Al Mahmoud v Director of Public Prosecutions (Cth)
[2021] VSCA 240
•1 September 2021
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S EAPCR 2020 0112
| MOUSSA AL MAHMOUD | Appellant |
| v | |
| DIRECTOR OF PUBLIC PROSECUTIONS (CTH) | Respondent |
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| JUDGES: | PRIEST and NIALL JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 10 August 2021 |
| DATE OF JUDGMENT: | 1 September 2021 |
| MEDIUM NEUTRAL CITATION: | [2021] VSCA 240 |
| JUDGMENT APPEALED FROM: | [2020] VCC 454 (Judge Doyle) |
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CRIMINAL LAW – Sentence – Whether sentencing judge erred in finding, beyond reasonable doubt, the weight of the tobacco – Whether sentencing judge erred in declining to declare a specific weight of the tobacco product imported – Whether sentence manifestly excessive – Importing tobacco products with intent to defraud revenue – Possessing tobacco products knowing the goods were imported with intent to defraud the revenue – Appeal dismissed – Customs Act 1901 (Cth) ss 233BABAD(1) and 233BABAD(2).
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr O P Holdenson QC with Mr J Kantor | Garde Wilson Lawyers |
| For the Respondent | Ms K Breckweg | Mr S Bruckard, Solicitor for Public Prosecutions (Cth) |
PRIEST JA:
I agree with Niall JA, whose reasons for judgment I have had the advantage of reading in draft.
NIALL JA:
The appellant pleaded guilty to one charge of importing tobacco products with the intention of defrauding the revenue[1] and one charge of possession of tobacco products, knowing that the goods were imported, with intent to defraud the revenue.[2] The maximum penalty prescribed for each offence is 10 years’ imprisonment.
[1]Customs Act 1901 (Cth) s 233BABAD(1) and s 11.2A of the Criminal Code (Cth).
[2]Customs Act 1901 (Cth) s 233BABAD(2).
On the plea, the quantity of the tobacco imported, which was the subject of charge 1, was in dispute. The prosecution contended that 3,994.61 kilograms of tobacco products was imported, whereas the appellant said the amount was 455.7 kilograms. Since excise is payable on the weight of tobacco, the amount of revenue defrauded and the seriousness of the offending depended on its weight. Having heard from a number of witnesses, the judge concluded that the weight of tobacco imported was a very large amount ‘which approaches that alleged by the prosecution’.[3]
[3]DPP v Suleiman and Al Mahmoud [2020] VCC 454, [49] (‘Reasons’).
Following a plea in mitigation, the judge sentenced the appellant to a term of imprisonment of three years and six months on charge 1. A sentence of four months was imposed on charge 2. As the judge ordered that the two sentences commence on the same day, the total effective sentence was three years and 6 months’ imprisonment and a non-parole period of 24 months’ imprisonment was fixed.
Pursuant to a grant of leave, the appellant now appeals his sentence on three grounds. The first two grounds challenge the factual finding made by the judge as to
the quantity of tobacco imported and the failure of the judge to arrive at a specific weight. Ground 3 contends that the individual sentence on charge 1 and the non-parole period are each manifestly excessive.
The facts and reasons for sentence
In order to understand the arguments, it is necessary to say something about the facts and the evidence adduced on the plea.
On 8 May 2018, the K Pegasus, a container ship, arrived at the Port of Melbourne and a number of 40 foot containers were landed, including one container consigned to MMS Ventures, with a delivery address of 269 Edwards Street, Reservoir. This shipping container was selected by Australian Border Force (‘ABF’) officers for examination, and for that purpose, it was taken to an ABF facility in West Melbourne. The appellant and a co-accused, Mr Suleiman, were both directors of MMS Ventures from the date of incorporation in November 2015. The two men were also equal shareholders in MMS Ventures.
Within the container was a consignment of white boxes labelled ‘Frendo’ brand coffee. ABF contractors unpacked a quantity of the white boxes and placed them on pallets. Each of those pallets was then x-rayed using a machine designed for that purpose and operated by officers of ABF.
The process was explained by Officer Kumanan, who said that because the boxes were supposed to contain a single declared product, namely coffee, he would expect it to produce a consistent image through the package. A darker part or parts would suggest the presence of a different product. When the x-ray showed an anomaly, represented by an area or areas of darker image, the relevant box was set aside.
Officer Burton said that he was also involved at the beginning of the examination. He gave evidence that as the container was being unloaded, he opened a box that had been identified as being anomalous. Inside that box were 12 bags of coffee. He looked more closely at six of those bags and he opened one of them. Inside was a silver packet with ‘Nakhla’ branding. He opened the Nakhla packet. Based on his experience, he believed the substance inside was molasses tobacco which I interpolate to note is a form of tobacco, often mixed with flavours, and smoked in a water pipe or shisha. He unpacked a number of other boxes and those he examined all contained 12 bags of coffee. In each of these further boxes, he selected one bag of coffee to open and each bag he opened contained a Nakhla packet similar to the first one he looked at and opened. The weight of the Nakhla package he opened was 242 grams. He also said that he opened up other boxes which did not show anomalies and that the contents of those boxes were consistent with the Customs declaration.
Officer Bonnici, another x-ray operator, said that he had been told to itemise any anomalies in the x-ray images and that he found ‘darker shadings which constituted an anomaly from what the normal items were coming through as normal coffee.’ He said a number of boxes contained darker shading and some did not. Although he said that he did not open the boxes, he said that each box contained vacuum sealed foil packets of ground coffee. He said that there were approximately 12 packets in each box but he could not recall that any box contained less than 12 packets.
Officer Bonnici was cross-examined about the nature of the anomalies that he had seen. He said if there was ‘any dark shading’ in the box it would be put aside. He agreed that he did not open any of the boxes and that his task was ‘basically to say if there was any darkness that was inconsistent with the other boxes’ based on the x-ray image. In re-examination, he said that if the image was inconsistent or bad quality they would most likely run the box though the x-ray machine again.
Officer Bramwich, another ABF x-ray operator who worked with Officer Bonnici, said they were looking for ‘any anomalies’ that would show an area that was denser than other parts of the x-ray image. He said that on each particular pallet, he would identify any box that contained a different density, and that box would be put aside. He accepted that the denser area could be in one corner of the box, the whole box, or ‘six parts of the box’. In each case the box was put aside.
As a result of this triage, 1,333 white boxes were put aside for further inspection.
The informant, Officer Lumsden, gave evidence that he attended the inspection facility on 31 July 2018 and observed 1,333 boxes on 12 pallets. He randomly selected one box from each pallet. He removed one packet of coffee from each of the boxes so chosen and found a packet of Nakhla tobacco in each. There is no dispute that these were the boxes set aside as a result of the x-ray process.
From the 1,333 boxes, Officer Lumsden randomly selected 154 boxes and put the sample aside. The remaining boxes, once the sample was removed, were ultimately destroyed without any further examination.
At the time of the plea the 154 boxes had not been examined. However, after the plea hearing commenced, Officer Stefanutti examined each of the 154 boxes. That examination revealed that each box contained 12 bags of coffee and inside each coffee bag was a packet of Nakhla molasses tobacco. The average weight of each Nakhla packet was 249.3 grams with a nett weight of 246.6 grams of tobacco product.
From those facts, the different positions of the parties on the plea as to the quantity of tobacco emerges:
(a) the prosecution says that by extrapolating from the sample, the total tobacco is 1,333 x 12 x 246.6 (the total number of boxes multiplied by the number of tobacco packets multiplied by the nett weight of each packet); and
(b) the appellant says that the only tobacco that could be proven beyond reasonable doubt was the tobacco actually inspected and weighed by Officer Stefanutti, namely 154 x 12 x 246.6.[4]
[4]There is some minor discrepancy in the figures used which may be explained by the parties using the gross rather than nett weight of each packet. With his customary precision, senior counsel for the appellant, who did not appear on the plea, identified the correct figures based on the logic of the parties’ respective positions and the evidence as to nett weight.
On the prosecution case, the excise payable on the consignment contained in the 1,333 boxes was $3,613,736.11.
With respect to charge 2, the appellant and Mr Suleiman jointly operated a combined gift shop, homewares, and tobacconist business, where they stored and sold imported cigarettes and water-pipe tobacco. During the execution of a search warrant on the business premises, customs seized 37.849 kilograms of water-pipe tobacco and 9,586 cigarette sticks. None of the $41,503.15 duty payable on the tobacco or cigarettes had been paid.
In his reasons for sentence, the judge set out a summary of the evidence in unexceptionable terms and said that:
[I]t is not a reasonable possibility that in this random sampling of around 11.5 per cent of the original 1,333 boxes that ABF officers managed to capture all of the boxes and packets which contained the tobacco and that there was no other tobacco in the remainder of the 1,333 boxes. I am further satisfied beyond reasonable doubt that a substantial majority of the 1,333 boxes contained 12 bags of coffee, inside of which was a packet of Nakhla tobacco.
The examination of the randomly selected boxes delivered a 100 per cent positive result for Nakhla tobacco packets. In my view, this is a very significant sample from which to obtain a 100 per cent result, in circumstances where all boxes shared the common characteristic of being darker on X-ray, indicating greater density; and where all boxes all contained approximately 12 packets of coffee.
I cannot rule out that there might have been some boxes or groups of boxes which did not fit the pattern, or that some boxes did not have the full complement of 12 bags of coffee with tobacco inside, but I am satisfied beyond reasonable doubt that the substantial majority did.
I am also satisfied beyond reasonable doubt that whilst there is a variation in the weight of the Nakhla tobacco packets, the average weight is between 240 and 250 grams and I base that on the average weight of the tobacco packets from the 154 boxes. [5]
He continued:
It is not possible, on the evidence, to be satisfied of a precise amount of tobacco imported, given the number of boxes not examined, but I am prepared to find that the amount of tobacco imported in the container is a very large amount which approaches that alleged by the prosecution and that therefore, the total duty evaded also approaches that amount alleged by the prosecution. [6]
[5]Reasons [44]–[47].
[6]Reasons [49].
Grounds 1 and 2
The appellant submits that it was not open to the judge to be satisfied that all of the 1,333 boxes contained 12 packets of tobacco products weighing an average of 246.6 grams. At the forefront of that submission was a contention that the anomalies seen on the imaging were not uniform, and therefore it was not open to conclude that the contents within the boxes were identical as alleged by the prosecution. He submits that the process revealed little consistency in the anomalies as between the boxes that were set aside and therefore there could be no certainty on the issue of quantum or weight.
The submission must be rejected.
It is not in dispute that the weight of tobacco products imported was a matter that had to be proven by the prosecution beyond reasonable doubt.[7]
[7]R v Olbrich (1999) 199 CLR 270 (Gleeson CJ, Gaudron, Kirby, Hayne and Callinan JJ); R v Storey [1998] 1 VR 359 (Winneke P and Southwell AJA); Best v The Queen (2015) 46 VR 196, 208 [64] (Ashley, Redlich and Priest JJA).
Importantly, and notwithstanding that the principal evidence relied on by the prosecution took the form of a random sample, the process of arriving at conclusions did not require the judge to approach his task as merely a mathematical or statistical exercise. Indeed, the process of assessing the weight of different items of evidence and reasoning to a conclusion on the civil or criminal standard cannot be reduced to mathematical formulae.[8] As Spigleman CJ said in R v Galli,[9] findings of fact in both civil and criminal cases require commonsense judgement and the tribunal of fact is required to reach a level of actual persuasion on the whole of the evidence. This does not involve a mechanical application of probabilities.[10]
[8]R v GK (2001) 53 NSWLR 317, 323 [26] (Mason P).
[9](2001) 127 A Crim R 493.
[10]Ibid 505 [55]; Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262, 284–5 [136] (Spigelman CJ). See also R v GK (2001) 53 NSWLR 317, 322–3 [21]–[22]; the Honourable Justice D Hodgson, A Lawyer Looks at Bayes' Theorem (2002) 76 ALJ 109; R v Adams [1996] 2 Cr App Rep 467 at 481 per Rose LJ.
The argument advanced by the appellant echoes Bayes’ Theorem, in that it proceeds from the premise that in assessing the probability that all of the boxes contain the same contents based on the sample, it is necessary to have regard to the anterior event that showed that the contents of the boxes were not uniform. In other words, he contends that it is impermissible to draw any conclusions from the sample without taking into account what was already known from the imaging. However, the application of Bayes’ Theorem by juries to non‑statistical evidence or a combination of statistical and non-statistical evidence has been discussed but generally deprecated and the same should hold true for contested fact finding on a plea of guilty.[11] That is because, for the reasons already discussed, the exercise is not one that requires a mathematical approach.
[11]Xie v R (2021) 386 ALR 371, 410 [139] (Bathurst CJ, R A Hulme and Beech-Jones JJ).
Of course, as the observations of Murphy J in Perry v The Queen[12] make clear, statistics can be beguiling but not without danger:
It is very easy to assume that in common experience a person is hardly ever associated with poisonings of four close relatives, and that if such an association occurs it is so remarkable that it is unlikely to be innocent. Common assumptions about improbability of sequences are often wrong. A suggested sequence, series or pattern of events is often incorrectly regarded as so extremely improbable as to be incredible. However highly improbable, as well as merely improbable, sequences and combinations are constantly occurring. In random tossing the occurrence of a run of ten consecutive heads or tails is generally regarded as highly improbable. But this will occur on the average once in every 512 tosses, and the lesser sequences more frequently (2 runs of 9; 4 runs of 8; 8 runs of 7). If one randomly tosses a coin 257 times, more likely than not there will be a sequence of ten heads or tails. Although it is extremely improbable that any particular ticket will win a large lottery, it is certain that one will.[13]
[12](1982) 150 CLR 580 (Gibbs CJ, Murphy, Aickin, Wilson and Brennan JJ).
[13]Ibid 594.
The evidence that around 11.5 per cent of the boxes were examined and 100 per cent of those examined contained 12 packets of tobacco, was a piece of strong circumstantial evidence which formed part of the evidence before the judge. It did not require any expert evidence from a statistician to have significant probative value in proving what was in the 1,333 boxes. The existence of a variation in the anomalies that led to the 1,333 boxes being chosen for examination did not render the random sample suspect nor did it preclude the judge from extrapolating. He was not required to proceed on the basis that variations in the observed anomalies meant that the contents could not be uniform.
Further and importantly, the results of the sampling exercise was not the only evidence. As Priest JA observed in his reasons for giving leave to appeal on grounds 1 and 2, the available evidence established that a system had been employed in the packaging of the tobacco. Hence, of the 1,333 boxes set aside because they displayed an apparent density ‘anomaly’, 154 of those — about 11.5 per cent — selected at random, each contained 12 bags of coffee, inside of which was a packet of Nakhla tobacco. Given the randomness of the sample, I consider that it was open to conclude that an identical system had been used with respect to all of the boxes displaying an anomaly, including those that were not selected at random and remained unchecked.
In this case, the judge took into account, as he was entitled to do, that the operation had the hallmarks of a sophisticated commercial importation which, in effect, involved a system. This made the extrapolation from the sample much more persuasive.
The judge gave some leeway to the appellant, perhaps on the basis of some chance of statistical error, and came to the conclusion that a substantial majority of the boxes contained 12 packets of tobacco. It was in the circumstances, a generous finding. It served to reduce the amount of excise forgone by some imprecise but not negligible amount. There was no error in failing to arrive at a precise figure. The penalty did not depend on a precise linear relationship with the weight of tobacco imported.
In my view, grounds 1 and 2 must be rejected. The findings made by the judge were well open to him.
Ground 3
The appellant submits that the sentence is manifestly excessive. In order to make out the ground he must show the sentence was wholly outside the permissible range.
The judge set out, in some detail and in unexceptionable terms, the relevant principles. He regarded charge 1 as a serious example of the importation offence. He noted that the duty evaded was a very large amount, the purpose of the activity was profit and the importation was arranged for the benefit of the appellant and Mr Suleiman. He described the importation as elaborate, sophisticated and difficult to detect.
The judge then addressed the appellant’s personal circumstances. The appellant was 34 at the time of sentence. He was born in Lebanon, educated to year 8 and came to Australia in 2008. His family of a wife, three children and some members of his extended family are financially dependent on him. At the time of the offending his business was under financial strain and in a parlous state. The judge considered the appellant’s prospects of rehabilitation as good, and reduced the weight to be given to specific deterrence.
The judge concluded that the impact on the appellant’s family, including that his wife would be left with no income and a mortgage that she cannot pay, did not amount to exceptional circumstances so as to permit him to reduce the sentence on the basis of its impact on family members. However, he did accept that a sentence of imprisonment would weigh more heavily on the appellant by reason of these matters. The impact of the COVID-19 pandemic was also taken into account as it limited family visits and increased anxiety.
As just observed, the judge set out a number of factors that served to moderate the sentence. The appellant relies on those matters to submit that, having regard to his plea of guilty, the late change in the evidence relied on by the prosecution, his previous good character, his good prospects of rehabilitation, the poor health of his wife, and the current pandemic, the individual sentence on charge 1 and the non-parole period are manifestly excessive.
In oral submissions, he placed particular emphasis on the decision of this Court in Barakat v DPP.[14] In Barakat, this Court allowed an appeal from a sentence of four years and three months imposed for the importation of tobacco with the intention of defrauding the revenue and substituted a sentence of three years and three months. Two offenders were dealt with in the judgment. Hassan Barakat was sentenced for a single rolled up charge which covered three importations of tobacco which, had they been declared, would have attracted about $3.96 million in duties. He was the principal offender.
[14][2020] VSCA 185 (Priest, Niall and Forrest JJA) (‘Barakat’).
It may be accepted that the offending in Barakat was in some respects more serious. Mr Barakat faced a rolled up count, covering three separate importations, and the amount lost to the revenue was greater. However, the outcome on resentence represents a single application of the principles in a particular factual context. It is not enough for the appellant to show that a differently constituted Court might have given him a more lenient sentence.
In Barakat, there was inordinate delay that was accepted as a very material factor in arriving at a just and appropriate sentence. The charges had hung over Mr Barakat for a number of years and he was sentenced five years after the commission of the offences. The delay was not explained, not attributable to the applicant and had a very significant effect on him. The outcome in Barakat is relevant but not controlling.
In my view, this was serious offending undertaken for profit and with a very large amount of duty evaded. The appellant was the principal offender in an elaborate and relatively sophisticated importation. The judge accepted that the offending took place at a time of significant financial stress for the appellant whose business was under strain. His good prospects of rehabilitation reduced the need for specific deterrence. Necessarily, for offending of this kind, general deterrence plays a central role in sentencing.
As the judge noted, the appellant is a first time offender and incarceration will leave his family behind in invidious financial circumstances made harder by his wife’s compromised health. The current pandemic will make contact with his family while in prison very limited, exacerbating the burden of imprisonment. He was entitled to the benefit of his plea. Its utilitarian value was somewhat reduced by the contest as to the quantity of tobacco but remained an important factor, and the judge found some level of remorse.
Bringing all these matters together, I am not persuaded that the appellant has established that the sentence was wholly outside the permissible range available to the judge in the sound exercise of his discretion. Ground 3 must be rejected.
The appeal should be dismissed.
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