Sevastopoulos v Director of Public Prosecutions (NSW)

[2020] NSWCCA 331

Court of Criminal Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Sevastopoulos v Director of Public Prosecutions (NSW) [2020] NSWCCA 331

Hearing dates:

30 November 2020

Decision date:

14 December 2020

Before:

Bell P at [1];
Johnson J at [2];
R A Hulme J at [3]

Decision:

1. Grant leave and uphold the appeal against the making of the drug proceeds order in the District Court on 25 June 2020.

2. Remit the Director’s application for a drug proceeds order to the District Court for rehearing.

Catchwords:

CRIMES - drug proceeds order - legislation is directed to benefits accrued to an individual - no power to make drug proceeds order against multiple defendants based on joint or several liability - remitted to District Court

Legislation Cited:

Confiscation of Proceeds of Crime Act 1989 (NSW), ss 29, 30, 31, 92

Cases Cited:

Director of Public Prosecutions v Nieves & Ors [1992] 1 VR 257

Western v Director of Public Prosecutions (SA) (2017) 271 A Crim R 102; [2017] SASCFC 177

Category:

Principal judgment

Parties:

Steven Sevastopoulos (Applicant)
Director of Public Prosecutions (NSW) (Respondent)

Representation:

Counsel:
Applicant self-represented

Crown:
Ms Curtis (Written submissions)
Ms Baker (Hearing)

Solicitors:
Solicitor for Public Prosecutions

File Number(s):

2016/18807

 Decision under appeal 

Court or tribunal:

District Court

Date of Decision:

25 June 2020

Before:

Mahony SC DCJ

File Number(s):

2016/18807

Judgment

1. BELL P: I agree with R A Hulme J.

2. JOHNSON J: I agree with R A Hulme J.

3. R A HULME J: Steven Sevastopoulos (the applicant) was sentenced by his Honour Judge Lakatos SC in the District Court on 7 December 2018 for drug supply offences. He received an overall effective sentence of 6 years, 6 months with a non-parole component of 4 years, 6 months dating from 8 July 2016. He will become eligible for release on parole on 7 January 2021.

4. Mr Joe Zaiter was a co-offender but he was sentenced separately in the District Court by his Honour Judge Mahony SC. That occurred later because, while the applicant had pleaded guilty, Mr Zaiter chose to take his matter to trial.

5. The Director of Public Prosecutions sought orders against both men under the Confiscation of Proceeds of Crime Act 1989 (NSW) (the Act). Rather than proceeding against them individually, he chose to delay pursuing the application in respect of the applicant until the proceedings concerning Mr Zaiter had been finalised. Ultimately, his Honour Judge Mahony SC made orders on 25 June 2020 against both men in the following terms:

1. Pursuant to s 18(1) cash in the approximate sum of $99,050 found at Wiley Park on 30.09.2015 be forfeited to the State.

2. Pursuant to s 29(1) the Defendants pay to the State of New South Wales a drug proceeds order in the sum of $110,000.

6. The men appeared by audio-visual link from custody before Mahony SC DCJ on that day. Mr Zaiter, seemingly speaking on behalf of both of them, indicated that they did not wish to obtain legal representation and wished to have the matter dealt with. Addressing the men individually, his Honour first asked Mr Zaiter whether he consented to the orders being made. Mr Zaiter answered in the affirmative, indicating as well that he had "the paperwork" in front of him. The applicant was asked the same question and replied in the affirmative. He did not add any comment about whether (or not) he had "the paperwork".

7. The applicant seeks leave to appeal only in respect of the drug proceeds order, on the following grounds:

1. The judge made an error in the split up of the $110,000 dollars.

2. The judge did not give me a chance to respond to the order.

8. Section 92 of the Act provides for an appeal against the making of a drug proceeds order as if it was, or was part of, a sentence imposed in respect of the offence in relation to which the order was made. As the relevant sentence was one for which there is an entitlement to seek leave to appeal to this Court, the applicant has the same entitlement in respect of the second of the orders mentioned above.

9. The facts underpinning the two orders made by the primary judge are as follows.

10. The applicant had indicated to a police informant that he and Mr Zaiter were involved in significant drug supply activity. This resulted in them being under surveillance. A car they were in was stopped by police at Wiley Park on 30 September 2015. Police found secreted within the car the sum of $99,050 in cash. This constituted an offence of knowingly dealing with the proceeds of crime that was taken into account when the applicant was sentenced.

11. On 17 December 2015, the applicant sold to the informant 500g of cocaine for $110,000. He had obtained the cocaine from Mr Zaiter and the inference was that some or all of the money was returned to Mr Zaiter. None of it was recovered by police.

12. The applicant was arrested on 19 January 2016 when he was in possession of half a kilogram of cocaine that he had negotiated supplying to the informant.

13. The applicant’s submissions include a complaint that because there were two defendants the amount of $110,000 should have been split between them, $55,000 each. This raises an issue that the DPP has conceded: there was no power to make a joint order in respect of both of the offenders.

The (relevant) statutory scheme

14. A "drug proceeds order" is one made pursuant to s 29 of the Act. It includes:

29 Drug proceeds orders

(1) If an application is made for a drug proceeds order against a person (in this Division called the defendant) convicted of a drug trafficking offence, the court must:

(a)    determine whether the defendant has derived any benefit in connection with drug trafficking at any time, and

(b)   if the court believes the defendant has so benefited, assess the value of any such benefit, and

(c)   order the defendant to pay to the State a pecuniary penalty equal to the amount so assessed.

…

(4) An amount payable by a defendant to the State in accordance with an order made under this section is, for all purposes, taken to be a civil debt due by the defendant to the State.

(5) An order made by a court under this section may be enforced as if it were an order made by the court in civil proceedings instituted by the State against the defendant to recover a debt due by the person to the State.

15. Section 30 deals with how a court is to assess the value of a benefit derived in connection with drug trafficking. It is to do so having regard to information before the court concerning any of the various matters itemised in s 30(1). These include, relevantly, "(a) the money … that came into the possession or control of the defendant … at any time in connection with drug trafficking by the defendant".

16. Section 31 makes provision in respect of the manner in which matters may be proved (e.g. by the tender of an agreed statement of facts from the criminal proceedings). However, as the DPP pointed out, the orders in this case were made by consent and so the Court was not required to engage in formal proofs.

Ground 1 – the joint order against Mr Sevastopoulos and his co-offender was unlawful

17. The effect of the complaint made by the applicant under this ground is that there should not have been an order that he and his co-offender be each liable to pay $110,000. He submitted, “the order should have been $55,000 each”.

18. The DPP submitted that it was not open to the primary judge to make an order under s 29 jointly against more than one defendant. It was necessary for there to be an order against each defendant. This concession was based upon three propositions that were carefully developed in written submissions and succinctly explained in oral submissions.

19. The concession was made, first on the textual basis that ss 29 and 30 envisage that an order is made against a specified person. Neither those provisions nor elsewhere in the Act is there anything that suggests joint and several liability as a basis for a drug proceeds order.

20. Second, similar legislation in Victoria and South Australia has been construed to the same effect: Director of Public Prosecutions v Nieves & Ors [1992] 1 VR 257 at 263-264 and Western v Director of Public Prosecutions (SA) (2017) 271 A Crim R 102; [2017] SASCFC 177 at [67]-[76] (Blue J; the other members of the Court finding the issue unnecessary to determine).

21. Third, the statutory purpose has been described as "punitive" in nature and that purpose would be undermined if joint and several liability could be the basis for drug proceeds orders. In this regard the DPP relied upon like legislation considered by the Victorian Court of Appeal in Director of Public Prosecutions v Nieves & Ors at 264.

22. Having considered the relevant text of the Act and the two interstate authorities to which the DPP referred I am satisfied that the concession is soundly based. A drug proceeds order made pursuant to s 29 of the Confiscation of Proceeds of Crime Act is concerned with benefits that have accrued to an individual defendant. An order cannot be made in respect of multiple defendants on the basis of joint and several liability.

23. In these circumstances, it is unnecessary to deal with the second proposed ground of appeal.

Orders

24. Quashing the order made in the District Court will necessarily have the concomitant effect of relieving Mr Zaiter of liability.

25. It was common ground that if the Court were to uphold the appeal the appropriate disposition was to remit the matter to the District Court for a further hearing.

26. I propose the following orders:

1. Grant leave and uphold the appeal against the making of the drug proceeds order in the District Court on 25 June 2020.

2. Remit the Director’s application for a drug proceeds order to the District Court for rehearing.

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Decision last updated: 14 December 2020