R v Zhao [2017] ACTSC 385

See [43] to [51] below.

CRIMINAL LAW - JURISDICTION, PRACTICE AND PROCEDURE - Judgment and Punishment - Sentence - trafficking in a controlled substance other than cannabis, namely methylamphetamine and heroin - offender's evidence not accepted - attempt to minimise involvement in drug enterprise - better than average prospects of the offender upon release - importance of deterrence.

Bui v The Queen [2015] ACTCA 5

Director of Public Prosecutions (Cth) v Beattie [2017] NSWCCA 301

Knight v Victoria [2017] HCA 29; 345 ALR 560

Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59

R v Clinch (1994) 72 A Crim R 301

R v Toumo'ua [2017] ACTCA 9

Wong v The Queen [2001] HCA 64; 207 CLR 584

1. Lei Zhao, the offender, pleaded guilty before this Court to four charges on an indictment as follows:

Count 1 That he, in the Australian Capital Territory on 15 October 2015, trafficked in a controlled drug other than cannabis, namely methylamphetamine;

Count 2 That he, in the Australian Capital Territory on 15 October 2015, trafficked in a controlled drug other than cannabis, namely heroin;

Count 3 That he, in the Australian Capital Territory between 30 April 2016 and 15 July 2016, trafficked in a controlled drug other than cannabis, namely methylamphetamine; and

Count 4 That he, in the Australian Capital Territory on 14 July 2016, trafficked in a controlled drug other than cannabis, namely methylamphetamine.

2. Mr Zhao first appeared in the Magistrates Court on 15 July 2016 in relation to what became Counts 3 and 4, to which he pleaded not guilty. He was remanded in custody and did not apply for bail. Later, on 17 October 2016, he was charged with what became Counts 1 and 2 being the historically earlier trafficking offences, to which he also pleaded not guilty.

3. The matter was committed to this Court for trial on 22 February 2017. It was then set down for trial in the week commencing 28 August 2017.On 16 August 2017, Mr Zhao pleaded guilty to the offences set out above.

4. These late pleas of guilty nevertheless have utility even in the face of a strong Crown case and I will allow approximately 10% discount for this fact. (See R v Toumo'ua [2017] ACTCA 9)

5. All four offences arise under s 603(7) of the Criminal Code 2002 (ACT) and carry a maximum penalty of 10 years imprisonment.

6. The offences occurring on 15 October 2015 arose as a result of police executing a search warrant at Mr Zhao's rental property in Page on that date. No-one was present on the property at the time when the police arrived. They forced entry through the rear laundry door to find that the house was partially furnished and that no-one appeared to be living there.

7. Police located and seized various clip seal and plastic bags, as well as digital scales, plastic funnels and other drug paraphernalia containing white crystalline substances. Analysis of the seized material found that Mr Zhao was in possession of:

(a) 358.9g of methylamphetamine; and

(b) 191.7g of heroin.

8. The statement of facts, to which Mr Zhao adheres, describes the offender's possession of the methylamphetamine as being for the intention of sale, and his possession of the heroin as guarding or concealing the drug with the belief that someone else would sell it.

9. The offence occurred between 30 April 2016 and 15 July 2016 and arose out of a surveillance device warrant police obtained on Mr Zhao and his vehicle. Police listened to Mr Zhao's conversations and observed him using coded language to traffic methylampheatmine to numerous purchasers on 14 occasions. The total amount sold during the relevant period was 665g.

10. The fourth trafficking offence arose after police conducted a traffic stop of Mr Zhao's car on 14 July 2016. Police executed a search warrant and seized Mr Zhao's mobile phone as well as $1052.90 in cash found in his wallet.

11. On that day, other police also executed a search warrant at Mr Zhao's residence in McKellar. They found and seized various bags contained crystalline substances, as well as a set of digital scales. The total amount of the crystalline substance was found to be 521.9g of methylamphetamine, which was possessed with the intention of sale.

12. Mr Zhao was arrested that night and has remained in custody since that date. The offender's sentence will commence on 14 July 2016.

13. Under the sch 1 of the Criminal Code Regulation 2005 (ACT), a trafficable quantity of methylamphetamine is between 6 grams and 3 kilograms. Similarly, a trafficable quantity of heroin is between 5 grams and 2.5 kilograms.

14. The evidence reveals that the offender sold methylamphetamine to his customers at the price of one ounce (28 grams) for the sum of $6000. Although this evidence comes directly from Count 3 there is no reason to believe that the same figure would not be applicable to sales of methylamphetamine should they have been made from the stock on hand of that substance in Counts 1 and 4.

15. The value of the stock of methylamphetamine on hand in counts 1 and 4 equates to $76,907 and $111,835 respectively at sales prices.

16. There are no actual sales of heroin and no figure for the value of the heroin is in evidence. It can be noted that this amount of heroin is 39 times the trafficable quantity.

17. It is clear from the evidence on Count 3, including the telephone interceptions in coded language, that the offender was a seller of drugs to other on-sellers. Counsel for the offender characterised the offender's role as "a dealer to street dealers". The lowest recorded sale by the offender is of the value of $6,000. The highest recorded sale is of the value of $36,000. The intercepted conversations confirm the on-selling of the drugs by the offender's customers. The total sales of methylamphetamine in Count 3 was of the order of $142,500.

18. It is not possible to know where precisely the offender sat in the hierarchy of on- sellers from the evidence. He was certainly a person above a street dealer but not a person who manufactured or imported the drugs. He himself purchased drugs in a syndicate where he was able to obtain those drugs at what he considered to be a good price because of his buying power. I reject the evidence given by him in chief before me that "I sell extra drugs so I had money to fund my own consumption of drugs" and in cross examination that the offender made a profit of some $2000 per week which was enough to pay for his own consumption of ice. That evidence was given to minimise his involvement in the selling of drugs which was undertaken by him for his own profit even if he consumed ice himself.

19. The offender in his evidence did not suggest he was a user of heroin and did not seek to explain the presence of heroin.

20. Although the weight of the drug may not be of chief importance (Wong v The Queen [2001] HCA 64; 207 CLR 584 at 609), here it provides an indication of the level of the scale of dealings and operations knowingly undertaken by the offender.

21. The offender gave evidence before me through an interpreter which made more difficult an evaluation of the reliability of that evidence. I did not form a view that all of it was accurate and truthful rather that it was aimed at minimising, out of enlightened selfinterest, his involvement with the actual scope of the drug enterprise. As recorded above, I do not accept his evidence that his involvement in drug dealing was merely to finance his own drug taking. Even allowing for the difficulties of assessing that evidence through an interpreter I found that the offender was not telling the truth about his activities. I found this on the basis of the way the offender answered questions in the witness box, the inconsistences in his testimony and also that testimony's consistency with the agreed facts.

22. Another factor also should be taken into account. The offender was informed by his wife that police had executed a search warrant at the offender's home and he knew that police had seized drugs from the rented premises. Notwithstanding this information, the offender continued selling drugs knowing of the police interest and their involvement. It is inherently unlikely that the offender would continue his business for either no profit or minimal profit in the light of that knowledge. There were other ways to satisfy his own drug consumption which came to about $1,500 per week on his own case using the figures at which he was selling the drug ice. As a practical matter, the cost would likely be much less to him. Funds were available from his parents or could be generated by a decrease in the gambling activities referred to below.

23. I do not know what amount of profit the offender made from his drug dealing. This was a factual issue between the parties. There was no evidence of conspicuous consumption or lifestyle. There was evidence of other sources of funds and expenditures of funds by the offender. The evidence showed gambling losses of some $50,000 or $60,000 over a period of three years. On the other hand, the offender's parents sent him funds well in excess of this amount being in the vicinity of $80,000 every year over that period. The evidence of other expenditures made by the offender was given imprecisely. The other finding that must be made is that the offender, at least in the last nine months or so before his arrest, was not in employment.

24. I find beyond reasonable doubt that the offender was motivated by profit in selling the drugs and that it was not a case where the offender was selling drugs to finance merely his own drug taking. I cannot say what profits were generated but this is not an element of the offence. Whether the offender was a good businessman or not is beside the point. We know the quantity of drugs trafficked and for which the offender is to be sentenced. We know the offender's motivation for the trafficking which is relevant to sentence.

25. Mr Zhao is now 40 years old. He was born in China and reports no negative events during his childhood.

26. Before migrating to Australia in 2005, Mr Zhao worked in sales until he lost his job in 2004. In 2010, he married his wife during a visit to China, who also migrated to Australia in 2011. Thereafter they had two daughters who are now aged 5 and 6. The offender's wife does not speak English and consequently struggles whilst the offender is in custody. After migrating to Australia, Mr Zhao has worked as a plasterer but it does not appear that was continuously employed in that work. He has received considerable financial assistance from his parents in China over the last few years to his arrest.

27. The offender said in interviews with ACT Corrective Services and ACT Health that since 2012 he was using one gram of amphetamine daily and smoked over 30 cigarettes a day.

28. He also admitted to the above entities a tendency to gamble and confirmed this in his evidence. However, I was specifically told during the evidence on sentence that no submission was to be made that gambling had a relationship to the selling of drugs.

29. Mr Zhao gave evidence before me that he had tried to give up Ice and failed prior to his arrest. He assured me that upon his incarceration he had indeed given up drugs. He now felt regret and remorse and recognised the harm done by drugs.

30. Notwithstanding some disquiet, I will act on the basis that the offender was consuming one gram of Ice each day prior to his arrest; that he has not consumed drugs in gaol; that he now has an insight into their harm to himself and his family and feels regret in involving himself in the trade.

31. One matter that is notable and also confirmed by objective material is that the offender has made very good use of his time at Alexander Maconochie Centre (AMC) and undertaken many courses and programs available to him. These courses and programs are aimed at teaching new skills in a work environment and also strategies for improving the offender's resilience in life. The undertaking and completion of these courses and programs has at least set the offender on a pathway to rehabilitation.

32. The authors of the Pre- Sentence Report under the heading of "Opinion" write:

Mr Zhao was assessed as low-medium risk of general reoffending. His primary criminogenic risks appear to be his substance abuse, unemployment and financial issues.

Further, he is not involved in any organised activities in the community and with the exception of friends who reside interstate, appears to have limited social supports. It is positive Mr Zhao has made use of his time on remand to begin addressing his substance abuse issues and it is recommended he continue in this stead. Further, it is recommended Mr Zhao address his identified criminogenic risks, his likelihood of reoffending may reduce.

33. Evidence was given by the offender that his wife visited him at AMC twice weekly which was the maximum number of visits permitted. On one of these weekly occasions his two daughters would also visit the offender in the prison. The offender gave evidence that, as their father, he just could not tell his daughters why he was in gaol so he reached an agreement with his wife to tell them "that your father is working and he will be back home after he finishes his work." The evident embarrassment and shame reflected in the offender's lies to his children may work to his advantage.

34. I regard the above as being at least a solid support for the offender when he emerges from AMC.

35. The combination of factors provides a basis of assessing the prospects of the offender, living a productive and law abiding life when released, as better than average. Nevertheless deterrence remains an important consideration in respect of these offences.

36. I will treat the offender as having no relevant convictions.

37. I record that I have been guided in the application of sentencing principles by the decision in Bui v The Queen [2015] ACTCA 5 particularly at [41].

38. I was also referred to a number of other single judge decisions from which I gained guidance. I also had regard to the actual facts found in Bui as they have a comparison with the current offending.

39. The High Court recognised the principle of totality in Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59. At 62-63, the joint judgment said:

The totality principle is a recognized principle of sentencing formulated to assist a court when sentencing an offender for a number of offences. It is described succinctly in Thomas, Principles of Sentencing, 2nd ed. (1979), pp. 56-57, as follows (omitting references):

The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is "just and appropriate". The principle has been stated many times in various forms: "when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong["]; "when cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences".

See also Ruby, Sentencing, 3rd ed. (1987), pp. 38-41. Where the principle falls to be applied in relation to sentences of imprisonment imposed by a single sentencing court, an appropriate result may be achieved either by making sentences wholly or partially concurrent or by lowering the individual sentences below what would otherwise be appropriate in order to reflect the fact that a number of sentences are being imposed. Where practicable, the former is to be preferred.

40. The passage of time has not developed any firmer guidelines as to how this process described in the text book passages adopted by the High Court should be undertaken with transparency. As Basten JA recently observes in Director of Public Prosecutions (Cth) v Beattie [2017] NSWCCA 301 at [28]:

Where the law permits, as in this case, the imposition of an aggregate sentence, the somewhat arbitrary process of adjusting individual sentences or adjusting the degree of concurrency is avoided, at least in the absence of any need to specify those effects with arithmetical precision. Nevertheless, the substantial issue remains as to what is properly described as a fair, just, proportionate or appropriate sentence for the whole of the offending. That problem arises where the sentence has been selected for each individual offence and principles governing the degree of concurrency or accumulation have been applied, but the overall period is one which offends some instinctive sense of fairness and justice.

41. The question of totality arises in this case. I have structured an overall sentence reflecting the criminality and offending involved and taken into account that the severity of a sentence is not simply the product of a linear relationship. This is explained by Malcolm CJ in in R v Clinch (1994) 72 A Crim R 301 at 306-307:

In other words the severity of a sentence increases at a greater rate than any increase in the length of the sentence. Thus, a sentence of five years is more than five times as severe as a sentence of one year. Similarly, while a sentence of seven years may be appropriate for one set of offences and a sentence of eight years may be appropriate for another set of offences, each looked at in isolation. Where both sets were committed by the one offender a sentence of 15 years may be out of proportion to the degree of criminality involved because of the compounding effect on the severity of the total sentence of simply aggregating the two sets of sentences.

42. In this case there can be concurrency between the first and second counts reflecting the fact that both methylamphetamine and the heroin were the dealers stock on hand at that point of time. It is not possible to apply this reasoning rationally to the third and fourth counts. It is only possible to rely upon degrees of concurrency to avoid a disproportionate result for the offending.

43. On Count 1 that you, in the Australian Capital Territory on 15 October 2015, trafficked in a controlled drug other than cannabis, namely methylamphetamine you are sentenced to 2 years and 6 months imprisonment.

44. I reduce this sentence to 2 years and 3 months on account of the utilitarian value of your plea. That sentence will commence on 14 July 2016 and will end on 13 October 2018.

45. On Count 2 that you, in the Australian Capital Territory on 15 October 2015, trafficked in a controlled drug other than cannabis, namely heroin you are sentenced to 18 months imprisonment.

46. I reduce this sentence to 16 months on account of the utilitarian value of your plea. That sentence will commence on 14 July 2016 and will end on 13 November 2017, so that has been served.

47. On Count 3 that you, in the Australian Capital Territory between 30 April 2016 and 15 July 2016, trafficked in a controlled drug other than cannabis, namely methylamphetamine you are sentenced to 3 years and 6 months imprisonment.

48. I reduce this sentence to 3 years and 2 months imprisonment on account of the utilitarian value of your plea. That sentence will commence on 14 January 2017 and will end on 13 May 2020.

49. On Count 4 that you, in the Australian Capital Territory on 14 July 2016, trafficked in a controlled drug other than cannabis, namely methylamphetamine you are sentenced to 2 years and 9 months.

50. I reduce this sentence to 2 years and 6 months on account of the utilitarian value of your plea. That sentence will commence on 14 January 2019 and will end on 13 July 2021.

51. The overall sentence is therefore of 5 years and I order that the offender not be eligible for parole prior to 13 July 2019. In fixing this non-parole period I have taken into account the offender's subjective case but also the fact that that period is the minimum time that justice requires (Knight v Victoria [2017] HCA 29; 345 ALR 560 at [8]).

I certify that the preceding fifty-one [51] numbered paragraphs are a true copy of the Reasons for Sentence of his Honour, Robinson AJ.