R v Roumanas - [2007] SADC 122

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative Appeals Tribunal)
R v ROUMANAS
[2007] SADC 122
Judgment of His Honour Judge Tilmouth
15 November 2007
CRIMINAL LAW - JURISDICTION, PRACTICE AND PROCEDURE - JUDGMENT AND PUNISHMENT - SENTENCE - FACTORS TO BE TAKEN INTO ACCOUNT
Mr Roumanas pleaded to two counts of producing cannabis. Count 2 related to 2.828 grams in a moistened condition, and a dry weight likely to be seven hundred grams, not less than half of which was found to be destined for commercial purposes. This could have returned about $3,500 profit from commercial dealing. However he forfeited to the Crown $280,000 under s47 of the Criminal Assets Confiscation Act 2005 (SA). The question in this matter is what influence this should have on the sentence to be imposed?
Held: The authorities show the court is obliged to have regard to any forfeiture order to the extent that it goes beyond the fruits or proceeds of criminal activity. The matters that may bear on this discussed.
Criminal Law (Sentencing) Act 1988 SA ss10(1)(ka); Criminal Assets Confiscation Act 2005 (SA) s47, s224, referred to.
R v Carpentieri (2001) 81 SASR 164, 126 ACrimR 359; R v Errigo (2005) 92 SASR 562; R v McLeod [2007] VSCA 183; R v Brough [1995] 1 NZLR 419, applied.
Whisson v Mead (2006) 95 SASR 124, considered.

R v ROUMANAS
[2007] SADC 122
Background

Mr Roumanas pleaded guilty in the Port Adelaide Magistrates Court on 19 July 2006, to two counts of producing a controlled substance, namely cannabis. He was convicted in this court of those charges on 21 August 2006 upon the allocutus being administered to him.
Both offences took place between February and April 2006 at his home in Woodville. Count one related to fifteen cannabis plants grown for personal use, whereas count two involved cannabis plants found by Police officers on 21 April 2006. No allegation was made with respect to count one or as to any course of uncharged conduct, of commercial dealing in cannabis, but it was on count two. That charged him with producing cannabis “in excess of two kilograms”, thus attracting a maximum penalty of $50,000 or imprisonment for ten years or both.[1] On the other hand, the maximum penalty attracted by count one, was a fine of $2,000, or two years imprisonment, or both, as this is a summary offence.[2]
[1] Section 32 (5) B (ii) Controlled Substances Act 1984 (SA)
[2] Section 32 (5) B (iii)
Count two involved five trays containing the drying flowering heads of the female plant, weighing 2.828 grams in a moistened condition, that is in excess of two kilograms. On the view most favourable to him, the resultant dry weight was likely to be seven hundred grams, not less than half of which was destined for commercial purposes.[3] The evidence, suggests he supplied and sold cannabis to a circle of friends and acquaintances who were regular users of cannabis. The estimates of police officers where that this could have yielded between $200 and $300 per ounce (28 grams), or between $2,200 and $3,500, if sold in one pound lots (450 grams). On the basis of this evidence, 350 grams or thereabouts to be used for commercial purposes could have returned somewhere upwards of $3,500 “profit” from commercial dealing.
[3] R v Roumanos [2007] SADC 79 (31 July 2007)
The issue of sentence
The court is now called upon to sentence him. This is not as straightforward as these relatively simple facts might appear to suggest. By consent orders entered in the civil jurisdiction of this court on 8 October 2007, Mr Roumanas agreed to forfeit to the Crown $280,000 under s47 of the Criminal Assets Confiscation Act 2005 (SA) (the ‘Confiscation Act’). This sum, apparently has its reference in the value of the home in which the cannabis was grown.
On any view this is a very large sum indeed. It is said on his behalf to have consumed most of his life savings. The acute question arises as to what influence this should have on the appropriate sentence to be imposed. His counsel submitted in light of a forfeiture of this magnitude, he had been sufficiently punished already, to the point that no further penalty was justified or required.
The position at common law
An issue of this kind first arose in this State in R v Carpentieri.[4] In that case a judge imposed a sentence of imprisonment of two years and six months and a non-parole period of fourteen months, on charges of producing and possessing cannabis for sale, constituted by the growing twenty five cannabis plants on a rural property owned by him. This was reduced on appeal to two years imprisonment with a non-parole period of eleven months, particularly having regard to his age (sixty two years) at the time. Both courts were aware the property on which the cannabis was grown would be forfeited as a result of the commission of the offence. It was accepted this was worth about $60,000, a consideration the court held was a relevant circumstance to take into account when passing sentence.[5]
[4] (2001) 81 SASR 164, 126 ACrimR 359.
[5] At [39].
The Court of Criminal Appeal also accepted the forfeiture in the circumstances of that case, was “not for the purpose of depriving the offender of the fruits of criminal activity or of the proceeds of the crime committed by the offender”.[6] Doyle CJ analysed the issue as follows: [7]
46.But what part does the forfeiture play in the sentencing process? It can only be one of the many factors to be considered. For example, if the forfeiture merely deprives the offender of the fruits of a crime, it may be of little significance, because an offender could hardly claim to receive a lesser sentence because the fruits of the crime have been lost. But here the forfeiture results in Mr Carpentieri suffering a significant detriment in addition to any judicially imposed sentence. The court can take account of this, although it cannot do so in a precise way. It would certainly not be appropriate to reduce the sentence by the amount of the forfeiture, even if some form of equivalence could be found. It is clear that Parliament intends forfeiture to be an additional detriment suffered by an offender in possession of property liable to forfeiture under the Criminal Assets Confiscation Act 1996 (SA).
47.What I have said is sufficient to make it clear that there can be no precision in the way in which forfeiture is taken into account. I proceed on the basis that the sentence to be imposed should be reduced to some extent on account of the fact that Mr Carpentieri will lose a property worth about $60 000, that not being the loss of an asset which is the proceeds or fruits of the commission of an offence, and the forfeiture not being required to prevent Mr Carpentieri from retaining "the profits of criminal activity": see s10(1).
[6] At para [40].
[7] Martin and Besanko JJ agreeing.
The first of these passages was subsequently cited with approval in Whisson v Mead.[8] The court in Carpentieri held the sentence should be reduced “to some extent” on account of the loss of property worth about $60,000. It can be seen the net effect was a reduction in the sentence of imprisonment otherwise appropriate according to general principle, in the order of approximately one fifth as to both the head sentence and the non-parole period, on account of the age and the forfeiture issues. The court did not allocate any particular reduction to either.
[8] (2006) 95 SASR 124, at [25].
The sentencing Act
Section 10(1)(ka) of the Criminal Law (Sentencing) Act 1988 (SA), introduced by the Legal Assistance (Restrained Property) Amendment Act (2003) (SA), effective from 12 April 2001, provides:
CRIMINAL LAW (SENTENCING) ACT 1988 - SECT 10
10 Matters to be considered by sentencing court
(1) A court, in determining sentence for an offence, should have regard to such of the following matters as are relevant and known to the court:
…
(ka) if a forfeiture of property (other than a forfeiture that merely neutralises a benefit through the commission of the offence) is, or is to be imposed, as a result of the commission of the offence-the nature and extent of the forfeiture;
This provision was declaratory of the common law.[9] The position was as Vanstone J observed in Whisson v Mead,[10] “under s10(1)(ka) … the court was obliged to have regard to the nature and extent of the forfeiture … except where it merely neutralized a benefit obtained through the commission of the offence”.
[9] R v Allen (1989) 41 ACrimR 51, R v Pastras (1993) 65 A Crim R 584, Hemming v Perkins (1999) 74 SASR 307, DPP v Alexander (2003) 86 SASR 577 at [29-30], R v Nguyen [2007] VSCA 165.
[10] Above at [33].
The case law
A similar problem arose in R v Errigo.[11] Mr Errigo owned a country property on which he permitted his parents to grow nearly two hundred cannabis plants. The automatic forfeiture provisions of the Criminal Assets Confiscation Act 1996 (Cth) applied to the property, so that land worth $295,000 was to be forfeited. As to the influence of this consideration on the sentencing process, Doyle CJ (Bleby and Gray JJ agreeing) said:
43.The forfeiture is a very substantial detriment suffered by Mr Errigo. It should be taken into account. There is no suggestion that the property was acquired with money gained from criminal activity, or that it was acquired for the purpose of criminal activities. On the other hand, it is appropriate to bear in mind that Parliament clearly intended forfeiture to be an additional penalty, when it occurs. It would not be appropriate for a forfeiture to be matched by a routine equivalent reduction in punishment, even if it were possible to equate the effect of a forfeiture with a period of imprisonment: Carpentieri at [46], Alexander at [17] and [80].
44.This means that it will be difficult to achieve consistency in sentencing when considering sentences for the one offence, and comparing cases where property has been forfeited with cases where property has not been forfeited. However, that, as I see it, is an inevitable result of the requirement to allow for the impact of forfeiture. To that extent the interest in consistency (or an appearance of consistency) must give way to the interest in ensuring that punishment is proportionate to the gravity of the offending, taking into account, as best one can, the impact of a forfeiture order.
[11] (2005) 92 SASR 562.
Mr Errigo was originally sentenced to three years imprisonment with a non-parole period of two years suspended. The prospect of forfeiture was not made known to the trial judge. The prosecution appealed against the leniency of the sentence. In the result the Court of Criminal Appeal allowed the appeal, imprisoned him for two years and fixed a non-parole period of nine months, left the fine intact, but revoked the suspension. The court concluded the decision to suspend calls for intervention “even allowing for the impact of the forfeiture”.[12]
[12] At para [45].
These cases demonstrate a forfeiture order is one capable of reducing a sentence otherwise appropriate, but not so as to replace that sentence altogether. They are consistent with the view that statutory forfeiture measures were intended to make “no claim to serving any rehabilitative purpose, their impact [was] intended to be incapacitative and deterrent”.[13]
[13] Fox and Freiberg "Forfeiture Confiscation and Sentencing" in Fisse, Fraser and Coss (eds) The Money Trail (Law Book, 1992), 106, 136.
The approach in Errigo appears to have been accepted by the Victorian Court of Criminal Appeal in R v McLeod.[14] It took the view that where forfeiture “constitutes a punishment and not simply the deprivation of profits of crime, a sentencing judge can take that punishment into account in the determination of an appropriate sentence in the circumstances”,[15] citing R v L Cheikh[16] and R v Yacoub,[17] and on the basis that to do otherwise was to ignore “a substantial additional punishment”.
[14] [2007] VSCA 183 at [18].
[15] At [21].
[16] [2004] VSCA 146 at [12].
[17] [2006] VSCA 203.
In McLeod a sentence of three years and four months imprisonment with a non-parole period of two years, was reduced to two years and ten months with a non-parole period of one year and nine months. In the course of doing so the court described the total sum effectively forfeited of $67,055, as “a considerable financial burden”.[18]
[18] At [45]. Compare R v Brough [1995] 1 NZLR 419 at 424.
The relevant cases, were extensively canvassed by Maxwell P, Redlich JA and Habersberger AJA in that case:
[15] There has been limited judicial analysis of when and how confiscatory legislation should affect sentencing. This may reflect the great variation in circumstances, relating both to the acquisition of the forfeited property and to its use in the commission of the crime, and the variations which exist in the statutory regimes which provide for confiscation. Difficult questions arise as to how, as a matter of proportionality, forfeiture legislation should interact with the judicial imposition of sentences.[19]
[16] The obligation to disgorge the proceeds of crime is not a penalty.[20] Disgorgement is necessary to prevent unjust enrichment.[21] Forfeiture of the proceeds of crime has, nevertheless, been treated as a mitigating factor in some cases.[22] Thus it has been said that pecuniary penalty orders which relate entirely to profits from the unlawful activity constitute an additional punishment.[23]
[17] Disgorgement of benefits apart, forfeiture is relevant to penalty.[24] At common law, forfeiture of lawfully-acquired property has generally been regarded as a mitigating factor in sentencing,[25]. since it places the offender in a worse position than he/she was before the commission of the offence. That is, forfeiture has a punitive or deterrent effect.[26]
[18] The sentencing principle of proportionality requires that the nature and extent of any forfeiture of property be considered in fixing the sentence.[27] That is not to say that such orders are always to be viewed as warranting mitigation of penalty.[28] It is necessary to consider whether the forfeiture will have a disproportionate or exceptional effect on the offender and may have a substantial deterrent effect.[29]
[19] R v Campbell and Creig (1999) 109 ACrimR 174, [37] (Tadgell JA).
[20] R v Brough (1994) 12 CRNZ 634 at 639].
[21] Burrows, Finn and Todd, "The Law of Contract in New Zealand" (Butterworths, 1997), 22; M Hinton, "Are Drug Trafficking Confiscation Orders Punitive?" (1992) 136 Solicitor's Journal 1264; Fried "Rationalising Criminal Forfeiture" (1988) 79 Journal of Criminal Law and Criminology, 328, 358.
[22] R v Allen (1989) 41 A Crim R 51 at 57-8; Kardogeros [1991] 1 VR 269; McDermott v R (1990) 49 A Crim R 105; Tapper v R (1992) 64 A Crim R 281; Stocks v R[2000] TASSC 106, [15]; R v Whitnall (1993) 68 A Crim R 119; R v Purdon (Unreported, NSW Court of Criminal Appeal, 27 March 1997 Hunt CJ at CL, McInerney J and Donovan AJ); Confiscation that counts: A Review of the Proceeds of Crime Act 1987, Australian Law Reform Commission Report 87, 3.43].
[23] McDermott v R (1990) 49 A Crim R 105; R v Tapper (1992) 64 A Crim R 281 at 287.
[24] R v Hoar (1981) 148 CLR 32 (Gibbs CJ, Mason, Aickin and Brennan JJ).
[25] R v Tiler[1998] 2 VR 194; R v Sergi unreported CCA (Vic) 23/11/89; Macri v The State of Western Australia [2006] WASCA 63; Urbano v The State of Western Australia [2006] WASCA 147; Borbil v The State of Western Australia [2007] WASCA 24.
[26] See Black v R (1997) 15 CRNZ 278; Solicitor-General v Wong (1997) 14 CRNZ 624; Mada v R [2003] WASCA 1 at 168; R v Carpentieri (2001) 81 SASR 164 at 170-3; R v Kalache (2000) 111 A Crim R 152; New South Wales Crime Commission v Farah (2003) 142 A Crim R 108; Whisson v Mead [2006] SASC 195; R v Errigo[2005] SASC 322, R v Errigo [2005] SASC 322.
[27] R v Erigo [2005] SASC 322 [44] (Doyle CJ); John Thornton "The Objectives and Expectations of Confiscation and Forfeiture Legislation in Australia - An Overview" (1994) 1 Canb LR 43.
[28] Where the offender has by an order for forfeiture lost his lawful savings which he had invested in a criminal enterprise, the offender has been treated as having taken the risk involved in the investment of money in such circumstances and that its loss was no more than he deserved for embarking upon the enterprise: Gee v R (Unreported, Supreme Court of South Australia, Court of Criminal Appeal, King CJ, White and Bollen JJ, 16 December 1998); R v Kalache (2000) 111 ACR 152, [72] (Sully J).
[29] R v Brough[1995] 1 NZLR 419 at 640; R v Stafford (1997) 97 A Crim R 85 at 91 (Myles CJ); McDermott v R (1990) 49 A Crim R 105; Allen (1989) 41 A Crim R 51 at 57; Pastras (1993) 65 A Crim R 584 at 592; R v Thomas[1991] 2 VR 207 at 208-9; R v Wignall (1992) 61 A Crim R 54; R v Campbell and Greig (1999) 109 A Crim R 174, [40] (Tadgell JA).
To these principles it might also be added that where forfeiture orders of property used in the commission of offences are particularly severe, some adjustment to the sentence may be appropriate because the deterrent effect of the forfeiture order may lessen the need for the deterrent element in the sentence: R v Brough.[30]
[30] [1995] 1 NZLR 419 at 424.
The Confiscation Act
The common law position, as reflected in s10(ka) of the Sentencing Act, was reinforced by s224 of the Criminal Assets Confiscation Act (above). This came into effect on 2 April 2006. That section provides:
CRIMINAL ASSETS CONFISCATION ACT 2005 - SECT 224
224-Effect of the confiscation scheme on sentencing
A court passing sentence on a person in respect of the person's conviction of a serious offence-
(a)     may have regard to any cooperation by the person in resolving any action taken against the person under this Act; and
(b)     must not have regard to any forfeiture order that relates to the offence, to the extent that the order forfeits proceeds of the offence; and
(c)     must have regard to the forfeiture order to the extent that the order forfeits any other property; and
(d)     must not have regard to any pecuniary penalty order, or any literary proceeds order, that relates to the offence.
The difference in wording between both pieces of legislation, means that what was permissive in s10(1)(ka) (above), has become mandatory in s244 (above). It is noticeable s224 recognises that the court must have regard to any forfeiture order, to the extent that it extends beyond the proceeds of an offence. In contrast, the forfeiture of the proceeds or fruits of an offence by way of a pecuniary penalty order, may not be taken into account by the sentencing court.
It is apparent from the structure and content of this provision, that Parliament intended the loss of the proceeds of crime, whether by way of forfeiture or pecuniary penalty orders, was irrelevant to the sentencing process, whereas those over and above such proceeds, remain relevant as potentially mitigating consideration in the case of forfeiture orders alone. As noted in McLeod,[31] “a close distinction is here drawn between forfeiture of the proceeds of crime which must be disregarded and other forfeiture of property”.
[31] (above) at [21])
The evident purpose of this type of provision is to deprive offenders of the proceeds of their crimes, to prevent the reinvestment of those proceeds in the commission of further crimes and to dispel the notion that after a potentially short period of incarceration, an offender would be freed to enjoy his ill-gotten gains.[32] Even though provisions like these have been called “draconian”,[33] might be described by some as “excessively harsh” or “an unjust overreaction to the problems with which it seeks to deal”,[34] the courts remain bound to apply them according to their tenor.
Sentencing principles in cases of forfeiture orders.
[32] Moreland “Justice in jeopardy? The relationship between sentencing and confiscation orders under the Proceeds of Crime Act 1991” 31 VUWLR 497 497-523.
[33] Bennett & Co (a firm) v Director of Public Prosecutions (WA) (2005) 31 WAR 212 at 223; (2005) 154 A Crim R 279 at 289; Jones Assets Forfeiture (2007) Law Soc J 73.
[34] Mansfield v DPP (WA) (2006) 226 CLR 486; (2006) 228 ALR 214; (2006) 80 ALJR 1366; (2006) 165 ACrimR 369, per Heydon J at [57].

Bearing in mind the authorities cited and discussed above, applied in the context of s224 of the Confiscation Act, the following principles emerge as bearing on the proper sentence to be imposed in the present circumstances, even though the exact impact on the sentencing process is not so far, clearly defined:
·an obligation to disgorge the proceeds of crime, by whatever means, is not to be taken as being a penalty and is not to be taken into account in passing sentence;
·the court is obliged to have regard to any forfeiture order to the extent to which it serves to forfeit property going beyond the fruits or proceeds of criminal activity;
·no precise formula can be applied as to the extent to which the forfeiture order may affect the sentence;
·it is not appropriate to routinely reduce the proposed sentence by the extent to which it matches the forfeiture (or its equivalent);
·the sentence ultimately imposed must remain proportionate to the offence and the offender, taking due account of the impact of the forfeiture order;
·the considerations that might effect the weight to be given to a particular forfeiture order, include;
othe nature and extent of the detriment it causes;
owhether it will have a disproportionate, substantial or exceptional effect;
owhether it imposes a substantial additional burden, or operates as a substantial additional punishment; and
oany lessened need for a deterrent element in the sentence proposed.
The court proposes to proceed to sentence Mr Roumanas by applying the above principles to the facts of his case accordingly.[35]
[35] Refer sentencing remarks R v Roumanas DCCRM 06-887.15/11/07