Kao v The Queen [2019] VSCA 84

Ms A Pavleka, Solicitor for Public Prosecutions (Cth)

1 On 18 August 2017, the applicant was sentenced as follows:

Dealing with money reasonably suspected of being proceeds of crime

Dealing with money reasonably suspected of being proceeds of crime

Attempt to possess a commercial quantity of a border controlled drug

15 years' imprisonment with a non-parole period of 11 years

2 On 1 August 2018, Whelan JA refused leave to appeal against sentence on two grounds advanced by the applicant. Those grounds were:

1. The sentencing discretion miscarried because the sentencing judge in assessing the objective gravity of the applicant's offending on Charge 1 'double counted' the 'dealings' of the applicant.
2. The sentence imposed on the charge of an attempt to import a commercial amount of a border-controlled drug was manifestly excessive.

3 The applicant elected to renew his application on 13 August 2018. Additionally, he sought leave to add two grounds of appeal at the hearing of this application. The additional grounds are:

1. The individual sentences, orders for cumulation, total effective sentence and non-parole period are manifestly excessive, having regard to the applicable maximum penalties and significant factors in mitigation, including the applicant's early guilty pleas, remorse, youth and lack of prior convictions.
2. The learned sentencing judge erred in finding that the applicant was the Victorian head of an international drug syndicate, in that:

(a) such a finding was not open; and/or

(b) the applicant was denied procedural fairness in relation to the finding.

4 At the time of his arrest, the applicant was aged 22 and his co-accused, Mr Ip, was aged 25. Both men are Chinese nationals. Ip was staying with the applicant at Unit 3006, 5 Sutherland Street, Melbourne. The applicant was a resident in Australia under a higher education visa. Ip entered Australia on a working holiday visa.

5 On 1 March 2016, the applicant attended at Global Forex Victoria. He transferred $38,730 to Liu Jihui at Industrial and Commercial Bank of China ('Transaction 1').

6 On 11 March 2016, the applicant attended at Global Forex Richmond. He transferred $98,025.50 to Liu Jihui at Industrial and Commercial Bank of China ('Transaction 2').

7 On the same day, the applicant received into his ANZ Access Advantage Cheque Account a deposit of $200,000. He then transferred that sum into his ANZ Online Saver Account ('Transaction 3').

8 On 15 March 2016, the applicant transferred $200,000 into his ANZ Access Advantage Cheque Account and subsequently withdrew that amount ('Transaction 4').

9 On 16 March 2016, in a total of six transactions, the applicant transferred $199,880 to the Bank of Communications Guangdong, China ('Transaction 5').

10 On 18 March 2016, the applicant attended at Global Forex Victoria and transferred $30,503 to Chan Chin Yin in Hong Kong, China ('Transaction 6').

11 In total, between 1 March 2016 and 18 March 2016, the applicant dealt with $567,138. This figure represents the total of all amounts incoming or outgoing from the applicant's accounts. It does not include internal transactions.

12 The above conduct in paragraphs 5 to 10 constituted charge 1 on the indictment.

13 On 29 March 2016 at 5.30 am, the applicant and Ip flew to Sydney. The applicant checked into a hotel for the day. At 8.10 pm on that day, both the applicant and Ip boarded an overnight train to Melbourne. They were intercepted and searched by uniformed police at Southern Cross Station. The applicant was found to be in possession of $206,950. Ip was found to be in possession of $150,050.

14 Both men were arrested. The Sutherland Street apartment was searched. An amount of $15,065 was seized, as was a money counting machine.

15 Charge 2 is constituted by the events set out in paragraph 13 of these reasons. The monies seized at the Sutherland Street apartment are not part of any charge.

16 The applicant made a 'no comment' interview. He was charged and released on bail on 30 March 2016.

17 On 14 April 2016, a consignment of 55 udon noodle packets was identified by investigators at the Australia Post Melbourne Gateway Facility. It was forensically examined and found to weigh 10.96 kilograms. The noodles contained methamphetamine at a purity of 16.6 per cent. The total quantity of pure methamphetamine was calculated to be 1.826 kilograms. A commercial quantity is 750 grams. The consignment was addressed to 'Timmy Leung, Unit 3016, 5 Sutherland Street, Melbourne'.

18 Investigators replaced the contents of the noodle consignment with an inert substance to effect a controlled delivery.

19 On 20 April 2016, an undercover police operative ('UCO') assumed the identity of an Australia Post delivery driver and carried out a controlled delivery of the udon noodle consignment. On arrival at 5 Sutherland Street, the UCO attempted to use the intercom to contact the occupants of Unit 3016. The intercom display indicated that Unit 3016 did not exist. At this time, the applicant was standing in the foyer. He approached the UCO and offered to assist him in using the pager system. The applicant stated, 'Don't worry, he is coming down anyway'.

20 The co-accused, Ip, then approached the UCO, stating that he was 'Timmy from Unit 3016'. The UCO asked for some identification. Ip procrastinated and then said, 'I have a problem. Timmy is at school ... he will not be back until this afternoon.' The UCO agreed that Ip could sign for the parcel, which he did. Ip carried the parcel inside the foyer of 5 Sutherland Street. The applicant went in with him.

21 A lawfully intercepted conversation was recorded. This conversation occurred within Unit 3006. The participants were the applicant, Ip and Chi Wan Tsang (who was the applicant's girlfriend):

Applicant: We are always lucky, I tell you ... I was smoking downstairs and I saw this guy pressing 3016.

I knew it was coming ... (unintelligible) ... and this guy arrived at the same time ... saw him pressing 3016, he actually came over and asked me ... (unintelligible)

Tsang: This must be it, so fake.

Applicant: Fuck. All ... all udon, seriously ... fuck ... I think it's in the udon ... don't tell me it's in the udon ... look the same ... why did they send udon ... fuck ... did mention about sending udon though ...

Tsang: Should you talk to them ... I heard you talking to them.

Applicant: (Laughs) No joking ... I don't believe it. How do you explain it? A whole box of udon.

Ip: A whole box of money. It's in the udon.

Tsang: How do we sell udon?

22 The conversation then centred around the weight expected to be delivered of the drug and also the process of how to extract the methamphetamine from the noodle packets.

Ip: Have to extract it by cooking.

Applicant: I think it's in the udon. Have to try it first, just a little bit. Might die from it.

Tsang: Yes. Smell it, you'll be able to tell.

Applicant: Hang on, let's count, how many do we have, 2, 4, 6, 8, 10 ... 2kgs ... 12 ... 2, 4, 6, 8, 10, 12, 14 ... I don't think all of these are ... The whole box?

Tsang: I still think the ones that look more 'plastic' are the one that's questionable.

Applicant: Why are you unpacking them?

Ip: To have a look.

Applicant: Well, they told me they would send vinegar in the beginning, 200g per pack.

Tsang: How about sort out all the 'sample' ones and weigh them together? The 'sample' ones ... hang on ...

Ip: It's 'noodle' if there's no 'sample' written on it.

Tsang: Sample, this one ... this one is not ...

Ip: This one is not ...

Tsang: Grab a scale. They said it should be 2kg. So they'll know we've unpack their stuff.

Applicant: These aren't FAI GOR's.

Tsang: Whom then?

Applicant: These are for AH FEI. Well, AH FEI did tell me...this time is udon, all udon.

Ip: All udon.

Applicant: Yes. Won't be able to put in four bottles.

Ip: But like you said ... what if there's some smell, we'll be stuffed.

Tsang: Open one pack, burn a strand and have a look.

Applicant: Burn one strand?

Tsang: There'll be smell when you burn it. But there'll be some smell for sure, just like when you smoke, if you don't smoke, you'll know it's a different smell ... stinks. Seriously, if you don't smoke you'll know when it smells different.

23 At 11.41 am on 20 April 2016, police attended the Sutherland Street apartment and executed a search warrant. The applicant, Ip and Tsang were arrested. Several packets of noodles had been removed from the noodle consignment. The consignment was sitting open on the kitchen bench. Noodles had been removed from individual packets and were placed in liquid in a saucepan.

24 Investigators also located and seized 200 glass vials in the laundry above the dryer. These glass vials had been consigned to a Timmy Leung and collected by him from the Box Hill South post office on 13 April 2016. Leung had been engaged by the applicant to receive this shipment. Unbeknown to Leung, Ip or the applicant, investigators had previously detected that these vials contained liquid methamphetamine and replaced it with an inert substance. At the applicant's direction, Ip received the vials, now containing the inert substance, and conveyed them to the Sutherland Street apartment. The liquid methamphetamine detected weighed 1.4234 kilograms with a purity of 36.8 per cent. The total quantity of pure liquid methamphetamine was calculated to be 523.8 grams.

25 Upon interview in relation to these matters, it is sufficient to state that the applicant gave a demonstrably untruthful account of his knowledge and activities.

26 In total, the applicant attempted to possess over 2.3 kilograms of pure methamphetamine. The commercial quantity for that border controlled drug is

750 grams pure. This means the applicant attempted to possess more than three times the prescribed commercial quantity.

27 Senior Counsel who appeared for the applicant submitted:

(a) A prison term was inevitable.

(b) The applicant's visa will be revoked, although it is not a certainty that he will be deported upon his release. The applicant does not rely on deportation as a mitigatory feature in this case.

(c) The applicant was 'the head of the Melbourne warehouse crew'.

(d) The applicant was responsible for the drugs once they had been delivered by others into the country.

(e) The drugs were 'to be collected by a third party who arranged others to deal with it'.

(f) Counsel accepted that the applicant was not a 'front line bunny' planted to receive the drugs.

(g) The conversation about opening a packet of noodles was related to determining which 10 of the 50 packages contained the methamphetamine.

(h) The applicant was higher 'up the line' of hierarchy in the combination than either Ip or Tsang.

(i) The applicant was not the organiser and it is reasonable to conclude that someone else would have collected the drugs.

(j) The applicant gave Ip a direction to collect the vials of methamphetamine from Leung.

(k) The applicant is still young - aged 22 at the time of offending.

(l) The applicant will not reside in Australia after his sentence is served.

(m) The applicant has concerned and supportive parents who will welcome him home. They are high achieving professionals. The applicant's parents and brother were present at court.

(n) The applicant suffered from depression as a teenager and has achieved little academically. He attended Ivanhoe Grammar, Taylors College and Swinburne University. He developed alcohol and drug problems, and mixed with the wrong people.

(o) The applicant became involved in money laundering and then receiving drug packages in Victoria.

(p) When the applicant is released, with the support of his family, he has good prospects for rehabilitation.

28 Senior Counsel agreed that the foundations of the plea were his client's plea of guilty, some remorse, good prospects for rehabilitation, increased burden in custody owing to his isolation, and perhaps some mental health aspects arising from the fifth limb of Verdins.[1]

29 Senior Counsel specifically disavowed reliance on coercion. It did not reduce the applicant's criminality. He further submitted:

(a) The applicant has used his time in prison very positively.

(b) Random urine tests have all tested negative.

(c) The applicant did not come to Australia to commit an offence; he is remorseful and pleaded guilty at an early stage. The applicant has good prospects for rehabilitation. He qualifies for consideration for the fifth factor of Verdins, based on the opinion of Dr Barth. He will be isolated in prison, which is perhaps a stronger factor.

(d) Upon specific inquiry from his Honour, he repeated that he disavowed coercion, threats and 'the debt' as relevant to the plea in assessing that his Honour ought be careful not to double count the applicant's criminality.

(e) His Honour was cautioned against double counting. Transactions 5 and 6 were said to involve the one $200,000 sum. Transactions 3 and 4 involved a different $200,000 sum.

30 The written submissions broadly covered the same ground.

31 Senior Counsel tendered a folder of references and written submissions. The applicant's father gave evidence. He described his son developing depression as a 12 or 13 year old boy and being medicated as a result. He had difficulties at school and dropped out for a time. It was thought the applicant might benefit from going to school in Australia and at 17, he attended Ivanhoe Grammar and lived with a host family. He dropped out and after a time, went to Taylors College. He completed Year 12 and commenced studying at Swinburne for a diploma in screen and media. The family bought him an apartment in Melbourne and gave him a modest monthly allowance.

32 Dr Barth's report was part of a folder of material tendered on the plea. This also included character references, a written apology and certificates of achievement from within the prison system. Dr Barth is a clinical psychologist who consulted with the applicant on two occasions in July 2017 for medico-legal purposes. The applicant suffers from Cannabis-Use Disorder at a 'severe' level and Alcohol-Use Disorder at a 'moderate' level. Both disorders are diagnosable under DSM-5 criteria and both are in sustained remission in a 'controlled environment'. The applicant meets the criteria for a diagnosis of 'Adjustment Disorder with Mixed Anxiety and Depressed Mood' by DSM-5 criteria. He has problematic personality traits and is very immature. Dr Barth remained guarded about the applicant's prognosis.

33 The respondent contended that, on the proceeds of crime charges, general deterrence was of particular significance. Counsel referred to Kim v The Queen[2] and R v Jiao.[3] The amount dealt with is the primary identifier of the maximum penalty. In this case, the amount is $567,138 - 5.67 times the monetary threshold. The proceeds of crime offences occurred over 18 days and involved a number of separate transactions. Charge 1 involves a 'rolled up' count and is objectively a more serious example of this offence.

34 Insofar as the drug offence is concerned, the amount seized was 3.12 times the minimum for a commercial quantity. The street value of the liquid methamphetamine was between $157,000 and $261,900. The street value of the methamphetamine found in the noodles was between $2.49 million and $4.98 million. As to the applicant's role, counsel for the respondent stated:

I don't think that there's much dispute between the parties, he is - has the senior role in the syndicate in Australia, he is directing other people, including Mr Ip, his role is clearly a trusted one or those involved in the organisation, and that is because he provides the names and addresses on the parcels ... He is directing others to take delivery of parcels, he is directing others as to money transactions ... clearly in the listening device he talks about members of the organisation such as Ah Fei and Fai Gor.[4] He has recruited Mr Ip into the offending. In terms of the first consignment, he has directed Mr Ip to obtain that, but it's clear that he has unpacked that consignment and examined the contents, given his fingerprints are on it [and he has] secreted it in the laundry ... The offending occurs in an apartment that his mother owns and has given him to live in ...

35 Counsel provided the court with written submissions as to comparative sentences and a table of comparative sentences under s 400.9(1) of the Criminal Code 1995 (Cth) ('Act').

36 Senior Counsel for the applicant, upon invitation, did not seek to challenge any of the matters raised by the prosecutor.

37 The judge noted that the summary of agreed facts was extensive and saw no need to descend into the full detail of the offending. He commented that the drug offending was very serious. The 'proceeds' offending was serious in its own right. His Honour then made the following observations concerning the applicant:

(a) He elected to give a false account to police. This is not an aggravating feature. The mitigating features of cooperation and honesty are, however, absent.

(b) Coercion as a mitigating feature was abandoned by the applicant's counsel.

(c) General deterrence is an important consideration in proceeds of crime matters. So too is the amount transacted, the period over which the transactions occur and the number of transactions.

(d) The amount for charge 1 for the applicant was over $500,000 with a number of dealings 'rolled up' into that single charge. His Honour stated, 'I take care not to doubly count the amounts described in the summary.'[5]

(e) The applicant recruited Ip for the transportation of cash from Sydney to Melbourne.

(f) The applicant was the 'man in charge at this end of what was an international syndicate'.

(g) Attempting to possess a drug is not in a less serious category than importing the drug.

(h) The applicant recruited Ip and Leung to collect the first shipment. The applicant must have provided Leung's address and name to the syndicate.

(i) In each case, involvement was driven by financial gain.

(j) The applicant was highly placed and a critical part of an organised international criminal syndicate. He had knowledge of players above him in the hierarchy, and had significant control and autonomy - evidenced by his ability to recruit others, store extremely valuable drugs and handle large sums of money.

(k) His Honour reviewed the applicant's background, educational attainments, prospects for rehabilitation and youth.

(l) General deterrence remains an important sentencing factor, despite the applicant's youth. The community must understand that those minded to commit these types of drug related offences face severe punishment. His Honour commented that he gave comparatively less weight to specific deterrence and protection of the community.

(m) His Honour then addressed parity of sentence. In the context of comparing the applicant's role with Ip's, the judge said, 'You are the Victorian head, Mr Kao'.[6]

Ground 1 - The sentencing discretion miscarried because the sentencing judge, in assessing the objective gravity of the applicant's offending on charge 1, 'double counted' the dealings of the applicant

38 It will be recalled that the prosecution case on the plea concerning charge 1 involved a number of different transactions where it was said that the applicant 'dealt' with the proceeds of crime. In summary:

(a) Transaction 1: On 1 March 2016, the applicant transferred $38,730 to Liu Jihui, Industrial and Commercial Bank of China.

(b) Transaction 2: On 11 March 2016, the applicant transferred $98,025.50 to the same account as above.

(c) Transaction 3: On 15 March 2016, the applicant received a deposit of $200,000. He transferred this from his cheque account to his online saver account.

(d) Transaction 4: On 15 March 2016, the applicant transferred $200,000 from his online saver account back into his cheque account. He subsequently withdrew that amount.

(e) Transaction 5: On 16 March 2016, in a total of six transfers, the applicant transferred $199,880 to a Chinese bank account.

(f) Transaction 6: On 18 March 2016, the applicant transferred $30,503 to Chan Chin Yin in Hong Kong, China.

39 The applicant contends that the $199,880 the subject of Transaction 5 was the same money that was the subject of Transactions 3 and 4. Thus, so the argument runs, the applicant has been punished for dealing with $200,000 the subject of Transactions 3 and 4, and for $199,880 (i.e. $200,000 minus the transfer fee) the subject of Transaction 5. This money, the subject of Transaction 5, is inferentially the same money as the subject of Transactions 3 and 4.

40 In our view, this argument cannot be sustained. Section 400.2 of the Act relevantly provides that a person 'deals with money or other property' if the person does any of the following:

a) receives, possesses, conceals or disposes of money...;

b) imports money ... into Australia;

c) exports money ... from Australia;

d) engages in a banking transaction relating to money ...

(a) There was no evidence that the $199,880 the subject of Transaction 5 was part of the $200,000 which was the subject of Transactions 3 and 4.

(b) Even if it was accepted that the $199,880 the subject of Transaction 5 was part of the $200,000 the subject of Transactions 3 and 4, it was a separate and distinct 'dealing with money', and could be considered separately for the purposes of calculating the total amount of money that has been 'dealt with'.

42 We can see no reason to conclude that the receipt of $200,000, and the subsequent withdrawal and distribution of a similar sum (after transferring it internally between accounts) ought not be considered as separate and distinct criminal acts. With respect, we agree with Whelan JA, who, when refusing the application for leave to appeal on this ground, observed:

Strictly speaking, all the relevant transactions were separate dealings, as counsel for the applicant recognised.[7]

43 While there is a certain practical attraction to the applicant's 'double counting' argument, and the sentencing judge stated he was careful to avoid 'double counting', the fact is the calculated end sum of $567,130 does not involve 'double counting'. It is no more than the total sum involved in the external transactions that constituted the 'rolled up' charge 1. The sentencing judge was entitled to proceed on the basis that the applicant dealt with a total sum of $567,130.

44 In our view, the applicant's better argument on charges 1 and 2 concerns manifest excess. We shall consider it later in these reasons.

45 Leave to appeal on proposed ground 1 is refused.

46 It is convenient to consider ground 4 before grounds 2 and 3, which will be considered together.

Ground 4 - The learned sentencing judge erred in finding that the applicant was the Victorian head of an international drug syndicate, in that:

(a) such a finding was not open; and/or

(b) the applicant was denied procedural fairness in relation to the finding.

47 In his written submissions, the applicant points to the two sentencing remarks made by his Honour:

(a) 'It is, after all, said that you were the warehouse manager at the Victorian end. That is, the man in charge at this end of what was an international syndicate.'[8]

(b) 'You are the Victorian head, Mr Kao.'[9]

48 The applicant contends that that statement - that the applicant was the 'Victorian head' of an international drug syndicate - was not open on the evidence and represented a mischaracterisation or misinterpretation of defence counsel's submissions.

49 Senior Counsel for the applicant on the plea, so it was argued, had accepted no more than that the applicant was the 'warehouse manager of the Melbourne crew'. It was submitted on this appeal that this phrase was used by Senior Counsel as a convenient description of the applicant's activities, which involved storing the two consignments at his mother's apartment and exercising some hierarchical control over Ip and Tsang. The phrase also provided a shorthand indication of what the applicant's role was not. Senior Counsel for the applicant submitted:

[N]amely, that he did not import the drugs; that he did not determine who the drugs were to be passed to; and that he was not to be involved in the sale of the drugs. He was responsible for storing the drugs for a certain period of time after they came into the country; however, he was not 'the man in charge' of the Victorian end of an international syndicate.

50 It is instructive to consider what the applicant's actual role was. We consider that there is more utility in identifying what the applicant actually did for the syndicate than the application of labels to his role. In short, the applicant:

(a) provided storage for both consignments of drugs;

(b) provided his own street address for delivery of the second consignment;

(c) recruited Leung to collect the first consignment and arranged for him to provide it to Ip for delivery to the applicant's address;

(d) recruited Ip to the combination;

(e) opened both packages to inspect, and in the case of the noodles, to test the contents;

(f) at the least, was part of a discussion with Tsang about the sale of drugs and the means of extraction of methamphetamine from the noodles;

(g) liaised directly with principals in China; and

(h) transferred large sums of money, reasonably suspected to be the proceeds of crime, to China. Whilst these sums of money cannot be demonstrated to be related to the impugned consignments, the fact that the applicant was transferring large sums of money to China bears circumstantially on the likelihood that he was a trusted and relatively senior member of the syndicate.

51 There is no evidence of the applicant taking orders or receiving instructions from any Victorian based person.

52 Given these factors, we consider it was open to his Honour to conclude that the applicant was the Victorian based person responsible for facilitating the importation of both consignments. His Honour summarised his conclusions in the following passage of the applicant's sentence:

As is probably almost always the position, there is so much that I do not know about the nature of the syndicate or your planned future activities. But even on your own counsel's description, Mr Kao, you were a highly placed and critical part of an organised international criminal syndicate.[10]

53 In our view, his Honour was saying no more than this when he described the applicant as the 'Victorian head'. There was an abundance of evidence to justify this conclusion.

54 The applicant was not denied procedural fairness. All the circumstances that combined to lead his Honour to the conclusion that the applicant was the 'Victorian head' were identified on the plea in discussion between his Honour and the applicant's very experienced Senior Counsel, and then were discussed at some length. In the midst of the discussion as to the applicant's role, the following exchange occurred:

Mr Dunn: That's right, Your Honour. And so if I go back to where I was, Your Honour, and Your Honour, I don't want to be pushing against a closed door here.

His Honour: Push all you like.

Mr Dunn: Well, I

His Honour: Push all you like. Seriously, I mean

Mr Dunn: I understand the spirit of what's Your Honour saying and Your Honour, you will understand

His Honour: Yes. Look, I can sit here silently and I know judges have done that in the past.

Mr Dunn: No, no.

His Honour: I don't think it's a great idea. I think it's better that you have some sense and

Mr Dunn: Your Honour, I've appeared before Your Honour before and I always welcome knowing where Your Honour's at...

55 We consider that his Honour, in discussion, was forthright and expansive in his reservations about the applicant's role. The applicant had ample opportunity to address the issue of his position in the syndicate hierarchy and, in fact, did so. The fact that his Honour did not use a shorthand label to characterise the applicant's role until he imposed sentence is, in our view, immaterial. The significant underlying circumstances that were captured by that label were fully canvassed.

Ground 2 - The sentence imposed on the charge of an attempt to import a commercial amount of a border-controlled drug was manifestly excessive

Ground 3 - The individual sentences, orders for cumulation, total effective sentence and non-parole period are manifestly excessive, having regard to the applicable maximum penalties and significant factors in mitigation, including the applicant's early guilty pleas, remorse, youth and lack of prior convictions

57 It is convenient to consider these proposed grounds together. The applicant contends that the sentences imposed on each individual charge are manifestly excessive and that the orders for cumulation are also manifestly excessive, resulting in a total effective sentence that suffers from the same error. He also contends that the minimum term imposed before parole eligibility is manifestly excessive.

58 The applicant submitted that the following factors were given insufficient weight in the sentencing exercise:

• Imprisonment more burdensome because the applicant is a foreign national serving a term of imprisonment in a foreign prison

• Some application of the fifth proposition of Verdins

59 The applicant further contended that the sentences imposed on charges 1 and 2 were 66 per cent and 39 per cent of the maximum penalties, respectively. Given the significant matters in mitigation, the applicant submitted that those sentences are outside the range of sentences which were reasonably open to the sentencing judge.

60 In sentencing appeals, this Court is reviewing the exercise of a discretionary judgment; it is not conducting a rehearing of the plea in mitigation.[11] It is well-established that 'manifest excess' grounds are difficult to sustain. The burden rests with an applicant or appellant to establish that the sentence imposed was so high as to be wholly outside the range of sentences available to the judge.[12] The argument can be directed at the individual sentences, orders for cumulation, non-parole period, total effective sentence, or any combination of these.[13]

Charge 3 - Attempt to possess a commercial quantity of a border controlled drug

61 It must be immediately observed that the sentence of nine years and eight months' imprisonment for this offence is quite stern for a 22 year old first offender. In our view, there were sound reasons to justify a sentence of this magnitude. The maximum penalty set down for this offence is life imprisonment; this type of offending is viewed by the legislature as of the utmost gravity. It provides a yardstick, along with other relevant factors, against which a sentence is to be considered.[14] As we have observed, the charge involved the attempted possession (in two shipments) of 2.34 kilograms of pure amphetamine. It was a 'rolled-up' charge and thus the criminality for which the applicant was to be sentenced was greater (all other things being equal) than a charge involving only one criminal episode.[15] The offending occurred very shortly after the applicant had been released on bail, and as we have discussed, the applicant occupied a critical role in the syndicate hierarchy.[16] The wholesale value of the two shipments was said to be between $997,220 and $1.59 million. The street value was said to be between $2.49 million and nearly $5 million. None of these values were disputed on the plea.

62 It is apparent from the extensive reasons for sentence that his Honour took into account all of the factors that the applicant now says were given too little weight. The applicant, under these grounds, does not contend that there is a specific identifiable error; rather, the Court is invited to infer that the sentence imposed on charge 3 is so egregiously high that it bespeaks error.

63 In our view, the applicant has not established this. General deterrence was correctly identified by his Honour as a powerful sentencing principle in this type of offending.[17] His Honour also correctly identified youth and prior good character as important sentencing considerations, whilst acknowledging that in serious offending, they will often surrender ground to other more punitive sentencing considerations.[18] We consider that his Honour was correct, in this instance, to consider that the need for general and specific deterrence, punishment, denunciation and community protection meant that there was less weight available to be allocated to the applicant's youth. With respect, it was put by his Honour with great clarity:

The more weight that must be given to punishment, deterrence and community protection, the less weight can be afforded to youth, though I never lose sight of it here.[19]

64 In our view, the applicant has failed to establish that the sentence imposed on charge 3 was manifestly excessive.

**Charges 1 and 2 - ** Dealing with money reasonably suspected of being proceeds of crime

65 It will be recalled that both charges 1 and 2 involved the applicant dealing with money reasonably suspected of being proceeds of crime. Charge 1 was a 'rolled up' count involving all the transactions we have identified in paragraph 38 of these reasons. For reasons we have expressed at paragraphs 42 and 43 above, his Honour was entitled to proceed on the basis that the applicant dealt with a total sum of

$567,130. Charge 2 involved a single transaction where the applicant flew to Sydney with his co-accused, Ip, and then, by train, returned to Melbourne where he and Ip were arrested. The applicant was in possession of $206,950 in cash.

66 The applicant contends that the head sentences imposed on charges 1 and 2 - two years and 14 months' imprisonment, respectively - are both manifestly excessive. This argument is underpinned largely by reference to the maximum penalty available for both offences: three years' imprisonment. The sentences are manifestly too high, it is contended, when the plea of guilty and other mitigatory factors are taken into account.

67 After some anxious deliberation, we have concluded that the sentences imposed on charges 1 and 2 are manifestly excessive. Division 400 of the Act is entitled 'Money laundering'. It contains a series of offences which are structured according to the amount of money 'dealt with' and the state of mind of the offender. Very serious examples of laundering, committed with full knowledge of the provenance of the money or property dealt with and involving money or property valued at $1 million or more, carry a maximum sentence of 25 years' imprisonment. Other lesser offences involve lesser sums and less criminally culpable states of mind. An offender may be reckless or negligent to the fact that the money or property is the proceeds of crime.

68 Sitting at the bottom of this structured series of offences is s 400.9. Where a person deals with money which is reasonably suspected to be the proceeds of crime, and the value of the money is $100,000 or more, no mental element concerning the provenance of the money is required to be proved at all. The maximum penalty for this type of offending is three years. It is impermissible to sentence an offender for a s 400.9 offence as if he or she had knowledge, or was reckless or negligent, as to the provenance of the money 'dealt with'. To do so would be to sentence on a view of the facts which should be the subject of a separate, more serious, discrete offence.[20]

69 We are therefore troubled by the following passage in his Honour's reasons for sentence:

As to the proceeds of crime matters, it is obvious that general deterrence is an important consideration. So too the monetary amount, the period of the activity and the number of transactions. The actual role and context is also obviously important. Well, here, the amount for charge 1 for you, Mr Kao, was over $500,000 with a number of dealings rolled up into that single charge. I take care not to doubly count the amounts described in the summary. For you on charge 4, Mr Ip, it was $200,000. That related to travel to Perth specifically to engage in the conduct. Then there are the Southern Cross station offences. Well, that is where you were each caught, you with over $206,000 cash, Mr Kao, and you with a touch over $150,000 cash, Mr Ip. Again, there is a clear aspect of deliberation here. This was not spontaneous offending at all. This involved the flight together up to Sydney and then the return on the same day by train. It was distinct offending from the earlier offending and related to sizeable quantities. You, Mr Kao, had recruited Mr Ip, as you had recruited others. This was highly professional, organised and highly premeditated criminal activity.[21]

70 If, by these remarks, his Honour intended to convey that the applicant dealt with either the monies the subject of count 1 or count 2, or both, knowing that it was the proceeds of crime or being reckless or negligent about that fact, then his Honour was in error in reasoning this way.

It is well settled that a judge may take a different view of the facts to the way they are presented on the plea. Those facts may aggravate or mitigate the seriousness of the offence charged. But the judge may not sentence the offender for conduct which would constitute a more serious offence than that charged.[22]

72 It is unnecessary to resolve this issue because, as we have observed, we have concluded that the sentences imposed on charges 1 and 2 were manifestly excessive. In our view, on charge 1, a sentence of two years' imprisonment on a three year maximum - that is, 66 per cent of the available maximum for a 22 year old first offender, who pleaded guilty and with all the mitigating factors we have set out in paragraph 58 - is wholly outside the range of available sentences. With more hesitation, we have also concluded that the sentence of 14 months' imprisonment on charge 2 - nearly 40 per cent of the available maximum sentence - is also manifestly excessive. The applicant cannot be sentenced for the apparent 'highly professional, organised and highly premeditated criminal activity', if that activity fixes him with knowledge that would make him guilty of a more serious offence. We consider that the applicant's age, lack of prior history, plea of guilt, prospects for rehabilitation, solid family support, isolation in custody and current psychological state, lead to the conclusion that the sentences imposed on charges 1 and 2 are both wholly outside the range of available sentences.

73 Leave to appeal on ground 2 is refused. Leave to appeal on ground 3 is granted and the appeal is allowed.

74 We propose to resentence the applicant on charges 1 and 2 as follows:

Dealing with money reasonably suspected of being proceeds of crime

Dealing with money reasonably suspected of being proceeds of crime

Attempt to possess a commercial quantity of a border controlled drug

14 years and 9 months' imprisonment with a non-parole period of 10 years and 9 months

75 This means that the total effective sentence is now 10 years and five months' imprisonment with a non-parole period of six years and six months.

[1] R v Verdins [2007] VSCA 102; (2007) 16 VR 269.

[2] [2016] VSCA 238.

[3] [2015] NSWCCA 95.

[4] Senior members of the syndicate based in China.

[5] DPP v Kao & Ip [2017] VCC 1169 ('Reasons') [42].

[7] Kao v The Queen [ 2018] VSCA 189 [23].

[11] Romero v The Queen [2011] VSCA 45; (2011) 32 VR 486, 489 [11] (Redlich JA).

[12] Kumar v The Queen [2013] VSCA 191 [24] (Maxwell ACJ); Clarkson v The Queen [2011] VSCA 157; (2011) 32 VR 361, 384 [89].

[13] Save that an argument cannot be directed at the total effective sentence alone (R v Boucher [1995] VicRp 7; (1995) 1 VR 110, 116). See also Ah Kau v The Queen [2018] VSCA 296.

[14] Markarian v The Queen (2006) 228 CLR 357, 372 [30]-[31].

[15] DPP v Watson [2016] VSCA 73; (2016) 259 A Crim R 327, 363 [110] (Priest JA) ('Watson').

[16] See paragraphs 50-52 of these reasons.

[17] Reasons [21], [38], [49] and [51]. See also DPP (Cth) v Thomas [2016] VSCA 237; (2016) 53 VR 546 ('Thomas'); R v Nguyen [2010] NSWCCA 238; (2010) 205 A Crim R 106, 126-128 [72]; Nguyen v The Queen [2011] VSCA 32; (2011) 31 VR 673.

[18] Reasons [38]. See also Thomas [2016] VSCA 237; (2016) 53 VR 546, 613 [193]; DPP (Cth) v Gregory [2011] VSCA 145; (2011) 34 VR 1, 15-16 [51]-[54]; Gajar v The Queen [2008] VSCA 268; (2008) 192 A Crim R 76, 81 [27]-[28].

[20] Pun v The Queen [2017] VSCA 219 ('Pun').

[22] Pun [2017] VSCA 219 [18] (footnotes omitted); see also [81]-[87] (Croucher AJA).

[23] Unchanged from the original sentence.