Ground 2 - Suggested Error in Finding of Objective Seriousness for Sequence 4 Offence
21These grounds of appeal were argued together and it is appropriate that the Court consider them together.
Submissions
22Mr Strickland SC, for the Applicant, submitted that it was not open to the sentencing Judge to make a finding beyond reasonable doubt that the Applicant had access to, and was in a position to actually supply, the 10,000 ecstasy tablets relevant to Sequence 4. Mr Strickland SC submitted that there were two key facts which were overlooked or given insufficient weight by the sentencing Judge. First, during the entire period of his criminal offending, the Applicant never supplied large quantities of ecstasy tablets to the UCO. He submitted that this was cogent evidence of the Applicant's inability to access the quantities of that drug that he stated he could access. Secondly, it was submitted that the Applicant told the UCO several times that, in the then current market for ecstasy tablets (at least in relation to his suppliers), there was a severe shortage of supply of those tablets, and that demand for ecstasy tablets significantly outstripped supply.
23It was submitted for the Applicant that the evidence did not support a finding beyond reasonable doubt, that when the Applicant offered 10,000 to the UCO, he was in a position to actually supply the 10,000 ecstasy tablets.
24Mr Strickland SC submitted that the Court could not be satisfied beyond reasonable doubt that the Applicant's offer was not a "salesman's pitch" . He submitted that it was not reasonably open to make the challenged finding beyond reasonable doubt, as there was another reasonable hypothesis (T19, 11 November 2011).
25Mr Strickland SC submitted that Ground 2 would be made out if the Court upheld Ground 1. If the Court could not be satisfied beyond reasonable doubt that the Applicant had the capacity to supply 10,000 tablets, he submitted that the objective seriousness of the offence would fall to the lower end of the range because, if he did not have that capacity, there was no potential for 10,000 tablets to be distributed to the wider community as a result of the Applicant's crime. It was submitted that the offence clearly did not cause any actual harm to the community because the supply never materialised.
26Mr Strickland SC submitted that the actual or potential consequence of an offender's criminal conduct is critical in assessing the objective seriousness of a large range of crimes, including crimes of personal violence, offences of dishonesty and fraud and that this was also true in relation to offences of supplying prohibited drugs. Reference was made to the decisions of this Court in Fahs v R [2007] NSWCCA 26 and R v Gao; R v Lim [2007] NSWCCA 343 at [22], [30] concerning the relevance to an assessment of objective seriousness, if drugs would not have found their way into the community.
27The Crown submitted that it was open to the sentencing Judge to make the finding presently under challenge.
28The Crown submitted that, had the Applicant given evidence to the effect that he did not have access to the number of tablets he had promised the UCO on 28 September 2009 and if such evidence was not challenged, the sentencing Judge may have been more amenable to a submission that it was mere "puffery" on the part of the Applicant. However, the Applicant did not give evidence. The evidence upon which his Honour relied was the Agreed Statement of Facts as set out above.
29The Crown submitted that this Court is bound by findings of fact of the sentencing Judge unless they were not open on the evidence or unless error is shown in the sense referred to in House v King [1936] HCA 40; 55 CLR 499 at 504-505.
30With respect to the two topics which the Applicant submitted the sentencing Judge had overlooked, the Crown submitted that the sentencing Judge had taken them into account.
31Concerning Ground 2, the Crown pointed to the finding that the Sequence 4 offence lay towards the lower end of the middle of the range of objective seriousness. It was submitted that the sentencing Judge had taken into account that, if the 10,000 had been actually supplied, they could not have been consumed by anyone given that the supply would have been to the UCO (ROS19). The Crown noted that the sentencing Judge had applied R v Gao; R v Lim and concluded that the fact that there would have been no supply to the community "resulted in a very minor diminution in culpability" (ROS15).
32The Crown submitted that error had not been demonstrated in accordance with Grounds 1 or 2.
Decision
33Ground 1 seeks to challenge a finding made by the sentencing Judge. This Court is a court of error. The jurisdiction of the Court to interfere with a sentencing decision is exercisable only where there can be seen to have been an error of principle, or some other mistake of fact or law: R v Visconti [1982] 2 NSWLR 104 at 108.
34It is important to keep in mind the limits of the jurisdiction of this Court where a finding of a first-instance Judge is challenged on appeal. A frequently cited and applied statement of principle is that of Hunt J (Carruthers and Wood JJ agreeing) in R v O'Donoghue at 401:
"It is important to emphasise that, unlike appeals to the Court of Appeal in civil cases, an appeal to this court is not by way of re-hearing. An appeal which is not by way of re-hearing is no more than the right to have a superior court interpose to redress the error of the court below: A-G v Sillem (1864) 10 HLC 704 at 724; 11 ER 1200 at 1209; Victorian Stevedoring & General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 at 109. Error may be demonstrated if there is no evidence to support a particular finding, or if the evidence is all one way, or if the judge has misdirected himself. But this court has no power to substitute its own findings for those of the trial judge. The members of this court may individually disagree with the findings which were made, but the court cannot for that reason interfere with those findings. It is only where the very narrow basis upon which this court can intervene in relation to a trial judge's findings of fact has been established that the conviction can be set aside, and then only if the error has led to a miscarriage of justice: see Regina v Merritt & Roso (1985) 19 A Crim R 360 at 372-373; Regina v Kyriakou (1987) 29 A Crim R 50 at 60-61."
35This statement has been applied in a multitude of cases, including sentence appeals where a finding of fact is challenged on appeal: R v Khouzame [2000] NSWCCA 505 at [38]-[41]; R v Merritt [2004] NSWCCA 19; 59 NSWLR 557 at 573 [60]-[61]; Kardoulias v R [2005] NSWCCA 456; 159 A Crim R 252 at 265 [56]; Camm v R [2009] NSWCCA 141 at [68]-[70]; SBF v R [2009] NSWCCA 231; 198 A Crim R 219 at 335 [75].
36I approach this ground of appeal with these principles in mind.
37It is helpful to place the challenged findings in the broader context of findings made by the sentencing Judge concerning the Applicant's course of criminal conduct. His Honour said (ROS14):
"He told Sam Borenstein that he came under pressure from the undercover officer. The Offender did not give evidence and the evidence placed before the Court does not support this claim. The Court is satisfied beyond a reasonable doubt the offences were premeditated and that he appreciated by his participation in them he was enmeshing himself in organised criminal activity. None of the four offences are an isolated aberration. It is clear that the Offender was involved in drug trafficking at a wholesale level to a substantial degree and for financial reward. The four offences cover a period slightly in excess of a month. It is clear that his illegal activities were not limited to his dealings with the undercover officer."
38Soon after, his Honour found (ROS15):
"In this illicit trade those operating within the upper rungs of the hierarchy tend to hide behind the activities of others, such as the Offender, to avoid detection and punishment. Clearly, he had the authority from those above him in the hierarchy to negotiate with purchasers in terms of price and they trusted him with large quantities of money and valuable drugs. During his conversations with the undercover officer he demonstrated a sound knowledge of the trade at a wholesale level as well as skills as a salesman.
Clearly he did not know he was dealing with an undercover officer and that the drugs he sold or offered to sell would not be consumed. Consistent with authority this factor resulted in a very minor diminution in culpability: R v. Gao and Lim [2007] NSWCCA 343. He obviously expected that they would be consumed and had no idea who those consumers would be and whether any of them were vulnerable."
39His Honour then turned to make findings concerning the Sequence 4 offence (ROS17-18):
"The offence Sequence 4 involves an offer to supply, which, in contractual terms, occurs before there is an agreement to supply. As is made clear by the definitions of 'supply', 'sell' and 'take part', s 25 covers a wide range of criminality. Consistent with the legislation the cases make clear that the criminality is determined by the facts of each case rather than characterising an agreement or an offer to supply as being less serious than an actual supply: R v Vu [2006] NSWCCA 188 at paragraphs 81 to 88; R v McKibben [2007] NSWCCA 89 at paragraph 16.
At paragraph 89 in Vu , Hall J, with whom James and Buddin JJ agreed, said 'in terms of offering to supply factors which will often be relevant in determining the objective seriousness of an offence under subs 25(2) of the Act will include:
· The terms of the offer, in particular, as to the quantity of a drug, its price, etc.
· Whether a particular offer is an isolated one or whether it occurs in the context of an ongoing supply of drugs.
· Whether, and if so, the extent to which the offer is motivated by reasons of commercial gain or greed.
· Whether the offeror at all material times had the intention to fulfil the offer.
· Whether the offeror had the capacity to fulfil the offer to supply.
· Whether the offeror attempts to fulfil the offer. If not, whether any failure to perform was the result of a decision by the person concerned not to supply or whether it was due to some intervening or extraneous circumstance.'
The Court notes the large commercial quantity for ecstasy is 500 grams. The weight that the Offender offered to supply, calculated on the basis of the sample, was a little over 6.7 times that quantity. The purchase price mentioned in connection with this offer was $85,000. The Court notes at 9%, the purity of ecstasy within the sample tablets with the Euro symbol was quite low. The Court is satisfied that the offer related to 10,000 tablets like those in the sample supplied to the undercover officer on 28 September."
40The sentencing Judge then made findings which are challenged in the first ground of appeal (ROS19-20):
"Mr Hamill SC on the Offender's behalf pointed out the Offender never delivered the 10,000 ecstasy tablets, the subject of this offer and negotiations were little more than puffery. However, the evidence discloses that the Offender made clear that he had a limited amount of ecstasy tablets available and that the market forces meant that they would not be available for long. He clearly stated that the offer remained on the table until only that night. The offence was complete when he made the offer. The ecstasy did not pass to the undercover officer because he did not indicate an acceptance of the offer by the stipulated time. The Court notes that if actually supplied the 10,000 tablets could not have been consumed by anyone.
The Offender chose not to give evidence. He sold cocaine to the undercover officer before and twice after this, the latter two involving substantial quantities and the evidence discloses the sales of drugs to others. On 16 September he told the undercover officer that the ecstasy he sold was of good quality and spoke of waiting for a telephone call to obtain the next lot of ecstasy pills. On that day he also mentioned the price range that he charged. He said: 'we don't charge for samples' and did not hesitate in indicating that he could supply the 5,000 ecstasy tablets per week that the undercover officer said he needed. On the following day he supplied the undercover officer with six tablets indicting they were ecstasy but they, in fact, contained a different drug. He said that he could supply them within 24 hours and he discussed supplying 40,000 tablets but indicated that the amount: 'depends on how much they're pumping, but they're going like that, there's not only you....there's lots of people', which, in the Court's view, indicates that he was supplying to others and that the demand was high. On 18 September he supplied a sample of five ecstasy pills with the Euro symbol on them that he said came from another source and indicated that the source was drying up and people were screaming for them.
The Offender did not give evidence. There is no credible evidence that he did not intend to supply the undercover officer with the 10,000 ecstasy tablets with the Euro symbol on them that were the subject of the offer. This offer was part of his activities as a wholesaler of illicit drugs. Having considered all the circumstances the Court is satisfied beyond reasonable doubt that, at the time of making the offer, the Offender had access to and was in a position to actually supply the 10,000 tablets and that by the time the undercover officer contacted him the next day they were not available to sell to the undercover officer because the Offender or someone else had sold them to another purchaser. However, there is no evidence that the Offender actually sold them to that other purchaser. There is no evidence that the Offender voluntarily withdrew the offer for any reason or decided against pursuing it and there is no evidence that he made the Offender [sic - offer] to impress the undercover [officer] or as part of a salesman's hype."
41There is a broad definition of "supply" in s.3(1) DMT Act:
" supply includes sell and distribute, and also includes agreeing to supply, or offering to supply, or keeping or having in possession for supply, or sending, forwarding, delivering or receiving for supply, or authorising, directing, causing, suffering, permitting or attempting any of those acts or things."
42The definition of supply includes "sell" , and that term is also defined widely in s.3(1) DMT Act:
" sell includes sell whether by wholesale or retail and barter and exchange, and also includes dealing in, agreeing to sell, or offering or exposing for sale, or keeping or having in possession for sale, or sending, forwarding, delivering or receiving for sale or on sale, or authorising, directing, causing, suffering, permitting or attempting any of those acts or things."
43The offence charged in Sequence 4 is an offence under s.25(2) DMT Act of supplying an amount of a prohibited drug which is not less than the commercial quantity applicable to the prohibited drug. The broad definition of "supply" in s.3(1) of the Act means that the offence is defined to include a comparatively wide range of circumstances, some of them overlapping. When an offence is defined to include any of several categories of conduct, the gravity of the conduct in a particular case depends on the facts of the case: Ibbs v The Queen [1987] HCA 46; 163 CLR 447 at 452; R v Dinh [2010] NSWCCA 74; 199 A Crim R 573 at 582 [46].
44The charge under Sequence 4 to which the Applicant pleaded guilty was based upon an offer to supply. The relevant intention that must be proved where there is a charge of supply involving an offer to supply is the intention inherent in the making of the offer. It must be a genuine offer made with the intention that it be regarded as genuine by the offeree. The intention required to bring conduct within this part of the definition does not involve any intention of ultimate supply - the intention is bound up with the making of the offer itself: R v Dendic; R v Mazzeo (1987) 34 A Crim R 40 at 45; R v Addison (1993) 70 A Crim R 213 at 217; R v Swan [2003] NSWCCA 318; 140 A Crim R 243 at 246-247 [12]-[18].
45A prosecution for supply based upon an offer for supply does not, of course, involve an actual supply. Nor does it involve an offender who has a prohibited drug in possession for supply, a different form of supply contained within the extended definition in s.3(1) DMT Act.
46The approach to sentencing for offer to supply offences has been considered in a number of decisions of this Court. An early decision was that of R v Kalpaxis [2001] NSWCCA 119; 122 A Crim R 320, where an offender offered to supply a large commercial quantity of cocaine to a purchaser without any means or intention of doing so. The decision in R v Kalpaxis has been described as "exceptional and extraordinary" since, from beginning to end, it involved nothing more than a ruse by a mentally disturbed offender, who was out of touch with reality, and who was seeking to obtain sufficient money to enable him to spend time in Greece with his family and with his father who was dying of cancer. The exceptional and extraordinary circumstances in R v Kalpaxis have been emphasised in later decisions: R v Smith [2002] NSWCCA 378 at [16]; R v Yaghi [2002] NSWCCA 396; 133 A Crim R 490 at 492-494 [11]-[22].
47The more typical offer to supply case involves an offer made to an undercover police officer or to a third person, in circumstances where the relevant conversation is recorded by way of telephone intercept or surveillance device. If there is an offer to supply a large commercial quantity of the nominated prohibited drug, then the offender is guilty of that offence. It is not necessary for the prosecution to prove more than the elements of the offence of offer to supply. An offender's plea of guilty to a charge of offer to supply admits the elements of that offence.
48It is appropriate for a sentencing court to have regard to the potential consequences intended by an offender who is to be sentenced for a drug supply offence based upon an offer to supply. This Court has observed that there is no reason in principle why a genuine agreement to supply drugs should be regarded as any less serious than a proven act of supply: R v Smith at [16].
49In the course of a helpful analysis concerning the approach to sentence for offer to supply offences, Hall J (James and Buddin JJ agreeing) said in Vu v R [2006] NSWCCA 188 at [88]:
"88 There will usually be a varying degree of objective seriousness between one or other of the activities that fall within the statutory definition of supply, but this, as reflected in the judgment of Bell, J., depends, not upon any general concept of a hierarchy of seriousness attaching to one or other of the activities that may constitute a 'supply' as defined in s.3, but upon the facts and circumstances of each case. Plainly, agreements to supply or offers to supply prohibited drugs each constitute transactional activities that play an important and essential role in the chain of drug trafficking."
50Hall J proceeded at [89] to recite the factors referred to by the sentencing Judge in the extract from the remarks on sentence at [39] above.
51The decision in Vu v R has been applied by this Court in circumstances where a submission similar to that contained in the Applicant's Ground 1 was advanced on appeal. In McKibben v R [2007] NSWCCA 89, Howie J (Simpson and Hislop JJ agreeing) said at [16] (emphasis added):
"It was further submitted that it was erroneous that the penalty for the agreement to supply was greater than the actual supply. I do not believe there is anything inconsistent or erroneous in that approach. As was explained in Vu v R [2006] NSWCCA 188, the seriousness of any particular activity falling within the concept of 'supply' under the Act will depend upon the particular facts of the case before the court and no generalised statement can be made about the relative seriousness of differing forms of supply. There is no suggestion here, as there was in 1985, that the applicant had no intention of supplying that quantity of the drug. In the absence of evidence from the applicant, the facts should be taken at their face value and that she intended to supply that amount of drug but was denied the opportunity of doing so before her arrest. It was open to the Judge to sentence as he did. This ground is not made out ."
52In R v Choi [2010] NSWCCA 318, a challenge was made on a Crown appeal to a finding by the sentencing Judge that the respondent could not realistically have obtained the drugs for the purpose of a proposed transaction with an undercover police operative. The respondent had given evidence that an unnamed person, from whom he was endeavouring to source drugs, was a person he had met by chance in a nightclub and, according to the respondent, that person had said to him that if ever he needed any help with drugs he should come to him. The sentencing Judge found that the drugs did not exist and could not realistically have been obtained by the respondent. This Court overturned that finding. Reference was made to evidence of conversations which did not indicate that the drugs could not be acquired at all, but simply that they could not be acquired by a particular time. RA Hulme J (Giles JA and Hislop J agreeing) said at [63]-[64] (emphasis added):
"63 It is important to bear in mind that the criminality inherent in the offence to which the respondent pleaded guilty was an agreement to supply, not the fulfilment of such an agreement. The agreed facts disclosed that he entered into such an agreement without hesitation in the very first conversation with Kwon on 19 November. He continually reaffirmed his participation in such an agreement over the ensuing nine days. He approached three different people in his endeavour to acquire a substantial quantity of drugs in order to fulfil the agreement. The evidence disclosed that the first contact indicated a preparedness to provide the drugs, but was unable to do so within a short timeframe. There was no evidence of any inability of the second and third contacts to fulfil at least a significant proportion of the order .
64 In my view, and with respect, the findings by the sentencing judge that the respondent and Kwon were not able to effect this size of supply, that the drugs did not exist, and that they could not realistically have been obtained by the respondent, were findings which were not open. The genuineness of the respondent's endeavours to fulfil his agreement is indicated by his obtaining and providing the sample tablets . It follows that the description of the respondent's role as 'youthful fantasy' cannot be sustained."
53These statements from other cases provide a framework of principle in which the issue raised by the first ground of appeal is to be considered.
54In my view, it was open to the sentencing Judge to make the challenged finding. It is necessary to keep in mind that this offence lay within a series of events in which the Applicant offered to, and actually supplied, prohibited drugs. As the sentencing Judge found, the Applicant was involved in drug trafficking at a wholesale level to a substantial degree and for financial reward, and he demonstrated a sound knowledge of the trade at a wholesale level as well as skills as a salesman.
55The Applicant was 27 years' old at the time of the offences. He was actually involved in the supply of prohibited drugs and demonstrated a capacity to hand over prohibited drugs as part of that process. There was no element of fantasy or delusion (as in R v Kalpaxis ) in this case. The Applicant was engaged actively in the real and hard world of drug supply.
56The Applicant supplied a sample of ecstasy to the UCO in the early evening of 28 September 2009, as part of a discussion about a larger supply in a climate of some demand for the product (paragraph 13 of Agreed Statement of Facts at [18] above). The facts relied upon directly in support of the offence in Sequence 4 are contained in paragraph 15 of the Agreed Statement of Facts. The Applicant offered to supply 10,000 ecstasy tablets to the UCO, making clear that there was a limited window of opportunity for that to happen. A price was indicated and a coded message proposed by the Applicant if the UCO was to take up the offer. The UCO did not contact the Applicant within the specified time and the Applicant said that he no longer had the tablets.
57It is important to observe that the Applicant was not arrested until 21 October 2009. It may be taken that he had direct knowledge of what occurred on and after he made the offer to supply 10,000 ecstasy tablets on 28 September 2009. He did not give evidence in the sentencing proceedings. To make this observation is not, in some way, to cast an onus of proof upon the Applicant. Rather, it is to make the point referred to by Howie J in McKibben v R at [16] (cited at [51] above).
58In the absence of evidence from the Applicant, the facts should be taken at face value - that he intended to supply 10,000 ecstasy tablets which were available in the timeframe prescribed by him, but that he could not later do so in circumstances where the UCO sought the supply outside that timeframe. Indeed, the fact that the offer was made in the context of a short timeframe, supports the view that there was a realistic prospect of 10,000 ecstasy tablets being supplied by the Applicant to the UCO within the specified timeframe. The provision of a sample of ecstasy tablets in the context of the making of the offer, supports the practical reality of the Applicant's offer to supply.
59The sentencing Judge had regard to relevant evidence in making the findings presently under challenge. This was not a case like R v Choi where the offender gave evidence at the sentencing hearing. It was entirely open to the sentencing Judge to be satisfied that, at the time of making the offer, the Applicant had access to and was in a position to actually supply the 10,000 tablets, but that they were not available to sell at the time when the UCO sought them after the nominated deadline had passed.
60In my view, the first ground of appeal ought be rejected.
61The rejection of the first ground of appeal narrows substantially the submissions upon which the Applicant can rely in support of Ground 2.
62The sentencing hearing proceeded upon the accepted basis that the offer to supply 10,000 ecstasy tablets was related in weight and purity to the sample ecstasy tablets, producing an estimated weight of 3.36 kgs and a purity of 9%.
63His Honour had regard to purity as a factor relevant to an assessment of objective gravity: R v Blair [2005] NSWCCA 78; 152 A Crim R 462 at 472 [56]; Paxton v R [2011] NSWCCA 242 at [129], [141]. Further, the fact that the ecstasy was offered to be supplied in tablet form was relevant. It may be taken that ecstasy in tablet form is ordinarily designed for supply in that form to end users without further processing, so that the issue of purity is of less importance in such a case: Ayshow v R [2011] NSWCCA 240 at [43].
64The sentencing Judge undertook a careful assessment of the objective gravity of the Sequence 4 offence, referring to R v Vu and McKibben v R as part of that process.
65His Honour took into account the submission that, even if supplied, the ecstasy would never have reached the drug-using public as the supply was to be made to police as part of an undercover operation. The sentencing Judge observed that this factor resulted in a very minor diminution in culpability, a conclusion supported by decisions of this Court considered in R v Achurch [2011] NSWCCA 186 at [88]-[100].
66In my view, no error has been demonstrated in the sentencing Judge's finding that the Sequence 4 offence lay towards a lower end of the middle of the range of objective seriousness for offences of that type.
67I would reject Ground 2.