R v Motherwell [2004] VSCA 241

Court of Appeal (Vic)|2004-12-09|Before: WINNEKE, P., CHARLES and CHERNOV, JJ.A.

Criminal law - Trafficking in amphetamine contrary to s.71A of the Drugs, Poisons and Controlled Substances Act 1981 - Judge making "pecuniary penalty order" but declining to make "forfeiture order" - Appeal solely against the making of the "pecuniary penalty order" - Questions relating to sufficiency of evidence raised - Confiscation Act 1997.

On 9 June 2004, the applicant, Suzanne Motherwell, was convicted (following a plea of guilty) in the County Court on one count of trafficking in methylamphetamine over an 80-day period in 2002; and one count of trafficking in cannabis. She admitted a large number of prior convictions for drug offences, including trafficking, possession and using various types of drugs of dependence. It was accepted that she was, at relevant times, a heroin addict who was trafficking the amphetamine to feed her heroin addiction.

On count 1, his Honour sentenced the applicant to three-and-a-half years' imprisonment; and on count 2 to a fine of $200. His Honour fixed a minimum period of two years to be served and declared that a period of 422 days had already been served of that sentence.

The conviction on count 1 was a conviction for an offence which is defined as a "forfeiture offence" within the meaning of s.3 of the Confiscation Act 1997 and the Drugs, Poisons and Controlled Substances Act 1981 (see also Schedule 2 of the former Act; and Part 3, Schedule 11 of the latter Act). The fact that the offence was a "forfeiture offence" exposed the applicant to the Director's application both for a forfeiture order of the applicant's premises, where the trading had been conducted, and a pecuniary penalty order under Part 8 of the Confiscation Act.

Indeed, at the conclusion of his sentencing reasons, his Honour made an assessment by way of pecuniary penalty order in the sum of $160,000, which his Honour viewed, on the balance of probabilities, to be the value of the benefits received by the applicant from trading in methylamphetamine. His Honour declined to make an order for the forfeiture of the applicant's house where the trading had been conducted.

This application for leave to appeal is solely directed to his Honour's assessment of the pecuniary penalty order. That order, by virtue of s.142(3) of the Confiscation Act, forms part of the sentence for the purposes of an appeal to this Court. Indeed, s.5(2A)(c) of the Sentencing Act entitles the sentencing judge, in fixing an appropriate sentence, to have regard to a pecuniary penalty order to the extent to which that order related to "benefits in excess of profits". Such "benefits" refer to the expenditures incurred in making a profit from the trafficking but not to the profits so made (see R. v. Cheikt[1]). In this case there was no evidence of such expenditure incurred, and thus the gross takings were the relevant "benefits" to be assessed.

I think it should be said at the outset of this judgment that the judge was invested with a wide discretion in assessing a pecuniary penalty order, even to the point (so it appears) of declining to make an order if he or she regards it as pointless to do so because of the lack of prospects in the applicant of satisfying it (Director of Public Prosecutions v. Delaney[2]). Thus, in this case, the judge simply declined, without reasons, to make a forfeiture order of the applicant's house, although no doubt it will provide some security for reclaiming the pecuniary penalty order if it remains unsatisfied.

Notwithstanding the width of the judge's discretion, it must, nevertheless, be exercised judicially and consistently with the purposes of the statute. Thus, there must be sufficient material put before the judge to support his assessment, which is required to be determined on the balance of probabilities (s.132 of the Act). Indeed, the Act prescribes that the proceedings, unless otherwise stated, are regarded as civil in nature (s.133). As I see it, the type of material upon which the judge will normally be asked to act will not be very precise because it is unlikely to include any input from the traffickers themselves. I say that the judge's discretion must be exercised bearing in mind the purposes of the statute. Those purposes clearly include (at least in this case) the suppression of the drug trade and the removal of ill-gotten gains from those engaged in it; in other words, the statutory expression of the maxim that "crime does not pay".

In this case the judge had before him, inter alia, material gained from police surveillance of the applicant's house. It showed, according to his Honour, that the applicant was - at relevant times - hopelessly addicted to heroin and sought to finance her habit by using her premises for trafficking in the amphetamine. Over the period of 80 days during which the house was under surveillance (the period from 20 May 2002 to 7 August 2002), there were said to be 2,882 visitors to the premises - an average of some 36 people per day over that period. His Honour accepted that not all of these people were involved in the illicit trade being carried on in the house, although it was, in my view, open to him to find that substantial numbers of visitors were engaged in such trade. In addition, there were 781 telephone calls intercepted, of which 402 related to drug transactions. An undercover operative attended the house on approximately nine occasions between 12 June 2002 and 7 August 2002, spending some $4,500 in purchasing a little less than 22 grams of amphetamine, on average $213 per gram. Furthermore, the judge had the benefit of other disclosures in the depositional material showing that there were other sales of $70 per quarter gram and $120 for half a gram. The applicant told the undercover operative that if he bought more than three grams the price would reduce to $200 per gram. The applicant told police in her record of interview that she only had three or four customers per day, and up to twelve on "pension days". His Honour did not accept that such was the trading activity because it ill-fitted the police surveillance. There was material before the judge that the applicant's heroin habit was - at least in the end - costing her some $500 per day and that she was financing that from her amphetamine trafficking. His Honour expressed the view that, on that evidence, to support such a habit she would have to be selling up to 10 grams of amphetamine per day, a total of about $160,000; alternatively, his Honour estimated that if half the 36 visitors per day were buying half a gram of amphetamine at $120 per half gram, that would show a gross benefit, conservatively, of $172,800.

His Honour said that these figures were conservative. He regarded the probabilities as supporting a figure well in excess of $160,000 and was prepared to make an order in that amount. If, indeed, this is what he found (as it appears to be), the formal court documents embodying his orders do not reflect this conclusion. The "back of the Presentment", the "Return of Prisoners" and at least one version of the formal "Pecuniary Penalty Order" signed by the judge state that the pecuniary penalty order made by the court was $100,000. Although it is difficult to reconcile this figure with the terms of his Honour's judgment, it is the figure which has been formally recorded. During the course of this hearing, the Court was given a different form of the pecuniary penalty order (said to be the "original"), which disclosed the figure of $160,000. Because the pecuniary penalty order fixed by the court is part of the sentence, it is now beyond the powers of this Court to rectify the record; in particular the Return of Prisoners and the back of the Presentment.[3] The Director will therefore have to seek rectification of the record by referring the matter back to the judge. Unfortunately, the judge's report to this Court throws no light on this discrepancy; and I must repeat what has been said several times by presiding judges in this Court. It is a very important task of a trial judge to ensure that the Presentment and Return of Prisoners accurately reflect the sentencing orders which the judge has pronounced in disposing of the matter before him or her. These are matters over which the judge should personally take control, and I say that because I note that the stamp on the orders in this case is nothing but that - a stamp - and not a personal signature.

In this Court, Mr Carter, who appeared for the applicant, challenged his Honour's assessment of $160,000, which he said could not be supported by the evidence. He submitted that his Honour's figure was nothing more than an "estimate" which was less than an "assessment of the benefits derived" which is required by s.59(1)(a) of the Confiscation Act. Mr Carter referred to Director of Public Prosecutions v. Dam[4], where Balmford, J. said in para. [15]:

"The initial task of the court on an application under s.58(2) [of the Confiscation Act] as provided in s.59(1)(a) is to 'assess the value of the benefits derived by the defendant in relation to the offence'. The word used is not 'estimate' but 'assess'. By virtue of s.67(1)(aa), the value of the benefit so derived may include 'any money actually received as a result of the commission of the offence regardless of expenditures incurred in deriving that money' and by virtue of s.132 that assessment of that value is to be decided on the balance of probabilities."

As I said earlier, the assessment has to be based on evidence. That evidence will not necessarily be precise, but will have to be of such a kind as to provide a sufficient basis for the assessment which is made. In this sense it seems to me to be similar to assessments frequently made by trial judges for past and future economic loss in personal injury claims. The basic premises upon which the assessment is to be founded must be supported by fact-finding on the balance of probabilities; and the processes of drawing inferences from those basic premises should be seen to be sound.

It would appear to me that Mr Carter accepts that there was material upon which the judge could conclude that benefits were being received and which were capable of being assessed. In other words, as Mr McArdle put it, it is the quantum of the assessment which is in issue - not the liability. Mr Carter's primary submission, however, was that the only assessment open to his Honour was one of $7,840, which was the figure put to his Honour by the applicant's trial counsel. That figure apparently derives from the sales to the covert operative, plus the sales that that operative apparently observed being made to other people on the eight or nine occasions that he was at the premises, he being there for only a short period of time. That submission seems to me to ignore the concessions made by the applicant in her record of interview with police that she was trafficking amphetamines on "most days since 1 April 2002". It further ignores the admission that she was using more than half a gram of heroin every day; and that she was trafficking amphetamine to feed that habit. Mr Carter submitted that his Honour's conclusions that the amphetamine trafficking had returned to her a conservatively estimated sum of $160,000 over the 80 days was no more than an "estimate" and did not reflect a proper conclusion based on the evidence. His Honour was wrong, he submitted, to base his conclusion on the cost of her "heroin habit" of $500 per day because that figure was relevant only to the later days of the relevant 80-day period. That calculation, he submitted, was not soundly based in acceptable evidence but was more in the nature of guesswork. He submitted that a finding on which a pecuniary penalty order is made should be sourced in "proper evidence"; and the evidence could not support a conclusion that the cost of her heroin habit was as much as his Honour had found.

Speaking for myself, and contrary to the submissions made by Mr Carter, I am of the view that his Honour's conclusions were open to him and properly founded upon evidence which he was entitled to accept. Although I am inclined to agree with Mr Carter that the assessment - based upon the extent of trading sufficient to support the applicant's heroin habit - might be open to question, I am nevertheless of the opinion that his Honour's alternative approach, based on findings that the trafficking must have involved at least, on average, 16 people per day buying half a gram of amphetamine at $120, was well open to him on the evidence, including the surveillance (which itself included telephone intercepts), the observations of and statements made to the covert operative, and the admissions made by the applicant to the police. All of the basic facts from which his Honour drew inferences were well before him; and were not contested by any material from the applicant. The inferences which his Honour drew from these basic facts were, in my view, reasonable and conservative and open to him. I would accordingly reject ground 1 of the application.

Mr Carter applied for the Court's leave to add a further ground of appeal out of time, to contend that the judge erred in his discretion in making a pecuniary penalty order, in particular by failing to consider:

(a) the fact that the applicant had no prospect of satisfying the order other than by selling the house;

(b) that all of the moneys which she received from the sale of amphetamine were spent on financing her heroin addiction;

(c) the potential impact of the pecuniary penalty order on the rehabilitation achieved by the applicant.

The Court gave leave to the applicant to argue the ground proposed but reserved to itself the question whether leave to amend ultimately should be granted.

As I understand the argument, Mr Carter submitted that the pecuniary penalty order was inconsistent with, and effectively "set at nought", his Honour's aim in concluding not to grant the forfeiture order. The only way to satisfy that order, he submitted, would be to sell the house. The problem for the applicant, he submitted, was compounded by his Honour's lack of adequate recognition of the applicant's pitiful condition, and the fact that she was not involved in the trade for greed or profits, but to feed her pitiful drug-addicted condition. This was, he said, a rare case in which the circumstances called for recognition of the hardships faced by the applicant; and the exercise of his Honour's undoubted discretion to decline to make a pecuniary penalty order, or at least one not as heavy as this one, was in the interests of preserving the applicant's rehabilitation that has now been firmly established. Hardship, so Mr Carter submitted, was relevant to the discretion whether or not to make a pecuniary penalty order in circumstances such as these - where the "ill-gotten gains" have not been applied for self-enrichment, but for addiction feeding.

16 Whilst I think for myself that these submissions have an appropriate foundation to them and are open to be put, I am not persuaded that they are sufficiently powerful to warrant the Court interfering with his Honour's discretion. All of these matters were before his Honour and there is nothing to suggest that he was not fully cognisant of them when exercising his discretion. The fact is that his Honour was provided with little or no evidence as to the applicant's means; although there was some material suggesting that she had money in the bank. As I have previously indicated, the discretion invested in the judge is one which is to be exercised judicially and in conformity with the purposes of the statute. I agree with Mr McArdle that the fact that the applicant was trading to support her addiction cannot be a reason for failing to apply the purposes of the statute, which is aimed at the prevention of trafficking in drugs, for whatever reason. It is the lifestyle which people choose to lead which supports the drug trade; the engagement in the trade by those who need to support a habit will be relevant to the penalty to be imposed overall; but must have less relevance - indeed, limited relevance - to the objects of the Confiscation Act.

For the reasons given, I would refuse leave to amend the grounds of the application by adding ground 2, and I would refuse the application for leave to appeal against the pecuniary penalty order made by his Honour.

1. The application for leave to amend the grounds by adding ground 2 is refused.

2. The application for leave to appeal against the pecuniary penalty order is refused.

[1] [2004] VSCA 146 at [12]- [13] per Vincent, J.A.; at [16] per Batt, J.A.

[3] Cf. R. v. Saxon [1998] 1 V.R. 503.

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