Fraser, W.G. v Regina

[1985] FCA 597

Re: WILLIAM GRAHAM FRASER
And: REGINA
No. ACT G331 of 1984
Criminal Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Davies J.
Kelly J.
Beaumont J.

CATCHWORDS

Criminal Law - Appeal on Sentence - Non-parole period apparently fixed having regard to remissions thereof available under relevant New South Wales legislation - Reduction of period - Imprisonment and fine - Term of imprisonment and fine imposed - Imprisonment in default of fine ordered to commence at expiration of non-parole period - Relevance of means of offender - Appearance given that matters not advanced by prosecution or in issue before court taken into account - Whether reduction of sentence thereby warranted.

Paivinen v. R. (1985) 59 A.L.R. 368

Paivinen v. R. (1985) 59 A.L.J.R. 543

Regina v. R. (unreported) Full Court of Federal Court of Australia, 13 August 1985

R. v. Raspovic (unreported) Supreme Court of the Australian Capital Territory, 30 May 1984

Kaye v. Vagg (No.2) (1984) 11 A.Crim.R. 127

Flego v. Lanham (1983) 32 S.A.S.R. 361

Winkler v. Cameron (1981) 33 A.L.R. 663

Reardon v. Nolan (1983) 51 A.L.R. 715

Savundra v. The Queen (1968) 52 C.A.R. 637

Lott-Carter (1978) 67 C.A.R. 404

R. v. Po (1974) Crim.L.R. 557

R. v. Forsythe (1980) Crim. L.R. 313

R. v. Jacobs (1980) Crim.L.R. 800

Cotic v. R. (1984) 12 A.Crim.R. 208

Achetraritei v. R. (1984) 53 A.L.R. 85

HEARING

CANBERRA
#DATE 27:11:1985

ORDER

The appeal be allowed.

The sentence of 8 years imprisonment be set aside and that in lieu thereof the appellant be imprisoned for seven and a half years.

A non-parole period of 4 years and 3 months be fixed.

The sentence date from 18 September 1984, the date when the sentence appealed from was imposed.

The fine of $10,000 be quashed.

NOTE: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

JUDGE1

On 18 July 1984 the appellant pleaded guilty in the Court of Petty Sessions, Canberra, to a charge laid under s.4(3) of the Poisons and Narcotic Drugs Ordinance 1978 (A.C.T.) (the Ordinance) that on 24 June 1984 he had heroin in his possession for the purpose of supplying it to another person. The maximum sentence which may be imposed for that offence under s.4(6) of the Ordinance is imprisonment for 25 years or a fine of $100,000 or both such fine and imprisonment. The appellant was committed for sentence to the Supreme Court of the Australian Capital Territory before which, on 9 August 1984, he adhered to his plea.

On 18 September 1984 the appellant was sentenced to imprisonment for 8 years, a non-parole period of 6 years being fixed, and was in addition ordered to pay a penalty of $10,000. In default of payment of the penalty the appellant was to serve one year's imprisonment to commence at the expiration of the non-parole period.

The following statement of facts is taken from the reasons for sentence of the learned sentencing Judge.

"The short facts of the matter are that the accused was apprehended at 10.25 p.m. on 24 June 1984 while driving his motor vehicle towards Civic in Northbourne Avenue, Canberra. A search of the tool box of his motor vehicle revealed two mallets, each containing a quantity of heroin. The contents of the mallets were subsequently found to weigh 45 grams, of which 22.14 grams was heroin. That same night the accused participated in a record of interview with the arresting police officers in which he admitted to owning both lots of heroin and the mallets; that he had obtained them from Sydney and that, to his mind, they contained 50 grams of heroin.

He said that he paid $5,000 for the heroin and that he owed another $5,000. He said that he intended to use some of it and sell 75 per cent of it. He said that he would sell it for $400 a gram to people he knew who used heroin. He said he had acquired the money to buy the heroin from selling heroin. Asked about the sum of $3,850 in cash which he had on him, he claimed to have won it at the races at Queanbeyan on 9 June. He said that as a result of buying and selling heroin to support his own heroin addiction since January 1984, he had built up the bank of $5,000 to purchase the heroin in Sydney.

In a written statement to police he said, in effect, that he realised that his activities in dealing in heroin had snowballed and got out of control."

During the course of the hearing before the Supreme Court the learned sentencing Judge asked counsel then appearing for the appellant why the drugs were concealed in such a lethal instrument. His Honour said of the smaller of the two mallets that it might look quite heavy to somebody who was having to pay out a debt due for heroin.

In his reasons for sentence the learned sentencing Judge said that he took into account the whole of the appellant's extensive criminal record. For practical purposes it dated from 1971. He listed the substantial number of drug related offences of which the appellant had been convicted and noted that on 18 July 1984 the appellant had been convicted of possessing an unlicensed pistol. In giving his reasons he said:-

"The mallets in which the heroin was concealed are sinister in themselves. There is no direct evidence that they were to be used by the accused to enforce payment or otherwise intimidate his drug purchasers but it is obvious that they could be used as weapons. . . . I have noted that the accused was convicted on 11 July 1984 of possessing an unlicensed pistol on 19 March 1984, just three months before this offence was committed."

Before us it was not contended that the sentence of 8 years imprisonment was beyond the proper exercise of the sentencing discretion. What was contended was that the non-parole period fixed was too great, that the fine should not have been imposed without evidence of the appellant's means and that it effectively amounted to an additional sentence of one year's imprisonment, and that the learned sentencing Judge's remarks concerning the mallets and pistol indicated a view on his part that the mallets and the unlicensed pistol referred to were for use by the appellant in what we venture to describe as the role of a "standover man".

Sentence was imposed before the judgment of the Federal Court in Paivinen v. R., (1985) 59 A.L.R. 368, was handed down. That judgment dealt with a problem which had arisen following the coming into operation of the Probation and Parole Act 1983 (N.S.W.) (the Act). When it came into operation, remissions which to that point had been applicable only to head sentences imposed on prisoners serving sentences in New South Wales were made applicable also to non-parole periods. Judges of the Supreme Court of the Australian Capital Territory took the view that it also operated in favour of prisoners sentenced by that Court who were serving their sentences in New South Wales by virtue of the Removal of Prisoners (Australian Capital Territory) Act 1968 (Cwth.).

In Paivinen's Case a Full Court of this Court (Bowen CJ and Fox J, Blackburn J dissenting) held that a sentencing authority in the Australian Capital Territory may not, in fixing a non-parole period, take into account any effective reductions to that period that may be made by virtue of the Act and the Regulations made under it. The High Court, in refusing special leave to appeal from that decision, held that the existence of the Act and Regulations is irrelevant to the fixing of non-parole periods in the Australian Capital Territory. (1985) 59 A.L.J.R. 543.

If the Act and Regulations made under it are left out of consideration, Regulation 110 of the Prison Regulations (N.S.W.) would operate to entitle the appellant in his particular circumstances to a remission of one quarter of the head sentence imposed upon him. He would thus be eligible for release, at the very latest, six years from the date of his sentence but for the fact that if he had not paid the fine he would have to serve another year's imprisonment. It is highly likely, as experience shows and as is common knowledge, that he might well have gained in that six years further remissions which would have entitled him to release even earlier.

In Regina v. R., a judgment of another Full Court of this Court (Bowen CJ, Muirhead and Toohey JJ) handed down on 13 August 1985 and as yet (so far as we know) unreported, the Court referred to accepted principle when it said:-

"The Crown accepts, in accordance with a number of authorities, that a non-parole period should provide a convicted person with an incentive to be of good behaviour so as to gain release on parole before the normal remission date."

In that case a non-parole period of nine months in relation to a head sentence of 18 months was put forward by the Crown as reasonable and the Court accepted that submission.

It is plain that his Honour intended the non-parole period to apply to the head sentence of 8 years only and the inference may readily be drawn (and we think it ought) that he had in mind the effect of the Act and considered that the appellant ought properly to serve a minimum of four and a half years before being eligible for parole.

This would accord with his Honour's views expressed in open Court. See, for example, R. v. Raspovic, an unreported decision handed down 30 May 1984.

By his amended notice of appeal, the appellant contended that the learned sentencing Judge erred in law in imposing the fine of $10,000 with provision for imprisonment in default of payment. Counsel for the appellant submitted that the imposition of the fine with that provision was against the principles of sentencing governing the imposition of monetary penalties in addition to custodial sentences. He submitted -

(a) that the head custodial sentence should be the reflection of the learned sentencing Judge's estimation of all the factors relevant to the sentence;

(b) that a fine should be imposed in limited circumstances;

(c) that there being no evidence of the appellant's ability to pay the fine, its imposition may be seen as a means of increasing his time in prison; and

(d) that the default provision may be seen as a device which would render any parole decision inoperable or impose a condition precedent to the grant of parole.

We understand the submission to mean not that the learned sentencing Judge intended the consequences referred to in paragraphs (c) and (d) but rather that they would be seen to be the result of what he had done.

An early statement of the view that a fine should not be imposed without an investigation into the offender's means appears in statutory form in s.5 (1) of the Criminal Justice Administration Act 1914 (U.K.) which required that a court of summary jurisdiction should, when fixing the amount of any fine to be imposed on an offender, take into consideration, amongst other things, the means of the offender so far as they appeared or were known to the court. The provision was effectively re-enacted in s.31(1) of the Magistrates' Courts Act 1952.

In Thomas, Principles of Sentencing, 2nd ed. (1979) at p.320 it is said that although the principle is not expressed in statute so far as the Crown Court is concerned, a fine should not normally be imposed without an investigation of the offender's means. In support of that proposition reference is made to two unreported cases in one of which it was said that a financial penalty must be related to evidence of means and in the other, of the appellant, that he might consider himself lucky that the sentencer imposed a fine for "a serious assault", but as "no inquiry was made whatsoever about the appellant's means" the fine imposed was higher than was fair.

In Kaye v. Vagg (No.2), Supreme Court, Tasmania, (1984) 11 A. Crim.R. 127, Cox J said at p.129 that he had been referred to a number of cases which he noted. He went on:-

"They establish, as Cosgrove J. says in Devlyn v. Lowe (unreported, Supreme Court, Tasmania, 23 May 1980), that 'The imposition of a fine which is beyond the offender's reasonable capacity to pay never was just or rational'."

Cox J referred also to McNamara's Case, noted in (1978) 2 Crim. L.J. 170. In that case the appellant pleaded guilty to cultivating cannabis sativa in his back yard. Police evidence was that three plants had been found. It was not disputed that the cultivation was purely for the appellant's own use. The Magistrate imposed a fine of $1,000 with six months to pay, in default six months imprisonment. The Queensland Court of Criminal Appeal (Wanstall CJ, Stable SPJ and Dunn J) held that the Magistrate erred in believing that the appellant, who had had only intermittent and casual labouring work since graduating from university the previous year, would be able to pay a fine of $1,000 within six months. The fine was accordingly reduced to $250 with six months to pay, in default one month imprisonment. The learned case note editor drew attention to the fact that in Gillard (11 March 1977), for an offence not readily distinguishable from McNamara's (except that 51 plants averaging six inches in height were found growing in pots), the same Court refused to disturb a Magistrate's sentence of 12 months imprisonment combined with a fine of $600 for possessing dried leaves from some of the plants. The note makes no reference to the appellant's capacity to pay the fine. No doubt the fact that two offences were being dealt with was largely responsible for the result.

In Flego v. Lanham (1983) 32 S.A.S.R. 361, at pp.366-7, Wells J appears to have proceeded implicitly on the basis that means of an offender are to be taken into account in fixing a fine and that an appropriate inquiry should generally be made as to those means.

In Winkler v. Cameron (1981) 33 A.L.R. 663, Supreme Court of South Australia exercising Federal Jurisdiction, Legoe J discussed, at pp.668-670, the question of an inquiry as to means when it is proposed that a fine should be imposed. He referred to a number of authorities - Young v. Geddie (1978) 22 A.L.R. 232; R. v. Lewis (1965) Crim L.R. 121; R. v. Deaga (1975), noted in Thomas, op.cit. at p.322; Zanol v. Newton (1974) 10 S.A.S.R. 199; and Reid v. Liersch (1970) 55 L.S.J.S. 525. Referring to the case last mentioned, Legoe J said:-

"In Reid v. Liersch (1970) 55 LSJS 525 at 526, Walters J said: 'If a fine is to be imposed with an alternative of imprisonment, there must be a true alternative and not an illusory one (R. v. Hall(1968) 52 CAR 735 at 738). In the ordinary case, if an offence is such as to merit a sentence of imprisonment, and the offender is without apparent means with which to pay a fine, no useful purpose will be served by sentencing him, as well as to a term of imprisonment, to a fine, in default of payment of which forthwith, he shall serve an additional term of imprisonment. In such a situation, it may well involve the application of an erroneous principle to impose, in addition to a sentence of imprisonment, a monetary penalty, well-knowing that it cannot be paid and requiring payment of it forthwith.' Indirectly his Honour was clearly stressing the need for the amount of the fine to be related to the defendant's means."

In Reardon v. Nolan (1983) 51 A.L.R. 715, a decision of this Court, Fisher J was dealing with the question whether when imprisonment is not available as a punishment for a primary offence the ability of a defendant to pay even part of a fine which may be imposed for that offence must be considered before imposing a prison term for failure to pay the fine. Taking the view that if a term of imprisonment is imposed where a defendant cannot pay any part of the fine the imprisonment could be regarded only as punishment for the primary offence, his Honour said, at p.720:-

". . . I conclude that, in circumstances where I am expressly forbidden to imprison for the primary offence, it is necessary for me to consider ability to pay before being of opinion that imprisonment will aid the enforcement of payment."

Proof of means will, no doubt, be far from easy in some cases, particularly those involving large-scale frauds. In Savundra v. The Queen (1968) 52 C.A.R. 637, for example, the Court of Appeal upheld sentences of imprisonment totalling 8 years and fines totalling !50,000 following convictions for such frauds. In default of payment of the fines the appellant was to serve an additional two years imprisonment. The appellant deposed on oath that his assets at the time of the hearing of the appeal were only just over !100. The Court of Criminal Appeal (Salmon LJ, Geoffrey Lane and Fisher JJ) said at p.646-7:-

"(Counsel for the appellant) has argued most persuasively that that part of the sentence (the fines) was wrong in principle because a receiving order has now been made against this appellant and he has deposed on oath to the fact that his assets now are only just over !100. Persuasively as (counsel) advanced the argument, this Court is unable to accept it. The judge and this Court cannot shut their eyes to the fact that when frauds are perpetrated on this scale it sometimes occurs that the criminal is conscious of the peril in which he stands of being prosecuted and takes the precaution of putting large sums of money out of the way of his creditors against the time when he comes out of prison; for example, by sending the money to a numbered account in Switzerland. Ex hypothesi there never is any evidence that this has been done. It is, however, a possibility of which sight cannot be lost. It is not in this case rendered impossible because of the admittedly very extravagant way in which this appellant used the money of which he has deprived the company.

However that may be, 50,000 pounds is a very small proportion of this appellant's plunder and this Court can see nothing wrong with the decision of the judge that if this appellant does not or cannot produce that sum, his sentence should be one of ten years, which this Court certainly would not regard as being in any way excessive. If he does produce it, he will serve two years less. Accordingly this appellant's appeal against sentence is dismissed."

It is noted in Hines, Judicial Discretion in Sentencing by Judges and Magistrates (1982), at para. 9.25, that:

". . . in Waterfield (1975) unreported February 17, C.A. . . . a fine of !9,000 was imposed, and upheld, in addition to imprisonment, with the express object of ensuring that the offender should not make money from importing indecent material for gain."

See also Lott-Carter (1978) 67 C.A.R. 404 where the Court of Appeal upheld a sentence of 12 months imprisonment with fines amounting to !2,000 with a consecutive term of 12 months in default. The trial judge had said:

". . . it seems to me abundantly clear that there is in cash or in kind available - a part at any rate of the proceeds of the offences - when you are released from the prison sentence which I regard as inevitable."

The Court of Appeal rejected the argument that there was no more than suspicion of ability to pay and, being satisfied that the appellant merited a sentence of two years imprisonment, held that she could properly have the opportunity of reducing that sentence by payment.

In R. v. Po (1974) Crim. L.R. 557, the appellant had been convicted of evading the prohibition on the importation of heroin. He was a merchant seaman who said he had been given 167 grams of heroin, with a retail value of !24,000 to !45,000, in Hong Kong and told he would be met in Liverpool by a man who would pay him for his services. He was sentenced to six years imprisonment and fined !5,000 with one year consecutive in default of payment. He had no previous convictions. He had no means of his own. The judge had said that seven years was the proper sentence but that he wanted the deterrent effect of the sentence to operate also against other future carriers nearly all of whom belonged to an organisation the funds of which were available to its members. He proposed to regard the means of the organisation as the appellant's means. The Court of Appeal (Lord Widgery CJ, Park and Forbes JJ) held that although it could be said on one view that the appellant was not prejudiced by the order as no complaint could have been made of a seven year sentence, the sentence offended against the principle that a fine should not be imposed on a person who had not the means to pay it, there being no reason to suppose that the organisation of which the appellant might or might not have been a member would pay the fine. The fine was quashed.

In R. v. Forsythe (1980) Crim. L.R. 313, the appellant had been convicted of three offences of being concerned in the importation of cannabis. The first two consignments were each of a few kilograms but the third consignment was of 152 kilograms and was estimated to be worth !200,000 at retail and !78,000 to the importer. It was accepted that half the proceeds of the enterprise was to be sent to the appellant's son, the rest being divided between the appellant and his brother. The appellant was sentenced to 10 years imprisonment and fined a total of !10,000 with a total of three years imprisonment in default and was ordered to forfeit !2,700 found in his possession as part of the proceeds of the offences. He was also ordered to pay the whole of the costs of the prosecution. His counsel, in an attempt to persuade the sentencing judge to impose a suspended sentence, had suggested that the appellant could sell his house worth about !10,000 to raise funds to pay a fine if one were imposed in conjunction with a suspended sentence. It was held that the sentences of imprisonment were excessive, a total of five years imprisonment being sufficient. Fines in addition to a substantial period of imprisonment were not appropriate, there being no evidence that the appellant had made a significant profit from the offences beyond the amount which was ordered to be forfeited.

In R. v. Jacobs (1980) Crim. L.R. 800 the appellant had pleaded guilty to various counts of having obscene articles for publication for gain. His premises were searched and large quantities of obscene material of all kinds estimated to be worth about !168,000 were found. He was sentenced to four years imprisonment and fined !5,000 with a further 12 months imprisonment in default. The fine had been imposed on the basis that he had !25,000 deposited with his supplier in Denmark but the appellant claimed that his supplier had retained the money when the obscene material was seized and destroyed. He had no funds to pay the fine and his liability to serve an additional term in default was affecting his consideration for parole or the hostel scheme. It was held that where a substantial sentence of imprisonment had been imposed it was necessary to look carefully to see whether it was necessary to add a fine. Such a course might be justified where there was clear evidence that the offender had secreted money to which he would have access on his release from prison. That not being the case, the fine was quashed.

In Cotic v. R. (1984) 12 A.Crim.R. 208, the Court of Criminal Appeal, Western Australia (Wallace, Brinsden and Kennedy JJ), took the view that a fine in addition to imprisonment is appropriate where an offender is seen to have derived ill-gotten gains from his crime. The applicant was convicted and sentenced in respect of two charges, the first that between 1 March and 10 May 1983 he cultivated cannabis with intent to sell or supply it to another and the second that on 10 May he had in his possession a quantity of cannabis with intent to sell or supply it to another. In respect of that cultivation and possession he admitted the likelihood of receiving (meaning, no doubt, that he would have received) something like $30,000. He had made two earlier plantings of cannabis. The first was in February 1982. From the proceeds of sale of its harvest he received over $9,000. The second was in November 1982. It was apparently a failure because persons unknown took the benefit of it. There was not the slightest doubt that he was engaged in a large and profitable commercial operation. The Court said, at pp.210-211:-

"In respect of the fines and the terms of imprisonment to be served if the fines are not paid the applicant has made out a case for relief in respect of one of the fines. In Loughnan (unreported, Court of Criminal Appeal, (Western) Australia, 23 June 1983) Wickham J who presided in the Criminal Court hearing, said, without the intention of laying down any principle, he thought a fine in addition to a term of imprisonment would only be imposed when it is necessary to deprive the offender of ill-gotten gains. The fine imposed in relation to the offence of cultivating cannabis cannot be said to deprive the applicant of ill-gotten gains for he had received no financial benefit from that cultivation. On the other hand he had received benefit from the cultivation in February 1982 and it is appropriate to have fined him in that regard. In our view in this case the imposition of one fine of $5,000 is sufficient."

The cases referred to establish, in our opinion, that a sentencing court may properly impose a fine together with a substantial sentence of imprisonment to deprive an offender of his ill-gotten gains and this may be done where the court has sound reason to believe that ill-gotten gains have been secreted. They also establish that a sentencing court may impose a substantial term of imprisonment and a fine with a default period which, when added to the term of imprisonment, totals what would have been a proper term of imprisonment for the offence in any event. That fine, too, may be imposed, in particular, to deprive the offender of his ill-gotten gains. Whatever the circumstances this type of sentence should be used most cautiously because, generally speaking, it may be seen as offering an offender a chance to buy his way out of part of a just prison sentence using his ill-gotten gains for that purpose. The authorities indicate that the two approaches march somewhat uneasily together. The cases also establish - and this is the important point in this appeal - that it is unusual and generally wrong, where an offender has no means, to sentence him to a lengthy term of immediate imprisonment and to impose on him a fine with imprisonment in default to commence at the expiration of the term of imprisonment fixed.

We think some relevant considerations are correctly and succintly stated in Hines, op.cit. at paras. 9.24 and 9.25.

"An offender should not be fined a sum which he has no means of paying . . . , and that principle makes it wrong to impose such a fine on the footing that some other person will pay. . . . The (Court of Criminal Appeal) in Lewis ((1965) Crim. L.R. 121) made it clear, however, that 'the court should not be misled into thinking that present incapacity to pay is conclusive. There may be many cases where a man at the moment may only be able to reveal overdrafts and debts, whereas somewhere at his beck and call are to be found resources with which he can meet the penalty'; moreover, future earning capacity is obviously relevant, provided that regard is had to current local work prospects.

When a court is considering the possibility of imposing a fine in addition to an immediate prison sentence of appreciable length, the question of means is particularly relevant, because the offender will be deprived for a substantial time of the ability to earn income, will be faced with the problems involved in re-establishing himself in society on his release, and may in practice simply undergo a longer period of custody for want of means to pay. Moreover, if the substantial punishment is imprisonment, it would seem wrong to add a fine save on some specific and logically justifiable ground. In general, the principle upon which such a course has been adopted has been that of depriving an offender of benefits received by him from his crime, so far as his capacity to pay will allow."

The factual material before the learned sentencing Judge did not indicate that the appellant had means to pay the fine of $10,000. He had said that he had paid $5,000 on account of the heroin of which he was found in possession but that a further $5,000 remained owing. He gave an explanation which was not challenged for his possession of the sum of $3,850. The learned sentencing Judge may well have been suspicious concerning that account but he made no finding about it. The appellant's explanation of how he had come to get $5,000 from the sale of drugs was inherently probable and it must be taken into account that he himself was an addict. He lost the heroin of which he was found in possession.

We take into account the fact that not everything which a sentencing judge takes into consideration is necessarily stated in his reasons for sentence although it may be reflected in the sentence which he imposes. Achetraritei v. R. (1984) 53 A.L.R. 85 at pp.90-91. But in this case it seems clear that on the critical question of means he made no finding and there was no evidence that the appellant was in possession of ill-gotten gains.

Accordingly, we consider that the fine ought to be quashed.

The appellant contended that the learned sentencing Judge either took into account or appeared to take into account as facts that the mallets in which the heroin was secreted might be used by the appellant for other nefarious purposes as, too, might the pistol for the unlawful possession of which he had been convicted. Certainly, the reference by his Honour to the mallets and the pistol in that connection gives rise to the impression that he did take those possible purposes into account.

We think that even the impression is enough to require a reduction of some kind in the sentence imposed on the appellant for the appellant was neither charged with nor convicted of possessing an offensive weapon and the use to which the mallets might be put was never an issue before the Court. Proper effect may be given to our view by a reduction in the sentence of imprisonment with a proportionate reduction in the length of the non-parole period which the learned sentencing Judge, in our opinion, intended to have effect.

In the result we think that the appeal should be allowed to some extent, that the sentence of imprisonment for eight years should be reduced to a sentence of seven and a half years with a non-parole period of four years and three months and that the fine of $10,000 should be quashed.