Director of Public Prosecutions (NSW) v EC [2015] NSWCCA 301
R v Hall [2013] NSWCCA 47
227 A Crim R 544
R v Jose Degouveia
Source
Original judgment source is linked above.
Catchwords
Director of Public Prosecutions (NSW) v DoddDirector of Public Prosecutions (NSW) v WhitbyDirector of Public Prosecutions (NSW) v EC [2015] NSWCCA 301
R v Hall [2013] NSWCCA 47227 A Crim R 544
R v Jose Degouveia
Judgment (14 paragraphs)
[1]
Solicitors:
Morrisons Law (for the offender)
Ms A Cabrera, Director of Public Prosecutions
File Number(s): 2018/00092075
[2]
Introduction
Between December 2017 and March 2018, Jamie Warren, in association with others in his criminal group, supplied or agreed to supply quantities of illicit drugs to undercover operatives acting under the authority of NSW Police. Warren was arrested and accepted his guilt for three supply prohibited drug offences, with two other matters dealt with on a Criminal Procedure Act 1986 Form 1: ss 25(1) and 25(2) Drug Misuse and Trafficking Act 1985.
On 15 November 2019 I sentenced him to an aggregate term of imprisonment of 4 years 2 months: R v Warren [2019] NSWDC 820.
During a lengthy remand, and after receiving Supreme Court bail, Warren had demonstrated considerable progress to rehabilitation. He successfully completed the Odyssey House drug addiction programme.
The contrast between the man who committed the offences and the man who appeared for sentence, was stark. He was described in an early Sentence Assessment Report as believing the "world owes him a living" and someone who "enjoys manipulating people." Later material from Odyssey House spoke of the man of positive values now seen as a "great role model". Warren has turned his life around. He has put behind him a life blighted by a highly abusive and violent childhood. Nevertheless, so serious were his crimes that a return to custody was required. He appears however to have strategies in place to cope with imprisonment and on release to parole live a normal life for the first time. His future plans require he receive support and assistance.
After sentence was imposed an application was made by the Director of Public Prosecutions for a Drug Proceeds Order for $20,800. The order related to benefits said to have been derived by Warren from the commission of his drug trafficking offences: s 29 Confiscation of Proceeds of Crime Act 1989 (Confiscation Act 1989). The application was opposed.
I was not aware of the pending order when I sentenced Warren. In any event, the consequences for the offender of any order under confiscation legislation cannot be taken into account as a mitigating factor in sentencing: s 24B Confiscation Act 1989.
[3]
The proceeds application
In short summary during the relevant period the following sums of cash were handed to Warren or his associates, including Daniel Gill and Nicholas Rogerio, in exchange for illicit drugs:
[4]
13 December 2017
$20,050 for 3.144 kg of cannabis
$4,800 for 27.2 g of methylamphetamine
$ 2,200 for 6.87 g of cocaine - total $27,050
[5]
4 January 2018
$21,000 for 3.141 kg cannabis
$8,000 for 26.89g of cocaine
$3,200 for 28.67 of methylamphetamine - total $32,000.
[6]
17 January 2018
$ 9,600 for 55.8 g methylamphetamine
$3,200 for 16.8 g 3-4 methylendioxyamphetamine
$ 8,000 for 24.6 g of cocaine - total $20,800.
No evidence other than the agreed facts for sentence was relied on by the Director in the proceeds application. It was uncontroversial that Warren and his associate were obtaining the drugs from other up line suppliers in order to supply the undercover operative with the drugs requested for an agreed price. Agreements in relation to the supply of those drugs between the offenders were contingent on the payment by the undercover officer. They were not accounted for until after payment was made. Warren shared the financial risk with his associate Gil. Each was reliant on the money being paid by the undercover officer. They retained a portion of the purchase price as their "cut" and handed on the balance to their supplier.
Unless it is a coincidence, it appears that the Director had calculated the sum claimed by reference to the sum paid as a sale price by an undercover police officer to Warren and Gil but only for the amount handed over by the undercover operative on 17 January 2018 - $20,0800.
The Director does not seek proceeds orders for the entire sum of $79,850 handed over by the undercover operative. The Director seeks, on behalf of the State, only the purchase price of each of the drugs bought on 17 January 2018. I presume that the claim is limited to that day because the Director is aware others, Gil in particular, shared the benefits. If they claimed the whole amount from Warren this might return to the State more than the actual costs expended to purchase each lot of drugs, accepting that Gil is still awaiting sentence and may also be subject to confiscation orders.
[7]
The offender's case
In response to the application Warren was called and gave evidence. He told me that most of the profits received were spent at local hotels on alcohol, gambling and illicit drugs. He said he shared any profit equally with his associate Gil. He said he paid his nephew Rogerio a relatively modest amount of cash for the work he did. This accorded with the facts before me when I sentenced Rogerio: R v Rogerio, unreported NSWDC, 1/3/2019.
His figures do not accord with the amounts given by their cannabis suppliers, the Degouviea's, however when I sentenced them I was sceptical and did not accept their evidence about cannabis pricing: R v Jose Degouveia; R v Joshua Degouveia [2019] NSWDC 161.
Warren said that his and Gil's proceeds were based on adding a margin to the price of the drug sold with the balance returned to their suppliers. He said they split the profit 50/50. The only expenses were $100 paid to Rogerio. He said for each cannabis transaction he, or they, expected $500 but on 17 December 2016, there was some miscommunication and they only made $50.
Warren said for each ounce or 28 grams of cocaine they would receive $800 to $1,000.
Warren said for each ounce or 28 grams of methyl amphetamine they would receive $300.
Warren said for each ounce or 28 grams of 3-4 methylendioxyamphetamine they would receive $500.
I challenged him that this seemed an extraordinarily small amount of money, given that if caught he faced imprisonment. He said, he didn't think about the risk or the consequences. He said he just took the opportunity to get drugs and make money, essentially so he could squander it by drinking and gambling.
Warren's account was not substantially challenged in cross-examination. No evidence was called in reply.
The submission advanced by Mr McCallum on his behalf was that the sum to be provided for in the drug proceeds order should be calculated by reference to the monetary sum actually derived by Warren.
I was not referred to any authority and it being late on a Friday and with Correctives Service staff anxious to get Warren on the last truck to gaol, I reserved my determination. Not for the first time I am being asked to make a proceeds order on less than complete information
[8]
Confiscation of Proceeds of Crime Act 1989
The principal objects of the Confiscation of Proceeds of Crime Act 1989 are here, relevantly; "to deprive persons of the proceeds of, and benefits derived from, the commission of offences against certain laws of the State:" s. 3. Division 4 (ss.28-31A) provides for the making of drug proceeds orders.
It is recognised that the task of a court in carrying out the assessment required by the Act may prove difficult. I am required to make an assessment "having regard to information before the court:" R v Hall [2013] NSWCCA 47; 227 A Crim R 544. The assessment is to take into account matters identified in s 30(1) Confiscation Act 1989. Here relevantly:
1. That the money came into the offender's possession in connection with drug trafficking: s 30(1)(a).
2. The value of any benefit provided for the offender: s 30(1)(c).
3. The market value of the drugs (s 30(1)(d)) disregarding any expenses as outgoings incurred by the offender in connection with the commission of the offences: s 30(6).
The Court in Hall, set out the steps required:
1. Determine that the particular offender had derived a benefit in connection with drug trafficking;
2. Assess the value of the benefit derived by the particular offender; and
3. Order the particular offender to pay to the State a pecuniary penalty equal to the amount as assessed. At [36]
The procedure provided by s 31 Confiscation Act 1989 allows for the tender of statements by the prosecution. An onus is cast upon the offender to respond.
Further guidance can be derived for from Justice Johnson's decision in Director of Public Prosecutions (NSW) v Colakoglu; Director of Public Prosecutions (NSW) v Dodd; Director of Public Prosecutions (NSW) v Whitby; Director of Public Prosecutions (NSW) v EC [2015] NSWCCA 301, at [87]-[95] "Colakoglu". His Honour there noted that the task to which s.30(6) is directed is "assessing the value of the proceeds of drug trafficking". Assistance can be obtained from the long title of the Confiscation Act 1989, which refers to the confiscation of the "profits of crime." The concepts of "benefit" and "proceeds" are distinct, and separately defined in s.4 of the Confiscation Act 1989:
benefit includes service and advantage.
drug proceeds order means an order made under section 29.
proceeds, in relation to a serious offence, means any property that is derived or realised, directly or indirectly, by any person from the commission of the offence.
The term "expenses or outgoings" is directed to a range of factors associated with a particular drug supply operation, such as payments made to persons to deliver drugs and payments made for transport hire associated with the delivery of the drugs: Colakoglu.
[9]
Determination
An order should not see the offenders being deprived, by way of a drug proceeds order, of more than "the fruits of their crimes:" Crimes (Sentencing Procedure) Amendment Act 2010, the Parliamentary Secretary, the Hon. Michael Veitch, Hansard, Legislative Council, 23 November 2010; Colakoglu, at [98].
Justice Johnson, for the Court, rejected the construction of the term "expenses or outgoings" in s.30(6) Confiscation Act 1989 put forward by the Director in those and the present proceedings: He accepted a construction of s 30 that means that money handed up the line by an accused is not an "expense" or "outgoing" of the offender made "in connection with the commission of the offence". Accordingly, s.30(6) does not prevent that money being "deducted" when a calculation of proceeds is made: Colakoglu, at [91] to [94] and [85].
His Honour accepted a submission for drug trafficking offences "expenses and outgoings" are limited to matters related to the particular transaction. This can include payments made to persons to deliver drugs and payments for transport associated with the delivery of the drugs. It did not include costs anterior to the particular offence: Colakoglu, at [70] to [77].
Applying those principles I find here that:
1. $79,850 came into Warren's possession in connection with drug trafficking;
2. The market value of the drugs was that set out in the agreed facts and noted at [13] - [15] above;
3. Warren derived a benefit in connection with drug trafficking;
4. I disregard the $100 paid to Rogerio as an expense incurred by Warren in connection with the commission of the offences;
5. The gross value of the benefit can be reduced by 50% as Gil shared in it and the State should not get a windfall result whereby multiples of the same sum held referable to each particular offender are accumulated: Colakoglu, at [90].
Assessing the value of the benefit derived by Warren requires returning to the information before the Court, including the agreed facts and his testimony. I note that testimony was from someone who was taking drugs and drinking to excess at the time and had then little concern for himself and the community. That said, it requires no imagination to accept that the benefit received was the difference between the amount received from the undercover operative and that paid to Warren's up line supplier.
While it could never be precise the evidence from Warren and the agreed facts provide the information from which an assessment can be made. That sum can be calculated as follows:
[10]
13 December 2017
Cannabis $50.
methylamphetamine $300.
Cocaine - $250.
[11]
4 January 2018
Cannabis $1,000; given that the cots price for 3.141 kg Cannabis appears to have been $20,000.
Cocaine $1,000.
methylamphetamine $300.
[12]
17 January 2018
methylamphetamine $600
methylendioxyamphetamine $500
Cocaine $1,000.
Total $5,000 less 50%= $2,500
[13]
Orders
I order Jamie Warren to pay to the State a pecuniary penalty of $2,500.
[14]
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Decision last updated: 25 February 2020