Marzano v Procopis - [2009] WASC 332

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: MARZANO -v- PROCOPIS [2009] WASC 332

CORAM: EM HEENAN J

HEARD: 5 NOVEMBER 2009

DELIVERED : 18 NOVEMBER 2009

FILE NO/S: SJA 1066 of 2009

BETWEEN: FRANK JOHN MARZANO
Applicant/Appellant
AND
BENJAMIN JOHN PROCOPIS
Respondent

ON APPEAL FROM:
Jurisdiction              :  MAGISTRATES COURT BUNBURY
Coram  :MAGISTRATE K T FISHER
File No  :BU 4037 of 2008

Catchwords:

Application for leave to appeal against conviction and sentence - Possession of stolen or unlawfully obtained property - Criminal Code s 428(1) - Forfeiture of $8,000 cash - Sentence of immediate imprisonment for 9 months - Application for leave to appeal against sentence - Conviction for an offence against s 428 does not establish that the property involved was stolen or unlawfully obtained - Significance of forfeiture order - Combination of pecuniary penalty in the form of forfeiture order and sentence of imprisonment - Suitability of suspended sentence

Legislation:

Criminal Code 1911 (WA)

Result:

Leave to appeal against conviction granted - appeal against conviction dismissed
Leave to appeal against sentence granted - appeal against sentence allowed - Appellant resentenced to 7 months' imprisonment sentence suspended for 18 months from date of conviction

Category: A

Representation:

Counsel:

Applicant/Appellant : Ms L Black
Respondent: Ms M J Paterson

Solicitors:

Applicant/Appellant : Porter Scudds
Respondent: State Solicitor for Western Australia

Case(s) referred to in judgment(s):

Beard v The Queen [2003] WASCA 262
Denton v Murdock (Unreported, WASC, Library No 95072, 12 October 1992)
Dinsdale v The Queen (2000) 202 CLR 321
Grant v The Queen (1981) 147 CLR 503
Hoskins v Ramsden [2008] WASC 28
Hoskins v Ramsden [No 2] [2009] WASCA 90
House v The King (1936) 55 CLR 499
Kavanagh v Claudius (1907) 9 WALR 55
Langridge v The Queen (1996) 17 WAR 346
Lowndes v The Queen (1999) 195 CLR 665
Mabbott v The Queen [1990] WAR 323
McLennan v Campbell [2003] WASCA 145
Ricciardello v Van Aken (1996) 14 WAR 1
Ryan v Dimitrovski (1996) 16 WAR 457
Samuels v Western Australia (2005) 30 WAR 473

EM HEENAN J: On 17 June 2009 Frank John Marzano was tried in the Magistrates Court of Western Australia at Bunbury before his Honour, Mr KT Fisher SM on a charge that on 4 July 2008 at Bunbury he was in possession of property (namely $8,000 in cash) that was reasonably suspected to be stolen or otherwise unlawfully obtained contrary to s 428(1) of the Criminal Code. Following his plea of not guilty the trial proceeded and Mr Marzano was convicted as charged. After hearing submissions in relation to sentence the learned magistrate then imposed a sentence of 9 months' immediate imprisonment and ordered the forfeiture of the $8,000 cash.
From that conviction and sentence Mr Marzano has applied to this court for leave to appeal and by orders made by McKechnie J on 24 August 2009 it was directed that the applications for leave to appeal and any appeal should be heard together. Following the institution of the applications for leave to appeal Hall J on granted him bail 7 July 2009 pending the determination of the appeal. The applicant has remained on bail since until the hearing of these applications before me and I ordered that bail be renewed pending my decisions on the applications.

Circumstances of the alleged offence

On the evening of Friday, 4 July 2008 Mr Marzano was driving his Holden Commodore (39 GM) on Spencer Road, Bunbury where he was stopped at about 9.11 pm by police who were then conducting traffic action. He was subjected to breath and drug testing and, as a result of a positive preliminary drug test, he and his vehicle were searched. The police found in the centre console and glovebox three glass smoking implements, all containing detectable traces of methamphetamine. The officers noticed that the rear seat of the vehicle was loose so they removed it. Under that seat they found a small clip‑seal bag containing less than one gram of cannabis, a Tupperware container containing an Ecstasy tablet and six LSD tablets. They also found $8,000 in cash in $50 notes, numerous empty clip-seal bags and a set of digital scales. These were all found next to each other. The police seized Mr Marzano's mobile phone and, on reviewing its memory, discovered a message or messages which were later suggested to relate to the purchase or sale of illegal drugs. Marzano was then arrested but declined to make any response to questions and, on being taken to the Bunbury police station, declined to participate in a video record of interview.
Mr Marzano was then charged with three counts of possessing a prohibited drug contrary to s 6(2) of the Misuse of Drugs Act 1981 (WA), one count of possessing a smoking utensil contrary to s 5(1)(d)(i) of the Misuse of Drugs Act 1981 (WA) and one count of possessing property reasonably suspected to have been unlawfully obtained contrary to s 428(1) of the Criminal Code.
Mr Marzano pleaded guilty to each of the four charges relating to the possession of a prohibited drug, or the possession of a smoking utensil. He was fined a total of $2,000 as a global penalty for those offences and ordered to pay costs. Each of those four offences involved simple possession of drugs, or a smoking implement, without any element or allegation of an intent to sell or supply or, for that matter, of commercial intent or trafficking.
At the trial in the Magistrates Court at Bunbury the sole evidence for the prosecution was that of Police Officer Procopis, one of the arresting officers, who outlined the incident involving the drug testing of the applicant, and the searches conducted of him and his vehicle leading to discovery of the items already mentioned and of the $8,000 in cash. His evidence included reference to some downloaded messages from the applicant's mobile phone, the details of which are to be found in the transcript at pages 7 and 8. These brief messages, in a very transparent code, indicate that some friend was communicating with Mr Marzano offering to sell him marijuana and that Mr Marzano indicated a possible interest in making a purchase. It was not alleged that any of these messages was related to the small amount of cannabis found in Marzano's possession. His explanation, which seems to have been accepted, was that he did not proceed with the offered sale of the marijuana at any time before he was arrested and charged.
At his trial Mr Marzano himself gave evidence and was cross‑examined. He maintained that he was in lawful possession of the $8,000 in cash and, consequently, had a complete defence to the charge. His explanation was that the $8,000 in cash was his property and that it was lawfully obtained from three separate sources, namely:
(a)that $4,500 came from a recent sale of his Kawasaki motorbike which he had done up and then sold for cash;
(b)the sum of $1,900 which he had recently obtained from the sale of a trailer; and
(c)the balance of $1,600 came from rent money paid to him in cash from an identified person who was renting a room or rooms from him.
He gave evidence that he had the $8,000 in cash with him in his car that evening because he wanted to make an offer for the purchase of a friend's Ducati motorcycle which he knew was for sale. According to him, the owner of the Ducati was asking $8,500 to $9,000 for the motor cycle but Marzano said that he had expected that an offer of $8,000 in cash might induce the vendor to accept the lower price. Evidently it was his habit to deal in cash and he said that it was his experience that cheaper prices could usually be obtained for cash sales. According to Mr Marzano, he had gone to his friend's house in order to offer to purchase the Ducati motorcycle but his friend was not there and he was unable to make an offer or discuss the proposal at that time.
At his trial Mr Marzano also called a Mr Daniel Rich, whose evidence was that he had purchased the Kawasaki motorcycle for $4,500 at the end of June 2008 and had paid cash to Mr Marzano for the purchase. This sale was only a week or so, at the most, before Mr Marzano was stopped by the police and found to be in possession of the $8,000. The learned magistrate accepted the evidence of Mr Rich that he had purchased Mr Marzano's motorcycle for $4,500 in cash but, as will be seen, cannot have accepted that any part of that payment was included in the $8,000 cash found by the police in the applicant's car.
The appellant also gave evidence that he let various rooms at three properties, including his parents' home, which he controlled, to various tenants for $100 a week but produced no records giving any detailed accounts of the receipt or banking of rent. He was asked whether or not he had any bank accounts and said that he did have one bank account but used it infrequently and did not know what the approximate current balance of the account was. His indifference to this financial statistic was explained by his assertion that he was accustomed to deal largely in cash for most, if not all, of his financial dealings. When asked about his employment (ts 12 ‑ 13) he said that he had been having a break from working because he had been doing up another motor vehicle but he expected to start work the following week for an engineering firm. He gave evidence of previous intermittent employment as a welder for a subcontractor near Ravensthorpe and also on offshore oil and gas rigs but with only general detail about the dates and places of employment. Although Mr Marzano said that he received pay slips from his various employers and paid some of the money into a bank account, he produced no financial records of any of these payments and maintained that he kept large quantities of cash.
The learned magistrate did not accept the explanations given by Mr Marzano for his possession of the $8,000 cash.
In his reasons for decision the learned magistrate concluded that the police officers clearly had a significant suspicion about the source of the $8,000 having regard to where it was found and the other items of drugs or drug paraphernalia found with it and the absence of any explanation for the money given by Mr Marzano at the time the police found it.
His Honour then addressed the evidence relating to the explanations offered in court by Mr Marzano for his lawful possession of the $8,000, examined the details of the sale of the Kawasaki to Mr Rich and the explanation about Mr Marzano's intention to offer to purchase the Ducati before going on to say at (ts 50):
It is unnecessary for the court to otherwise and in great detail set down the evidence as it unfolded, or as it was revealed, for the court today has had the benefit of hearing the evidence called by the prosecution and the evidence of the accused and his witness Rich, and I have in the circumstances no quarrel with the evidence of Rich: self‑evidently, he fundamentally purchased the restored Kawasaki motorcycle of the accused.
The accused, however, was self‑evidently clearly uncomfortable in the course of giving evidence and given, no doubt, any person in his position in giving evidence in circumstances such as this, would be clearly uncomfortable, but he was significantly so. His evidence, if I may be forgiven, for the brevity of the explanation, was such, in my view, that it simply was testing my credulity. His account was simply an account that flowed with the flavour of a question.
In every respect he was trying to accommodate, but of course he simply, in any respect, when he was in a position, he simply could not recall. It is striking that a gentleman such as he is who is clearly a person of keeping significant records as is evidenced by the receipt books, that he simply could not recall the details when they are of significance and of some moment to his explanation. I reject his account as incredulous.
In the circumstances, an objective assessment, given the nature and location where the article and the money was found, clearly there is a suspicion of which I am satisfied of that the property was otherwise unlawfully obtained and the charges proven are proven beyond a reasonable doubt.
In the circumstances, this must be taken to be an assessment of the credibility of the applicant based on demeanour and the nature of his answers given in cross‑examination when compared with the facts as known. Stripped of courtesies, it amounts to a positive finding that the accused was untruthful and that the accounts which he gave about the origins of this particular $8,000 were false. Not only is that a critical and important finding, but the implications following the rejection of that evidence can only be that the accused was deliberately attempting to conceal the actual sources of the $8,000 which, in the circumstances of the other drug-related activities, led to a very strong and well‑founded suspicion that the money came from or was associated with unlawful dealing in illicit drugs. That implication is challenged by counsel for the applicant both in the application for leave to appeal and in the application for leave to appeal against sentence, as will soon appear. The significance attached to those conclusions by the learned magistrate and their effect for the present applications will be considered shortly.

Amended grounds of appeal

At the hearing of these applications I gave leave for the applicant to amend his grounds of appeal against conviction. The grounds, so amended, are:
1.The presiding Magistrate erred both in law and in fact by misstating and misapplying the requisite test of guilt under s 428 of the Criminal Code such that there was a miscarriage of justice.
Particulars
i.The presiding Magistrate stated that he reached his conclusion as to the Appellant's guilt on the basis that he rejected the Appellant's account given in evidence as concocted and was therefore satisfied that the case had been proved against him beyond reasonable doubt. This amounted to reversing the burden of proof. In fact, the presiding Magistrate should only have found against the Appellant under s 423 of the Criminal Code 'if satisfied beyond reasonable doubt that one reasonable suspicion open on the evidence was that the [money] in question… might have been stolen or unlawfully obtained', per Templeman J in Hoskins v Ramsden [2008] WASC 28.
ii.The Learned Magistrate in apparently concluding that the money in question was connected with the sale of drugs, failed to take into account the fact that the Appellant had been convicted solely of charges involving simple possession of dugs for which there was no element of commercial intent or trafficking.
2.The presiding Magistrate erred both in law and in fact by finding that the case against the Appellant had been proved beyond reasonable doubt such that there was a miscarriage of justice.
Particulars
i.A witness called on behalf of the Appellant gave evidence that one week before the Appellant's arrest with the money in question he had purchased a motor vehicle from the Appellant and paid him $4,500.00 in cash. The presiding Magistrate specifically stated that he did not reject the witnesses' evidence.
ii.It follows that the Appellant must have established an evidential basis for reasonable grounds for not suspecting that at least $4,500.00 of the $8,000.00 in cash was not stolen or unlawfully obtained and his defence under s 428(2) of the Criminal Code should have succeeded as a mater of law to that extent directly and by inference in its entirety.
iii.The Learned Magistrate in apparently concluding that the money in question was connected with the sale of drugs, failed to take into account the fact that the Appellant had been convicted solely of charges involving simple possession of drugs for which there was no element of commercial intent or trafficking.
The proposed grounds of appeal against sentence are those set out in the original proposed appeal notice of 25 June 2009 and are as follows:
Applicant's proposed grounds of appeal against sentence
1.The term of 9 months imprisonment imposed on the Appellant upon conviction was wrong in principle and excessive.
Particulars
i.The presiding Magistrate in imposing a term of immediate imprisonment failed adequately to consider the appropriateness of a term of suspended imprisonment by reference to:
(a)the circumstances of the commission of the offence;
(b)the low likelihood of future re‑offending;
(c)the appellant's rehabilitation;
(d)the impact of a prison sentence upon the appellant.
The Appellant pleaded guilty to and was fined for the illegal drugs associated with the $8,000.00 forming the subject of the count for which he was imprisoned. He had not offended for some seven years previously and he was the principal wage earner in a family that included 2 children under the age of 6 years.
ii.In passing an immediate term of 9 months imprisonment the presiding Magistrate found that the instant offence was in the 'middle order' of such offending. Given the sum of $8,000 that founded the conviction this was an incorrect finding.

Conviction

As the proposed grounds of appeal against conviction reveal, the principal contentions were that the learned magistrate:
•wrongly reversed the onus of proof;
•wrongly reasoned that the $8,000 was derived from, or associated with, illegal dealing in drugs in circumstances where the other convictions for unlawful possession of small quantities of drugs or drug-using paraphernalia, arising from the discovery of other items in the applicant's car that evening did not involve any elements of unlawful sale or supply or trafficking and, therefore, were incapable of supporting any inference or grounding any suspicion that the $8,000 cash was associated with illegal drug dealing; and
•erred because, even if there were reasonable grounds to suspect that some of the money discovered in the applicant's car was associated with illegal drug dealing, it was wrong for the learned magistrate to conclude, as he did, that the whole of the $8,000 could reasonably be suspected of being unlawfully obtained when there was evidence, which His Honour accepted, that the applicant had recently sold his Kawasaki cycle for $4,500 in cash.
It is necessary to examine those contentions in the light of the submissions advanced by counsel for the parties at the hearing of these applications.

Applications for leave to appeal

Leave to appeal, both against conviction and against the sentence, is sought on the grounds that if granted the applicant has reasonable prospects of succeeding ‑ Criminal Appeals Act 2004 (WA) s 9(2). It is submitted that there are reasonable grounds for success arising from the matters raised and that therefore leave should be granted. Counsel for the respondent points out that the statutory requirement means that any ground of appeal must have a rational and logical prospect of succeeding. That is, that it would not be irrational, fanciful or absurd to envisage it succeeding: Samuels v Western Australia (2005) 30 WAR 473, 487, but that on that test none of the proposed grounds of appeal has any reasonable prospect of success and that leave to appeal should not be granted. It is convenient to consider the merits or otherwise of the proposed grounds of appeal in relation to both the applications for leave and the appeals together as was ordered when the directions hearing was conducted by McKechnie J.
Section 428 of the Criminal Code in its present form was introduced in 2005 by the Criminal Law Amendment (Simple Offences) Act 2004 (WA) which, in the process, removed similar and other simple offences from the Police Act 1892 (WA). Section 428 in its present form replaces the former s 69 of the Police Act but as the learned author of 'Commentaries On The Criminal Law of Western Australia', Mr Ian Weldon, has written, the terms of the two provisions are not identical.

Section 428 in its present form appears only to have previously been considered by this court by Templeman J in Hoskins v Ramsden [2008] WASC 28 which accepted, in a general way, the similarities between the present section and the former s 69 but there are material differences. Section 69 and comparable provisions in other jurisdictions, have been traced to the Metropolitan Police Courts Act 1839 (UK): Kavanagh v Claudius (1907) 9 WALR 55, and McLennan v Campbell [2003] WASCA 145 and Grant v The Queen (1981) 147 CLR 503. The application of those earlier or other prototypes was approached with some reserve by the courts because of the need for a strict construction of the words outlining the elements of the offence ‑ Grant v The Queen (supra) [6].
One important difference in the present s 428 is the expressed statutory intention for it to apply to property which has been unlawfully obtained otherwise than by stealing. That was a deliberate change disclosed in the second reading speech (Hansard 2004 page 268) to overcome the effect of the decision in Ricciardello v Van Aken (1996) 14 WAR 1 where Scott J held that the provisions of the former s 69 of the Police Act were inappropriate to refer to forms of unlawful acquisition other than those analogous to stealing ‑ so, significantly, excluding the acquisition of money relating to the manufacture or supply of prohibited drugs. That that limitation has now been expressly overcome is also apparent from the construction placed on s 40 of the Summary Offences Act 1970 (NSW) as emerges from the decision in Grant v The Queen (supra).
For the offence to be established it must be proved beyond reasonable doubt that there was a reasonable suspicion open on the evidence that the property in question (in this case the $8,000 cash) might have been stolen or unlawfully obtained ‑ see per Templeman J in Hoskins v Ramsden.
In Ryan v Dimitrovski (1996) 16 WAR 457, dealing with the former statutory provision, Steytler J held that the suspicion must be held by the court at the time of the prosecution. Counsel for the applicant and for the respondent accepted that it is still the position under the present s 428. Even if this is proved, however, an accused will successfully defend such a charge if he or she can establish that at the time he or she was in possession of the particular property, they had no reasonable grounds for suspecting that it was stolen or unlawfully obtained ‑ s 428(2).
Consequently, there are three elements to the offence under s 428(1), namely:
(a)possession
(b)of a thing capable of being stolen
(c)reasonably suspected to be stolen or otherwise unlawfully obtained.
In this present case there is no doubt that Mr Marzano was proved to have been in possession of the $8,000 cash at the time of his arrest. Nor was there any doubt that the cash was a thing capable of being stolen. The only issue at trial was whether or not the prosecution had also proved that the cash was reasonably suspected to have been unlawfully obtained.
This was not a case where the accused was attempting to set up a defence that, although the property was stolen or unlawfully obtained, he had no reasonable grounds for suspecting that at the time. His position was that he had lawfully come by the money and, if the prosecution were not able to refute that explanation beyond reasonable doubt, there would, accordingly, be no grounds for the court to conclude, at the time of the hearing, that the money was reasonably suspected to have been stolen or otherwise unlawfully obtained.
Recognition of this aspect of the case demonstrates that the onus of proof, from first to last, remained on the prosecution. Given the circumstances in which the cash was found and its proximity to small quantities of drugs and drug‑using apparatus, there was at least a prima facie case of reasonable suspicion that the property was unlawfully obtained. This meant that, although the prosecution retained the ultimate onus, there was an evidentiary onus on the accused to provide an explanation as to how he came by the property which, if given, would need to be considered along with all the rest of the evidence to determine whether or not all elements of the charge had been established beyond reasonable doubt.
A question of some importance in this and similar cases is to what extent, if any, can the particular circumstances surrounding the discovery of the property in question and, for that matter, false explanations given by the accused, be regarded as evidence to support an inference or a finding that there were reasonable grounds to suspect that the property was stolen or unlawfully obtained. Close examination of the authorities bearing on this issue, in the context of a charge for receiving stolen property, was undertaken by the Court of Criminal Appeal in Mabbott v The Queen [1990] WAR 323, 327 ‑ 332 by Kennedy J. It is, of course, necessary to emphasise that under the present s 428 it is not necessary for the prosecution to prove that the property in question was stolen or was unlawfully obtained because proof of reasonable suspicion that it was will be sufficient to establish the offence. Nevertheless, in a practical setting where the accused, as this applicant did, contends that there was no ground for any such suspicion because, as a matter of fact, the property was his and was lawfully obtained, the determination of whether or not the prosecution has disproved that explanation beyond reasonable doubt will, in many instances, call for an evaluation of that explanation in the light of all the surrounding circumstances.
In this present case the discovery of some drug‑using paraphernalia in the glovebox of the car, and the further discovery of a small quantity of drugs, clip‑seal bags, scales and the cash effectively hidden under the rear seat was intensely suspicious and also suggested a connection between the drugs and the drug paraphernalia on the one hand and the money on the other. That was the basis for the existence of an alleged reasonable suspicion by the police officers when the arrest was made and for the proof of the existence and a similar reasonable suspicion by the court at the trial.
However, since this accused claimed lawful ownership of the cash, but not the drugs or drug paraphernalia, it remained for the prosecution to refute his explanation beyond any reasonable doubt. It was at this point that the credit of the applicant became a material factor. Recognising that the onus of proof remained at all times on the prosecution and that this was accepted by the learned magistrate, disbelief in the explanation given and his Honour's implicit conclusion that it was a deliberately false explanation not only allows the conclusion to be drawn that the prosecution case was proved beyond reasonable doubt but the finding that the explanation was deliberately false is also, in effect, a finding of guilty knowledge which, in most cases and unquestionably in this one, simultaneously reinforces the prosecution case on the entire evidence. Accordingly, there is no basis in the present case to conclude that the learned magistrate misplaced, misapplied or failed to consider the burden of proof or the degree of proof resting on the prosecution. His Honour specifically noted these matters at ts 45.
Nevertheless, there was one feature of the case which led counsel for the appellant to submit that the background circumstances could not justify a reasonable suspicion that the $8,000 was unlawfully obtained, in this context meaning that it was derived from or associated with the illegal use of drugs, because the other summary offences to which Mr Marzano had pleaded guilty related only to small quantities of drugs without any element or allegation of him intending to sell or supply drugs or to traffic in them commercially. Effectively, the submission was that if the only drugs found in association with the money were small quantities for personal use that could not support any reasonable suspicion that the $8,000 was associated with the unlawful use or supply of drugs.
I do not accept that submission. A drug dealer who habitually sells or supplies illicit drugs for money may, if he is apprehended shortly after the sale or supply of drugs, have very little, if any, quantity of illegal drugs left in his possession but he may have a large amount of money derived from the sale or supply of drugs. Similarly, a person who uses only small quantities of drugs for his own personal use would not ordinarily be expected to be carrying large sums of cash of a size disproportionate to the small quantities of drugs which he had or intended to obtain. The fact that a person has been charged with particular offences relating to his possession of small quantities of drugs, without an allegation that he intended to sell or supply large quantities of drugs, may mean no more than that there is insufficient evidence to justify a prosecution for a more serious offence. Of course, it may mean that there is no suggestion that a more serious offence has been committed but every case will need to be considered in its own setting.
All that this examination of the possibilities does is to demonstrate that possession of small quantities of drugs, consistent with personal use, and conviction for offences not involving an intent to sell or supply is not inconsistent with, nor does it prevent, a conclusion that discovery of a significant amount of unexplained cash in the possession of the accused at the same time is capable of constituting a ground for a reasonable suspicion that the cash was obtained unlawfully. This means that the grounds of appeal asserting that the learned magistrate was in error by failing to conclude that possession only of small quantities of illicit drugs and minor drug use paraphernalia by the accused, did not prevent or detract from a suspicion that the $8,000 was obtained unlawfully.
The second ground of appeal contends, in substance, that the learned magistrate was in error in concluding that there were reasonable grounds for suspicion that the whole of the $8,000 had been obtained by the applicant unlawfully when his Honour had already accepted the evidence of Mr Rich to the effect that Mr Rich had paid $4,500 in cash to the applicant a week or so, at the most, before the alleged offence because that, at the least, suggested that the accused had lawfully obtained $4,500 in cash not long before. This ground of appeal has a second and more subtle component. It is that even if the learned magistrate did not accept the evidence of the accused, that the $8,000 was comprised in part by the $4,500 being the proceeds from the earlier sale of his Kawasaki, his Honour's acceptance that such a sale had been made and $4,500 lawfully received cast upon his Honour an obligation to attend to this aspect of the case in order to determine whether or not this was a reasonable explanation for possession of some of the money or, more precisely, at least an explanation which could not be excluded beyond reasonable doubt, leaving for separate consideration whether or not the prosecution had effectively disproved the explanations given for the remaining $3,500 in the bundle of cash discovered under the rear seat.
Clearly his Honour accepted that the evidence showed that an amount of $4,500 had been paid to Mr Marzano by Mr Rich but his Honour, of necessity, must be regarded as concluding that none of that $4,000 formed any part of the cash in the car found by the police. The only evidence that it did was from Mr Marzano himself, and that explanation was rejected as being deliberately false.
His Honour's conclusions in this respect cannot be separated from the context of Mr Marzano's financial affairs generally. The applicant claimed to be a person who had worked in the very profitable welding trade intermittently in the past and had earned, and was able to earn, large amounts from that occupation. However, he produced no records of that employment and only gave vague details of the places and circumstances of his alleged employment. He claimed to be a person who dealt with substantial sums of money but, although admitting that he had a bank account, he produced no banking, income tax or other financial records to show any pattern of income or expenditure. He claimed to conduct his financial affairs largely in cash but this bundle of $8,000 in $50 notes was the only cash discovered in his possession and no explanations about other amounts of cash were proffered. The purpose given for having the $8,000 was to offer the cash in return for another motorcycle, a Ducati, but if the offer had been accepted that would have left the appellant without any other money. There was no sense of incongruity about this recognised by the applicant. His Honour's reference to the appellant's explanation being designed to test his credulity can, however, be taken to accommodate this and other similar potentialities.
It was open to the learned magistrate to reject, as he did, the whole of the explanation given by the applicant about the sources of the $8,000. The applicant did not contend that even if his explanation for part of the money, namely the $1,900 said to derive from the sale of a trailer and further amount of $1,600 said to derive from rent, should be found to be deliberately false, the explanation that $4,500 of the money seized had been lawfully obtained should be accepted. This was essentially an issue of credit. If, as his Honour concluded, his evidence was false and his entire explanation were a pretext, there was really no reason to stop to consider whether, nevertheless, the prosecution had not excluded, as a reasonable possibility, that $4,500 of this particular bundle of cash had come from the sale of the Kawasaki. With respect, I see no error in this approach and I therefore reject the second ground of appeal.
Counsel for the prosecution submitted that even if this court were to conclude that the learned magistrate should have addressed the question of whether or not part of the $8,000 found might have been comprised by some or all of the $4,500 deriving from the sale of the Kawasaki, his Honour's failure to do so should not result in this ground of appeal succeeding because of s 14(3) of the Criminal Appeals Act 2004 which provides:
14(3)The Supreme Court is not required to set aside or vary a decision of a court of summary jurisdiction because the court omitted to make any necessary find of fact of the facts or evidence ‑
(a)in substance support the decision; or
(b)justify the finding,
and the Supreme Court under subsection (1), may instead either vary the decision or substitute another decision for it.
In view of the conclusion which I have reached that this second ground of appeal fails, it is unnecessary for me to embark upon any detailed consideration of the provisions of s 14(3) of the CAA. In any case, I do not consider that that would have been necessary because the learned magistrate's reasons for decision make it plain that he entirely rejected all aspects of the applicant's explanations about the source of the $8,000. This can only connote his Honour concluding that on all the evidence the prosecution had established beyond reasonable doubt that there were no grounds for entertaining any reasonable possibility that any part of the $8,000 had been lawfully obtained. In the light of his rejection of the credibility of the evidence of the applicant, that was a conclusion which was open on the evidence. I can see no demonstrated error in that conclusion or the manner in which it must have been reached by his Honour.
Therefore, while I am satisfied that the proposed grounds of appeal against conviction have raised arguable issues so that leave to appeal against conviction should be granted, I have concluded that those grounds should be rejected and that the ensuing appeal should be dismissed.

Appeal against sentence

The proposed grounds for leave to appeal against sentence which have been put forward in support of the application for leave to appeal have already been set out. Section 428(1) of the Code provides that in the event of a conviction for this offence the offender is liable to imprisonment for two years and a fine of $24,000.
The personal circumstances of the applicant were that at the time of conviction he was aged 43, having been born in Italy and arriving in Australia at the age of three. As a young child he had moved with his parents, three sisters and two brothers to Harvey, Greenbushes, and back to Harvey. At the time of the trial he was living in Bunbury with his de facto partner of eight years, with whom he had two young girls, aged four years and two years. It had already emerged from his evidence at the trial that he was a qualified tradesman, a welder, and from that occupation had opportunities to earn a substantial income.
I have already mentioned that for the four related drug offences arising from the discovery of small quantities of drugs or drug paraphernalia found in his motor vehicle on 4 July 2008 Mr Marzano was fined a total of $2,000 as a global penalty. He was also fined $300 and suffered the loss of some demerit points for driving with a prescribed illicit drug in his oral fluid contrary to s 64AC(1) of the Road Traffic Act1974 (WA) but that penalty was not imposed until later, on 22 September 2008.
A previous criminal record was produced to the learned magistrate when Mr Marzano was sentenced on 17 June 2009. This showed a number of offences for which fines or driver's licence suspensions or disqualifications had been imposed between May 1990 and April 2001. This included one count of burglary in January 1996 for which a fine of $800 was imposed. However, in May 2002 Mr Marzano was convicted of one count of possessing cannabis, another count of possessing a prohibited drug, a third count of possessing a smoking implement, a fourth count of cultivating a prohibited plant and 19 counts of unlawful possession. For these offences he was sentenced to an effective term of 18 months' imprisonment. He appealed to the Court of Criminal Appeal and it appears that his appeals were partially successful and that his effective sentence was reduced to 15 months. There were no further convictions recorded between May 2002 until this and the associated convictions of July 2008, meaning that more than six years had elapsed since his last previous conviction.
In the light of that history counsel for the applicant when making submissions to his Honour with respect to sentence invited the learned magistrate to consider a fine but was immediately met with the response (ts 51) that his Honour was inclined to provide a custodial sentence and that the prior conviction resulting in the 15‑month global penalty must have been for a serious matter. After hearing further submissions his Honour gave reasons for imposing the sentence ordered and in doing so also said:
That is not to suggest that the court here determines that that is in fact the source of this money. Self‑evidently the court, even to this point, has no explanation before it as to precisely where the money came from and is simply able to indicate that it has a suspicion attached to it. Suspicion, of course, is attached to the nature and place in which it was located and found, and the articles were found with it.
I appreciate in respect of those particular articles, they were dealt with summarily, and one can assume on the basis that they were for your own personal use. In respect of the offence, the offence self‑evidently, within the Parliament's intention, requires some deterrent aspect to a penalty, a deterrent both to an individual, specifically, and to the community generally.
Certainly on the scale of seriousness, this is not a case that falls at the top end of the scale. In my respectful view, it would be something in the middle order of the sorts of offence of this type that comes before the court. In my respectful submission, the appropriate disposition, mindful of the deterrent aspect, is a custodial one. There is nothing within your record that would discourage the court from imposing a custodial sentence and I order that you be subject to a period of imprisonment of nine months.
I am obliged to give consideration to whether it's appropriate to suspend that period of imprisonment and I'm mindful of the fact that you are, as indicated by counsel, in a relationship which against the background of this trial is now a functioning, restored relationship of which you are the primary bread-winner for two children. In the circumstances otherwise, you have a record which indicates a previous disposition to [sic] illicit substances which I am now advised that you have rid yourself of involvement with those substances.
It's the case otherwise that you have, albeit some years ago but not that long ago, a conviction not dissimilar to the present of unlawful possession which attracted a custodial sentence. There is nothing in your antecedents which would compel the court at this point in time to afford you the one last opportunity and I declare that you are not appropriate for a suspended imprisonment and an immediate custodial sentence is called for. It is otherwise an order.

His Honour then also imposed an order for forfeiture of the $8,000.
I note that no submissions were made by the prosecution in relation to the issue of sentence. In other words, the prosecution did not submit that a sentence of immediate imprisonment should be imposed.
The general principles relating to sentencing and, in particular, to any appeal against sentence were not contested at the hearing before me. Through their counsel the parties accepted that on a sentencing appeal the court should determine whether there was an error made in sentencing in the exercise of the court's discretion: House v The King (1936) 55 CLR 499 and that an appellate court should only interfere with the sentencing discretion if it is satisfied that there has been an error in the way in which the discretion was exercised ‑ Lowndes v The Queen (1999) 195 CLR 665, 671 ‑ 672.
One of the accepted ways for considering whether or not a latent or patent error in the exercise of the sentencing discretion has occurred is to ascertain whether the particular sentence falls outside the range of a sound exercise of the discretion for the particular offence. Accordingly, an appeal court will be justified in intervening and upholding an appeal against sentence because error is to be inferred on the ground that the sentence is unreasonable or unjust, or is manifestly excessive: Dinsdale v The Queen (2000) 202 CLR 321. For this particular offence, counsel for the applicant submits that no range of sentences is apparent because the amendment to s 248 was only made in 2004 and that the only reported case dealing with such an offence ‑ Hoskins v Ramsden (supra) not only is incapable of establishing any range but the actual sentence there imposed was significantly less than the 9 months sentence of immediate imprisonment in the present case.
In Hoskins v Ramsden each of the offenders was fined $15,000 as a total penalty for 13 convictions for offences under s 428 of the Code. Each of the charges related to jewellery discovered in the execution of a search warrant at the offenders' unit. Among other property seized at the unit were other items, the owners of which were eventually identified, and that resulted in additional charges being laid against the offenders for stealing. The appeal before Templeman J, however, related only to the 13 convictions for possession contrary to s 428. Evidently, the sentencing magistrate had initially adverted to the possibility of a sentence of imprisonment being imposed but, because of the lack of a prior record which might be thought to warrant a sentence of imprisonment and because of the offenders' antecedents, fines were imposed. Templeman J did not consider that they were excessive and dismissed the appeals against sentence. Miller J refused leave to appeal against the decision of Templeman J ‑ [2008] WASCA 139, and from that refusal the offenders applied for a review to the Court of Appeal comprising Wheeler, Pullin and Buss JJA. That application was also dismissed ‑ Hoskins v Ramsden [No 2] [2009] WASCA 90.
The single ground of appeal against sentence is that the period of imprisonment imposed was wrong in principle and excessive. That is broad enough to accommodate an error in sentencing by approaching the severity of the offence on the basis that it involved or implied drug dealing rather than possession of property reasonably suspected of being unlawfully obtained. While the ground of appeal is constrained by the particulars added to it, the particulars nevertheless refer to the circumstances of the commission of the offence and so focus on what the offence is at law and the circumstances of its commission.
Passing regard was given by the learned magistrate to the fact that the applicant was the principal breadwinner of a family which included two young children. He had been fined for the associated offences of possession of small quantities of drugs and drug paraphernalia and the $8,000 had been ordered to be forfeited. The forfeiture of the property suspected of being unlawfully obtained was not the subject of any controversy at the trial or on the appeal. It was only addressed after the sentences had already been decided and pronounced. The learned magistrate did not identify or examine the power to order forfeiture in the particular circumstances. This was not a case of an application for the forfeiture of property under the provisions of s 10(1) of the Drugs (Confiscation of Profits) Act 1980 (WA) and there had been no attempt nor any basis to have the applicant declared to be a drug trafficker.
Presumably, his Honour was exercising power under s 731 of the Code on the basis that the $8,000 'was used in or in connection with the commission of the offence'. Because no notice of the proposed forfeiture was given to any other person the learned magistrate must have assumed that the $8,000 was actually the property of the applicant.
The application in terms of s 731(1) of the Code to an offence under s 428(1) is not entirely straightforward because, for reasons already given, conviction of such an offence does not establish that the property in question was actually stolen or unlawfully obtained. Quite where that leaves the application of s 731 is perhaps a matter that deserves attention on another occasion, but, as it did not arise on this appeal, I shall not pursue it further. Nevertheless, the order for forfeiture does have consequences because where the order proceeded on the footing that the $8,000 was the property of the applicant it amounts to a significant pecuniary penalty. There is authority for the approach that it is necessary to take the financial consequences of pecuniary forfeiture orders into account, together with any fines or other penalties imposed for an offence or offences, when determining the question of the totality of the penalties imposed ‑ Denton v Murdock (Unreported, WASC, Library No 95072, 12 October 1992) per Parker J. See also Beard v The Queen [2003] WASCA 262 and Langridge v The Queen (1996) 17 WAR 346, 378 per Murray J.
In these circumstances the imposition of a further pecuniary penalty, in the form of a fine, as the applicant's counsel at trial had initially submitted should be done, might have given rise to issues of totality. Even if that were not so, the imposition of a forfeiture order raises the question of whether or not further penalties for the offence in the form of a sentence of imprisonment would not be better suited to the occasion. The learned magistrate did not apparently reflect upon the availability of alternative methods of sentencing or upon the selection of the combined sentencing response which he ultimately imposed but, nevertheless, the effect upon the applicant of the composite orders made by his Honour needs to be evaluated for the purposes of the present application.
Counsel for the applicant submits that the learned sentencing magistrate gave very little attention to whether or not the sentence of imprisonment which his Honour selected should nevertheless be suspended. It seems that the factors which inclined his Honour against suspending the sentence included the prior record of Mr Marzano and his Honour's view of the need for general and specific deterrence. It is at this point that the reasons given for the sentence are incomplete. In the first place, no detailed attention was given to the significance of the offender avoiding any convictions from 2002, when sentenced to his first period of imprisonment, and this offence in July 2008. Also, when considering the need for deterrence his Honour's express reasons do not appear to have gone beyond a recognition of the general clear policy reasons that s 428 is designed to establish an offence because, as said by the Attorney‑General in his second reading speech when the amendment was before Parliament, the purpose of the Bill in part was to:
Add further strength to the Government's strategy to combat burglary in this State. Previously police had been powerless to deal with the situation when suspected criminals involved in drug trafficking or burglary are found with large amounts of money and property that they cannot account for.
Although the offence is simply being in possession of property reasonably suspected of being stolen or unlawfully obtained and his Honour expressly mentioned this in his sentencing remarks (see passages reproduced in [45] above), it is difficult to escape the conclusion in the present case that his Honour then drifted into making an association between this money and unlawful dealing in drugs so implying that this particular offence was equivalent to unlawful drug dealing and merited the more stringent approaches to deterrence associated with significant drug offences generally.
There is a specific indication that the learned magistrate was, for practical purposes, treating the offence of which the appellant had been convicted as one involving drug dealing in his Honour's reference (ts 52) to the particular offence being 'something in the middle order of the sorts of offence of this type that comes before the court'. This is because the genus of the offence created by s 428(1) of the Code is so wide and various that it would be meaningless to refer to 'the middle order' of that sort of offence unless it were placed in the context of some particular illegal activity and the only context to which his Honour can possibly have been referring was to illicit drug dealing.
This is the very risk associated with prosecutions for offences against s 428 and its comparable counterparts or antecedents which has historically led courts to insist upon caution in dealing with and applying such provisions. Weldon (op cit) in this regard refers to the observations of the High Court in Grant v The Queen (1981) 147 CLR 503, [6] where Gibbs CJ, Mason, Aickin and Wilson JJ said, with respect to s 40(1)(a) of the Summary Offences Act 1970 (NSW):
From the history of this offence it is important to note the consistency with which courts, both in the United Kingdom and in Australia, have insisted upon a strict construction of the words outlining the elements of the offence, recognising the extraordinarily serious character of a law which authorises the arrest of a person on mere suspicion, to be followed by his conviction and possible imprisonment unless he satisfies the court that he had no reasonable grounds for suspicion that the thing in his custody bore the taint of illegality (references omitted).
The realisation that conviction of an offence under s 428 does not constitute, nor does it connote, any finding that the particular property was in fact stolen or unlawfully obtained (from whatever potential sources) is clearly apparent in the reasons of the Court of Appeal in Hoskins v Ramsden [No 2] (supra) where Wheeler JA, with whom Pullin and Buss JJA both agreed said at [24] ‑ [27]:
… the distinction between proof beyond reasonable doubt, and suspicion (reasonable or otherwise) is fundamental to the criminal law, and there is no reason to suppose that when Parliament used the latter term, it intended the former. All authority dealing with similar legislation appears to be consistent with what I would understand is the plain meaning of the section.
It follows that an interpretation in which a 'beyond reasonable doubt' identification of an item is requirement where it is alleged that an item, suspected to have been stolen, is related to a specific theft, is inconsistent with the plain meaning of the word 'suspected'. As Smith J said in Nicholls v Young [1992] 2 VR 209 at 214, 'It is in the nature of suspicions that it is possible to hold more than one suspicion at the same time and to hold suspicions which are inconsistent'.
Dealing with s 527C of the Crimes Act 1900 (NSW), in R v Porter (2004) 61 NSWLR 384, Spigelman CJ said, in reasons with which Barr and Hoeben JJ agreed, at [28]:
'In my opinion, the offence is intended to encompass circumstances in which the provenance, including the geographical provenance, and the goods in custody is unknown. Other offences, both at common law and by statute, dealing with unlawfully obtained goods do contain elements which require proof that a thing has in fact been stolen or unlawfully obtained. An important purpose of having an offence which turns on "reasonable suspicion" is to cover situations in which such an element cannot be established.'
It follows, from this approach to s 428 and the fact that the conviction does not constitute a finding that the property in question was, in fact, stolen or unlawfully obtained, that no element of punishment or expression of the need for deterrence can rightly be postulated upon the conclusion that the property in question was stolen or unlawfully obtained. However strong the suspicions may have been, a conviction for this offence does not constitute a finding that, in this case, the $8,000 was associated with illicit drug‑taking or dealing. The offence is expressly recognised by Parliament to deal with cases where proof of such matters is not possible, and hence the penalty for breaching s 428 is significantly less than the penalty available in cases of stealing or of possession of illicit drugs with intention to sell or supply.
This very necessary and practical legislative compromise must not only be recognised but must also be carried into the sentencing approach. In the passage quoted from his Honour's reasons in [45] above there are clear indications that his Honour treated this conviction as being comparable with the previous offences and indicating a disposition by the applicant to the use of illicit substances. Despite the strength of the suspicions which may be entertained, a conviction for this offence does not warrant such a conclusion, and the drawing of such a conclusion as part of the sentencing procedure is therefore an indication of a common fallacy.
Once this is recognised the significance of the policy of deterrence as a consideration in sentencing for this offence requires special attention. Obviously, the offence is designed to strengthen the legislative strategy to combat burglary and trafficking in drugs for money. It achieves this purpose by rendering persons who indulge in such unlawful activities subject to prosecution, conviction and a punishment of a lesser degree even if proof of theft or possession with intent to sell or supply is not possible. That is the deterrent factor which, so this policy assumes, will constitute a further discouragement against this type of criminal activity. However, it does not mean that wherever such a conviction is imposed, the sentencing can or should be approached on the basis that the offender is a thief or a dealer in illicit substances. That cannot be done. To attempt to do so would be to punish the offender for a different offence, one with which he or she has not been charged or convicted. Consequently, this means that the deterrent effect of such offences lies principally in the existence of s 438 and the potentiality for people who may have been engaged in stealing or drug trafficking to be convicted of what is, in effect, a lesser and inconclusive offence.
Personal deterrence must also be confined to the realisation that the offence involves no more than reasonable suspicion that the property possessed was stolen or unlawfully obtained. It does not justify the conclusion that the offender is a thief or a drug trafficker. It is not surprising having regard to the complexity of these considerations that an approach to sentence merged into treating the offender as if he had been convicted of a substantive offence of dealing in drugs with intention to sell or supply.
It follows from this examination that I consider that actual error has been revealed in the sentencing process and that, consequently, the applicant should be granted leave to appeal against sentence, that his appeal should be upheld and that he should be resentenced. The difficulty is that the submissions advanced in support of the application for leave to appeal against sentence contended that the sentence imposed was excessive and that there had been inadequate consideration of the possibility of the alternative of suspending the sentence of 9 months which had been selected. That approach is affected by the same shortcomings, namely, the implicit assumption that the conviction is equivalent to a conclusion that the $8,000 was derived or associated with illegal drug activity, instead of connoting no more than possession of property reasonably suspected to have been unlawfully obtained without in fact establishing that it was unlawfully obtained. There were, however, no submissions that a purely pecuniary penalty should have been imposed and this offender did, in fact, have a prior record of convictions which included a substantial term of imprisonment although many years ago. I am inclined to think that less significance should have been given to that prior record having regard to the period which had elapsed before 2008 without further convictions since May 2002.
In all the circumstances, it appears to me that the sentence of imprisonment was an available option had the process of sentencing been approached with these principles in view but that it should have been shorter than the period imposed. There is the prohibition against imposing a sentence of 6 months' imprisonment or less contained in s 86 of the Sentencing Act and it is possible that this was a factor in the sentence imposed.
This offender has already served 21 days in prison from the date of his conviction until his release on bail (17 June 2009 until 7 July 2009), and has also been subject to the restraints of being on bail subject to the conditions imposed.
In the circumstances, I consider that in resentencing the applicant a term of 7 months' imprisonment should be imposed but that it should be suspended for a period of 18 months to date from 17 June 2009. In the event that the applicant is to be dealt with for breaching the terms of suspended imprisonment or reoffending under pt 11 of the Sentencing Act, and the court dealing with that matter decides that he should serve all or part of the 7 months' imprisonment which I have now imposed but suspended, then credit should be given for the 21 days of imprisonment already served under the sentence which I now vary.
It follows that leave to appeal against sentence should be granted and that the appeal against sentence be upheld with the sentence imposed varied and suspended as set out.