Kim v The Queen
[2016] VSCA 238
•10 October 2016
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCR 2015 0260
| MOON JA KIM | Applicant |
| v | |
| THE QUEEN | Respondent |
S APCR 2016 0013
| ZHE FANG | Applicant |
| v | |
| THE QUEEN | Respondent |
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| JUDGES: | REDLICH, SANTAMARIA and McLEISH JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 26 May 2016 |
| DATE OF JUDGMENT: | 10 October 2016 |
| MEDIUM NEUTRAL CITATION: | [2016] VSCA 238 |
| JUDGMENT APPEALED FROM: | DPP (Cth) v Kim (Unreported, County Court of Victoria, Judge Meredith, 18 December 2015) |
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CRIMINAL LAW – Appeal – Sentence – Guilty plea – Whether person who pleads guilty to Commonwealth offence entitled to discount for utilitarian benefit of plea – DPP (Cth) v Thomas [2016] VSCA 237, followed.
CRIMINAL LAW – Appeal – Sentence – Manifest excess – Aiding and abetting dealing in proceeds of crime worth $50,000 or more – Applicants part of syndicate involved in managing licensed brothels without approval under Sex Work Act 1994 – Applicant Kim sentenced to 3 years and 2 months’ imprisonment with 2 years non‑parole period – Applicant Fang sentenced to 3 years and 8 months’ imprisonment with 2 years and 3 months non-parole period – Sentences not manifestly excessive – Criminal Code (Cth) s 400.5(1) – Appeals dismissed.
CRIMINAL LAW – Appeal – Sentence – Money laundering – Sentencing principles – Criminal Code (Cth) div 400.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant Kim | Mr C F Thomson | James Dowsley & Associates Pty Ltd |
| For the Applicant Fang | Mr M D Stanton | Stary Norton Halphen |
| For the Respondent | Ms W Abraham QC with Mr D Holding | Mr M Pedley, Solicitor for Public Prosecutions (Cth) |
REDLICH JA
SANTAMARIA JA
McLEISH JA:
The applicants Moon Ja Kim and Fang pleaded guilty to aiding and abetting dealing with proceeds of crime worth $50,000 or more, contrary to s 400.5(1) of the Criminal Code (Cth) (‘Code’). Section 400.5(1) provides as follows:
(1) A person is guilty of an offence if:
(a) the person deals with money or other property; and
(b) either:
(i) the money or property is, and the person believes it to be, proceeds of crime; or
(ii) the person intends that the money or property will become an instrument of crime; and
(c)at the time of the dealing, the value of the money and other property is $50,000 or more.
Penalty: Imprisonment for 15 years, or 900 penalty units, or both.
Moon Ja Kim and Fang were, by virtue of having aided and abetted Mae Ja Kim in committing an offence under s 400.5, taken to have committed that offence themselves and were punishable accordingly.[1]
[1]Criminal Code s 11.2.
The expression ‘proceeds of crime’ is defined in s 400.1 of the Code to mean ‘any money or other property that is wholly or partly derived or realised, directly or indirectly, by any person from the commission of an offence … that may be dealt with as an indictable offence’. The offence committed by Mae Ja Kim was knowingly living wholly or in part on, or deriving a material benefit from, the earnings of sex work as defined in the Sex Work Act 1994 (‘Sex Work Act’), other than as a licensed sex work services provider. Pursuant to s 10 of the Sex Work Act, the maximum penalty for that offence is imprisonment for 5 years.
Mae Ja Kim pleaded guilty to the offence of dealing with proceeds of crime. She was sentenced on the basis that, during the period 8 February to 2 July 2013, she headed a syndicate which arranged for the use of sex workers in four licensed brothels in inner city Melbourne. A percentage of the earnings of the sex workers was diverted to the benefit and use of Mae Ja Kim. She had contacts in South East Asia and enticed women to work in the brothels with promises of good pay and conditions. The women were often lent money to pay for their travel expenses in coming to Australia on the understanding that the money would be repaid by performing sex work. The women were provided with accommodation and drivers who would take them to and from the brothels. Mae Ja Kim was not a licensed sex work services provider, and so was prohibited by s 10 of the Sex Work Act from deriving a material benefit from the earnings of sex work.
The other members of the syndicate included three co-accused, being Fang, Moon Ja Kim (who is the younger sister of Mae Ja Kim) and Huan Wen Ye (Mae Ja Kim’s former husband). Each of them pleaded guilty to adding and abetting Mae Ja Kim’s offending and all four were sentenced together after a combined plea hearing.
The sentences were as follows:
Mae Ja KIM
| Charge on Indictment | Offence | Maximum | Sentence |
| 1 | Dealing in proceeds of crime worth $50,000 or more contrary to s 400.5(1) of the Criminal Code | 15 years | 4 years |
| Total Effective Sentence: | 4 years | ||
| Non-Parole Period: | 2 years and 6 months | ||
| Pre-sentence Detention Declared: | 514 days | ||
| 6AAA Statement: | TES 6 years NPP 4 years | ||
| Sentence but for future co-operation | 4 years and 10 months’ imprisonment with 3 years and 2 months non-parole period | ||
Moon Ja KIM
| Charge on Indictment | Offence | Maximum | Sentence |
| 1 | Aiding and abetting dealing in proceeds of crime worth $50,000 or more contrary to ss 11.2(1) and 400.5(1) of the Criminal Code | 15 years | 3 years and 2 months |
| Total Effective Sentence: | 3 years and 2 months | ||
| Non-Parole Period: | 2 years | ||
| Pre-sentence Detention Declared: | 57 days | ||
| 6AAA Statement: | TES 4 years and 4 months NPP 3 years and 2 months | ||
| Sentence but for future co-operation | TES 3 years and 8 months NPP 2 years and 5 months | ||
Zhe FANG
| Charge on Indictment | Offence | Maximum | Sentence |
| 1 | Aiding and abetting dealing in proceeds of crime worth $50,000 or more contrary to ss 11.2(1) and 400.5(1) of the Criminal Code | 15 years | 3 years and 8 months |
| Total Effective Sentence: | 3 years and 8 months | ||
| Non-Parole Period: | 2 years and 3 months | ||
| Pre-sentence Detention Declared: | 164 days | ||
| 6AAA Statement: | TES 4 years 6 months NPP 2 years 10 months | ||
Huan Wen YE
| Charge on Indictment | Offence | Maximum | Sentence |
| 1 | Aiding and abetting dealing in proceeds of crime worth $50,000 or more contrary to ss 11.2(1) and 400.5(1) of the Criminal Code | 15 years | 3 years and 8 months |
| Total Effective Sentence: | 3 years and 8 months | ||
| Non-Parole Period: | 2 years | ||
| Pre-sentence Detention Declared: | 225 days | ||
| 6AAA Statement: | TES 4 years and 6 months NPP 2 years and 6 months | ||
The proposed grounds of appeal advanced by Moon Ja Kim and Fang, which are set out later in these reasons, concern the way in which the sentencing judge approached the benefit to be allowed for the pleas of guilty, the treatment of the applicants’ lack of prior convictions, and arguments as to parity and manifest excess. Before coming to the grounds, it is convenient to set out the background to the offending and the personal circumstances of the four offenders.
Mae Ja Kim provided the sex workers to the brothels, and some of the workers were promoted to the position of ‘manager’. The managers did not have a licence to perform any lawful management function. The role of the manager was to record the number of 30 minute periods worked by workers under their supervision, to encourage those workers to perform as much work as possible and to report any problems with the workers. Mae Ja Kim acquired a percentage of the monies paid to the workers. The managers were paid in cash. In various ways, each of Fang, Moon Ja Kim and Ye aided and abetted Mae Ja Kim in her dealing with the proceeds derived from the sexual services provided by the sex workers.
Fang worked as a manager at a licensed brothel in South Melbourne. He held an approval under s 52 of the Sex Work Act as a manager of the sex work service providing business at that brothel. Although occupying a lawful role within the brothel, he assisted in unlawful activities by collecting documents and cash, as well as bookkeeping. He calculated profits and the payments to workers. The unlawfulness consisted in collecting cash from customers and paying the workers out of that cash on behalf of Mae Ja Kim. The law instead required that the brothel charge sex workers for providing licensed premises for them to provide services for which they would charge customers directly.
Moon Ja Kim’s work took place at a licensed brothel in West Melbourne. Over the charged period she collected money from the workers in the brothel, paid the managers and transferred the profits to Mae Ja Kim. Moon Ja Kim played a supervisory role at the brothel, organised rosters for workers and gave them instructions, as well as helping to keep records. She discussed the details of the operation of the four brothels with Mae Ja Kim, including discussing pay rates for the workers.
Ye provided accommodation and transport for the workers and managed overseers at a brothel in Richmond. He kept records for that brothel and also kept records of things such as the provision of meals or washing services for the workers, to enable deductions to be made for such expenses. He assisted in rostering and the transfer of cash to Mae Ja Kim.
The sentencing judge stated that it was apparent from all of the evidence that Mae Ja Kim was at the apex of the syndicate conducting the ongoing criminal enterprise. However, each of the other offenders had performed roles that were essential for the continued operation of the syndicate and had played an integral part in its operation. The judge said that there was no legitimate basis on which to distinguish the culpability of Fang, Moon Ja Kim and Ye by reference to the role which each of them had performed in aiding and abetting the offending of Mae Ja Kim.
The judge held that the quantum of money dealt with by Mae Ja Kim during the period of the applicants’ offending was toward the upper range of between $50,000 to $100,000. This was a reference to the provisions of div 400 of the Code. As mentioned, the maximum penalty for dealing in proceeds of crime to a value of $50,000 or more is 15 years’ imprisonment. Section 400.4 provides for a maximum penalty of 20 years’ imprisonment where the value of the money or other property the subject of the dealing is $100,000 or more.
A variety of personal circumstances in respect of each of the four offenders was put before the sentencing judge.
Mae Ja Kim was 41 years of age at the time of sentencing. The judge noted she had no prior convictions. Among other things, the brother of Mae Ja Kim and Moon Ja Kim had a disability and lived in an institution in China. Mae Ja Kim financially supported her brother’s son. She came to Australia in 2004 on a working holiday visa with little English and worked in the sex industry. She ceased this work by the time of her marriage to Ye in 2008. It was put on her behalf that she lived with Ye and that she had been with him for 11 years. However, the plea of Ye indicated that the two were living at separate residences. The father of the Kim sisters died while they were in custody and they were unable to attend to his funeral arrangements. Mae Ja Kim had been isolated and distressed in custody, in part because of her limited English. The judge rejected evidence that suggested that she was financially struggling during the time of the offending. He noted that while she was on bail, she had been training as a masseuse at a studio operated by her sister, Moon Ja Kim.
Moon Ja Kim was 58 years of age at the time of sentencing. She came to Australia in 2006, some years after the end of her second marriage, in order to visit her son who was living in Australia. She met and married a man who worked in the restaurant industry but he ultimately sold his business and returned to Hong Kong in 2009. Kim then worked at the West Melbourne brothel as a prostitute from 2009 to 2011, when she was divorced. She then worked as a cleaner. During the period of the offending she arranged for the grant of a planning permit to enable her to set up a remedial massage centre. She was out of Australia from 24 February to 9 April 2013 and had not aided and abetted in Mae Ja Kim’s offending in that period. Moon Ja Kim also had limited language skills and communicated in Korean. Like her sister she had found custody difficult and isolating, and had been unable to attend their father’s funeral. At the time of sentencing she had obtained the permit for the remedial massage business and was working full time in that business. The business employed two other people and she had an expectation of making a profit in the current financial year.
Evidence was given that Kim had been providing for her nephew in the amount of $500 per month and that she would not be able to continue doing so if she were to be incarcerated. Kim had also indicated a preparedness to make a statement implicating Ye and Fang, which had been made known to Fang’s counsel, but not to the representatives of Ye, before each of them offered to plead guilty. The judge took account of Kim’s preparedness to co-operate with the prosecuting authorities.
Both Mae Ja Kim and Moon Ja Kim undertook to provide statements in respect of prosecutions contemplated under the Sex Work Act.
Fang was 27 years of age at the time of sentencing. He arrived in Australia in 2009 on a student visa without friends or family in Australia and had limited English skills. He had completed two years of a three year accounting course and was continuing to study accounting through a different institution at the time of his arrest. His student visa was cancelled on his arrest and he had been unable to resume his studies as a result. He was married in 2011 but the marriage failed after his arrest and remand in custody. Part of his pre-sentence detention had involved a 25-day period kept in the cells under the Magistrates’ Court where he was locked in his cell for 23 hours per day. It was agreed that Fang would be deported as a result of his conviction and that any expectation he had of a future life in Australia was lost.
Ye was 34 years of age at the time of sentencing. He had lived in Australia since 10 years of age and had a bachelor of science degree from Melbourne University. He had commenced a postgraduate course at Victoria University with a view to becoming a certified practising accountant. After his release on bail, he had commenced the study of Buddhism and reflected on the path which his life had taken. He was living with his parents and was supported in court by his father. The judge regarded Ye as showing a degree of remorse not evident in the other offenders.
It will be convenient to consider later in these reasons the manner in which the sentencing judge considered the question how to take account of any utilitarian benefit as a result of the pleas of guilty. As to the other matters that were considered, the sentencing judge accepted that the pleas of guilty evidenced some remorse and acceptance of responsibility by each of the offenders. There had been a delay since the offending in July 2013 until the sentencing in December 2015, and the judge accepted that a process of rehabilitation had commenced for each of the offenders during that time. The delay had also produced a degree of strain as a result of the matter hanging over their heads. The judge took account of these matters. He was satisfied that the rehabilitative prospects of each of the offenders were reasonably good. The judge took account of the statements which Mae Ja Kim and Moon Ja Kim had undertaken to make and took their preparedness to cooperate in the relevant prosecutions into account. However, he did not consider that their cooperation was motivated in any significant way by feelings of remorse. Despite that finding, the judge regarded each of them as being entitled to a discount, not only by reason of their cooperation but because they experienced a degree of apprehension concerning their safety as a result of having assisted the authorities.
Proposed grounds of appeal
Kim relied on the following proposed grounds of appeal:
1.There is insufficient disparity between the sentence of the applicant and the sentences of the other three co-offenders.
2.The learned sentencing judge erred in not finding exceptional circumstances of family hardship.
3.The head sentence and the non-parole period are manifestly excessive.
At the hearing of the application for leave to appeal, counsel for Kim indicated that the second proposed ground was not pressed. Counsel also sought to adopt the first and second grounds advanced by Fang. The four grounds upon which Fang sought to appeal were as follows:
1.The learned sentencing judge erred in his application of the principles in Phillips v The Queen (2012) 37 VR 594 in relation to the benefit to be allowed for the applicant’s plea of guilty.
2.The learned sentencing judge failed to take into account the applicant’s lack of prior convictions and thereby failed to comply with s 16A(2)(m) of the Crimes Act 1914 (Cth).
3.The sentence imposed offends the principle of parity.
4.The learned sentencing judge erred in imposing a head sentence and a minimum non-parole period which were both manifestly excessive.
These grounds encompass those relied on by Moon Ja Kim. Leave should be granted to add the additional grounds. There are therefore four grounds in each application and it is convenient to consider the applications together in respect of each of them.
Plea of guilty
The present applications were heard shortly after argument in the Crown appeals which are the subject of Director of Public Prosecutions (Cth) v Thomas,[2] in which the question of the benefit to be allowed for a plea of guilty was also raised. The parties in each set of appeals were provided with the transcript from the other hearing and given the opportunity to respond.
[2][2016] VSCA 237 (‘Thomas’).
For the reasons given in Thomas, Moon Ja Kim and Fang were entitled to reduced sentences by virtue of the utilitarian benefit following from their pleas of guilty. They submitted that the sentencing judge failed to afford them that benefit.
The question whether the utilitarian benefit is attracted in respect of Commonwealth offences was argued before the sentencing judge. Although the judge held that he was bound by this Court’s decision in Phillips v The Queen[3] to reduce the sentence to reflect the fact that the community had been saved the expense of a contested hearing, the applicants submitted that the reasons for sentence showed that no such reduction had been afforded. The sentencing judge dealt with the matter as follows:
[3](2012) 37 VR 594 (‘Phillips’).
Written submissions, which I will exhibit, were relied on by the prosecutor on behalf of the Commonwealth Director, stating that I could not take into account a purely objective assessment of the utilitarian value of each of your pleas of guilty.
This was said to reflect the majority view in [Cameron v The Queen (2002) 209 CLR 339]. It is necessary that I deal with this submission.
…
As I am exercising Federal jurisdiction in this case, Victorian sentencing law is picked up and applied pursuant to the Judiciary Act unless it is inconsistent with Federal law.
Under Victorian sentencing law, an objective assessment is to be made of the extent to which a plea of guilty has facilitated the course of justice, and this may be taken into account irrespective of the existence of a subjective intent to do so.
No notice under the Judiciary Act, referring to a constitutional issue, has been filed in this case.
No argument was advanced by the prosecution concerning the meaning and content of s 16A(2)(g) Crimes Act (Cth), nor was any argument advanced as to whether the requirement under Victorian law to which I have previously referred arises from s 5(2)(e) Sentencing Act (Vic) or elsewhere.
Counsel for each of you urged me not to accept the Commonwealth Director’s submission, and referred me to the case of Phillips v R [2012] VSCA 140, a case involving offending under State law. I was also referred to the application of the principles set out in Phillips, to the sentencing of Federal offenders in Peng [2014] VSCA 128, Alam [2015] VSCA 48, and KMD [2015] VSCA 255. In these cases which deal with Commonwealth offending, what I have earlier described as the Victorian approach has been applied. In none of these cases, however, was the point in question raised by the Commonwealth Director.
…
Given the position which I occupy in the court hierarchy, and the present state of authority, in my view I am bound by the approach adopted by the Victorian Court of Appeal. It will be for a higher court to determine whether that approach is invalid, and whether Cameron is of broad application or a decision confined in its application given that Cameron’s case involved an offence under WA law and the application of the WA fast track plea system as it existed at the time of Cameron’s case.
I wish to make it plain, however, that in the circumstances of this case, it makes no difference to the sentencing outcome which of the two approaches I adopt.
I make it plain that none of you are disadvantaged by my sentencing of you in keeping with the Victorian practice of forming an objective assessment of the utilitarian value of your guilty pleas. For each of you, the mitigatory effect of your guilty pleas would be the same if I had upheld the Commonwealth Director’s submission.
In other words, I have arrived at the same level of discount for each of you but by a different route than that suggested by the Director, and in the particular circumstances of this case, the result would be the same applying either of the two approaches.
Notwithstanding that your guilty pleas came after your trials had commenced, and that I had made rulings against your interests, your pleas of guilty occur in the broader context of a money laundering case which has not been previously put in this manner, and your testing of the case’s legitimacy in preliminary argument is understandable given the reality of your forensic positions.
Counsel for the Director submitted that I ought to find that each of you possessed a subjective intention to facilitate the course of justice in the circumstances of your individual cases, and in terms of all of your pleas of guilty, I find that you all possessed this intention.
Were I to sentence you consistently with the Director’s submission, then the utilitarian benefits which have flowed from your pleas would have informed the extent of the mitigatory effect I would have allowed, consequent on my finding that each of you intended to facilitate the course of justice by your guilty pleas. As to the appropriateness of this see Phillips v R (2012) 222 A Crim R 149, at pp 158–159, paragraph [36] point no 7. In forming this assessment, amongst other matters, I would have had regard to: the fact that absent a plea of guilty, the prosecution would have been put to its proof and would have had to call evidence with respect to this; the likely length of your trials and their relative complexity.
As I have rejected the Director’s submission, however, the sentencing discount for your pleas of guilty incorporates both a subjective and objective component. The overall discount incorporates your subjective willingness to facilitate the course of justice, and amongst other matters, an objective assessment of the value of your guilty pleas, having regard to the fact that absent a plea of guilty, the prosecution would have been put to its proof and had to call evidence with respect to this, the likely length of your trials and their relative complexity.
Counsel for Fang submitted that the sentencing judge had erred in stating that either of the two approaches would yield the same result. The objective utilitarian benefit needed to be the subject of its own independent allowance, especially since the saving to the community of the cost of a trial in the present matters was very significant. It was wrong to have, in effect, allowed the benefit which accrues from a willingness to facilitate the course of justice to subsume the utilitarian benefit which flows from a plea of guilty.
The Commonwealth Director of Public Prosecutions (‘the Director’) submitted that the judge had indicated that he was applying Phillips and had sentenced on the basis of the utilitarian benefit. The fact that he would have treated the subjective factors differently, had he accepted the Director’s submission based on Cameron v The Queen,[4] did not reveal error in the sentences that he passed. It could not be said that the reduction in sentence following the plea of guilty was inadequate in all the circumstances. The discount, amounting to 19 per cent, was very high when regard is had to what was said to be the usual range of 10–25 per cent. The ‘range’ of 10–25 per cent referred to by the Director is derived from the decision of the New South Wales Court of Criminal Appeal in C v The Queen.[5] That decision, concerning a Commonwealth offence, relies in turn on R v Thomson and Houlton,[6] the guideline judgment in relation to the discount for a plea of guilty in respect of New South Wales offences to which we made reference in Thomas. It may be doubted whether the ‘guideline’ thereby applied in New South Wales operates in the same way in Victoria, notwithstanding that, in relation to Commonwealth offences, sentencing decisions of New South Wales courts in comparable cases serve as ‘yardstick[s] against which to examine a proposed sentence’.[7] However, that question was not explored in argument and need not be resolved.[8] On any view, the discount which was given in the present case was within the available range. Consideration of where it fell in that range does not assist in identifying whether the sentencing judge was in error in the way in which he discounted for the plea of guilty.
[4](2002) 209 CLR 339 (‘Cameron’).
[5](2013) 229 A Crim R 233, 239–40 [32]–[34] (Hoeben JA; Adams and Beech-Jones JJ agreeing).
[6](2000) 49 NSWLR 383.
[7]Barbaro v The Queen (2014) 253 CLR 58, 74 [41] (French CJ, Hayne, Kiefel and Bell JJ). See also Hili v The Queen (2010) 242 CLR 520, 537 [54] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ); R v Pham (2015) 90 ALJR 13, 19–20 [28]–[29] (French CJ, Keane and Nettle JJ).
[8]Doubt as to the applicability in federal jurisdiction of the New South Wales provisions as to guideline judgments was expressed in Wong v The Queen (2001) 207 CLR 584, 616 [88] (Gaudron, Gummow and Hayne JJ).
There is force in the Director’s submission that the judge effectively applied the correct legal test. He made it plain that he was applying Phillips rather than Cameron. Had the matter rested there, for the reasons set out in Thomas, no error could have been suggested. However, the reasons for sentence make it clear that, had the judge accepted the Director’s submission and not discounted the sentence by reason of the utilitarian benefit, he would have applied the same discount by reference to the demonstrated willingness of the accused to facilitate the course of justice. It is true, as the judge observed, that the utilitarian benefit which flows from a plea of guilty may also inform the extent of the latter discount.[9] But understandably, in light of some of the expressions used in Cameron and the way in which the argument proceeded, the judge appears to have gone further and considered that the whole discount for utilitarian benefit could be ascribed, by way of alternative, to willingness to facilitate the course of justice.
[9]Phillips (2012) 37 VR 594, 605 [36(7)] (Redlich JA and Curtain AJA).
As we have said in Thomas, that will not always be the case. Despite the overlapping operation of the discounting factors, particular considerations may sometimes produce a different level of discount. For example, the likely complexity and length of a contested trial may result in the discount for willingness to facilitate the course of justice being different to that allowed for the utilitarian benefit.[10] Here, however, the judge made it plain that the level of discount was unaffected by the rationale adopted.
[10]Ibid 610–13 [53]–[67], 614–16 [70]–[74]. See generally Thomas [2016] VSCA 237 [148] (Redlich, Santamaria and McLeish JJA).
In the circumstances, there is no reason to suppose that the judge, in applying Phillips, failed to take account of all the factors relevant to allowing a discount following from a plea of guilty. In particular, there is no ground for considering that the judge applied Phillips without taking account of the extent to which the utilitarian benefit could also inform the discount to be attributed to the plea of guilty.
Accordingly, we would grant leave to appeal on the first proposed ground of appeal but the appeal on this ground should be dismissed.
Absence of prior convictions
Both Moon Ja Kim and Fang submitted that the sentencing judge failed to take into account their lack of prior convictions, contrary to s 16A(2)(m) of the Crimes Act 1914 (Cth). None of the four co-accused had any prior or subsequent convictions or findings of guilt against them. These matters were raised in submissions made on the plea. In his sentencing remarks, the judge referred to the fact that Mae Ja Kim had no prior convictions but said nothing on the subject in relation to Fang or Moon Ja Kim. It is on this basis that they submit that their lack of prior convictions was not taken into account.
The Crown submitted that the failure of the judge to refer to the applicants’ lack of prior convictions did not show that he had not taken them into account. It was submitted that the Court should not readily conclude that the matter was overlooked. The judge had found that all the offenders had reasonably good prospects of rehabilitation. In the circumstances, the failure to refer to the absence of convictions was merely an oversight.
There is nothing in the reasons of the sentencing judge, apart from the omission in question, which supports the inference that the judge failed to take into account the lack of prior convictions of Kim and Fang. Each of the offenders was in the same position in this regard and there was no basis upon which it might be thought that the judge had confused their respective circumstances. Moreover, he considered that each of them had the same prospects of rehabilitation. In the circumstances, the failure of the judge to refer to the absence of prior convictions or findings of guilt on the part of Kim and Fang was merely an oversight.
Leave to appeal on this ground should be granted but the ground should be rejected.
Parity
Each of Moon Ja Kim and Kim submitted that the sentence imposed upon them offended against the principle of parity. Kim and Fang relied on different particulars under this proposed ground. Moon Ja Kim submitted that there should have been greater disparity between her sentence and that of her sister Mae Ja Kim. She further contended that her sentence should have been substantially less than those imposed on Fang and Ye. Fang also contended there was insufficient disparity between the sentence imposed on him and that imposed on Mae Ja Kim, and that there was an unjustifiable disparity between the sentence imposed on him and the lower sentence imposed on Ye.
In order to succeed on these grounds, it must be established that there is disparity such as to give rise to a justifiable sentence of grievance, or in other words the appearance that justice has not been done.[11] That issue needs to be resolved by reference to objective criteria, rather than the feelings of the person complaining of disparity.[12] The approach to an appeal based on such grounds is as follows:
The principles governing parity are well established. As has been said before, equal justice requires that like offences be treated alike, but also that relevant differences between offenders be capable of being treated as justifying different outcomes. If there is a ‘marked’ or ‘manifest’ disparity between sentences which gives rise to a justifiable sense of grievance on an appellant’s part, then the principle of parity may be said to have been infringed. However, no justifiable sense of grievance can be said to arise where it was reasonably open to the sentencing judge to differentiate between co-offenders in a way in which he or she did. Where an appellate court considers whether it was open to the sentencing judge to differentiate, or not differentiate, in the way in which he or she did, the approach is relevantly analogous to that which arises when it is said that a sentence is manifestly excessive.[13]
[11]Lowe v The Queen (1984) 154 CLR 606, 610 (Gibbs CJ); Green v The Queen (2011) 244 CLR 462, 474 [31] (French CJ, Crennan and Kiefel JJ); Majeed v The Queen [2013] VSCA 40 [49] (Kaye AJA; Neave JA and Lasry AJA agreeing) (‘Majeed’).
[12]Postiglione v The Queen (1997) 189 CLR 295, 323 (Gummow J), 338 (Kirby J); Green v The Queen (2011) 244 CLR 462, 474 [31].
[13]Anthony v The Queen [2016] VSCA 22 [12] (citations omitted) (Redlich and Beach JJA).
Counsel for Moon Ja Kim highlighted the position of Mae Ja Kim as head of the syndicate and the organising force behind the criminal enterprise, in comparison to her sister’s subsidiary role. It was also submitted that Mae Ja Kim received a greater discount for her cooperation with authorities, even though her cooperation had been less extensive. Moon Ja Kim had agreed to give evidence against two of her co-accused, whereas Mae Ja Kim had not.
Moon Ja Kim further contended that there was insufficient disparity between her sentence and that of Mae Ja Kim because she had been out of Australia for about six weeks of the five-month period of offending and had, therefore, not aided and abetted Mae Ja Kim’s dealing in the proceeds of crime during that period.
Moreover, counsel for Moon Ja Kim submitted that it was not open to the sentencing judge to treat her as being integral to the criminal enterprise because she had been absent for six weeks without any effect on its operations. He further submitted that there were additional mitigating features in her case. She was older than the other offenders, being aged 59. While the offending was taking place, she was in the process of establishing a remedial massage business which had subsequently commenced operating and employing people. This demonstrated that she was getting out of the unlawful syndicate. She had undertaken a significant financial obligation to her nephew, which was an indicator of charity. She had been unable to visit her father when he was ill or to attend his funeral.
Fang was sentenced to a period of 3 years and 8 months’ imprisonment with a non-parole period of 2 years and 3 months. As mentioned, the judge stated that, but for the cooperation of Mae Ja Kim with the authorities, she would have received a head sentence of 4 years and 10 months with a non-parole period of 3 years and 2 months. It was submitted that Fang’s role and personal circumstances were significantly distinguishable from those of Mae Ja Kim so as to make the level of disparity insufficient. She had been the principal of the syndicate and the person who received the money and dealt with it. Mae Ja Kim had performed an overarching role in the organisation and management of the business and received a direct benefit from it. In contrast, Fang had aided and abetted Mae Ja Kim’s dealing while occupying a lawful role within the brothel, for which he was paid a wage. No finding was made that he had been enriched by his offending. It was submitted that Fang was not a partner in the business and was clearly subordinate to Mae Ja Kim. There was a significant age difference. At the time of the offending, Fang was 25 years of age whereas Mae Ja Kim was 39 years old. Fang had been unable to complete his studies and would be deprived of the life he had expected to lead in Australia because he would very likely be deported at the end of his term of imprisonment. He had also experienced an exceptionally harsh period of pre‑sentence incarceration for 25 days on 23 hour per day lockdown without access to any natural light. He had been destitute while on bail awaiting trial.
Putting to one side for present purposes the discounts that were applied by reason of cooperation with the authorities, the judge fixed sentences for each of the co-accused other than Mae Ja Kim of 3 years and 8 months. The head sentence that would have been imposed on Mae Ja Kim had she not cooperated was 4 years and 10 months. The non-parole periods revealed greater variation. Moon Ja Kim, Fang and Ye would have been required to serve 2 years and 5 months, 2 years and 3 months and 2 years respectively. The cooperation of the Kim sisters meant that Mae Ja Kim was sentenced to 4 years with a minimum of 2 years and 6 months, and Moon Ja Kim was sentenced to a term of 3 years and 2 months with a minimum of 2 years.
In considering the difference in sentences imposed on Mae Ja Kim and the other offenders, it is necessary first to take out of account the benefit accorded to Mae Ja Kim on account of her cooperation with the authorities. But for that cooperation, Mae Ja Kim’s sentence would have been 1 year and 2 months longer than that of any of the other offenders. That sentence would have been about one third higher than those of the others, who aided and abetted her offending. Mae Ja Kim was plainly the principal offender and derived the direct benefit of the relevant dealings. However, they were dealings in the proceeds of an enterprise in which all the accused took part, and the sentencing judge found that all were integral to its operation. The approach of the sentencing judge properly gave weight to the greater culpability of Mae Ja Kim.
Moon Ja Kim has a further reason for complaint about the difference between her sentence and that imposed on her sister, because she also cooperated with the authorities, and had been prepared to give evidence against the other accused. When the actual sentences are compared, there is only 4 months difference between them. However, the discounts given to each sister are comparable, amounting to about 14 per cent in the case of Moon Ja Kim (3 years and 8 months reduced to 3 years and 2 months), and about 17 per cent in the case of Mae Ja Kim (4 years and 10 months reduced to 4 years). Moreover, as well as finding that Moon Ja Kim’s cooperation was not motivated by remorse, the judge took into account the value of the information she provided and the circumstances surrounding the giving of the undertaking. There was evidence that the police had regarded her as being ‘less than fully frank’ and that almost all of the information she provided had already been known to them. In the circumstances, it was well open to the judge to moderate the discount in her sentence on account of cooperation.
Moon Ja Kim was also able to point to the shorter time of her offending as a reason why her sentence was too high relative to that of her sister. This argument was relied on to identify disparity between her sentence and those of Fang and Ye as well, and is dealt with below.
Differences in the sentences of the offenders other than Mae Ja Kim were to be expected, given the different mitigating factors upon which they relied. Fang and Ye had, to some extent, their relative youth in their favour. In the case of Fang, the prospect of deportation and the cessation of his studies were significant matters in mitigation. He had also suffered considerable hardship by reason of the severe conditions of his incarceration prior to sentence. On the other hand, he had not demonstrated the degree of remorse shown by Ye. Kim had been overseas for six weeks during the five month period of the offending. She was also able to point to the financial help which she gave to her nephew. She too had not exhibited remorse.
As mentioned, counsel for Moon Ja Kim placed emphasis on the period of her absence overseas. This plainly goes to the duration of her offending, which was about 100 days as against 144 days. On the other hand, she offended both before and after her time out of the country. Her absence merely interrupted her ongoing offending. While this was a matter relevant to sentencing, its weight should not be overstated. In particular, to have afforded a reduction in sentence proportionate to the mere duration of the offending of the various parties would have substantially overlooked the seriousness of her offending.
Where the same judge sentences co‑offenders and gives detailed reasons for imposing the sentences, an appellate court should be cautious in reaching the conclusion that the parity principle has been infringed.[14] Here, the sentencing judge faced a difficult exercise, with four co‑accused pleading guilty to their involvement in a common course of conduct. There was little to distinguish the offending of the co-accused other than Mae Ja Kim. The mitigating features relied upon by each of the offenders were different in nature and giving effect to them called for an evaluative exercise upon which minds might legitimately differ. If discounts for cooperation were left out of account, the sentencing judge would have imposed the same head sentence on each of the accessorial offenders. Fang received a higher non-parole period than Kim, but only because of Kim’s cooperation, without which her non-parole period would have been two months longer than his. Fang was the only holder of a licence under the Sex Work Act, which indicated that he was well aware of the unlawfulness of the syndicate’s operations. His non-parole period was three months longer than Ye’s, who had impressed the judge with his remorse. Kim received a non-parole period the same as that of Ye.
[14]R v Swan [2006] NSWCCA 47 [71] (Barr and Howie JJ).
The differences between the non-parole periods fixed in respect of Fang, Moon Ja Kim and Ye are not large. Their culpability was considered not to differentiate them from each other and the judge considered that they all had reasonably good prospects of rehabilitation. Each of them relied on different mitigating factors, which are not directly comparable. In all the circumstances, there is no marked or manifest disparity so as to give either Fang or Moon Ja Kim a justifiable sense of grievance in respect of the sentences imposed. Leave to appeal on this proposed ground should be granted but the appeal on this ground should be dismissed.
Manifest excess
Both Moon Ja Kim and Fang submitted that the head sentence and the non-parole period imposed upon them were not reasonably open. Moon Ja Kim also relied on the factors in mitigation which had been relied upon at the plea. It was submitted on her behalf that the seriousness of the ‘predicate offence’ against the Sex Work Act is a relevant sentencing factor and that it was highly unlikely that she would have received a sentence of imprisonment had she been prosecuted under the Sex Work Act. Counsel submitted that none of the indicia of sophisticated money laundering were present in her case. It was submitted that Kim was not to be punished for aiding and abetting the ‘predicate offence’, as distinct from the dealing in the proceeds of that offence.
Fang drew attention to the mitigating factors which had been advanced in his favour on the plea, to which reference has already been made. Like Kim, he further submitted that the offending which leads to the property becoming proceeds of crime is relevant to an assessment of a contravention of s 400.5 of the Code.[15] In that connection, reference was made to the maximum penalty of five years’ imprisonment for contravention of s 10 of the Sex Work Act.
[15]He relied on R v Ansari (2007) 70 NSWLR 89, 118 [119]–[120] (Howie J; Simpson and Hislop JJ agreeing), affd Ansari v The Queen (2010) 241 CLR 299; Foster v The Queen [2009] 1 Qd R 53, 64 [60] (McMurdo P; Mackenzie AJA and Chesterman J agreeing) (‘Foster’).
Fang further submitted that the nature of the dealing was relevant to the assessment of the offence. The expenditure of proceeds of crime by Mae Ja Kim did not have any of the aggravating features of concealment or deception found in other cases. It was submitted that the offending by Mae Ja Kim had been a ‘highly technical version of the offence’.[16] Fang submitted, finally, that the offence of dealing in proceeds of crime covers a wide range of activity and mental states and that prior sentences for such dealings do no more than produce a broad indication of a developing sentencing practice.[17]
[16]See Thorn v The Queen (2009) 198 A Crim R 135, 142 [31] (Howie J; Campbell JA and Rothman J agreeing).
[17]R v Li (2010) 202 A Crim R 195, 204 [40] (Barr AJ; Allsop P, Basten JA, McClellan CJ at CL and Simpson J agreeing) (‘Li’); Majeed [2013] VSCA 40 [34] (Kaye AJA; Neave JA and Lasry AJA agreeing).
The Director accepted that it was difficult to identify any general sentencing practice in relation to div 400 of the Code, not least because the section provides for a wide range of related offences. However, it was submitted that when regard is had to general principles governing sentencing for offences of this kind, the sentences imposed in the present case were within the range of sentencing options available to the judge.[18]
[18]See Clarkson v The Queen (2011) 32 VR 361, 384 [89] (Maxwell ACJ, Nettle, Neave, Redlich and Harper JJA).
Division 400 of the Code is entitled ‘Money laundering’. It is the only division in pt 10.2, which is itself titled the same way. It contains a series of offences which are structured according to both the amount of money which is dealt with and the state of mind of the offender. In each case, it is an element of the offence that the money or property is ‘proceeds of crime’ or that there is a risk, or the offender has the intention, as the case may be, that the money will become an ‘instrument of crime’ (expressions which are both defined). Section 400.3 concerns money or property to the value of $1 million or more. Other sections contain thresholds of $100,000 (s 400.4), $50,000 (s 400.5), $10,000 (s 400.6) and $1000 (s 400.7). Section 400.8 provides for an offence in respect of money or property of any value.
Each section contains three offences, graded according to the state of mind of the offender. There are offences for dealing with money or other property which the person believes to be proceeds of crime or intends will become an instrument of crime; where the person is reckless to the fact that the money or property is proceeds of crime or the fact that there is a risk that it will become an instrument of crime; and where the person is negligent as to those matters.
The penalties for the respective offences are likewise graded, according to their seriousness. The maximum penalties for dealing with money which is, and is believed to be, proceeds of crime range from 25 years’ imprisonment where the value is $1 million or more through 10 years for a value of $10,000 or more down to 12 months where the money is of any value. Lower penalties apply, as would be expected, where the mental element involves recklessness or negligence respectively.
Section 400.9 provides for a further offence, punishable by imprisonment for three years, where a person deals with money which it is reasonable to suspect is the proceeds of crime, the value of the money being $100,000 or more. No mental element is specified. It is not necessary to refer further to the remaining provisions of pt 10.2 of the Code.
It was held by this Court in Majeed that, despite the increasing number of money laundering cases which have been the subject of appellate decision, they offered no more than a broad indication of developing sentencing practice.[19] While the number of decisions has continued to increase, that remains the position. However, as the Court held in Majeed, the previous decisions are of assistance in identifying some of the principles to be applied in imposing a sentence for a money laundering offence.
[19][2013] VSCA 40 [34] (Kaye AJA; Neave JA and Lasry AJA agreeing). See also Li (2010) 202 A Crim R 195, 204 [40] (Barr AJ; Allsop P, Basten JA, McClellan CJ at CL and Simpson J agreeing); R v Truong [2016] VSCA 228 [35] (Priest JA; Santamaria JA agreeing).
The following principles have so far emerged from the authorities:
1.The starting point is to consider where the offence sits in the scheme of offences provided for by div 400 of the Code.[20]
2.Attention must be focussed on the precise circumstances of what the offender did, including the actions which constituted the dealing for the purposes of the offence, the period of time over which the offence was committed, the number of transactions involved, the amount involved in the offending, and the role of the offender in the money laundering arrangement (including whether the offender was the author or instigator of that arrangement, and the degree of authority reposed in the offender in carrying it out).[21]
3.The person who launders money is an important cog in the wheel of organised crime and such conduct warrants severe punishment in which general deterrence is to be given significant weight.[22]
4.The amount of money involved is a highly significant matter and the primary identifier of the maximum penalty for any given offence.[23]
5.Generally speaking, a larger number of transactions involving small amounts of money will be more serious than a single transaction of a larger amount, which may be seen as an isolated offence.[24]
6.It is ordinarily relevant to consider how the money dealt with is proceeds of crime, and the extent of the offender’s belief as to, or knowledge of, how the money is proceeds of crime.[25]
7.However, consideration of the sentence for which the offender may have been liable had he or she been charged with a different offence (in particular, that which generated the proceeds of crime) is a distraction from the sentencing process in respect of the offence charged.[26] In offences against div 400, that will serve to preclude consideration of the maximum sentence for the ‘predicate offence’.
[20]Majeed [2013] VSCA 40 [36]; R v Ly (2014) 241 A Crim R 192, 204 [86] (Leeming JA, Hall and Schmidt JJ) (‘Ly’).
[21]Majeed [2013] VSCA 40 [37]; Li (2010) 202 A Crim R 195, 204 [41]; R v Huang (2007) 174 A Crim R 370, 381 [34]–[35] (Simpson, Howie and Hislop JJ) (‘Huang’); Ly (2014) 241 A Crim R 192, 214–15 [138].
[22]Majeed [2013] VSCA 40 [39]; Huang (2007) 174 A Crim R 370, 381 [36]; Ly (2014) 241 A Crim R 192, 205 [86].
[23]Huang (2007) 174 A Crim R 370, 381 [34]; R v Ansari (2007) 70 NSWLR 89, 119 [122] (Howie J; Simpson and Hislop JJ agreeing); Li (2010) 202 A Crim R 195, 204 [41]; Ly (2014) 241 A Crim R 192, 205 [86].
[24]Huang (2007) 174 A Crim R 370, 381 [35]; Ly (2014) 241 A Crim R 192, 205 [86].
[25]Majeed [2013] VSCA 40 [38]; Li (2010) 202 A Crim R 195, 204 [41]; Foster [2009] 1 Qd R 53, 64 [60] (McMurdo P; Mackenzie AJA and Chesterman J agreeing).
[26]Elias v The Queen (2013) 248 CLR 483, 497–8 [35]–[36] (French CJ, Hayne, Kiefel, Bell and Keane JJ); Ly (2014) 241 A Crim R 192, 214 [137].
The maximum sentence for the offences to which Kim and Fang pleaded guilty was 15 years’ imprisonment. The judge was satisfied that the quantum of money dealt with was towards the upper range of between $50,000 and $100,000. As noted, that was plainly a reference to the structured set of offences for which div 400 provides. The offending on the part of Kim and Fang involved repeated, rather than isolated, acts. These acts included bookkeeping and calculating receipts and expenses, as well as otherwise assisting in the operation of the enterprise, which facilitated Mae Ja Kim’s dealing with the proceeds of the crime of deriving a material benefit from the earnings of sex work. These features, taken together with the usual requirement that general deterrence be emphasised in sentencing for offences against div 400, suggest that the offending was not at the lower end of the range. On the other hand, the dealings in the proceeds of crime in the present case are somewhat unusual, in that they consisted only of spending those proceeds, rather than arranging for them to be secreted or disbursed or otherwise dealt with. This suggests that the case does not have some of the serious features to which the authorities make reference as calling for severe punishment.
However, while spending the proceeds of crime, without more, may not aptly be described as ‘money laundering’, such conduct readily constitutes a dealing within the scope of div 400. Moreover, the offending in the present case was protracted, and by their actions the applicants aided and abetted Mae Ja Kim in dealing with the proceeds of a significant criminal enterprise. Importantly, the involvement of Moon Ja Kim and Fang in that enterprise points to them having had a high degree of knowledge that the dealings of Mae Ja Kim which they were aiding and abetting were dealings in proceeds of crime. That is a relevant sentencing consideration, notwithstanding that they are to be sentenced, not for aiding and abetting Mae Ja Kim’s offence against the Sex Work Act, but for aiding and abetting her in dealing with the proceeds of committing that offence. Taking account of that matter does not contravene the dictum in Elias v The Queen, mentioned above.[27]
[27]See above n 26 and accompanying text.
Among other authorities, the Director referred the Court to Ly,[28] in which the respondent was charged with the offence under s 400.4(1) (dealing with an amount exceeding $100,000 believing it to be proceeds of crime). She had fraudulently obtained payments from the Australian Taxation Office by lodging false income tax returns in the names of taxpayers who were unaware that their identity and tax file numbers were being used. An amount of $357,568 was involved. The New South Wales Court of Criminal Appeal held that the sentence imposed after trial, namely 3 years and 6 months’ imprisonment with a non-parole period of 2 years and 4 months, was inexplicably lenient in light of the seriousness of the offending and the maximum penalty of 20 years’ imprisonment. A sentence of 8 years was imposed instead, with a non-parole period of 4 years and 6 months.
[28](2014) 241 A Crim R 192.
It had been submitted in Ly that the case did not call for general deterrence in the same way as other money laundering cases because Ly had done no more than spend her ‘ill-gotten gains’ and general deterrence was instead promoted by the potential punishment for the anterior offence.[29] The New South Wales Court of Criminal Appeal rejected the submission, observing that providing comfort to a criminal enterprise was not an element of the offence and that Ly had engaged in deliberate, sustained and wilful conduct over a relatively lengthy period (10 months).[30] Likewise here, it does not avail Moon Ja Kim and Fang to assert that the offending by Mae Ja Kim was ‘highly technical’. As noted, the definition of ‘dealing’ readily includes dealings which are not secretive.
[29]Ibid 203 [77] (Leeming JA, Hall and Schmidt JJ).
[30]Ibid 214 [135]–[136].
The Court in Ly referred, among other cases, to its previous decision in R v Huang.[31] In that case the offender Siu pleaded guilty to a charge of having dealt with money intending it to become an instrument of crime, contrary to s 400.4(1) of the Code. The amount in question was $556,400, which had been deposited at various bank branches in amounts of just under $10,000 over a period of some 10 weeks. The respondent received a total fee of less than $3,000. He was instructed what to do by his principal, although he knew that he was involved in an illegal activity. He was 64 years of age and on a disability pension, in poor health and with limited English. He was initially sentenced to a term of 2 years and 11 months’ imprisonment, with release on recognisance after 12 months. The Court on a Crown appeal described the offending as involving ‘very substantial criminal activity warranting a severe, deterrent sentence’.[32] A sentence of 5 years’ imprisonment was substituted, with a minimum term of 2 years and 6 months. The Court considered that a preliminary head sentence of 8 years’ imprisonment reflected the seriousness of the offending, before taking account of mitigating factors including the plea of guilty. Had the matter not been a Crown appeal, the Court believed that a more appropriate starting point would have been between 9 and 11 years. According to the approach then governing Crown appeals in New South Wales, the Court adopted the lowest sentence within the available range.[33] It described the sentence of 5 years as ‘the very least that could be imposed upon the respondent to reflect his criminality’.[34]
[31](2007) 174 A Crim R 370.
[32]Ibid 383 [46] (Simpson, Howie and Hislop JJ).
[33]Ibid 383 [47]. See the reference to the then practice in Ly (2014) 241 A Crim R 192, 206 [93].
[34]R v Huang (2007) 174 A Crim R 370, 383 [47].
These decisions exemplify the seriousness with which offences under div 400 are treated by appellate courts. In the present case, the sentences imposed were markedly lower than those indicated as appropriate in the above matters. That partly reflects the fact that a substantially lesser amount of money was involved and a lower maximum penalty was applicable. It could also reflect a degree of moderation in light of the fact that, as already observed, the dealings in the present case were different in character by virtue of consisting only of spending the proceeds of crime, although that feature does not distinguish Ly. In any event, this is not truly a mitigating consideration, because, as was held in Ly, the offence is committed irrespective of whether comfort is given to a criminal enterprise or, to put the matter differently, whether the dealing operates as a ‘cog in the wheel of organised crime’.[35] And as already noted, the offenders in the present case were to be sentenced according to their very high degree of knowledge of the criminality which yielded the proceeds which were the subject of the dealings they aided and abetted.
[35]Majeed [2013] VSCA 40 [39].
Far from showing that the sentences imposed in the present case were manifestly excessive, these decisions suggest that they represented a proper balancing of the relevant sentencing considerations. If anything, when the authorities and the maximum penalty of 15 years’ imprisonment are considered, the sentences might be seen as lenient.
For the above reasons, the applicants have failed to demonstrate that the sentences imposed were manifestly excessive. Leave should be granted to raise this proposed ground of appeal but the appeal on this ground should be dismissed.
Conclusion
Leave to appeal against sentence should be granted in each matter, but both appeals must be dismissed.
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