IN THE Court of appeal OF new Zealand

I TE KŌTI PĪRA O AOTEAROA	
 CA587/2019
 [2020] NZCA 486

	
BETWEEN	
YUEN CHEUNG CHAN
Appellant	
	
AND	
THE QUEEN
Respondent	

Hearing:	
7 October 2020	

Court:	
Gilbert, Mallon and Ellis JJ	

Counsel:	
P K Hamlin for Appellant
C Ure for Respondent	

Judgment:	
15 October 2020 at 9.30 am	

JUDGMENT OF THE COURT

A	The application for an extension of time to appeal is granted.  
B	The application to adduce further evidence is granted.
C	The appeal against sentence is allowed.
D	The sentence of 10 years and 11 months’ imprisonment with a minimum period of imprisonment of 50 per cent is set aside.  A sentence of nine years and eight months’ imprisonment with a minimum period of imprisonment of 50 per cent is substituted.
____________________________________________________________________

REASONS OF THE COURT

(Given by Gilbert J)
[1]	Mr Chan pleaded guilty to conspiring to manufacture methamphetamine, possession of material with intent to manufacture methamphetamine and possession of equipment with intent to manufacture methamphetamine.  He was sentenced by Gordon J to 10 years and 11 months’ imprisonment and ordered to serve a minimum period of imprisonment of 50 per cent.  This sentence was constructed by taking a starting point of 13 years and 10 months’ imprisonment, allowing a two-month discount to recognise the difficulties Mr Chan would face as a foreign national serving a prison sentence in New Zealand and allowing a 20 per cent discount for his guilty pleas.  
[2]	Mr Chan now appeals against his sentence.  He contends that a discount ought to have been allowed for his previous good character and the discount to recognise his difficulties as a foreign national was inadequate.
[3]	Mr Chan’s appeal was filed well out of time.  However, the delay has been explained.  There is no prejudice to the Crown and it does not oppose the application to extend time for the appeal.  We are satisfied that it is in the interests of justice for the appeal to be determined on its merits.  An extension of time is granted accordingly.
[4]	Mr Chan applies for leave to adduce further evidence in support of his appeal, being affidavits sworn by his wife and mother.  This evidence provides further information about Mr Chan’s personal circumstances in support of his contention that a good character discount ought to have been allowed.  We did not apprehend there to be any objection from the Crown to the receipt of this additional material.  The evidence appears to be credible and cogent.  We accept there would have been difficulty obtaining the evidence from Laos and Hong Kong and arranging for it to be translated in time for sentencing.  Even if the evidence is not strictly fresh, we are prepared to receive it in the circumstances.
The facts
[5]	While there is no challenge to the starting point adopted by the Judge, we commence by summarising the facts of the offending.  This is necessary because the ultimate question on appeal is whether the end sentence was appropriate in all the circumstances, not how it was constructed.
[6]	In brief, Mr Chan and two others made preparatory arrangements for the manufacture of a very large quantity of methamphetamine.  They took delivery of 160 litres of t-BOC methamphetamine imported from Hong Kong.  This quantity was sufficient to enable the extraction of approximately 46 kilograms of pure methamphetamine.  They also took delivery of various items of equipment needed for the extraction process.  Mr Chan and his co-offenders arranged for the t-BOC methamphetamine and equipment to be taken to a garage at the property where one of Mr Chan’s co-offenders was living.  The operation did not progress further because the police, who had been keeping Mr Chan and his co-offenders under surveillance, intervened and arrested them.  
[7]	The following, more detailed, summary is drawn from the agreed summary of facts to which Mr Chan pleaded guilty.   
[8]	On 28 January 2017, a consignment labelled “dishwashing liquid” arrived in New Zealand from Hong Kong.  On analysis by the New Zealand Customs Service on 8 February 2017, a number of the boxes in the consignment were found to contain t‑BOC methamphetamine.  t-BOC methamphetamine was not classified as a controlled drug under the Misuse of Drugs Act 1975, nor was it controlled under the Medicines Regulations 1984. 
[9]	The police arranged delivery of the consignment on 15 February 2017.  Three days later, Mr Chan’s two co-offenders, Thammanoun Mingsisouphanh and Shui Tong Wong, arranged for the consignment to be uplifted and put into storage at a storage unit in New Lynn.  Mr Mingsisouphanh had rented this storage unit in Mr Wong’s name the previous day.
[10]	Mr Chan flew to Auckland from Hong Kong on 19 February 2017.  On 22 February 2017, he and Mr Wong went to the storage unit, removed the contents of the boxes and moved the boxes around.  The following day, Mr Chan and Mr Wong travelled in Mr Wong’s vehicle to visit several properties advertised for rent around Auckland.  
[11]	Mr Chan flew from Auckland to Hong Kong at 9.50 am on 27 February 2017.  That same day, a package arrived by air into New Zealand.  This was found to contain a rotary evaporator used for the conversion of t-BOC methamphetamine into methamphetamine. Mr Chan’s co-offenders took this package to the same storage unit on 2 March 2017, the day it was delivered.  The police conducted two separate covert searches of the storage unit later that day and found significant quantities of hydrochloric acid and methanol required for the conversion process.          
[12]	On 11 March 2017, Mr Chan returned to New Zealand, this time travelling from Kuala Lumpur.  That same day, a second package arrived by air into New Zealand.  Contrary to the description on the invoice, this package contained an agitator, also intended to be used in the conversion process.  Two days later, on 13 March 2017, a third package arrived by air into New Zealand containing various types of glassware and other equipment to be used in the conversion process.   
[13]	On 14 March 2017, Mr Chan and Mr Mingsisouphanh took delivery of the agitator and loaded it into Mr Mingsisouphanh’s vehicle.  About an hour later, Mr Wong took delivery of the third package containing the glassware and other equipment.  All of these items were then placed in a rental van and taken to an address in Lynfield, Auckland where they were unloaded into a garage.  The three of them then went to the storage unit in New Lynn and loaded the consignment of t-BOC methamphetamine into the rental van and transported it back to the garage in Lynfield.   
[14]	The defendants were arrested later that day.  Approximately $250,000 in cash was found at Mr Wong’s home address together with one ounce of methamphetamine and drug utensils.  Mr Wong pleaded guilty to additional charges (beyond those faced by Mr Chan) arising out of this offending. Six grams of methamphetamine were found on Mr Mingsisouphanh’s person.  Various substances used for producing methamphetamine were found at Mr Mingsisouphanh’s address when searched.  He also faced additional charges for this offending. 
[15]	There is no challenge to the starting point adopted of 13 years and 10 months’ imprisonment for Mr Chan’s involvement in this enterprise.  By comparison, in sentencing Mr Mingsisouphanh, Venning J considered that a starting point of 12 years and six months’ imprisonment would be appropriate for his role in the same methamphetamine offending.  Mr Chan was considered to have played a more significant role because of his repeated travel to and from Hong Kong where the t‑BOC methamphetamine originated.  Lang J adopted the same starting point for Mr Wong of 12 years and six months’ imprisonment on the charge of conspiring to manufacture methamphetamine.  
Should there have been a discount for Mr Chan’s previous good character?
[16]	Mr Chan was born in Hong Kong in March 1975.  He relocated with his parents and brother to Canada in 1992, when he was 17.  He lived in Canada from that time until his arrest in 2017.  Mr Chan is now aged 45.  He was 42 at the time of the offending.      
[17]	Apart from a conviction for petty theft (under CAD 1,000) in Canada when he was aged 18, Mr Chan has no previous convictions of any kind.  It appears from the affidavits that have been filed that Mr Chan has otherwise been of good character and supportive of his wife and family.          
[18]	Modest discounts were given to both Mr Mingsisouphanh and Mr Wong at sentencing to reflect that they were first offenders.  Lang J described this as the principal mitigating factor justifying a global discount of nine months for Mr Wong.  Because Mr Wong was sentenced for additional offending, his overall starting point before adjustment for personal mitigating factors was 13 years’ imprisonment.  The nine month global discount therefore equated to a little less than six per cent. Mr Mingsisouphanh received a lesser global discount of six months for personal mitigating factors, including that he was a first-time offender.  
[19]	Gordon J allowed no discount for the fact that Mr Chan was effectively a first‑time offender.  Two reasons were given.  First, the Court did not have any official record of Mr Chan’s criminal history in Hong Kong and Canada.  Secondly, and more importantly, the Judge stated that a mere absence of previous convictions does not necessarily justify a discount for previous good character.  The Judge said that more is required, particularly in the context of commercial drug offending, where the principle of deterrence carries significant weight.  
[20]	However, as this Court has now clarified in Zhang v R, personal mitigating circumstances must be given due regard at stage two of the sentencing exercise in all instances of serious drug offending, as in any other offending.  Mr Chan’s prior good record is not in dispute.  In our view, this factor required some recognition in the sentencing analysis.  We consider a modest discount ought to have been allowed, similar to the discount Mr Wong received, in the order of five per cent.    
Was the foreign national discount inadequate?
[21]	The Judge said there was no evidence that Mr Chan suffered from any particular language difficulties.  In any event, the prison authorities would be able to make adequate arrangements to ensure he could understand what he needed to.  Nor did the Judge consider that separation from his wife and children was a factor carrying any significant weight.  The Judge did, however, accept that his family may be unable to visit him in prison and recognised this by allowing what she described as “small discount”, of two months.  This equated to a 1.2 per cent discount.  Ms Ure, for the Crown, responsibly acknowledges that this discount may warrant further consideration by the Court.
[22]	Mr Chan’s wife and two young children, aged five and three, now live in Laos.  Prior to Mr Chan’s arrest, his wife said he worked hard to support them as an employed motor mechanic while she raised their children at home.  She says he was a good father and was regarded as a good employee at his place of work.  She says she is now in a very difficult position, having to support herself and raise the two children alone.  Mr Chan’s father died earlier this year.  His mother and sister remain in Hong Kong. 
[23]	Mr Chan has no family or friends in New Zealand.  Apart from his offending, he has no connection with New Zealand.  It appears that his grasp of English is limited.  We accept that serving a lengthy term of imprisonment will be particularly hard for Mr Chan because he will be isolated from his family.  It appears there is no realistic prospect of him being able to see his wife or children until he is released.  He may never see his mother again and his father has died since he was imprisoned.  We consider the combination of these circumstances — language difficulty, social and cultural isolation and almost complete lack of family contact and support — mean that a lengthy sentence of imprisonment will be disproportionately severe in Mr Chan’s case.  The significant hardship that can be caused to foreign national prisoners who face these types of difficulties is well-recognised and documented.
[24]	We therefore agree that the Judge was right to allow a discount to recognise this personal mitigating factor.  However, we consider the discount allowed for it was token and inadequate.  We agree with Mr Hamlin, for Mr Chan, that a discount of not less than five per cent was required for this factor.  
[25]	We note for completeness that Mr Hamlin placed some reliance on Mr Chan’s security classification which takes account of the fact he is subject to a deportation order.  Mr Hamlin says the security classification limits the range of programmes and work opportunities available to Mr Chan in prison and a sentencing discount should be allowed for this.  We do not consider this is a personal mitigating factor and we have not taken it into account.  
[26]	The chief executive of the Department of Corrections has the responsibility of ensuring that every prisoner subject to a sentence of imprisonment for a term exceeding three months is assigned a security classification reflecting the risk posed by that prisoner.  The assessment must reflect the level of risk posed by the prisoner inside or outside the prison, including the risk of escape and the consequent risk to the public.  The classification is not static and must be reviewed every six months or whenever there is a significant change in the prisoner’s circumstances.  Any prisoner who is dissatisfied with his or her classification may apply to the chief executive to have the classification reconsidered.  Any such application must be reconsidered promptly.  This process appears to be operating correctly in Mr Chan’s case.  His preliminary security classification based on internal and external risk scores was assessed as “high”.  However, this was overridden and is currently set at “low medium”.  The plan for Mr Chan records that he is working towards achieving a security rating of “low”.  
[27]	Security classifications concern the safe management of prisoners and are not relevant to sentencing.  To illustrate this, it would be incongruous if a maximum security prisoner, so assessed because he or she poses great danger to other prisoners and the community, would be entitled to a sentencing discount to reflect the greater restrictions that follow the consequently high classification whereas a prisoner at the other end of the spectrum would receive no such discount.  
Conclusion  
[28]	In summary, we accept there was an error in the sentence and a different sentence should be imposed.  The appeal against sentence must therefore be allowed.  The total discount for personal mitigating factors should be 30 per cent, being five per cent for previous good character, five per cent for the difficulties Mr Chan will face serving a lengthy period of imprisonment as a foreign national and 20 per cent for his guilty pleas.  Applying the two-step methodology approved in Moses v R, the end sentence should therefore be one of nine years and eight months’ imprisonment.      
Result
[29]	The application for an extension of time to appeal is granted.
[30]	The application to adduce further evidence is granted.
[31]	The appeal against sentence is allowed.
[32]	The sentence of 10 years and 11 months imprisonment with a minimum period of imprisonment of 50 per cent is set aside.  A sentence of nine years and eight months’ imprisonment with a minimum period of imprisonment of 50 per cent is substituted.

Solicitors: 
Crown Law Office, Wellington for Respondent