IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CRI-2014-425-49 [2015] NZHC 346

BETWEEN	JOHN CHRISTOPHER O'DRISCOLL
Appellant	

AND	
NEW ZEALAND POLICE Respondent	

CRI-2014-425-51

BETWEEN	MATTHEW JAMES MILNE HARRIS Appellant

AND	NEW ZEALAND POLICE Respondent

Hearing:	3 February 2015	

Appearances:	
K McHugh for appellant Mr O'Driscoll
S Williamson for appellant Mr Harris
S N McKenzie for respondent	

Judgment:	
4 March 2015	

JUDGMENT OF CLIFFORD J

Introduction

[1]       The appellants, John O’Driscoll and Matthew Harris, were charged in May

2014 with cultivation of cannabis.1   They both pleaded guilty and were sentenced by Judge Turner on 2 December 2014, Mr O’Driscoll to two years and one month imprisonment; Mr Harris to two years and three months’ imprisonment.2   They now
appeal those sentences.  They do so on the basis that the starting point of three years

1	Misuse of Drugs Act 1975, s 9.
2	Police v Harris & O’Driscoll DC Invercargill CRI-2014-025-001074, 2 December 2014.

O'DRISCOLL & HARRIS v POLICE [2015] NZHC 346 [4 March 2015]

and six months adopted by the Judge in determining each of their sentences was too high, and resulted in manifestly excessive end sentences.

Facts

[2]       In March 2014 Mr O’Driscoll rented a commercial property in Invercargill.

On 23 May 2014 the police executed a search warrant of that property and found

30 cannabis plants in a growing area.  The area was set up with a range of growing equipment, including liquid feeders, lights, cabling and timers.   The plants were approximately four weeks from maturity.  In the agreed summary of facts, the police estimated the defendants could have expected between $21,000 and $67,500 profit from the plants once harvested and sold.

[3]       Mr O’Driscoll was co-operative with the police, and admitted renting the premises and organising the electricity.  He said the intention was to grow one crop, and for him to use his share of the proceeds  to invest in his own electrician’s business.  Mr Harris initially denied involvement but later admitted his part in the offending.

[4]       At the time of sentencing, Mr O’Driscoll was 24 years old and was living at his parents’ house with his partner.  He was employed as an apprentice electrician. Mr O’Driscoll has no previous convictions.

[5]       At the time of sentencing, Mr Harris was 26 years old.  Mr Harris had been married  for  some  18  months  and  had  one  child  who  was  then  six  weeks  old. Mr Harris was also employed as an electrician.  Mr Harris and his wife were living in their own home and were paying off their mortgage.  Mr Harris has a number of relatively minor previous convictions.  The last of those occurred in February 2010. He has never before been sentenced to imprisonment.

[6]       Following their sentencing, Messrs O’Driscoll and Harris were bailed by Judge Turner, pending the outcome of this appeal.  I continued that bail when I heard their appeal, pending the release of my judgment.

The challenged sentencing decision

[7]       Judge Turner assessed the offending as falling between categories 2 and 3 of the Terewi tariff judgment.   Those categories are described in that case in the following terms:3

Category 2 encompasses small-scale cultivation of cannabis plants for a commercial purpose, i.e. with the object of deriving profit.   The starting point for sentencing is generally between 2 and 4 years but where sales are infrequent and of very limited extent a lower starting point may be justified.

Category 3 is the most serious class of such offending.   It involves large- scale commercial growing, usually with a considerable degree of sophistication and organisation.  The starting point will generally be 4 years or more.

[8]       In  Terewi,  the  Court  of Appeal  departed  from  its  previous  approach  of categorising the seriousness of cannabis cultivation offending by reference to the number of plants involved.   It did so because, more and more, cultivation was producing increased yields due to intensive cultivation methods.   Rather, Judges were to assess seriousness not only by reference to considerations such as the size of the crop, but also on the basis of likely yield and revenue.

[9]       Neither did  the Court  describe categories  2  and  3  in  terms  of monetary values, primarily because annual revenues needed to be considered in dollars of the day.  Having said that, annual revenues of more than $100,000 in 1999 values would place a cultivation clearly within category 3.

[10]     Adopting  that  approach,  and  referring  to  R  v  Smith,4   R  v  Silson5   and R v Prest,6   the  Judge  determined  his  starting  point  by ascertaining  the  potential annual revenue of the crop. As the crop cycle was projected to be three months long, and each crop to yield $21,000 to $67,000 profit, the Judge estimated an annual yield
of $84,000 to $270,000.  By reference to the $100,000 figure referred to in Terewi,

adjusted for inflation ($144,000), the Judge assessed Mr O’Driscoll’s and Mr Harris’

offending as falling between categories 2 and 3.  He noted the fact that this was a

3	R v Terewi [1999] 3 NZLR 62 (CA) at [4].
4	R v Smith CA562/99, 23 March 2000.
5	R v Silson CA172/01, 30 August 2001.
6	R v Prest HC Auckland CRI-2008-004-028639, 27 May 2010.

first crop, but regarded the evidence of sophistication and preparation as indicating the operation would continue and that both defendants would remain involved.  The Judge concluded that a starting point of three years and six months would be appropriate.  That starting point was higher than that submitted by the police (two years eight months to three years) and by both defendants (two years to two years six months).

[11]     The Judge considered that there were no personal aggravating factors for either of Mr O’Driscoll or Mr Harris.

[12]     The Judge recognised that personal mitigating factors were applicable.  The Judge gave both of them full credit for their guilty pleas and allowed further discounts, for additional personal mitigating factors, of 15 per cent for Mr O’Driscoll and 10 per cent for Mr Harris.  Those further discounts recognised Mr O’Driscoll’s position as a first offender, and, in each of their cases, matters that had been referred to  in  memoranda  from  the  prosecutor.    The  Judge  saw  no  material  difference between Mr O’Driscoll’s and Mr Harris’ involvement.

Submissions

Appellants

[13]     Messrs O’Driscoll and Harris challenge their sentences on broadly similar grounds.  Whilst they accept that, applying Terewi, an analysis of potential yield is relevant to determine criminality and starting point sentences, they say that here the Judge undertook his exercise in an overly mechanical way.  That he did so could be seen, they say, from the many decisions of the Court of Appeal and this Court where, in very similar circumstances, lesser starting point sentences – in the vicinity of the
two years and six months argued for by them – had been adopted.7   By reference to
those matters, the Judge had failed to give proper recognition to the desirability for consistency between sentences for similar offending.8

7	For Mr O’Driscoll, Ms McHugh prepared a table summarising some 26, principally High Court,
sentencing decisions involving similar numbers of cannabis plants and annual yield estimates.
8	Sentencing Act 2002, s 8(c).

[14]     Given that the agreed statement of facts set a value for sentencing purposes of between  $21,000  and  $67,500,  the  Judge  had  been  wrong  in  determining  his sentence by reference to the range of $84,000 to $270,000 without having indicated that he would do so and without giving Messrs O’Driscoll and Harris an opportunity to respond.  The Judge had, in effect, been sentencing them not for what they had done, but for what they might have done in the future.

[15]     As had been recommended in both of their pre-sentencing reports, Messrs O’Driscoll and Harris argue that the appropriate sentencing outcome on appeal for each of them is home detention.

[16]     They further submit that the Judge wrongly relied on both R v Smith and R v Silson.    R  v  Smith  was  a  decision  overturned  in  the  Taito  appeal  in  the  Privy Council,9 on the basis that it was decided contrary to justice.  The Judge had failed to recognise that.  With regard to R v Silson, the Judge stated that a sentence of three years was upheld by the Court of Appeal.10   In fact, the Court of Appeal considered a starting point of four years was too high.  The Court had reduced that starting point to three years and imposed an end sentence of two years.  The appellants note the facts of that case involved 167 well cared-for cultivated plants.

Crown

[17]     The Crown submits that the starting point was in accordance with authority, including R v Terewi itself.  At sentencing, counsel for the appellants had submitted that the offending came within category 2, which allows for a starting point of between two and four years.  Therefore, the starting point was within range.  It took into account the nuances of the case, such as the fact it was a first grow that had not reached maturity.  However, considering the operation was sophisticated and likely to be long term, a starting point at the higher end of category 2 was justified.

[18]     The extrapolation methodology of the Judge was not wrong and relied on a number  of  authorities,  including  Terewi.    The  Court  of  Appeal’s  decision  in

9	Taito v R [2003] 3 NZLR 577.
10	Police v Harris and O’Driscoll, above n 2, at [20].

R v Smith, although overturned by the Privy Council in Taito on other grounds, was still an appropriate example of the use of that methodology.

[19]     The extrapolated value arrived at by the Judge was neither arbitrary nor unfair.    The  expected  yield  of  the  crop  as  determined  by  the  police  was  not challenged by counsel.   It was this figure that the Judge used to determine annual yield.  Adjusting for inflation, the end value fell well within category 3 of Terewi. Therefore, the Judge in fact chose the lowest starting point that was justified.

Further submissions

[20]     At the end of the hearing of this appeal I asked counsel to prepare a joint memorandum, particularly addressing the extent to which the Court of Appeal’s decision in R v Smith had been considered in subsequent cases.  Counsel could also provide  me  with  further  recent  authorities.     It  took  longer  to  prepare  the memorandum than counsel had anticipated, hence the delay in my releasing this decision.  I thank counsel for those further submissions, but they did not change the substance of the submissions I had heard nor, in terms of any additional authority referred to, did they materially affect those submissions.

[21]     In particular, and in terms of the additional submissions from Ms McKenzie for the Crown, I acknowledge the references in R v McMullan and R v Jury11 to R v Smith and that, in the former case, reliance was placed on R v Smith without there being any reference to the effect of the Privy Council’s decision in Taito.  I note, as regards R v Smith itself and its relevance here to the challenged starting point, that not only was the growing operation there materially larger, in terms of total numbers of plants, but that it had also been carried on for a longer period and there was clear evidence of dealing,  namely sales  records. As  regards the  further starting point authorities provided by Ms McKenzie, R v Dixon, R v Iripa and Jones v R,12 again, in each of those cases the growing operations were considerably more extensive than
that involved here and there was clear evidence of supply having occurred over a

11	R v McMullan CA234/01, 20 June 2002; R v Jury CA148/02, 31 October 2002.
12	R v Dixon HC Rotorua CRI-2011-069-282, 20 September 2011; R v Iripa   HC Whangarei
CRI-2009-027-2585, 15 April 2010; Jones v R [2010] NZCA 119.

period of time. They were therefore, in my assessment, cases involving more serious

offending than that to which Messrs O’Driscoll and Harris pleaded guilty. [22]	Therefore I do not refer to those additional submissions further.
Analysis

[23]     In remarks quoted by the Judge in his sentencing notes, the Court of Appeal in R v Fatu, in an indirect reference to the Terewi (yield) approach observed:13

… As a matter of principle, an offender should only be sentenced in relation to offending which he or she admits or which the Crown can prove.  It is not right for an offender to be sentenced on the basis of offending that he or she would or could have committed had the police not intervened.  On the other hand, the courts must take a realistic view of the dynamics of this particular form of offending. Those who gear up to manufacture methamphetamine are not likely to be content with a single “cook”.  As was recognised in Worth v R [2001] WASCA 303 at [50], the “practical potential of the operation” must be a relevant consideration.

[24]     As  Ms  McHugh  for  Mr  O’Driscoll  and  Mr  Williamson  for  Mr  Harris correctly  pointed  out,  there  are  many High  Court  (and  Court  of Appeal)  cases applying Terewi where, in very similar circumstances to those involved in the offending of Mr O’Driscoll and Mr Harris, starting point sentences between two years and six months and three years have been identified as being appropriate.  For the Crown, Ms McKenzie acknowledged that reality.  The issue for me is whether, in terms of the Terewi sentencing methodology, that starting point sentence is within range, albeit that it is – by comparison with those cases – on the high side as acknowledged by Ms McKenzie.

[25]     The  Court  of  Appeal’s  particular  concern  in  Terewi  was  to  ensure  that sentencing  judges  took  appropriate  account  of  the  effect  of  enhanced,  indoor growing conditions for cannabis plants.  Those effects could increase the criminality involved in the growing of a particular number of cannabis plants, compared to the results  that  previously  would  have  been  achieved  in  the,  up  until  then,  more prevalent outdoor growing arrangements.   It is in that context that Blanchard J’s observations, as to the significance of yield, are to be applied.  The key, in my view,

to the correct sentencing approach is not so much to make a mechanistic calculation of theoretical potential yields, but, adopting the words of the Court of Appeal in Fatu, to take a “realistic view” of the dynamics of the particular form of offending under consideration.  At the same time, the principle is that an offender should only be sentenced in relation to offending which he or she admits or which the Crown can prove.   It is not right, as the Court of Appeal said in Fatu, for an offender to be sentenced on the basis of offending that he or she could have committed had the police not intervened.  The Court of Appeal’s decision in R v Smith, putting aside the effect  of  Taito  on  its  status  as  an  authority,  is  not  authority  for  any  other
proposition.14

[26]     Here, 30 almost-mature plants were being grown by the appellants.   The agreed statement of facts does not refer to any arrangements for supply, nor to any indirect evidence of such arrangements.  In terms of Mr O’Driscoll’s assertion that his intention was for there to be one cycle only, no small or seedling plants – which would have evidenced an intention to undertake repeated grow cycles – were found.

[27]     The agreed yield value reflects the fact that the cannabis in question was being  grown  indoors.   That, in turn,  reflects the accepted commerciality of the operation,  and  the  characteristics  of  the  growing  environment  being  used  by Messrs O’Driscoll and Harris.   That is, the dollar value of the agreed yield range itself  acknowledges,  as  Terewi  requires,  the  particular  characteristics  of  the offending.  There clearly was a potential for there to be further offending, but that was not the basis of the charges laid nor, importantly, of the agreed statement of facts with respect to which the appellants’ guilty pleas were entered.

[28]     In my view, in these circumstances the Judge did err, in what was otherwise a very careful sentencing decision, in his application of Terewi and the difficult – as recognised in Fatu – balancing exercise that is called for in these types of sentencing exercises.

[29]     The very many decisions referred to me by Ms McHugh, which adopt starting points in the range approximately equivalent to those identified by both the defence

and the prosecution in their sentencing submissions to the Judge, support that conclusion.

[30]     Not all of those decisions, I acknowledge, identify a yield value or, if they do so, explicitly refer to that value when setting a starting point sentence.  But a number do.  For example, in R v Sharp,15 the estimated yield was $40,000–$80,000 per crop. A  starting  point  of  three  years  was  adopted.    The  crop  in  question  was  the defendant’s  fifth.    In  R  v Constable,  Mackenzie J  took  a broad  street  value of
$20,000–$100,000 for the crop.16   Allowing for the lack of commerciality, he set a

starting point of two years and six months.17     In Dyer v Police, the Court adopted a starting point of two years and five months imprisonment for an estimated yield of
$45,150–$135,450 per year.18   In R v Warren,19 the agreed conservative estimate20 of

potential yield was $205,500.21   The Court adopted a starting point of two years and six months imprisonment.   In Silson, a case involving 167 cannabis plants in nine separate cannabis plots which were sophisticated and well-constructed, the Court of Appeal reduced a four year starting point to one of three years, and imposed a final sentence  of  two  years’ imprisonment  reflecting  a  guilty  plea,  co-operation  and personal circumstances.22

[31]     By reference to those decisions, in my view here a proper application of the Terewi (yield) approach should have resulted in the Judge adopting a starting point considerably lower than that which he did.  I consider that a starting point sentence of two years and nine months would have been appropriate. Applying – at this point
– the discounts applied by the District Court Judge, that results in end sentences of:

(a)	for Mr O’Driscoll, of 20 months, that is one year and eight months;

and

15	R v Sharp HC Rotorua CRI-2010-063-004641, CRI-2010-063-005866, 22 July 2011.
16	R v Constable [2013] NZHC 1658 at [5].
17	At [5].
18	Dyer v Police [2014] NZHC 2961.
19	R v Warren HC Hamilton CRI-2011-073-184, 13 September 2011.
20	This related to the viability of the plants: 287 plants were found, but many were in poor condition.
21	At [10].
22	R v Silson, above n 5.

(b)	for Mr Harris, of 21 months, or one year and nine months.

[32]     On that basis, home detention is an available sentencing option.  A common feature of many of the decisions referred to me by Ms McHugh and Mr Williamson is that, where available, that is the sentence imposed by the courts in similar circumstances to those which apply here.

[33]     Mr O’Driscoll is a first-time offender.  He has no previous convictions at all. Whilst  Mr Harris  does  have previous  convictions,  they are few in  number and relatively  minor.  Furthermore, he has not offended since 2010.   Both men are in stable relationships and were, and if sentenced to home detention could again be, in full-time employment.  Mr Harris has the additional responsibility of a young child. Whilst I acknowledge that Mr O’Driscoll is a first-time offender, and Mr Harris is not, in these circumstances I see no need to distinguish their culpability for this offending.

[34]     I also acknowledge that deterrence is a principal purpose of sentencing for drug offending.  The Court of Appeal has, however, emphasised the deterrent nature of a sentence of home detention.23   Home detention is not an easy option.  Moreover, it responds to recent amendments to sentencing law which emphasise the importance of keeping offenders within the community.

[35]     In my view, it is the appropriate sentencing outcome here.

[36]     Suitable  addresses  are  available  for  both  Mr  O’Driscoll  and  Mr Harris, namely the home addresses to which they are currently bailed.  They have, as already noted, been on bail at those addresses since sentencing.  They have been subject to a
24 hour day, seven day a week curfew.

[37]     I therefore allow each of their appeals, quash the sentences of imprisonment imposed on them and sentence each of them to nine months’ home detention at their
current bail addresses.

23	R v Iosefa [2008] NZCA 453 at [41].

[38]	In both their cases, that period of home detention is based on a recognition of the time already spent on bail subject to a 24 hour day, seven day a week curfew.

[39]     Given those existing bail arrangements, no further orders from me would appear to be required at this stage.  They can now take up with the Probation Service the question of their return to employment.

“Clifford J”

Solicitors:
AWS Legal, Invercargill for Mr O’Driscoll
Hewat Galt, Invercargill for Mr Harris
Preston Russell Law, Invercargill for respondent.