Application for Bail - Obian [2016] VSC 607 (6 October 2016) - VSC 2016 case summary

Supreme Court of Victoria|2016-10-06|Before: LASRY J

BAIL - Drugs, Poisons and Controlled Substances Act 1981 (Vic) ss 71 and 71AA - Drug offences in large commercial quantity - Exceptional circumstances - Principles - Strength of prosecution case - Delay - Other considerations.

Traffick in a drug of dependence - large commercial quantity (Ecstasy) - at Brunswick East

Traffick in a drug of dependence - large commercial quantity (Methylamphetamine) - at Brunswick East

Traffick in a drug of dependence - commercial quantity (1,4 - Butanediol) at Brunswick East

Traffick in a drug of dependence -commercial quantity (1,4 - Butanediol) at West Footscray

Traffick in a drug of dependence -commercial quantity (1,4 - Butanediol) at Flemington

Possession of precursor chemicals - at Brunswick East

Traffick in a drug of dependence (Cannabis) - at Brunswick East

2 The applicant is alleged to be one of the significant offenders. Most of the nine accused charged have been admitted to bail with substantial sureties and reporting conditions. The applicant and one other have so far not been granted bail. The committal mention for this matter is listed in Magistrates Court for 30 November 2016. The committal hearing itself has been fixed to commence on 18 April 2017.

3 Section 4(2) of the Bail Act 1977 provides that in the case of a person charged under sections 71, & 71AA, 72 or 72A of the Drugs Poisons and Controlled Substances Act 1981 ("the DPCS Act") as the applicant is in charges 1-5, a Court shall refuse bail unless it is satisfied that exceptional circumstances exist which justify the grant of bail.

4 Thus, the applicant is required to establish exceptional circumstances as a consequence of the charges he is alleged to have committed namely, offences under sections 71 and 71AA of the DPCS Act. Establishing exceptional circumstances is a high test but as the authorities establish not so high that it is impossible for an accused person presently in custody to achieve, or virtually ever achieve, bail.[1]

5 These charges arise following a significant police investigation which resulted in nine people including the applicant being charged with drug offences.

6 According to the informant's resume of the evidence, the applicant is a director, secretary and shareholder of a company established in 2013 known as SAA Cleaning Services at 44 Glenora Avenue, Coburg.

7 On 29 September 2015, the applicant imported 17,760 kg of 1,4-Butanediol from a company located in China. The sum of $37,229 was transferred to that company. The importation which is not illegal of itself was done by SAA Cleaning Services. The applicant will say that this substance was imported for a legitimate industrial purpose.[2]

8 The evidentiary material indicates that this particular chemical is a Schedule 11 drug of dependence and is primarily used as a component of polyesters or as a chain extender. It is not for human consumption. It is also an industrial solvent which contains toxic substances. Apparently, however, the chemical metabolises in the human body forming the drug gamma hydroxybutyrate (commonly known as GHB). It is often sold on the illicit market as GHB according to the informant.

9 The issue at the trial of the applicant will be whether the importation was for a lawful industrial purpose or whether it was for human consumption. In support of the proposition that the prosecution case is weak on that issue, I will refer to documents exhibited to the affidavit of the solicitor for the applicant revealing that 'Saa Cleaning Service's Pty Ltd' [sic] is a trading cleaning company based at 44 Glenora Avenue Coburg. That address is a domestic residence where the parents of the applicant reside and where he would reside if granted bail. Financial records attached to the affidavit show a gross profit on trading for 'SAA Cleaning Services' of $54,274.00. In his evidence, the informant said that there has been investigation into the legitimacy of that business and though a couple of cleaning contracts were found to exist, not enough has been found that would support a thriving business.[3] He agreed that he was aware of a cleaning contract for a supermarket.

10 On 30 November 2015, two men entered the premises of FPC Food Plastics, located at 1515 Hume Highway, Campbellfield. That company makes plastic bottles in various sizes suitable to contain food and liquids. The bottles and lids are identifiable because they are made with 'FPC' moulded into them. The first man ordered 5,712 one-litre bottles and four cartons of lids for those bottles. The order was placed in the name of 'Sam' and provided a telephone number.

11 On 2 December 2015, Sam and two other men returned and paid $2,519 in cash and collected the order. The phone number that was left is in the name of the applicant. On 15 December 2015, a man using the name Saer ('Saer') ordered 2,030 cardboard boxes from Australian Corrugated Packaging at 18 Horne Street, Thomastown and paid cash for the order.

12 On 22 December 2015, it appears that from police surveillance a meeting took place between the applicant and his co-accused Mustafa, Aloush and Mogasheri in Champs Road, Coburg. The prosecution allege that was to facilitate a transaction of 6000 ecstasy tablets. There are telephone interceptions relevant to this matter which have not yet been processed and provided to the legal representatives of the applicant.

13 On 2 March 2016, a person named Belal Allouche was contacted by James Mobasheri to order 6,000 ecstasy pills. Allouche then made contact with the applicant and facilitated the transaction. Allouche explained to Mobasheri to attend at the applicant's home address. After Mobasheri collected the ecstasy pills from the applicant, he sold 2,000 to a third party. Allouche then confirmed with Mobasheri that the cost of the ecstasy was $36,000. The third party was arrested by police whilst on his way to Geelong and 2,000 ecstasy pills were located. There is surveillance and telephone intercept evidence in relation to that.

14 On 13 June, at 3.30pm, information was received by the police that a man by the name of 'Carl' was leasing storage facilities at the rear of a florist in Lygon Street, Brunswick. At about 2.50pm, 'Carl' had attended the storage area of these premises with four other people, including a woman known as 'Fiona' and a male known as 'Sam'. It is said that Carl was pushing an unknown male through the florist and into the storage area of the rear in an aggressive manner and was being asked by Fiona not to hurt the male. Carl has been identified as the accused in this matter, Khaled Moustafa, and Fiona was identified as Fiona Thai. 'Sam' was identified as the applicant. Furthermore, a woman named Le Banh is also involved and is the mother of Fiona Thai.

15 When police went to the premises in Lygon Street, Brunswick and forced entry into the storage area they found a substantial quantity of drugs of dependence including 15kg of dried cannabis, 10,000 MDMA tablets, 2kg of methylamphetamine, a packed up clandestine laboratory and sufficient precursor chemicals to manufacture methylamphetamine. They also found cardboard boxes containing 70 one-litre bottles of 1,4-Butanediol, being a total of 70 litres. That in itself establishes a circumstantial link with the applicant. Investigators also executed a warrant at a storage facility utilised by the accused Moustafa in Ashleigh Street, Braybrook.

16 On 14 June 2016 the applicant and others were under surveillance and at about 12.40am he is alleged to have attended at the Mini Koala Car Rental in Bell Street, Preston and rented a white Toyota Hi-Ace van. He produced a South Australian driver's licence in the name of Saer Obian and a bank card in the same name and a phone number which is his phone number. At 1.49am that vehicle went to Unit A34, 159 Racecourse Road, Flemington and close-circuit television indicates Moustafa and the applicant taking large silver-coloured drums from the unit and loading them into the back of the Toyota.

17 At about 4.10am, police observed a silver Toyota Corolla registered to Moustafa's brother attend the Ashley Street address where items were transferred from the storage unit to the van and, at 4.41am, the two vehicles attended 296 Racecourse Road, Flemington. All the occupants of both vehicles entered the rear yard of the address and unloaded a large number of brown cardboard boxes from the van and placed them into a shed. At 5.00am, the vehicles departed and subsequently went to the Ashley Street address. A third vehicle, being a 1993 Toyota Town Ace van, was with them and the registration plates on that vehicle are alleged to have been stolen from another vehicle in Brunswick overnight on 4 and 5 June 2016.

18 At 5.30am on that day, arrests were made and a search warrant executed which revealed cardboard boxes containing 1 litre bottles of 1,4 Butanediol and drums containing the same substance. As I understand it there are 5 metric tonnes of 1,4 Butanediol still unaccounted for.

19 On 28 June 2016, a search warrant was executed at 44 Glenora Avenue, Coburg and the applicant was located and arrested. At that address various telephones and assorted documents were found in the name of the company SAA Cleaning Services.

20 The applicant was taken to the Melbourne West Police Station where an interview was conducted in which he exercised his right not to answer any questions.

21 In an affidavit sworn on 19 September 2016 on behalf of the applicant, the following facts relevant to the issue of exceptional circumstances were raised for consideration on the application:

(a) The applicant is aged 22 years of age, his date of birth being 29 December 1993.

(c) The applicant has remained in custody since his arrest on 28 June 2016 and by the time the committal commences he will have spent almost a year in custody. Counsel for the informant has informed me the committal hearing has been given a date of 18 April 2017. It is common ground that a contested trial in the County Court would not start before the first half of 2018. The delay may be more significant than that.

(d) The applicant argues that the Crown case is weak because it relies heavily on circumstantial evidence and an identification of the applicant driving a vehicle in conveying large amounts of 1,4-Butanediol in company with other accused on 14 June 2016.

(e) It is also noted that the applicant was not arrested until 28 June 2016, some two weeks after these incidents.

(f) The applicant also relies on the fact that he suffers from a degenerative eye disease and had surgery on his right eye in May 2016 and, at the time of his arrest, was awaiting surgery on his left eye. If left untreated, the condition will worsen and increase impairment to his vision.

(g) It is further submitted that the applicant has strong ties to the jurisdiction on the basis that although born in Lebanon he is an Australian citizen and resides with his mother and siblings. He has a long term partner. He also has no prior criminal history.

22 In response, the informant's counsel submitted that the applicant was required to establish exceptional circumstances and had failed to discharge that onus. It was also submitted that the applicant would pose an unacceptable risk if released on bail on the basis that:

(c) He would interfere with witnesses or otherwise obstruct the course of justice;

(e) The applicant's limited ties to the jurisdiction;

(f) The applicant's apparent connection with the Middle Eastern organised crime community;

(g) The applicant's access to firearms and licence to use same.

23 In my opinion many of those matters are little more than assertion but the first question is whether exceptional circumstances have been established by the applicant.

24 The provisions of the Bail Act 1977 which apply to the applicant require a refusal of bail by the Court unless a condition is satisfied, being the existence of exceptional circumstances.

25 Over many years in this Court there have been a number of rulings on applications for bail where the meaning and effect of that test is considered and dealt with. An obvious challenge in determining such an application is the absence of legislative guidance on the meaning of the phrase 'exceptional circumstances'. As Hollingworth J noted in a recent application for bail which is factually similar to this application:[4]

The [Act] does not specify what considerations may be relevant to establishing exceptional circumstances. It has often been said that there must be something unusual or out of the ordinary in the circumstances relied upon by the applicant, before those circumstances can be characterised as exceptional. But, although the hurdle is a high one, it "should not be set so high that it is impossible for an accused person presently in custody to ever achieve or virtually ever achieve bail."

26 Her Honour's quotation refers to the ruling of Warren J (as she then was) in Whiteside.[5] In that case, after being referred to authority, her Honour adopted the observations of Vincent J in Moloney[6] as follows:

A number of decisions which have been handed down by judges in this court, however, make it clear that such circumstances may exist as a result of the interaction of a variety of factors which of themselves might not be regarded as exceptional. What is ultimately of significance is that, viewed as a whole, the circumstances can be regarded as exceptional to the extent that, taking into account the very serious nature of the charge to which they are applicable, the making of an order admitting the person to bail would be justified.

27 In Dale v DPP,[7] the Court of Appeal was invited to conclude that the likely delay in that case which would result in pre-trial detention approaching some two years was, on its own and without more, sufficient to constitute an exceptional circumstance which would justify a grant of bail. In response, the Court said:

Counsel referred to a number of cases in which it has been said that, although a delay of two years is no longer a rarity, it is nevertheless inordinate and unacceptable and in that sense may be viewed as exceptional. Alternatively, counsel contended, if the delay were not enough in itself to warrant bail, the delay coupled with the appellant's medical condition and the emotional and financial hardship inflicted on him and his family, were sufficient in total to warrant bail.

Clearly, the delay involved in this case is very substantial, even if not unprecedented in a case of this complexity. What makes it much more significant, however, is that the conditions in which the appellant was imprisoned following his arrest in February have severely affected his mental health.

28 So, the Court dealt with the matter on the basis of the combined effect of several factors and concluded:[8]

All things considered, we were persuaded that the appellant had established exceptional circumstances. That conclusion was based on the combined effect of:

the anticipated delay in the matter coming on for trial,
the fact that his conditions of incarceration have caused him to suffer moderate to severe depression, which requires treatment; and
the potential loss of the family business.

29 As Kirby J said in Cabal v United Mexican State:[9]

In the setting of the Act, where the somewhat analogous criterion of special circumstances must be shown, the courts have resisted, correctly in my view, an attempt to segment or compartmentalise the circumstances that will, or will not, meet the statutory standard. An overprecise or artificially rigid classification of qualifying or insufficient circumstances is not what is called for, any more under the Constitution than under the Act.[10] What is essential is that the Court should consider all the circumstances in their totality.

The purpose of obliging the applicant for bail to demonstrate "special" or "exceptional" circumstances is to focus the attention of the court on the reasons why detention in custody pending surrender is the normal rule. And why something unusual and extraordinary is necessary to depart from that rule.

31 Mr Dunn relied on a number of factors which might lead to a conclusion that exceptional circumstances had been established on an application for bail where that was required and then referred to several features of this case which he submitted demonstrated that high test had been met by the applicant.

32 As I have previously noted, in DPP v Sabino Cozzi,[11] Coldrey J followed the approach of Vincent J in Moloney and then reviewed several of the cases which subsequently discussed the meaning of 'exceptional circumstances'. He noted:

An examination of the cases bearing upon this concept reveals a multitude of single and conflicting interpretations thrown up, no doubt, by the variety of fact situations with which Judges have been faced.

33 Coldrey J went on to refer to a variety of circumstances which had been found in various cases to constitute exceptional circumstances and summarising those to which his Honour referred they included:

• the strength of the Crown case which is in issue on this application;

• strong family support which applies in this case;

• stable accommodation about which there may be some issue in this case;

• availability of employment which does not apply in this case;

• low risk of flight or re-offending which is not common ground here;

• lack of prior criminal history which applies in this case; and

34 It should be emphasised that this list is not exclusive and obviously other factors might arise in a particular case which will contribute to the conclusion that exceptional circumstances have been established.

35 In support of the conclusion that exceptional circumstances have been established, Mr Dunn QC submitted that the prosecution case is a weak one. He said that this is a case which is based, first of all in relation to the drugs that are found in Lygon Street, on circumstantial identification and is obviously a matter which is going to be contested. As to the other occasion that the applicant is said to be there shown on CCTV he is not actually seen in the storage room, though he is at the premises. He highlighted there is no DNA evidence or fingerprints.

36 In my opinion, however, it is far too early to conclude that the case against the applicant is weak. I am not sure that Mr Dunn dealt with the charges concerning the substance 1,4 Butanediol other than to refer to the existence of the cleaning company and I am by no means sure that that is not a strong case. In addition, there appears to be a significant body of surveillance, telephone intercepts, circumstantial evidence and other material that seems to me to be capable of building a reasonably strong case against the applicant in relation to all of the illicit substances alleged. When arrested, the applicant declined to participate in a record of interview as is his legal right but no obvious alternative explanation for his conduct is yet apparent apart from the existence of a cleaning business and the issue to which I have already referred.

37 In relation to the 1,4 Butanediol, the prosecutor submitted that the sheer volume of it told against a legitimate industrial purpose. There may well be a basis to contend that SAA Cleaning Services was little more than a front or a pretext for the importation and distribution of that substance for human consumption.

38 It is true that the applicant's brother gave evidence on the application and referred to the cleaning business having an agreement to clean one supermarket and one other location. However as I understand it, those arrangements are not sufficient to explain the volume that was ordered and imported.

As I have earlier noted, there will be an appreciable delay in this matter by virtue of the size of the brief and the number of people involved. The applicant is 22 years of age and is in a prison rather than a remand centre which I agree is unsatisfactory. Consistent with principle, however, it was not submitted on behalf of the applicant that the delay on its own would be sufficient to warrant a conclusion that exceptional circumstances had been established.

39 According to the affidavit sworn on 19 September 2016 on behalf of the applicant the County Court trial of this matter is unlikely to proceed before mid-2018. Indeed Mr Regan, counsel for the Respondent, conceded that given the complexity, number of co-accused and lengthy trial estimate a trial date in early 2018 was likely, at best.

40 The delay is of course regrettable and from the discussion it may be that the matter can expedited to some degree over the next few months.

41 It is proposed that if released on bail, the applicant would resume living at 44 Glenora Avenue in Coburg. It was from that address that the prosecution contend the applicant was committing these offences. Further, the applicant does not have employment of any kind and there is no evidence of any prospect of it.

42 There is some evidence that applicant suffers from an eye condition known as keratoconus. According to a letter from a Dr Uday Bhatt who has apparently treated the applicant, without treatment the condition may worsen but noticeable progression can take 'months to years' to occur. Dr Bhatt was not called to give evidence on the application for bail.

43 As I have already noted the applicant does not have a prior criminal history.

44 It was next argued that with appropriate conditions the risk of the applicant fleeing and/or reoffending was very low. The prosecutor made the point that a significant amount of 1,4 Butanediol remained unaccounted for and the likelihood of the applicant committing further offences to generate some income was realistic. Mr Dunn identified the conditions that could be imposed to diminish that risk.

45 There is nothing in the evidence that demonstrates the applicant is a flight risk for specific reasons.

46 During the application the mother of the applicant gave evidence that she and her husband own a property at 6 Williams Road, Coburg North which they would make available for the purposes of a surety. That seemed to involve an equity in the property, in which they do not in fact live in, of about $170,000.00. I take that into account.

47 In my opinion exceptional circumstances have not been established. Ultimately, I have concluded that this may be a relatively strong case. At this early stage there are obvious difficulties in assessing the relative degree of strength but, that being said, the evidence against the applicant appears significant.

48 There will be a delay in the matter coming to trial which is very regrettable. On its own however it is not sufficient to amount to an exceptional circumstance. The applicant's circumstances do not add sufficiently to the delay in establishing exceptional circumstances. The circumstances of the applicant's custody have been unsatisfactory but the factors which militate in favour of a conclusion of the kind reached by the Court of Appeal in Dale of exceptional circumstances do not seem to me to apply in this case.

49 In all the circumstances, the application for bail is refused.

[1] Whiteside VSC 413 (Unreported, Warren J, 1999)

[2] See Part 3 of Schedule 11 of the DPCS Act which includes 1,4 - Butanediol as a proscribed drug of dependence 'except for a lawful industrial purpose and not for human consumption'.

[4] Hang Cao v DPP (2015) VSC 198 at para [7].

[6] (Unreported, Vincent J, 31 October 1990).

[10] See Holt v Hogan (No 1) [1993] FCA 463; (1993) 44 FCR 572 at 579; Kainhoffer v Director of Public Prosecutions [1993] FCA 655; (1993) 48 FCR 9 at 12-13 referring to R v Giordano (1982) 31 SASR 241 at 243.

Poisons and Controlled Substances Act 1981

Application for Bail - Obian [2016] VSC 607 (6 October 2016)

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