Kapkidis v The Queen
[2013] VSCA 35
•1 March 2013
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCR 2012 0086
| VASSILIOS KAPKIDIS | Applicant |
| v | |
| THE QUEEN | Respondent |
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| JUDGES | MAXWELL P and REDLICH JA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 10 September 2012 |
| DATE OF JUDGMENT | 1 March 2013 |
| MEDIUM NEUTRAL CITATION | [2013] VSCA 35 (First Revision, 1 March 2013) |
| JUDGMENT APPEALED FROM | DPP v Kapkidis (Unreported, County Court of Victoria, Judge McInerney, 23 March 2012) |
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CRIMINAL LAW – Appeal – Sentence – Trafficking in a drug of dependence in commercial quantity (2 indictments, 3 charges), perjury and attempt to pervert the course of justice – Total effective sentence of 7 years and 6 months’ imprisonment with non-parole period of 5 years – Sentencing judge erred in sentencing applicant as serious drug offender on second indictment – Whether different sentence should be imposed – Record to be corrected – Whether judge bound by understanding reached between parties about concurrency – Sentencing judge not constrained – Whether judge failed to have regard to low purity of drugs trafficked – Levels of purity not minuscule or extraordinarily low – Whether individual sentences and total effective sentence manifestly excessive – Applicant’s role in offending – One offence committed whilst on bail – Fresh evidence – Restraining order in respect of applicant’s property – Automatic forfeiture – Relevance to sentence – Whether property lawfully acquired – Whether consent to forfeiture evidence of remorse – Application for leave to appeal refused save for fresh evidence ground – Appeal dismissed – Criminal Procedure Act 2009 (Vic) s 281(1); Confiscation Act 1997 (Vic) ss 16, 22; Sentencing Act 1991 (Vic) s 5(2A)(ab), (e), s 5(2B).
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr M J Croucher SC with | Melasecca, Kelly & Zayler |
| For the Crown | Mr P B Kidd SC | Mr C Hyland, Solicitor for Public Prosecutions |
MAXWELL P
REDLICH JA:
In December 2008, Victoria Police commenced ‘Operation Smutch’, an investigation into the applicant and his syndicate. Between 9 December 2008 and 30 April 2009, a covert operative, ‘George’, ordered methylamphetamine from the applicant on 11 occasions. Ten of the orders made by George and another transaction between the applicant and a Mr Singh constituted Charge 1 of the first indictment. The deliveries of these 11 orders were made by the applicant and his co-offender, Evangelos Noussis. A total of 1724.3 grams of methylamphetamine was sold to George. The 11th transaction between the applicant and George, in which George purchased 501.8 grams of methylamphetamine, constitutes Charge 2 of the first indictment. These transactions are outlined below.
On 3 May 2009 the applicant took his black Mercedes 4WD to the Lamplighter Hotel in Chadstone, where he checked in with two women. He was the victim of an aggravated burglary in which his vehicle, his mobile phone and a large amount of methylamphetamine were stolen. He made a statement to police, parts of which were deliberately false, in which he claimed that the Mercedes was owned by another male (first indictment, Charge 3). Despite the applicant being the true owner of the Mercedes, it was registered in the name of his friend, MS. After the applicant’s arrest, he asked his mother to visit MS in prison to encourage him to lie and tell the police that he, MS, was the true owner of the car (first indictment, Charge 4).
Whilst the applicant was on bail for the drug trafficking charges arising from Operation Smutch, the police became aware from intercepted telephone calls (as part of ‘Operation Ratten’) that he had resumed trafficking activities with one Robert Ayres. Between 18 March and 20 June 2010, telephone intercepts revealed a number of transactions between the applicant and Ayres. On two occasions it could be established that the applicant supplied methylamphetamine to his associate and it was accepted on appeal that the amount that could be identified as trafficked was 8 grams (second indictment, Charge 1). Importantly, this conduct occurred while the applicant was on bail for the offences on the previous indictment.
Following the applicant’s plea of guilty to the Charges on the first and second indictments, the applicant was sentenced for these offences as follows:
SMUTCH Indictment
Offence
Max
Sentence
Cumul.
Overall Cumul.
Charge 1
Trafficking in a drug of dependence – commercial quantity – methylamphetamine
(s 71AA Drugs Poisons and Controlled Substances Act 1981 – (‘DPCS Act’))
25
5 y
Base
Charge 2
Trafficking in a drug of dependence – commercial quantity – methylamphetamine
(s 71AA DPCS Act)
25
3 y
1 y
Charge 3
Perjury (common law)
15
6 m
—
Charge 4
Attempt to pervert the course of justice (common law)
25
9 m
6 m
6 y 6 m
RATTEN Indictment
Offence
Max
Sentence
Cumul.
Overall Cumul.
Charge 1
Trafficking in a drug of dependence – commercial quantity – methylamphetamine (s 71AC DPCS Act)
15
2 y 6 m
1 y
1 y
Total Effective Sentence: 7 y 6 m
Non-Parole Period: 5 y
(The precise trafficking transactions on Charges 1 and 2 of the first indictment are listed in the Schedule at the end of these reasons.)
The applicant sought leave to appeal on five grounds, proposed Ground 4 having been abandoned. The application was conducted on the basis that we would proceed to hear the appeal in the event that we concluded that leave to appeal should be granted on any ground.
Ground 1: the sentencing judge erred in sentencing the applicant as a serious drug offender on the second indictment
The sentencing judge sentenced the applicant as a serious drug offender on Charge 2 of the first indictment (contravention of s 71AA of the DPCS Act). His Honour also sentenced the applicant as a serious drug offender on Charge 1 of the second indictment (contravention of s 71AC of the DPCS Act).[1]
[1]DPP v Kapkidis (Unreported, County Court of Victoria, Judge McInerney, 23 March 2012), (‘Reasons’), [37], [74].
For the purposes of Part 2A of the Sentencing Act 1991 (Vic) (the ‘Act’), ‘serious drug offender’ is defined in s 6B as follows:
serious drug offender means an offender (other than a young offender) who has been convicted of a drug offence for which he or she has been sentenced to a term of imprisonment or detention in a youth justice centre.
A ‘drug offence’ refers to an offence to which cl 4 of sch 1 of the Act applies.[2] Charge 1 on the second indictment alleged trafficking ‘simpliciter’ — that is, in a traffickable quantity (of methylamphetamine) — in contravention of s 71AC of the DPCS Act. Section 71AC is not an offence to which cl 4 of sch 1 of the Act applies.
[2] Sentencing Act 1991 (Vic), s 6B(1).
Under s 6D of the Act, a sentencing judge, in determining the length of the sentence for a serious drug offence, ‘must regard the protection of the community from the offender as the principal purpose for which the sentence is imposed’ and ‘may, in order to achieve that purpose, impose a sentence longer than that which is proportionate to the gravity of the offence considered in the light of its objective circumstances’.
The respondent concedes that the sentencing judge incorrectly sentenced the applicant as a serious drug offender. The respondent nevertheless submits that a different sentence should not be imposed, as the sentencing judge explicitly stated that he was not imposing a sentence which was disproportionate to the criminality with respect to Charge 1 on the second indictment.[3]
[3]Reasons, [86].
Notwithstanding that the sentencing judge did not seek to impose a disproportionate sentence, the applicant contends that to sentence him as a serious drug offender was a material error. It must be assumed, he argues, that the sentencing judge gave effect to the directive that protection of the community be the principal purpose for which the sentence was to be imposed pursuant to s 6D(a) of the Act. That was the conclusion reached by this Court in R v Cardona.[4] However, the finding of such error does not necessarily require that the appeal be allowed and the applicant be re-sentenced. In R v Arnautovic,[5] notwithstanding that the applicant had been sentenced as a serious drug offender and a sentence disproportionate to the objective gravity of the offence imposed, the majority of the Court, comprising Brooking and Charles JJA, did not consider that a less severe sentence should be imposed. The application for leave to appeal was refused save to the extent that it was necessary to correct the record that the prisoner had been sentenced as a serious offender.
[4][2011] VSCA 58, [9].
[5](2001) 121 A Crim R 412.
The applicant has submitted that we should conclude that a different and less severe sentence should be imposed. He relies upon the small amount that was trafficked and his genuine remorse for his conduct. In particular, he relies upon the events which the sentencing judge was satisfied led to the further offending, the subject of the second indictment. He had been bailed in relation to the first and second charges on the first indictment on 22 December 2009. On 1 February 2010, he arranged a blind date between Elsa Corp, a friend of his girlfriend, and David Clifford whom he had met in prison. Later that day, Clifford murdered Ms Corp in horrific circumstances. On 9 February 2010 the applicant, who was then in the course of a rehabilitative drug programme, returned his first positive drug screen result since being bailed. He subsequently returned a number of positive results. The applicant’s rehabilitation consultant, Joseph Lamberti, reported these positive drug screens to the police, as required by the applicant’s bail conditions. Thereafter he was recorded in telephone intercepts which gave rise to the charge on the second indictment.
We should not grant leave unless the contention that a less severe sentence should be imposed on the charge on the second indictment has some prospect of success.[6] The sentencing judge in careful and detailed reasons for sentence described the applicant as a ‘persistent and active trafficker who was a high-end supplier to street vendors who was servicing the drugs at a wholesale level.’ That characterisation of the applicant’s conduct was challenged on this appeal. We shall return to that issue when considering other grounds of appeal. On Charge 1 on the second indictment his Honour noted that the trafficking was over a considerable period and was aggravated by the fact that he was then on bail on two charges of trafficking a commercial quantity of a drug of dependence.
[6]Criminal Procedure Act 2009 (Vic) s 280(2).
The record must be corrected but we would not otherwise grant leave to appeal on this ground, as we do not consider it reasonably arguable that a different and less severe sentence should be imposed.
Ground 2: the sentencing judge erred in failing to have regard to the Crown concession that the sentences imposed on Charges 3 and 4 of the first indictment should be served concurrently with the base sentence
Six months of the sentence imposed on Charge 4 of the first indictment was ordered to be served cumulatively upon the base sentence. According to the applicant, during settlement discussions regarding these matters the Crown conceded that the sentences imposed on Charges 3 and 4 (perjury and obstruction of justice) should be served concurrently with the sentences imposed on the trafficking charges.
On the plea, the applicant’s counsel made reference to the understanding which had been reached between the parties, and which was referred to in a written outline of submission handed to the sentencing judge. In the course of submitting that Charges 3 and 4 should be made concurrent with Charges 1 and 2, it was twice mentioned that the Crown conceded that such orders for concurrency should be made. Although the prosecutor did not specifically refer to this concession, he did not take issue with defence counsel’s submissions and confined his argument to a contention that there should be some cumulation of the sentences on Charges 1 and 2.
The applicant submits that the sentencing judge erred by failing to take the agreement into account.
It was submitted by the applicant that there had been an understanding or agreement reached between the prosecution and defence that the Crown would not seek to challenge the submission that was to be made by the applicant during the plea in mitigation, that Charges 3 and 4 should be served concurrently with the base sentence on either Charge 1 or Charge 2 of the first indictment. Although the Crown asserted in its written submission on appeal that there was some uncertainty as to what the agreement as to concurrency referred to, we accept the submission of counsel on the appeal (who had also appeared on the plea in mitigation) that the understanding was that there should be concurrency between Charges 3 and 4 and the base charge.
The sentencing judge ordered that six months of Charge 4 should be served cumulatively on the sentence imposed on Charge 1. He did not in his sentencing remarks make any reference to the applicant’s submission that the sentences on Charges 3 and 4 should be concurrent with the sentences on Charges 1 or 2. However, no suggestion was or could have been made on the appeal that his Honour had failed to take account of the applicant’s submission, nor could it be said that he had overlooked the fact that the Crown supported that contention.
In any event we are not persuaded that there was any error by the sentencing judge. In deciding the sentence, the judge must apply the relevant law and sentencing principles to the facts that he finds. The submissions of counsel may assist the sentencing judge but any understanding between counsel as to the submissions of law that they will make do not in any sense bind the sentencing judge. As the High Court stated in G A S v The Queen,[7] the judge’s responsibility to find and apply the law is not circumscribed by the conduct of counsel. The sentences to be imposed and any orders for cumulation or concurrency remain the exclusive responsibility of the sentencing judge. Any agreement between the parties as to the submissions that should be made on sentence does not serve to elevate the submissions to any higher status than submissions.[8] The sentencing judge was not under an obligation to reiterate every submission that was advanced during the plea in mitigation. It was entirely within a sound exercise of the sentencing discretion to have made the impugned order for cumulation. This ground cannot support a grant of leave.
Ground 3: the sentencing judge erred in failing to have regard to the low purity of the drugs trafficked
[7](2004) 217 CLR 198, 211 [30]–[31].
[8]See Talbot v The Queen [2012] VSCA 118, [55]–[57].
The applicant submits that the low purity of the drugs supplied was a relevant consideration that should have been taken into account by the sentencing judge. The applicant relied upon Trajkovski v The Queen[9] and Nguyen v The Queen,[10] cases in which the court has held that the low purity of the drug should be regarded as a significant factor in assessing the gravity of the offending. The respondent submits that those authorities are distinguishable from the present case.
[9][2011] VSCA 170 (‘Trajkovski’).
[10][2011] VSCA 139 (‘Nguyen’).
In R v Pidoto,[11] it was stated in the joint judgment of Maxwell P, Buchanan, Vincent and Eames JJA that in sentencing an offender under the quantity-based trafficking provisions a judge ought not have regard to the relative harmfulness of the drug in question:
But the most important conclusion to which this analysis leads is that the harmfulness of the drug is an irrelevant consideration. On the proper construction of the quantity-based trafficking provisions (s 71, s 71AA and s 71AC),[12] there is no scope for the court, in sentencing an offender for an offence created by one of those sections, to consider the (relative) harmfulness of the drug in question. That is, Parliament did not intend judges to undertake that task.
Ultimately, the question to be considered is not whether trafficking in one drug is to be viewed more seriously than trafficking in another, but what sentence should be imposed for the particular trafficking, bearing in mind the maximum penalty that may be imposed for dealing in the material involved. Of course, not all examples of trafficking are equally serious and it is obvious that discrimination between offences and offenders is required, based upon a wide range of considerations, in order to ensure that the sentences handed down in individual cases are appropriate in the particular circumstances relating to the offences and offenders concerned.
But in the fixing of the sentence for the particular offence of trafficking, there is no place — as the law stands — for any consideration of the (relative) harmfulness of the drug involved.[13]
[11](2006) 14 VR 269 (‘Pidoto’).
[12]Section 71AC is quantity-based where the drug in question is a drug for which a commercial quantity is specified and to which s 71AA therefore applies: see [48] below.
[13]Pidoto (2006) 14 VR 269, 278 [42], 283 [62]–[63].
In Trajkovski, the appellant, among other charges, was convicted of trafficking in a large commercial quantity of methylamphetamine. He was found to be in possession of a total of 3.924 kilograms of methylamphetamine mix. Weinberg JA (with whom Ashley JA and Hargrave AJA agreed) found that the exceptionally low purity of the mix had to be taken into account in sentencing the appellant:
It should be noted that the actual amount of methylamphetamine contained in the mix was minuscule. The level of purity was approximately 0.05 per cent. That meant that he was in possession of only approximately 1.96 grams of pure methylamphetamine.
…
There is no reason, in principle, why the fact that the mixture contains what is plainly only the most miniscule quantity of a drug of dependence, and is therefore unlikely to produce the deleterious effects normally associated with a much larger amount of that particular drug, albeit in a mixture, should not be regarded as a significant factor to be taken into account in assessing the gravity of the offending.
This very point was considered by the Western Australian Court of Criminal Appeal in R v Mahasay.[14] There it was held that the low level of purity of the methylamphetamine in question was a factor of some importance, at least in a case involving trafficking in that drug. In the case of couriers, the purity might be less relevant.
The matter arose again, before this Court, in R v Minh Thanh Do.[15]There, the Court found it unnecessary to determine whether the low level of purity of a drug as a mitigating factor had survived the rejection by this Court in R v Pidoto & O’Dea[16] of a harm-based system of classification of drug offences.
In my opinion, there is nothing in Pidoto which requires the low level of purity of a particular drug in a case such as the present to be given little or no weight. Whether one views such a matter as a mitigating circumstance, or rather as simply reducing the objective culpability of the offending, matters little in the ultimate result. There is obviously a difference between trafficking in 3.9 kilograms of pure methylamphetamine, and trafficking in 1.9 grams of methylamphetamine in a mixture of 3.9 kilograms. To treat these two offences as relevantly indistinguishable would be an affront to common sense.[17]
[14](2002) 135 A Crim R 232.
[15][2008] VSCA 199.
[16](2006) 14 VR 269.
[17][2011] VSCA 170, [15], [124]–[127].
In Nguyen, the Court of Appeal (Weinberg JA and King AJA) allowed an appeal against sentence, noting that the ‘extraordinarily low purity’ of the drug had to be borne in mind in sentencing:
The sentence imposed on count 1 was not only severe, but out of kilter with the general length of sentences imposed for trafficking in drugs of this kind and in this quantity. It must be remembered when considering the gravity of any drug trafficking offence, that it is the quantity of the drug that is trafficked that is of greatest reliance. In the present case, the appellant was in possession of a vast number of tablets, but the purity of the drug was extraordinarily low. That had to be borne in mind. Furthermore, it was conceded by the Crown at the hearing of the appeal that, although the appellant’s role was significant, he was not the ‘mastermind’ behind a bigger drug organisation operating at a higher level. In effect, the applicant was operating ‘down the line’ of that larger organisation.[18]
[18][2011] VSCA 139, [16].
In our view, nothing said in Trajkovski and Nguyen detracts from what this Court made clear in Pidoto. There is no place for considering the relative harmfulness of a drug in sentencing an offender for trafficking offences. Where the purity of the amount trafficked is ‘de minimis’ it may be taken into account, but save for such exceptional circumstances, the relative purity of a mixed quantity of a drug of addiction does not bear upon the objective gravity of the offence.
In the present case, the levels of purity of the drugs were not minuscule or extraordinarily low. No arguable error is evidenced in his Honour’s findings on these charges.
Ground 5: manifest excess
Under cover of Ground 5 it is asserted that the individual sentences on Charges 1, 3 and 4 of the first indictment and Charge 1 on the second indictment are manifestly excessive, and that the total effective sentence, resulting from the degree of cumulation of Charge 4 on the first indictment and Charge 1 on the second indictment, and the non-parole period are manifestly excessive.
The applicant relied upon the following factors in mitigation of sentence. First, that he pleaded guilty at the earliest opportunity and that his pleas had a high utilitarian value, avoiding the need for four separate trials. The applicant was remorseful. Second, particular reliance was placed upon what was said to be the applicant’s good prospects for rehabilitation. He had the support of his family, had a previous good history of employment and the availability of short-term employment in the family business upon his release. He had completed numerous programmes in prison. His drug urine screens in prison were clean over an extended period. In this regard the applicant relied upon the evidence of Mr Lambretti who testified as to his attempts at rehabilitation when initially bailed.
Thirdly, there had been a significant delay since the offending and considerations of fairness required that the strain of having these matters hanging over his head should be taken into account. Fourthly, the applicant had provided valuable assistance to the authorities in the prosecution of Clifford for murder. He had made a statement and given evidence at committal despite being in prison at the time. Fifthly, the assistance he had given to authorities would make his time in prison particularly onerous. He had already been assaulted in prison and was moved from prison to prison for his own protection. He had been offered the option of moving into protective custody. None of these considerations were challenged by the Crown. They were clearly recognised in the sentencing judge’s careful and extensive remarks.
What was disputed on appeal was the applicant’s primary contention that he should have been viewed by the sentencing judge as a ‘low level trafficker,’ who diluted the drugs available to him to meet the ever increasing demands of the undercover operative and which raised the quantity supplied to a commercial quantity. It does not appear, however, from the transcript of the plea in mitigation that counsel characterised his client’s role in that way on the plea. As we have said, the sentencing judge characterised the applicant’s role as a ‘persistent high-end supplier,’ who was ‘servicing the drugs at a wholesale level’. The sentencing judge did not treat the involvement of the undercover police officer as a matter which mitigated the sentence. As the respondent submitted, the transcribed telephone intercepts revealed that the applicant was a willing seller who often pursued the undercover operative.
We see no error in his Honour’s characterisation of the applicant’s conduct.
On the plea and again on appeal, the applicant placed considerable reliance upon the decision of this Court in Mustica v The Queen,[19] a case involving similar charges for similar conduct. In Mustica the offender was also sentenced to a term of imprisonment of five years on a charge involving approximately the same mixed quantity of a drug of dependence. The applicant pointed to the many mitigating factors in his favour which could not be found in the case of Mustica.
[19][2011] VSCA 79 (‘Mustica’).
The sentencing judge addressed this submission, noting the similarities and differences between the applicant’s case and that of Mustica. His Honour rightly observed, however, that consistency of sentencing was not to be achieved in the search for a like case. In Hudson v The Queen[20] and Hasan v The Queen,[21] this Court deprecated the approach of a search for a like case for the purpose of fixing a sentence. Significantly, when pressed on appeal, counsel for the applicant conceded that a sentence of five years for trafficking in a commercial quantity of a drug of dependence would ordinarily be regarded as falling well within the range of sentences reasonably open. Further, he conceded that there may well be cases where such a sentence has been imposed where powerful mitigating factors were present. All this serves to emphasise that comparison with a like case will be of limited utility.
[20](2010) 30 VR 610.
[21](2010) 31 VR 28.
In further support of the ground of manifest excess, the applicant relied upon the fact that the conduct the subject of Charge 1 on the second indictment, whilst committed on bail, was the consequence of his falling back into drug use in the highly unusual circumstances surrounding the murder of Elsa Corp. That factor should have led to an imposition of a lower sentence. Additionally it was submitted that, because of the small amount trafficked, his Honour ought to have taken into account the fact that the offence could have been dealt with in the Magistrates’ Court but had been uplifted by agreement with the applicant’s solicitor so that it could be dealt with at the same time as the first indictment.
Allowing that the applicant could have been sentenced under a less punitive regime, and that there is a well established sentencing principle that the sentencing court may take account of that fact,[22] it is not a rule which operates universally to reduce the sentence, particularly where it is concluded that the offender’s criminality was too serious to be dealt with in the lower court.[23] His Honour was plainly not prepared to attach weight to this consideration given the duration of the offending and the fact that it involved ‘aggravated breaches of the law’.[24]
[22]R v El Masri [2005] NSWCCA 167, [29].
[23]R v Sandford (1994) 72 A Crim R 160, 195; R v Yang (2002) 135 A Crim R 237, 240.
[24]Reasons, [74].
We do not consider it to be reasonably arguable that the individual sentences are manifestly excessive. There is no force in the submission that the orders for cumulation made by the sentencing judge offended the principle of totality or that the total effective sentence or non-parole period that were fixed were beyond the range of a sound exercise of the sentencing discretion.
Additional ground - fresh evidence – automatic forfeiture and pecuniary penalty order following sentence
At the hearing, the applicant sought leave to file a further ground of appeal under cover of which it is sought to lead evidence regarding the forfeiture of property post-sentence. Pursuant to the direction of the Court, the parties filed further written submissions in respect of that ground after the hearing.
After the applicant was charged, a restraining order was made in respect of his property pursuant to s 16 of the Confiscation Act 1997 (the ‘Confiscation Act’), for the purposes of satisfying a pecuniary penalty order (‘PPO’) and automatic forfeiture upon the applicant’s conviction. The relevant property comprised a house at Witchwood Crescent, Burwood East, a house at Clyden St, Burwood East, three bank accounts, $16,800 in cash and a Mercedes Benz motor car. The applicant then filed an exclusion application and the respondent filed an application for a PPO. Neither of these applications nor the question of automatic forfeiture had been resolved at the time the applicant was sentenced. The prospect of forfeiture of the applicant’s property was therefore not taken into account on sentence.
On 15 May 2012, some 2 months after the applicant was sentenced, relevant orders to the following effect were made by consent in the County Court with respect to the restrained property:
a) the applicant pay a pecuniary penalty in the agreed sum of $184,000 (this being the total sum paid by the undercover police officer for the drugs purchased);
b) the Witchwood property be sold and the proceeds of sale be applied to the PPO of $184,000;
(c) the balance of the proceeds of sale of the Witchwood property be forfeited pursuant to automatic forfeiture under s 35 of the Confiscation Act;
c) the motor car be declared to be forfeited pursuant to automatic forfeiture; and
d) the house at Clyden St, the three bank accounts and the $16,800 in cash be excluded from the restraining order.
Some $352,000 was paid to the Department of Justice from the proceeds of sale of Witchwood Crescent. Thus, in addition to the $184,000 applied to the PPO, the applicant automatically forfeited a further $156,000, as well as his motor car.
It was not in issue on the appeal that the motor car had been used in connection with Charge 1 and that the Witchwood property was not used, or intended to be used, in the commission of any offence the subject of these proceedings. The applicant contends that the automatic forfeiture of these properties, not being the proceeds of crime, was a relevant consideration in determining the applicant’s sentence pursuant to s 5 of the Act.
Section 5 of the Act deals with forfeiture in the following terms:
(2A) In sentencing an offender a court—
(a)may have regard to a forfeiture order made under the Confiscation Act 1997 in respect of property—
(i)that was used in, or in connection with, the commission of the offence;
(ii)that was intended to be used in, or in connection with, the commission of the offence;
(iii)that was derived or realised, or substantially derived or realised, directly or indirectly, from property referred to in subparagraph (i) or (ii);
(ab)if it is satisfied that property was acquired lawfully, may have regard to automatic forfeiture under the Confiscation Act 1997 in respect of property—
(i)that was used in, or in connection with, the commission of the offence;
(ii)that was intended to be used in, or in connection with, the commission of the offence;
(iii)that was derived or realised, or substantially derived or realised, directly or indirectly, from property referred to in subparagraph (i) or (ii);
(b)must not have regard to a forfeiture order made under that Act in respect of property that was derived or realised, or substantially derived or realised, directly or indirectly, by any person as a result of the commission of the offence;
(c)may have regard to a pecuniary penalty order made under that Act to the extent to which it relates to benefits in excess of profits derived from the commission of the offence;
(d)must not have regard to a pecuniary penalty order made under that Act to the extent to which relates to profits (as opposed to benefits) derived from the commission of the offence;
(e)subject to paragraph (ab), must not have regard to any property forfeited under automatic forfeiture or a pecuniary penalty order made in relation to a Schedule 2 offence under that Act.
(2B)Nothing in subsection (2A) prevents a court from having regard to a forfeiture order or civil forfeiture order made under, or automatic forfeiture occurring by operation of, the Confiscation Act 1997 as an indication of remorse or co-operation with the authorities on the part of the offender.
Thus automatic forfeiture may be taken into account as an indication of remorse or cooperation with authorities (s 5(2B)) but may not otherwise be taken into account unless the Court is satisfied that the property was lawfully acquired and was used or intended to be used in the commission of the offence or was derived from property that was so used or intended (ss 5(2A)(ab) and 5(2A)(e)).
We are satisfied that the forfeiture settlement, together with the affidavit of the applicant’s solicitor sworn 19 September 2012, constitutes fresh evidence which should be admitted. The evidence concerns events that have occurred since sentence and which establish the extent to which the applicant’s property would be forfeited.[25] If the applicant is able to bring himself within the requirements of s 5, we must then determine whether on the material now before us a different sentence should be substituted for that passed by the sentencing judge.[26] We would therefore grant leave to add the further proposed ground of appeal.
[25]R v Duy Duc Nguyen [2006] VSCA 184, [36]. Also see R v Eliasen (1991) 53 A Crim R 391, 394.
[26]R v Eliasen (1991) 53 A Crim R 391; R v S H [2006] VSCA 83; R v McLeod (2007) 16 VR 682, 687–6, [17]–[18] (‘McLeod’); R v Tezer [2007] VSCA 123, [27] (‘Tezer’).
The applicant submitted that the property forfeited was substantially in excess of the applicant’s ‘ill-gotten’ gains, and constituted a significant additional punishment likely to achieve a measure of general and specific deterrence. The applicant’s sentence was said to be excessive as the sentencing judge did not (and could not) have regard to this substantial additional punishment, as required by s 5(2A)(ab) of the Act. The applicant contended that, at the very least, by virtue of his consent to the automatic forfeiture orders, he had evidenced his remorse and willingness to cooperate with the authorities and that should be taken into account.
Whether the Witchwood property was lawfully acquired
The applicant accepts that he bears the onus of establishing that the property the subject of automatic forfeiture was lawfully acquired, a necessary pre-condition to the application of s 5(2A)(ab). In R v McLeod,[27] this Court said:
An offender who relies on forfeiture (whether it has occurred or is anticipated) as a mitigating circumstance will ordinarily bear the onus of establishing that it should be so regarded. Where lawfully acquired property has been used in the commission of the crime and is ‘tainted’ property, the punitive element in its forfeiture must be sufficiently identified for the sentencing judge. How much of it was lawfully acquired, the offender’s interest in the property and the extent to which it was used to facilitate the commission of the crime may all require proof.
The sentencing judge is not required to speculate as to whether, or to what extent, the property in question was lawfully acquired or, alternatively, represented profit which the offender derived from his activities.[28] It is for the offender to present ‘credible material’ identifying the source of the property, so as to permit the sentencing judge to form a positive conclusion that at least some substantial portion of the property has been lawfully acquired.[29]
Likewise, where an offender seeks to rely in mitigation upon the loss of ‘benefits in excess of profits derived from the commission of the offence’, the offender must produce evidence to enable a positive determination to be made on the balance of probabilities.[30]
[27](2007) 16 VR 682.
[28]Macri v State of Western Australia [2006] WASCA 63, [9] (Wheeler JA).
[29]R v El Cheikh [2004] VSCA 146, [13]–[14] (Vincent JA), [17]–[18] (Batt JA); Kirby v The Queen [2003] WASCA 164; Sinagra-Brisca v The Queen [2004] WASCA 68; Urbano v The State of Western Australia [2006] WASCA 147 (Pullen JA).
[30] (2007) 16 VR 682, 689 [29]–[30].
The applicant relied on the affidavit of his solicitor, who attested that the applicant had always maintained that the confiscated property was lawfully acquired but was prepared to compromise and consent to the forfeiture orders, for several reasons. These included: feelings of guilt for his offending; putting his family in jeopardy; his desire not to put his family through having to give evidence at a contested confiscation hearing; an unwillingness to expend the funds required for an accounting expert to prepare the relevant documentation to establish that the property was legally acquired; and his view that the settlement constituted a pragmatic solution that avoided a contested hearing. The affidavit does not address the question of how the applicant obtained either property. The applicant did not seek to place any further evidence before the Court to support his claim that the property was lawfully acquired. There is no evidence as to the circumstances in which the properties came to be acquired, or the source of the funds with which the properties were acquired.
The evidence of the applicant’s solicitor as to the applicant’s assertions is inadequate to discharge the burden resting on the applicant. Whilst it is conventional for many things based upon instructions to be asserted from the Bar table during a plea, proof sufficient to satisfy the court on matters such as these would generally require direct evidence from the applicant, together with other confirmatory evidence as to the lawful source of the funds used to acquire the property. Counsel for the applicant appear to have recognised that the hearsay proof of the applicant’s assertions was unlikely to be sufficient. They nevertheless contended in their supplementary written submissions that the Crown’s agreement to settle this matter and release the Clyden street property, the bank accounts and the cash, constituted an implied acceptance on the part of the Crown that this property was lawfully acquired. They submitted that the Witchwood property and the motor car should be viewed in the same light, as they were purchased before any of the offences were committed.
The submission rests upon the quite unsustainable assertion that it can be inferred from the surrounding circumstances that the source of funds was lawful. First, as senior counsel for the respondent rightly submits, the applicant’s argument rests upon the false assumption that any property forfeited, over and above the monies that the Crown was able to identify as coming from the applicant’s drug trafficking, came from a lawful source. There is no basis for any such assumption. Secondly, there is substantive evidence that casts suspicion over the circumstances in which the relevant property was acquired. The applicant was employed at his family’s chicken shop until 2008, at which point the shop had to be sold because, as the sentencing judge observed, the applicant ‘had progressed to “ice” and became completely immersed in the drug culture’.[31] From that point on, the applicant was unemployed. The Witchwood property was purchased by the applicant and registered solely to him on 25 September 2008, which was 3 months before the period of offending in this case. There was no mortgage in respect of the property. The motor car was purchased in the name of the applicant’s friend, MS, in late 2008 with a large cash deposit. The applicant provided no evidence to show how he was able to lawfully purchase either property at a time when he was unemployed or to explain why the car was placed in the name of his friend.
Where the property is not related to the offending
[31]Reasons, [54].
With respect to the Witchwood property, the applicant’s argument also falls at the second hurdle imposed by s 5(2A)(ab), namely, that this paragraph only applies to property that is used in, connected to or derived from the commission of an offence.
The applicant also contended that the loss of $156,000 and the Mercedes car is a substantial punishment and likely to achieve a measure of both specific and general deterrent. As the applicant failed to establish that this property was derived from a lawful source, it does not constitute additional punishment warranting any diminution in the weight to be attached to general and specific deterrence. Such a view is consistent with the statutory regime of the Confiscation Act and s 5(2A).
The applicant also submitted that it would be an absurd result if, to adopt the literal meaning of s 5(2A)(ab), only forfeiture of property used in connection with an offence was relevant to sentence, but forfeiture of property not connected with an offence was excluded. The applicant referred to the Second Reading Speech of the Attorney-General upon introduction of these provisions:
[T]here have been difficulties in reconciling confiscation proceedings with the various aims of the sentencing process. In particular, on occasions courts have been reluctant to make confiscation orders where to do so would impose a punishment which would under general sentencing principles be regarded as disproportionate or unduly harsh. The bill resolves that difficulty by providing that, where the effect of the confiscation order is to disgorge the profits gained from the offence, it is not to be taken into account when a sentence is being imposed. This is because in divesting offenders of ill-gotten gains, the order simply restores them to the position they were in before the offence was committed. However where the order relates to previously owned property used in connection with the offence, or otherwise goes further than merely disgorging ill-gotten gains, the court will be able to take this into account in fixing sentences.[32]
[32]Crimes (Confiscation of Profits) (Amendment) Bill, Second Reading Speech, 10 October 1991, 1153–4. Victoria, Parliamentary Debates, Legislative Assembly, 10 October 1991, 1154 (Jim Kennan, Attorney-General).
This Court was invited to adopt a construction of s 5(2A)(ab) that would give effect to the asserted legislative intention that forfeiture of all property that was not ‘derived’ from ill-gotten gains would be relevant to sentencing.
The argument — that it would be absurd to exclude from consideration in sentencing forfeiture of property that was not tainted — has already been considered and rejected by this Court. In Tezer, this Court[33] referred to the rationale for s 5(2A)(ab):
Counsel accepted that if the unit was not tainted property then the judge was expressly prohibited by s 5(2A)(e) of the Sentencing Act1991 from taking the automatic forfeiture into account. As she observed, this prohibition was presumably based on the assumption that if the property is untainted, a successful exclusion application will be able to be made. However, as counsel further submitted, although at the time of the plea Tezer had lost his unit due to the operation of the Confiscation Act, he could not properly ask the learned sentencing judge to have regard to the automatic forfeiture as to do so would have been an admission that the property was tainted, when Tezer’s position was that it was not.[34]
[33]Habersberger AJA (Maxwell P and Eames JA agreeing).
[34][2007] VSCA 123, [24].
Subsequently in R v Filipovic,[35] Neave JA (with whom Kellam JA and Curtain AJA agreed) observed that the regime of s 5(2A)(ab) is explained by the right of exclusion from an automatic forfeiture conferred under s 22 of the Confiscation Act where the property is neither ‘tainted’ or ‘derived’ from an unlawful source:
Subject to the qualification below, I do not think that such an absurdity arises. If there is sufficient evidence before the sentencing court that the property was lawfully acquired and that the conditions of s 22 are satisfied, so that the property will be excluded from forfeiture under s 22, there is no reason for taking account of forfeiture in sentencing an offender, because he or she will not suffer this additional punishment.
That being said, I accept that a difficulty arises in sentencing an offender where it is likely that automatic forfeiture will not occur, because the offender will succeed in having the property excluded, but the outcome of the exclusion application is not certain. As this Court commented in R v McLeod, ‘[p]articular difficulties arise where, at the time the offender falls to be sentenced, there exists a possibility of future forfeiture.’
If the court takes account of the risk that the offender’s property will be forfeited and an exclusion order is later made in relation to that property because s 5(2A)(ab) is satisfied, the offender will have been given the benefit of a factor which did not actually apply. If, on the other hand, forfeiture later occurs because the offender does not prove the facts set out in s 22 on the balance of probabilities, the sentencing court will have acted inconsistently with s 5(2A)(e), unless the circumstances set out in s 5(2A)(ab) are satisfied.[36]
[35](2008) 181 A Crim R 83.
[36]Ibid 101 [76]–[78] (citations omitted).
‘Untainted’ property[37] — that is, property that is not connected to the commission of the offence — is excluded as a relevant sentencing consideration under s 5 because an offender is entitled to obtain an exclusion order in respect of that property. Where the property has been lawfully acquired, and the property is not ‘tainted’ or ‘derived’ from some other unlawful activity,[38] an exclusion order can be obtained, even for a limited time after conviction. It is in the circumstance where the property is ‘tainted’ but has been lawfully acquired that the legislature thought it necessary to confer a right upon the offender to have the automatic forfeiture taken into account on sentence.
Section 5(2B) – Remorse and Cooperation
[37]Section 5(2A)(ab)(i)(ii) and (iii) mirror part of the definition of ‘tainted’ property in s 3 of the Confiscation Act.
[38]See s 22(a) (i), (ii) and (iii) Confiscation Act.
Finally the applicant submitted that, irrespective of the operation of s 5(2A), his consent to the automatic forfeiture orders could be taken into account as indicative of his remorse and cooperation with the authorities. The applicant pointed to the fact that unlike s 5(2A), s 5(2B) does not contain any explicit requirement that the property in question be lawfully acquired or connected with any offence.
The respondent contended that the consent orders did not constitute fresh evidence, as they did not throw significant new light on remorse or cooperation which it said did not ‘loom at all large’ on the plea. By contrast the applicant contended that remorse and cooperation were important features of the plea. Seen in the light of the mitigating factors earlier enumerated in these reasons, it was said that the applicant’s consent to the forfeiture orders provided a further indication of his remorse and ongoing cooperation.
A sentencing judge may have regard to a forfeiture order for the purposes of s 5(2B) without being constrained by the same pre-conditions as 5(2A). But the fact that an applicant is unable to establish that property subject to the forfeiture order was lawfully acquired remains relevant in determining whether the forfeiture settlement evinced remorse or willingness to cooperate. Here the circumstances surrounding the forfeiture settlement do not enable the inference to be excluded on the balance of probabilities that the applicant did not apply for an exclusion order in respect of the Witchwood property because he was incapable of showing that the property was lawfully acquired. Based on the limited evidence before the Court, we are not persuaded that the forfeiture settlement is a substantive indicator of remorse or cooperation justifying any reduction in the applicant’s sentence.
We would refuse leave to appeal on Grounds 2, 3, and 5. We would also refuse leave to appeal on Ground 1 save to the extent necessary to correct the record. We would grant leave on Ground 6 and dismiss the appeal.
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Schedule 1 – Trafficking Transactions
| Trans | Ch | Date | Quantity | Price | Purchaser |
| 1 | 1 | 9 December 2008 | 83.1 grams | $10,500 | CO George |
| 2 | 1 | 17 December 2008 | 102.2 grams | $12,700 | CO George |
| 3 | 1 | 17 February 2009 | 65.3 grams | $10,000 | CO George |
| 4 | 1 | 27 February 2009 | 27.8 grams | $5,000 | CO George |
| 5 | 1 | 3 March 2009 | 220.8 grams | $24,000 | CO George |
| 6 | 1 | 16 March 2009 | 137.8 grams | $18,000 | CO George |
| 7 | 1 | 17 March 2009 | 83.3 grams | $6,000 | CO George |
| 8 | 1 | 24 March 2009 | 280.0 grams | $30,000 | CO George |
| 9 | 1 | 4 April 2009 | 220.4 grams | $24,000 | CO George |
| 10 | 1 | 29 April 2009 | 0.8 and 1.0 grams | Sample not paid for | CO George |
| 11 | 2 | 30 April 2009 | 501.8 grams | $54,500 | CO George |
| 12 | 1 | 12 March 2009 | 110.1 grams | Unknown | Singh |
11
14
0