Barakat v DPP (Cth)
[2020] VSCA 185
•10 July 2020
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S EAPCR 2020 0042
| DIB BARAKAT | Applicant |
| v | |
| DIRECTOR OF PUBLIC PROSECUTIONS (CTH) | Respondent |
S EAPCR 2020 0056
| HASSAN BARAKAT | Applicant |
| v | |
| DIRECTOR OF PUBLIC PROSECUTIONS (CTH) | Respondent |
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| JUDGES: | PRIEST, NIALL and T FORREST JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 17 June 2020 |
| DATE OF JUDGMENT: | 10 July 2020 |
| MEDIUM NEUTRAL CITATION: | [2020] VSCA 185 |
| JUDGMENT APPEALED FROM: | [2019] VCC 1997 (Judge Stuart) |
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CRIMINAL LAW – Appeal – Sentence – Whether sentence manifestly excessive – Conveying tobacco products with intent to defraud revenue – Total effective sentence of 20 months’ imprisonment with recognisance release after 10 months – Application for leave to appeal granted – Appeal allowed – Resentenced to 8 months’ imprisonment – Customs Act 1901 (Cth) s 233BABAD(1).
CRIMINAL LAW – Appeal – Sentence – Whether sentence manifestly excessive – Importing tobacco products with intent to defraud revenue – Total effective sentence of 4 years and 3 months’ imprisonment with non-parole period of 2 years and 6 months – Application for leave to appeal granted – Appeal allowed – Resentenced to 3 years and 3 months’ imprisonment with non-parole period of 2 years – Customs Act 1901 (Cth) s 233BABAD(1).
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant Dib Barakat | Ms J Swiney | Portfolio Law |
| For the Applicant Hassan Barakat | Mr P A Chadwick QC | Portfolio Law |
| For the Respondent | Ms K Breckweg | Ms A Pavleka, Solicitor for Public Prosecutions (Cth) |
PRIEST JA:
I agree with Niall JA, whose reasons I have had the advantage of reading in draft.
NIALL JA:
Hassan Barakat (for convenience, ‘HB’) was involved in the importation into Australia of three consignments of tobacco products from the United Arab Emirates. After the arrival of the consignments, and before they had been cleared by customs, the tobacco was collected and driven to a bonded warehouse where it was to remain until tax and duty was paid, or the tobacco exported. On the way to the warehouse, other vegetable matter (which was disguised as the tobacco cargo and had a duplicate airway bill attached) was substituted. The substituted product was delivered into bond and the tobacco into the community. The purpose of the substitution was to evade the substantial tax and duty that were payable before the tobacco could be released. The substituted product languished in the bond warehouse presumably to be abandoned or later exported.
Notwithstanding that there were three separate consignments, HB pleaded guilty to a single rolled up charge of importing tobacco products with the intention of defrauding the revenue in breach of s 233BABAD(1) of the Customs Act1901 (Cth) (‘Customs Act’). He was sentenced to a term of imprisonment of four years and three months. The sentence was structured as follows:
Charge Offence Maximum penalty Sentence 1
Importing tobacco products with the intention of defrauding the revenue (Customs Act 1901 (Cth) s 233 BABAD(1) and Criminal Code 1995 (Cth) s 11.2A(1)).
10 years
4 years and 3 months’ imprisonment
Non-parole period 2 years and 6 months’ imprisonment Pre-sentence detention Nil Section 6AAA statement 6 years’ imprisonment with a non-parole period of 4 years Other orders Forfeiture order for goods seized
HB recruited his older brother, Dib Barakat (‘DB’) to participate in the first two importations, DB playing no role in relation to the third. DB physically collected the tobacco from its arrival point and drove it to the bonded warehouse. On arrival, he delivered the substituted product, keeping the tobacco in his van and delivering it to another location, thus allowing the tobacco to be smuggled without payment of any tax or duty.
DB pleaded guilty and was sentenced on a single charge of conveying tobacco products, knowing the goods were imported with the intent to defraud the revenue in breach of s 233BABAD(2). He was sentenced to a term of imprisonment of 20 months, to be released after serving 10 months. His sentence was structured as follows:
Charge Offence Maximum penalty Sentence 1 Conveying goods, namely tobacco products, knowing the goods were imported with the intent to defraud the revenue (Customs Act 1901 (Cth) s 233BABAD(2)).
10 years
20 months’ imprisonment,
to be released after serving 10 months’ imprisonment on condition of good behaviour for 2 years and payment of $1,000 pecuniary penalty[1]Non-parole period N/A Pre-sentence detention Nil Section 6AAA statement 30 months’ imprisonment to be released after serving 20 months’ imprisonment on condition of good behaviour for 3 years and payment of $1,000 pecuniary penalty [1]Ordered pursuant to Crimes Act 1914 (Cth) s 20(1)(b).
Each applicant has applied for leave to appeal against his sentence on the single ground that the sentence imposed in each case is manifestly excessive.
Summary of the offending
The goods were imported via airfreight from the United Arab Emirates and declared to be tobacco. The goods arrived at Menzies Aviation (‘Menzies’), an airport cargo terminal operator, where they remained under the control of customs. A customs broker was engaged, who was told that the importation was to be delivered to a licensed warehouse for storage. The broker lodged a document, called an ‘N20’, which allowed the goods to be transported from Menzies to a licensed warehouse, where they were to be stored until duty and Goods and Services Tax (‘GST’) were paid.
In a process called an ‘under bond movement’, importers were permitted to collect goods from their point of arrival and transport them to a licensed warehouse under bond where they would remain until the duty and GST were paid, and the goods released. Once an ‘under bond movement’ is approved by the Australian Border Force (‘ABF’), the transportation could be carried out by anyone, including the owner of the goods.
On 6 December 2014, DB collected the first consignment, comprising eight loaded pallets with a gross weight of 1,915 kg from the freight company. When collecting the goods, he presented photo identification in his own name. He produced an ‘authority to collect‘ document, providing permission to All Australia Transport to collect the goods. All Australia Transport is the trading name of a company owned and controlled by DB. At the bonded warehouse, he deposited the substituted cargo and kept the tobacco. He was wearing a hooded jumper with the hood over his head.
The second consignment followed a similar pattern. It comprised eight pallets with a gross weight of 2,000 kg. On 19 December 2014, DB collected the second consignment from the freight company and again produced company identification in his own name. The tobacco was again substituted and the substituted product was delivered to a bonded warehouse. The prosecution alleged that DB was seeking to conceal his face and identity by keeping the hood of his jumper pulled over his head and wearing sunglasses.
The two consignments consisted of 1,280,000 tobacco cigarettes each. The duty payable on each consignment would have been $592,230.40, making a total of $1,184,460.80.
After the successful substitution of the first two consignments, HB organised a third, larger consignment, comprising 37 pallets of cigarettes with a gross weight of 9,880 kg. It was more than twice the weight of the first two consignments combined. The third consignment arrived in Australia in June 2015. After the arrival of the goods, HB made extensive efforts to locate a place for storage, ultimately securing storage from a marine serve and logistics company with a bonded warehouse. In August 2015, ABF officers located and seized the third consignment, and later executed a search warrant at HB’s home. Questioned by police in relation to the third consignment, HB said that he believed the goods were to be exported and that he had not been involved in tobacco importing before. He denied any wrongdoing.
The seizure of the goods occurred before any substitution could be made. However, in September 2015, police executed a search warrant at a storage facility and located 37 black wrapped pallets in the storage unit. Each pallet was found to be made up of eight large cartons. The prosecution alleged it was intended that these goods were to be substituted for the tobacco that had been imported in the third consignment.
Unlike DB who used his own name, HB held and used a number of mobile phones registered in different names, and used these names in dealing with the importation and storage.
In relation to the third consignment, the duty payable on the tobacco comprising 5,920,000 sticks of cigarettes was $2,782,873.60.
Reasons for sentence
The judge sentenced both applicants at the same time.
The judge considered that the applicants had abused the system in a sophisticated manner.[2] There were a number of features of the endeavour which demonstrated the planning involved and the sophistication of its execution. These included the separate importation of counterfeit consignment documentation, which was attached to the substituted product to make them look like the original consignments and avoid detection, the preparation of the disguised product, the use of legitimate export companies and the exploitation of the ability to transport the goods from the point of arrival to a bonded warehouse.[3]
[2]DPP v Barakat [2019] VCC 1997, [27], [110] (‘Reasons’).
[3]Ibid [13].
Applicant HB
Although the judge was unable to identify precisely the role played by HB, he accepted that HB was a principal in respect of all three consignments;[4] HB was ‘very much involved’ in all aspects of the importation and substitution of the tobacco.[5] HB coordinated the importation of all three consignments of tobacco and had the main role in arranging the transportation of the tobacco once it had been imported.[6] HB used aliases, including ‘Rabih Ali’ and ‘Alex’.[7]
[4]Ibid [111].
[5]Ibid [117].
[6]Ibid [12], [16].
[7]Ibid [12].
HB’s role spanned December 2014 to mid-2015 and beyond.[8] The judge assessed HB’s criminality as high[9] and noted that the third consignment involved a significant escalation in criminality.[10]
[8]Ibid [123].
[9]Ibid [135].
[10]Ibid [151].
The judge found that HB was motivated by profit. Although the precise amount he expected to derive is not known, the judge noted that ‘it must have been a considerable amount’ across the three consignments.[11]
[11]Ibid [115].
The judge addressed in some detail the personal circumstances of both applicants. In relation to HB, the judge noted that he was born in Lebanon. He finished schooling in that country and by 19 years of age had migrated to Australia with poor English. He studied mechanical engineering and graduated in 2009.
He has lived with his wife since 2010 and they have three children. At the time of sentencing, his wife had suffered severe depression for the previous 10 months and has chronic renal disease. The judge accepted that these circumstances and HB’s concern for his wife and children would make his incarceration more burdensome, and there was a need to moderate his sentence on this basis.
The judge noted that the brothers had come to Australia and became model citizens (apart from these matters).[12] While the judge considered this to be an aberration for DB, the judge observed that the same could not be said for HB given the length of his involvement, his role as principal and the fact that he was involved in all three consignments.[13]
[12]Ibid [151].
[13]Ibid.
References tendered on the plea spoke highly of HB and the judge took these into account. The judge also took into account the high utility of HB’s plea of guilty, and accepted that he was truly remorseful and insightful.[14] He assessed HB’s prospects of rehabilitation as excellent.[15]
[14]Ibid [163].
[15]Ibid [168].
The judge found that specific deterrence was significantly moderated.[16] He regarded general deterrence as the principal sentencing factor, and that punishment and denunciation also had a role to play.[17]
[16]Ibid [164].
[17]Ibid [169].
The judge noted the significant delay and carefully considered how delay had affected both applicants.[18] He noted that their lives had been ‘placed on hold’, that this had been a source of great stress but that they had used the time well to demonstrate a commitment to avoid further offending.[19]
[18]Ibid [165]–[166].
[19]Ibid [165], [168]
Applicant DB
The judge accepted that DB had acted on instructions of HB and played a limited role in conveying the tobacco, which was nevertheless a critical stage of the collection of the imported product.[20] The judge assessed DB’s criminality as being ‘towards the lower end’.[21] He also accepted that DB stood to gain a ‘relatively small’[22] sum which the judge described as ‘pathetically small considering the risks’[23] of detection.
[20]Ibid [115].
[21]Ibid [135].
[22]Ibid [133].
[23]Ibid.
The judge recorded that DB was, at the time of offending, of unblemished character. He noted that after the offending, DB was involved in some driving offences but these did not feature in the sentencing process.[24]
[24]Ibid [161].
The judge then set out DB’s background. Like his brother, DB was born in Lebanon and arrived in Australia when he was 20 years old. Since his arrival, he had constantly been employed. He is separated from his wife, albeit they are living under the one roof, and he has five young children, ranging in age from an infant to 13 years.[25]
[25]Ibid [159].
The judge received, and accepted, a large number of detailed references which attested to the reputation of DB as a hard-working, conscientious family man of good character. The judge accepted that DB’s conduct, apart from the offending, was exemplary, and that he exhibited a strong work ethic and was devoted to his children.[26] The judge considered the offending to be an aberration.[27]
[26]Ibid [161].
[27]Ibid [151].
The judge noted that the plea of guilty had high utilitarian value on the basis the trials would have been complex and taken many weeks to complete.[28] He also regarded the guilty plea as evidence of true remorse and insight.[29] For that reason, judge concluded that specific deterrence was ‘of no moment in relation to [DB]’.[30] The judge also assessed his prospects of rehabilitation as excellent.[31]
[28]Ibid [163].
[29]Ibid.
[30]Ibid [164].
[31]Ibid [168].
The judge also took into account the fact there had been significant delay between the offending and the finalisation of the charge. The offending took place in December 2014 and the applicants were not sentenced until late November 2019. The evidence demonstrated that this delay had weighed heavily upon DB. The judge accepted some aspects of the delay could be laid at DB’s feet.[32]
[32]Ibid [166].
After referring to those matters, the judge highlighted the importance of general deterrence for offences of this kind observing that it is important that the court send a clear message to those who would likewise seek to defraud the revenue that stern punishment can be expected.
Delay
As noted, the judge had regard to the delay between the offending and sentence in respect of both applicants. The offending occurred in December 2014 (consignments 1 and 2) and around June 2015 (consignment 3). A search warrant was executed in relation to the third consignment in August 2015. The applicants were interviewed in September 2015 and denied wrongdoing.
The applicants were charged on summons on 21 November 2016. In October 2017, the applicants were committed for trial following a contested committal. DB maintained that he was not the person who collected, transported or facilitated the substitution of consignments 1 and 2. HB also denied the charges.
Four direction hearings were listed in the County Court in August, September and October 2018, and the trial commenced in October 2018 when preliminary rulings were made. The trial was adjourned on the application of DB because he considered that the prosecution had changed its case against him. The adjournment was not opposed by HB. The trial was adjourned to a date to be fixed in mid-2019.
In June 2019, there were negotiations between the applicants and the prosecution which resolved in July 2019, and the applicants pleaded guilty to the current charges. The plea hearing was held in November 2019 and the applicants were sentenced on 25 November 2019.
It follows that there were three years between the laying of the charges and the imposition of sentence. The judge was unable to attribute responsibility for the delay. This Court is in no better position to make that assessment. We were informed that the applicants originally faced more charges relating to the importations and after negotiation, the matters were resolved. However, it appears that it was not until June 2019 that the applicants indicated a willingness to plead guilty.
Whatever its cause, and there is no suggestion of obfuscation or tactical delay by the applicants, the delay was considerable and was relevant to sentence. It meant that the burden of the charges weighed heavily on the applicants for an extended period of time with resultant uncertainty and stress. It also gave the applicants the opportunity to demonstrate that the offending was out of character and unlikely to be repeated. The judge recognised the importance of these matters and expressly adverted to them.
Grounds of appeal
Each applicant advances a single proposed ground of appeal — that the sentence is manifestly excessive. In order to succeed on such an application, it is necessary for an applicant to establish that the sentence imposed by the judge was wholly outside the range available in the sound exercise of the sentencing discretion.[33]
[33]R v Abbott [2007] VSCA 32, [13]–[15] (Maxwell P), [23] (Habersberger AJA); Clarkson v The Queen (2011) 32 VR 361, 384 [89] (Maxwell ACJ, Nettle, Neave, Redlich and Harper JJA); DPP v Karazisis (2010) 31 VR 634, 662–3 [127] (Ashley, Redlich and Weinberg JJA); Hards v The Queen [2013] VSCA 119, [4] (Maxwell ACJ).
In seeking to establish the ground, HB relies on the following matters:
(a) delay;
(b) he has taken the opportunity to prove himself during the period since the offending took place;
(c) the absence of prior convictions and good character;
(d) sound work history;
(e) plea of guilty with a significant utilitarian benefit;
(f) genuine remorse and insight;
(g) the need for specific deterrence was significantly moderated;
(h) he is unlikely to reoffend;
(i) excellent prospects of rehabilitation; and
(j) the sentence appears to be in excess of sentences handed down for similar offending.
DB relies on the following:
(k) delay;
(l) he has taken the opportunity to prove himself during the period since the offending took place;
(m) the absence of prior convictions and good character;
(n) sound work history;
(o) plea of guilty with a significant utilitarian benefit;
(p) the criminality was at the lower end and an aberration in his otherwise good behaviour;
(q) genuine remorse and insight;
(r) no need for specific deterrence;
(s) he is unlikely to reoffend;
(t) excellent prospects of rehabilitation; and
(u) the sentence appears to be in excess of sentences handed down for similar offending.
Both applicants emphasised the importance of delay. They submit that the judge referred to delay as a moderating factor but this is not reflected in the actual sentence passed.
The respondent distilled a number of matters said to be relevant to the imposition of sentence for breaches of s 233BABAD:[34]
[34]R v Zhang [2017] SASCFC 5, [37] (Chivell AuJ); R v Saleh [2015] NSWCCA 299 (‘Saleh’); Young v The Queen [2016] VSCA 149 (‘Young’).
(v) the amount of duty defrauded;
(w) the scale of the enterprise, including the quantity of tobacco imported, possessed or conveyed, and the logistics or sophistication of the endeavour;
(x) the role of the offender is a critical factor, particularly whether an offender was a principal offender or following the instructions of others;
(y) the period of the offending;
(z) the expected financial gain;
(aa) whether the loss to the revenue has been repaid;
(bb) whether the offending ’involved other illegalities, such as the use of false identities’;
(cc) whether the offender was involved on the distribution and sale of the tobacco products in Australia;
(dd) serious examples of offending under s 233BABAD(1) are sufficiently grave as to warrant a sentence of full-time imprisonment;
(ee) general deterrence is the primary sentencing consideration;
(ff) where general deterrence takes priority, factors such as prior good character and age are usually afforded less weight than might otherwise be given;
(gg) the offence is effectively one against the revenue and accordingly, any offending must be viewed in the context of taxation and similar offences, and guidance taken from sentences imposed in these matters;
(hh) offending of this nature is often difficult to detect; and
(ii) the trend of not imposing a sentence of full-time custody for serious examples of s 233BABAD offences, which is evident in earlier first instance sentences, ought to be corrected.
Having regard to those matters, the respondent submits that the sentences were well open to the judge.
Application to adduce fresh evidence
On 16 June 2020, the day before these applications were listed for hearing, each applicant filed a document described as ‘Further Submissions Addressing COVID-19’, foreshadowing an application to file an affidavit and add a second proposed ground of appeal in the following terms:
New evidence establishes that imprisonment is more burdensome for the applicant as a consequence of the COVID-19 pandemic.
In each case, the submission asserted that the burden of imprisonment arising from the COVID-19 pandemic could not have been foreseen at the time of sentence and his time in gaol is more burdensome. The submission referred to the suspension of personal visits and, in the case of HB, being moved into solitary confinement and then transferred to another prison, which he attributes to the pandemic.
The respondent opposes the amendment and submits that the material is inadmissible on the question of whether there is error by the sentencing judge and could only be used in the event that this Court allows the appeal, sets aside the sentence and comes to re-sentence the applicants.
I accept the respondent’s submission. First, it is noted that despite what is said in the submission, no affidavit was filed. Accordingly, there is no evidence that could be admitted as fresh evidence.
Secondly, even if we were satisfied that the facts outlined in the submission could be verified by affidavit, the evidence does not fall within the principles that apply to fresh evidence.[35] Relevantly, to be admissible, the new evidence must relate to events which have occurred since the sentence was imposed and demonstrate the true significance of facts in existence at the time of the sentence. As Winneke P explained in WEF:
However, this court has recognised that there is a rare exception to this otherwise fundamental rule. The court will receive evidence of events occurring after sentence, in appropriate circumstances, if those events can be said to be relevant, not so much per se, but because they throw a different light on circumstances which existed at the time of sentence.[36]
[35]R v Nguyen [2006] VSCA 184, [36]–[37]; R v Babic [1998] 2 VR 79, 80–81; R v WEF [1998] 2 VR 385 (‘WEF’).
[36][1998] 2 VR 385, 388–9.
The impact that the current pandemic has on the operation of the prison system does not fall within that category and is not admissible in support of a ground of appeal.
Analysis
Before dealing with the specific and quite different position of each applicant, it is appropriate to make some general observations about the offences to which they pleaded guilty.
Section 223BABAD was introduced in 2012 and increased the applicable maximum penalty for the smuggling of tobacco products fivefold.[37] The maximum penalty of 10 years’ imprisonment reveals the seriousness with which the legislature views offending of this kind and is calculated to provide a strong deterrent to those connected with the illegal smuggling of tobacco, whether by its importation or possession.[38] Although specifically addressed to tobacco offences, s 233BABAD, for sentencing purposes, is similar to other offences involving defrauding the revenue, such as taxation and like offences.[39] Offences against the revenue are not victimless crimes. They undermine the integrity of the taxation system and the ability of governments to raise revenue in a fair and accountable manner.
[37]Saleh [2015] NSWCCA 299, [32]. See also Young [2016] VSCA 149, [121]; Hussein v The Queen [2016] VSCA 212 (‘Hussein’).
[38]Ibid [31].
[39]Ibid [32]; Saleh [2015] NSWCCA 299, [9] (Beech-Jones J), [37]–[43] (R S Hulme AJ). See also Young [2016] VSCA 149, [124].
Because of the financial rewards that can be associated with offending of this kind (where the goods are subject to relatively high taxes and duty), the difficulty of detection and the erroneous view that offending of this kind is lower level order criminality or ‘victimless’, it is necessary to place emphasis on general deterrence. That remains so, even where the offender is otherwise of good character and unlikely to offend again. Relatedly, offending of this kind often involves, as it did in this case, premeditation and planning. There is the opportunity to reflect on the risk and reward equation. It is necessary that sentencing courts visit the offending with suitably stern sentences so as to deter those who might otherwise be attracted to the high returns fortified by the difficulty in detection.
A review of the authorities reveals the importance of general deterrence and that, as a result, custodial sentences generally are called for.[40]
[40]Saleh [2015] NSWCCA 297, [37]–[43].
Saleh was a Crown appeal from a sentence imposed in the District Court of New South Wales on a person who had, on a single occasion, aided and abetted the importation of a container containing 2,250 kg of unmanufactured (loose) tobacco and evaded duty of $996,997.50. The offender was not a principal in the importation but he had a significant role. The period of his offending was 12 days. He had been in a difficult position financially and was supporting a large family. He had some prior convictions, although they were considered to have been of a ‘different kind’. In the District Court, he had been sentenced to a term of 20 months’ imprisonment which was fully suspended. The Court of Criminal Appeal found that that sentence was manifestly inadequate. The judges differed as to the sentence which should be imposed. The majority (constituted by R S Hume AJ with whom Johnson J agreed) considered a sentence of three years’ imprisonment with release on recognisance after two years should be imposed. Beech-Jones J considered a sentence of two years’ imprisonment with a release on recognisance after 15 months should be imposed.
R v Kopa; Ex Parte Director of Public Prosecutions (Cth) and R v Istogu; Ex Parte Director of Public Prosecutions (Cth)[41] were appeals by the Director of Public Prosecutions (‘Director’), brought in order to establish sentencing guidelines. They concerned offences under the Excise Act 1901 (Cth), which carried maximum custodial penalties of only two years’ imprisonment. The Court of Appeal noted that while sentencing factors vary depending on the offender, the amount of excise avoided provides a yardstick for comparative purposes. The Court observed that the offence of deliberately defrauding the revenue is a serious one and, particularly where the sum is large, a significant custodial sentence is called for.[42] Istogu had evaded excise duty of $385,884.73 by manufacturing and possessing tobacco products. He was sentenced to three months’ imprisonment. Kopa was found to have recklessly possessed 6,509.28 kg of tobacco leaf with a dutiable value of $1,694,800, which he had been paid to transport it in a truck. He was sentenced to four months’ imprisonment.
[41][2004] QCA 100.
[42]Ibid [25].
In R vVellinos,[43] this Court dismissed an appeal in which the grounds included the claim that a sentence of three years’ imprisonment with release after 21 months was manifestly excessive. Vellinos had pleaded guilty to the offence of defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914 (Cth) by manufacturing and distributing tobacco, and thereby evading excise duty in excess of $500,000. The offence carried a maximum penalty of 10 years’ imprisonment. The offending occurred over a 12-month period and Vellinos had no prior convictions.
[43][2001] VSCA 131.
In Hussein,[44] the applicant was involved in the evasion of more than $8 million on 17,009 kilograms of tobacco. He was sentenced to two years and six months’ imprisonment, to be released on recognisance after serving 12 months.[45] This Court rejected an argument that the sentence was manifestly excessive. Priest JA noted the amount intended to be defrauded and the role of the applicant, which was an active one, involving unpacking and transporting the container of imported tobacco, and substantial planning and premeditation. To perform his role, the applicant purchased a prepaid mobile telephone; liaised closely with the importer by telephone and text messages; hired two trucks; and enlisted others to unload and transport the tobacco.
[44][2016] VSCA 212.
[45][2016] VSCA 212, [31] (Priest and Santamaria JJA).
The respondent also referred to the decision of R v Medalian.[46] Medalian had pleaded guilty to smuggling tobacco with the intent to defraud the revenue under s 233BABAD(1) of the Customs Act. Medalian was the principal offender. The offending involved the importation of a container containing 1,080 kg of molasses tobacco and the amount of duty evaded was approximately $725,414.40. Initially, he was sentenced to one year and nine months’ imprisonment. The sentencing judge ordered that he serve nine months on home detention before being released on a recognisance release order (‘RRO’) for 12 months. The Director appealed on two grounds. The ground which is relevant for present purposes is that the sentence imposed was manifestly inadequate. The appeal was allowed on the other ground only, which related to whether a home detention order could be combined with a RRO. The initial sentence was set aside, and the Court of Appeal sentenced Medalian to one year, nine months and 19 days’ imprisonment. Having regard to the fact that he had already served nine months of home detention, it was ordered that he be released on a RRO.
[46](2019) 133 SASR 50.
HB submitted that his was the second longest sentence for an offence against
s 233BABAD. In Director of Public Prosecutions v Sim,[47] a judge of the County Court imposed a longer sentence. In that case, the offender pleaded guilty to a single charge of importing tobacco with intent to defraud the revenue. It involved two consignments with a total amount defrauded of around $3 million. The offender was a ‘middleman’ in a large and sophisticated smuggling syndicate. He had no prior convictions and was sentenced to five years’ imprisonment with a minimum of three years.
[47][2019] VCC 168 (‘Sim’).
With those general matters in mind, I turn to the sentence imposed on HB.
Applicant HB
The applicant’s offending involved three separate consignments. As the judge found, the importation and substitution involved a degree of sophistication and HB was a principal protagonist. He was involved in all its aspects. The third consignment represented an escalation in the offending as it involved a substantial increase in the amount of tobacco involved.
In financial terms, the offending was undoubtedly serious. The amount defrauded remains a very important indicator of the seriousness of the offending. Together, the three consignments involved an intent to defraud the Commonwealth of close of $4 million. The revenue payable on the tobacco that found its way into the community was $1,184,460.80, none of which has been repaid. The third consignment involved an intent to defraud a further amount of $2,782,873.60. HB was motivated by financial gain. Although the judge was unable to put a figure on the amount that HB intended to yield from his offending, he concluded, with justification, that it must have a been a considerable amount.
The fact that the single charge spanned a number of months, involved three discrete importations, and required a high degree of planning and organisation were matters of some importance in assessing the objective gravity of the offending. Having regard to the importance of general deterrence, it called for a substantial period of imprisonment.
Compared with other cases concerning importation of tobacco, the sentence was very high. Indeed, in oral submissions, counsel for HB highlighted that the sentence imposed on his client was the second longest sentence imposed for offences under s 233BABAD.
General deterrence and the need for the court to denounce offending of this kind meant that a substantial period of imprisonment was called for. However, when proper allowance is made for his unblemished record, remorse and excellent prospects of rehabilitation, and the high utilitarian value of the plea, the sentence must be seen to be at the high end, having regard to the objective gravity of the offending and to comparable sentences. Once the very long delay, which had a significant effect on HB, is factored in, I am persuaded that the sentence of four years and two months’ imprisonment is wholly outside the available range. On the facts accepted by the judge, the delay was very burdensome and needed to find adequate reflection in the sentence. With the exception of Sim in the County Court, the sentence was substantially higher than cases that are, in some respects, comparable. It follows that the ground has been made out.
I would give leave, allow the appeal and resentence the appellant. As part of the resentencing exercise, in addition to the matters to which I have already referred, I would to take into account the fact that during the current pandemic, family visits have been limited or prevented.[48] I would sentence HB to a term of imprisonment of three years and three months with a non-parole period of two years. Had he not pleaded guilty, the appellant would be in an entirely different position in relation to remorse and rehabilitation; without the benefit of a plea, that makes the hypothetical exercise of s 6AAA of the Sentencing Act 1991 (‘Sentencing Act’) (assuming it is picked up and applies to Commonwealth offences)[49] extremely difficult. As the judge noted, there was a high utilitarian value in the plea and, on the mandated hypothesis, I would have imposed a term of imprisonment on HB of five years and six months.
[48]Freeburn v The Queen (No 2) [2020] VSCA 176, [61] (‘Freeburn’).
[49]See DPP (Cth) v Couper (2013) 41 VR 128.
Applicant DB
The position in relation to DB is quite different. Although it is accurate to characterise the overall scheme as sophisticated, premediated and ongoing, the role of DB is to be ascertained by what he actually did. His role was important in the sense that it was necessary for the tobacco to be conveyed to the bonded warehouse and for the substitution occur. And, by his plea, he accepted that he intended to defraud the revenue. However, it remained a menial function and there was nothing in the prosecution summary to connect DB to any of the decision-making. Indeed, the judge accepted that he did what he was directed to do. Given the way the narrative was structured in the prosecution summary, which interwove the conduct of both applicants and the familial relationship between them, there was a risk that a higher degree of knowledge and therefore culpability would be attributed to DB than could fairly arise on the facts having regard to the criminal standard. Pared back to his conduct, DB’s role is fairly described as ancillary.
DB’s role was therefore modest, collecting the tobacco and driving it to the bonded warehouse. Although the prosecution alleged that he diverted to another location in order to make the swap with the substituted product, the judge accepted that, in fact, the substituted product was already loaded in the van driven by him, that he collected the tobacco and drove directly to the bonded warehouse where the substitute product was unloaded, and where it remained.[50]
[50]Reasons [15], [36].
DB’s role did not itself require any sophistication or planning, was of limited duration and gained very modest reward. It was done at the direction of his brother. Although the judge correctly classified his offending as falling within the lower end of criminality, in assessing the sophistication of the offending, the judge said, in terms that did not distinguish between the applicants, that ‘this was a sophisticated scheme designed to take advantage of a vulnerability in the scheme since closed’.[51] In my view, it is not correct to describe DB’s offending as sophisticated, or as involving any premeditation or planning on his part. Moreover, his paltry return, which the judge referred to as ‘pathetically small’[52] also points up the relatively minor role played by DB.
[51]Ibid [121].
[52]Ibid [133].
I consider that the actual role of DB, in the context of a relevantly unblemished record and excellent prospects of rehabilitation, was not properly reflected in the sentence. Although DB did not mount a specific attack on the head sentence and focussed on the length of the period to be served, it is not possible to examine the 10 months to be served in isolation of the total sentence of 20 months.
When the very long delay is factored in, I am satisfied that the sentence imposed on DB is wholly outside the available range. General deterrence justified a period of imprisonment, even for a person who had an unblemished record and performed a menial role, however, it did not justify the sentence imposed in this case.
I would set aside the sentence imposed on DB. I would resentence DB to a period of imprisonment of eight months. Again, in addition to the matters referred to above, on resentence, it is appropriate to take into account the fact that during the current pandemic, family visits have been limited or prevented.[53] I note, without repeating, my remarks in relation to s 6AAA of the Sentencing Act above and state, for the purpose of that section, that I would have sentenced DB to a sentence of 18 months’ imprisonment had he not pleaded guilty.
[53]Freeburn [2020] VSCA 176, [61].
Conclusion
On the application for leave to appeal brought by HB, I would grant leave, allow the appeal and resentence the appellant to a term of imprisonment of three years and three months with a non-parole period of two years.
On the application for leave to appeal by DB, I would grant leave, allow the appeal and resentence the appellant to a term of imprisonment of eight months.
T FORREST JA:
I agree with Niall JA.
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