Palaj v The Queen - [2020] SASCFC 8

SUPREME COURT OF SOUTH AUSTRALIA
(Court of Criminal Appeal)
PALAJ v THE QUEEN
[2020] SASCFC 8
Judgment of The Court of Criminal Appeal
(The Honourable Chief Justice Kourakis, The Honourable Justice Stanley and The Honourable Justice Nicholson)
19 February 2020
CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - GROUNDS FOR INTERFERENCE - OTHER MATTERS
CRIMINAL LAW - PARTICULAR OFFENCES - DRUG OFFENCES - SENTENCE - PRODUCING OR CULTIVATING - CANNABIS
Appeal against sentence.
The appellant pleaded guilty to one count of cultivating a commercial quantity of a prescribed plant and one count of possessing prescribed equipment contrary to sections 33B and 33LA of the Controlled Substances Act 1984 (SA) respectively. The appellant was a first-time offender who had moved to Australia from Italy with his family. He was approached about growing cannabis and offered $20,000 to do so. The person with whom the appellant was dealing supplied the hydroponic equipment and maintained the rent payments on the appellant’s property. At the time of the appellant’s arrest, the grow house contained 39 cannabis plants at different stages of maturity.
The two grounds of appeal were: (1) the sentencing Judge erred by sentencing the appellant on the basis that he was involved in an enterprise that went beyond the 39 cannabis plants that he pleaded guilty to cultivating; and (2) that the sentence was manifestly excessive.
Held per Nicholson J (Kourakis CJ and Stanley J agreeing) allowing the appeal:
1. The Judge erred in failing to accept that the offending was isolated, thus excluding the possibility of leniency.
2. The appeal is allowed on ground 1 and the appellant is resentenced to a head sentence of two years and three months, with a non-parole period of 13 months. The sentence is backdated to commence when the appellant went into custody on 27 August 2019.
Controlled Substances Act 1984 (SA) s 33B, s 33LA; Sentencing Act 2017 (SA) s 11, s 26, referred to.
R v Horstman (2010) 269 LSJS 42; The Queen v Reiner (1974) 8 SASR 102; R v Yavuz; R v Soyler; R v Bayraktar (2017) 130 SASR 231, discussed.
The Queen v De Simoni (1981) 147 CLR 383, considered.

PALAJ v THE QUEEN
[2020] SASCFC 8
Court of Criminal Appeal: Kourakis CJ, Stanley and Nicholson JJ

KOURAKIS CJ: I would allow the appeal for the reasons given by Nicholson J and join in the orders he proposes.
STANLEY J: I would allow the appeal. I agree with the reasons of Nicholson J and the orders he proposes.
NICHOLSON J.
Introduction
The appellant,[1] after pleading guilty, was convicted in the District Court of one count of cultivating a commercial quantity of a prescribed plant contrary to subsection 33B(2) of the Controlled Substances Act 1984 (SA) and one count of possessing prescribed equipment contrary to section 33LA of the Controlled Substances Act 1984 (SA). The offences were committed prior to and on 1 April 2019.[2] The maximum penalty for cultivating a commercial quantity of a prescribed plant is a fine of $200,000 or imprisonment for 25 years or both and the maximum penalty for possessing prescribed equipment is a fine of $10,000 or imprisonment for two years or both.
[1] On 28 October 2019, a Judge of this Court granted permission to appeal on ground 2 of the notice of appeal and referred the question of permission to appeal with respect to grounds 1 and 3 to the Court of Criminal Appeal.
[2] This was the day the police searched the appellant’s premises, found the plants and prescribed equipment and arrested the appellant.
The sentencing Judge imposed a single sentence pursuant to section 26 of the Sentencing Act 2017 (SA) of three years imprisonment reduced by 40 per cent from a starting point of five years for the pleas of guilty. A non-parole of 18 months was fixed. The sentence was not suspended and the appellant commenced to serve it on the day he was sentenced, 27 August 2019. The amended notice of appeal contains the following three grounds.
1.The learned sentencing Judge erred by sentencing the [appellant] on the basis that he was involved in an enterprise that went beyond the 39 cannabis plants that he pled [sic] guilty to cultivating.
2.The head sentence and non-parole period imposed was manifestly excessive.
3.The learned sentencing Judge erred by failing to find that there existed good reason to suspend the sentence.
At the hearing of the appeal ground 3 was abandoned.
The approach to be observed by an appellate court on an appeal against sentence was explained by Kourakis J (as he then was) in R v Horstmann.[3]
On an appeal against sentence, the Court of Criminal Appeal has no power to set aside or vary that sentence unless it is satisfied that the sentence is affected by an error of the type identified in House v The King: a failure to take into account relevant matters; having regard to irrelevant matters; or unreasonableness (manifest excess or inadequacy). I shall refer to the first two errors as process errors and the last as an outcome error. Where either a process error or an outcome error has been made, the Court of Criminal Appeal may interfere.
Plainly enough, in the case of an outcome error it is implicit in a finding of manifest excess or inadequacy that the Court of Criminal Appeal has formed the view that a different sentence should have been passed and it will vary the sentence accordingly.
In the case of a process error, the Court of Criminal Appeal may yet refrain from interfering with the sentence if it thinks that the resulting penalty was appropriate notwithstanding the demonstrated error. In such a case, the Court of Criminal Appeal will not vary the sentence if it thinks that the same or a higher sentence would be passed if it were to exercise the discretion itself. However, where a process error is demonstrated, the Court of Criminal Appeal may reduce the sentence if in the exercise of its own discretion it considers that a lesser sentence is appropriate, even though the sentence under appeal is not manifestly excessive.
(Emphasis in original)
(Footnotes omitted)
Appeal ground 1 asserts a “process” error and appeal ground 2 asserts an “outcome” error.
[3] [2010] SASC 103; (2010) 269 LSJS 42 at [36]-[38].
For the reasons that follow, I would allow the appeal on the basis of appeal ground 1 and resentence the appellant.
Background to and circumstances of the offending
The appellant was 41 years of age at the time of sentencing. He was born in Albania under its communist regime and fled to Italy as a teenager. He worked in landscaping, welding and fabricating in Italy before commencing a gyprock business in 2002 which proved to be successful. The appellant married in 2002 and has three children, aged 13, 10 and seven as at the time of sentencing on 14 August 2019.
In 2015, the appellant and his family visited Australia for a holiday. Soon after that, the family moved to Australia thinking that they would like to live here permanently. In February 2017, the appellant applied for a student visa. Had the appellant been granted a student visa, he would have been entitled to undertake some level of employment. However, the visa was refused and as a consequence the appellant was unable to engage in employment. The appellant lodged an appeal to the Administrative Appeals Tribunal some time prior to commencing the cultivation of the cannabis in question. This appeal was still pending at the time of the offending.
In order to be able to support his family, and being unable to work, the appellant had transferred from Italy more than $100,000 in savings. More than $80,000 was expended on fees for the education of himself and his children. The appellant had been living at the address in Prospect where, in due course, the offending occurred. However, in the middle of 2018, being under severe financial pressure, he moved the family to a Tranmere address.
The appellant was committed to a lease at the Prospect property and was considering subletting that property. However, he spoke to a person he met at the college his daughter was attending about his need to sublet the Prospect property. He was then approached and spoken to about allowing the property to be used in order to grow cannabis. He was offered $20,000 to do so. In exchange for the $20,000 (paid in advance) instead of subletting the house he was to allow the house to be set up as a grow house and it was his task to manage the grow house. The person with whom he was dealing supplied the hydroponic equipment and maintained the rent payments on the Prospect property.
At the time of his arrest, the grow house contained 39 cannabis plants; 18 were mature plants, six were immature plants and 15 were clones. The property also contained a very sophisticated hydroponic set up. Two bedrooms and a room in the rear section of the shed were set up as grow rooms and each contained six mature plants growing under globes attached to reflectors and ballasts. Another grow room was set up in the laundry and contained six immature plants and 15 very small immature plants (clones) also growing under globes attached to reflectors and ballasts. A timer system was used to regulate the hydroponics. Also located were eight spare reflectors, seven spare ballasts, 14 spare globes and some plant fertiliser.
At the time of sentence, the appellant’s family had returned to live permanently in Italy, the appellant had withdrawn his appeal for a student visa and he was of the clear understanding that he would be required to return to Italy after serving any prison sentence that might be imposed.
The Judge’s approach to sentence
The Judge summarised in some detail the circumstances of the offending and, in particular, the set up in the grow house which his Honour described as having the appearance of a professionally well-organised grow house. His Honour performed some rough calculations and observed that had the 39 plants been grown to and harvested at maturity they might have yielded cannabis worth between $93,600 and $223,000 depending upon the manner of packaging for sale. However, his Honour, quite properly, also observed “those are of course maximums and subject to a large number of contingencies”. His Honour briefly outlined the straitened circumstances in which the appellant found himself leading up to his decision to commit the offences and then outlined in some detail the appellant’s personal circumstances.
His Honour characterised the appellant’s offending as serious and as involving “a significant operation producing a significant amount of illicit cannabis plants being conducted solely for significant financial return, both to you and no doubt others”.
The Judge then imposed the head sentence earlier identified and “in light of personal factors, in particular the effect of imprisonment on [the appellant] being more harsh given the absence of [his] family” fixed what his Honour described as a slightly shorter than usual non-parole period of 18 months.
The Judge dealt with the question of suspension in brief terms. His Honour formed the view that the seriousness of the offending and the need for general deterrence in this case was such as to preclude good reason to suspend the sentence. Given the appellant’s domestic circumstances at the time of sentencing, no application was made on his behalf for the court to consider ordering the sentence be served by way of home detention.
Appeal ground 1 – whether the Judge erred with respect to the factual basis for sentencing
It is common ground that the factual basis on which the appellant was to be sentenced included the following.
(i)He was responsible for the cultivation of 39 cannabis plants which, as at the time of the police attendance at the property, were at different stages of maturity. Accordingly, the conduct for which the appellant was found to be culpable would necessarily take place and was intended to take place over a period of time. The appellant’s intention or expectation was that, subject to vicissitudes, each of the 39 plants would be brought to maturity and cannabis harvested.
(ii)The appellant had no prior criminal record, or at least none of which the court was made aware and, in particular, no record of drug offending.
(iii)There was no evidence, and it was not submitted, that the appellant had engaged in the past in any cannabis cultivation or production.
(iv)Apart from the existence of the sophisticated hydroponic set up in the Prospect house and anything that might properly be inferred from that, there was no evidence that the appellant intended to cultivate any cannabis plants in the future in addition to the 39 with respect to which he was charged.
Accordingly, the appellant was to be sentenced solely with respect to the 39 cannabis plants seized. He was entitled to have the two offences he committed treated as a single or isolated incursion into criminal conduct rather than as having been committed against a background of similar offending. The fact of it being isolated offending, ordinarily, would be taken into account when considering whether some leniency might be allowed so as to impose a lesser sentence than otherwise would be warranted. Bray CJ in The Queen v Reiner[4] put the position thus.
[I]t was permissible, relevant and important for [the sentencing judge] to know whether the act charged was an isolated offence or whether it was only, to use the metaphor often adopted, the tip of an iceberg. The surrounding circumstances of the crime may be taken into account in considering whether or not to extend leniency so as to reduce what would otherwise be a proper sentence but the commission of other crimes not asked to be taken into account under the procedure just mentioned cannot be used in order to increase what would otherwise be a proper sentence.
[4] (1974) 8 SASR 102 at 105.
The fact that offending is isolated, particularly where, as here, a first offender is concerned, of itself is an important sentencing consideration.[5] In addition, it can be relevant to an assessment of the likelihood of the offender re-offending,[6] the offender’s prospects of rehabilitation,[7] and the weight to be given to any need for personal deterrence.
[5] Subsection 11(1)(d) of the Sentencing Act 2017 (SA).
[6] Subsection 11(1)(e) of the Sentencing Act 2017 (SA).
[7] Subsection 11(1)(h) of the Sentencing Act 2017 (SA).
It is against the factual background for the offending, set out above, that certain of the Judge’s remarks are to be considered. The appellant contends, in short, that the Judge sentenced on an incorrect factual basis to the effect that the offending was not isolated and for this reason did not give consideration to whether leniency might be allowed. In order to give proper consideration to this contention, it will be necessary to consider in more detail certain aspects of the Judge’s sentencing remarks.
The Judge described the circumstances of the offending including: the hydroponic set up in the various grow rooms containing the 39 plants; an assessment of the likely yield and value of the 39 plants if grown to maturity; and the circumstances in which the appellant came to be deployed as manager of the grow house. To this point, the Judge correctly focussed on the 39 plants seized by the police as the gravamen of the offending.
His Honour then made the following observations.
(i)The house has all the appearance of a professionally well organised grow house that, in the court's view, was plainly envisaged to be an ongoing enterprise. The house was well organised for production and some considerable expense had been gone to. There were mature plants together with groups of smaller plants and the overwhelming inference is that the groups of smaller plants were intended to be the next mature crop when the current crops were harvested from the main grow rooms. There is no indication at all that this was not intended to be an ongoing growing enterprise.
(ii)Having said that, you will of course only be penalised for the offences to which you have plead guilty. It does however render unavailable the submission that this was an isolated event.
(Emphasis supplied)
Later in the Judge’s remarks, after dealing with the appellant’s circumstances and in the context of formulating the sentence (“the court turns to sentence”) his Honour returned to this issue.
(iii)This was however a well organised, professionally set up grow house, efficiently cultivating several crops of various stages of maturity, plainly designed to be operating on an ongoing basis. Your involvement was entirely for personal profit and you admittedly had received $20,000 for your role in cultivating the drugs that were there. This was a significant operation producing a significant amount of illicit cannabis plants being conducted solely for significant financial return, both to you and no doubt others.
(iv)The court does emphasise however that you are only to be penalised for the actual crops that you were growing at the time.
(Emphasis supplied)
I have numbered the quoted paragraphs above to assist with future reference.
Counsel for the appellant in his submissions focused on the emphasised sentence in paragraph (i) (repeated in paragraph (iii)) and the conclusion drawn in the emphasised sentence in paragraph (ii). Counsel submitted that the emphasised sentence in paragraph (i) reflected the sentencing Judge’s “provisional thoughts” that had been indicated during sentencing submissions in the following terms.
I’m prepared to accept that it was only growing for a matter of some months while the mature crop was there, my provisional thinking I would accept the submission from the defence without the need for evidence. On the other hand, the set up was quite professional, it involved a lot of specialist equipment, it involved devoting a lot of rooms. There were a lot of lights and filters and other pieces of equipment there and there was an immature crop ready to go in when the mature crop was harvested. Now from that, my provisional view is that it was going to be an ongoing situation. So I don’t think I can accept on the balance of probabilities, without evidence, that [in counsel for the accused’s words] “this is it”.
(Emphasis supplied)
Counsel for the appellant contended that the impugned passage in paragraph (i) of the Judge’s reasons:
[A]mounted to a speculative finding that the appellant would continue cultivating cannabis beyond the 39 plants in respect of which he had pleaded guilty and fell to be sentenced. This had the effect of disallowing leniency to the appellant (a first offender who had pleaded guilty) for hypothetical future offending that might have been engaged in but for the intervention of police.
(Emphasis in the original)
This is not a case where the Judge improperly sentenced by taking into account other uncharged offending.[8] Nevertheless, the emphasised passage in paragraph (i) (repeated in the emphasised passage in paragraph (iii)) and the conclusion drawn in paragraph (ii) remains a potential concern. There may be some ambiguity about the emphasised sentence in paragraph (i); his Honour might simply have been referring to the 39 plants at different stages of maturity as being the “ongoing enterprise”. However, any ambiguity in this respect was clarified by his Honour’s repeated assurance (paragraphs (ii) and (iv)) that the appellant was only to be sentenced for the offences to which he pleaded guilty. There was no need to mention this if the reference to “ongoing enterprise” was a reference to no more than the 39 plants, at different stages of maturity, the subject of the cultivation offence.
[8] The Queen v De Simoni [1981] HCA 31; (1981) 147 CLR 383 at 389 and for an earlier statement by this Court of the principle, see The Queen v Reiner (1974) 8 SASR 102 at 105 (Bray CJ).

Having explicitly drawn this necessary distinction, his Honour was plainly influenced by his finding to the effect that the appellant was a participant in an ongoing enterprise involving prospective cultivation over and above the 39 plants, as demonstrated by the emphasised observation in paragraph (ii) – “It does however render unavailable the submission that this was an isolated event”. His Honour can only have meant that there was no scope for leniency on this basis. My drawing of this inference is fortified by the fact that, having regard to the circumstances of the offences, as committed, and given the appellant’s favourable personal circumstances, a starting point of five years imprisonment is not, in my view, to be seen as lenient.
In R v Yavuz; R v Soyler; R v Bayraktar,[9] this Court, in the context of a wide ranging recitation of factual considerations potentially relevant to an assessment of the seriousness of a particular cultivation offence, explained the potential relevance of past acts of cultivation.
It is also important, as with trafficking, to note that the number of plants may be a matter of happenstance; circumstantial evidence may reveal the number of plants to be all that remains of a more significant crop or that the crop found is a second or third crop. Of course, the cultivator is only to be punished for those plants being cultivated, but, again, past activity is relevant to any assessment of the leniency that may be extended.
(Footnote omitted)
[9] [2018] SASCFC 24; (2017) 130 SASR 231 at [77] (Kourakis CJ, Blue and Hinton JJ).
The Judge’s finding that “there is no indication at all that this was not intended to be an ongoing growing enterprise” was a finding to the effect that the appellant was likely to commit further cultivation offending in the future had the police not intervened. Such a finding with respect to the enterprise itself was open on the evidence. The set up was sophisticated and if the current crop was brought to fruition the enterprise would have been very lucrative. There is no reason to think that the controller of the enterprise would not have continued with the operation provided he or she could continue to secure a lease of the premises.
It is another question whether the appellant would have continued to be involved. Having succeeded the first time in earning $20,000 without police intervention, the appellant may well have been encouraged to try again. However, other contingent factors might have operated to deter him. One obvious contingency would be the outcome of his visa appeal. If unsuccessful, presumably the appellant and his family would have returned (voluntarily or involuntarily) to Italy. If successful, the appellant would have a visa that permitted him to undertake employment and might be less motivated to continue to engage in serious criminal activity.
In any event, I will assume for present purposes that the implied finding that the appellant was likely to have committed further cultivation offences in the future had the police not intervened was open on the material before the Judge. Such a finding is not relevant to the sentencing exercise. In particular, it is not a proper basis to deny leniency with respect to isolated offending committed by a first offender. The appellant did not commit any other offences before or after the offending with which he was charged. Notwithstanding the Judge’s finding, the intervention of the police rendered the appellant’s offending as an isolated incursion. Whatever the appellant’s mental state might have been prior to the police intervention, that intervention, together with the appellant’s personal circumstances, mandated that the appellant would not offend again, strongly indicated that he had good prospects for rehabilitation and reduced significantly any need for personal deterrence.
With respect, the Judge erred in failing to accept that the offending was isolated, thus excluding the possibility of leniency. I would allow the appeal and resentence the appellant. In the circumstances, I do not need to consider appeal ground 2 (manifest excess).
Resentencing
The offending was undoubtedly serious for the reasons given by the Judge. Furthermore, where foreign nationals come to this country and participate in such criminal enterprises, the issue of general deterrence is a very significant consideration. It must be made clear to syndicates and others who employ managers of grow houses and to overseas visitors who decide to come here for such purposes that, ordinarily, a substantial prison term to be served will be imposed for such offending.[10]
[10] In this respect, I note that the appellant was already here when he agreed to commit the crimes although his motivation was, in part, to assist him to stay here.
Nevertheless, the appellant’s personal circumstances as earlier described, the circumstances in which his offending and his motivation to offend came about and the fact that these were his first, and only, offences, call for some leniency in this case. In this respect, I also place significant weight on the fact that the appellant’s wife and three young children are now back in Italy and will remain there for the duration of the appellant’s prison sentence. As such, his time in prison will be significantly more onerous as compared with most other prisoners who commit such offences. However, for this reason, the fact that he is to return to Italy on release is not to be considered a hardship. Even if I were permitted to take this latter fact into account, I would place no weight on it.
I would start with a head sentence of imprisonment for three years and nine months reduced by 40 per cent for the pleas to two years and three months. I would fix a non-parole period of 13 months.
Like the Judge, I am not satisfied that there is good reason to suspend this sentence. The seriousness of the offending and the importance in such a case of general deterrence militate against suspension, notwithstanding the appellant’s favourable personal circumstances. Both the head sentence of 27 months and the non-parole period of 13 months should be backdated to commence when the appellant went into custody on 27 August 2019.