Proceeds of Crime Order Imposed on Cannabis Supplier

The court imposed a proceeds of crime order on a defendant who supplied cannabis, rejecting the defendant's contradictory evidence and accepting the prosecution's version of events.

District Court New South Wales

Medium Neutral Citation: R v [NAME] [2021] NSWDC 205 Hearing dates: 24 March 2021; 23 April 2021 Decision date: 27 May 2021 Jurisdiction: Criminal Before: Haesler SC DCJ Decision: Sentence Orders – see [43]-[44] Order Proceeds of Crime – see [57] Catchwords: CRIME - Supply prohibited dug - cannabis CRIME - Confiscations - Forfeiture order - Proceeds of indictable offence SENTENCE - Relevant factors on sentence - early plea - agreed facts not adhered to – contested facts - finding against [NAME] - reduction of utilitarian discount – parity - role of [NAME] - subjective case Legislation Cited: Confiscation of Proceeds of Crime Act 1989 Crimes (Sentencing Procedure) Act 1999 Crimes (Sentencing Procedure) Amendment Act 2010 Drug (Misuse and Trafficking) Act 1985 Evidence Act 1995 Cases Cited: [NAME] v R [2017] NSWCCA 246 [NAME] v Colakoglu [2015] NSWCCA 301 [NAME] (2011) 244CLR 462 Hamzy v R (1994) 74 [NAME] 341 Jadron v R [2015] NSWCCA 217 [NAME] v R NSWCCA unreported 12/12/1996 Ozenkowsi v R (1982) [NAME] 394 Parente v R [2017] NSWCCA 284 Postiglione v The Queen (1997) 189 CLR 295 R v [NAME] [2013] NSWCCA 47; 227 [NAME] 544 R v Herring (1956) 73 WN (NSW) 203 R v [NAME] [2020] NSWDC 151 R v [NAME] [2020] NSWDC 554 R v Simpson [2001] NSWCCA 534; 53 NSWLR 704 Robertson v R [2017] NSWCCA 205 The Queen v Olbrich (1999) 199 CLR 270 Category: Sentence Parties: [NAME] ([NAME]) Director of Public Prosecutions Representation: Counsel: [redacted]

Solicitors: [redacted] File Number(s): 2019/00397066 Publication restriction: Pseudonym orders made for 2 witnesses

Judgment

Introduction 1. [NAME], while before the [ADDRESS], entered a guilty plea to a count that the supplied 24 kilograms of cannabis: s 25(1) Drug (Misuse and Trafficking) Act 1985 - Maximum penalty 10 years imprisonment. Only 1.8 Kg of the cannabis was seized by police. The quantity was 'rolled up' from 16 transactions that took place between November 2019 and June 2019. This accumulation of quantities and transactions was accepted by the defence: Hamzy v R (1994) 74 [NAME] 341 and Jadron v R [2015] NSWCCA 217.

2. In accordance with District Court Practice Note 20, documents and submissions to be relied on at sentence were served and filed. I had the opportunity to read them before the date initially fixed for sentence - 24 March 2021. "Agreed facts" signed by [NAME] on 1 December 2020 in the presence of his solicitor, formed part of a Crown bundle (Exhibit A- tab 3). Having read the Crown version and a version repeated by [NAME]; to a Community Corrections Officer, in letter to me and through his psychologist's report, I raised with his senior counsel, [NAME], an apparent inconsistency - [NAME]'s version did not accord with the agreed facts document! 3. I indicated that resolution of that inconsistency could make a significant difference to my assessment of objective circumstances of the offending and thus the length of the sentence. The length of the sentence could then determine the manner of its disposition. [NAME]'s written submissions asked that any sentence be served in the community subject to an Intensive Corrections Order (ICO). 4. [NAME], Solicitor for the Director of Public Prosecutions, indicated that she was put at a disadvantage if the difference asserted by [NAME] was now pressed. She had prepared this matter on the basis of the signed facts document. She was not in a position to meet the different case if it was pressed. [NAME] did press his client's version of events. [NAME] also asked that the Evidence Act 1995 apply to this aspect of the proceedings. [NAME] then requested, and was granted, an adjournment until 23 April 2021.

5. On 23 April 2021 I received Exhibits C to M and 1 to 4. All went to the factual dispute. I heard from [NAME], a pseudonym, and [NAME], a pseudonym, and [NAME]. Submissions concluded late that afternoon. My judgment was adjourned until today. It was agreed that any factual finding would determine concurrent proceedings seeking a proceeds of crime order.

Facts for sentence 1. [NAME]'s case is that all he did was source the cannabis for [NAME] so that [NAME] could continue to supply to [NAME], a mutual friend who lived in Goulburn. As [NAME]'s source did not trust [NAME] he allowed the drugs to be delivered to his home from where they were collected by [NAME]. [NAME] now says he was not involved in any way with any business dealings between [NAME] and [NAME] or his source and [NAME]. He received no reward apart from a small quantity of cannabis for his own use.

2. The prosecution case is that [NAME] ran a supply operation and his principal customer was [NAME], an old friend. Their case is [NAME] used [NAME] as a go between in order to reduce his risk of detection. He paid [NAME] a fee per transaction, of $700, to deliver the drugs from Wollongong to [NAME] who sold them in Goulburn area. When [NAME] lost his license his partner [NAME] drove him and the drugs to Goulburn. The 16 transactions were purely commercial and organised between [NAME] and [NAME]. He took the profit of about $1,750 per transaction.

3. In the "agreed facts" [NAME] made these important concessions:

1. He had known [NAME] since 2004.

2. He offered [NAME] the opportunity to make extra money by driving quantities of cannabis to Goulburn, 3. By using [NAME] as a go between, he was able to avoid direct contact with [NAME] and thus reduce the risk he would be identified as involved in the supply to [NAME]. 1. [NAME] in evidence contradicted these apparent concessions. He told me he did not believe the document he signed was binding on him in any way when it came to the sentence proceedings. And he would not have signed the document had he believed it did. He said that although he had previously been gaoled for drug supply that was too long ago for him to appreciate what might occur in a sentence hearing. He said he had introduced [NAME] and [NAME] as both were friends but he did not become involved in their business until [NAME] told him he having trouble sourcing cannabis. He then as a favour sought out '[NAME]' a man he knew to supply cannabis in bulk. As [NAME] did not know or trust [NAME] agreed that the two could use his home to meet so the cannabis transactions and payment for it could occur. His role, he said, was limited to making the introductions and providing premises for the transactions to take place. Everything else was organised by [NAME] and [NAME] and the up-line supplier. He had no commercial interest in the transactions. His only motive was to help his friends. His only reward was an occasional free sample of cannabis for his own personal use. [NAME] relied on, as corroboration of his account, a quantity of cannabis and wrapping for it found by police at his home, which he said had been his gratuity for helping [NAME] in his dealings with [NAME].

2. The evidence given by [NAME] and [NAME] was consistent with the Crown case and the "Agreed facts" document. Their evidence was consistent with police interviews each made at the time of their arrest at a time neither had opportunity to concoct a version. Their version was consistent with police call logs and surveillance evidence, limited though that was. Neither had sought a reduction of sentence for assisting police. Both however stood by the version on which they had been sentenced. What they said accorded with police surveillance and telephone records.

3. No evidence put to me, including the cannabis found at [NAME]'s home, provided any significant corroboration of [NAME]'s account.

Fact finding 1. Most sentencing proceedings do not involve a general joinder of issue between prosecution and [NAME]. Where a matter is put forward in sentencing proceedings is contested, it may not be acted unless it is established. Where there is a real dispute that will have a significant impact on sentence the party seeking to have the matter taken into account must bring that matter to the attention of the judge and, if necessary, call evidence about it: The Queen v Olbrich (1999) 199 CLR 270 at [25]. The proof of such a fact must occur in the context of the proceeding concerned. Calling and testing evidence is however required if important asserted facts are put in dispute I am obliged to make my own assessment of the evidence as part of my overall synthesis of relevant factors. This is particularly so if, as here leave is sought, and given, that the Evidence Act apply to that part of the proceedings: s 4(1)9c) Evidence Act 1995.

2. As the High Court made clear in The Queen v [NAME], matters in mitigation must be established on the balance of probabilities; matters in aggravation of penalty must be established beyond reasonable doubt. The High Court also recognised that sometimes a sentencing Court must sentence according to what is known or agreed.

Resolution factual dispute 1. [NAME] was challenged by [NAME]. She did not waiver. She did not dissemble. She had some difficulty with the questions asked by [NAME] about the transcript of her police interview: HIS [NAME] Q. You read okay? [NAME]? A. Yeah. Q. Not everyone is a good reader, are you a good reader? A. Yeah, I'm not the most smartest person when it comes to English so, yeah. Q. What's your first language? A. English but, yeah. HIS [NAME]: Okay, well [NAME] will read it to you. 1. [NAME]'s submission to the contrary, minor discrepancies in her police interview do not amount to lies damaging to her credit. 2. [NAME] gave evidence consistent with; [NAME], his police statement and his evidence before me in his sentence proceedings: R v [NAME] [2020] NSWDC 151. He was not directly engaged with [NAME]. Nor do I accept [NAME]'s evidence that he was a supplier of cannabis before his involvement with [NAME]. I have no doubt that, as at their bona-fide work, he was the apprentice and acting under instruction. 3. [NAME] was an unconvincing witness. He appeared to be tailoring his evidence after the event to match a concocted story. His rationale for signing the "agreed facts" document made no sense. His attempts to blame his then solicitor did him no credit.

4. My determination of this issue must be based on the evidence before me, the facts I find have been proved and the logic of events. Reviewing the objectively established evidence what I am left with is this – the version of events set out in the agreed facts and signed by [NAME] in the presence of his then solicitor was the correct one and one he should be sentenced on. His later attempts to put a different version can best be explained by a realisation of the consequences of his crime and a desperate and ultimately futile attempt to re-write history. Importantly his own signature accepting the unambiguous dot points set out in the "agreed facts" document; facts that accord entirely with the evidence called by the Director, establish those matters beyond reasonable doubt.

Objective Seriousness 1. This was not a case were [NAME] merely introduced two mutual friends [NAME] and [NAME] and then helped out by providing introductions and premises for their business.

2. Organisation, level of control, repetition and amount are all factors that must be considered. It is axiomatic that rolled up quantities involves a series of criminal acts so care needs to be taken not to double count s 21A(m) Crimes (Sentencing Procedure) Act 1999 factors. But the number of occasions, here 16 and the period 8 months, remain relevant considerations. The offence was committed without regard to public safety, it was part of an organised criminal activity – most of the drugs were disseminated. It was dealing to a substantial degree. As with many such operations there was no fixed hierarchy but I find [NAME] effectively employed [NAME] and he has some equivalence to [NAME]. However, [NAME] sold directly to the public whereas [NAME] sourced the cannabis and took his cut. 3. [NAME] played and important and vital role in the drug supply chain. Without people such as [NAME] distribution networks such as those run by [NAME] would simply collapse. He did so for profit; making about $1,750 per transaction: see below [53].

Parity 1. I have sentenced [NAME] and [NAME]: R v [NAME] [2020] NSWDC 151; R v [NAME] [2020] NSWDC 554. My factual findings when sentencing the co-offenders were put before me for parity purposes only. I do not sentence this [NAME] on facts agreed to by others. [NAME] was dealt with in the [ADDRESS].

2. This sentence however must be determined by having regard to the relativity between the circumstances of the co-offenders and their respective degrees of culpability. Like must be compared with like. Different personal and criminal histories may "justify a real difference in the time each will serve in prison:" Postiglione v The Queen (1997) 189 CLR 295. This principle is known as parity. It is the classic example of the need to, so far as possible, ensure equal justice: Green v The Queen (2011) 244CLR 462; [NAME] v R [2017] NSWCCA 246.

Subjective Case 1. Some factual matters put before me are not controversial. Born in 1981, [NAME] is now 37. His is in regular employment in a supervisory position. His letter to the court indicates he has a partner and 3 sons. His father is ill and he has elderly grandmother, who needs his assistance. All of them depend on him.

2. In 2005 he was gaoled for drug supply. He says he has now stopped all drug use. He is not entitled to the benefits often given first offenders although it appears he had until the commission of this offence demonstrated a capacity to lead a productive and law abiding life.

3. A Sentence Assessment Report, dated 22/2/21, is generally positive. It notes his expressions of regret and his previous success while on parole. It indicates he appears to be at low risk of re-offending. Community service is available to him. 4. [NAME] a psychologist provided a report. In it he set out [NAME]'s background. [NAME] grew up Goulburn with a supportive family. He has worked all his life but at times self-medicated with cannabis and ended up selling & doing a year in gaol. [NAME] said that [NAME] was and had been suffering mild depression and an anxiety disorder (mild -moderate). He used cannabis to self-medicate for this undiagnosed condition. [NAME] did not see [NAME] before he commenced offending. His conclusion was based on the history given and his subsequent testing. Depression and anxiety at the prospect of gaol is not unusual. Self-medication with cannabis is not unusual but neither explains the commission of this offence nor do they mitigate it. 5. [NAME] postulated that [NAME]'s depression, anxiety and cannabis use may have weakened his resolve not to reinvolve himself in cannabis supply. On balance I cannot accept that conclusion; nothing before me indicates [NAME]'s mental condition had anything to do with his offending. His actions were planned, deliberate and calculated to reduce the risk of detection. 6. [NAME] said [NAME] needs ongoing intervention. A treatment plan is set out at page 7. It seems sensible. A letter from [NAME] confirms a Mental Health Care Plan is in place. References all speak of hard working man devoted to his boys. His friends all find his offending hard to believe but say he is respectful and remorseful and that he'll never offend again. 7. [NAME] sought to avoid responsibility for the true extent of his crimes and gave unbelievable evidence to me, he has work available to him, a stable family and strong pro-social ties to the community. If he values those things he has a powerful incentive not to re-offend. Those factors and his need to be supervised on release for as long as practicable provide a basis for a finding of special circumstances.

Submissions 1. I received comprehensive written and oral submissions from [NAME], who appears with [NAME]. Ultimately they suggest a sentence of less than 2 years can be imposed, leaving open the option of a 'strongly conditioned based" ICO. They submit that such a disposition would meet all the aims and purposes of sentencing and work to protect the community from future offending. They cite Ozenkowsi v R (1982) [NAME] 394; [NAME] v R NSWCCA unreported 12/12/1996; Parente v R [2017] NSWCCA 284 and Robertson v R [2017] NSWCCA 205. They suggest that [NAME] could have no legitimate sense of grievance were such a lenient sentence to be imposed.

2. Those submissions were however, predicated on my accepting that [NAME]'s role was limited to facilitating the supply between [NAME] and [NAME], and was thus "one of the lowest roles in the supply chain and is far removed from those who are controlling the supply as principals:" Defence Subs MFI 2 at [11] & [12]. 3. [NAME], for the [NAME], submits that if I found the facts as initially "agreed" the consistent application of principle would require a sentence that must be served fulltime. In [NAME] she noted [NAME] showed some sophistication in the use of a driver ([NAME]) and use of coded language. She submitted his previous conviction for drug supply disentitled him to the leniency often given first offenders and those of prior good character.

4. Further, she noted that that the dispute means [NAME] can no longer get the full benefit his early plea would have attracted had this matter proceeded on 24 March 2021 without the factual dispute: s25F(4) Crimes (Sentencing Procedure) Act 1999.

Synthesis 1. While every offence and every [NAME] requires individualised treatment courts must in the exercise of their undoubted discretion take guidance from a number of sources. They include; the maximum penalties prescribed; the decisions of other courts, particularly those designed to give guidance; and of course, the purposes of sentencing, which here importantly include the deterrence of others from committing similar crimes and proper recognition of the harm done to the community by the trade in illicit drugs 2. The illicit trade in drugs is one of the principle sources for crime in the community. Again, it is not just the sale of the drugs, it is the crimes committed by those who seek to obtain funds for drugs, the destruction to family life, to personal life, that drugs cause, as [NAME] and his family will recognise, and also the economic impact that illicit profits made from the sale of drugs cause to the community.

3. While a Court's sentencing discretion cannot be judicially constrained, a Court, as Simpson JA pointed out in Robertson v R, must nevertheless give full and proper consideration to the guidance offered by past sentencing decisions. [NAME] noted, in practice that this means absent, perhaps of some unusual circumstance, that for those who engage in trafficking in illicit drugs, no matter what their level, a sentence of imprisonment is generally imposed.

4. I return to the principle of sentencing that requires deterrent sentences, sentences that by their harshness indicate to others and this [NAME] the consequences of seeking easy money by distributing illicit drugs. And recognise, by the blunt instrument of gaol - the potential harm done to the community. Here given the length of the sentence imposed an Intensive Corrections Order is not available.

5. Mitigating factors will be given full weight and operate here to found a finding of special circumstances. It is doubtful [NAME] will offend again and I am prepared to accept he now realises that he has too much to lose by continuing to offend and that he now regrets what he did. He has however sought to place a gloss on his crimes and present only the good side of his character. But offend he did, and he did so for no reason other than to enhance an already comfortable life style. Mitigating circumstances can only so far.

6. In drug supply matters such as this a sentence designed to have a deterrent impact on others is required. There must also be proper proportionality with the sentence imposed on [NAME]. A proper sentence marks the Court's view of the seriousness of the crime, and lets other wrongdoers know the retribution which will fall upon them if they commit similar crimes:" R v Herring (1956) 73 WN (NSW) 203 at 205. The minimum period for which [NAME] should be imprisoned must also properly reflect the gravity of his offence and the other purposes of sentencing: R v Simpson [2001] NSWCCA 534; 53 NSWLR 704 at [59].

7. I return to seriousness of what was done – [NAME] organised others to supply 24 kg of cannabis. He did so for profit. Only a full time custodial sentence of some length could meet the purposes of sentencing and adequately punish him.

8. Although generally a guilty plea in the [ADDRESS] attracts a reduction of 25% to reflect its utilitarian value. Section 25F(4) Crimes (Sentencing Procedure) Act 1999 provides an exception if facts are disputed. In such situations the court may determine not to apply the full sentencing discount, or to apply a reduced sentencing discount if the utilitarian value of the plea of guilty has been eroded by a dispute as to facts that were not determined in favour of [NAME]. [NAME] chose to avoid the responsibility he admitted in the [ADDRESS]. Witnesses had to be called and court time taken. His guilty plea thus did not have the same utilitarian benefit as it would have had he stuck to what he agreed to in the [ADDRESS] - he will now receive only a 20% reduction.

Sentence Orders 1. The original term of the sentence was 3 years 6 months. After applying a discount of 20% the term of the sentence is 2 years 9 months. 2. I set a non-parole period of 1 year 9 months commencing 27 May 2021 and expiring 26 February 2023. There will be a parole period of 1 year to commence upon the expiration of the non-parole period, and expiring on 26 Feb 2024.

Proceeds of Crime - Confiscation of Proceeds of Crime Act 1989 1. I am required to make an assessment "having regard to information before the court." It is recognised that the task of a court in carrying out the assessment required by the Act may prove difficult. Some guidance was given in [NAME] v Colakoglu [2015] NSWCCA 301at [87]–[95] and in R v [NAME] [2013] NSWCCA 47; 227 [NAME] 544.

2. A court should:

1. Determine that the [NAME] had derived a benefit in connection with drug trafficking;

2. Assessed the value of the benefit derived by the [NAME]; and 3. Order the [NAME] to pay to the State a pecuniary penalty equal to the amount as assessed.

1. The assessment is to be made having regard to the information before the Court including matters identified in s 30(1): * that the money came into the respondent's possession in connection with drug trafficking: s 30(1)(a); * the value of any benefit provided for the respondent: [redacted] * the market value of the drugs; disregarding any expenses as outgoings incurred by the respondent in connection with the commission of the offences: s 30(1)(d) and s 30(6).

1. The procedure provided by s 31 for the tender of statements by the prosecution from which an assessment of the benefit is the preferable manner by which to prosecute this type of matter. By casting an onus upon [NAME] to respond, the court may be more comfortably able to make an assessment which must, of course, always be adverse to the interests of an [NAME]. Section 31A will also be of assistance to the prosecution in many cases.

2. The task to which s.30(6) is directed is "assessing the value of the proceeds of drug trafficking". Assistance is obtained from the long title of the 1989 Confiscation Act which referred to the confiscation of the "profits of crime".

3. The concepts of "benefit" and "proceeds" are distinct, and separately defined in s.4 of the 1989 Confiscation Act: [NAME] v Colakoglu at [44]. benefit includes service and advantage. drug proceeds order means an order made under section 29. proceeds, in relation to a serious offence, means any property that is derived or realised, directly or indirectly, by any person from the commission of the offence.

1. The term "expenses or outgoings" is directed to a range of factors associated with a [NAME] drug supply operation, such as payments made to persons to deliver drugs and payments made for transport hire associated with the delivery of the drugs.

2. Section 24B was introduced following a report of the NSW Sentencing Council. In the course of the second reading speech for the Crimes (Sentencing Procedure) Amendment Act 2010, the Parliamentary Secretary, the Hon. Michael Veitch, said with respect to s. 24B: "The [NSW Sentencing] Council was of the view that these orders are imposed to deny offenders the fruits of their crimes and this action should not be considered to be extra curial punishment that might lead to a sentence discount:" Hansard, Legislative Council, 23 November 2010 1. An order should not see the offenders being deprived, by way of a drug proceeds order, of far more than "the fruits of their crimes".

Determination – proceeds of crime 1. I have rejected the version given by [NAME]. He has not satisfied any onus placed on him He did supply cannabis for profit. He paid [NAME] $700 per transaction. [NAME] estimates are a sound basis to calculate any actual benefit [NAME] received. * 17 December 2020 [NAME] sold to [NAME] for $4,000 per pound (per [NAME]) * [NAME] paid $700 x 15 = $10,500 * 1 kg = 2.2 pounds so 24 Kg = 52.8 pounds. 4 pounds were recovered by police when [NAME] and [NAME] were arrested. * A pound could be purchased whole sale for $3,000 = 48.8 pounds the up-line supplier would have been paid about - $158,000. * Those 48.8 pounds (x $4,000) were sold to [NAME] for about $195,000 * [NAME]'s $10,500 this would mean a net gain to [NAME] of about $26,000.

1. At time of arrest - [NAME] owned his home. In April 2020 He sold an investment property sold for $541,000 He had an onsite van at Lake Conjola. He owned a Harley Davidson motor cycle worth about $27,567 and an antique but restored Holden Torana worth about $100,000. 2. [NAME] and partner earning good wages. It was alleged they lived beyond their means but what they owned could be accounted for by wages and sale of the investment property. Nevertheless profits from the sale of cannabis would have reduced any debts and increased [NAME]'s disposable income.

Order Proceeds of Crime 1. I make an order pursuant to s29(1) Confiscation of Proceeds of Crime Act 1989 that [NAME] pay to the State of New South Wales a drug proceeds order in the sum of $26,000.

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Amendments 27 May 2021 - Amendment to give effect to Pseudonym order 27 May 2021 - Typographical error DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 May 2021