R v Vannini - [2014] SADC 65

DISTRICT COURT OF SOUTH AUSTRALIA
(Criminal)
R v VANNINI
[2014] SADC 65
Reasons for Ruling of His Honour Judge Beazley
30 April 2014
CRIMINAL LAW
DISPUTED FACTS
Defendant pleaded guilty to one count of cultivating a commercial quantity of cannabis; one count of trafficking in a large commercial quantity of cannabis and four counts of simple possession of controlled drugs - the police had located cash in the sum of $59,000 at the defendant's house - dispute as to whether the cash or any of it was unlawfully obtained by the defendant.
Held: Some of the cash was obtained by the defendant from a previous cultivation. Court unable to determine, beyond reasonable doubt, what proportion of the cash was unlawfully obtained. Discussion as to factual basis of the sentence.
Summary Offences Act (1953) s 41; Criminal Assets Confiscation Act (2005) s 47; Criminal Law (Sentencing) Act (1988) s 6, referred to.
R v Kreutzer [2013] 118 SASR 211 at [27]-[32]; Gas v R [2004] 217 CLR 198 at [30]; R v Anderson [1973] 177 CLR 520; R v Ninnes (2007) 96 SASR 443; R v Perfili (2006) 95 SASR 560, considered.

R v VANNINI
[2014] SADC 65
Disputed Facts Hearing
Introduction

Maride Anthony Vannini (the defendant), and Grace Maria Catanzariti were jointly charged on Information dated 22 April 2013 with six drug offences which had allegedly occurred on 9 June 2011.
On 12 February 2014, the day fixed for trial, Mr Vannini was arraigned and pleaded guilty to six offences as appear hereafter. Upon the entry of those pleas, a nolle prosequi was entered in respect of Ms Catanzariti on each of the counts on the Information.
The parties then announced that there was a dispute as to the status of cash in the sum of $59,000 located by the police at the defendant’s home, and seized by them.
The respective counts to which the defendant pleaded guilty are as follows:
·One count of cultivating a commercial quantity of a controlled plant for sale contrary to s 33B(2) of the Controlled Substances Act 1984 (the Act).
·One count of trafficking in a large commercial quantity of a controlled drug contrary to s 32(1) of the Act.
·Four counts of simple possession of a controlled drug, each involving small quantities of:
·       methamphetamine;
·       cocaine;
·       1-Benzylpiperazine (BZP);
·       3,4-Methylenedioxymethamphetamine (MDMA).
Background
On 9 June 2011 police attended at the defendant’s residential premises at MacDonald Park. They located, in his bedroom, a jewellery box which contained, inter alia, small quantities of methylamphetamine, cocaine, BSP and MDMA.
They then observed two sheds on the property, in which had been constructed, three “grow rooms” containing hydroponic equipment. Each room was set up with high powered lights, automatic watering and filtering system, transformers, light shades and a carbon filter.
In one of those rooms they discovered some 37 cannabis seedlings, each of which was approximately 10 to 50 centimetres in height. They subsequently discovered approximately 9.4 kilograms of female head cannabis plant material, in various bags on the premises.
Upon returning to the defendant’s bedroom they searched drawers in a wardrobe and found two shopping bags which contained the above mentioned cash in the sum of $59,000. There is a dearth of evidence as to the denominations of the notes, however photographs of some of the cash in a white shopping bag disclosed $50 and $100 bundles, while some of the cash in a green shopping bag disclosed bundles of $50 and $20 notes.
A number of other items which were located at those premises were set out in detail in the police Exhibit 5 Log.
They included quantities of jewellery; sales receipts for jewellery dated 14/4/2008; 14/1/2009; and 5/2/2009; together with two jewellery appraisals; a Westpac Bank envelope with handwritten note “M Vannini $15,000”; what was described as a “tick list”; and 3 mobile phones.
The dispute
It is the prosecution case that the cash in the sum of $59,000 was the proceeds of prior cultivation and trafficking of cannabis by the defendant from the three grow rooms on the property. The defendant denies that assertion, and contends that the monies were lent to him by members of his family, or were the proceeds of other ventures including dog breeding and jewellery interests.[1]
[1] See pgs 5 & 6 of the Declaration of Constable Adam Blandford dated 22/9/2011.
I had enquired of the parties as to whether a determination of the source of the subject cash would necessarily involve any aggravating factor for sentencing purposes in light of the pleas of guilty by the defendant to the offences involving commercial quantities of cannabis. Mr Ellison, counsel for the DPP submitted that the finding would be relevant to the question whether there was a background of trafficking and cultivation and that, although I would only sentence for the subject offences, it was directed to whether this offending was an isolated event.
Counsel for the defendant, Mr Retalic, submitted that a disputed facts hearing would enable the Court to ‘get a bigger picture’, and reach conclusions as to the level of offending.
·Other proceedings
There are some unusual factors in the subject case.
The prosecution could rarely, if ever, be in a position to establish the source of cash funds. It is for that reason that the determination of that issue is the subject of other proceedings, whether they be civil proceedings under the Criminal Assets Compensation Act 2005 or a criminal complaint alleging unlawful possession. In each case the onus falls upon the defendant to establish on the balance of probabilities that the cash was obtained lawfully.
·Criminal assets confiscation
I was informed by Mr Ellison that civil proceedings had been instituted in the civil jurisdiction of this Court, pursuant to the Criminal Assets Confiscation Act 2005, in which the Crown had sought to restrain the defendant’s interest in his house, and in the subject cash sum of $59,000.
In the ordinary course of events the Crown would seek that restraining order under s 24 of that Act. In the subject case the subject cash is not the proceeds of the counts with which the defendant has been charged. The Court would need to be satisfied that there are reasonable grounds to suspect that it is the proceeds of another offence.
The onus would then be on the defendant to satisfy a Court under s 34 of that Act on the balance of probabilities that the property is neither the proceeds of unlawful activity, that his interest was lawfully acquired and that it would not be contrary to the public interest for the property to be excluded from the restraining order.
·Unlawful possession
If the defendant had been charged with the offence of unlawful possession under s 41 of the Summary Offences Act, 1953, then the onus would have fallen upon the defendant to prove on the balance of probabilities that he had obtained the cash honestly. It has long been established that it is highly undesirable for a charge of unlawful possession to the joined with charges such as those to which the defendant has pleaded guilty.[2]
[2] R v Perfili [2006] 95 SASR 560
Accordingly no complaint had as yet been laid against the defendant in respect of the offence of unlawful possession.
It appears to me that the parties may not be ad idem as to the proceedings before me. Both counsel assumed that I may eventually be in a position to make orders with respect to the cash. However while the defendant may have assumed that I would reach some binding decision in these proceedings with the prosecution carrying the onus to determine the source of the funds beyond reasonable doubt, the prosecution appears to have approached the issue differently – namely a determination for the purposes of an aggravating factor on sentencing initially, but that there would be, subsequently, a separate determination in respect of the question of forfeiture.
The standard of proof
In Gas v The Queen[3] the High Court of Australia noted that it was for the sentencing judge alone to determine the sentence to be imposed and for that purpose, the judge must find the relevant facts.
[3] (2004) 217 CLR 198 at [30]
In R v Anderson[4] the High Court of Australia said:
If, on a sentencing hearing after a plea of guilty, the Crown wishes to rely on some alleged, but disputed, factual circumstance as aggravating the offence, the ordinary rule is that the onus lies upon the Crown to establish the existence of that circumstance. It is common ground, and rightly so, that the standard of proof which rests upon the Crown in such a case in South Australia, is of the ordinary criminal standard, namely, beyond reasonable doubt. If the Crown fails to establish the disputed circumstance of aggravation to that standard of proof, the offender must be sentenced on the basis that the circumstances of aggravation have not then shown to exist.
[4] [1973] 177 CLR 520 AT 536.
There was no doubt that the dicta contained in that decision is the ordinary rule in respect of factors allegedly aggravating the offence.[5]
[5] R v Ninnes [2007] 96 SASR 443.
Recently the question of the determination of disputed facts was considered by the Court of Criminal Appeal. In a lengthy examination of relevant authority in R v Kruetzer,[6] Kourakis CJ said:
[6] R v Kreutzer [2013] 118 SASR 211 at [27]-[32]
In The Queen v Olbrich, Gleeson CJ, Gaudron, Hayne and Callinan JJ explained the different sentencing onus and standard of proof applicable to matters of aggravation and mitigation in the following way:^[18]
Courts of criminal appeal in Australia have considered the subject of fact finding for sentencing many times in the last thirty years. Not all of the questions that have been examined in those decisions must be considered now. For present purposes, it is enough to say that we reject the contention that a judge who is not satisfied of some matter urged in a plea on behalf of an offender must, nevertheless, sentence the offender on a basis that accepts the accuracy of that contention unless the prosecution proves the contrary beyond reasonable doubt. The incongruities that would result if this submission were accepted are well illustrated by the present case. The respondent swore that he was a courier but the judge disbelieved him. To require the judge to sentence the respondent on the basis that he was a courier is incongruous.
Much of the discussion of fact finding for the purposes of sentencing addresses questions of onus and standard of proof. References to onus of proof in the context of sentencing would mislead if they were understood as suggesting that some general issue is joined between prosecution and offender in sentencing proceedings; there is no such joinder of issue. Nonetheless, it may be accepted that if the prosecution seeks to have the sentencing judge take a matter into account in passing sentence it will be for the prosecution to bring that matter to the attention of the judge and, if necessary, call evidence about it. Similarly, it will be for the offender who seeks to bring a matter to the attention of the judge to do so and, again, if necessary, call evidence about it. (We say “if necessary” because the calling of evidence would be required only if the asserted fact was controverted or if the judge was not prepared to act on the assertion.)
In the proceedings before the primary judge in this case, the prosecution did not submit that the sentence to be imposed on the respondent (a fifty-eight year old first offender who pleaded guilty to importing more than 1.1 kg of heroin) should be increased beyond what otherwise would be called for by those facts because the appellation “principal” could be attached to him. Rather, the respondent submitted that the sentence otherwise to be imposed on him should be mitigated because he was “a courier”. The respondent bore the burden of proving this fact. The judge was not persuaded of it.
As to the standard of proof that should be applied, we would adopt what was said by the majority in R v Storey — that a sentencing judge:
“may not take facts into account in a way that is adverse to the interests of the accused unless those facts have been established beyond reasonable doubt. On the other hand, if there are circumstances which the judge proposes to take into account in favour of the accused, it is enough if those circumstances are proved on the balance of probabilities.”
….
Shortly after the judgment in Olbrich was delivered, this Court considered the effect of that decision on the earlier authorities of this Court. In R v Lobban,^[20] Martin J (with whom Bleby and Mullighan JJ agreed) gave an exposition of those principles with which I respectfully agree and now set out at some length:^[21]
In my opinion, the effect of Olbrich was to modify the principle by which Bray CJ was guided with the consequence that the approach adopted by Bray CJ is not the correct approach. In Olbrich, the majority specifically rejected the proposition that if an offender fails to satisfy a judge of some matter urged in mitigation, the judge is, nevertheless, obliged to sentence the offender on that basis unless the prosecution proves the contrary beyond reasonable doubt. Their Honours adopted the majority view in R v Storey [1998] 1 VR 359 at 369 ...
In Storey, the majority explained that a reference to facts “adverse to the interests of the accused” is not limited to circumstances which “aggravate the offence”. That expression extends to any circumstance which the judge proposes to take into account adversely to the interests of the accused in the sense that the circumstance is “likely to result in a more severe sentence than would otherwise be the case” (at 369). It follows that reference to a circumstance to be taken into account in favour of the offender is a reference to a circumstance that is likely to result in a less severe sentence than would otherwise be the case. This approach was approved in Olbrich (at 281).
As was pointed out in Storey, descriptions of circumstances as aggravating or mitigating are useful shorthand expressions, but they are no more than shorthand expressions. Their Honours observed that factors cannot be characterised as always aggravating or always mitigating. The sentencing judge must ask what the tendency of the circumstance is in the particular case under consideration. I agree with the following explanation (at 371):
“The test is not what tag can or should be applied to any particular fact but what use the judge proposes to make of the fact in relation to the offender. If it is a use adverse to the interests of the offender then proof beyond reasonable doubt is required: if it is a use in favour of the offender then proof on the balance of probabilities will suffice.”
I also agree with the following remarks in Storey (at 372) as to the meaning of “proof of disputed facts”:
“We have spoken of disputed “facts”. As was pointed out in R v Ali [[1996] 2 VR 49 at 60-61] there may be a large number of facts which it is contended demonstrate a relevant conclusion. Just as on a trial the Crown does not have to prove every fact on which it relies beyond reasonable doubt in order for the jury to conclude that the offence is proved, [Shepherd v The Queen [1990] HCA 56; (1990) 170 CLR 573], so too on sentencing, attention must be directed to the relevant issue and it is the issue that must be established to the requisite standard — not each of the individual facts which is said to bear upon the issue.”

Finally, it is important to bear in mind that not infrequently a sentencing judge will not be persuaded of a particular fact. If a fact is advanced in favour of an offender but a judge is not persuaded of the existence of the fact, the absence of that fact does not prove the converse fact adverse to the offender. It simply means that the offender does not get the benefit of the fact that was advanced in the offender’s favour. Similarly, if a fact is advanced adverse to the interests of the accused but is not proven beyond reasonable doubt by the Crown, it simply means that the adverse fact does not exist for the purposes of sentencing. As King CJ pointed out in R v Calabria (1982) 31 SASR 423 at 437, if a fact such as the degree of participation in the crime is unknown, speculation is futile and unjustified. The offender is to be punished for the particular crime committed. His Honour pointed out that if the degree of participation were known, it might operate in aggravation or extenuation of the degree of guilt. If the degree of participation is not known, it can operate neither as aggravation nor extenuation.
In Weininger v The Queen,[22] the High Court provided further explication of its decision in Olbrich but, in my respectful opinion, did not modify the principles therein stated in a way which casts any doubt on the understanding and application of those principles in Lobban. It is appropriate to cite, again at length, from the reasons of Gleeson CJ, McHugh, Gummow and Hayne JJ in Weininger:^[23]
... attention to questions of onus and standard of proof may distract attention from another important aspect of the decision in Olbrich. Framing the question in terms of the onus and standard of proof may suggest that all disputed issues of fact related to sentencing must be resolved for or against the offender. That is not so. As was recognised in Olbrich, some disputed issues of fact cannot be resolved in a way that goes either to increase or to decrease the sentence that is to be imposed. There may be issues which the material available to the sentencing judge will not permit the judge to resolve in that way.
[The nature and circumstances of the offending] are to be taken into account only to the extent that they are relevant and known to the court. The sentencing judge may not be able to make findings about all matters that may go to describe those circumstances. In particular, an offender may urge a particular view of the nature and circumstances of the offence, favourable to the offender. The sentencing judge may be unpersuaded that the view urged is, more probably than not, an accurate view of the circumstances. In such a case, it is not correct that the judge is bound to sentence the offender on that favourable basis, unless the prosecution proves the contrary beyond reasonable doubt. Accordingly, in the particular facts of Olbrich, where the offender asserted that he was no more than a courier of the drugs, but the sentencing judge disbelieved him, it was neither necessary nor appropriate to sentence him on the basis that he was a courier.
To frame the relevant question in terms of the onus and standard of proof may also suggest that the only material which may be treated as being “known to the court”, and on which the judge may act in sentencing an offender, is material revealed by the plea or verdict of guilty, admission by the offender, or evidence received on the sentencing hearing. The use of the phrase “known to the court”, rather than “proved in evidence”, or some equivalent expression, suggests strongly that s 16A was not intended to require the formal proof of matters before they could be taken into account in sentencing. Rather, having been enacted against a background of well-known and long-established procedures in sentencing hearings, in which much of the material placed before a sentencing judge is not proved by admissible evidence, the phrase “known to the court” should not be construed as imposing a universal requirement that matters urged in sentencing hearings be either formally proved or admitted.
In addition to the points just made about what is known to the sentencing judge, there is another important feature of fact finding in sentencing which must be recognised. Many matters that must be taken into account in fixing a sentence are matters whose proper characterisation may lie somewhere along a line between two extremes. That is inevitably so. The matters that must be taken into account in sentencing an offender include many matters of and concerning human behaviour. It is, therefore, to invite error to present every question for a sentencer who is assessing a matter which is to be taken into account as a choice between extremes, one classified as aggravating and the opposite extreme classified as mitigating. Neither human behaviour, nor fixing of sentences is so simple. ...
As was pointed out in Storey, it is important to avoid introducing “excessive subtlety and refinement” to the task of sentencing. That object is advanced if sentencing and appellate courts pay close attention to identifying those matters that the sentencing judge takes into account in a way that is adverse to the interests of the accused, and those matters that the sentencing judge takes into account in favour of the accused. It must be recognised that not every matter urged on the judge who is to pass sentence has to be, or can be, fitted into one or other category. The judge may be unpersuaded of matters urged in mitigation or in aggravation. The absence of persuasion about a fact in mitigation is not the equivalent of persuasion of the opposite fact in aggravation. So to conclude would ignore the different standards of proof that are to be applied. It would also be wrong because it would assume that human behaviour can always be described as a dichotomy. It cannot. Human behaviour and characteristics are more varied than that. Further, it would be wrong because it would assume that sentencing is a syllogistic process. It is not. It is a synthesis of competing features which attempts to translate the complexity of the human condition and human behaviour to the mathematics of units of punishment usually expressed in time or money.
(Underlining added and citations omitted)
….
The decisions in Olbrich, Lobban, Storey, and Weininger support the following approach to fixing the factual matrix for sentencing purposes:
(1) Circumstances which operate adversely to a defendant on the one hand, or favourably on the other, should first be identified, bearing in mind that not all relevant circumstances can be so categorised. Even though there exists authoritative guidance about many commonly recurring circumstances, the categories are not closed.
(2) In the absence of agreement and acceptance by the court, the prosecution must formally prove circumstances of aggravation beyond reasonable doubt and the defendant must formally prove matters in mitigation on the balance of probabilities.
(3) If a circumstance of aggravation or mitigation is not proved by the party who carries the onus to do so, the converse is not thereby proved and the court must proceed to sentence not knowing whether the circumstance, or the converse, is true.
(4) A sentencing court may inform itself of matters which are neither circumstances of aggravation nor mitigation as it sees fit in accordance with historical sentencing practice and any applicable statutory discretions such as s 6 of the Criminal Law (Sentencing) Act 1988(SA).

In the subject case both counsel submitted that the prosecution carried the onus of establishing that the cash was the proceeds of a prior cultivation and trafficking in cannabis.[7]
[7] T. p2.
The Evidence
·The prosecution case
Consistent with s 6 of the Criminal Law (Sentencing) Act 1988, the prosecution tendered various documents which had been seized by the police on 9 June 2011. Amongst those documents was a copy of what was described as a ‘tick list’. Counsel for the DPP, Mr Ellison asked the Court to infer that that document detailed a large number of transactions for the sale of cannabis. Some 66 photographs taken at the time of the police attendance at the defendant’s property on 10 June 2011, were also tendered. Relevantly, photograph number three identified bundles of cash held by rubber bands in a plastic bag, other photographs included sundry jewellery items and documentation evidencing a jewellery appraisal; 3 mobile telephones; and electrical and other equipment undoubtedly used by the defendant for the hydroponic cultivation of cannabis. The prosecution also tendered Certificates of Ownership of 3 motor vehicles in the name of the defendant and the Certificate of Title to the defendant’s home.
The defence case
The defendant elected not to give evidence on the hearing.
Counsel for the defendant, Mr Retalic, called, as the only witness for the defendant, his sister Maria Irranca. She detailed the family history involving their father being engaged in the opal mining business at Coober Pedy.
She explained that on or about 6 March 2002 the family property at Coober Pedy was sold and that the sum of approximately $144,000 was placed into an investment account on behalf of the defendant, two other brothers, Antonio and Bruno; and herself. By reference to the bank statement,[8] she explained that on 9 October 2009; 12 October 2009 and 13 November 2009 a withdrawal of $15,000 each was taken from that account, for herself, Antonio and the defendant.
[8] Westpac Bank from 30 Sept 2009 - 30 Nov 2009.
As to the 13 November 2009 withdrawal, she explained that that sum was in cash. The defendant had collected it from the bank and it had been in denominations of $100 bills and $50 bills.[9] She explained that the family, and in particular the defendant had commonly traded in cash.
[9] TP 10.
She said that the withdrawals had taken place because the defendant needed money to renovate his house. Accordingly the balance of those withdrawals totalling $30,000 was lent to the defendant by Ms Irranca and her brother Antonio. Although she couldn’t be certain when that cash in the sum of $30,000 was handed to the defendant, as she had held on to her share for a while, she conceded that it would have been given to the defendant by November 2009. She produced a document said to evidence the total loan of $30,000 from Antonio and herself to the defendant and dated 29 April 2011.[10]
[10] P. 12, Exhibit DFH5.
I will return to that document subsequently. Another document dated 1 July 2010 was said to evidence an additional loan by Antonio to the defendant in the sum of $4,000.[11] By separate document dated 20 August 2010 between Antonio and the defendant it is said to evidence a further loan of $6,000.
[11] Exhibit D6.
She explained that the defendant, was on a disability pension and, in addition, bred and sold Rottweiler dogs.
She deposed that he had some expertise in relation to jewellery and that he bought and sold jewellery to other people.[12] She identified the type of jewellery in the photographs tendered by the prosecution.[13]
[12] TP 13.
[13] Exhibit P2.
Ms Irranca explained that she had subsequently lent other funds to the defendant in respect of his legal fees and Antonio had also lent money to him. When cross-examined she explained that the withdrawals were always in cash rather than being transferred to a bank account. She said that on 13 November 2009 she had arranged for $15,000 in cash in $100 notes to be made available for the defendant. She had telephoned the bank, but was informed, at that stage, they did not have the amount of cash available. She arranged for the defendant to come to collect the money the next day. She was shown a photograph of an envelope, which had been seized by the police, and which was in the name of the bank and marked ‘M. Vannini - $15,000’.
She was questioned about two inconsistent loan agreements, each dated 29 April 2011. She accepted that by November 2009 there was some $30,000 in cash lent to the defendant. She conceded that one loan agreement was drawn for $30,000 rather than two separate loans of $15,000 for herself and $15,000 for her brother, Antonio. The other loan agreement of the same date suggested that a loan of $45,000 had been made. She conceded that, although the money had been given to the defendant in October to November 2009, the loan agreement that recorded the transaction, was not prepared until April 2011.
She was asked:
QBoth of these documents were signed on 29 April 2011 weren’t they.
AYes.
QSo why has Maride signed loans for forty five thousand dollars on 29 April 2011 yet only received thirty thousand dollars.
AWell the other fifteen, there was thirty thousand from us from Tony and, thirty thousand dollars, that was Tony’s and mine.
QYes.
AAnd the other fifteen that was actually in relation to – that was really to ??back, the thirty thousand. In actual fact the loans for him were thirty thousand and then his fifteen thousand. So it’s –
QMaride, you and Antonio signed two contracts on 29 April 2011. Correct.
AYes.
QAnd Maride signed documents stating that he owed you thirty thousand and Antonio fifteen, correct.
AYes.
QIf he only owned you fifteen and he only owed Antonia fifteen.
AThat’s true. He owed us thirty thousand, the other fifteen was his.
QHow can you explain the existence of two different loan agreements which don’t’ reflect the amount of cash that was handed over.
AWell, possibly the one between Tony and Maride I’m holding onto it anyway, it’s not – because – I haven’t given it to Tony because I actually gave Maride this one, the one for thirty thousand.
QMaride signed both on 29 April 2011 didn’t he.
AYes. But I didn’t – I didn’t give it to Tony. I’m still holding onto it. You could say it’s not valid really. The one that is valid is for thirty thousand.
QSo you say the second one is not valid.
AWell, not really.
QWhy wasn’t it signed.
AIt was – it was probably a mistake on our part to say that, you know – he actually took thirty but fifteen belonged to Tony so it was a mistake probably on my part.
QSo did Maride have any problems signing two loan documents adding up to thirty thousand when he only owed you fifteen thousand.
ANo we knew how much he owed us. It was probably a mistake on our part. Yeah it wasn’t a problem. We should have tore that one up. It’s not like we are going to chase him for that one.
She was then asked about the photograph number three which evidenced a bundle of $20 notes. She explained that he may have changed it and that she did not know about that. She said as to the other documents allegedly supporting withdrawals for $4,000 and $6,000 it was not her money and that her brother Antonio was the only person who could explain those sums.
She explained that approximately $100,000 remained in the joint account belonging to the four of them. She accepted that he, the defendant, could have demanded his share of that sum without the need to borrow from them.
When asked as to why loan agreements were prepared, she said ‘We wouldn’t …want to, he didn’t want to. We were happy to loan him the $15,000.’
Submissions
·The prosecution
Mr Ellison submitted that I ought to have concerns about the evidence of Ms Irranca.
On any view monies had been ‘loaned’ to the defendant by November 2009. It defied belief that the subject cash was the proceeds of those loans. He submitted that the purpose of the loans was to renovate the house. He said that by implication monies would have been spent in establishing the three grow rooms.
He pointed to the bundle of $20 notes in the photographs. He repeated his concerns about the two ‘loan agreements’ which were dated 29 April 2011 – shortly before the subject offences. He submitted that I should be satisfied beyond reasonable doubt that the defendant had been involved in the commercial cultivation and trafficking of cannabis. The photograph disclosed remnants of cannabis plants from the other grow rooms. He referred to the total of approximately 9.4 kilograms of cannabis found at the house in addition to the 37 seedlings that were growing. He submitted that the evidence disclosed overwhelmingly a background in trading, with transactions recorded on the accused’s LG mobile phone; the diverting of electricity; and, the ‘tick list’ with a record of sales and the price of cannabis.
He referred to the extensive use of hydroponic equipment. This was not a new venture. He submitted that even if I were satisfied that some loans had taken place between the family, the evidence put forward as to the extensive cultivation of cannabis establishes that a large portion of the $59,000 must have come from the sale of cannabis on an earlier occasion. He referred to the defendant being on a pension. Yet he had three motor vehicles. He repeated that the loan agreements did not make sense. The defendant was entitled to 25 percent of the balance of funds in the account of $100,000 and there was no need for any loan agreement in those circumstances. At its highest, there was only evidence of a $30,000 loan received by the defendant; and any of the balance of $29,000 must have been the proceeds of trading in drugs.
Defence submissions
Mr Retalic submitted that there was evidence to suggest that the cash in the sum of $59,000 had been lawfully received by the defendant.
He stressed that the family history involved trading in cash, and that it ought not be surprising or unusual that cash, even large amounts of cash, would be kept by the defendant.
He submitted that the prosecution had failed to rebut the reasonable possibility that the cash was the proceeds of the $30,000 in loans in 2009; the $10,000 in other loans in 2010; sales of jewellery; sales of dogs; and his own $15,000 in cash. He stressed in particular, the photograph number 30, identifying the envelope ‘M Vannini $15,000’; from the Westpac Banking Corporation. It is the best evidence, he said, that Mr Vannini was trading in cash. Mr Retalic was critical of the inferences sought to be drawn by the prosecution from the ‘tick’ list. On its face the document made no sense at all. It did however refer, on any view, to the cost of renovation.
He very properly conceded that the defendant had already pleaded guilty to trafficking on the basis of a possession for sale and that, in those circumstances, an inference could be drawn that some cannabis had been sold by him previously. That had to be balanced however, against the loan agreements, the denominations of the notes and the bank envelope.
Findings and conclusion
I repeat that I am concerned in this exercise only with the facts relevant to sentence and not directly with a final determination as to the status of the cash in the sum of $59,000. That issue could only be determined in proceedings where there was some onus upon the defendant, to establish the source of the funds.
I am satisfied beyond reasonable doubt that the defendant was involved in a commercial operation for the cultivation and trafficking in cannabis. Indeed the evidence in that respect is overwhelming, having regard to the extensive hydroponic equipment in each of the grow rooms, the diversion of the electricity supply and the 9.4 kilograms of cannabis on the premises.
I am in no doubt that the defendant has engaged in at least one previous cultivation at these premises.
The presence of the 9.4 kilograms of cannabis is itself evidence of the quantum of cannabis which may have been previously produced at this site.
The production of cannabis would therefore have been an obvious source of the subject cash located in the wardrobe – particularly for a pensioner with 9.4 kilos of cannabis in his possession. The question is whether the prosecution has rebutted any other reasonable possibility as to the source of that cash.
I listened very carefully to the evidence of Ms Irranca. She was of course not in a position to identify the subject cash, nor was she able to say what the defendant had done with the cash obtained by him in 2009 and 2010.
All she was able to say was that in 2009 he had received in cash the sum of $45,000 being loans of $15,000 each from her brother Antonio and herself and the defendants’ own $15,000 in cash from the bank. She could not give any detail of the ‘loans’ from Antonio to the defendant totalling $10,000 in 2010.
I repeat that neither the defendant nor his brother, Antonio, gave evidence in this hearing. I draw no inference adverse to the defendant because for the purpose of this hearing the onus is upon the prosecution to establish beyond reasonable doubt whether the cash or any of it came from an unlawful source.
I was initially concerned about the evidence of Ms Irranca with respect to the ‘loan agreements’. It begs the question as to why they chose to record ‘loans’ which had been allegedly made almost 2 years earlier and why the two ‘agreements’ dated 29 April 2011 were mutually inconsistent.
Whatever the truth as to the drawing of those ‘loan agreements’, it is abundantly clear that the defendant received the sum of $15,000 in cash in November 2009, in the bank envelope.
I also accept that the defendant, Ms Irranca and her brother Antonio commonly dealt with cash transactions.
On the state of the evidence in this case and upon the heavy onus upon the prosecution, it is not surprising that the prosecution cannot rebut the reasonable possibility that the defendant did receive a total of $45,000 including the $30,000 from his siblings in or about November 2009, nor the $10,000 from Antonio in 2010.
Similarly the prosecution could not rebut, as a reasonable possibility, that the defendant had received some monies from the sale of dogs and jewellery.
That however is not the end of the matter. These monies, on the defence case, were provided to the defendant to undertake renovations to his home. There is, as I have noted some calculations on the ‘tick list’ as to the costs of renovation.
What is of course untested is why the defendant obtained further loans totalling $10,000 in 2010 if he had kept the proceeds of $45,000 from 2009.
Considerable monies must also have been expended to set up the three grow rooms at the defendant’s house. At least some of the subject cash was in $20 denominations.
I do not accept, even as a possibility, that all of the cash found at the house in 2011 was the proceeds of the 2009 and 2010 cash payments nor the sale of dogs or jewellery.
I am satisfied beyond reasonable doubt that some of the cash, was the proceeds of sale of a previous cultivation of cannabis. Other than this finding I am unable to conclude beyond reasonable doubt the precise proportion which represents the proceeds of that previous cultivation.
Conclusion
I will sentence the defendant on the basis that the cannabis offences to which he has pleaded guilty were not in isolation. They were principally for commercial purposes.