Applicant v OFFICE OF PUBLIC PROSECUTIONS

CRIMINAL LAW - Application for bail - Applicant charged with multiple offences including trafficking methylamphetamine in a quantity that is not less than a large commercial quantity - Prior criminal history - Availability of residential drug rehabilitation program - Surety of $200,000 - Exceptional circumstances not established - Application refused.

1 David Margus, the applicant, seeks a grant of bail. He is 27 years old, and faces 28 charges relating to events said to have taken place between July 2022 and November 2024,[1] connected, the prosecution alleges, to his involvement in a drug trafficking syndicate. He is charged with trafficking methylamphetamine including in a large commercial quantity contrary to s 71 of the Drugs, Poisons and Controlled Substances Act 1981, dealing with proceeds of crime and with property suspected of being proceeds of crime, knowingly providing false and misleading information to police, obtaining financial advantage by deception, attempting to destroy evidence, attempting to use another person to conceal items to prevent their use as evidence, and stealing a motor vehicle and dishonestly assisting in its retention.

2 If convicted of trafficking in a drug of dependence of not less than a large commercial quantity, the applicant faces a 'standard sentence' of 16 years and, potentially, life imprisonment.

3 An offence against s 71 of the Drugs, Poisons and Controlled Substances Act 1981 is a 'Schedule 1 offence' under the Bail Act 1977. Accordingly, I am required to refuse bail unless the applicant establishes that 'exceptional circumstances exist that justify the grant of bail'.[2] If the applicant succeeds in establishing that exceptional circumstances exist that justify the grant of bail, I must refuse bail if the prosecution establishes that there is an 'unacceptable risk' that the applicant would, if released on bail, commit a Schedule 1 or Schedule 2 offence, otherwise endanger the safety or welfare of any other person, interfere with a witness or otherwise obstruct the course of justice or fail to surrender into custody in accordance with the conditions of bail.[3]

4 In determining whether there are exceptional circumstances or whether there is an unacceptable risk, I must take into account the 'surrounding circumstances' as defined (without limitation) in s 3AAA of the Bail Act 1977. The exceptional circumstances test may be established by a combination of factors including the extent to which the applicant poses a risk if bail is granted.

(a) The delay before any trial;

(b) The availability of an in-patient rehabilitation program at 'The Cottage' in Shepparton;

(c) The fact that his father is prepared to provide a bail guarantee in the amount of approximately $200,000;

(d) What the applicant said are 'uncertainties' in the prosecution case (his solicitor in an affidavit submitted that the case against the applicant for trafficking in a drug of dependence of not less than a large commercial quantity was 'not strong'); and

(e) What he says is the absence of an unacceptable risk.

6 The Statement of Material Facts provided by Victoria Police sets out the case against the applicant. As noted above, the allegation is that the applicant - along with his brother Mr Rami Margus, women they were in intimate relationships with, and his younger sister - engaged in large-scale drug trafficking that generated hundreds of thousands of dollars in revenue, and was carried out for the most part at the direction of the applicant and Rami using various women to deliver the drugs. The evidence seems to be strong that a sophisticated drug trafficking business was being conducted by persons close to the applicant, and the central issue in any trial will be whether it can be proved that the applicant was involved in it or the extent to which he was involved in it or whether he intended to traffic 'a large commercial quantity'.

7 The applicant contends that the case against him is weak because, in essence, he was not found with any drugs in his possession and that there is little that may be relied upon to implicate him as an active participant in the criminal activity. The prosecution case is that communications were for the most part through encrypted messaging applications that automatically deleted communications. Some electronic communications have, however, been recovered, mobile phone movements have been recorded, some conversations have been intercepted or recorded, and some movements of money have been identified.

8 I do not accept that the claim against him the applicant is weak. I note, for example, that the prosecution proposes to lead evidence to the effect that:

(a) Substantial funds were deposited into bank accounts in the applicant's name by persons alleged to be delivering the drugs on his behalf (despite the fact that most proceeds, it was alleged, would have been in cash). Sufficient money was deposited to allow him to deposit $200,734 into betting accounts in his name between 1 January 2023 and 9 May 2024;

(b) The applicant was part of group conversations on several encrypted message services which discussed amounts of drugs being sold, how much was left, the (large) sums of moneys being received, prices to be paid for 'green tea' (said to be code or slang for methylamphetamine), and the customers who owed them money;

(c) Other persons involved in the syndicate communicated to customers and suppliers in a manner that implicated the applicant. One piece of evidence may be referred to as an example. It is said that the applicant's brother Rami, in the course of negotiating the purchase of kilograms of methylamphetamine, told the potential supplier that he and the applicant were currently paying $98,000 to $105,000 per kilogram, and that if it was possible to get it at a price between $92,000 and $96,000 per kilogram then he and the applicant would purchase a kilogram a week. Screenshots of this conversation, or parts of it, were then sent to the applicant, who replied to his brother saying that he was happy with that, and that he also had some other people he could contact to see if he could get it cheaper than their current supplier was offering;

(d) A police undercover operative was told by the then girlfriend or intimate partner of the applicant that she was involved in a syndicate that trafficked one to two kilograms of methylamphetamine a week, that she herself had made $10,000 in the last few weeks, that new shipments were coming in and her bosses wanted her, as a girl, to collect them so it looked less suspicious. She offered to supply the undercover operative, but first required permission from her bosses including the applicant and his brother. On another occasion, she told the undercover operative that she had given three one-ounce bags (84 grams) to the applicant (or 'David'), and that having to go between the two brothers meant it was hard to keep track of her business;

(e) The applicant chased up, by electronic messages, outstanding payments from persons believed to be customers, and attended premises to receive payment;

(f) The applicant's phone was found to have a deleted photograph of a gloved hand lifting a large shard of methylamphetamine out of a bag, and a 'note' of various persons, how much they had been supplied in grams, and how much they owed; and

(g) The applicant had an expensive lifestyle, with regular overseas trips. Further, after his sister had been arrested, the applicant messaged his partner and asked whether there was anywhere she could take his 'watches and stuff to'. Police later found two luxury watch boxes at the applicant's friend's house. The watches belonging to the boxes had previously been taken by the applicant to Rolex for servicing. Another watch that the applicant had purchased was sold by his friend in May 2024 for $43,000.

9 This is only a summary and does not include many of the allegations made or evidence said to be available. It may be that some of the evidence ends up being inadmissible, or exaggerated, or unreliable for some reason or another. Nonetheless, I reject the submission that the case against the applicant is weak to the extent that that may operate to show that there are exceptional circumstances that justify the grant of bail.

10 The applicant's police criminal history report reveals that (and this is not a complete list):

(a) On 21 January 2015 (when he was 17 years old), the applicant was charged with failing to answer bail, three counts of unlicensed driving, possession of cannabis, possession of amphetamine, committing an indictable offence whilst on bail, and two counts of contravening a conduct condition of bail. He was required to pay a sum to the Court Fund and was given a Good Behaviour Bond;

(b) On 15 October 2015 (when he was 18 years old), the applicant pleaded or was found guilty of attempted burglary, two counts of burglary, several counts of shoplifting and attempted shoplifting, six counts of committing an indictable offence whilst on bail, theft of a motor vehicle, and five counts of contravening a condition of bail. He was sentenced to 72 days imprisonment (which had been served by that time), was given a Community Correction Order, and was required to undergo assessment and treatment and testing for drug abuse or dependency as directed;

(c) On 20 October 2015 (when he was 18 years old), the applicant was charged with unlicensed driving, a traffic offence, burglary, theft, committing an indictable offence whilst on bail and contravening a conduct condition of bail. The charges were found proved but dismissed. No convictions were recorded and he was given a Good Behaviour Bond;

(d) On 10 March 2016 (when he was 18 years old), the applicant was fined $100 for, it appears, acting or threatening to act, in a way prejudicial to, or that threatens, the security, good order or management of a police gaol;

(e) On 27 February 2017 (when he was 19 years old), the applicant pleaded or was found guilty of burglary and theft. He was convicted, given another Community Correction Order and was again required to undertake drug treatment and rehabilitation;

(f) On 6 June 2017 (when he was 19 or 20 years old), the applicant pleaded or was found guilty of driving while disqualified, and contravening a Community Correction Order. Another Community Correction Order was imposed, with conditions including alcohol and drugs and mental health assessment, treatment and supervision; and

(g) On 11 September 2019 (when he was 22 years old), the applicant pleaded or was found guilty of theft of a motor vehicle, two counts of driving whilst disqualified, burglary, making a false report to police, trafficking methylamphetamine, and contravening a Community Correction Order. He was given another Community Correction Order and, again, required to undergo treatment and rehabilitation for drug abuse or dependency as directed.

11 Other than the 72 days referred to, the applicant was not imprisoned for these prior offences. I refer below to a report relied on by the applicant dated 27 October 2024 from a consulting psychologist, Mr Luke Armstrong, who met with and assessed the applicant on 21 October 2024, and a report dated 21 January 2025 from an addiction treatment counsellor, Ms Maria Hutchison, who assessed the applicant for his suitability to the program via teleconference call on 24 October 2024. Notwithstanding that the applicant had been required several times to engage in rehabilitation as part of his Community Correction Orders, neither Mr Armstrong nor Ms Hutchinson took or were given a history in any detail of any attempts made by the applicant to engage in such treatment programs in the past or, if so, what effect they had had.

12 The burglaries of which the applicant was convicted included serious, planned group break-ins of commercial premises to steal iPhones and other electronic devices undertaken with the use of stolen cars. They were not burglaries of the type that might be explained as a means of obtaining funds immediately needed to service a drug habit. Similarly, the allegations now made against the applicant are not allegations of conduct that might be explained as conduct engaged in to feed the immediate demands of a drug habit. The charges of which the applicant was found guilty included the trafficking of drugs into the prison system to his brother, Rami, for the purpose of raising funds to pay his legal costs.

13 This history of offending is of concern because it shows a pattern of the applicant being willing to engage in criminal activity while on bail and failing to comply with conditions of Community Corrections Orders and Good Behaviour Bonds.

14 The applicant also acted dishonestly by falsely nominating drivers between 2022 and 2024 who were overseas or in prison at the time to avoid incurring demerit points and fines for speeding, and by making a false report to police in 2017. The false report was made in circumstances where the applicant and another person were driving in his car, having recently engaged in a burglary, and were evading police who were trying to stop the car. He arranged for his sister to report the car stolen. These reveal a willingness to engage in dishonest conduct in relation to authorities seeking to enforce the law.

15 The applicant has already been in custody for close to ten months. Any trial will likely be complicated and time-consuming to prepare for. I accept that it is unlikely to be heard before late 2026 or early 2027, by which time the applicant, if not bailed, will have spent over two and a half years in jail. I consider that that is the relevant period of delay in the assessment of exceptional circumstances rather than, as was floated by the prosecution, a period of 10 months or so until after the committal on the basis that the applicant could thereafter make a fresh application if bail is not now granted.

16 That period of delay is significant. This is not a case, however, where the period of time spent on remand would or likely would exceed the likely term of imprisonment imposed if the applicant is found guilty.[4] Any sentence for any offence found proved would have to take into account the applicant's prior history including his prior conviction for trafficking methylamphetamine.

A.4 The inpatient program at 'The Cottage' and the applicant's history of drug use

17 The Cottage is a residential drug rehabilitation facility located in Shepparton. It has assessed the applicant as suitable for its 12-week program and has reserved a bed for the applicant should he be granted bail. It is a residence at which participants engage in a 'group-based approach to long-term mental illness, personality disorders and drug addiction.' For the first four weeks, residents have no personal phone or visitors. For the next six weeks, residents are ordinarily eligible for 'off-site leave ... without supervision' between, it seems, 12:30pm to 6pm, and are able to have personal phones and visitors in the afternoons. For the final two weeks, they are 'able to leave [the] premises alone'.

18 Although residents are required to 'check in' in the morning and to undergo urine tests twice a week or as required and to engage in programs for part of each day, it is not a secure facility and residents have many hours each day where they are not involved in any specific treatment plan. Residents or their rooms are not routinely searched, and nor are visitors. Although there are CCTV cameras in the common areas and staff on duty, it is not the role of staff to restrain residents who choose to leave, although I accept that the staff would notify the local police and also the Informant if they became aware that the applicant had left or otherwise breached any bail conditions.

19 In order to accommodate any concerns about the lack of security at The Cottage, the applicant, through his lawyers, suggested bail conditions including that he: participate in all treatment programs as directed; follow all lawful instructions and not leave the premises unless in the company of a staff member; not possess a mobile phone without the permission of The Cottage staff and have not more than one phone, have it in his name and provide the number to the Informant; not use drugs or alcohol; surrender his passport; not leave Victoria or attend any point of international departure; and not contact or approach any witness for the prosecution other than the informant. It was suggested that he be bailed, initially, for only the first 12 week part of the program.

20 As noted above, the applicant relied on a report dated 27 October 2024 from a consulting psychologist, Mr Luke Armstrong, who met with and assessed the applicant on 21 October 2024, and on a report dated 21 January 2025 from an addiction treatment counsellor, Ms Maria Hutchison, who assessed the applicant for his suitability to the program via teleconference call on 24 October 2024. Mr Armstrong said that The Cottage would be a suitable treatment facility. The applicant gave him a history of 'chronic familial and domestic violence, on a regular basis, alcohol fuelled'. He gave a history that he began smoking cannabis when he was between 15 and 18 years old, and 'experimented' with amphetamines and cocaine. He said that in 2019 he met his current partner who 'does not condone drug use' and, accordingly, he reduced his drug use to cannabis and then ceased use of cannabis by the end of 2022. However, from April 2023, he began to 'dabble' in methamphetamine when his 'work slowed down' but that use, and cannabis use, then escalated. He also began gambling, he said, approximately $200 every second or third day. How the funds needed to obtain the drugs and to gamble in that amount were raised was not referred to. The applicant told Mr Armstrong that he had not engaged in any drug use while on remand, and Mr Armstrong opined that the applicant's 'Stimulant and Cannabis Use Disorder' was in 'Early Remission'.

21 Ms Hutchison took a history from the applicant that he had engaged in regular drug use with some periods of abstinence followed by relapses, and of daily methamphetamine use in the last 12 months. In her opinion, the applicant appears to meet the criteria for Substance Use Disorder and would benefit greatly from participation in the program. She says that the applicant 'was able to acknowledge that he does not have the skills or experience to turn his life around and that he is ready and willing to accept help and support for his addiction, his thinking and his behaviour' and that he was 'seeking help for the first time as he wants to get clean and stay clean', and that his past attempts at abstinence had been 'attempted alone' and that he 'wants to learn some new tools'.

22 The prosecution does not accept that the applicant has been honest in the histories of drug use that he has given and contends that the applicant is embellishing a history so as to improve the prospects of his obtaining bail. It points to inconsistencies in the histories given to Mr Armstrong and to Ms Hutchinson: the applicant told Ms Hutchinson that he was using methamphetamine daily, but he told Mr Armstrong that he had not engaged in drug use while on remand; he told Mr Armstrong that he ceased using cannabis by the end of 2022 and remained 'clean off all substances until approximately April 2023', but he told Ms Hutchison that cannabis had been a 'daily habit for him since 15 yrs of age'. He also told Ms Hutchinson that methamphetamine had been a 'daily habit' for the 12 months prior to when he saw her on 24 October 2024, but when he was arrested the applicant told the arresting constable that he was not using drugs because his girlfriend was trying to conceive. The prosecution points out that no drug paraphernalia has been found in the applicant's house or in his possession and an intimate partner of the applicant informed the police that the applicant didn't 'smoke' and that the applicant was aware of using drug dependency and private rehabilitation clinics as a method of being granted bail. Further, the applicant, in a telephone conversation from prison that the prosecution contends the applicant knew would likely be listened to, the applicant told a friend of his that he was or had been a user of heroin, but heroin use was not referred to in the histories to Mr Armstrong or Ms Hutchinson. The prosecution's position is given some weight by the fact that the applicant's criminal history includes offences involving dishonesty and it cannot be assumed that the applicant would have felt constrained to be truthful when speaking to Mr Armstrong and Ms Hutchinson.

23 In these circumstances, I have a real concern that the applicant has exaggerated his history of substance abuse or dependency in order to present a case for residence at The Cottage so as to improve his prospects of bail, and that he does not in fact have the type of condition that The Cottage is set up to treat.

24 Further, as noted above, neither Mr Armstrong nor Ms Hutchison adequately considered and explained the effects of any past rehabilitation attempts made in accordance with conditions imposed as part of the community correction orders previously made. In the absence of any information relating to those court-ordered periods of treatment, the inference may be drawn that either the applicant did not fully participate in them or if he did they did not achieve their purpose.

25 Finally and in any event, again as noted above, this is not a case where the applicant's alleged offending may be explained by any underlying drug condition, such that treating any underlying drug condition would likely remove the motivation to engage in criminal behaviour. His alleged offending was large scale trafficking engaged in for the purpose of generating large sums of money, not for the purpose of accessing or being able to access drugs for personal use. So even if residing at The Cottage would help the applicant, assuming he has a substance abuse problem of some degree, I am not persuaded that his undergoing a treatment program there would substantially reduce the risk of his thereafter engaging in criminal conduct.

26 The applicant's father has offered to 'put up' his equity in a property owned by him in Glenroy. The property is mortgaged. According to a rates notice provided, the capital improved value of the property is $580,000. According to document from the Bank of Melbourne, the amount owing as at 28 January 2025 was just under $350,000 with a zero 'available balance'. It is asserted, therefore, and I accept, that the 'equity' is more than $200,000.

27 The size of this surety, however, is to be seen in a context where it is alleged that the applicant trafficked a commercial quantity of drugs and generated substantial sums by doing so.

28 The Informant did not say, in the witness box, that the applicant was likely to leave Australia (though she was concerned that he would leave Victoria and, as I took it, The Cottage). Further, the Informant accepted that the witnesses in the case against the applicant were, or for the most part were, professional witnesses. Accordingly, the real risks to consider are whether, if bail is granted, the applicant is likely to engage in further criminal activity or make improper contact with his co-accused.

29 The material establishes that the applicant's brother and co-accused, Mr Rami Margus, was on parole at the time of the alleged offending and had an ankle bracelet. If, as is the prosecution case, the applicant was involved in the drug trafficking with his brother, it must be the case that he was participating with his brother in conduct that was, to his knowledge, contrary to his brother's parole conditions. Associated with this, as the discussion of his prior history shows, the applicant has a history that includes breaching bail and committing indicatable offences while on bail and failing to comply with Community Corrections Orders. I accept that those offences took place when the applicant was younger than he is now. But, if the allegations against him are correct, the applicant has, since that time, increased the level of his criminal activity, rather than reduced it. These matters raise a real concern that the applicant would not have any compunction about breaching conditions imposed on his bail or engaging in further criminal activity if he thought it in his interests to do so.

30 Further, the material before me establishes that the applicant has criminal connections and that his brother has connections to international organised crime figures. I consider that the applicant, if he wished to do so, could communicate with persons involved in organised crime. I consider that there is a real risk that the applicant would be able to obtain a mobile phone, irrespective of whatever bail conditions are imposed, and to use that phone to engage in criminal activity, and that this is the case whether he be at The Cottage or in the community. Much of the criminal activity alleged against him involved him organising others with the use of encrypted messages on mobile phones.

31 For all these reasons, I consider that there is a real risk that, if granted bail, the applicant would engage in criminal behaviour.

32 I also consider that there is a risk that the applicant would communicate with co-accused if on bail, given that multiple co-accused are family members. It was suggested by counsel that the applicant may attempt to co-ordinate with co-accused and 'lean on someone to maybe take more of a fall for [the charges] than him'. This was posited as a risk to be considered in all bail applications where there are co-accused rather than being particularly heightened in the applicant's case, and, in the circumstances, I give this risk no real weight.

33 For the above reasons, and having regard to the surrounding circumstances, I am not satisfied that exceptional circumstances exist that justify the grant of bail. In summary, the case against the applicant is not weak and there is good evidence that he was, at the least, participating to some extent in a large scale drug trafficking operation using means of encrypted and other forms of communication designed to prevent discovery. The period of delay is lengthy, but any sentence imposed if found guilty would likely be much longer. The surety is significant, but relatively modest when compared to the scale of the drug trafficking that is alleged. There is a real risk that the applicant would again commit criminal offences if granted bail. The Cottage is not a secure facility and, even if conditions were put on his bail of the type suggested, residence there would not ameliorate the risk of the applicant reoffending. Further, I am not satisfied that the applicant, who says that he has not taken drugs for some time now, has the type of drug problem that The Cottage is designed to address and, even if he did, any such problem could not sensibly been seen to have been the cause of his alleged criminal activity.

34 If I were satisfied that there were exceptional circumstances, then I would, in any event, for the same reasons, conclude that, having regard to the surrounding circumstances, there is an unacceptable risk that the applicant would, if released on bail, even on the terms proposed, engage in criminal activity including by committing a Schedule 1 or Schedule 2 offence.

35 As the applicant David Margus has not established that there are exceptional circumstances that exist that justify the grant of bail, the application for bail must be refused.

[1] The specific charge dates are: between 1 January 2023 and 7 May 2024 (charges 1-2); between 3 January 2023 and 7 August 2023 (charge 3); between 3 January 2023 and 7 May 2024 (charges 4-8); between 3 August 2023 and 7 May 2024 (charge 9); on 1 March 2024 (charge 10); 21 November 2024 (charges 11-15); 14 November 2024 (charge 16); 5 July 2022 (charges 17-18); 2 August 2022 (charge 19); 22 February 2024 (charge 20); 23 April 2024 (charge 21); 30 April 2024 (charge 22); 7 May 2024 (charges 23-26); on or between 28-29 November 2023 (charge 27); and on 7 May 2024 (charge 28).

[4] Cf Bail Act 1977, s 3AAA(1)(aa).