R v Wu

District Court of NSW|2020-06-04

remarks on sentence

The offender is to be sentenced for an offence pursuant to s 233BABAD(2) of the Customs Act 1901 (Cth), of possess goods, being tobacco products, namely 368,480 sticks of various tobacco brands and 1.18 kilograms of loose tobacco, knowing that the goods were imported with intent to defraud the revenue.
The offender pleaded guilty to the offence in the Local Court. The maximum penalty is 10 years imprisonment and/or a fine specified pursuant to s 233BABAD(5) of $1,513,055.55.
The offender was arrested on 2 May 2019. He was born on 2 April 1989 and was 30 years of age at the time of the offence.

The sentence hearing

The sentence hearing took place in Sydney on 4 June 2020. The Commonwealth Crown Sentence Summary became Ex A. It contained an Agreed Statement of Facts which may be summarised as follows.
On 1 May 2019, staff at Kennards Storage in Ultimo, having conducted a review of their accounts and identified that a particular unit, H214, was in arrears, entered the unit to prepare the contents for auction or disposal. They found a large quantity of tobacco labelled with foreign writing. The staff then changed the lock and notified the Australian Border Force ("ABF").

The offender's evidence

The offender tendered a letter to the court (Ex 1). In it, the offender outlines the effect of being charged has had on him and his family. The offender stated that he was "so regretful of things" that he did, and "so sorry to his family and the community".
Exhibit 2 is a letter from the offender's wife, Carrie Chen, in which she expressed that the offender was sorry for the offence, that he had decided to make changes and had sold the retail tobacco shop under his name and found a new job. She stated that his intention in committing the illegal tobacco offence was to help his family and to ensure that he could support his wife and baby. She further stated that he would do whatever he can to make amends.
Exhibit 3 was a letter from Dr N Dou dated 16 April 2020. Dr Dou described the offender as being "very depressed, guilty and regretful for what he had done". Dr Dou believed that the offender should be able to learn well from this hard lesson and restart a new life for himself.
Exhibit 4 was a letter from Dr H Xia dated 6 March 2020. Dr Xia described the offender as a "considerate and kind friend", who looked after others in the community.
Exhibit 5 was a letter from R Zhang dated 18 April 2020. Mr Zhang described the offender as one of the "top students" at Sydney University and "a responsible and reliable person" who he had known for six years. He had expressed the deepest regrets for his offending and its grave repercussions for his family.
The offender had qualified as a chartered accountant but had been unable to obtain employment in that field. Exhibit 6 was an extract of the "fit and proper requirement" published by CPA Australia. Under the by-laws of that organisation, the fit and proper requirement is an ongoing requirement for membership. The document reveals that the determination as to whether a person is fit and proper will include whether that person has ever been convicted of a criminal offence or has charges pending against them.
The offender also relied on an affidavit sworn by him on 6 May 2020. In that affidavit he set out his family history. He was born in China and came to Australia in 2014 at the age of 25 on a student visa to study accounting. He completed his Master's Degree at the University of Sydney in 2016. He had sponsored his wife and they had one child born on 10 July 2019.
After graduating from accounting, the offender could not find employment as an accountant. He decided to purchase a 30% share in a tobacconist venture, HD Team Pty Limited, which operated a business known as Cignall Parramatta. He purchased the property in 2017, however, it was not profitable and he sold his share in the business in 2018. He then commenced employment in another tobacco business and his involvement in the current offence he described as delivering illegal tobacco for the owner of that business. When he commenced that employment his wife was pregnant and he felt a great pressure to provide financially for his family. He was paid $10 per carton per delivery.
The offender explained that the messages contained in Ex B, as relating to transactions for the sale of tobacco prices on behalf of his employer, not relating to his own business at Parramatta. The messages relating to sales in the period January to April 2019 were done as favours for people who he knew who lived near his house at Oatlands. He was paid for the delivery of that tobacco at $10 per carton.
The offender deposed that as at the date of the offence, 2 May 2019, the tobacco in the storage unit belonged to "another person, and it was for another shop". He denied arranging the rental of the storage unit. He knew Shougang Liu as a landscaper he used for a gardening job, but had never met him. He stated that he neither signed for the storage unit nor arranged Shougang Liu to do so, and stated that he was not in control of the unit. On 2 May 2019 he was going to the storage unit to get the tobacco to take to the other person's shop. He stated there was no profit in it for him. He was given the key, however, he was aware that the tobacco was illegal tobacco, that no duty was paid on it, and that it was in his possession for the purpose of delivering it. He wished to emphasise that the actual profit intended to be made from dealing in the tobacco was not for him, save for the delivery fee which he was paid. He sincerely regretted his actions and now worked in a money exchange shop. In the future he wished to move to a new industry, either in web development or in accounting.
The offender gave evidence with the benefit of an interpreter. He confirmed that the content of his affidavit was true and that he was now a permanent resident of Australia.
He was shown Ex B, and asserted that the messages contained therein did not relate to the present offence.
The offender objected to giving evidence on the basis of self-incrimination, and having satisfied the requirements of s 128 of the Evidence Act 1995, a certificate pursuant to s 128 was issued. He then proceeded to give evidence in relation to each of the categories of message relating to the persons named therein who were either suppliers or customers of the tobacco business for which he worked.
The offender gave evidence that he had no current plans to work as an accountant as his CPA status would be affected by the outcome of the sentence hearing.
In cross-examination, the offender confirmed that he agreed with the facts in Ex A. When asked to identify the shop for whom he worked part-time, he stated that it was a tobacco shop in Haymarket. He had first begun dealing with tobacco when employed at that shop in early 2017.
The offender was asked about the 70 shares he held in HD Team Pty Limited, and stated that he was holding 40 of those shares on behalf of another shareholder.
In relation to the transactions outlined in Ex B, the offender gave evidence that whether the transactions took place in fact was up to the boss. When asked who was the boss, he declined to answer, stating: "He may affect my life and I don't want to involve other people."
The offender gave evidence that he stopped working in the Haymarket business in June 2017, but after he sold the share in his own business, he was asked to work at Haymarket again on a part-time basis.
When asked who had leased the storage unit, the offender said he did not actually know. His boss had given him the key and on the morning of his arrest he was given a new key to the unit. When asked how he knew that S Liu had leased the unit, he said he had had a conversation with his boss.
When asked further about the key, and why his wife was looking for the key on the morning of his arrest, the offender gave evidence that the key was usually kept in the shop. When asked why his wife had paid the outstanding fees for the unit, he said "my boss asked her to do that'.
The offender was asked about the email address ending in QQ.com, which had been found as a contact on his phone. He described it as one of the email addresses used by his boss. Similarly, the mobile number ending in 703 was also found on his phone and computer. The offender gave evidence that he shared his computer with his wife and she worked at the same shop in mid-2016.
The offender gave evidence that he knew his involvement with illegal tobacco was wrong and that he realised that when he worked at the shop from early 2017.
In re-examination, the offender gave evidence that whilst he decided to sell his shares in H D Team Pty Limited in early September 2018, the sale was completed by May 2019.

The Crown submissions

The Crown relied on a detailed and thorough written outline of submissions, which set out general principles for sentencing for Commonwealth offences. It was submitted that ultimately, given the need for general deterrence and denunciation of the offender's conduct, a sentence of full-time imprisonment with a period to serve was the only appropriate disposition on sentence here. The Crown referred to the second reading speech in relation to the bill which introduced s 233BABAD of the Customs Act in 2012, which had emphasised the need for deterrence for tobacco smuggling offences which constitutes offences of fraud against the Commonwealth revenue. The objective seriousness of the offending was to be assessed by reference to the following factors outlined in R v Zhang [2017] SASCFC 5; [2017] 265 A Crim R 113: "(a) The offender's role in the criminal enterprise; (b) The sophistication of the offending; (c) The period over which the offending was committed; (d) The quantity of the tobacco imported, and the amount of duty evaded; (e) Whether the loss of revenue has been repaid; (f) Whether the offending involved other illegalities, such as the use of false identities; (g) Whether the offender was involved in the distribution and sale of tobacco products within Australia; and (h) The extent to which the offender gained financially from his offending."
In assessing the offender's role, the Crown submitted the court should take into account the following: "(i) The offender stored illicit tobacco products in a location separate to his place of business, in a storage unit that had been opened in the name of a third party. (ii) The offender was involved in the establishment of the storage unit from the time of its initial opening on 14 September 2016, demonstrated by the following: A. The QQ account details provided on the Kennards Storage Agreement were consistent with the QQ account details located on the offender's phone on his arrest; B. The mobile number provided on the Kennards Storage Agreement was recorded under the contact name 'Shop Shop Mobile' in the offender's phone and in a note on his Macbook computer dated 14 September 2016, being the date the storage unit was rented. (iii) The offender maintained his distance from direct dealings concerning the storage unit by having his wife attend Kennards Ultimo to renew the rental agreement and pay the arrears on 2 May 2019 (b) The amount possessed by the offender was significant, being 368,480 sticks of various tobacco brands and 1.18 kilograms of loose tobacco; (c) The tobacco products possessed by the offender represent a total of $302,611.11 in evaded duty. (d) The offender was the sole director of a tobacconist and therefore: (1) Was involved in the distribution and sale of tobacco products in Australia and had knowledge of the Australian market for cigarettes; and (2) Was aware of the requirement to pay duties in relation to cigarettes and that the cigarettes he possessed did not conform to Australian Standards."
The Crown submitted that the offending was committed for financial reward, and the offender possessed the tobacco products for future sale.
The Crown submitted that both general and specific deterrence were important in the sentencing process, relying on R v Saleh [2015] NSWCCA 399 at [47]. The offending was difficult to detect, and created significant enforcement and investigation costs for the Commonwealth of Australia and consequently taxpayers.
The offender was 30 years old at the time of the offending and had no prior criminal history. However, the Crown submitted that for offences of this nature, prior good character generally carries less weight as a mitigating factor.
The Crown submitted that the offender was entitled to a utilitarian discount for his plea of guilty which was entered in the face of a strong prosecution case.
The Crown submitted that in the absence of exceptional circumstances, potential hardship to the offender's family must not be taken into account as a mitigating factor. In accordance with well established authorities, the court should determine the minimum term to be served as the period of time the court considers appropriate in order to ensure both adequate punishment and an incentive for rehabilitation.
The Crown submissions annexed a schedule of general principles for sentencing for Commonwealth offences, together with a schedule of cases for offences pursuant to s 233BABAD of the Customs Act 1901.
In oral submissions, the Crown submitted that the role of the offender here was not either relatively brief or that of a peripheral nature as submitted by the offender in his written submissions. He was not merely a delivery driver. Rather, the Crown submitted that the offender's role was that of intermediary or distributor. He had been the sole director of a tobacconist business and had knowledge of the Australian market. He understood that it was a requirement of citizens to pay duty on tobacco products and that there was Australian Standards for tobacco packaging. The court would be satisfied beyond reasonable doubt that the offender's role was more consistent with that of an intermediary and that his offending was committed for financial reward, thereby increasing the objective seriousness of the offending.
It was submitted that the court could not find on the balance of probabilities that the offender was a delivery driver doing favours for others. This was not isolated offending, but a course of conduct that had commenced early in 2017. Further, the offender was not entitled to leniency on the basis of his good character, referring to Weininger v R (2003) 212 CLR 629; [2003] HCA 14.
As to remorse and contrition, the Crown submitted that the offender's evidence demonstrated that he was remorseful for himself and the court should be guarded in accepting that he was remorseful for others in the community or that he had accepted full responsibility for his criminal conduct. This also affected his prospects for rehabilitation.
Further, the court would be cautious in accepting the evidence of those who provided testimonials because of the period over which the conduct took place. Further, the effect on the offender's employment prospects do not amount to extra curial punishment here. The offending took place over an extended period after the offender had completed his qualifications as a chartered accountant. The impact on his future employment was an inevitable consequence of his offending, relying on R v Zerafa (2013) 235 A Crim R 265; [2013] NSWCCA 222.
Of the schedule of cases provided, the Crown submitted that the closest to the present offending was R v Zhang [2017] SASCFC 5, where for separate charges of import tobacco products and possess tobacco products, the offender had been sentenced to imprisonment for 2 years and 7 months with a non-parole period of 2 years.
Finally, the Crown referred to R v Pham (2015) 256 CLR 550; [2015] HCA 39 at [28], where the court emphasised the importance of general deterrence in respect of such offences which were hard to detect, and warranted full-time custodial sentences.

The offender's submissions

Counsel for the offender also relied on a detailed written outline of submissions which set out the factors to be taken into account pursuant to s 16A of the Crimes Act 1914 (Cth). It was submitted that the offender's role in the offending was peripheral and that of a delivery driver, notwithstanding that it was a role of "some importance". It was submitted that the offender did not initiate the importation of the tobacco products and he received no payment or reward. His only payment was being paid as an employee and there was no suggestion of any trappings of wealth.
In respect of s 16(2)(e), it was accepted there was a loss of revenue, however, this was an element of the offence and the court would guard against double counting.
It was submitted that the offender's plea of guilty was entered at the earliest opportunity and he was therefore entitled to a discount of 25%. Further, there was considerable evidence of remorse.
The offender submitted there were significant subjective features to be taken into account. Having arrived in Australia in 2014, he had completed a Master's Degree in accounting. The offender had no criminal history and was a devoted family man with a strong work ethic. It was submitted that he did not take advantage of his good character in any way to commit the offence.
It was submitted that the offender had excellent prospects of rehabilitation and would not reoffend. He was genuinely remorseful and had good insight into his offending behaviour. It was submitted that because of these factors, the need for personal deterrence called for less weight.
The offender referred to JIRS statistics and a schedule of cases to provide guidance in sentencing. It was submitted there was considerable scope for a sentence involving punishment to be imposed short of full-time imprisonment. It was submitted that possible future detriment to his employment was a factor which could justify leniency. Finally, it was submitted that the offender fell into that category where any sentence was best served in the community by promoting his rehabilitation.
In his oral submissions, learned Counsel for the offender submitted that the matters outlined in the facts concerning uncharged matters were not relevant to the assessment of objective seriousness of the offending or the role of the offender. Further, it was not established that the offender had organised the unit, and his wife paid the outstanding fees because she worked for the same tobacconist.
It was submitted that on the evidence the court would not draw an inference that he was involved in organising the storage unit at Kennards. Any suspicion surrounding that did not amount to proof beyond reasonable doubt.
The offender rehearsed his submissions relating to the absence of reward over and above his wages as an employee.
It was submitted that there was no evidence that the offender was financially committed to the shop at Haymarket or the Kennards unit. His role was therefore at the lower end of objective seriousness.
It was submitted that the offender was contrite for his offending and full weight should be given to his contrition. Further, the court would not disregard the impact his offending would have on his capacity to be employed as a CPA. It was submitted that the court would make some allowance for this loss of opportunity to now work as a CPA.
It was submitted that the authorities relied on by the Crown all involved or concerned importation of tobacco products. A closer example was R v Tieu [2019] NSWDC 485, which involved possession of tobacco products representing $330,000 of unpaid duty. In that case the court imposed a sentence of 2 years to be served by an ICO. In circumstances where the offender had no prior offences, and was unlikely to reoffend, was a person of good character with strong subjective factors to be taken into account, the court should impose a sentence allowing him to stay in the community. It was submitted that appropriate conditions could be imposed involving community service and/or home detention.

Submissions in reply

The Crown submitted that the decision of the Victorian Supreme Court of Appeal in Hussein v R [2016] VSCA 212 was comparable. In that case, a sentence of 2 years and 6 months was imposed to be released on recognizance after 12 months.

Determination

In sentencing the offender for this Commonwealth offence, I must have regard to the matters set out in s 16A of the Crimes Act 1914 (Cth). Section 16A(1) requires a sentence to be imposed that is "of a severity appropriate in all of the circumstances of the offence".
I must take into account the following matters pursuant to s 16A(2):

"(a) The nature and circumstances of the offence.

In assessing the objective seriousness of the offending, I take into account that this was sophisticated offending involving detailed planning, including the lease of a storage unit in a false name with false details. I am not, however, on the evidence before me, satisfied beyond reasonable doubt that it was the offender who arranged for the storage unit. I also take into account that the offending took place over a period of time, and that the items seized were 36 separate brands of cigarettes totalling 368,480 sticks and 1.18 kilograms of loose tobacco in 12 commercially labelled cigar packets, containing loose tobacco. I also take into account that upon execution of the search warrant of the home of the offender, 211 empty and commercially labelled cigar packets were located. Further, the total amount of revenue evaded on the cigarettes was $301,324.52 and the amount of revenue evaded on the loose tobacco was $1,286.59.
The use of false names and contact details makes this offending difficult to detect, and the details of the whole operation involving the importation and distribution of the illegal products is unknown. In assessing the role played by the offender, given that he was charged with possession of the goods, knowing they were imported with intent to defraud the revenue, but not the importation of them, his role must be assessed taking into account the following.
The offender had some involvement in the establishment of the storage unit, having regard to the fact that the email address ending in QQ.com was located on his phone, and the mobile phone number recorded in the storage agreement was recorded on his mobile phone contacts and in a note on his Macbook computer dated 14 September 2016, being the date of commencement of the lease of the storage unit. Further, as a sole director of a company that operated a tobacconist business, I accept the Crown submission that the offender was involved in the distribution and sale of tobacco products in Australia and had knowledge of the local market for cigarettes, and further, that he was aware of the requirement to pay duties in relation to cigarettes and tobacco products, and that the cigarettes he possessed did not conform to Australian Standards.
In all of those circumstances, I am not satisfied that the role of the offender was limited to that of driver only and I accept the Crown's submission that his role was that of intermediary or distributor.
Having regard to all of the circumstances, the offending was objectively serious, but below the mid-range for an offence pursuant to s 233 BABAD(2) of the Customs Act 1901 (Cth) and in the middle of the lower range for such an offence.
I also take into account that the offender gained a modest financial benefit by way of $10 per carton upon delivery, and that there were no trappings of wealth identified which would suggest otherwise. The total benefit received by the offender is, however, unknown.

(b) Other offences that are required to be taken into account.

As outlined above, there was evidence of other uncharged offences contained in Ex B which I have not taken into account in assessing the seriousness of the offending here. Nor do I take those matters into account in sentencing the offender for the index offence.

The offending took place over a period of time between 2016 and the arrest of the offender on 2 May 2019, and represented a series of criminal acts rather than an isolated offence.

(d) The personal circumstances of any victim of the offence

As outlined above, such offences as this are difficult to detect and not only defraud the revenue, but involve considerable investigative resources and therefore revenue to detect. Thus, all Australian taxpayers become victims of this type of offending.

(e) The injury, loss or damage resulting from the offence

As outlined above, the loss and damage is comprised of the lost revenue, and the investigative resources involved in detection of the crime.

(f) The degree to which the offender has shown contrition

I accept that the offender, by his evidence, has shown contrition for the offending conduct, however, no reparation has been made for the loss to the revenue.

(g) The offender's plea of guilty

I have taken into account the offender's early plea of guilty, both as an expression of his remorse and giving effect to a utilitarian discount by way of facilitating the course of justice in the face of a strong Crown case. I intend to allow a discount of 25% for the utilitarian value of his plea, together with his contrition and remorse for his offending conduct.

(h) The degree of cooperation with law enforcement agencies

There is no evidence that the offender cooperated with law enforcement agencies.

(j) Specific deterrence

Specific deterrence must be taken into account, as the offender must understand the serious nature of his offending and its denunciation by the community.

(ja) General deterrence

General deterrence is important in the sentencing process for offences under s 233BABAD of the Customs Act. Such offending is difficult to detect and creates significant enforcement and investigations costs for the Commonwealth of Australia and consequently taxpayers.

(m) The character, antecedents, age of the offender

The offender, who is now 31 years of age, is otherwise of good character. He had qualified with a Master's Degree as a CPA, however, was unable to obtain employment in that field. His decision to invest in a tobacconist business led to this offending. The offender's good character may be given some weight in mitigation in the sentencing exercise, however, the fact that this was not an isolated offence and the uncharged acts took place over a period of time means that it does not entitle him to leniency.

(n) Prospects of rehabilitation

I accept that the offender has learnt a salutary lesson following his arrest for this serious offence. His motivation for the offending was to provide for his family, and he now has reasonable prospects of rehabilitation.

(p) The probable effect of any sentence on the person's family

It is clear that the offender's sentence will impact upon his family, as he is the major financial contributor, however, that does not amount to hardship in the sentencing process by comparison to other offenders. It is the unavoidable consequence of his criminal behaviour, as is the fact that he will be unable to satisfy the requirements of a "fit and proper" person to become a CPA upon conviction.
I have had regard to the maximum penalty pursuant to s 233BABAD(2) of the Customs Act 1901, of 10 years imprisonment and/or a fine specified pursuant to s 233BABAD(5) of $1,513,055.55. The maximum penalty is a guidepost in the sentencing process.
I am mindful of the principles of proportionality and the avoidance of double punishment. Having regard to all of the above factors, including the significant subjective factors put on behalf of the offender, I am satisfied that no penalty other than imprisonment is appropriate in all of the circumstances, pursuant to s 17A of Crimes Act 1914 (Cth). I intend to sentence you to imprisonment for a period of two years.
Pursuant to s 20AB(1) of the Crimes Act 1914 (Cth), that sentence may be served by way of an Intensive Correction Order pursuant to s 7(1) of the Crimes (Sentencing Procedure) Act 1999 ("CSPA").
In considering whether that sentence ought be served by way of an ICO, I have regard to what Harrison J said in R v Pullen [2018] NSWCCA 264 at [84]: "84 In determining whether an ICO should be imposed, s 66(1) makes 'community safety' the paramount consideration. The concept of 'community safety' as it is used in the Act is broad. As s 66(2) makes plain, community safety is not achieved simply by incarcerating someone. It recognises that in many cases, incarceration may have the opposite effect. It requires the court to consider whether an ICO or a full-time custodial sentence is more likely to address the offender's risk of re-offending. The concept of community safety as it is used in the Act is therefore inextricably linked with considerations of rehabilitation. It is of course best achieved by positive behavioural change and the amendments recognise and give effect to the fact that, in most cases, this is more like to occur with supervision and access to treatment programs in the community."
I have considered the issue of community safety as a paramount consideration pursuant to s 66 of the CSPA, together with the purposes of sentencing set out in s 3A of that Act, and find that your sentence should be served by way of an ICO, given the low risk of you re-offending and it being the best way to promote your rehabilitation.

Orders

I make the following orders: 1. You are convicted of the offence pursuant to s 233BABAD(2) of the Customs Act 1901 (Cth) of possess goods, being tobacco products, namely, 368,480 sticks of various tobacco brands and 1.18 kilograms of loose tobacco, knowing that the goods were imported with intent to defraud the revenue. 2. I sentence you to a term of imprisonment of 2 years from today. 3. Pursuant to s 7(1) of the CSPA the sentence imposed on you is to be served by way of an Intensive Correction Order. The sentence will commence today. 4. You must report to the Community Corrections Office at Parramatta as soon as practicable but no later than 7 days from today. 5. The standard conditions of the order apply: 1. You must not commit any offence. 2. You must submit to supervision by Community Corrections Office. 1. The following additional condition apply: 1. A Community Service work condition requiring the performance of community service work for 300 hours. I am satisfied that no SAR is required pursuant to s 17D(1A) of the CSPA 1999. 1. If you fail to comply with the conditions of this order, sanctions may be imposed by the Commissioner of Corrective Services or the Commonwealth Director of Public Prosecutions. Those sanctions may include a formal warning, imposing more stringent conditions, or it may include revocation of this order. 2. If the order is revoked, you may be required to serve all or some of the period of your sentence in full-time custody.
You are now directed to attend the court registry where a copy of this order will be explained and given to you.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 July 2020

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Judgment (22 paragraphs)

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