DPP (Cth) v Fan [2025] VCC 1137

Taxation Administration Act 1953 (Cth)

Possession of Tobacco of 500 kilograms or above (fault based) on 6 Dec 2023

10 years imprisonment, and/or the greater of the following, or both:

(i) 1,500 penalty units;

(ii) The amount mentioned in subsection 308-110(2) of the Taxation Administration Act 1953 (Cth), multiplied by 5.

s308-15(1)

Taxation Administration Act 1953 (Cth)

Possession of Tobacco of 100 kilograms or above (reasonable suspicion) on 6 Dec 2023 (rolled up)

2 years imprisonment and/or the greater of the following, or both:

(i) 500 penalty units;

(ii) The amount mentioned in subsection 308-15(2) of the Taxation Administration Act 1953 (Cth), multiplied by 5.

Deal with Proceeds of Indictable Crime of $50,000 or more (belief) on 6 Dec 2023

1. You have also pleaded guilty to a related summary[1] offence (RSO):

Crimes Act 1958 (Vic)

1. You are a 34-year-old migrant from China, who has spent the best part of the last decade building a life for yourself in Australia. You have both a strong academic history, and a reputation for being caring and generous. How you came to offend this way is explicable only when one examines the personal strain and financial hardship operating on you at the time you offended. In mitigation, much reliance was placed on your early plea of guilty and your excellent prospects of rehabilitation.
2. Recognising the seriousness of this offending, your Counsel concedes you will be sentenced to a period of imprisonment, however, argues that sentence should be imposed in a way that means you will be released immediately on an RRO. The Crown quite properly conceded that such a sentence was open in the circumstances of this case.
3. Moreover though, I was urged by Mr Hill KC and Mr Kelly on your behalf to impose a sentence that would not trigger the automatic deportation provisions in the Migration Act 1958 (Cth); which is to say a sentence not exceeding 12 months. Your future in this country understandably assumed a real prominence in the plea, although in the end, this cannot overshadow other important countervailing sentencing considerations.
4. I will sentence you to a total effective sentence of two years' and one months' imprisonment on the Commonwealth charges in addition to a 2-year good behaviour bond on the State charge. I will order that you be released forthwith by way of Recognizance Release Order (RRO)
5. My reasons follow.

1. You possessed illicit loose-leaf tobacco and illicit branded cigarettes located in a storage unit at Storage King, Clayton and in a Toyota Hi-ace van. The tobacco and cigarettes are illicit as they are excisable goods upon which excise duty was not paid.
2. You also dealt in proceeds of crime located both on you and at your place of residence (that you shared with your partner) in Burwood East.
3. As a result of the entirety of this offending, you possessed or dealt with a total of:

(a) 648.69 kilos of loose-leaf tobacco [Charge 1];

(b) 723,460 cigarettes (482.612 kilos of tobacco plant material); [Charge 2] and

(c) $74,145 in proceeds of crime [Charge 3].

1. On 7 July 2023, you entered into a Self-Storage Agreement with Storage King Clayton at 27 Clarinda Road, Oakleigh South, in relation to Storage Unit 925.
2. The terms of the Storage Agreement was for rental between 10 July 2023 and 9 August of the same year. The terms provided automatic extension until 14 days' notice was given by either party.
3. Logs from that facility show that your unique pin code was used to access Storage King Clayton in the months between 25 October 2023 and 23 November 2023 on 69 occasions.
4. On 11 August 2023, you entered into a Car Rental Agreement with F & Y Trading in Tullamarine. The Car Rental Agreement stipulated that from 15 August 2023, the agreement was for the rental of a Toyota Hi-ace van, 1VJ 7HW. The rental was paid on a monthly basis and was paid until 11 December 2023.

Storage King Clayton, 27 Clarinda Road, Oakleigh South

1. On 6 December 2023, Victoria Police attended Storage King and executed search and seizure warrants.
2. Storage Unit 0925, was secured by two padlocks. Upon entry, investigators located a number of cardboard boxes in the Storage Unit containing:

(a) 377 vacuum sealed bags, labelled as tea containing loose leaf tobacco;

(b) 60 bags labelled as Cat Food, containing loose leaf tobacco;

(c) 4 non-labelled packages, containing loose leaf tobacco;

(d) 10 bags of loose-leaf tobacco;

(e) 6 bags labelled as Dog Food, containing loose leaf tobacco;

(f) 20 cartons[4] of Shuang XI branded cigarettes;

(g) 1499 cartons[5] and 53 packets[6] of Double Happiness branded cigarettes;

(h) 1576 cartons[7] of various Marlboro branded cigarettes;

(i) 6 packets[8] of Pach Septwaves branded cigarettes;

(j) 1 carton[9] of Love 66 branded cigarettes;

(k) 11 packets[10] of Nanjing branded cigarettes;

1. 7 cartons[11] and one packet of Mevius branded cigarettes;

(m) 33 cartons[12] and 21 packets[13] of various Al Fakher Mint branded cigarettes;

(n) 35 cartons[14] 721 packets[15] of Esse Menthol branded cigarettes;

(o) 1 carton[16] and 16 packets[17] of various Manchester branded cigarettes; and

1. 4 cartons[18] and 200 packets[19] of Hongtan branded cigarettes.

(q) 17 vacuum sealed bags of loose-leaf tobacco.

1. The total weight of the items described as containing loose leaf tobacco located in that Storage Unit was 541.64 kilograms [Charge 1].
2. In total 655,780 illicit cigarettes were located in the Unit. The total weight of the plant material in the cigarettes referred to above is 430,076 grams [Charge 2].
3. Whilst Police were conducting the search of that Unit, you entered the secure gates and arrived at Storage King Clayton, in the white Toyota Hi-ace van with your partner in the front passenger seat. You were intercepted by Police just prior to reaching the storage unit.
4. You were placed under arrest and a pat down search uncovered:

(a) $2,095 in Australian Currency [Charge 3]; and

(b) A blue iPhone.

Toyota Hi-ace van, Victorian Registration 1VJ 7HW

1. Victoria Police executed search and seizure warrants on the Toyota Hi-ace van and located the following items:

(a) 38 bags labelled as dog food, containing loose leaf tobacco.

(b) 328 cartons[20] of Double Happiness branded cigarettes.

(c) 14 orange coloured vacuum sealed bags, labelled as tea containing loose leaf tobacco.

(d) 13 cartons[21] and 4 packets[22] of Esse branded cigarettes.

(e) A black Apple iPhone Plus; and

(f) A key that opened storage unit 0925.

1. The total weight of the illicit items described as containing loose-leaf tobacco located in the Hi-ace van is 107.5 kilograms. [Charge 1]
2. In total there were 67,680 illicit cigarettes located in the van alone. The total weight of the plant material in the 67,680 cigarettes is 52,536 grams. [Charge 2]

Apartment 506 of 28 Foundation Boulevard, Burwood East

1. On 6 December 2023, Police attended the apartment at 506 of 28 Foundation Boulevard, Burwood East, your place of residence that you shared with your partner. They executed search and seizure warrants.
2. Entry was made using a key from the Toyota Hi-ace.
3. During the search of the apartment, Victoria police located: $92,050 in Australian Currency located in the bedroom, on the top draw of the cupboard. Of the $92,050, $72,050 were the proceeds of crime [Charge 3].

Apartment 307 of 2 Caulfield Boulevard, Caulfield North

1. On the same day as the previous search, Police attended at apartment 307 at 2 Caulfield Boulevard, Caulfield North, that is your place of residence35 and executed search and seizure warrants. 36
2. During the search of that apartment, they located a Storage King booklet in your name in the bedroom cupboard, top draw.37

1. You participated in a Record of Interview (ROI) with the assistance of an Interpreter.
2. During that interview, Police requested a passcode for your phone and you refused [related summary offence; Charge 6].
3. During the interview, you denied the offending, but made the following statements:

(a) You decided to drive in and look around Storage King.

(b) You rented the van for 'long rent', one to two months ago.

(c) You do not know if you rented a storage facility or storage box.

(d) You were unemployed.

(e) You confirmed no one else had access to the van or drove it.

(f) The cash on you was to buy a gift for your girlfriend, and it was from previous constructions jobs.

(g) You had personal items at your girlfriend's house in Burwood East.

(h) You rent the Caulfield North address.

(i) You did not know why there are two keys to storage unit attached to the keys to the van.

(j) The currency located at Burwood was not yours. It might have been your girlfriend because they sold cars in the previous month.

1. Few of those statements were particularly convincing, or true for that matter but what you did disclose that was true (and turns out to be informative), is that you last returned to your home country back in 2018 and that you were in communication near daily with your parents, who lost their job and, to quote your words, 'do not earn'.[23]

1. Your refusal to provide Police with the passcode to your phone did not prevent that phone from being analysed. Analysis conducted of your Apple iPhone uncovered a number of text messages in both Chinese and English containing:

(a) Screenshots of WhatsApp messages relating to the buying and selling of tobacco including weights and prices.

(b) Screenshots of WeChat and text messages disclosing names, address locations and mobile numbers.

(c) Videos of the unpacking and possession of loose-leaf tobacco and cigarettes; and

(d) Screenshots containing tracking sites for item delivery.

1. The seized tobacco leaves and cigarettes are excisable goods upon which excise duty was not paid.
2. From 1 September 2023, the following rates are current for tobacco manufacture occurring in Australia and the manufactured tobacco goods imported into Australia. I will not read subparagraphs (a) and (b), the more relevant portion of these remarks is at paragraph 36.

1. The total value of unpaid excise duty on the illicit goods is as follows:
   1. Loose-leaf tobacco - 648.69 kilograms:[24] $1,194,886.98; and

(b) Cigarettes - 723,460 cigarette sticks:[25] $899,513.99.

(c) Total value of unpaid excise: $2,094,400.97.

1. The matter has progressed through the criminal justice system in the following way:

1. The fundamental principle in sentencing a federal offender is that the Court must impose a sentence, 'that is of a severity appropriate in all the circumstances of the offence'. A number of particular factors for consideration by a sentencing Court are set out in s16A(2) of the Crimes Act (the Act). That list is not exhaustive, but includes:

(a) The nature and circumstances of the offence - s16A(2)(a)

(b) The course of conduct of which the offence forms part - s16A(2)(c)

(c) Contrition shown, including by reparation - s16A(2)(f)

(d) Guilty plea: fact of, timing and benefit to the community, victims, witnesses - s16A(2)(g)

(e) Cooperation with law enforcement agencies - s16A(2)(h)

(f) Specific deterrence - s16A(2)(j)

(g) General deterrence - s16A(2)(ja)

(h) The need to ensure adequate punishment - s16A(2)(k)

(i) The character, antecedents, age, means and physical or mental condition of the offender - s16A(2)(m)

(j) Prospects of rehabilitation - s16A(2)(n)

(k) The probable effect that any sentence would have on any of the offender's family or dependants - s16A(2)(p)

1. In particular, although not referred to specifically in s16A(2) of the Act, key common law principles of parity, proportionality and totality also apply since they are relevant to the fixing of a sentence of a severity appropriate in all the circumstances. Subject to the limited statutory exceptions in s16A of the Act, sentencing requires an 'instinctive synthesis' of relevant considerations.
2. Before a term of imprisonment can be imposed, the Court must be satisfied it is the only appropriate sentence in all the circumstances, pursuant to section 17A(1) of the Act. If so satisfied, the Court should state its reasons why no other sentence is appropriate and cause those reasons to be entered into the records of the Court.
3. For clarity, the matters mandating serious offender provisions, minimum

non-parole periods, or category 2 offences, or sex offence registration, or standard offences, all are inapplicable or do not apply to this case.

1. The related summary offence is a Victorian offence, for which you fall to be sentenced in accordance with the Sentencing Act 1991 (Vic) ('Sentencing Act') and the applicable common law principles.
2. The purposes for which sentence might be imposed are set out in s5(1) of the Sentencing Act; namely just punishment, specific and general deterrence, rehabilitation, denunciation and protection of the community. Section 5(2) of the Sentencing Act contains a non-exhaustive list of the matters to which the Court must have regard in sentencing, and I have considered them.
3. Again, the standard sentencing scheme, or mandatory custodial sentencing provisions, minimum non-parole period provisions and serious offender provisions do not apply.

1. The maximum penalties for an offence, taken with other relevant factors, provides a yardstick against which a sentence is to be considered[26] and I have considered it in that way. Having dealt with matters of general principle, I will turn to this type of offending specifically, commencing with tobacco offences.

1. Charges 1 and 2 concern the possession of tobacco on which excise was not paid. The offences serve the purpose of protecting the revenue by criminalising the possession of tobacco in circumstances where the offender was at least reckless as to the circumstance of non-payment of payable excise duty (Charge 1), or where it is reasonable to suspect the non-payment of excise duty (Charge 2).
2. General deterrence is a particularly strong consideration for this kind of offending. The possession of illicit tobacco is difficult to detect. The offending occurs in the context of a trade which has potential for significant financial reward. As Niall JA (as he then was) stated in Barakat v DPP (Cth):

Because of the financial rewards that can be associated with offending of this kind (where the goods are subject to relatively high taxes and duty), the difficulty of detection and the erroneous view that offending of this kind is lower level order criminality or 'victimless', it is necessary to place emphasis on general deterrence. That remains so, even where the offender is otherwise of good character and unlikely to offend again.[28]

1. The offending also impacts the public because 'smokers of cheaper illicit tobacco are not subject to the deterrent effect of higher prices applying to tobacco to which duty applies, which is aimed at reducing tobacco consumption in this country'.[29]

1. In Tran v The Queen[30], the Court of Appeal set out the relevant sentencing consideration for the offence of possessing tobacco under the relevant counterpart in the Customs Act 1901 (Cth) and that offence is analogous to s308-110(1), in that it also concerns possession of tobacco with a fault element relating to whether the tobacco is illicit.[31] 2. The relevant factors in Tran include:

(a) the amount of revenue lost to the Commonwealth. > > (b) the scale of the enterprise, including the quantity of tobacco possessed, and its sophistication. > > (c) the role of the offender. > > (d) the period of offending. > > (e) the expected gain and high level of potential rewards. > > (f) whether the loss to the revenue has been repaid. > > (g) whether the offender was involved in its distribution and sale; and > > (h) general deterrence.[32]

1. In Kim v The Queen[33] the Court of Appeal observed that sentencing for 'money laundering offences', including an offence under s400.5(1) of the Criminal Code (Cth), requires attention to be given to the following matters:

(a) precisely what the offender did, including the actions constituting the dealing for the purposes of the offence and the period of time over which the offence was committed;

(b) the amount involved in the offending (which is highly significant);

(c) how the money dealt with is proceeds of crime, and the extent of the offender's belief as to how the money is the proceeds of crime; and

(d) the need to give significant weight to general deterrence.[34]

1. The offender's belief as to the source or provenance of the funds will always be a relevant consideration.[35]

1. In recent times, Parliament has criminalised the refusal of offenders to allow Police to access their electronic devices. The reasons for granting Police the power to make a request for access to devices is obvious, especially given the use of mobile phones in committing offences that require a degree of furtive communication and co-ordination between parties. One might surmise that the storage and movement of large amounts of tobacco would involve such activities.
2. This related summary offence concerns your failure to provide the passcode for your phone after being lawfully directed to do so by police during your interview. You were told of the authority under warrant to make the direction, and that failure to comply was an offence.33 Yet you still refused to do so. In the end, Police did obtain the data they required from your phone despite your lack of co-operation.

Nature, circumstances and gravity of this offence

1. Mr O'Connor has set out the following useful analysis of the offending, which I adopt. [36]
2. You rented the Storage King unit on 7 July 2023. You rented the Toyota van on

11 August of the same year. Very significant quantities of tobacco would be found in the storage unit, and the van, on 6 December 2023. 3. While both Charges 1 and 2 allege offending on a single day (6 December 2023), it is nevertheless evident that the possession of tobacco alleged was the product of organisation and planning by you over a period of months. Your Counsel concedes that although the charge of possession is on a particular day, there is a context to it and it would be unrealistic to say otherwise. 4. However, that planning was not particularly sophisticated, and it was not calculated to avoid detection, noting that the rental agreements were in your own name. Underscoring that point, Mr Hill observed that the phone messages reveal you were not using any encrypted applications to communicate, and no codes were being used to communicate. 5. Much of the loose-leaf tobacco the subject of Charge 1 was contained in bags labelled 'tea', or as cat food or dog food. It must have been apparent (and you accept as much by your plea) that there was at least a substantial risk that payable excise had not been paid, given the attachment of false labels to such large quantities of tobacco. 6. The total quantity of tobacco, in loose leaf form and in cigarettes, across the Charges 1 and 2 exceeded 1,131 kg. The total amount of duty avoided was more than $2m ($2,094,400.97). The amount of tobacco involved in Charge 1 (648.49 kg) comfortably exceeds the amount of 500 kg sufficient to bring the offence within s308-110(1) (and thus subject to the maximum penalty of 10 years). The amount of tobacco involved in Charge 2 (in excess of 482 kg) is nearly five times the quantity of 100 kg sufficient to bring the offence within the scope of s308-15(1). 7. You are not to be sentenced for selling this (or any other) illicit tobacco, or manufacturing or importing this (or any other) illicit tobacco for that matter either. You fall to be sentenced for possession of the tobacco with the requisite states of mind. 8. Nevertheless, the possession of these large quantities of tobacco was plainly for commercial purposes extending beyond the single day on which the tobacco was found. You had the means to sell the quantities of tobacco, and messages relating to the buying and selling of the same which were found on your phone. 9. Whilst the messages (and sheer quantity of tobacco) show you had some connection to the commercial aspects of this offending, you are clearly acting at the direction of others, your role in this enterprise is not one of importer (or funder or purchaser), nor is it one of seller. Beyond that it is hard to precisely identify any role that you had further. 10. Mr O'Connor said by inference the expectation of financial reward must have been significant in light of the quantity of tobacco. You were prepared to take the risk of having such a large quantity of illicit tobacco in your possession. I cannot make an accurate determination of what financial reward you were to receive from this offending. You were desperate and I cannot exclude that you would take whatever you could get. I cannot go as far as the Crown urges me to, in finding that financial greed was a motivating factor in this offending for similar reasons. You appeared on the face of it to be living quite modestly, as one would expect of a man with limited means. There is no evidence you saw any financial reward. The Crown accepted there were not any of the 'trappings of wealth' evident. 11. At least, I accept the proposition that you must have known the Commonwealth was foregoing a substantial quantity of revenue by this activity. 12. You possessed, and therefore dealt with, $74,145 in cash that was the proceeds of crime. That is a significant sum by any measure. By your plea you accept that you believed this sum was the proceeds of indictable crime. 13. Mr Hill KC and Mr Kelly conceded that the quantum of duty evaded is significant. However, due to your limited and unsophisticated role in this enterprise, it was submitted that the offending falls toward the lower end of seriousness for offending of this nature. That submission was made in reference to the principles in Tran I have mentioned earlier,[37] where the following factors were said to work to your advantage;

(a) You are charged on a single day. However, that day does not, obviously, occur in isolation and the context surrounding that day is recognised.

(b) The value of the unpaid duty is significant. However, because of police action, some of that duty, being the money subject of Charge 3, has been recovered.

(c) Your role in the offending is limited. You are essentially an employee whose role was more that of a storeman. Your culpability centres on renting and using the van and storage unit.

(d) There is no evidence you were involved in the importation or manufacture of tobacco.

(e) The storage unit and van were rented in your own name, with a copy of your license provided with the rental applications.

(f) Documents relating to the storage unit, found during the search, were in a drawer at your house.

(g) The $72,050 of cash that was in your bedroom in the top drawer - which is to say not hidden, stashed, or secured.

1. I have had regard to the following material filed on your behalf:

(a) Plea submissions [38]

(b) Character references from

(i) Jialu Li, Mr Fan's friend, dated 19 May 2025.[39]

(ii) Fanzhong Meng, Mr Fan's friend, dated 19 May 2025[40]

(iii) Xina Mu, Mr Fan's friend, dated 19 May 2025.[41]

(c) Translated 'Certificate of No Criminal Record' from China, dated 19 May 2025.[42]

(d) Letter from Ms Elaine Mong, psychologist, dated 31 March 2025.[43]

(e) Kunlun Fan, Curriculum Vitae.[44]

(f) Bundle of degrees and certificates:

(i) La Trobe University Testamur, Bachelor of Finance dated 16 May 2019.[45]

(ii) Monash University Testamur, Master of Business Information Systems dated 27 September 2022.[46]

(iii) Certificates of completion from Performance Education and Australian Computer Society.[47]

(g) Letter from Department of Home Affairs dated 6 February 2024.[48]

(h) Bail undertaking dated 18 April 2024.[49]

1. You are now 34 years of age. Ms Chloe Lin has been your partner since October 2023. Although born in China, her life and future are here.
2. You grew up in China, where your parents still live. Your parents were in the business of property development in China and as a result, they were able to fund your time in Australia (from 2016 - at age 25) so that you could focus on your studies. They wanted a better life for you than the one that they had had.
3. In 2018, your parents' construction company went into liquidation. They fled from their creditors back to the rural village from where they came, which is a very poor community. Whereas they are in good health, they are not employed and in receipt of a pension from the Chinese Government. They live in a small apartment. They were subsequently unable to financially support you.
4. This meant you had to take on the financial responsibility of your own life in Australia, causing you to work and study 'around the clock' to make your situation tenable.
5. You continued to be in regular contact with your mother in China.

1. Despite having limited English, you earned two university degrees in Finance and Business Information.
2. After coming to Australia in July 2016, you completed a three-month course in English before being approved to undertake a Bachelor of Finance at La Trobe. You were conferred with that degree on 16 May 2019.
3. You then enrolled in a Master of Business Information Systems at Monash University. You were conferred with that degree on 27 September 2022.
4. As a result of your limited English and lack of work experience in Australia, you struggled to find employment in your chosen field.
5. To improve your prospects of employment, you enrolled in various courses through the Performance Education and Australia Computer Society, such as 'Accelerating Interview Skills' and 'Australian Workplace Environment'. you completed the 'Professional Year Program' on 31 May 2023.

1. Between 2017 and 2023, you undertook a series of employment positions to support yourself whilst pursuing your studies:

(a) January 2017: you were employed to undertake plastering and insulation work with a sub-contractor, Gang Li, earning $18 per hour working 14-hour days from 6am to 8pm.

(b) November 2017: you were employed as a pick-and-packer in Bundoora, earning approximately $11 per hour working 9am to 6pm. You left the factory due to it going into liquidation.

(c) February 2018: you were employed as a pizza delivery driver at Diamond Village earning $12 per hour working 5pm to 11pm.

(d) November 2018: you worked as a receptionist at Parkville Place serviced apartment whilst still undertaking work as a pizza delivery driver earning $12 per hour.

(e) From 2019, you were unable to secure casual and entry level employment due to the Covid-19 pandemic.

(f) May 2022: you were employed in an Asian supermarket.

(g) August 2023: you secured remote work as a data analyst with a mortgage broker at Pekmel Pty Ltd until the Department of Home Affairs advised you were unable to work from October 2023.

1. This, though, Mr Fan, is the impressive work history of an industrious, hardworking young man. You have improved yourself at university as well as taken on jobs that do not reflect your talent or expertise as a means of making ends meet. You have not taken shortcuts or easy fixes in life until this offending. That says something of your character, and the perceived desperate need you felt to offend in the way that you did.

1. Aside from a prior matter in 2020, I am very much guided by the references of those who know you and have provided letters in support of you in this case.
2. You are universally described as kind, selfless, generous and patient. You are described as a contributor to, not a burden on the community that you live in. You are absolutely committed to relieving any suffering that your parents might be experiencing. Your actions are seen as aberrant during your life and run counter to the way in which you were raised - as someone with integrity and respect.
3. The offending and the shame it has brought upon you and your family is palpable.

1. You were approached by a man named Hans (who is another Chinese national) to involve yourself in this offending. From what I can discern from the character references, and consistent with your character, you were motivated by a desire to relieve some of the financial stress of your family. It appears that they were at risk of losing their home. It seems to me that I can only really understand this offending in that context.
2. You expressed your reason for offending though to Xina Mu in a way that hints at a selfless, innocent explanation in that you set out to help out a friend by letting him use your storage unit and truck, and move some boxes, but there was obviously more to your involvement in this offending than that.

1. You have, as I said, a prior criminal record,[50] which amounts to a single incident dealt with in the Magistrates' Court more than four years ago. On 18 November 2020, you received a $250 fine without conviction for a charge of assault at Ringwood Magistrates' Court.
2. You have no other subsequent or outstanding matters. Self-evidently, you have no prior offences for dishonesty or drug-related offending.
3. You were not remanded for this offending and have remained on bail with strict conditions since charged.
4. Those bail conditions included reporting three times per week to Box Hill. You have complied with those bail conditions for nearly 19 months, which bodes well for your prospects.

1. You have attended on Elaine Mong, psychologist, at Laburnum Psychology since 30 May 2024.[51] You initially presented with symptoms of depression, anxiety, and stress.
2. You have since completed 15 sessions of psychological intervention from that service, ending in March of this year. You still reported experiencing low mood accompanied by poor sleep, diminished appetite, and social withdrawal, due to financial pressures and legal proceedings, although noted efforts to cope using cognitive restructuring and behavioural techniques. You expressed motivation to continue psychological intervention. The clinician opined that you will benefit from ongoing psychological intervention.
3. You are currently prescribed 30 milligrams of mirtazapine per day because of symptoms of depression.

1. You face a real prospect of deportation because of this offending. It is very hard to ignore the effect that a sentence of a particular type and duration will have on your future and your life. Of course that is the case for any offender, but in your case, there are identifiable triggers to deportation once a certain threshold is crossed.
2. You currently reside in Australia under a bridging Visa having applied for permanent residency in 2021. The prosect of being returned to China has hung over your head since being charged.
3. Section 501(3A) and (7) of the Migration Act 1958 (Cth) mandates Visa cancellation where an offender is sentenced to more than 12 months' imprisonment and where they fail the character test.

1. This Court cannot anticipate any executive action in relation to you. However, the risk of deportation is mitigatory (a point which was rightly conceded by the Crown[52]) because you may:[53]

(a) Receive your sentence with the expectation of being deported as a result. > > (b) Lose your opportunity of settling permanently in Australia. There can be no doubt that you have invested much into making this country your home.

(a) By the time of your plea, you have been living in Australia for nearly nine years. > > (b) On 14 July 2016, you arrived in Australia at the age of 25 on a student Visa. > > (c) You did not come here with the express intention of offending. > > (d) You then completed undergraduate and post-graduate courses whilst subject to a student VISA with the goal of finding employment and obtaining permanent residency through a 'skilled Visa' pathway. > > (e) As a result of your studies and subsequent student Visa ceasing, on 28 May 2022, you applied for post study work subclass 485 Visa. > > (f) This Visa would enable you to remain in Australia and work in your qualified field, being business information systems. > > (g) As a result of this application, you were placed on a bridging Visa C. A condition of that bridging Visa is that you do not work until the application is determined. > > (h) You are now awaiting a decision on your application for permanent residency from the Department of Home Affairs and that decision is dependent on the outcome of this matter. > > (i) Ms Lin your partner currently works in a real estate company, Fletchers, in Melbourne. She intends to remain in Australia and continue to build her life here.

1. Mr Hill KC and Mr Kelly say that, of course, one cannot predict how a Minister will exercise or will not exercise any discretion they have, but one can come to an educated, informed view, and it is one likely that favours the removal from Australia. 2. I did query on the plea whether or not deferring sentence in your case to a later date was valid; in that it might further illuminate matters touching on your prospects. That in turn may inform the sentence to be imposed. In the end I was persuaded that there was little utility in doing so. 3. In that process I was reminded by Mr O'Connor of this comment in Loftus; [54]

Although the potential that an offender may be deported following sentence is a relevant consideration in sentencing in the way explained above, that potential cannot control or dictate the sentencing outcome. It would be an error for a sentencing judge to impose a sentence, that would otherwise not be appropriate, for the purposes of avoiding the operation of the Migration Act.

1. Despite the obvious potential human cost of a sentence of more than 12 months to you, the sentencing exercise cannot be performed in a way where the sentence imposed is artificially compressed to bring about an outcome that is beneficial to you.

1. You are entitled to a significant discount for your plea of guilty, made at an early point in time after engaging in resolution discussions. In fact, it seems you made an offer to resolve this matter when it was still listed in the summary jurisdiction stream before the Moorabbin Magistrates Court. You made a further offer to resolve this matter after it was uplifted in the indictable stream.
2. The matter resolved at committal mention without any witnesses being

cross-examined. 3. You are entitled to a discount on sentence for at least the substantial utilitarian value of the plea. The timing of the plea is relevant to the weight to be given to the utilitarian value, as the benefits to the criminal justice system flow particularly from an early plea.[55] 4. Your plea has spared the time and expense of a committal, or case management in this Court, including sentence indications and/ or ultimately a trial. 5. This plea is also some evidence of remorse as it shows a willingness to take responsibility for your offending. Merely entering a plea of guilty does not establish remorse and proper evidence will be required.[56] Courts are cautious before accepting that a plea of guilty indicates remorse warranting more than a utilitarian discount, though the Crown accepts that I can treat it as evidence of some remorse in this case. Of course, evidence of remorse comes elsewhere in your case, which I will come to in a moment. 6. The value of your plea of guilty will be reflected in the s6AAA declaration that accompanies these remarks.

1. On the topic of remorse, I will turn to that now. Your remorse is apparent not only through your plea, but also from the supporting material relied on in the form of references, nearly all of which speak of your expressions of contrition.
2. Your Counsel focussed on one reference in particular - that is Jialu Li, who says:

When Kunlun spoke to me about the offence, he didn't make any excuses. He told me very seriously how deeply sorry he is for what he did. He regrets it immensely, and he understands how wrong it was. He told me, more than once, if he could go back in time, he would make a different choice without hesitation. His mother is already overwhelmed with financial stress - and now, she is fearing the possibility of losing her son where he may sit in a jail which is extremely shameful and will ruin his whole life for just one mistake. That weighs heavily on him, and it also weighs heavily on us, his friends.[57]

1. Genuine remorse is an important element in sentencing as it enhances the offender's prospects of reform and reduces the need for specific deterrence and community protection. Even genuine remorse, however, does not displace the need for the gravity of the offending to be reflected in the sentence.[58]
2. In this case I find that you express genuine contrition. What is more, you are specifically deterred from further offending.

1. In this case, principles of deterrence general, protection of the community and denunciation all still play roles in the sentencing exercise, as does parsimony.

1. I have noted already that the common law principle of parsimony (as reflected in s 17A of the Crimes Act 1914), provides:

(1) A court shall not pass a sentence of imprisonment on any person for a federal offence, or for an offence against the law of an external Territory that is prescribed for the purposes of this section, unless the court, after having considered all other available sentences, is satisfied that no other sentence is appropriate in all the circumstances of the case.

1. Put simply, prison is a sentence of last resort, but that point has been reached in your case.

1. Totality is a relevant sentencing consideration given the offending occurred on a single day. However, a degree of cumulation is necessary to reflect the additional criminality involved in the possession of further quantities of tobacco on Charge 2, and the offending the subject of Charge 3.

1. It was contended (and I should add rightly conceded) that you have excellent prospects of rehabilitation because:

(a) You have a very limited criminal history.

(b) You have no subsequent criminal history

(c) You have honoured your bail conditions since being charged

(d) You have an excellent academic history.

(e) You have an enviable work history

(f) You still enjoy family support

(g) You enjoy the support of your partner

(h) You have engaged in psychological counselling.

(i) You are remorseful.

1. While each case must of course be assessed on its own facts and circumstances, other sentences may be of assistance in guiding the court where such cases bear similar features or where they deal with relevant sentencing principles.
2. I have had the benefit of being provided with an albeit small selection of comparable cases that are of some utility in gauging current sentencing practices for both tobacco offences and proceeds of crime.

1. In CDPP v Nguyen[59] the offender pleaded guilty to an offence contrary to s 308-10(1) of the Taxation Administration Act 1953 (Cth), which carries a maximum of five years' imprisonment (where the offending here carries a maximum of 10). The offender possessed 890 kilograms of loose leaf tobacco and more than two and a half million cigarettes. The offending was committed over a period of five months. He had no criminal record and good rehabilitation prospects. The sentencing judge accepted that principle five of Verdins applied. A sentence of 20 months' imprisonment was imposed, with the offender to be released immediately upon a recognizance release order.

1. In R v YZ,[60] the offender pleaded guilty to one charge alleging an offence of possessing tobacco where reasonable to suspect that excise duty had not been paid, contrary to s 308- 10(1) of the Taxation Administration Act 1953 (Cth), and one charge of possession of tobacco products knowing they were imported with intent to defraud the revenue, contrary to s 233BABAD(2) of the Customs Act 1901 (Cth). On the charge contrary to s 233BABAD(2) alone, the offender possessed 5,683 kg of tobacco products, on which the revenue payable and avoided was more than $10,000,000. The offender had committed that offence while on a community corrections order. The offender was sentenced to an aggregate term of three years' imprisonment, with release upon entering into a recognizance release order after serving 12 months' imprisonment.

1. In R v Al Khafajir [61] the offender pleaded guilty to an offence contrary to s 308-15(1) of the Taxation Administration Act 1953 (Cth), and one offence contrary to s 400.9(1) of the Criminal Code (Cth) concerning dealing with money reasonably suspected to be proceeds of crime. The offender had been driving a truck from Melbourne to Sydney when he was stopped by police. There were 526,830 cigarettes on the truck, amounting to about 205kg of tobacco, on which about $377,000 in duty was payable. The offender dealt with $535,000 in cash. His involvement was towards the lower end of the scale in the operation, and he was not responsible for the sophistication of the scheme. He was a youthful offender with no relevant prior convictions and good prospects of rehabilitation. Both Bugmy and mental health considerations applied. An 18-month aggregate term of imprisonment was imposed providing for the offender's immediate release upon entering into a recognizance release order.

1. In R v MHM,[62] the offender was convicted after trial of one count of trafficking in a marketable quantity of methylamphetamine, one count of dealing in proceeds of indictable crime contrary to s 400.5(1) of the Criminal Code (Cth) ($59,920), and one count of possessing a controlled drug. On the proceeds charge, he was sentenced to 12 months' imprisonment (to be served cumulatively upon the sentence imposed upon the trafficking charge). A Commonwealth appeal against sentence was dismissed. The offender had significant prior record, and was an 'important cog' in the criminal operation. The WA Court of Appeal considered the sentence on the proceeds of crime charge to be lenient, but not manifestly inadequate.
2. In Jackson v The Queen,[63] the offender pleaded guilty to one charge of dealing with the proceeds of crime contrary to s 400.5(1) ($60,000), and one charge of importing a commercial quantity of cocaine (547kg). Relevantly, on the proceeds of crime charge, the offender was sentenced to two years' imprisonment, six months of which was to be served cumulatively upon the lengthy sentence for the importation offence. The offender was aged 64 at the time of sentence.
3. One can readily see that terms of imprisonment are routinely imposed for offences of this kind. The quantity of tobacco, and/or the quantity of the proceeds of crime and the state of mind of the offender all play in an important role in assessing the gravity of any particular offence. Depending on the presence of matters in mitigation, such a term is at times not ordered to be served immediately and yours is such a case.
4. Insofar as one can discern a range or current sentencing practices from the sample of cases provided to me above, a sentence of less than 12 months on Charge 1 alone would be by some measure it seems, lower than any other which has been imposed to date in other jurisdictions for similar criminality. That is not determinative of what I do of course; and I am not engaged in a de facto exercise in applying parity here either. One must bear in mind though that I am to sentence you for other offences in addition to Charge 1, which adds to your overall criminality and hence naturally adds to the sentence I impose here.

1. Where there are multiple federal offences the subject of an indictment, the Court may impose a term of imprisonment for those offences in two ways.
   1. First, I may set a single aggregate term,[64] which would commence on the day the sentence is imposed.[65] Second, I may set out individual terms for each offence. The Court is then required by the Act to direct when each sentence commences, [66] while avoiding any gaps between sentences.[67] For the sake of clarity, that is the approach I have adopted.
   2. Where the total effective head sentence is more than three years, the Court must[68] fix a single non-parole period.[69]
   3. But where the Court imposes a total effective head sentence of three years or less (but greater than six months)[70] the Court must (unless satisfied it is not appropriate to do so, having regard to the nature and circumstances of the offence and the offender's antecedents: make an RRO, otherwise known as a recognizance release order.
   4. Section 20(1)(b) of the Act permits the conditional release of an offender sentenced to imprisonment upon giving security of the kind referred to in s20(1)(a). The order may provide for the offender's immediate release, or release after the offender has served a specific period of imprisonment. Where a court imposes an RRO, the court must explain the purposes and consequences of that order.[71]
   5. Where the total effective sentence is six months or less, I may impose either an RRO or a straight sentence.[72]
   6. The sentence for the State offence must be a separate sentence to that imposed for the federal ones.[73]

1. It was submitted having regard to the gravity of the offending and the powerful matters relied on in mitigation, this is a case where the balance of sentencing considerations can be properly addressed by a sentence of imprisonment but having you released forthwith on an RRO. A concession was made by the Commonwealth (that was entirely proper in my view), that such a course was open to me.
2. Your Counsel said that this was an exceptional case and essentially warranted an exceptional outcome. The Crown concession I just mentioned though, did not extend to an acquiescence that it was open to me to impose a sentence of the duration that your Counsel urged on me.
3. Synthesising all the relevant considerations and circumstances of this case, imprisonment is clearly the only appropriate sentence, though I am, as I said, persuaded it is proper for you to be released forthwith.

1. Having considered the matter, and weighed the necessary sentencing considerations I sentence you as follows

Taxation Administration Act 1953 (Cth)

Possession of Tobacco of 500 kilograms or above (fault based) on 6 Dec 2023

10 years imprisonment, and/or the greater of the following, or both:

(ii) The amount mentioned in subsection 308-110(2) of the Taxation Administration Act 1953 (Cth), multiplied by 5.

s308-15(1)

Taxation Administration Act 1953 (Cth)

Possession of Tobacco of 100 kilograms or above (reasonable suspicion) on 6 Dec 2023 (rolled up)

2 years imprisonment and/or the greater of the following, or both:

(ii) The amount mentioned in subsection 308-15(2) of the Taxation Administration Act 1953 (Cth), multiplied by 5.

Sentence commences 6m before the expiration of sentence on charge 1

Deal with Proceeds of Indictable Crime of $50,000 or more (belief) on 6 Dec 2023

Sentence commences 7m before the expiration of sentence on charge 2

Crimes Act 1958 (Vic) Access to computer or computer system (fail to comply with direction to assist)

With conviction, good behaviour bond for 2 years.[75]

1. That would bring about a total effective sentence of 25 months, meaning two years and one months' imprisonment.
2. You are directed to be released forthwith and that requires explanation.

1. Where a sentence is imposed that exceeds six months, but is under three years, I must make an RRO.[76] An RRO means an order under s20(1)(b) of the Act.[77] 2. The process of consideration of whether to release the federal offender 'forthwith' under s 20(1)(b) of the Crimes Act 1914 (Cth) (that is to say, fully suspend the period of imprisonment) has been described as involving these three steps:[78]

(a) All the relevant sentencing factors (notably those under s16A) must be taken into account in deciding whether to order imprisonment and, if so, the length; > > (b) It may be necessary for the court to determine or consider whether, pursuant to s19AC(4), I should decline to make an RRO; and finally > > (c) In deciding whether to release the offender 'forthwith' the court must consider the same factors applicable to the imposition and fixing of the term of imprisonment. But the weight to be accorded to those factors and the manner in which they are relevant will differ as a result of the different purpose underlying each function.

1. A sentencing judge has a very wide discretion as to the appropriate period of imprisonment, if any, which must be served before an offender is released on recognizance. In R v Newton,[79] it was noted that this fact was recognised in R v Ruha where it was observed that:

Part 1B of the Crimes Act, under which sentencing judges are given a discretion to direct release on recognizance at any time from the commencement to the end of the term, is consistent with the application of the general principle that material differences in particular cases might justify materially different sentences, including in the specification of the pre-release period.

1. I concluded that it is appropriate to release the accused forthwith for the reasons contained in my what I consider reasonably detailed sentencing remarks
2. It is clear to me that such a course has an obvious benefit to you, but it is also the community who can be the beneficiaries of his industry and contribution to its number if he is given the opportunity to do so.
3. Having sentenced you to two years and one months' imprisonment, pursuant to s20(1)(b) of the Act, I direct that you be released forthwith, upon giving the security of a recognizance of $1,000 (which is not payable now, only upon any breach) on the condition that you be of good behaviour for two years from now.
4. It seems that I have to explain the purpose and consequences of making the RRO under s16F(2). I am making this order because firstly it is a term of imprisonment. It strikes the correct balance of relevant sentencing considerations. I do not consider it appropriate as I have said, to require you to actually be confined in circumstances where the objectives of the Act can be met by a sentence that allows you to live in the community and still makes you answerable to this Court for years after the commission dates of the offence.
5. Far being from no punishment at all, I repeat you have been sentenced to a term of imprisonment of two years and one month. It is not an unconditional release or a mere exercise in leniency. You will be required to be of good behaviour for years after now, with an active prison sentence hanging over your head, ready to be activated upon the slightest breach of its terms. Should you breach the order you will be returned to me for breach proceedings and could be re-sentenced in relation to this offending.

1. I will make the forfeiture orders by consent.
2. Pursuant to s6AAA of the Sentencing Act 1991 (Vic), but for your plea of guilty, I would have sentenced you to three years by way of recognisance release and I would have ordered that you serve 12 months, before being released.

1. [1] Section 465AAA(6) Crimes Act 1958 (Vic).
2. [2] Section 242(1)(a) and (6) Criminal Procedure Act 2009 (Vic). The related summary charge as filed contains a typographical error, referring to s 465AAA(2) of the Crimes Act 1958 - instead of the offence provision, s 465AAA(4) - where it states the section number of the offence. The offence is otherwise correctly stated. This does not affect the validity of the charge: Criminal Procedure Act 2009 s 9(1).

[3] Taken from Exhibit A; Amended Summary of Prosecution Opening for Plea dated 1 July 2025.

[4] 4,000 cigarettes in total. One carton of cigarettes contains 200 cigarettes (each carton contains 10 packets of cigarettes, each packet contains 20 cigarettes).

[5] 299,800.00 cigarettes in total. One carton of cigarettes contains 200 cigarettes (each carton contains 10 packets of cigarettes, each packet contains 20 cigarettes).

[6] 1,060 cigarettes in total (one packet of cigarettes contains 20 cigarettes).

[7] 315,200 cigarettes in total. One carton of cigarettes contains 200 cigarettes (each carton contains 10 packets of cigarettes, each packet contains 20 cigarettes).

[8] 120 cigarettes in total (one packet of cigarettes contains 20 cigarettes).

[9] 200 cigarettes in total. One carton of cigarettes contains 200 cigarettes (each carton contains 10 packets of cigarettes, each packet contains 20 cigarettes).

[10] 220 cigarettes in total (one packet of cigarettes contains 20 cigarettes).

1. [11] 1,420 cigarettes in total. One carton of cigarettes contains 200 cigarettes (each carton contains 10 packets of cigarettes, each packet contains 20 cigarettes).

[12] 6,600 cigarettes in total. One carton of cigarettes contains 200 cigarettes (each carton contains 10 packets of cigarettes, each packet contains 20 cigarettes).

[13] 420 cigarettes in total (one packet of cigarettes contains 20 cigarettes).

[14] 7,000 cigarettes in total. One carton of cigarettes contains 200 cigarettes (each carton contains 10 packets of cigarettes, each packet contains 20 cigarettes).

[15] 14,420 cigarettes in total (one packet of cigarettes contains 20 cigarettes).

[16] 200 cigarettes in total. One carton of cigarettes contains 200 cigarettes (each carton contains 10 packets of cigarettes, each packet contains 20 cigarettes).

[17] 320 cigarettes in total (one packet of cigarettes contains 20 cigarettes).

[18] 800 cigarettes in total. One carton of cigarettes contains 200 cigarettes (each carton contains 10 packets of cigarettes, each packet contains 20 cigarettes).

1. [19] 4000 cigarettes in total (one packet of cigarettes contains 20 cigarettes).

[20] 65,000 cigarettes in total. One carton of cigarettes contains 200 cigarettes (each carton contains 10 packets of cigarettes, each packet contains 20 cigarettes).

[21] 2,600 cigarettes in total. One carton of cigarettes contains 200 cigarettes (each carton contains 10 packets of cigarettes, each packet contains 20 cigarettes).

[22] 80 cigarettes in total. (one packet of cigarettes contains 20 cigarettes).

1. [24] 541.64 kilograms (storage unit) and 107.05 kilograms (Toyota Hi-ace van).

[25] 655,780 cigarette sticks (storage unit) and 67,680 cigarette sticks (Toyota Hi-ace van).

[26] Markarian v The Queen (2006) 228 CLR 357, [30]-[31].

[27] I am indebted to the clear way that this is expressed in the Crown sentencing submissions (Ex B) at [4], which I have essentially reproduced here.

1. [28] [2020] VSCA 185; (2020) 284 A Crim R 149, [54], noting that Barakat concerned an offence of importing tobacco products with intent to defraud the revenue, contrary to s 233BABAD(1) of the Customs Act 1901 (Cth), and an offence of conveying tobacco products, knowing they were imported with intent to defraud the revenue, contrary to s 233BABAD(2) of the Customs Act 1901 (Cth).

[29] Explanatory Memorandum to the Treasury Laws Amendment (Illicit Tobacco Offences) Bill 2018 (Cth).

[30] [2021] VSCA 292.

1. [31] In Tran, the Court noted that care is required to account for the different nature of the offending captured by different provisions concerning illicit tobacco: at [58].

[32] Tran [41] (Walker JA, with whom Priest JA agreed).

[33] [2016] VSCA 238.

[34] [61] (Redlich, Santamaria and McLeish JJA).

1. [35] R v Huang, R v Siu [2007] NSWCCA 259, [32] (Simpson, Howie and Hislop JJ).

[50] With no prior criminal history in China either.

1. [53] Guden v The Queen [2010] VSCA 196; (2010) 28 VR 288, 295 [27], see also Loftus v The Queen [2019] VSCA 24, [79] (Whelan AP and Niall JA).

[55] See DPP (Cth) v Thomas [2016] VSCA 237 [63].

[56] Barbaro v The Queen [2012] VSCA 288, [40].

[58] Lane v The Queen [2017] VSCA 289 at [42].

[59] [2023] VCC 421.

1. [60] [2025] NSWDC 98.

[61] 22 November 2024, Judge Lerve, NSW District Court.

[62] [2023] WASCA 172.

[63] [2020] NSWCCA 230.

[64] Subject to s 9(1) of the Sentencing Act 1991 (Vic), as picked up and applied by Judiciary Act 1903 (Cth) s 68(1).

1. [65] Sentencing Act 1991 (Vic) s 17, as picked up and applied by s 16E(1) of the Crimes Act 1914 (Cth).

[66] Crimes Act 1914 (Cth) s 19(2).

[67] Crimes Act 1914 (Cth) s 19(2).

[68] Unless the Court is satisfied that it is not appropriate to do so having regard to the nature and circumstances of the offence and the offender's antecedents: Crimes Act 1914 (Cth) s 19AB(3).

[69] Crimes Act 1914 (Cth) s 19AB(1).

1. [70] Crimes Act 1914 (Cth) ss 19AC(1), 19AC(3).

[71] Crimes Act 1914 (Cth) s 16F(2).

1. [72] Crimes Act 1914 (Cth) s 19AC(3).
2. [73] Fasciale v The Queen (2010) 30 VR 643, [27] (Weinberg JA, Ashley JA agreeing).

3. [74] Section 242(1)(a) and (6) Criminal Procedure Act 2009 (Vic). The related summary charge as filed contains a typographical error, referring to s 465AAA(2) of the Crimes Act 1958 - instead of the offence provision, s 465AAA(4) - where it states the section number of the offence. The offence is otherwise correctly stated. This does not affect the validity of the charge: Criminal Procedure Act 2009 s 9(1).

[75] I had originally taken the view that this conduct was worthy of a short term of imprisonment, with a modest degree of cumulation upon other sentences. I had formulated a sentence that saw you receive imprisonment for 3 months for this offence, with one month cumulated, resulting in a total effective sentence of 2 years 2 months. Mr O'Connor took me to s. 19AJ of the Crimes Act 1914 (Cth) which precluded such a state sentence as forming part of an RRO and conceded that in the unusual circumstances of this case, and in order to give effect to my intention for you not to be actively imprisoned at all, I could deal with this charge by way of bond or fine. Accordingly, I imposed a good behaviour bond under the Sentencing Act 1991 for 2 years with conviction. Such a period of supervision corresponds with the duration of the RRO.

1. [76] A court may decline to make a Recognizance Release Order if (a) the court is satisfied that such an order is not appropriate, having regard to: (i) the nature and circumstances of the offence or offences concerned; and (ii) the antecedents of the person; or (b) the person is expected to be serving a State or Territory sentence on the day after the end of the federal sentence, or the last to be served of the federal sentences: s 19AC(4) of the Act. If the sentence does not exceed 6 months, the imposition of a Recognisance Release Order is discretionary per s 19AC(3) of the Act.
2. [77] Section 16 Crimes Act 1914 (Cth).

[78] De Hollander v R [2012] WASCA 127 [86]; Larkin v R [2012] WASCA 238 [75]-[76].

[79] R v Newton [ 2010] QCA 101 at [39]