Houssein Saoud v The Queen
[2018] VSCA 242
•17 August 2018
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCR 2018 0112
| HOUSSEIN SAOUD | Applicant |
| v | |
| THE QUEEN | Respondent |
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| JUDGE: | NIALL JA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 15 August 2018 |
| DATE OF JUDGMENT: | 17 August 2018 |
| MEDIUM NEUTRAL CITATION: | [2018] VSCA 242 |
| JUDGMENT APPEALED FROM: | DPP (Cth) v Saoud; DPP (Cth) v Fernandez (Unreported, County Court of Victoria, Judge Hampel, 17 May 2018) |
APPLICATION FOR LEAVE TO APPEAL AGAINST SENTENCE DETERMINED BY A SINGLE JUDGE PURSUANT TO S 315 OF THE CRIMINAL PROCEDURE ACT 2009
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CRIMINAL LAW – Leave to appeal against sentence – Jointly dishonestly causing a loss to the Commonwealth contrary to ss 11.2A(1) and 135.1(5) of the Criminal Code Act 1995 (Cth) – Sentence of 3 years’ imprisonment with recognisance release order after serving 2 years and 3 months – Whether denial of procedural fairness – Whether sentence manifestly excessive – Whether parity principle infringed – Leave granted in part.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr T Kassimatis QC | Melasecca, Kelly and Zayler |
| For the Respondent | Mr R T Barry | Ms A Pavleka, Solicitor for Public Prosecutions (Cth) |
NIALL JA:
On 17 May 2018, the applicant was sentenced by a judge of the County Court as follows:
Charge Offence Maximum penalty Sentence
1 Jointly dishonestly causing a loss to a Commonwealth entity [Criminal Code Act 1995 (Cth ss 11.2A(1) and 135.1(5))] 5y 3y Total Effective Sentence: 3y. Release after serving 2y 3m upon giving security by recognisance of $5,000 to be of good behaviour for a period of 9m. Pre-sentence Detention Declared: 28 days
Another man involved in the same criminal enterprise, Carlos Fernandez, was sentenced by the judge as follows:
Charge Offence Maximum penalty Sentence
2 Jointly dishonestly causing a loss to a Commonwealth entity [Criminal Code Act 1995 (Cth) ss 11.2A(1) and 135.1(5)] 5y 3y Total Effective Sentence: 3y. Release after serving 2y 3m upon giving security by recognisance of $5,000 to be of good behaviour for a period of 9m. Pre-sentence Detention Declared: 28 days
The applicant has applied to this Court for leave to appeal against his sentence.
The offending
Before turning to consider the judge’s reasons for sentence and the applicant’s proposed grounds of appeal, it is necessary to say something of the offending.
On 3 May 2014, following a period of surveillance, investigators from the Australian Taxation Office executed search warrants at two farms, a factory, and the garage of a house in Tarneit. There were signs that a tobacco crop had recently been harvested at the first farm. At the other farm, investigators found three tobacco drying kilns containing 4,227.5 kg of tobacco. The excise duty payable on that tobacco was $2,147,612.27.
At the factory, investigators found 2,222.7 kg of dried and cut tobacco, with an excise value of $1,129,153.93. A number of boxes of cut tobacco, with an excise value of $1,314,318.39, were found in the garage.
The applicant was the lessee of the two farms and, at the time the search warrants were executed, was living at the farm where the kilns were located. The applicant’s brother-in-law and cousin, Lebanon Kamarelddin, frequently travelled between the two farms and would attend at the factory as well. The applicant and Kamarelddin were linked to the transportation of kilns to the first farm and another property.
Fernandez was the lessee of the factory and would attend there on occasion, although not as frequently as Kamarelddin. The owner of the house in Tarneit provided investigators with a handwritten lease agreement for the garage in favour of Fernandez.
The applicant, Fernandez and Kamarelddin were each charged with dishonestly causing loss to a Commonwealth entity. The applicant and Kamarelddin were charged in respect of the growing, harvesting and drying operation that took place at the two farms. Kamarelddin and Fernandez were charged in respect of the processing, storage and distribution operation at the factory. A further charge was brought against Fernandez in respect of the tobacco stored in the garage.
All three men denied any knowledge of or involvement in the operations. The applicant told investigators that he was a market farmer. He admitted installing the drying equipment in the kilns, but said other (unnamed) people had used the kilns to dry what he believed to be herbal tobacco. Kamarelddin admitted to supplying the kilns, but claimed that he was unaware of what crop was being grown and dried in the kilns. Unlike the applicant and Kamarelddin, Fernandez did not participate in a recorded interview with investigators.
Following a 12 day trial before a jury, the applicant and Kamarelddin were convicted in respect of the operation at the farms, and Kamarelddin and Fernandez were convicted in respect of the operation at the factory. Fernandez was acquitted of the charge relating to the storage of tobacco in the garage.
Reasons for sentence
The applicant and Fernandez were sentenced together. Although it was intended that all three men would be sentenced at the same time, in the event, Kamarelddin was sentenced at a later date.[1]
[1]In its written case, the respondent says that Kamarelddin was sentenced to 3 years’ imprisonment on both charges, with the sentence on the second charge to begin 3 months after the sentence on the first charge. Kamarelddin’s total effective sentence is therefore 3 years and 3 months’ imprisonment.
The judge described the offending as a sophisticated enterprise carried out over a period of time involving the investment of considerable sums of time, money and manpower.[2]
[2]DPP v Saoud; DPP v Fernandez (Unreported, County Court of Victoria, Judge Hampel, 17 May 2018) [28] (‘Reasons’).
The judge identified denunciation, general deterrence and specific deterrence as key sentencing objectives. Her Honour observed that the offending was no less serious because it was the Commissioner of Taxation who suffered loss rather than an individual.[3] In that regard, her Honour referred to recent budget papers which refer to the cost to the revenue associated with illegal tobacco.[4] The judge observed that the gravamen of the offence was cheating the revenue, and that was so regardless of what view one might have about the licensing and marketing of tobacco and of the government raising revenue on tobacco products.[5]
[3]Reasons [38].
[4]Reasons [39].
[5]Reasons [40].
The judge then turned to the applicant and Fernandez’s personal circumstances. She observed that both men were adults who made ‘conscious choices to engage in wholesale criminal activity’ in the expectation of gain.[6]
[6]Reasons [44].
The judge noted that the applicant had been born in Lebanon and emigrated to Australia with his wife in 2003. He had been unable to find employment commensurate with his level of training on account of his difficulties with written English.[7] The applicant’s older son is profoundly deaf and has been diagnosed with autism, which the judge accepted had resulted in family hardship.[8]
[7]Reasons [45], [47].
[8]Reasons [46], [54].
The judge recorded that the applicant’s wife gave evidence on the plea.[9] It is not necessary to rehearse that evidence in full. It suffices to note that the applicant’s wife gave evidence that, because of the extent of the child’s disorder, he needs to be supervised and managed. She said that she and the applicant were able to communicate with their son by sign language (Auslan) and words and that their son needed his father around.[10]
[9]Reasons [51].
[10]Reasons [52].
However, the judge said she was unable, on the evidence, to make findings about the extent of the applicant’s involvement with his children and therefore the degree of hardship which his wife would suffer on account of his imprisonment.[11]
[11]Reasons [54].
In relation to the applicant’s criminal history, the judge noted that he had been fined (without conviction) in the Magistrates’ Court in 2011 for trafficking and possessing cannabis.[12]
[12]Reasons [55].
The judge then turned to Fernandez’s personal circumstances. She noted that he had not been in paid employment for most of his life on account of health problems. However, in recent years, he had been involved in kickboxing and had participated in exhibition events raising funds for orphans in Syria and Turkey.[13]
[13]Reasons [60].
The judge observed that Fernandez had a significant prior conviction for possession of tobacco with an excise value of $537,467.25. He had been sentenced to six months’ imprisonment, to be released immediately on his recognisance to be of good behaviour for two years.[14] Fernandez had also been convicted of two offences since being charged in relation to his part in the enterprise. Relevantly, in February 2015, he was sentenced to six months’ imprisonment for money laundering, with immediate release on his recognisance to be of good behaviour for two years. He was also fined $15,000 for failing to report the transfer of currency in excess of $10,000 out of Australia.[15]
[14]Reasons [65].
[15]Reasons [66]–[67].
The judge observed that Fernandez’s prior conviction had not deterred him from engaging in like offending. This, the judge said, tempered the weight to be given to his prospects for rehabilitation and also meant that specific deterrence assumed particular significance as a factor in sentencing.[16]
[16]Reasons [66].
The judge concluded her sentencing remarks by noting that neither the applicant nor Fernandez had the benefit of a guilty plea or any evidence of remorse.[17] She observed that the offending was ‘at the high end of the range of seriousness’ on account of the ongoing, sophisticated nature of the criminal enterprise and the quantum of loss occasioned to the Commonwealth.[18] She sentenced the applicant and Fernandez as set out above.
[17]Reasons [70].
[18]Reasons [71]–[72], [74].
After the judge imposed the sentences, it came to her attention that certain documents had been filed on behalf of the applicant shortly before sentencing.[19] Among those documents were testimonials from various acquaintances of the applicant and a letter from the applicant’s wife supplementing the evidence she gave on the plea and referring to her circumstances (and those of her older son) since the applicant had been in custody. Her Honour noted that the testimonials had not led her to form a more favourable view of the applicant’s character or prospects for rehabilitation than that she had expressed earlier in her reasons for sentence.[20] In relation to the letter from the applicant’s wife, her Honour said that the hardship occasioned by the applicant’s imprisonment was ‘no more than what would be expected, and what I have already taken into account.’[21]
[19]Reasons [165]–[172].
[20]Reasons [184]–[185].
[21]Reasons [171], [183].
Grounds of appeal
The applicant’s notice of application for leave to appeal contains the following proposed grounds of appeal:
Ground 1:
The learned judge erred in the application of the principle of parity. In particular, it was not reasonably open to her Honour to impose the same sentence on the applicant and his co-offender Fernandez having regard to:
(a) Fernandez’s relevant prior and subsequent offending;
(b)Her Honour’s findings in relation to Fernandez concerning specific deterrence and rehabilitation; and
(c)The differences in the applicant’s personal circumstances compared to those of Fernandez.
Ground 2:
The sentence imposed is manifestly excessive having regard to:
(a) The maximum penalty of 5 years imprisonment; and
(b) The applicant’s limited criminal history.
At the hearing of the application for leave to appeal, counsel for the applicant sought, and was granted, leave to add a further ground alleging that the sentencing discretion miscarried as a result of the judge making the following findings in circumstances that constituted a denial of procedural fairness:
(a) ‘budget papers ma[d]e clear [that] the cost to the revenue of illegal tobacco by way of excise foregone is considerable’; and
(b) the applicant knew the health risks associated with tobacco products and of its relationship to the government raising revenue on such products.
Consideration
Denial of procedural fairness
It is convenient to deal first with the proposed ground of denial of procedural fairness.
It is desirable to set out the two relevant paragraphs of the reasons in full:
39.Indeed, as the recent budget papers make clear, the cost to the revenue of illegal tobacco by way of excise foregone is considerable. It is clear that general deterrence is an important sentencing factor.
40.Regardless of the view one might have about the licensing and marketing of tobacco, given what is known about its health risks, and of governments raising revenue on such a product, the gravamen of this offending is cheating the revenue, and it is for that that you must be sentenced.
The applicant submitted that the judge made findings as to the prevalence of the offence based on ‘the recent budget papers’ in circumstances where the applicant was not given any opportunity to address that matter. The respondent submitted that, read in the context of the reasons more generally, her Honour was simply making a ‘throwaway remark’. The respondent further submitted that the issue of general deterrence being an important sentencing factor and the gravamen of the offence being loss to the revenue were clearly live issues on the plea, being issues that were the subject of submissions on behalf of the applicant. The respondent sought to further put the judge’s remarks in context by noting that the plea occurred in April and that the applicant was sentenced on 17 May 2018 with the Federal budget having been delivered in the meantime.
I am persuaded that it is reasonably arguable that there was a denial of procedural fairness in circumstances where the judge relied on a matter that came to her attention between the plea and sentence and that it was a matter that the judge regarded as going to the prevalence of the offence and as being sufficiently important as to justify its inclusion in the reasons for sentence. Although the reference to budget papers is very general, it is arguable that the judge was directing herself to the question of prevalence in circumstances where the applicant had not been given an opportunity to address that matter directly.
The applicant submitted that there would be a vitiating denial of procedural fairness unless the Court considered that the alleged denial of procedural fairness could not possibly have made a difference to the sentence. As I am persuaded to grant leave on this ground, I do not propose, on the present application, to enter into that question or the question of whether a different sentence ought be imposed even if this ground is made out. There is a sufficient basis demonstrated to justify the grant of leave to appeal.
Manifest excess
As this Court has repeatedly emphasised, the ground of manifest excess is difficult to make good. An applicant seeking to make out this ground must demonstrate that the sentence imposed is ‘so far outside the range of a reasonable discretionary judgment as to itself bespeak error.’[22]
[22]Hanks v The Queen [2011] VSCA 7 [22] (Bongiorno JA, with whom Redlich JA agreed). See also Clarkson v The Queen (2011) 32 VR 361, 384 [89].
The applicant submits that the sentence of three years’ imprisonment is ‘unusual and excessive’, particularly in light of his limited criminal history and favourable prospects for rehabilitation.
As a preliminary matter, I note that the judge did not find that the applicant has favourable prospects for rehabilitation, although her Honour did observe that his prospects for rehabilitation were better than those of Kamarelddin (who has a more extensive criminal history).[23] She noted that the applicant did not have the benefit of a guilty plea or evidence of remorse, which might bode well for his prospects for rehabilitation.[24] No challenge is made to her Honour’s findings in this regard.
[23]Reasons [55]–[56].
[24]Reasons [70].
As the judge correctly observed, the offence with which the applicant was charged is a serious crime notwithstanding that the loss is occasioned to the state rather than an individual. In imposing a sentence, the judge was required to have regard not only to the ‘dollar value concept of the loss’ but also to considerations of general deterrence and denunciation, which have particular significance in sentencing for white collar crime.[25]
[25]DPP (Cth) v Gregory (2011) 34 VR 1, 15–16 [53]–[55].
The offence of jointly dishonestly causing a loss to a Commonwealth entity carries with it a maximum penalty of five years’ imprisonment. Inevitably, given the wide range of potential conduct that might be caught within the section and the relatively low maximum penalty, there is the possibility of a degree of compression in the range of sentences. That is a matter that must be factored in to any assessment of a challenge on the basis of manifest excess.
The respondent was unable to point to any authorities in which this offence provision had been relied on in relation to excise duty on tobacco. I was informed, from the Bar table, that offences relating to the non-payment of excise duty on tobacco have been more commonly charged as offences under the Excise Act 1901 (Cth).
The judge found that the applicant, together with Fernandez and Kamarelddin, was involved in an ongoing, sophisticated criminal enterprise which occasioned a substantial loss to the revenue. The applicant was convicted on his trial in respect of the growing, harvesting and drying operation at the farms, which involved 4,227.5 kg of tobacco with an excise value of $2,147,612.27.
Having regard to the circumstances of the offending, and the findings made by the judge on mitigation, it was open to the judge to find that it was at the high end of the range of seriousness for the offence. I am not persuaded that it is reasonably arguable that a sentence of three years’ imprisonment was wholly outside the available range.
I would refuse leave to appeal in respect of this ground.
Parity
By the parity ground, it is alleged that the judge erred in failing to impose different sentences on the applicant and Fernandez. The applicant relies on Fernandez’s more significant criminal history and findings made by the judge regarding his prospects for rehabilitation and the significance of specific deterrence in respect of him. It is also said that the judge failed to give weight to the hardship suffered by the applicant’s family on account of his son’s disabilities.
The judge’s reasons disclose that she gave careful consideration to the personal circumstances of both the applicant and Fernandez. Her Honour concluded that there were few mitigating features in either man’s personal circumstances.[26]
[26]Reasons [42].
In relation to the applicant, the judge accepted that his son’s disabilities had occasioned hardship to the family, but said there was insufficient evidence before her to make a finding as to the impact that imprisonment would have on the applicant’s wife.[27] The applicant has not articulated a cogent challenge to that conclusion.
[27]Reasons [54].
Although the applicant has a more limited criminal history than Fernandez, it is significant that his part in the operation was associated with a loss to the revenue of $2,147,612.27. By contrast, the excise value of the tobacco stored at the factory (in respect of which Fernandez was convicted) was $1,129,153.93.
Having regard to all these circumstances, it was open to the judge not to differentiate between the applicant and Fernandez, and her failure to do so does not give rise to a justifiable sense of grievance. This proposed ground of appeal is not reasonably arguable, and I would refuse leave in respect of it.
Conclusion
I would grant the applicant leave to appeal on the proposed ground relating to denial of procedural fairness. I would otherwise refuse leave to appeal.
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