R v El Cheikh [2004] VSCA 146

6. The appellant pleaded guilty in the County Court on 2 September 2003 to one count of trafficking in a drug of dependence, namely methylamphetamine, between 1 August 2000 and 14 September 2001.

9. After hearing a plea in mitigation of penalty the learned sentencing judge, on 9 October 2003, imposed a sentence of imprisonment of four years and six months in respect of which a non-parole period of three years was fixed. His Honour made other consequential orders including, by consent, a pecuniary penalty order in the sum of $107,900.

12. Having been granted leave to do so, the appellant appeals against the sentence imposed upon him on seven grounds:

"1. The sentence imposed in all the circumstances was manifestly excessive; 2. The learned sentencing judge erred in that insufficient weight was accorded to the plea of guilty; 3. The learned sentencing judge erred in that insufficient weight was accorded to the appellant's antecedents and prospects of rehabilitation; 4. The learned sentencing judge erred in that insufficient weight was accorded to the psychological evidence and the appellant's experiences in custody, which would render his sentence more onerous than normal; 5. The learned sentencing judge erred in fixing a non-parole period that made no proper allowance for the appellant's antecedents, personal circumstances, and prospects of rehabilitation; 6. The learned sentencing judge erred in that he gave too much weight to the principles of specific and general deterrence; 7. The learned sentencing judge erred in his application of section

5(2A)(c) of the Sentencing Act 1991 (Vic).

The learned sentencing judge gave incorrect meaning to the words 'benefits in excess of profit'."

20. During the period encompassed by the count, the appellant arranged and transacted the sale of a large number of foils of methylamphetamine with 40 regular customers and two undercover police officers in the northern suburbs of Melbourne. The kind and scale of the trafficking in which he engaged can be gauged from evidence that one quarter of a straw sample of 801 mobile telephone calls made and received by him and taken from 5,384 such calls, which were concerned with drug activities, related to street sale levels of amphetamine at a price of $200, while the remainder related to $100 sales. Two customers purchased $500 worth of amphetamine per week and another estimated that he gave the appellant $3,000 for drugs. The sales to the undercover operatives involved 110.7 grams and a sale price of $25,500.

23. The learned sentencing judge described the appellant's activities as continuous and repetitive. He was, his Honour further stated, engaged in a "systematic business of dealing in the misery of others to satisfy [his] own greed."[1] However, although the appellant trafficked in a substantial amount of methylamphetamine the judge pointed out that he was not to be sentenced on the basis that he had dealt in a commercial quantity. His Honour also accepted that there were a large number of considerations which operated in mitigation of penalty, in the appellant's case, that had to be taken into account in the determination of an appropriate disposition. They included:

(d) the appellant's age of 45 years and evidence of generally prior good character;

(e) the appellant's substantial rehabilitative efforts subsequent to his arrest both in prison and whilst on bail;

(f) the availability of ongoing full-time employment;

(h) a psychological assessment by Ms Wendy Northey which His Honour stated in relation to that report:

"I accept to a large extent the matters that are contained in the two reports of your psychologist, Ms Wendy Northey. Such reports reflect to a large extent the evidence that I have heard that you have assisted those in prison and that you have undertaken courses to improve yourself." Sentence T.70.

He accepted that the appellant suffered from depression since a motor accident in 1978 and that in view of his somewhat fragile mental state his period in custody might be rendered more onerous. His Honour described the prospects of the appellant's rehabilitation as reasonable but, nevertheless and understandably, regarded specific deterrence as a relevant sentencing consideration in his case.

36. It is in my view evident that the learned sentencing judge directed his mind to all relevant sentencing principles and specifically all matters that could operate in mitigation of penalty. I do not understand Mr Carter who appears on behalf of the appellant to have submitted otherwise. At this level, as the grounds of appeal indicate, the submissions were directed to a contention that the judge failed to attribute sufficient weight to these various factors. Counsel did argue, however, that in view of his Honour's acceptance that in the period following his arrest, the appellant made serious and sustained efforts over a lengthy period to rehabilitate himself, the finding that his prospects of rehabilitation were "reasonable" rather than excellent did not reflect the real position. It is apparent from the learned sentencing judge's remarks that he approached the consideration of the appellant's prospects of rehabilitation with care. His Honour noted specific reference to the various matters advanced on his behalf in the course of the plea and indicated that he accepted the evidence given in relation to them. The judge recognised that there was much that could be said in the appellant's favour but also that it had to be remembered that the appellant had engaged in serious and sustained criminal activities for profit. He made this clear when dealing with the report of the psychologist, stating at one point in his remarks:

"Whilst Ms Northey states that your prospects of re-offending are low, Ms Northey does not appear to have analysed the material presented before me as to your continuous and repetitive behaviour of trafficking in amphetamines for money over a given period of time. However, I am prepared to accept that on the material presented before me, including the various character references, the character evidence itself, the psychological reports and other material presented before me, that your prospects for rehabilitation are reasonable." Sentence T.71.

40. I am unable to detect any error in his approach to this aspect. Each of the matters to which Mr Carter has drawn our attention in his written and oral submissions was addressed by his Honour. I am far from persuaded that the judge may have failed to attribute appropriate weight to any of them or to their combined effect. There is nothing in his remarks in the course of the plea or when handing down sentence that can be perceived as raising the suggestion that this may have occurred and neither the term of imprisonment imposed nor the non-parole period fixed can be seen to manifest error. Each was well within the range of dispositions available in the circumstances.

43. As I have earlier indicated, his Honour also made, by consent, a pecuniary penalty order pursuant to s.58(2) of the Confiscation Act 1997. Such orders are designed to deny to a perpetrator the opportunity to retain the benefits derived from the commission of his offence. Under s.5(2A)(c) of the Sentencing Act, a judge:

"May have regard to a pecuniary penalty order made under that Act (the Confiscation Act) to the extent to which it relates to benefits in excess of profits derived from the commission of the offence."

47. It is clear enough and certainly since the Confiscation Act was amended in 1998 that the word "benefits" in this provision refers to any money actually received as a result of the commission of the offence regardless of the expenditures incurred in deriving it, while "profits" refers to that amount less such expenses concerned in deriving it.

50. In his second reading speech, when introducing this provision in the Sentencing Act in 1991, the Attorney-General said:

"A major area of uncertainty in relation to criminal confiscation has been the complex relationship between confiscation proceedings, compensation, restitution and sentencing. New provisions in this Bill make it clear that the first priority is to be given to orders for compensation and restitution to the victims of a particular crime. In terms of the relationship between sentencing and confiscation, there have been difficulties in reconciling confiscation proceedings with the various aims of the sentencing process. In particular, on occasions courts have been reluctant to make confiscation orders where to do so would impose a punishment which under general sentencing principles might be regarded as disproportionate or unduly harsh. The Bill resolves that difficulty by providing that, where the effect of the confiscation order is to disgorge the profits gained from the offence, it is not to be taken into account when a sentence is being imposed. This is because in divesting offenders of ill-gotten gains, the order simply restores them to the position they were in before the offence was committed. However, where the order relates to previously owned property used in connection with the offence, or otherwise goes further than merely disgorging ill-gotten gains, the court will be able to take this into account in fixing sentence."

Crimes (Confiscation of Profits) (Amendment) Bill, Second Reading Speech, 10 October 1991, pp.1153-1154.

55. Accordingly, where and to the extent that a pecuniary penalty order constitutes a punishment and not simply the taking away of the profits of crime, a sentencing judge can take that punishment into account in the determination of an appropriate sentence in the circumstances.

58. In the present case, there was, however, as his Honour pointed out, no evidence whatever before him as to the incurring of any expenses which could be taken into account in this way. Whilst one may reasonably assume that the appellant did incur some costs, in the absence of his decision to say nothing about the cost or origin of the material in which he was trafficking, the sentencing judge was not required to speculate as to what profit he was deriving from his activities or to make some guess as to the extent to which the appellant was being penalised by the making of the order in the sense that I have discussed. It must be borne in mind that such matters were peculiarly within the knowledge and control of the appellant . The judge put the position as follows:

"It was conceded by your solicitor appearing on your behalf, and correctly so in my opinion, that the matters contained within s.5(2A)(c) and (d) of the Sentencing Act 1991 would be matters in mitigation of sentence and that the onus is upon yourself to show on the balance of probabilities what benefits there were in excess of profits. I was informed that you would not be calling any evidence. Ordinarily, of course, the exact financial details of running a secretive drug business would be solely within the province and knowledge of the drug dealer and ordinarily not within the knowledge of the authorities. Even taking into account the factual matters raised by counsel on your behalf in his written submissions on 6 October 2003, I say it is nigh impossible on a fair and reasonable reading of the depositional material concerning your drug business activities over the relevant period of time to make any sensible determination as to what benefits there were in excess of profits and in particular as to what part of [the] $107,900 order made by consent consists of benefits in express of profits." Sentence T.74.

62. I find no error in his Honour's approach to this question. There was simply no matter which could be appropriately taken into account in the appellant's favour, on the basis of the material before the court. Nor do I find that his Honour erred in his reference to the absence of any material before him concerning the likelihood that the amount due under the penalty order would even be paid.

65. In summary, I am of the view that there is no substance in any of the complaints advanced in this Court and I would dismiss this appeal.

69. In its principal ground, ground 7, this appeal concerns the sufficiency, indeed the existence, of evidence. The case does not turn on the correctness of his Honour's example of benefits, for on any view of the meaning of the word "benefits" the amount of the benefits was established. Indeed, the case is not about benefits, but about expenses. Section 5(2A)(c) of the Sentencing Act 1991 provides for consideration by the sentencing court of a factor that is mitigatory. The evidence that was required under it was evidence as to "the extent" to which the benefits to which the pecuniary penalty order related exceeded the "profits derived from the commission of the offence". Now, the profits were, essentially, the benefits less expenses, as is now at least shown by s.67(1)(aa) of the Confiscation Act 1997. As I have said, the benefits were quantified. As Vincent, J.A. has demonstrated, however, there was no evidence as to the amount of the expenses. Any figure for them was purely speculative. Under s.5(2A)(c) the interests of an offender are assisted by showing that the expenses are more, not less.

72. The onus of proof of the mitigatory factor was on the offender, here the appellant, on the balance of probabilities. Furthermore, over 200 years ago Lord Mansfield in Blatch v. Archer[2] stated a fundamental proposition of the law of evidence that "all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted". It was in the power of the appellant to have produced proof of his expenses. That he signally failed to do, either by giving or by calling evidence.

75. His Honour was faced with evidence of an undissected amount of benefits. As the offender, on whom the onus lay, could not show how that sum was to be dissected he had to fail, as, in a far distant field, yet analogously, the Commissioner of Taxation failed in the instructive cases of McLaurin v. Federal Commissioner of

Taxation[3] and Allsop v. Federal Commissioner of Taxation[4].

79. For these reasons and those given by Vincent, J.A. I agree that this appeal must be dismissed.

83. I agree that the appeal should be dismissed for the reasons given by Vincent, J.A.

[2] (1774) 1 Cowper 63 at 65; [1774] EngR 2; 98 E.R. 969.

[3] [1961] HCA 9; (1961) 104 CLR 381 especially at 392.

[4] [1965] HCA 48; (1965) 113 CLR 341 especially at 351.