R v Hou

[2017] ACTCA 14

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL

Case Title:

R v Hou

Citation:

[2017] ACTCA 14

Hearing Date:

22 February 2017

DecisionDate:

13 April 2017

Before:

Murrell CJ, Rangiah J and Walmsley AJ

Decision:

Appeal dismissed.

Catchwords:

CRIMINAL LAW – APPEAL – SEVERITY OF SENTENCE APPEAL – drug offences – manifestly inadequate – Crown appeal against sentence – error in sentencing discretion – MDMA manufacturing – possession of controlled precursor – trafficking in controlled drug other than cannabis

Legislation Cited:

Crimes (Sentencing) Act 2005 (ACT) pt 4.4

Criminal Code 2002 (ACT) ss 603(7), 607(3), 607(5), 611(1), 612(1), 612(5), 614
Drug Misuse and Trafficking Act 1985 (NSW) ss 23(2), 24(2), 25(2)

Supreme Court Act 1933 (ACT) ss 37E(2)(a), 37O(7)

Cases Cited:

House v The King [1936] HCA 40; 55 CLR 499

Pearce v The Queen [1998] HCA 57; 194 CLR 610
R v Duffy [2014] ACTCA 53; 297 FLR 359
R v McDonnell [2002] NSWCCA 34; 128 A Crim R 44

Zdravkovicv The Queen [2016] ACTCA 53

Parties:

The Queen (Appellant)

Stanley Hou (Respondent)

Representation:

Counsel

Mr J White SC (Appellant)

Mr J Purnell SC (Respondent)

Solicitors

ACT Director of Public Prosecutions (Appellant)

Kamy Saeedi Law (Respondent)

File Number:

ACTCA 21 of 2016

Decision under appeal: 

Court/Tribunal:             ACTSC

Before:  Robinson AJ

Date of Decision:         14 June 2016

Case Title:  R v Hou

Citation: [2016] ACTSC 124

THE COURT:

The appeal

1. This is a Crown appeal against sentences imposed by Robinson AJ for a number of offences involving the production of methylenedioxymethylamphetamine (MDMA or ecstasy) in a clandestine drug laboratory.

1. A Crown appeal against a sentence by a single judge lies to this Court under s 37E(2)(a) of the Supreme Court Act 1933 (ACT) (Supreme Court Act).

1. On such an appeal, the Court of Appeal has wide powers which include increasing or decreasing the sentence, and substituting a different sentence: s 37O(7) of the Supreme Court Act.

1. But as this Court said in R v Duffy [2014] ACTCA 53; 297 FLR 359 at [53]:

On such an appeal, the Court of Appeal will intervene only if it is satisfied that there has been an error of the type referred to in House v R (1936) 55 CLR 499. There must be a specific error of fact or law, or an implicit error that is discernible because the sentence is so plainly wrong (so “manifestly excessive” or “manifestly inadequate” or “outside the range of available sentences” or “dramatically inappropriate”) as to compel the conclusion that there has been an error in the exercise of the sentencing discretion, although no specific error can be identified: Dinsdale v R (2000) 202 CLR 321 per Gaudron and Gummow JJ at [22]; Wong v R (2001) 207 CLR 584 at [58]; Hili v R (2010) 242 CLR 520 (Hili) at 58-59.

1. Here, the Crown submitted there was a House v The King [1936] HCA 40; 55 CLR 499 error in that the sentences imposed on the respondent were manifestly inadequate.

1. For the reasons which appear below, the Court has reached the view that the sentences imposed, although lenient, were not manifestly inadequate, and that the appeal should be dismissed.

Background to the offences

1. The respondent was born in Sydney in 1979.  In 1986, when he was seven years of age, his father was murdered.  No-one has ever been charged with his murder.

1. After his father died the respondent moved to Canberra with his mother and three siblings.  That was a particularly difficult period of his childhood.  His mother had acquired a brain injury from contracting meningitis as a child, and the respondent was obliged to help her to raise his siblings.

1. The respondent completed Year 12.  He later studied mathematics and finance, graduating in 2004 with a degree in those disciplines from the University of Technology, NSW.

1. He was employed in the banking and construction industries after graduation, eventually working as a financial planner.

1. He married in 2008, and he and his wife have two young children.

1. In 2013, the respondent resigned from his position as financial planner, telling his employer he would be working from home.

1. However, in late September 2013 he arranged to lease an industrial space in a building in Hume, ACT.  He told the letting agent he was interested in the property to store female dress clothing he supplied through an online website.  He agreed to pay $2,200 per month rent.

1. Although there was evidence on his sentencing hearing that his partner had registered the business name Designer Lane in 2005, and that neighbours told police they had seen clothing being taken into the Hume premises on at least one occasion, the offender’s main reason for taking the lease was to set up a clandestine drug laboratory for the manufacture of MDMA.

1. On 12 August 2014, after neighbours had complained about chemical smells coming from the premises, police discovered the laboratory.  They found a considerable quantity of equipment associated with drug manufacture, such as glass beakers, and drums of chemicals.  When questioned by police, the offender conceded he had been making MDMA using heat elements and a cooling system.  When apprehended, he was in the course of distilling an MDMA precursor.

1. Police seized the equipment and chemicals.  The respondent’s home was then searched.  From the respondent’s home the police seized a number of documents including a manual called ‘Complete MDMA synthese’.  Finger prints of the respondent were found on that manual.

1. Police later returned to the laboratory where, in the course of a further search, they found $1,090 in cash.

1. Police inquiries showed that a number of items of equipment in the laboratory had been bought using accounts linked with the respondent.

1. The respondent’s bank records showed cash deposits in joint accounts with his wife, from September 2013 to July 2014, amounting to $71,700.  A separate account in the name of the respondent showed cash deposits for the same period, of $35,300.

1. A forensic chemical analysis revealed that two packages of MDMA found at the premises had come from two separate batches.  The combination of chemicals found at the premises was unique to the production of MDMA.  The chemicals were capable of use in all steps in the process of making MDMA.

1. Photographs of the premises and their contents confirm the observation evidence of the police.

1. However, neither the photographs nor the agreed facts assist in showing the scale of the operation.  Thus, on the facts in evidence, the scale of the operation must be a matter of speculation.

1. Further, although police found a large quantity of the MDMA precursor on the premises, there was no evidence about the potential quantity or profit the precursor represented.

1. After his arrest, the respondent obtained employment, which he kept until he went into custody.

1. He pleaded not guilty to all charges in the Magistrates Court, and was committed for trial.

1. On 4 June 2015, the Director of Public prosecutions presented an indictment containing eight counts, two of which were alternatives to each other.

1. Count 1 (s 607(3) of the Criminal Code 2002 (ACT) (Criminal Code)) alleged the offender had, between 23 September 2013 and 13 August 2014, manufactured a commercial quantity of MDMA intending to sell it or believing someone else would sell it. A commercial quantity of MDMA is 5 kg. The maximum penalty for a breach of s 607(3) is 25 years’ imprisonment or 2500 penalty units or both.

1. Count 2 (s 607(5) of the Criminal Code), the alternative to Count 1 on the indictment, alleged the offender had manufactured MDMA intending to sell it or believing someone else would sell it. The maximum penalty for that offence is 15 years’ imprisonment or 1500 penalty units or both.

1. Count 3 (s 614 of the Criminal Code) alleged the offender had possession of items for use in the manufacture of a controlled drug. The maximum penalty for a breach of s 614 is five years’ imprisonment or 500 penalty units or both.

1. Count 4 (s 612(5) of the Criminal Code) alleged the offender had possession of a controlled precursor for use in the manufacture of a controlled drug, intending to sell it or believing someone else would sell it. The maximum penalty for a breach of s 612(5) is seven years’ imprisonment or 700 penalty units or both.

1. Counts 5 and 6 (s 612(1) of the Criminal Code) each alleged the offender had possession of a large commercial quantity of a precursor for use in the manufacture of a controlled drug, intending to sell it or believing someone else would sell it. The maximum penalty for a breach of s 612(1) is 25 years’ imprisonment or 2500 penalty units or both.

1. Count 7 (s 611(1) of the Criminal Code) alleged the offender had manufactured a large commercial quantity of a controlled precursor with an intention of manufacturing a controlled drug and intending to sell it or believing someone else would sell it. The maximum penalty for a breach of s 611(1) is 25 years’ imprisonment or 2500 penalty units or both.

1. Count 8 (s 603(7) of the Criminal Code) alleged the offender had trafficked in a controlled drug other than cannabis. The maximum penalty for a breach of s 603(7) is 10 years’ imprisonment or 1000 penalty units or both.

1. The case was listed for trial on 1 March 2016. There were negotiations that day between the respondent’s counsel and the Crown.  On the following day the respondent was arraigned and pleaded guilty to Counts 2, 5 and 8, asking that the sentencing judge take into account Count 6 with Count 5.  The Crown accepted those pleas in discharge of the indictment. On this occasion, his Honour also revoked the respondent’s bail.

1. The matter then proceeded to sentence.  The Crown tendered an agreed statement of facts and other documents.  The author of a pre-sentence report was called by the Crown and cross-examined by the respondent’s counsel.  The respondent did not give evidence.  His counsel tendered some references and called his aunt to give oral evidence.

1. Relying on what the respondent’s aunt told the court and what the respondent had told the author of the pre-sentence report, the respondent’s counsel attempted to persuade the sentencing judge that the respondent had been obliged to set up the laboratory as a result of pressure from a book maker to whom the respondent owed a large sum of money, having developed a gambling addiction.

1. His Honour, having heard submissions, adjourned the matter until 14 June 2016.

The sentences

1. When sentencing the respondent, the sentencing judge reduced the sentences his Honour would otherwise have imposed by approximately 10% to reflect a discount for the pleas.

1. The offences for which the respondent was sentenced and the sentences imposed (after a deduction of 10%), were as follows:

(a)Count 2

Manufacturing a controlled drug for selling:

Imprisonment of one year and ten months, commencing 20 February 2016.

(b)Count 5

Possessing a large commercial quantity of a controlled precursor, namely 32.1 litres of nitromethane:

Imprisonment of three years commencing 20 February 2017 (after taking into account the Count 6 offence under pt 4.4 of the Crimes (Sentencing) Act 2005 (ACT))

(c)Count 8

Trafficking in a controlled drug other than cannabis, namely 71.223 g of MDMA:

Imprisonment of 3 months, commencing 20 February 2017.

1. Thus, after the sentencing judge had applied a degree of accumulation and concurrency, the offender was sentenced to an effective head sentence of four years, with a minimum of two years to serve before being eligible for parole.

1. On the manufacturing charge, his Honour noted that there was no evidence of the amount of MDMA manufactured.  As to the possession charge, the quantity had been 32.1 litres of nitromethane, the threshold for a large commercial quantity being one litre.  As to the trafficking charge, the quantity was 71.223 g, the threshold being 10 g, with the threshold for the next most serious trafficking offence being 5 kg.  His Honour noted that the Crown had not alleged that the respondent had intended to sell the MDMA himself.

1. As to Count 6 which his Honour took into account with Count 5, his Honour observed that the offender had had 800 g of mercuric chloride in his possession, intending to use it to make MDMA to sell or for someone else to sell.  His Honour noted that the threshold for a large commercial quantity for that offence was 2 g.

1. His Honour took into account the offender’s role in setting up and running the laboratory, and in being (as he found he had been) ‘the cook’.  His Honour noted there was no evidence the respondent had sold any drugs, and that the operation had run for only 10 months.  His Honour found the offender had been motivated by financial gain, observing however that the offender’s banking records had not helped his Honour calculate with any confidence any particular earnings from the laboratory.

1. His Honour did not find established on the probabilities any causal connection between any gambling debts and the respondent’s motivation in setting up the laboratory.

1. His Honour found the offender was sorry for what he had done and that it was unlikely he would re-offend.  Those findings were consistent with observations in the pre-sentence report, and in the references, and with the pleas of guilty.

1. The offender had no prior convictions, although in 2010, he had been discharged without conviction in NSW after pleading guilty to drug possession. We consider that his Honour correctly treated the offender as a person of good character.

Crown submissions

1. On this appeal, the Crown emphasised the objective features for each offence.  In relation to the manufacture charge, the significant factors included the planning and setting up of the laboratory, the respondent’s senior position there (including that of cook), the fact that the operation had run for 10 months, the scale of the laboratory, and that the respondent’s motivation had been financial gain.  These and other matters, the Crown submitted, put this offence at the upper end of the scale of objective seriousness.

1. The Crown emphasised the need for the penalties for this, and the other offences to act as general deterrence.

1. As to the Count 5 possession count, it was submitted that it had to be considered with the Count 6 possession count, the precursors were there for use in the making of MDMA, and the amounts for each offence were well over the large commercial quantity threshold.  It was submitted that there was considerable potential harm to others from the drug when made, and that this offence also fell at the upper end of the scale of objective seriousness.

1. As to the offence of trafficking in a controlled drug, the Crown submitted that although 71.223 g was well below the 5 kg threshold for a commercial quantity, other factors including the respondent’s role and his motivation, were more important.

1. In summary, the Crown submitted that the operation had been substantial and sophisticated, the offender had been a principal (if not the principal), the enterprise had been on a large scale and had been a well run business, there was a significant public safety issue, the offender had been involved purely from financial motives, and the sentencing judge had paid insufficient regard to general deterrence.

1. The Crown conceded that the sentencing judge had been entitled to sentence the offender as a person of good character, but submitted the subjective circumstances had not justified such lenient sentencing.

1. The Crown also submitted that its main complaint was with the head sentences for Counts 2 and 5, but that the overall head sentence was manifestly inadequate when regard is had for the maximum penalties.  Further, his Honour had allowed too great a degree of concurrency.  Not accumulating for the trafficking was said to be a significant error.

1. Thus, it was said, the appeal should be allowed and this Court should resentence the offender.

The respondent’s submissions

1. The respondent submitted that the sentences were not manifestly inadequate, but on the assumption the Court finds they were, the sentences should not be disturbed in the face of demonstrated rehabilitation.

1. In support of that submission, the respondent gave notice he would apply to permit new evidence to be adduced, submitting there was evidence of significant academic and other achievements having occurred since he was first imprisoned.

1. Counsel for the respondent did not pursue that application before the Court, but the matter was left open in the event that the Court decided the respondent should be resentenced.

Consideration

1. There was a wide range of sentencing options available for the sentencing judge. As we have earlier observed, the sentences were lenient.  The sentences should not necessarily be taken to represent appropriate sentences for future examples of these offences.  But in our view they were not erroneously low.

1. The laboratory was apparently well set up and well run.  But there was no evidence to show whether it was a large or small scale operation, what potential output of MDMA it had, or what financial profits were achievable there or had been achieved in ten months.

1. The financial records were, as his Honour found, equivocal on the level of any earnings the offender had received, assuming the records related to laboratory earnings.

1. There was evidence that when the offender was arrested he and his wife had a vehicle, as well as interests in real estate.  There was no evidence of the worth of the car or the real estate or as to what mortgage liabilities they had.

1. There was no evidence of unusual wealth, or ostentatious spending.  At the time the respondent was arrested, he and his wife were living with his mother in law.

1. Further, although the Crown submitted the respondent had left a highly paid job to set up the laboratory, thus potential profits must have been large, his financial records show his taxable income in the 2012-13 tax year, his last year of employment, was only $31,254.

1. The appellant submitted that this was the first such offence or group of offences arising from the operation of a clandestine laboratory in the ACT.  Thus there were few comparable sentences in the ACT to show an appropriate sentencing range.

1. The appellant provided the Court with a table showing sentencing outcomes for what were said to be comparable offences in NSW.

1. However, in our view the sentencing regime in NSW is not the same as that of the ACT. Further, ss 23(2), 24(2) and 25(2) of the Drug Misuse and Trafficking Act 1985 (NSW) carry a concept called a ‘standard non-parole period’, which is not part of the law of the Territory. We do not find the table of assistance.

1. The Crown emphasised the large quantities of precursors involved.  But although the quantities were large, as they had to be to qualify as large commercial quantities, and were, especially in the case of Count 5, well over the relevant thresholds, it can be unwise to concentrate on quantities in the absence of evidence of the potential production of MDMA.  Of course the maximum penalties are a guide, but our reading of the evidence does not put the possession offences at the high end of the scale where the Crown submits they were.

1. As to the Count 2 offence of manufacture, the Crown was not able to prove any particular quantity to emphasise that this offence was a more serious example than any other.  That is not a criticism of the Crown. It merely reflects what the evidence was. We bear in mind again that in drug manufacturing cases, quantity is not necessarily as important as ‘what the offender did’: R v McDonnell [2002] NSWCCA 34; 128 A Crim R 44 at [33] per Wood CJ at CL, Sully and Dowd JJ agreeing; see also Zdravkovicv The Queen [2016] ACTCA 53 at [40]-[42] which concerned drug supply, although the same principle applies. We also bear in mind his Honour’s finding that the respondent had a significant role, being the ‘cook’.

1. We do not agree there was error shown with the sentence on the trafficking charge.  The sentence was in our view an available sentence, and as that offence was, objectively, considerably less serious than the other offences, it was appropriate for his Honour to make the sentence totally concurrent with other sentences.  That is especially so since all charges were related: Pearce v The Queen [1998] HCA 57; 194 CLR 610 at [40] per McHugh, Hayne and Callinan JJ.

Conclusion

1. As no error has been shown the appeal should be dismissed.

Orders

1. Appeal dismissed.

I certify that the preceding seventy [70] numbered paragraphs are a true copy of the Reasons for Judgment of the Court.

Associate:

Date: 13 April 2017