Nahlous v R

Court of Criminal Appeal (NSW)|2010-04-09|Before: Howie J, Rothman J, Clellan CJ

CITATION: Nahlous v R [2010] NSWCCA 58 This decision has been amended. Please see the end of the judgment for a list of the amendments.

JUDGMENT OF: McClellan CJatCL at 1; Howie J at 1; Rothman J at 1

DECISION: Application for leave to appeal against sentence is allowed in relation to the count alleging a breach of s 400.6(1) of the Criminal Code 1995 (Cth). The Court quashes the sentence imposed in relation to that count. The Court dismisses the charge pursuant to s 19B(1)(c) of the Crimes Act 1914.

CATCHWORDS: CRIMINAL LAW - Sentence - applicant charged with sale of unauthorised decoders and possession of money received from undercover police officer - possession charge an abuse of process - charge dismissed under s 19B(1)(c) of Crimes Act (Cth)

Criminal Code 1995 (Cth) - s 400.6(1) LEGISLATION CITED: Crimes Act 1914 (Cth) - ss 19B(1)(c), 20(1)(b) Copyright Act 1968 (Cth) - ss 135ASB(1), 135ASC(1) Criminal Appeal Act 1912 (NSW) - s 6(3)

R v Janceski [2005] NSWCCA 288 CASES CITED : Arnaout v R [2008] NSWCCA 278; 191 A Crim R 149 Thorn v R [2009] NSWCCA 294 Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610

COUNSEL: S McNaughton - Crown G Gillett - Applicant

SOLICITORS: Commonwealth Director of Public Prosecutions - Crown G Gillett - Applicant

IN THE COURT OF CRIMINAL APPEAL 2009/4817

McCLELLAN CJ at CL HOWIE J ROTHMAN J

FRIDAY 9 APRIL 2010 Youssef Habib NAHLOUS v REGINA Judgment 1 THE COURT: On 31 March 2010 the Court dealt with this application of leave to appeal and made orders in respect of a sentence imposed for an offence contrary to s 400.6(1) of the Criminal Code 1995 (Cth) that had the effect of quashing the sentence imposed in the District Court for that offence and in substitution dismissing the offence pursuant to s 19B(1)(c) of the Crimes Act 1914 (Cth). These are the reasons for making those orders. 2 The applicant had pleaded guilty in the Local Court to six offences contrary to the provisions of the Copyright Act 1968 (Cth) (the "decoder offences") concerning the sale of, or offering to sell, unauthorised decoders. The relevant provisions were ss 135ASB(1) and 135ASC(1) of that Act. He also pleaded guilty to an offence contrary to s 400.6(1) of the Code (the "Code offence"). That section is concerned with dealing in the proceeds of crime. The decoder offences each carried a maximum penalty of imprisonment for 5 years. The Code offence carried a maximum penalty of imprisonment for 10 years. 3 As a result of the pleas of guilty he was sentenced in the District Court by Sorby DCJ ("the Judge") on 9 June 2009. For the two offences contrary to s 135ASC(1) (offering for sale) he was sentenced to two concurrent terms of imprisonment each of three months and each to be served by way of periodic detention. Those sentences commenced on 25 June 2009 and expired on 24 September 2009. For the four offences contrary to s 135ASB(1) (selling) he was sentenced to four concurrent terms of imprisonment for six months each to be served by way of periodic detention. Those sentences commenced on 25 September 2009 and expired on 24 March 2010. For the Code offence, he was sentenced to a term of imprisonment of 20 months to be served by way of periodic detention. That sentence commenced on 25 December 2009 and was to expire on 24 August 2011. In respect of that sentence the Judge ordered the applicant's release after serving 12 months of the sentence upon entering a recognizance pursuant to s 20(1)(b) of the Crimes Act (Cth). This meant that the applicant would be entitled to be released on 24 December 2010. 4 The effective sentence imposed was 26 months imprisonment to be served by way of periodic detention with a minimum period of imprisonment of 18 months. 5 The applicant challenged only the sentence imposed for the Code offence. 6 The facts can be stated very briefly. The applicant offered to sell, or did sell, a number of unauthorised decoders on six occasions during 2008. A decoder is a device that enables the owner to obtain pay television services without paying a subscription fee to a service provider, in this case Foxtel, Austar and United Broadcasting International. On 6 November the applicant sold to an undercover police officer 50 decoders and received payment of $15,000 in cash. He placed the money in his vehicle but it was recovered immediately after his arrest. One of the charges under s 135ASB(1) referred to the sale of the 50 decoders and the Code offence related to the $15,000. 7 The Judge said the following before imposing the sentences upon the applicant:

I now turn to the appropriate sentence. The offences were not "one offs" or isolated incidents but were the receipt of a deliberate course of action for financial gain. There was a continual course of conduct that is the repeated sale of unauthorised goods or offering for sale such items. As I said earlier, in relation to all offences, general deterrence is an important consideration. The offences are prevalent and hard to detect. A strong message needs to be sent to like-minded persons of the community that such activities face condign punishment.

In setting the appropriate sentence for each offence and the ultimate penalty I am obliged to impose a sentence that ensures the offender is adequately punished for the offences.

The objective seriousness of the offences must be balanced by consideration of subjective factors in the offender's behaviour, including his standing in the community, his strong family and work history.

Following Pearce I am obliged to set a penalty for each offence before considering such questions as concurrency and acumulation, or whether the sentences should be partly both and the question of totality. 8 With respect, in light of these statements, it is difficult to understand how his Honour structured the sentences in the way he did. The four offences under s 135ASB(1) each received a sentence of six months. This is notwithstanding that his Honour had indicated he was giving the applicant a discount of 20 per cent for his early plea of guilty. It is difficult to determine what the starting sentence was before the discount was applied. But in any event his Honour imposed the same sentence for the sale of one decoder as he did for the sale of 50 decoders. Yet clearly the criminality could not be the same. Further, all of the sentences were made concurrent, notwithstanding that they were separate and distinct offences committed over a period of nine months. No application of appropriate sentencing principles could permit that result. 9 His Honour then imposed the sentence for the Code offence. The sentence imposed was 20 months imprisonment for a single offence that on any view was the result of the criminality involved in the sale of the 50 decoders for which the applicant had been sentenced to six months imprisonment. Again it is difficult to determine what was the starting sentence for the offence before the discount of 20 per cent was applied. The overall sentence is 26 months after a discount of 20 per cent. Once more there seems to be a disconformity between the sentence and the discount. 10 The applicant filed three grounds of appeal. The first was that the sentence for the Code offence was disproportionate to the criminality involved in the offence. The second ground was that in imposing the sentence for the Code offence his Honour failed to apply the principle of totality. The third was that the sentence for the Code offence was manifestly excessive. 11 In effect the complaint by the applicant was that the gravamen of his criminality was in the sale of the decoders not in the receipt of $15,000. It was submitted that the receipt of the money was "part and parcel" of the sale of the decoders. It was noted that his Honour never differentiated the Code offence from the decoder offences except in the sentence imposed and does not explain how his comments, set out in the passage above, can be relevant to the Code offence. It was submitted that the Judge failed to give any reason explaining why the criminality of having $15,000 received from the sale of the decoders was so much more serious than the sale itself so that it could justify a sentence that was over three times longer than the sentence imposed for the sale. 12 The Crown in written submissions emphasised that this Court should be concerned with the overall sentence imposed and not how it was structured. The submission was that this Court should find no lesser overall sentence was warranted for the offences for which the applicant was sentenced: see s 6(3) of the Criminal Appeal Act 1912 (NSW). Considerable reliance was place upon a passage in the judgment of Hunt CJ at CL in R v Janceski [2005] NSWCCA 288 at [25]. That was a Crown appeal and says nothing about the operation of s 6(3). More recent authority, Arnaout v R [2008] NSWCCA 278; 191 A Crim R 149 indicates that the operation of that section is not free from doubt as evidenced by the conflicting views in the judgments of Basten JA and Price J. The dispute is whether s 6(3) refers to a particular sentence or the overall sentence imposed upon the applicant. For reasons that will become apparent we do not need to enter into that debate. 13 We believe that there is considerable merit in the complaints made by the applicant. However, they do not go far enough. In our view the whole sentencing exercise miscarried principally because the applicant should never have been charged with the Code offence. Had he sought to have that charge permanently stayed as an abuse of process we cannot see how the application could have been refused. 14 In Thorn v R [2009] NSWCCA 294 this Court raised concerns about the use of the section in the circumstances of a person who was engaged in taxation fraud. As well as being charged with the actual fraudulent conduct, he was also charged with an offence involving dealing with the money obtained by the frauds. In that case the activity was merely accessing the funds that he had derived from the frauds. The sentencing judge in that case failed to appreciate the nature of the criminal activity involved in what was called "the money laundering offence" and sentenced the applicant to an excessive sentence for that offence. As in the case now before the Court, the offence to a certain extent concerned the profits of the applicant's own criminality and resulted in a miscarriage of justice. However, unlike the present case, there was some justification for the money laundering offence because it captured criminality of the applicant's co-offender, who had never been charged and yet was involved in a joint criminal enterprise with the applicant. 15 In Thorn Howie J, who delivered the principal judgment of the Court, stated at [27]:

This was an unusual use of a money laundering offence. To the extent that there was an overlap with the fraud offences the charge represented the use of the funds that had been dishonestly obtained under those offences. The criminality was very much in the obtaining of the funds not in their use. It is somewhat analogous to a robber being sentenced for both the robbery and being in possession of the stolen goods. But in the present case, according to the maximum penalties prescribed, the money laundering offence was more serious than the frauds by which the money was obtained. Further the money laundering charge was used to punish the applicant for his criminality arising from his partner's fraudulent conduct. As was noted earlier, there is no concept of a joint criminal enterprise under the Code , so the applicant could not be charged with his partner's fraudulent activity even though it was common activity of them both. 16 In the present case we can see no justification whatever for the applicant being charged with the Code offence. In relation to the 50 decoders the criminality was in the sale as a result of which the owners of the services were deprived of their financial entitlement to rental charges for their use. The concept of a "sale" necessarily involves the seller obtaining some financial gain from the transaction. The receipt of the money was merely an element of the offence under s 135ASB(1). 17 We appreciate that a person can by the one act commit two offences and, where the two offences address different aspects of the criminal conduct, there is nothing wrong with prosecuting the two offences or, subject to the principle of totality, with imposing separate sentences for the two offences. But in our view the receipt of the money as a result of the sale did not result in a separate act of criminality that warranted a separate charge and a separate penalty. We do not believe that there is anything in Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 that conflicts with the view that we have taken as to the inappropriateness of the prosecution of the Code offence as well as the decoder offence; see particularly at [31]. We believe that in the circumstances of this case it was oppressive to charge the applicant with both the sale of the decoders and the receipt of the money as a result of the sale. That is because in our view the offence of sale encompassed the criminality of possessing the proceeds of the sale. 18 The Crown at the hearing of the appeal sought to argue that the two offences were aimed at different policies. The Code offence was intended to punish the possession of the proceeds of crime however they are obtained and the fact that the proceeds of the crime were in the public domain and could be dealt with or passed on to others. We accept that this may be a justification for the prosecution of such an offence particularly where the source of the funds is unknown, or where the proceeds were derived from the criminal act of another person or where the person is in some way dealing with the proceeds in order to hide their source or change the nature of the proceeds. But we cannot believe that it was the intention of Parliament that the offence should extend to the facts of the present case notwithstanding the width of the offence under the Code. 19 It is in our opinion not irrelevant that the Code offence carries twice the maximum penalty prescribed for the sale offence, which on any view was the principal act of criminality. It was never the intention of the investigators that the applicant should keep the money he obtained from the sale. If the police officer intended at the time of handing over the money also to charge the applicant with an offence relating to the possession of the money, it was a clear case of entrapment. The applicant could have been arrested before the money was handed over and charged with an offence under s 135ASC(1) of offering to sell the 50 decoders. The maximum penalties for the offence of offering to sell a decoder and the offence of selling a decoder are the same. We do not see in the circumstances of this case how the actual payment of the $15,000 to the applicant impacted upon his criminality in offering to sell the decoders to the undercover police officer. We can see no forensic purpose in handing over the money other than to secure evidence of the sale. 20 The Crown pointed out that, because of the way the sentences were structured, the penalty imposed for the offence of selling the 50 decoders was manifestly inadequate and it was only the sentence for the Code offence that allowed the overall sentence to reflect the applicant's criminality. This is correct, but it was a combination of both the inappropriate use of the Code offence by the Crown, on the one hand, and the way that his Honour structured the sentences, on the other. His Honour failed to understand that the Code offence was not the principal offence despite its higher maximum penalty. The same error was made in Thorn. 21 In our opinion the only way to deal with the Code offence in the absence of any appeal against conviction was to dismiss the offence under s 19B(1)(c) of the Crimes Act. It was in the circumstances of the particular facts of this matter of a trivial nature and we were of the opinion that it was inexpedient to inflict any punishment on the offender. Although this means that the punishment inflicted upon the applicant for the decoder offences is inadequate, that is to a large part the fault of the Crown. **********

20/04/2010 - Edit error - Paragraph(s) 21 24/05/2010 - Edit error - Paragraph(s) 20

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