Regina v Stankovic [2006] NSWCCA 229 | Case summary

1 August 2006 REGINA v NENAD STANKOVIC Judgment 1 GILES JA: I agree with Grove J. 2 GROVE J: This is a Crown appeal asserting the inadequacy of sentence imposed by Geraghty DCJ at Sydney District Court. The respondent had been committed for sentence from Central Local Court following his plea of guilty to supplying a large commercial quantity of a prohibited drug methylenedioxymethylamphetamine (MDMA) commonly called ecstasy. His Honour was asked to take into account pursuant to the Form 1 procedure further offences of cultivating a prohibited plant (fifty four cannabis plants); possession of a prohibited substance (0.34 grammes of MDMA); possession of a restricted substance (Stanazol) and possession of unlawfully obtained goods in premises ($5,000 cash). 3 The respondent was sentenced to imprisonment consisting of a non parole period of five years two months commencing on 26 February 2005 and a balance term of two years seven months. This amounts to an effective total sentence of seven years nine months. The primary offence had available a prescribed maximum penalty of life imprisonment. 4 The respondent is a Serbian national who arrived in Australia in 2003 as a member of the support entourage for a musical group. He was permitted entry pursuant to a visitor's visa which was valid for one month. He overstayed that visa. There remained in Serbia a former partner, Sanja Lukenic (also known as Tomic) and three daughters born to their relationship. Whilst he was in Australia, the respondent married Ljiljana Novakovic. The evidence did not disclose when this marriage took place. A letter from Ms Novakovic tendered in the sentence proceedings (Exhibit 5) stated that they are separated but remain close friends. 5 Another letter (Exhibit 2) authored by Jelena Marjanovic asserts that she and he "became involved in an intimate relationship in December of 2003 which lasted until Nenad's arrest". She states that she was unaware of his illegal activities and has "ended the relationship but we have remained good friends". It would appear that she is referring to the arrest in February 2005 although the respondent had been arrested previously in respect of the matters which were eventually dealt with on the Form 1. Interviewed by police after the February arrest, the respondent claimed that he was living "at the moment" with his girlfriend, Zorica Popovic in a hotel "in the city", the address of which he did not know. The content of intercepted telephone calls would confirm the likely existence of an intimate relationship between the respondent and Ms Popovic. In his testimony at the sentencing hearing, the respondent mentioned the marriage to Ms Novakovic and the relationship with Ms Marjanovic in response to questions led commencing "since you've been in Australia have you had relationships with two women?" (T13 - 14 December 2005). No mention was made of Ms Popovic. 6 In a letter (and translation) tendered in the proceedings, Ms Lukenic stated that her "husband by marriage" lived and worked in Australia but the respondent, the father of her children, lived with her in Serbia until he disappeared in 2002. She heard that he was somewhere in Montenegro but in late 2004 he started calling her from Australia. The respondent denied some of this detail, asserting that he left Serbia in March 2003 and that Ms Lukenic had seen him off at the airport. Despite his marriage and subsequent relationships, he expressed an intention to bring Ms Lukenic and the children to Australia. 7 The respondent came to the notice of police on 15 April 2004 when they executed a search warrant at Mount St Thomas near Wollongong and he was detained after he was located trying to leave the premises by a rear door. The door from which he emerged contained cannabis plants (linked to an elaborate hydroponic set-up). Further search led to the location of other items which, together with the cannabis under cultivation, constituted the offences in respect of which the respondent acknowledged his guilt and asked his Honour to take into account pursuant to the Form 1 procedure when he was being sentenced. 8 After arrest and charge in respect of those matters, the respondent was released on bail. In cross examination he admitted that he did not appear in Court in accordance with his bail undertaking. His Honour found that he was invited to establish another "cannabis business" but declined, and he noted his claim that he went into hiding in order to avoid the overtures of his "business partner" Nikola Sipka. Nikola Sipka died in June 2005. 9 The respondent testified that Sipka was in effect a principal of the Mount Thomas venture and provided money for the respondent's legal fees after his arrest and also to establish the venture at Dee Why in respect of which the respondent faced the primary charge. He said he came out of hiding after January 2005 when Ms Lukenic contacted him about a letter she had received threatening harm to her and the children. 10 Consequent upon this information he met Nikola Sipka who persuaded him to participate in the new criminal venture of manufacturing MDMA at premises in Dee Why. The respondent testified that this commenced in February 2005 but by 21 February 2005 police had commenced physical and electronic surveillance of the activity. 11 Police became aware that the respondent had injured his hand operating a press used in drug manufacture and had attended for treatment at Royal Prince Alfred Hospital. At the hospital he gave a false name. 12 On 26 February a warrant was executed at the Dee Why premises and the respondent and a co-offender Nikolic were arrested. Just short of forty four kilos of manufactured MDMA were seized. This is nearly eighty eight times the amount of drug scheduled in legislation as constituting a large commercial quantity. 13 The premises were found to contain the accoutrements of drug manufacture. In addition to the pill press, there were found mixing bowls, air purifying respirators, dust masks, eye goggles, punches, dies for the press, bags and a container in which there was a quantity of tablets and as well there were supplies of sealable bags. The dining room of the premises in particular was covered in green powder and a similar powder was extracted from the vacuum cleaner. The green dust was analysed and discovered to represent varying purities of MDMA. 14 It was plain that, like the earlier cannabis cultivation, the respondent had involved himself in illicit drug activity on a planned "commercial" scale. 15 His Honour imposed sentence by assessing what he described as a "starting point" of twelve years. He discounted this by a factor of 20 percent to recognize the respondent's plea of guilty which was made at the earliest opportunity after an alteration in the specification of the preferred charge. There was, by agreement of counsel, a further discount of 15 percent for matters described in a document identified as Exhibit F which his Honour directed to be sealed. We have examined that document in the course of hearing the appeal. 16 Given the content of Exhibit F, I comment that the discount appears very generous but, in the light of the express agreement, I consider that it should be taken as appropriate. 17 Geraghty DCJ noted that it was "conceded by the Crown" that these two reductions should be added together and deducted from the head sentence. Hence, a notional sentence of twelve years reduced by 35 percent became seven years nine months and this was divided into a non parole period of five years and two months and a balance term of two years seven months. The applicable provision of sentencing legislation requires the setting of the non parole period first but there is no reason why that setting and the setting of the balance term (amounting to a total sentence) need be done in a two step process and the relevant steps may be taken simultaneously: R v Hampton 1998 44 NSWLR 729; R v Way 2004 60 NSWLR 168. 18 Having regard to the concession, I would be content to approach the issues on the basis that the plea of guilty and the matters referred to in Exhibit F should be implemented by application of an applicable discount of 35 percent against notional total starting point. In adopting this course in this case I would not wish to be taken to be holding that where a sentencing judge estimates discounts against sentence otherwise assessed which involve different factors, those factors should necessarily be added together before being applied. 19 The prescribed maximum penalty for the offence to which the respondent pleaded guilty was, as I have said, imprisonment for life. There is also specified in Part 4 Division 1A of the legislation a standard non parole period of fifteen years imprisonment. This is not directly applicable unless the offence is in the middle of the range of objective seriousness for the offence and the conviction follows trial. The plea of guilty by the respondent avoided the necessity of trial. His Honour does not appear to have made a finding in terms of range but he did state that "there is no doubt on an objective basis, that the offence is extremely serious". I consider that the respondent's blatant criminal activity would be placed at least in the middle of the range of objective seriousness for this offence. 20 His Honour recognized that, although the standard non parole period did not apply, it was a guideline to be "borne in mind" when sentencing. 21 He expressed his ultimate conclusions in these terms: "Bearing in mind the guideline of a standard non-parole period of fifteen years and, for the moment, not considering the guilty plea or the co-operation offered by the offender, and considering especially the quantity of the drugs involved, the role of the offender in the joint enterprise and the duress factor, a starting point for a total sentence in my estimation is twelve years. This period of a total sentence reflects the objective seriousness of the offence, the aggravating factors to which I have referred, as well as the mitigating factors, except the factor of the plea of guilty". 22 A non parole period (standard or otherwise) must represent the minimum period of imprisonment to be served because the crime committed calls for such detention: Power v The Queen 1974 131 CLR 623; R v Simpson 2001 53 NSWLR 704. To the extent that a standard non parole period offers guidance it must guide in respect of that minimum term. It appears from his Honour's remarks that he used the specified standard non parole period as a guide to his assessment of a total sentence. 23 It is observable in the above quoted summary of his findings that his Honour made no reference to the crimes required to be taken into account pursuant to the Form 1 procedure. These were offences of considerable gravity. I am conscious that at the conclusion of his remarks his Honour said that he had taken the matters on the Form 1 into account and, although I accept this statement, it is difficult to perceive that offences of the magnitude involved have been reflected in a sentence (after discounts) consisting of a non parole period of five years two months and a balance term of two years seven months. Neither is the reflection of the Form 1 matters perceptible in the stated starting point of twelve years. 24 The use of the Form 1 procedure is designed to achieve a longer sentence than would have been imposed for the primary offence had it stood alone: Attorney General's application under s 37 of the Crimes (Sentencing Procedure) Act 1999; No 1 of 2000 2002 56 NSWLR 146; Des Rosiers v R [2006] NSWCCA 6. 25 Whether the assessment by his Honour is so low that latent error should be deduced is a question which needs to be assessed after analysis of the factors which his Honour took into account and in particular those which he took into account as mitigating factors. 26 I have already mentioned the discounts totalling 35 percent against sentence which his Honour applied. The other mitigating factors found by his Honour seem to be the absence of prior conviction, that he "has expressed his remorse and regret", duress and his participation as "a factory worker or a labourer" rather than as a principal in the criminal enterprise. 27 The value of the absence of prior conviction is somewhat diminished by the commission of the offences which were ultimately taken into account on the Form 1 and by the fact that, before being arrested and charged with the primary matter, he was at conditional liberty on bail (which he breached) in respect of those offences. 28 His Honour did not make a finding in terms that the respondent was remorseful and his evaluation of the expressions to that effect, to himself and to friends who provided testimonial letters, was accompanied by what seemed to be some reservation when he said that such expression "is an easy matter to do when facing the consequences of such a serious crime". 29 There can be no argument about the correctness of the characterization of the respondent's activity as that of a factory worker or labourer, nor, in my opinion, of his Honour's conclusion that the respondent was "an essential part of the joint enterprise". He recognized that a measure should be made against what the respondent did rather than simply trying to deduce his ranking among the participants in the enterprise: The Queen v Olbrich 1999 199 CLR 270. That the respondent's activity might have been more serious had he been a principal does not constitute an element of mitigation. Obviously the appropriate penalty for more serious activity is likely to require severer reflection than lesser activity, but the existence of a hypothetical discrimination does not provide a mitigatory factor against appropriate penalty reflecting what the respondent has in fact done. 30 The fourth apparent factor of mitigation taken into account by his Honour was duress. It is plain from the extent to which his Honour elaborated his findings in this regard that he gave significant weight to it. 31 The sequence of events was that the respondent asserted that he became indebted in the sum of $10,000 for the equipment which was used in the hydroponic production of cannabis - which, I would observe, seems to place the respondent at a higher level than being a mere labourer in that enterprise - and a further $10,000 for legal expenses. The latter, I assume, were incurred in connection with his arrest and charge following the discovery of the Mount St Thomas activity by police. The respondent claimed that he had repaid $2,500 of this debt. 32 As earlier mentioned, he went into hiding. He reappeared and became involved in ecstasy manufacture after being told that his Serbian family received a threat by letter. 33 The translation of this letter is as follows (Chokie is a reference to the respondent): "To Sanja Tomic, mother of Chokie's three children. You were not at home when we came by to explain some things to you. We shall come another time or maybe it will be better for you and your children if we do not come at all; also mum and dad live peacefully and nicely in 28 Podavalska St., but for how much longer we don't know, depends on you and also on your husband Chokie who apparently thinks that he can borrow without having any intentions of paying back. We have tried to bring him back to his senses in a normal and civilized way, but he thought he could avoid it by hiding, but Mister has forgotten that he has a wife and three children in Serbia, that is you. Therefore, we ask you to tell him to come to his senses, to get in touch with us and have his debts settled, otherwise we will be collecting them via you and your children. I hope we are the only ones he owes to and that he will know whom to turn to. In the case that he doesn't know, tell him that a friend from Australia is sending his regards; he will figure it out then. At least you can be reasonable - if he can't, and don't let you children end up in Italy. We shall wait for a little while to see what results this letter will bring. And just for you to know how lucky you were for not having been at home when we arrived otherwise we would have taken your eldest daughter to show you how serious this is". 34 Ms Lukenic understood this anonymous letter as a threat of violence and she made a written report to a Serbian government department concerning those "threatening me and endangering my life and the lives of my children" and requested that they be found and that the Resnik (her place of residence) police force "watch over me more often". 35 A response from that department stated that investigation did not get "any clues" which would aid in the identification of the "persons who left the threatening letter". 36 His Honour's findings, after noting that duress might be a significant mitigating factor even if not available as a defence, were: "I have already recited the details of the alleged debt owed to Nikola Sipka by the offender, in the sum of $20,000, and of the threat to recover money, which at the time of the threat, would seem to have been $17,500. Quite a paltry amount when one thinks of the money that would be 'earned' by putting forty-four kilograms of ecstasy on the market. I do not accept this was a genuine debt. I do accept that among fellow criminals, one man often provides money to another in a business endeavour. I do not accept the physical involvement of Nikola Sipka in the provision of the equipment since, being a one legged man, it would seem impossible for him to deliver the pills, the powder and the heavy machinery to a coffee shop. I do accept however, that there were threats to the family of the offender in Serbia. I do accept that those threats appeared to be demanding repayment of money, but were in fact a violent means to maintain Stankovic's involvement in criminal enterprises. His initial involvement was to make fast, easy money. He himself initiated this involvement and freely engaged in this criminal activity. But, once part of the criminal world, he became more deeply involved in it so that he was drawn down and blackmailed as it were into further inducement, and threats were made to his family. These threats predated the production of the pills at Dee Why and would seem to have been a reason for the offender becoming further involved". 37 Given all the foregoing, the Crown's submissions were in summary:

(a) A starting point of twelve years total must have reflected too much weight having been given to the extent of duress which his Honour found; (b) A starting point of twelve years imprisonment could not have taken into account the Form 1 matters; (c) The objective seriousness of the primary offence was "lost" in whatever equation his Honour used to determine sentence; and (d) A non parole period of five years two months could not, as it is required to, reflect the objective gravity of the offence. 38 As I have already observed, I would accept his Honour's statement that he took into account the Form 1 matters, however, the consequential figure which he used (before the 35 percent discount) on any analysis cannot disclose any greater than a minimal contribution to the commission by the respondent of those offences. As was observed about the Form 1 procedure in Des Rosier: "There must be some increase in sentence, above that otherwise appropriate to the circumstances of the primary offence". 39 In the present case, the magnitude of the criminality involved in the Form 1 offences is such that the increase would need to have been substantial. 40 The Crown contention that the sentence imposed was manifestly inadequate has been made out for the reasons above summarized. The sentence should be quashed and this Court should proceed to resentence. In so doing the restraint to be exercised in recognition of what is frequently termed "double jeopardy" following a successful Crown appeal must be borne in mind and applied. 41 As Olbrich makes clear, a participant in drug activity should be sentenced for what he or she has done as distinct from their ranking in the criminal organization. Although I would accept his Honour's categorization of the respondent as a worker or labourer, the statement of facts records that the co-offender Nikolic had arranged the leasing of the Dee Why premises and that: "It would appear that Nikolic also worked making tablets but the electronic and physical surveillance over the 5-day period prior to the arrests indicates the majority of the blending and pressing for the tablets was done by Stankovic". 42 In evidence at the sentencing proceedings the respondent confirmed the limited role of the co-offender: "Q Did the man (Sipka) then indicate to you how you might be able to repay the debt that he said you owed him? A. Yes. Q. What did he say you could do to repay that debt? A. He brought along a machine and two bags of this powder and a bag with green tablets. And he explained to me that I have to grind these tablets and I have to mix them with the powder and from 90,000 I should make 180,000. Q. Were you alone in doing that or was there another man involved? A. I was doing that myself. The man that was involved in this he only rented the house. Q. That's the man who was your co-offender Mr Nikolic? A. Yes". 43 A critical matter is the weight to be given to the finding of duress. As Geraghty DCJ noted (and accepted) the threats appeared to relate to demanding money. The approach to the family in Serbia was made by delivery of the anonymous letter and there was no evidence of any further approach following Ms Lukenic's request for police investigation or any further approach at all. 44 Whilst the threat operated on the respondent's mind as his Honour found, his initial involvement was to make fast, easy money and, once involved, irrespective of what motivated him, he freely engaged in the criminal activity. He was not supervised. The content of the translations of the intercepted telephone calls does not reveal any instance where he mentioned that he was acting by reason of fear and in fact the overall tenor of his conversations is of enthusiastic participation in what was anticipated to be a very profitable enterprise. 45 Although the current provision of the sentencing legislation requires that the non parole period be set first, that does not mean that the total effect of the sentence is to be ignored. It is desirable in this instance to approach assessment using the same procedure adopted in the District Court so that it will make patent any needed comparison. 46 In my view, giving full weight to the matters of objective seriousness of the offence, the respondent's role and the very serious matters on the Form 1 of which account must be given, and the matters of mitigation with particular emphasis on the element of duress as well as the restraint which I previously mentioned, I would consider an appropriate starting point for total sentence would be eighteen years imprisonment. In that estimation I necessarily have regard to guidance offered by the statutory prescription of available maximum penalty of life imprisonment and the standard non parole period of fifteen years, both of which guides stand independently of the need to reflect the Form 1 matters. 47 I would adopt the total discount of 35 percent for the reasons given by Geraghty DCJ. I have noted the agreement by counsel at first instance and this was not sought to be repudiated in the appeal. I would also, like his Honour, not depart from the proportion between non parole period and balance term which would result from application of the formula mentioned in the statute. The final figures, adopting those approaches, should be slightly rounded. 48 I propose the following orders:

Regina v Stankovic

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