R v Bakunowich & Dalgleish (No. 2)

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DISTRICT COURT OF QUEENSLAND

CITATION:

R v Bakunowich & Dalgleish (No. 2) [2022] QDC 189

PARTIES:

THE QUEEN

v

STEPHEN BRENDAN BAKUNOWICH

(defendant)

and
KELLIE JEAN DALGLEISH

(defendant)

FILE NO:

32/2021

DIVISION:

Criminal

PROCEEDING:

Contested Sentence

ORIGINATING COURT:

Ipswich District Court

DELIVERED ON:

19 August 2022

DELIVERED AT:

Ipswich

HEARING DATE:

4 June 2021 and 20 May 2022

JUDGE:

Horneman-Wren SC DCJ

ORDER:

The defendants are to be sentenced on the basis that the Crown has failed to establish a commercial purpose to the possession of the cannabis the subject of Count 2 on the indictment

CATCHWORDS:

CRIMINAL LAW – SENTENCE – SENTENCING PROCEDURE – FACTUAL BASIS FOR SENTENCE – where the defendants plead guilty to producing and possessing dangerous drugs in excess of 500g – where possession for a commercial purpose is alleged by the Crown and contested –where large quantities of cash found in the defendant’s home – where Crown submit that as indicia of commercial purpose – where Crown also relies on presence of growing instructions, grinder and fertilisers as evidence of commerciality – where defendants provide evidence – whether other explanation for presence of cash and other materials is available on the evidence – whether commerciality is proved.

LEGISLATION:

Evidence Act 1977 (Qld) s 132C

CASES:

R v Field [2017] QCA 188
COUNSEL:

Mr C Wallis for the Crown
Ms D Holliday QC for the defendant Bakunowich (4 June 2021)
Mr A J Glynn QC for the defendant Bakunowich
(20 May 2022)

Mr J R Jones for the defendant Dalgleish
SOLICITORS:

Office of the Director of Public Prosecutions for the Crown
Robertson O’Gorman, solicitors for the defendant, Bakunowich
Potts Lawyers for the defendant, Dalgleish

The background so far

  1. On 15 October 2021, the Court published reasons (the ‘earlier reasons’) as to why a two-stage process for fact finding under s 132C of the Evidence Act 1977, as proposed by the parties, was ill conceived and to be rejected.  The continued hearing of the sentencing proceeding had been listed for 14 December 2021.  That hearing could not proceed due to the border closure between Queensland and New South Wales as a result of the Covid 19 pandemic, the defendants being residents of New South Wales.  It was listed for 20 May 2022.  On that occasion, each defendant indicated that they would not go further into evidence.[1]

    [1]Each of the defendants had previously gone into evidence; Mr Bakunowich by reading an affidavit and Ms Dalgleish by tendering documents.

  2. Some further relatively brief submissions were made by all parties.  At the conclusion of that hearing, the court having said in the earlier reasons that for reasons explained in R v Field,[2] its reasons for findings of fact should be given at the time at which the finding of fact is ultimately made, and that this could not occur until the court was aware of all the evidence which it was to consider in making those findings, adjourned to consider what it then knew to be the full…

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Details
Case
[2022] QDC 189
Decision Date

CaseChat Overview and Summary

In the case of R v Bakunowich & Dalgleish (No. 2), the defendants were charged with producing and possessing dangerous drugs in excess of 500g. The Crown alleged that the possession was for a commercial purpose, a claim which the defendants contested. The court was required to determine whether the Crown had sufficiently proven that the possession was for commercial purposes, considering the presence of large quantities of cash, growing instructions, a grinder, and fertilisers in the defendants' home. The court also had to evaluate whether the defendants had provided a plausible explanation for these items that could be consistent with non-commercial possession.

The court examined the evidence provided by the Crown, including schedules of sales from two trade shows and bank account statements annotated by the defendants. The Crown argued that the large amount of cash, particularly cash sales, indicated a commercial purpose. However, the defendants provided evidence of a legitimate knife business, which could explain the cash and other materials found in their home. The court considered whether the cash could be explained by the defendants' business activities and whether there was any other evidence that could point towards commercial possession of the drugs.

After evaluating the evidence, the court concluded that the most probable explanation for the cash was the defendants' knife sales business. The court found that the presence of fertilisers and growing instructions could be consistent with both commercial and personal use of cannabis. The court also noted that the lack of evidence of cannabis use by the defendants could be due to the limited scope of the police search. The court did not place significant weight on the presence of unauthorised weapons, as there was no clear connection to the cash or commercial activity. Ultimately, the court determined that the Crown had not proven beyond reasonable doubt that the possession was for a commercial purpose.

The court ordered that the defendants be sentenced on the basis that the Crown had failed to establish a commercial purpose for the possession of the cannabis.

Orders

Orders of the court

The defendants are to be sentenced on the basis that the Crown has failed to establish a commercial purpose to the possession of the cannabis the subject of Count 2 on the indictment

Background

Background to the litigation

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Evidence

Evidence Before The Court

In order to consider the Crown’s submissions, it is necessary to set out some of the evidence and agreed facts relating to the cash and the legitimate knife business.The relevant evidence Exhibits RMK4, 5 and 6 to the affidavit of Mr Kurz are schedules of sales. RMK4 and 5 each relate to sales said to have been made at two trade shows on, respectively, 4 and 5 August 2018 and 16 and 17 February 2019. The Schedules record sales said to have been made by cash transactions and by PayPal transactions. RMK4 records total sales of $38,281.33 of which $32,315 were cash sales. RMK5 records total sales of $36,410.72 of which $31,050 were cash sales. RMK6 records cash sales totalling $15,000 to one customer on 2 June 2018 and five sales to two other customers totalling $1,825 on various dates from 22 August to 30 August 2019. RMK7 was said to be the 2019 tax return for Future Garden Design. That is inaccurate. It is in fact the individual tax return for Ms Dalgleish in which is included income from the business Future Garden Designs; but it is not that entity’s tax return. RMK8 comprises the statements of a bank account held in the name of Ms Dalgleish trading as Future Garden Designs spanning the period 18 April 2018 to 17 April 2020. Those statements have been hand annotated by the defendants identifying various entries as being for knife sales. There are other annotations which describe the source of funds deposited on various dates. RMK9 is a bundle of invoices. Many of the invoices exhibited fall outside of the 2018-2019 financial year. RMK10 is the statement of the accountant, Ms Murphy, referred to earlier. There are a number of matters set out in that statement which are noteworthy. At paragraph 8 Ms Murphy says that she was engaged to prepare and submit the year ending 2019 tax return in relation to the knife sales business operations. She says that she was provided by Ms Dalgleish with three spreadsheets which are said to be the schedules of transactions which are exhibits RMK4, 5 and 6 referred to above. She says that she was provided a “cash ledger” combining the cash sales in those three spreadsheets and invoices. In his affidavit, Mr Kurz says that the annexures to Ms Murphy’s statement “have been excised, they replicating those annexures already included in this affidavit”. At paragraph 10 of her statement Ms Murphy says:“As a result of receiving this material I prepared and submitted a tax return on behalf of FGD. That return was submitted on 29 May 2020. My understanding is that ALL income reported within actually arose from AKS’s operations.” There are a number of inaccuracies in what Ms Murphy says in paragraphs 9 and 10 of her statement; some patent, some latent. The first patent inaccuracy is that, as already noted, the tax return which she prepared and submitted was not a return on behalf of FGD. It was a return on behalf of Ms Dalgleish in which business income from FGD was included as part of Ms Dalgleish’s income.

Decision

Reasons for decision

For those reasons, on the evidence before the Court, the most probable explanation for the income declared in the tax return exceeding the transactions reflected in the bank account is that there were cash knife sales the proceeds of which were retained in cash in the defendants’ possession. I cannot, therefore, be satisfied that the cash found in the possession of the defendants is a matter which assists the Crown in proof of the fact that the cannabis was possessed by the defendants for a commercial purpose.Conclusions as to commerciality Given the centrality of the cash to the Crown case that there was a commercial purpose to the possession of the cannabis and the concessions made, the other indicia relied upon may be disposed of shortly. The recording and documentation of fertilizers, particularly when it is conceded that the defendants’ former horticultural business may explain the presence of fertilizers, does not, in my view, point more to commercial possession than possession for private use. So too, growing instructions are, in my view, at least and perhaps more, consistent with growing cannabis (and thus being in possession of it) for personal rather than commercial reasons. Commercial growers may well be thought to need less instruction than those growing it for personal use. The lack of indicia that the defendants were themselves cannabis users must be considered in light of the concession that police only searched for indicia consistent with use by smoking and not consumption of cannabis oil. It is said that there was a grinder capable of being used in the production of cannabis oil. Of course, if the production of oil was commercial, the possession of the cannabis for its production would also take on that commercial complexion. However, it seems that police were not looking for items which might have suggested oil production on any scale or for any purpose. There is some evidence of Mr Bakunowich having previously used cannabis oil prior to the search of the property. A letter from his doctor dated 19 May 2022[17] refers to him having disclosed this on 18 May 2022. That disclosure, of itself, may be thought to be a self-serving statement. However, the letter also refers to a 15-year history of chronic back pain following an injury, bilateral hand pain, anxiety, depression and insomnia. Those matters could be consistent with his using cannabis to manage those problems consistently with his recent disclosure.[17]Exhibit 5. The quantity of the drugs and number of plants really do not take matters too far. Whilst the quantity may appear large, there is no evidence to inform the court of, for example, what the yield of cannabis oil from plants is likely to be. It might well take a large volume of plant to produce only a little oil. I would place little weight upon the presence of the unauthorised weapons. Much was sought to be made in the Crown’s submissions of the fact that the weapons were co-located with the cash. Mr Wallis put it that “the inference is unassailably one that they are tangentially and by their very location connected with the cash itself and that’s an inference, or a circumstance from which your Honour could draw the inference of commerciality – one of the circumstances”.

Ratio Decidendi

Legal Principle Established

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