Wat v R

Court of Criminal Appeal (NSW)|2017-03-20|Before: Bathurst CJ, Walton J, Price J

Judgment

BATHURST CJ: I agree with the orders proposed by Price J and with his Honour's reasons.
WALTON J: I agree with Price J.
PRICE J: Kar Wang Wat ("the applicant") seeks leave to appeal against the sentence imposed upon him in the District Court at Sydney by Norrish QC DCJ ("the judge") on 14 December 2015. The applicant pleaded guilty in the Local Court to one count of knowingly taking part in the supply of a prohibited drug (218,764.5 grams of ephedrine) being an amount which was not less than the large commercial quantity applicable to that prohibited drug contrary to s 25(2) Drug Misuse and Trafficking Act 1985 (NSW) ("DMT Act").
The maximum penalty for an offence contrary to s 25(2) of the DMT Act is life imprisonment with a standard non-parole period of 15 years. The large commercial quantity for ephedrine is 5 kilograms.
The applicant adhered to his plea before the judge, who sentenced him to imprisonment with a non-parole period of 10 years commencing on 8 October 2014 and expiring on 7 October 2024, with a balance of sentence of 5 years expiring on 7 October 2029.
A 25 per cent discount was given for the utilitarian value of the plea.
An amended notice of appeal identifies the following grounds: "1. The learned sentencing judge erred in finding that a substantial aggravating factor was that the offence occurred [sic] was committed for financial gain; and 2. The learned sentencing judge erred in finding that a substantial aggravating factor was that the offender was involved in planned and organised criminal activity. 3. The applicant has a justifiable sense of grievance arising from the sentence imposed upon his co-offender, Wei Piao Chu."

Facts

An agreed statement of facts was tendered which may be summarised as follows:
The applicant and Wei Piao Chu ("Chu") were suspected to be a "shore party" for a transnational criminal syndicate who recently took possession of a 940 kilogram consignment of garden pots from China which was found to contain 218,764.5 grams of ephedrine.
On 23 May 2014, the applicant flew from Hong Kong to Melbourne. On 26 May 2014, he registered the company "Hong Far Pty Ltd" ("Hong Far") and was listed as the sole director, member and secretary.
The applicant departed from Melbourne for Hong Kong on 4 June 2014 and returned to Melbourne on 23 June 2014.
Austrac records reveal that on 6 August 2014, Hong Far transferred US$35,000 to China, to a company named "Hundred Year Yuanyeung Supply Chain".
The applicant signed a Residential Tenancy Board bond authority on 6 August 2014 and lodged AU$2,281 in cash as a bond for a unit at 119-13 Ashted Road, Box Hill, Victoria 3128 with an estate agent. The rental agreement was for 12 months, with a monthly rental of AU$1,564. The applicant made an initial payment of AU$4,692 in cash for the first three month's rent to the estate agent.
On 8 August 2014, Hong Far received a consignment in a container from Li Ren International Trading Co, China described as 940 kilograms of bowls and garden pots.
Chu flew into Sydney from Hong Kong on 19 August 2014. The applicant and Chu attended Kennard's Self Storage in Petersham and rented storage unit J4 ("J4") on 22 August 2014. The applicant's Hong Kong passport was provided as identification.
On 27 August 2014, staff at Kennard's Self Storage Petersham, advised police that: 1. since 22 August 2014, the applicant, Chu and other persons had been seen in J4 on a daily basis; 2. on about 24 August 2014, a truck-load of timber crates were delivered to J4 and stacked at the entrance of J4 to obstruct the view of its interior; 3. since 22 August 2014, sounds of people banging, hammering and moving things were regularly heard coming from J4; and 4. between 25 August and 27 August, the applicant and Chu were observed going to and from the vicinity of J4.
On 29 August 2014, both the applicant and Chu left Australia. On the same day, a search warrant was executed for J4. Police found a large number of cardboard boxes which had been emptied and about one hundred ceramic bowls were stacked on the side of the storage unit, which appeared to have false bottoms broken off. Police seized 218,764.5 grams of ephedrine.
The applicant was arrested on 8 October 2014, when he returned to Australia.

The applicant's subjective circumstances

The applicant did not give evidence. A defence bundle (Ex 1) was placed before the judge containing: 1. a psychological report of Ms Caroline Hare dated 7 December 2015; 2. a medical certificate from Nanfang Hospital; 3. a letter from the applicant's second wife, Zhijuan Liang; 4. a certificate of the applicant's employment with Will Sky Capital Company ('Will Sky') a company in Hong Kong; and 5. a report noting the applicant was on a work programme at Silverwater Metropolitan Remand and Reception.
At the time he committed the offence, the applicant was 65 years old. He was born in China, but spent most of his adult life in Hong Kong.
The applicant told Ms Hare that he had been out of work for about three years prior to his offending and that his financial situation was deteriorating due to his wife developing bowel cancer, for which she required hospital treatment. He described being offered HK$50,000 to assist with setting up an import/export company in Australia for individuals he was introduced to via an old school friend. His initial understanding was that the goods to be imported were crockery items made in China. He stated that in approximately August 2014, he had become aware that chemicals used to make illicit drugs were contained within the items that had been shipped from China to Australia.
Ms Hare reported that the applicant "was apparently promised payment of an additional HK$200,000 for his continued involvement. As such, his engagement in the offending was financially motivated".
In a letter to the judge, Ms Liang wrote that her husband had committed the offence because of her illness. Money was needed urgently for her operation, and as a result, he owed money to his friend. Her husband did not realise that his friend was using him to conduct illegal activities in Australia.
The certificate from Nanfang Hospital recorded that Ms Liang's initial diagnosis was early-stage bowel cancer.
The applicant and Ms Liang had been together for 14 years and have a daughter, who at the time of the psychologist's report was 14 years old.
The certificate from Will Sky stated that the applicant was an employee between 13 December 2008 and 25 January 2013 earning an average monthly income of HK$18,500.
The applicant had no prior criminal history in New South Wales, China or Hong Kong.

Some findings by the judge

The judge observed that 156,530.9 grams of pure ephedrine in theory can produce 140,877.8 grams of methylamphetamine base, or 176,097.3 grams of methylamphetamine hydrochloride.
The judge referred to the "military style" precision with which the applicant and Chu were able to meet the arrival of the items that clearly contained the prohibited drugs. The judge said that "the whole operation was well organised and somewhat sophisticated" (ROS 8).
His Honour stated that as the applicant "committed the offence for financial reward on his own account that is an aggravating factor" (ROS 10). Whilst he accepted that, in part, the financial reward may have assisted in meeting Ms Liang's medical bills, his Honour did not accept that the issue of Ms Liang's health was a primary factor motivating the applicant's involvement in the commission of the offence. The judge found that the primary factor was financial reward.
His Honour noted that it was agreed that approximately five Hong Kong dollars equalled one Australian dollar.
The judge assessed the objective seriousness of the offending to be at the upper end of the middle range of objective seriousness, having regard both to the applicant's role and the very substantial quantity of drugs involved.
The judge was not satisfied beyond reasonable doubt that the applicant was the principal of the importation, but said that he was a clearly trusted person whose role was "absolutely vital for the success of the enterprise" (ROS 14). The judge found that the applicant was "a senior executive" of the scheme.
His Honour said (ROS 15): "It is clear, having regard to s 21A(2) of the Crimes (Sentencing Procedure) Act 1999 that the two substantial aggravating factors are that the offence was committed for financial gain and the offender was involved in planned and organised criminal activity. As I said earlier, the facts themselves refer to an investigation of what was described as 'transnational criminal syndicate' crime."
His Honour did not accept the applicant's "feigned ignorance… of the purpose of his initial employment" (ROS 17). He said that it was clear by the time the applicant was inside the Petersham facility, helping with the dismantling of goods imported from China, he had full awareness of the scope of the enterprise with which he was connected.
The judge concluded that the applicant did not have any record of prior convictions and the applicant was a person of good character, who by reason of his age was unlikely to re-offend and had good prospects of rehabilitation.
His Honour found that there were "special circumstances" justifying a reduction of the non-parole period and extension of the parole period.

Ground 1: The learned sentencing judge erred in finding that a substantial aggravating factor was that the offence occurred [sic] was committed for financial gain; and

Ground 2: The learned sentencing judge erred in finding that a substantial aggravating factor was that the offender was involved in planned and organised criminal activity

Argument

These grounds may be conveniently dealt with together.
The applicant referred to the quantity of the ephedrine being many times in excess of the "large commercial quantity" and submitted that the monetary motive involved in committing such an offence has been recognised in its title. The judge's conclusion that the applicant's role was that of a "senior executive" was said to assume that significant financial gain was the motive for his involvement.
The applicant argued that financial gain ought to have been regarded, in the circumstances of this offence, as an inherent feature of the crime and the judge had erred in concluding that his financial motivation was a "substantial" aggravating factor.
Similarly, that the offence was part of "planned and organised" criminal activity ought to have been regarded as an inherent feature of the offence. The applicant contended that given the quantity of ephedrine involved, the supply could not have been undertaken without significant planning and there was nothing about this particular offence that supported a finding that the level of planning and organisation constituted a "substantial aggravating factor".
In oral argument, Mr Nash, the applicant's counsel, conceded that it was open to the judge to find these two factors as aggravating circumstances but not as "substantial" aggravating circumstances.
The Crown argued that it is not an element of the offence that the applicant gained financial or material reward. The Crown submitted that the applicant's financial reward and the substantial planning that he had engaged in, went well beyond what would be expected in the lowest form of such offending.

Consideration

For an offence of knowingly taking part in the supply of not less than the large commercial quantity of a prohibited drug contrary to s 25(2) of the DMT Act, it will almost inevitably be the case that inherent characteristics of that class of offence are a level of planning and financial gain. These inherent characteristics are not to be treated as aggravating factors, unless "the financial gain or the planning is significant, that is, more than might be expected in the lowest level of offending for this type of offence" Prculovski v R [2010] NSWCCA 274 at [43] (Howie AJ, McClellan CJ at CL agreeing); Farkas v R (2014) 243 A Crim R 388; NSWCCA 141 at [62] (Campbell J, RA Hulme J agreeing).
The judge found that two substantial aggravating factors were that the offence was committed for financial gain and the offender was involved in planned and organised criminal activity (see [34] above). His Honour was referring to s 21A(2) of the Crimes (Sentencing Procedure) Act 1999 (NSW) which relevantly provides: "21A(2) Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows: …(n) the offence was part of a planned or organised criminal activity, (o) the offence was committed for financial gain".
In the present offence, the planning included trips in and out of Australia by the applicant, the registration of an Australian import/export company; the transfer of US$35,000 to China; travel by Chu to Australia; concealment of the ephedrine in ceramic bowls; the consignment of the ephedrine from China to the Australian company; the rental of J4; the delivery of the ephedrine to J4; and the dismantling of the boxes and ceramic bowls. The level of planning was elaborate. His Honour aptly described the whole operation, which was conducted by a transnational criminal syndicate, as well-organised and sophisticated.
For his participation in the offence, the applicant was initially offered HK$50,000 to assist with the setting up of the Australian import/export company and was promised an additional HK$200,000 for his continued involvement. This was equivalent to AU$50,000 whereas Chu was promised AU$10,000.
The level of planning and the financial gain went well beyond that which might be expected in the lowest level of a s 25(2) DMT Act offence that involved the supply of not less than the large commercial quantity of a prohibited drug.
In my opinion, it was not an error for the judge to find these two substantial aggravating factors. I would dismiss Grounds 1 and 2.

Ground 3: The applicant has a justifiable sense of grievance arising from the sentence imposed upon his co-offender, Wei Piao Chu

Berman SC DCJ's remarks on sentence in relation to Chu

As the focus of the applicant's sense of grievance is on the sentence imposed on Chu, it is necessary to refer to Judge Berman's ex tempore sentencing remarks.
Chu was arrested on 18 October 2015 upon his arrival at Sydney Airport from Hong Kong.
Chu pleaded guilty to a charge contrary to s 25(2) of the DMT Act which was in the same terms as the charge upon which the applicant had been sentenced. He appeared before Judge Berman on 15 September 2016.
A statement of agreed facts was tendered which included the following: "A male name 'Fai' that the accused was working with was in charge of the supply after the substance was removed and packaged. The accused stated 'I was in charge to make sure it arrived safely'. The accused stated that the substance smelt strongly like a chemical. The accused stated that due to the circumstances of his involvement and promised payment of AU$10,000 by the syndicate he knew that the substance was illegal. He was informed by the syndicate that the importation would arrive about the same time that he landed in Australia." [Emphasis added.]
Judge Norrish's sentencing remarks were provided to Judge Berman during Chu's proceedings on sentence.
Judge Berman referred to the applicant's sentence and to the importance of ensuring that the sentence he imposed on Chu did not engender a justifiable sense of grievance. Judge Berman went on to say (ROS 5): "It is important to compare the roles taken by each of the two men, Mr Wat and this offender. It does appear that the offender's role was less than that of Mr Wat although I do have to say that no-one really knows, all we know is who did what but we do not know at whose direction it was done. I am prepared to proceed on the basis that the offender did play less of a role than Mr Wat and that this offender was far from a principal. As is notoriously the case, those who are the principals in the evil business of a drug supply rarely put themselves in a position where they can be easily identified, arrested and prosecuted. Instead, principals use people like Mr Wat, often men of otherwise good character, who are tempted by the advantage of easy money. That is not to downplay the offender's role. He himself described it as a role which involved him being 'in charge' of one aspect of the drug supply operation. He was thus much more than a mere labourer, although it would appear that labouring was one of the functions he did carry out." [Emphasis added.]
and (ROS 6): "The principle of parity has operated in a significant way and indeed it is one of the most important factors which have led to me determining the appropriate sentence to impose upon the offender."
Chu was 59 years old with no previous criminal history. His sentence was discounted by 25 per cent for the utilitarian value of the plea of guilty. His Honour found special circumstances. Chu was sentenced to imprisonment with a non-parole period of 7 years with a head sentence of 10 years.

Argument

The applicant referred to the sentence imposed on Chu by Judge Berman. It was put to the Court that Chu was charged with the same offence as the applicant but the applicant was sentenced to a total term half as long again as that of Chu and a non-parole period that was only slightly less than that proportion.
It was argued that the rental of the Kennard's storage unit and the overseeing of the ephedrine's arrival were more critical to the success of the importation and intended on-supply than the setting-up of the company and the rental of premises in Melbourne. The applicant contended that although he was present for both, Chu's arrival in Australia for the delivery of the shipment together with Chu's admission that he was in-charge of overseeing the delivery process supported a finding that Chu was the more senior person, at least in that aspect.
In oral argument, Mr Nash said the admission by Chu that he was in charge of ensuring that the drug arrived safely was not before Judge Norrish. He pointed out that it was the applicant's passport which provided identification for the rental of J4. Mr Nash submitted that this indicated that the applicant played a lesser role and was consistent with Chu being in-charge of ensuring that the ephedrine arrived safely.
Mr Nash referred to Chu's account of the money he received as not having been tested and it would have been open to Judge Berman to have found that Chu's role was at least at the level of the applicant. However, Mr Nash accepted that the finding that Judge Berman made as to the respective roles was open to his Honour.
The applicant submitted that there was nothing in the subjective cases of the co-offenders that warranted any significant disparity in their sentences.
The Crown contended that Judge Berman was conscious of the need to sentence Chu so that he (and by inference the applicant) did not have a justifiable sense of grievance.
The Crown submitted that Judge Berman considered that Chu played a different role in the importation, although the assessment of roles was a difficult one. The Crown observed that the difference in roles was an important factor when Chu was sentenced, and the applicant does not have a justifiable sense of grievance.

Consideration

A marked disparity between the sentences imposed on co-offenders which gives rise to a justifiable sense of grievance is required before appellate intervention: Postiglione v R (1997) 189 CLR 295; [1997] HCA 26. Mere disparity is not enough. The applicant must show that a reasonable person, looking at the circumstances of the case, would regard the applicant's grievance as justified: R v llbay [2000] NSWCCA 251; R v Kollas and Mitchell [2002] NSWCCA 491. The plurality (French CJ, Crennan, and Kiefel JJ) in Green v R; Quinn v R (2011) 244 CLR 462; [2011] HCA 49 said at [31]: "…The sense of grievance necessary to attract appellate intervention with respect to disparate sentences is to be assessed by objective criteria. The application of the parity principle does not involve a judgment about the feelings of the person complaining of disparity. The court will refuse to intervene where disparity is justified by differences between co-offenders such as age, background, criminal history, general character and the part each has played in the relevant criminal conduct or enterprise." [Footnotes omitted.]
I should state at the outset that the sentence imposed upon the applicant by the judge was appropriate in all the circumstances of his offending. The applicant does not complain that it is manifestly excessive which is consistent with the proposition that a ground of appeal based upon parity assumes that the sentence is otherwise correct: Tatana v R [2006] NSWCCA 398 at [15]; Gill v R [2010] NSWCCA 236 at [50]. His sense of grievance arises from the sentence imposed upon his co-offender by Judge Berman. The applicant was sentenced to 15 years imprisonment with a 10 year non-parole period, whereas Chu's sentence is 10 years with a 7 year non-parole period. There is no significant difference in their subjective circumstances that requires that different sentences be imposed. The question is whether the disparity between the sentences may be reasonably explained by the role each played in the commission of the offence.
Judge Berman was aware of the sentence imposed on the applicant and it is clear that the sentence imposed on Chu was structured with that knowledge. It was plainly open to Judge Berman to find that Chu played less of a role than the applicant.
Much had been done by the applicant before Chu's arrival in Sydney. The applicant had registered Hong Far, money was transferred to China and premises had been rented in Victoria. He had flown to Hong Kong and returned to Australia. Eleven days before Chu's arrival, Hong Far received the consignment containing the ephedrine from China.
Following Chu's arrival in Sydney, the applicant and Chu rented J4. Both of them participated in the removal of the ephedrine from the containers. The applicant's financial reward for his participation in the offence was to be AU$50,000.
When Chu was sentenced, it was an agreed fact that he stated "I was in-charge to make sure it arrived safely" (see [53] above). Chu's admission is supported by the agreed fact that it was the applicant who provided his Hong Kong passport for identification when J4 was rented.
Although Chu may have been in charge of ensuring the ephedrine arrived safely, the offence could not have taken place without the infrastructure established by the applicant. As Judge Norrish observed, the applicant's role was "vital for the success of the enterprise" (ROS 14). Another matter of difference was the lesser financial reward that Chu was to receive, namely AU$10,000.
All of these matters justify sentencing the applicant to a longer term of imprisonment than that of Chu but they do not reasonably explain the extent of the disparity in the co-offenders' sentences. The applicant's head sentence is 50 per cent more than that imposed on Chu and the non-parole period exceeds Chu's by 43 per cent (round figures). Such a marked disparity gives rise to a justifiable sense of grievance and should be moderated. Nevertheless, given the objective gravity of the applicant's offending and the statutory guideposts of the applicable maximum sentence and non-parole period, the scope for reduction is limited. It must not be overlooked that the applicant took part in the supply of 218.8 kilograms of ephedrine. In my respectful opinion, Chu's sentence was lenient. However, the Crown did not appeal against the inadequacy of that sentence.
Having allowed Ground 3, the applicant is to be re-sentenced. I propose that the head sentence be reduced to 12 years with a non-parole period of 9 years. I do not find special circumstances as any further reduction would result in a manifestly inadequate sentence.
Accordingly, I propose the following orders: 1. Leave to appeal granted. 2. Appeal allowed. 3. The sentence imposed by Norrish QC DCJ on 14 December 2015 is quashed. 4. The applicant is sentenced to a term of imprisonment of 12 years consisting of a non-parole period of 9 years commencing on 8 October 2014 and expiring on 7 October 2023 with a balance of term of 3 years commencing on 7 October 2023 and expiring on 7 October 2026. 5. The earliest date the applicant will be eligible to be released on parole is 7 October 2023.

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: 31 March 2017

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