R v McKenzie [2024] NSWDC 624

Citation: R v McKenzie [2024] NSWDC 624
Court: District Court of New South Wales
Date: 9 December 2024
Judge(s): Priestley SC DCJ

Background

The offender, a man with a biomedical science degree and a background in club management, appeared for sentence on three drug offences discovered when police executed a search warrant at his family home in June 2022. Inside a converted bedroom, officers found a functioning laboratory with two active chemical processes underway, along with nearly two kilograms of pure methylamphetamine (in liquid and powder form), just under 69 grams of MDMA, and a small quantity of cocaine.

Police had become aware of the offender after he purchased regulated drug manufacture apparatus online using his own name and personal details. He had been in custody since the date of his arrest.

The two indictable counts were: manufacturing or producing not less than a large commercial quantity of methylamphetamine under section 24(2) of the Drug Misuse and Trafficking Act 1985 (NSW), which carries a maximum of life imprisonment and a standard non-parole period of 15 years; and manufacturing or producing MDMA under section 24(1), which carries a maximum of 15 years. The summary offence was possession of 0.52 grams of cocaine.

Legal Issues

What findings of fact should be made about the nature and extent of the offender's role in the manufacturing process, and whether his conduct went beyond extraction?
Whether the offender established, on the balance of probabilities, that he acted under non-exculpatory duress imposed by standover men threatening him and his family
Whether the offender was motivated by financial gain
What was the objective seriousness of the manufacturing offences, including for the purposes of the standard non-parole period under section 54A of the Crimes (Sentencing Procedure) Act 1999 (NSW)?
What aggregate sentence and non-parole period were appropriate, having regard to the offender's subjective circumstances?

Decision

Issue 1: The offender's role and the Crown's contested submissions

The court rejected the Crown's contention that the offender's role extended beyond the extraction process described in the agreed facts. The DMTA defines "manufacture" to include "the process of extracting or refining the prohibited drug," which is exactly what the agreed facts described (at [20]). The Crown conceded it did not know what else the offender had done, yet continued to press that he must have done more, a position the court found without evidentiary foundation (at [22]). The court also rejected the Crown's submission that the offender's oral evidence was inconsistent with the agreed facts, finding the two accounts were compatible (at [20]-[21]). The sentencing hearing extended across parts of eight days, largely due to lengthy Crown cross-examination of the offender without a clearly identified objective (at [21]).

Issue 2: Duress

After careful assessment of the offender's evidence, the court found it more likely than not that the offender was visited by men involved in the drug trade who coerced him, at gunpoint, into carrying out the extraction work (at [40]). The offender's account was corroborated by what he told his psychologist, a contemporaneous remark to his sister, and a text message to a financial contact describing being "extorted for certain skills" (at [29]). While the court identified some matters adverse to the offender's credibility, particularly around cryptocurrency transactions and multiple small bank deposits, it was satisfied those concerns did not undermine the duress account. The court noted that a factfinder may accept part of a witness's evidence while rejecting other parts (at [32]-[40]).

Issue 3: Financial gain and objective seriousness

The court rejected the Crown's submission that the offender was motivated by financial gain (at [41]-[43]). The motivation for the offending was compliance with instructions from those who had supplied the powder, not profit. The court assessed the objective seriousness of the manufacturing offending as low (at [56]). No drugs entered the community as a result of the offender's conduct; the extraction process had largely failed over three months; the equipment was basic rather than sophisticated; and the operation was conducted in the bedroom of the offender's mother's home (at [53]-[54]). The Crown ultimately did not maintain that the offending was above the mid-range of seriousness (at [47]).

Issue 4: Sentence

The court imposed an aggregate sentence of six years' imprisonment with a non-parole period of three years, backdated to commence on 23 June 2022 (at [95]). A 25% discount was applied for the guilty plea (at [59]). The indicative sentence for count one before discount was eight years, and for count two three and a half years, with both sentences wholly concurrent given that the MDMA was found in the same mixture and added no further criminality (at [93]-[94]). Special circumstances were found to justify a reduced non-parole period, principally because this was the offender's first time in custody and an extended supervision period upon release would assist rehabilitation (at [85]). The indicative non-parole period for count one was three years, departing from the 15-year standard non-parole period on account of the low objective seriousness, the plea discount, and the special circumstances finding (at [96]).

Orders Made

The offender is convicted on all three counts.
On the summary cocaine possession offence (section 10, DMTA), the court proceeds by way of section 10A: conviction recorded, no other penalty imposed.
On counts 1 and 2, the offender is sentenced to an aggregate term of imprisonment with a non-parole period of 3 years commencing 23 June 2022 and expiring 22 June 2025, and a balance of term of 3 years expiring 22 June 2028.

Key Takeaways

The District Court confirmed that "manufacture" under the DMTA expressly includes extraction and refining, so a plea to manufacturing does not, without more, admit that the offender created the source substance. Where the agreed facts limit the offender's role to extraction, the Crown cannot expand that role without an evidentiary foundation established to the required standard (at [20], [48], [51]).
A finding of non-exculpatory duress, while not a complete defence, can reduce an offender's moral culpability and diminish the weight given to general deterrence, particularly where the duress triggered a relapse of diagnosed PTSD (at [40], [88]).
Low objective seriousness was supported here by the combination of a failed or largely unsuccessful extraction process over three months, no drugs entering the community, an unsophisticated operation, and an absence of financial motivation. The quantity of drug, while approximately four times the large commercial quantity threshold, was not treated as determinative (at [53]-[56]).
Where two counts of manufacture are founded on the same physical mixture and the second drug was unknown to the offender, concurrent rather than cumulative sentences may be appropriate on the basis that the second count adds no independent criminality to the first (at [79], [94]).
Special circumstances justifying a non-parole period below the statutory norm can be established where an offender is serving their first custodial sentence and where extended post-release supervision is assessed as materially improving prospects of rehabilitation, particularly where sobriety is central to the risk profile (at [85], [95]-[96]).

Legislation and Cases Referenced

Legislation
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Drug Misuse and Trafficking Act 1985 (NSW)

Cases
- Caristo v R [2011] NSWCCA 7
- Director of Public Prosecutions (Cth) v De La Rosa (2010) 79 NSWLR 1; [2010] NSWCCA 194
- El Kheir v R [2019] NSWCCA 288
- R v James [2017] NSWCCA 287
- McLaren v R [2012] NSWCCA 284
- Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39
- R v Pedavoli [2002] NSWCCA 87; 128 A Crim R 137
- Tepania v R [2018] NSWCCA 247