R v Kopa; ex parte DPP

SUPREME COURT OF QUEENSLAND

CITATION: R v Kopa; ex parte DPP (Cth); R v Istogu; ex parte DPP (Cth) [2004] QCA 100

PARTIES: R v KOPA, Henare Waata (respondent) EX PARTE DIRECTOR OF PUBLIC PROSECUTIONS (COMMONWEALTH) (appellant) / R v ISTOGU, Petrit (respondent) EX PARTE DIRECTOR OF PUBLIC PROSECUTIONS (COMMONWEALTH) (appellant)

FILE NO/S: CA No 344 of 2003 / CA No 379 of 2003 / DC No 2421 of 2003 / DC No 1670 of 2003

DIVISION: Court of Appeal

PROCEEDING: Sentence Appeals by Cwth DPP

ORIGINATING COURT: District Court at Brisbane

DELIVERED ON: 8 April 2004

DELIVERED AT: Brisbane

HEARING DATE: 18 March 2004

JUDGES: McPherson and Williams JJA and Philippides J / Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS: In CA No 344 of 2003 – appeal dismissedIn CA No 379 of 2003 – appeal allowed only to the extent of varying the sentence imposed at first instance by deleting the provision that “the sentences be suspended wholly for a period of three years” and inserting in lieu a direction “that you be released forthwith upon you giving security by recognisance in the sum of $1,000 conditioned that you be of good behaviour for a period of three years”

CATCHWORDS: CRIMINAL LAW – APPEAL AND NEW TRIAL AND INQUIRY AFTER CONVICTION – APPEAL AND NEW TRIAL – APPEAL AGAINST SENTENCE – APPEAL BY ATTORNEY-GENERAL OR OTHER CROWN LAW OFFICER – APPLICATIONS TO INCREASE SENTENCE – OTHER OFFENCES – where Kopa convicted of unlawful possession of tobacco leaf being reckless as to whether material was tobacco leaf – where Istogu convicted of intentionally manufacturing excisable goods, intentionally possessing excisable goods and intentionally possessing tobacco leaf – where Kopa sentenced to 12 months imprisonment to be released forthwith on recognisance of $1,000 and conditioned to be of good behaviour for two years – where Istogu sentenced to 15 months imprisonment wholly suspended – where appeal by DPP (Cth) – whether sentence imposed manifestly inadequate – whether each respondent should serve a short period in actual custody – whether appropriate to order short period of imprisonment on DPP appeal / Crimes Act 1914 (Cth), s 16A, s 17A / Excise Act 1901 (Cth), s 25, s 117, s 127A / Commissioner of Taxation v Cocaj & Anor; Commissioner of Taxation v Behluli [2004] QCA 69; Appeal No 11016 of 2003 and Appeal No 11017 of 2003, 18 March 2004, cited / DPP v Hussein; R v Hussein [2003] VSCA 187, considered / R v Melano; ex parte A-G (Qld) [1995] 2 Qd R 186, applied / R v Solway; ex parte A-G (Qld) [1995] QCA 374; CA No 164 of 1995, 22 August 1995, considered

COUNSEL: A J Glynn SC for the appellant in CA No 344 of 2003 and CA No 379 of 2003 / The respondent in CA No 344 of 2003 appeared on his own behalf / A J Rafter SC for the respondent in CA No 379 of 2003

SOLICITORS: Director of Public Prosecutions (Commonwealth) for the appellant in CA No 344 of 2003 and CA No 379 of 2003 / The respondent in CA No 344 of 2003 appeared on his own behalf / Dearden Lawyers for the respondent in CA No 379 of 2003

McPHERSON JA: I agree with the reasons of Williams JA for dismissing this appeal. I also agree with his Honour’s comments about reasons for a possible change of judicial attitude to sentencing in future cases of this kind.

WILLIAMS JA: These appeals were heard together. The respondent Kopa pleaded guilty on 14 October 2003 to breaching s 117C(1) of the Excise Act 1901 (Cwth) as amended (“the Act”) in that he had unlawful possession of tobacco leaf being reckless as to whether the material was tobacco leaf. He was sentenced to 12 months imprisonment to be released forthwith on giving security by recognisance in the sum of $1,000.00 conditioned to be of good behaviour for two years. The respondent Istogu pleaded guilty on 7 November 2003 to breaching s 25(1) of the Act in that he intentionally manufactured excisable goods (tobacco), breaching s 117(1) of the Act in that he intentionally possessed manufactured excisable goods (tobacco), and breaching s 117C(1) of the Act in that he intentionally possessed tobacco leaf. He was given a wholly suspended sentence of 15 months imprisonment. The Commonwealth Director of Public Prosecutions has appealed against the sentences imposed on each respondent.

Prior to September 2000 the Act did not provide for imprisonment as a penalty for offences of the type in issue here. Up to that date only a monetary penalty could be imposed for such breaches, though that penalty could be up to five times the amount of duty that would have been payable on the tobacco in question. In Commissioner of Taxation v Cocaj [2004] QCA 69 this court recently considered some questions as to the appropriate penalty for this type of offence prior to the amendments in 2000. Therein the President said: “The appellants deliberately set out to defraud the revenue and such conduct warrants substantial deterrent sentences in accordance with the spirit of the Act.”

The Act was relevantly amended in September 2000 by the Excise Amendment (Compliance Improvement) Act 2000. That amendment provided that for offences against s 25 (manufacturing excisable goods without a licence) and s 117(1) (unlawful possession of excisable goods) the penalty should be:

“2 years imprisonment or the greater of:

500 penalty units; and

5 times the amount of duty that would be payable if the goods had been entered for home consumption on the penalty day.”

The amendment also created a number of new offences; s 117A(1) (unlawfully moving excisable goods), s 117B(1) (unlawfully selling excisable goods), s 117C(1) (unlawful possession of tobacco seed, plant or leaf), s 117D(1) (unlawfully moving tobacco leaf), s 117E(1) (unlawfully buying tobacco seed or plant), s 117F(1) (unlawfully buying tobacco leaf), s 117G(1) (unlawfully selling tobacco seed or plant) and s 117H(1) (unlawfully selling tobacco leaf). With respect to each of those new offences the penalty provision was as quoted above.

It should also be noted that s 127A applies to each of the offences referred above; it essentially provides that although the penalty is expressed to be in the alternative, upon conviction “the court may impose both penalties on the person”. It is important to note that provision because in a number of District Court sentences referred to in the course of argument before this court it appears to have been mistakenly held that the sentencing court did not have power to impose both a sentence of imprisonment and a monetary penalty upon the same conviction.

The facts relevant to the charge against the respondent Kopa and the sentence imposed at first instance can be summarised as follows. On 30 November 2002 a Hino truck being driven by the respondent was stopped near Charters Towers for inspection. It was found to contain 6,509.28 kilograms of tobacco leaf; just over six and a half tonnes. The amount of duty payable on that was $265.34 per kilogram, or a total of $1,694,800.00. In consequence the maximum pecuniary penalty that could have been imposed was $8,474,000.00. It was not contested that the respondent was not appropriately licensed to have possession of or transport the tobacco leaf. The respondent was interviewed by police and made quite a detailed statement as to his involvement in the episode. From that statement, submissions made by his counsel on sentence, and submissions he made himself on the hearing of this appeal the following is a summary of the background to his committing the offence:

In 2002 he had a gambling problem and owed money though he had a job as a truck driver;

he was approached by two Lebanese males he knew only by the names of Jamal and Yusa and offered money to travel to north Queensland and collect “cuttings”;

he met those men in an hotel, though in submissions to this court it appeared that the men were aware of his gambling problem;

he was offered $5,000.00 to do the run and was also provided with money to acquire the truck which he had to purchase and register in his name;

he was told to drive to Innisfail, to park at a service station, to leave the keys in the ignition and walk away. The truck was to be returned two hours later loaded;

he was to return to Melbourne and park the truck in a truck bay at Broadmeadows, again leave the keys in the ignition and walk away;

he was to return later and collect the empty truck and payment for the trip. He was told that at the end of the trip he could “inherit” the truck;

he did not ask what sort of load he was carrying but was told it was “mulch” and that was all he needed to know. He did not ask any further questions.

The case was conducted on the basis that the respondent acted in accordance with the instructions he had been given until he was apprehended. The truck in question was forfeited pursuant to the provisions of s 116 of the Act.

Given the statement supplied by the respondent to prosecuting authorities he was not charged with intentionally possessing excisable goods but rather with “being reckless as to whether the goods are excisable goods on which duty has not been paid”. It can be seen from the foregoing outline that he was really no more than a courier who had been recruited because of his vulnerability.

The respondent was aged 41 at the material time; he was born in New Zealand but had lived in Australia since 1980. He married in 1984 but his wife died in 1992. Since then he has raised the three children of the marriage as a sole parent. At the material time the youngest children were aged 14 and 16; both were still at school. He has had regular employment in a number of capacities; over recent years his principal employment has been as a truck driver. He has no previous convictions. It was accepted that the plea of guilty was entered at an early stage and that ultimately he had been co-operative with the authorities.

The learned sentencing judge referred to the fact that the quantity of tobacco involved was “very large” but he also noted that the charge was reckless possession rather than intentional possession. He emphasised that “general deterrence is very important” particularly in the light of the legislative changes introduced in September 2000. But in that context reference was also made to s 16A and s 17A of the Crimes Act 1914, the latter section providing that a sentence of imprisonment should not be imposed 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”. Despite that the learned sentencing judge considered that imprisonment had to be ordered as the head sentence. He then recorded that the respondent was a “good worker” who had pleaded guilty and co-operated. He had shown remorse and had no criminal history. Reference was made to his being the sole carer of his children. The sentencing remarks then recorded that the respondent had addressed his gambling problem and there were good prospects of rehabilitation. The reasoning of the sentencing judge then indicates that though he considered the quantity of tobacco involved prima facie required the offender to spend some actual time in custody, the other matters favourable to the respondent justified making an order that he be released forthwith on a good behaviour bond.

I turn now to the facts relevant to the offences to which the respondent Istogu pleaded guilty and to the sentence imposed. On 28 March 2002 police approached a shed situated next to a house at Jimboomba. A person was observed in the shed spraying a substance over material covered by a tarpaulin. A strong odour of tobacco was detected. The respondent Istogu came to the door and was questioned by the police as to the contents of the shed. At that stage a large amount of tobacco leaf could be seen stored at the rear of the shed as well as tobacco stored in plastic bins. Some of the tobacco was chopped finely and there were fragments of tobacco on machinery. The respondent initially denied that the shed contained tobacco and attempted to block the view of the police officers. He eventually allowed the police to enter and the shed was found to contain machinery used to process tobacco, containers with processed tobacco in them and bales of uncut tobacco leaf. The machinery included a cutting machine, 64 metal blades, spray pumps, a press machine, a compressor, a grinder and a set of scales. The total weight of the cut tobacco was 249.02 kilograms on which the amount of excise payable was $65,034.00. The total weight of tobacco leaf was 1,228.56 kilograms on which the excise payable was $320,850.73. Therefore the total excise duty payable on all the tobacco material was $385,884.73. In consequence the total monetary penalty that could have been imposed in this case was $1,929,423.60. Police investigations revealed that the property at Jimboomba had been rented to the respondent who paid the rent in cash on a fortnightly basis.

The respondent had no prior convictions. At the relevant time he was aged 29 having been born in Kosovo on 7 February 1975. He emigrated to Australia in June 1998. He married shortly thereafter and has permanent resident status in Australia.

On the prosecution case there was a significant quantity of tobacco involved and the activities in the shed were accurately described by the learned sentencing judge in his remarks as a “rather sophisticated operation”. The learned judge also referred to the fact that the “illegal trade in tobacco is flourishing” and the trade was “lucrative” for some persons. In consequence there was a need for deterrent sentences. He referred to the fact that the respondent Istogu was the major offender; an offsider also pleaded guilty to manufacturing excisable goods.

The judge concluded that no other sentence than a term of imprisonment was appropriate, but that in all the circumstances it could be wholly suspended. It should be noted that the learned judge erred in suspending the sentence pursuant to the Penalties and Sentences Act 1992, rather than ordering release on a bond pursuant to the provisions of the Crimes Act 1914. Counsel for the appellant did not ask this court to re-sentence because of that; both counsel agreed that this court should, if the sentence imposed at first sentence otherwise stood, vary it by making the order for immediate release pursuant to the provisions of the Crimes Act.

Both before the sentencing judge, and again before this court, counsel for the respondent emphasised a number of matters going to mitigation. The submission before the sentencing judge was that the respondent was no more than a “process worker” having been engaged by a man named Ivan to cut tobacco leaf in return for payment of about $4,500.00. At the time the respondent was out of work and his wife was ill; she had suffered significant illnesses necessitating some four operations during 2001-2. The respondent had no previous convictions and references suggested he was of good character. It was an early plea of guilty.

As will be demonstrated shortly since September 2000 sentences for breaches of relevant provisions of the Act have attracted a wide variety of sentences and a number of District Court judges have observed that some guidance from an appellate court is necessary. These appeals have been brought largely to establish some guidelines for judges of the District Court in imposing penalties for breaches of the Act. In particular guidance is requested as to when it would be appropriate to require an offender to serve some actual time in custody.

Prior to the amendments in 2000 attempts were made from time to time to give to the court the option of imposing a custodial sentence by bringing the charge under s 29D of the Crimes Act, which provides a penalty of imprisonment for 10 years for the offence of defrauding the Commonwealth. That was the charge in DPP v Hussein [2003] VSCA 187; the offence occurred in about June 1999. The charges there involved somewhat more than 2,500 kilograms of tobacco. The offender was sentenced to a term of 12 months imprisonment but released forthwith upon entering into a recognisance to be of good behaviour for two years. He was also ordered to pay $39,838.83 representing the excise that was payable on the cut tobacco. The prosecutor appealed, but the Victorian Court of Appeal dismissed the appeal. Significantly it was said in the course of the reasons:

“I think it is relevant to have regard, as the sentencing judge did, to the penalties which Parliament at the time thought appropriate for manufacturing tobacco without a licence, dealing in tobacco leaf without being registered as a dealer and being in possession of excisable goods on which duty had not been paid. The Crown was entitled in its absolute discretion to decide upon the particular charge to lay against the applicant. Nevertheless, it was appropriate for the sentencing judge to have regard to the fact that there were other and less punitive offences that were appropriate to the facts alleged against the applicant.”

In at least two cases in Queensland the prosecution was also laid under the Crimes Act; in each case the sentence imposed was significantly higher than sentences imposed where, for similar conduct, the charge had been laid under the Act. Helen Paki pleaded guilty on 23 January 2003 in the District Court to a charge laid pursuant to s 29D of the Crimes Act involving tobacco on which the excise payable would have been $53,991.98. The sentence there imposed was two years imprisonment with an order that she be released after serving four months on entering into a recognisance to be of good behaviour for three years. Colin Edwards pleaded guilty in the District Court on 7 February 2003 to a charge laid pursuant to s 29D of the Crimes Act involving tobacco on which the excise payable would have been $600,000.00. He was sentenced to four years imprisonment with an order for release after nine months.

Offences of the type in question are prevalent and it is obvious that the deterrent aspect of sentencing is of critical importance. In the matter of Kopa material was placed before the sentencing judge indicating the prevalence of the offences. In the financial year ended 30 June 2002 excise investigators and police seized within Australia 33.6 tonnes of illegal tobacco. In the period 1 July 2002 to 31 December 2002 approximately 51 tonnes of illegal tobacco with an excise value of $13,500,000.00 was seized. The vast majority of that was seized in Queensland. A lengthy schedule of comparable sentences was placed before the court. Whilst all that information was not placed before the court in the matter of Istogu the schedule of comparable sentences given to the judge in that case clearly indicated the prevalence of the offence.

Of course on the issue of sentence factors personal to the offender will always be of critical importance. Persons with a criminal history, particularly where similar offending is involved, would ordinarily attract a higher sentence. The degree of criminality may also vary greatly. As with the drug trade, a courier would ordinarily attract a lesser penalty than someone actively involved in production. It would seem that many of the offenders dealt with in recent times were couriers. Again, as with the drug trade, those higher up in the chain of command seek to engage vulnerable persons as couriers who can be sacrificed if caught. The respondent Kopa falls into that category.

Whilst recognising those other considerations relevant to determining the appropriate sentence, the amount of excise avoided does provide a yardstick for comparative purposes. Using that criteria only the following table of recent sentences in the District Court in Queensland demonstrates the extremely wide range of sentences that have been imposed:

Offender Date Excise Avoided Penalty

Maksuti 12/10/2001 In excess of $1,000,000.00 12 months release after serving four months

Fazliu 30/06/2003 In excess of / $1,000,000.00 12 months release after serving three months

Clarke 14/07/2003 $1,239,425.00 12 months release after serving four months

Husovic 06/10/2003 $ 49,531.00 Intensive correction order

Meco 24/10/2003 $ 75,000.00 18 months release after serving four months

Clark-Kennedy 14/01/2002 $ 277,019.00 12 months release after serving three months

Drobec 02/05/2002 $ 66,000.00 12 months immediate release

Robison 31/05/2002 $ 244,312.00 10 months immediate release

Sambolec 18/06/2003 $ 85,800.00 12 months immediate release

Begic 22/07/2003 $ 349,916.00 12 months immediate release

Dauti 10/09/2003 $ 290,568.00 12 months immediate release

El Kodhr 10/10/2003 $ 279, 636.00 15 months immediate release

Krepi 30/11/2001 $ 505,892.00 12 months immediate release

Kalaja 31/01/2002 $ 516,908.00 12 months immediate release

Stanic 24/04/2002 $ 249,944.00 11 months release after serving two months

Jelic 24/02/2002 $ 246,066.00 Nine months release after serving one

Khadem 22/10/2002 $ 401,309.00 12 months immediate release

Krause 01/11/2002 $ 740,249.00 15 months release after serving six months

Khouri 31/01/2003 $ 51,970.00 Nine months immediate release

Q B Lam 13/03/2003 $ 325,731.00 12 months release after serving five months

G T Lam 13/03/2003 $ 325,731.00 12 months release after serving four months

Dodaj 18/06/2003 $ 427,651.00 12 months immediate release

Alibasic 19/06/2003 $ 272,270.00 12 months immediate release

Sweeney 19/06/2003 $ 216,461.00 Nine months immediate release

Krizsan 20/08/2003 $ 536,814.00 15 months release after serving five months

Serra 09/09/2003 $ 321,910.00 Eight months immediate release

One can see from that schedule that in the three cases where the excise avoided exceeded $1M (Maksuti, Fazliu and Clarke) the offender was required to serve an actual period of imprisonment. Where the excise avoided was between $500,000 and $1M on two occasions (Krause and Krizsan) a period of actual custody had to be served whereas immediate release orders were made in another two (Krepi and Kalaja). Edwards, where the prosecution was under the Crimes Act, would also fall into that category. Where the excise avoided was between $250,000 and $500,000 in five cases (Clarke-Kennedy, Stanic, Jelic, Q B Lam, and G T Lam) a period of actual custody had to be served whereas in the other six (Bejic, El Kadhr, Khadem, Dodaj, Alibasic and Serra) an immediate release order was made. In all cases except one (Meco) an immediate release order was made where the excise avoided was less than $100,000. Meco does seem out of step with the trend; there the excise avoided amounted to $75,000 and the sentence was 18 months imprisonment with an order for release after serving four months. Paki, where the charge was brought under the Crimes Act, is another instance of an offender being required to serve an actual gaol sentence where the excise avoided was less than $100,000.

Again it must be stressed that the foregoing analysis does not take into account personal factors relevant to the offender, including, for example, criminal history. Nevertheless, it can be seen that the schedule suggests that where the amount of excise avoided is in excess of $500,000 the sentence would ordinarily require the offender to serve a period of actual imprisonment.

Whilst there is not a direct comparison between these and other offences broadly categorised as defrauding the Commonwealth where sentences involving actual terms of imprisonment are regularly imposed, nevertheless it is the fact that these offences are but another instance of that type of offending. Deliberately defrauding the revenue is a serious offence and, particularly where the amount involved is large, a significant custodial sentence is called for. As the type of offence in question is prevalent a deterrent penalty is called for. Against that background any sentence which did not require the offender to serve at least six months in actual custody where the excise avoided was more than $500,000 would, in my view, be inappropriate. Where the amount of duty avoided was between $250,000 and $500,000 an appropriate sentence recognising the seriousness of the offence and the need for deterrence would ordinarily involve the offender serving at least three months in actual custody. Of course, as noted above, factors personal to the offender could justify the imposition of some other (higher or lower) sentence.

So far as the respondent Kopa is concerned his offence was extremely serious if only because it involved avoiding duty of $1,694,800. But against that he had no previous convictions, was a courier who had been engaged because of his vulnerability and expendability, and he was the sole parent of early teenage children. On top of that he was entitled to the benefit flowing from the fact that his plea was an early one and that he had cooperated with the authorities.

In all of those circumstances it is my view that the sentence originally imposed should have required him to serve four months actual custody. However given sentences detailed in the lengthy schedule set out above I am not persuaded that when he pleaded guilty on 14 October 2003 to an offence committed on 30 November 2002 the sentence in fact imposed was outside the range of sentences then being imposed for comparable offences. This is an appeal by the prosecution and in consequence the principles derived from decisions such as R v Melano, ex-parte Attorney-General [1995] 2 Qd R 186 are applicable. It has been said that an appellate court ought to be reluctant to impose a short custodial sentence on an appeal by an Attorney-General where a non-custodial sentence was imposed at first instance; cf R v Grey, ex parte Attorney-General CA 477 of 1994. That is not a universal proposition, but an appellate court must proceed with caution in circumstances such as these. In R v Solway, ex parte Attorney-General [1995] QCA 374 this court was concerned with an Attorney’s appeal where a child molester had been given a wholly suspended prison sentence. Though the court considered that a term of actual imprisonment should have been imposed, the sentence appealed against was not disturbed. That was because, as Fitzgerald P put it, the sentence imposed “was within range having regard to the earlier decisions” but it was made clear that those earlier decisions “should no longer be followed”. As Pincus JA said, “it is an unusual course to send an offender who is at large to prison for a relatively short period, as we are urged by the Attorney to do”. To my mind a similar approach should be adopted here.

So far as the respondent Istogu is concerned the position is much the same. Because in his case the amount of excise avoided was $385,884.73 ordinarily a sentence requiring him to serve three months in actual custody would have been appropriate. But, given the offence occurred on 28 March 2002 and he pleaded guilty on 7 November 2003, the above table demonstrates that the sentence imposed was within the range of penalty then being imposed in the District Court for such an offence; in most instances the table discloses that offenders avoiding excise duty of that order were not required to serve any actual period in custody. In those circumstances it would, in my view, be wrong for this court now to require the respondent to serve a short actual period in custody. However, as noted above, in future for offences of this seriousness ordinarily the offender would be required to serve an actual period in custody.

As already noted a number of District Court judges have sought guidance from this court as to the approach which should be adopted for sentencing with respect to offences of the type in question here. These reasons have gone beyond the facts of the two cases in issue in order to indicate, in broad terms, what the approach in the future should be.

The appellant has not satisfied the court that in all the circumstances it would be appropriate to increase the sentences imposed on each respondent by providing that each should serve a short period in actual custody. However, these reasons should be given some publicity so that persons contemplating committing offences of the type in question would be aware that any sentence imposed in the future would ordinarily provide that some actual time in custody be served where a significant amount of duty was avoided.

The orders of the court should therefore be:

(1)CA No 344 of 2003 – appeal dismissed.

(2)CA No 379 of 2003 – appeal allowed only to the extent of varying the sentence imposed at first instance by deleting the provision that “the sentences be suspended wholly for a period of three years” and inserting in lieu a direction “that you be released forthwith upon you giving security by recognisance in the sum of $1,000 conditioned that you be of good behaviour for a period of three years”.

PHILIPPIDES J: I have had the advantage of reading the reasons for judgment of Williams JA and agree with those reasons and the orders proposed.

I would also emphasise for the reasons stated by Williams JA that the sentences imposed in these cases ought not to be viewed as being indicative of the likely sentence which an offence of the type in question might attract in the future.