting to pervert the course of justice.  He was acquitted of three other charges.  
[3]	Mr Goldsbury was sentenced to a total of ten and a half years imprisonment with a five year minimum period.  On this appeal against sentence, he challenges the eight year starting point Keane J adopted on the conspiracy charge.  He also challenges the imposition of the minimum period of imprisonment.
[4]	Mr Carroll was sentenced to three years and three months imprisonment from a starting point of three and a half years.  His appeal against sentence is advanced solely on the footing that if there is a reduction in Mr Goldsbury’s sentence, then his should be reduced correspondingly.
[5]	In sentencing Mr Goldsbury, Keane J found that the equipment and materials in his possession suggested that he must have been capable of manufacturing methamphetamine on a scale likely to yield at least 250 grams of methamphetamine.  This placed Mr Goldsbury’s offending towards the top of band 2 in terms of the tariff judgment of this Court in the R v Fatu.  The Judge could not be satisfied to the criminal standard that the yield was sufficient to place the offending within band 3.  
[6]	The sole ground of Mr Goldsbury’s sentence appeal is that there was insufficient evidence to support the Judge’s finding as to the likely yield and the sentence was manifestly excessive in consequence.  
The Judge’s approach to sentencing
[7]	The Judge began by outlining the offences for which Mr Goldsbury was convicted in these terms:
[2]	First, you are for sentence for an offence on 19 September 2012 at Pokeno.  You then supplied some Asian males from Auckland with one litre of hypophosphorous acid, which is capable of being used to manufacture methamphetamine.  You knew that was the purpose for which it was to be used.
[3]	Your second offence was on 7 October 2012 at Tauranga.  You then supplied methamphetamine to John Poi and Desmond Jury, who are members of the Gisborne chapter of the Mongrel Mob.  You were then, and may be still, a member of the Maketu chapter.  The quantity you supplied them was 8.6 grams of methamphetamine.  That was established when they were arrested on the same day on their way back to Gisborne.
[4]	Your third offence was on 3 December 2012.  You were stopped at Ruahihi, travelling back from Hamilton to Tauranga.  You then possessed 1.3 kilograms of iodine, which is also used in the manufacture of methamphetamine, and that is why you had it.  It was worth between $1,000 - $4,000.
[5]	Your fourth, and primary, offence was between 7 – 9 December 2012.  You conspired with Ryan Carroll, an associate of yours, and also with his employee, Terrence Jones, and in turn with his then partner, Tracey Farrow, to manufacture methamphetamine at 56 Park Road, Katikati.  Mr Jones and Ms Farrow were the tenants of that address. Whether you manufactured, and the scale on which you did so, are the primary issues I have to resolve in sentencing you.
[6]	Your fifth offence was at the Katikati address on 9 December, when the Armed Offenders' Squad made its presence plain.  You then wilfully attempted to defeat the course of justice by destroying equipment and materials for manufacture, assisted by Mr Jones.  You were also charged with setting fire to the building but the jury acquitted you of arson.  That did, however, coincide with the destruction of the equipment and that raises an issue in itself.
[8]	The Judge was satisfied that the iodine in Mr Goldsbury’s possession on 3 December 2012 was for the purpose of the manufacture of methamphetamine which took place four days later.  He also found that the two earlier offences in time demonstrated that Mr Goldsbury had access to and was dealing in precursor substances or materials for manufacture as well as methamphetamine itself.  There was no dispute that Mr Goldsbury instigated and controlled the conspiracy.
[9]	Keane J recognised that, for sentencing purposes in conspiracy cases, the closer Mr Goldsbury came to manufacturing, the more closely he was to be sentenced as a manufacturer.  If there had been manufacturing, it was necessary to determine the scale on which this occurred.  In determining these questions the Judge noted that, while he was able to make findings by inference, the criminal standard of proof applied.  
[10]	The Crown contended at sentencing that the process of manufacturing had commenced at a large building at Katikati on 9 December 2012.  The address had been under surveillance overnight by the police including members of the Armed Offenders Squad.  Mr Carroll was seen to leave the property soon after 9:30 am.  The Armed Offenders Squad then intervened at about 11:30 am.  A fire in the premises erupted shortly afterwards.  Mr Goldsbury, Mr Jones and Ms Farrow were found on the premises and were arrested.  
[11]	In a pit close at hand, the police located 1.095 kilograms of iodine and 600 millilitres of hypophosphorous acid along with a parr bomb in which were traces of past manufacture of methamphetamine.  
[12]	The Crown’s contention was that the process of extracting pseudoephedrine from precursor substances was in progress at the time the police intervened.  It remained only to convert pseudoephedrine into methamphetamine.  The Judge noted that the Crown relied on the opinions of ESR analysts as to the likely yield from the manufacturing process.  One was that 600 millilitres of hypophosphorous acid could in optimal conditions yield 556 grams of methamphetamine.  The other was that just over a kilogram of iodine could yield in excess of 800 grams of methamphetamine.  The Crown had also contended alternatively that Mr Goldsbury might have completed manufacture and returned what remained to the pit.  In either event, the Crown contended that the yield must have exceeded 250 grams.
[13]	As to whether manufacturing had commenced, the Judge found:
[23]	Against that background I return to the two issues about which I have to be satisfied and, as to the first, I am satisfied that you were intent on manufacturing to a significant commercial level at Katikati on 8 – 9 December 2012, that you engaged Mr Carroll and Mr Jones and Ms Farrow in that endeavour, and that you were manufacturing when the AOS intervened.
[24]	First, I find, that was why you obtained 1.3 kilograms of iodine on 3 December 2012 and, after you were apprehended at Ruahihi and that iodine was taken from you, you obtained more from Hamilton on 7 December 2012.  The iodine found in the fire pit after the fire, 1.095 kilograms, could well have been what you procured the second time.
[25]	Secondly, I find that on 7 December 2012, after you returned from Hamilton at about 11 pm, you and Mr Carroll went to Katikati so you could check it out.  Your text, in which you told him you were 10 minutes from his house, and the text Mr Jones sent him at 11.20 pm describing how he could get access and reassuring him it was safe to come, are all of a piece.  So too is an earlier exchange between Mr Jones and Ms Farrow, and the text you sent your partner at 3.34 am on 8 December saying that you were working late that night.  
[26]	Thirdly, I find, you equipped yourself by buying hardware items at three outlets in Tauranga on 8 December 2012 capable of being used in manufacture: a PH meter, Teflon tape, plastic funnels, disposable latex gloves, a drop sheet, flock lined gloves, several baking dishes, metal sieves, a chilly bin, a Magic Bullet, a form of granulator, and finally Pure Dew water.
[27]	Fourthly, I find it no coincidence that when at 8.23 pm, you and Mr Carroll met at the Bethlehem shops, after you made those purchases, you did not transfer them from your partner’s car to his wagon immediately.  You transferred them, less conspicuously, in a semi rural area at Tanewha Place.
[28]	Fifthly, I find that, when at 9.27 pm you and Mr Carroll arrived at Park Road, you ceased to use your mobile phone, because you were intent on manufacture.  Earlier that day, when texting a woman you had agreed to pick up from the airport at some later date, you told her that you were going to be inaccessible because you were going down the coast.  That was plainly untrue.
[29]	Sixthly, at 10.50 pm, I find also, it is no coincidence that Mr Jones and Ms Farrow went to the BP Service Station and got eight bags of ice, which on the ESR evidence, enables condensation essential to manufacture.  The bags were found afterwards in a burnt out freezer, close to where manufacture must have taken place.
[30]	Seventhly, it is also no coincidence, I find, that at 11.34 pm Mr Jones and Ms Farrow left a second time and, while they came back at 1.52 pm, they left again at 2.38 am and spent the balance of the night at Mr Carroll’s yard at Mt Maunganui where Mr Jones worked on Ms Farrow’s car.  They clearly left to enable you to begin manufacture, assisted by Mr Carroll.
[31]	Eighthly, I find that when at 11.30 am on 9 December, the AOS made its presence plain, manufacture must have been well advanced.  You and Mr Jones first attempted to escape through the back roller door, only to be checked by the AOS.  Then, just by that door, there was considerable noise consistent with the equipment for manufacture being destroyed.  After that the fire erupted and you, Mr Jones and Ms Farrow, did not leave the building, at the far end, until the very last moment.  You were clearly intent on ensuring that no evidence remained. 
[32]	Ninthly, the search of the burnt out shell afterwards, I find, confirms that you were manufacturing close to the back roller door.  At that point there were cookers, three condensers, three metal cylinders, all consistent with distillation, two fans and an item of glassware.  The condensers and cylinders were not every day items.  Their purpose had to be manufacture.
[33]	Tenthly, obviously and most tellingly, discovered afterwards in a fire pit near to the destroyed building, carefully wrapped, were three items needed for the last phase of manufacture: the kilogram of iodine, three fifths of a bottle of hypophosphorous acid, and a parr bomb in which were traces of past manufacture.
[34]	At trial the Crown case was that these items were consistent with manufacture not yet at the reaction stage.  On sentence I am invited to infer, alternatively, that manufacture might have been complete and they had been returned to the fire pit. I do not accept that.  That was not the Crown’s case at trial.  The larger issue remains on what scale you were manufacturing when interrupted.
[14]	As to the available yield of methamphetamine the Crown contended that Mr Goldsbury was able to complete manufacture on a scale consistent with the amount of hypophosphorous acid and iodine found in the pit.  The Judge rejected a submission made on Mr Goldsbury’s behalf highlighting the absence of evidence of pseudoephedrine.  He did not accept this was fatal to the Crown’s case.  As the Judge put it:
[37]	Everything that had happened before that date, everything that happened on that morning, the equipment itself and the presence of other chemicals necessary for manufacture, point to the fact that you must have had sufficient pseudoephedrine for significant manufacture.  Everything you had and did would be inexplicable otherwise.
[15]	Keane J then distinguished the decision of this Court in Te Rure.  In that case, at the time the police intervened, evidence of the manufacture of methamphetamine had been largely destroyed.  This Court said that all was left were traces of chemicals and other relevant materials as well as further evidence consistent with an unknown amount of methamphetamine having been manufactured.  In contrast, the Judge said that, in Mr Goldsbury’s case:
[40]	… the evidence as to manufacture and its scale is much more definite.  The equipment and materials you had suggest that you must have been capable of manufacturing on a scale likely to yield at least 250 grams of methamphetamine, towards the top of band two.  I cannot be satisfied to the criminal standard as to band three.
[41]	I have also to be conservative in the starting point I take within band two, because you are charged with conspiracy, not manufacture.  I take an eight year starting point.
Mr Goldsbury’s argument on appeal
[16]	The focus of Mr Mabey QC’s challenge to the Judge’s findings was that there was no proper basis to conclude that the quantity of the yield must have been at least 250 grams.  With regard to the finding by the Judge that the process of extracting pseudoephedrine was occurring, Mr Mabey conceded he was not in a position to offer any alternative explanation as to what was happening at the point the police intervened.  Nor could Mr Mabey offer any other explanation for the presence of those quantities of iodine and hypophosphorous acid apart from the manufacturing of methamphetamine.  However, he did not have any instructions to accept the Judge’s finding on this point.  Mr Mabey acknowledged that if we were to accept the Judge’s finding that the process for extracting pseudoephedrine was occurring, then, in law, the process of manufacturing methamphetamine had commenced.
[17]	Mr Mabey submitted that the Judge’s finding that the expected yield was at least 250 grams of methamphetamine was arbitrary.  The Judge’s finding should have been that there was insufficient evidence to establish the expected yield.  There was no evidence of quantity and frequency of supply following manufacturing.  Although there were intercepted communications in evidence, none gave any indication as to the intended scale of the manufacturing operation.  Referring to R v Gollop it was submitted that the Judge ought to have adopted a cautious approach.  The scale of an operation could not be reliably inferred from an arithmetical calculation.
Conclusion
[18]	We are unable to accept Mr Mabey’s submissions.  We are satisfied that the Judge thoroughly considered all the relevant evidence and that his conclusions were amply justified for the reasons he gave.  We cannot improve on them and little would be gained by attempting to do so.  In short, we agree with the Judge that there could be no other explanation for the existence of the equipment and precursor substances he found to be present other than they were to be used and were being used for the purpose of manufacturing methamphetamine on a significant scale.  No other explanation was offered.  It remained for the Judge to determine the likely yield of methamphetamine and we are satisfied he did so on an entirely supportable and appropriately conservative basis.  
[19]	The case can be readily distinguished from Te Rure for the reasons the Judge gave.  Counsel also referred us to the High Court sentence in R v Newton but we have not found this case to be of material assistance.
[20]	There being no other basis for Mr Goldsbury’s sentence appeal, it is dismissed.  
Mr Carroll’s appeal
[21]	Mr Carroll’s appeal against sentence was filed out time. We grant an extension of time.
[22]	Mr Nabney accepted that the success of Mr Carroll’s appeal stood or fell with the outcome of Mr Goldsbury’s appeal.  It follows that his appeal too must be dismissed.
Result
[23]	The appeals by Mr Goldsbury and Mr Carroll against sentence are both dismissed.  

Solicitors: 
Jason Reeves, Tauranga for Appellant Goldsbury
Crown Law Office, Wellington for Respondent