District Court New South Wales Medium Neutral Citation: R v Smith [2022] NSWDC 474 Hearing dates: 8 September 2022 Date of orders: 8 September 2022 Decision date: 08 September 2022 Jurisdiction: Criminal Before: Scotting DCJ Decision: 1 The offender is convicted. 2 Taking into account the matters on the s 16BA schedule, I impose a term of imprisonment of 5 years to date from 8 June 2021 and expire on 27 June 2026. I fix a non-parole period of 3 years that will expire on 7 June 2024. The offender will be eligible to be released on parole on 7 June 2024. Catchwords: CRIME — Drug offences — Commonwealth offences — Traffic controlled drug Legislation Cited: Commonwealth Criminal Code Crimes Act 1914 Cases Cited: Bugmy v The Queen (1990) 169 CLR 525 Cameron v The Queen (2002) 209 CLR 339 Danial v R [2008] NSWCCA 15 Deakin v The Queen (1984) 58 ALJR 367 Hili v The Queen (2010) 242 CLR 520 Johnson v The Queen (2004) 78 ALJR 616 Power v The Queen (1974) 131 CLR 623 R v Nassir [2020] NSWCCA 88 R v Nguyen (2010) 205 A Crim R 106 R v Olbrich (1999) 199 CLR 270 Xiao v R (2018) 96 NSWLR 1 Category: Sentence Parties: Regina (Crown) Brett Anthony Smith (Offender) Representation: Counsel: A Gauja (Crown) S Buchen SC (Offender) Solicitors: Commonwealth Director of Public Prosecutions (Crown) Benjamin and Leonardo Criminal Defence Lawyers (Offender) File Number(s): 2021/165113 Publication restriction: None JUDGMENT 1. Brett Anthony Smith appears for sentence after pleading guilty in the Local Court to an offence of trafficking a marketable quantity of a controlled drug, being 544.6 grams of pure cocaine contrary to s 302.3(1) Commonwealth Criminal Code. The maximum penalty for the offence is 25 years imprisonment and/or a fine of 5,000 penalty units. 2. The offender also asks the Court to take into account an offence of dealing with property that he believed to be the proceeds of the indictable crime with a value of more than $100,000 and an offence of possession of a controlled drug, methylamphetamine, on a s 16BA schedule when passing sentence for the principal offence. The maximum penalty of the proceeds of crime offence is 20 years imprisonment and/or a fine of 1,200 penalty units and the maximum fine for the possession offence is two years imprisonment and/or a fine of 400 penalty units. Approach to Sentencing 1. To the extent that I make findings of fact adverse to the offender, I am satisfied of that fact beyond reasonable doubt. To the extent that I make findings of fact favourable to the offender, I am satisfied of that fact on the balance of probabilities: R v Olbrich (1999) 199 CLR 270 at [27] (Gleeson CJ, Gaudron, Hayne and Callinan JJ). 2. I must have regard to Part 1B Crimes Act 1914 in passing sentence and in particular the matters provided for by s 16A of that Act. A Court determining a sentence in respect of any person for a federal offence must impose a sentence that is of a severity appropriate in all the circumstances. The Court must take into account matters listed in s 16A(2) that are relevant and known to the Court. The list of factors in s 16A(2) of the Act is not exhaustive and common law principles apply to the sentencing of federal offenders: Johnson v The Queen (2004) 78 ALJR 616 at [15] 3. The offender has entered a plea of guilty for federal offences. The Court must consider the offender's willingness to facilitate the course of justice and can consider the utilitarian value of the plea: Cameron v The Queen (2002) 209 CLR 339 at [14] and Xiao v R (2018) 96 NSWLR 1 at [279]-[280]. In assessing the willingness of the offender to facilitate the course of justice the strength of the Crown case against the offender is a relevant consideration: Danial v R [2008] NSWCCA 15 at [27]-[28]. 4. The Crown case was a strong one, but I note that there is presently a major challenge to the admissibility of evidence obtained through the use of ANØM devices. It is significant that the offender has not challenged that evidence in this case. 5. The offender's plea has saved the need for witnesses to be called at trial and the utilitarian value of the plea is high. I am satisfied that the offender's plea indicates an acceptance of responsibility for his actions and was motivated by a willingness to facilitate the course of justice. The appropriate discount is 25%. 6. I have had regard to the principles relevant to sentencing serious federal drug offenders set out in R v Nguyen (2010) 205 A Crim R 106 at [72] (Johnson J) and the comments of Bathurst CJ in R v Nassir [2020] NSWCCA 88 at [100]. 7. For a federal offence, the non-parole period or recognisance release period is the minimum period that justice requires the offender to serve in custody fixed by reference to s 16A(1), the relevant matters in s 16A(2) and by application of the principles set out by the High Court in Power v The Queen (1974) 131 CLR 623; Deakin v The Queen (1984) 58 ALJR 367 and Bugmy v The Queen (1990) 169 CLR 525: see Hili v The Queen (2010) 242 CLR 520 at [40]-[44] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ). 8. The parties presented an Agreed Statement of Facts. I have taken into account the entirety of that document in coming to the appropriate sentence. What follows is a summary of the facts necessary for the understanding of the sentence passed. 9. Since October 2018 the Australian Federal Police (AFP) have been conducting an investigation named Operation Ironside in relation to an encrypted communications network known as ANØM used in Australia. This encrypted communications system was a platform offering privately encrypted telecommunications between users. Such encrypted platforms are installed in mobile telecommunications devices and may prevent communications on the platform from being lawfully intercepted. 10. During Operation Ironside the offender was identified by the AFP as being a user of the ANØM platform. On the ANØM platform, the offender used the user ID "249dab" and the user handle "keyser" since 18 March 2020. The offender was involved in the supply of prohibited drugs to others and used the ANØM network to facilitate this activity. 11. A Samsung A30 device was located in the living room on a cabinet. The IMEI number of this handset corresponded with the IMEI number associated with the ANØM user ID "249dab" and the user handle "keyser." 12. On 17 May 2021 the offender and the user of the handle "eatenloose" were involved in an exchange on the ANØM platform. That provided as follows: eatenloose Hey brother, how are you. There is 750g loose there. At 275. If interested. And maybe another 750g tomorrow. Let me know ASAP please. Thanks bro Yeah bro, not to bad, how are you doing? Offendre Yes, bro, ibwill grab, Thanks legend Well thanks. Okay, no drama. eatenloose so you want 750g? or the 1.5kg? Just to be clear ? Offender Will only grab 750 eatenloose Done Offender If still about in a couple of weeks will grab so 206,250 eatenloose Ate yes whatber it works out. 275 per kg. So 275 per gram times 750 boss Offender Yes $206,250 eatenloose Easy Offender Jocker? no be another mate. eatenloose Joker say he not want to work He paranoid lol Offender Okay allgood 1. Later that day, the offender and the user of the handle eatenloose, were involved in a further exchange on the ANØM platform as follows: Offender Can we do Wednesday ... got tovgetssome coin together Oh these guys in hurru Eatenloose Let me check It's a grab when it arrives situation normally or they sell Let me check Offender Okay can we do in morning Will get together tonight eatenloose Ok sorry mate Offender All good legend 1. On 17 May 2021, a group chat was created on the ANØM platform between the offender and the users eatenloose and illanswer to arrange logistics for the exchange the following day. On 18 May 2021 the chat was used to arrange a meeting and eatenloose advised the offender that it was only 500 and to adjust paper as a consequence. The final two messages in the chat were the offender stating "Thanks boys (triple thumbs up emoji)" and the user eatenloose stating "No problems". 2. On 18 May 2021, the offender and the user of the handle eatenloose were involved in the following exchange on the ANØM platform: Offender Thanks legend Yes tomorrow more eatenloose Hey brother How are you How is that one all good? I'm guessing same shit yeah? Offender Yeah brobim all good ... did not look at it bro will do in the morning (double thumbs up emoji) 1. On 8 June 2021, members of the AFP conducted a search warrant at the offender's residence in Maroubra. When asked if there were drugs in the house, the offender indicated that he had a little bit of cocaine in the kitchen sink which was for personal use. 2. The following items were located concealed behind a kickboard under the kitchen sink, in close proximity to one another: 1. bundles of notes totalling $279,850.00; 2. a clear heat-sealed bag containing 318.2 grams of pure weight cocaine; 3. a separate bundle of heat-sealed bags, themselves containing brown paper bags with 216.4 grams of pure weight cocaine inside; 4. a Tupperware container with 10 grams of pure weight cocaine inside; 5. a clipseal bag containing 0.5 grams of pure weight methamphetamine; 6. a small plastic wrap containing 2.7 grams of pure weight methamphetamine. 1. Kitchen scales located in the same kitchen as these items also tested positive for trace elements of cocaine. In addition to the items in the kitchen, a bundle of notes totalling $48,275.00 was located in a plastic bag in a drawer within a bedroom of the house. 2. The DNA analysis of the samples taken from the currency located behind the kitchen kickboard revealed extremely strong support for the proposition that the offender was a contributor. 3. The DNA analysis of samples taken from the currency located in bedroom 3 revealed extremely strong support for the proposition that the offender was a contributor. The total amount of cocaine located behind the kickboard by pure weight was 544.6 grams. The minimum marketable quantity of cocaine is 250 grams. 4. The money behind the kitchen kickboard amounted to $279,850.00. The money in bedroom 3 amounted to $48,275.00 with a total of $328,125.00. 5. On 8 June 2021, the offender was arrested and conveyed to the Australian Federal Police Eastern Command located in Sydney. The offender was provided with an opportunity to participate in a formal record of interview, however, after seeking legal advice, participated in a no comment interview. The offender has remained in custody since that date. The Offender's Case on Sentence 1. The offender tendered the following documents: 1. a report of Sam Borenstein, psychologist, dated 23 August 2022; 2. an affidavit of Crystal Gale Smith sworn 7 September 2022 3. an affidavit of Stephanie Smith, the offender's mother, affirmed on 7 September 2022; 4. an affidavit of Leo Premutico affirmed on 7 September 2022; 5. an inmate application form dated 30 October 2021; 6. case notes kept by the New South Wales Department of Corrective Services; and 7. a list of programs completed by the offender whilst in custody. 1. The following is a summary of the content of those documents. 2. Mr Borenstein consulted with the offender for the purpose of preparing his report by way of audio visual link. On 23 August 2022, he received a history that the offender had pleaded guilty to trafficking a marketable quantity of a controlled drug and admitted his guilt in relation to the other offences. The offender gave a history of previous offences, one drug related matter for supply in 2005 for which he received a term of imprisonment and a further term of imprisonment in 2014 or 2015 relating to a proceeds of crime offence. 3. The offender reported a deterioration in his mental health leading up to these offences. The offender, together with his wife, owned and operated a café at Maroubra Junction. The offender also operated a waterproofing business. In about 2017, the offender, together with other partners, set up an organic food business which manufactured a vegan protein diet which they sold at markets. Over time the business became more successful and they were in negotiations with Woolworths to supply their protein bar to their stores. The business was expanded in 2019 and doing particularly well when COVID hit and the business suffered a 40% downturn. At the time, the business employed 15 staff members, not all of whom were citizens, and some of them were not eligible for Jobkeeper. 4. The offender continued the business as best he could. He did not draw a wage and invested another $150,000 to keep the business afloat. These consequences affected his mental health and also the stability of his marriage. The offender became acutely depressed and began to self‑medicate with cocaine and occasionally MDMA. The offender had previously had a drug addiction problem, leading to the earlier drug supply offence. Up to that point in time, the offender had been using cocaine no more than four times per year, but after the difficulties with the business in COVID, he began to use about one gram of cocaine per day and occasionally MDMA. He told the psychologist he was taking enough to impact his decisions. He was chasing his tail and his priority was to keep the company afloat. 5. Further pressure on the business led to the sheriff becoming involved to seize property. The offender and his partners were forced to sell machinery and let staff go during this period of time. The offender became increasingly depressed and anxious and was losing hope. His marriage was negatively impacted and they had several separations. His wife, Crystal, is currently 42 years of age and their son Cale is currently 13 years of age. 6. The financial stress involved at this time caused the offender to recontact people who were using drugs on a regular basis. He lacked motivation and his sleep was disturbed. He suffered from mood fluctuations, irritability and increasing frustration. He felt like everything was out of control and he did not understand how he could keep the business going. A friend gave him the phone equipped with the ANØM software. He described himself as then making stupid decisions in an effort to make quick money. 7. The offender has a younger brother who suffers from bipolar disorder and schizophrenia as a result of frontal lobe damage sustained in a motor vehicle accident about 20 years ago. The offender has been a significant source of support to both his brother and his elderly mother, who often deals with his brother's needs. His brother requires monthly injections and the offender has been involved in taking him to those appointments. His brother still suffers significant symptoms as a result of his mental illness. His father had to move out of the house because of the extent of his brother's mental illness and the fact that his brother has, in the past, attacked his father. His father has recently had his left foot amputated as a result of poor circulation. The amputation occurred about two weeks before the offender was arrested. The offender reported significant concerns with worrying about his mother and brother. 8. As a result of the financial pressures and stress, his wife, who is a problem gambler, returned to gambling. In the 12 months leading up to his arrest she lost approximately $180,000. In the past, the offender has been instrumental in getting her to attend Gamblers Anonymous and to seek help from a psychiatrist for her addiction. His son is presently doing well. He is enrolled at high school and participates in boxing and plays the drums. 9. The offender has completed the EQUIPS addiction program in prison when at Parklea and has also completed the Positive Lifestyle Program. He participates in Narcotics Anonymous meetings. He has been given the responsibility of being a sweeper at Parklea in the COVID wing. He contracted COVID on 10 January 2022 and was transferred between MRRC, Parklea and Long Bay before coming to Wellington prison in about March 2022. I note that recently he has been moved back to Parklea. 10. The offender described his upbringing as good. His parents separated when he was younger and he provided support, particularly to his mother, to assist with his brother. His parents do not get on, but the offender is defensive about his father. 11. The offender had no particular issues at school. He left school in Year 10, completing an apprenticeship course in welding and later a Certificate course in real estate. He started work as a labourer. In 1999 he set up his own waterproofing company and he has worked as a general handyman and in 2010 took time off to build the family home in Chifley. The offender and his wife purchased the café in 2017, which remains in operation. 12. He commenced recreational drug use when he was about 20 years of age and continued using cocaine and cannabis until he stopped for a period of time to set up his own business. 13. The psychologist administered a number of psychometric tests. The psychologist opined that leading up to the offences, the offender was grappling with mental health issues in particular, severe symptoms of depression arising from the financial pressures of the business. He began to self-medicate against worsening depression and marital tension with cocaine He then entered into the offending behaviour. He accepted the opportunity of participating in the offences in order to keep his business and marriage intact. Since being in prison, the offender has successfully participated in rehabilitation programs. He remains concerned about the welfare of his younger brother as well as his wife, who has relapsed into gambling. 14. The psychologist opined that the offender was suffering from a mental health impairment leading up to the time of the offences, leading to a disturbance of thought, mood, volition, perception and memory, which was significant. In the psychologist's opinion, his impaired emotional wellbeing, judgment and behavioural choices were compounded by alcohol and substance use disorders, which were currently in remission as a result of his incarceration. The psychologist opined that the offender was suffering from an adjustment disorder with mixed anxiety and depressed mood, for which he had self-medicated with cocaine and alcohol. 15. When he is released from prison, the offender intends to provide care to his younger brother, mother and wife and to manage the café. He also intends to return to his waterproofing business. The offender understands the need to focus on relapse prevention and the propensity to use alcohol and drugs as a form of self-medication. He understands the need to stay away from the people who let him into the offending conduct. The psychologist recommended that he participate in psychological treatment with an emphasis on targeting effective management of recurrent symptoms of depression, anxiety and stress, together with relapse prevention. 16. Mrs Smith deposed that they had been in a relationship for 22 years and have one son aged 13. Mrs Smith was aware of her husband's prior criminal history. She describes herself as struggling, in October 2021, with the financial pressure. She commenced going to clubs and gambling on poker machines, losing initially $120,000 and then a further $60,000 that she borrowed from a friend. She was initially reluctant to tell the offender about these losses, but eventually did so. 17. The offender and his wife have a large extended family who are supportive. The offender's mother is presently 70 years of age, and he often helped her with household chores or worked on her house when she needed it. Mrs Smith deposed that the offender's brother lives in Randwick and has significant mental health issues. The offender always ensured that his brother was looked after. Mrs Smith deposed that the offender's father was presently 80 years of age and has recently had his leg amputated. The offender often saw his father and would help him attend to household duties and to attend medical appointments. The offender has expressed to his wife the concern that he may not see his father again as a result of being in gaol. 18. Mrs Smith took their son to visit the offender in custody. On one occasion the offender's son was exposed to a disturbing incident with another inmate where he dropped a baby and was involved with a physical altercation with Corrections officers. As a result of that interaction, the offender's son has expressed that he does not want to visit his father in gaol in the future because he was quite distressed as a result of that incident. 19. The offender's mother deposed that the offender was instrumental in assisting her to look after his brother and also to look after her, helping her around the house when required. She supported the history given to the psychologist that the offender also assisted his father. 20. The offender's solicitor has set out the dates upon which there were lockdowns in custody during the term of the offender's incarceration. From those calculations, it seems that there were lockdown conditions in place for about 143 days of the time in which the offender has been incarcerated. Lockdown conditions mean that there are no visits, no telephone calls and no AVL appearances or conferences; the prisoners were locked in their cells and do not have access to television or buy-ups or programs. 21. The offender tendered an inmate application form that confirmed that he had previously been the subject of an assault in custody. The case notes generally reflect very positively on the offender as both a model prisoner and as a positive influence to other younger prisoners. I note that the offender has completed a number of programs and the information tendered by him supports the completion of those programs. Objective Seriousness 1. The total quantity of cocaine, the subject of the charge, is 544.6 grams pure weight. The marketable quantity range for cocaine is between 250 grams and 2,000 grams. Consequently, the quantity involved in this case, whilst approximately 2.17 times the threshold for the marketable quantity, is towards the lower end of the range applicable to a marketable quantity. It is substantially less than the upper limit for a marketable quantity. 2. The agreed facts are quite brief. The offender was engaged in a brief exchange over the ANØM platform in which he agreed to purchase cocaine for a not insignificant sum of money. About three weeks after the relevant exchange, police located drugs and cash at his residence. From the facts, the offender's involvement in the offence covered a relatively short period of time. It is not clear who was the ultimate supplier of the cocaine. Whilst the offender participated in the offence, he did not seem to instigate it. There was no evidence of significant planning or organisation, particularly on the offender's part. The offence was relatively unsophisticated, other than by use of the ANØM platform. It did not involve a methodology of arrangements of any significant complexity. There is no evidence that the offender involved any other person. 3. The offence is one of trafficking and in that respect the drugs were concealed within the kickboard of the kitchen cupboard. There was some other evidence relevant to trafficking, but as these are elements of the offence, they are not particularly aggravating. Whilst there was some concealment, it was not a particularly sophisticated attempt. The drugs and cash were still able to be located in the offender's home, exposing him to law enforcement action. A substantial proportion of the cash recovered was located in a bedroom drawer and was not concealed at all. I have taken into account the maximum penalty for the offence. Deterrence 1. General deterrence is a fundamental consideration in serious drug offences. The sentence must be of such severity as to deter others from engaging in drug related activity. The sentence must signal to would be participants in drug offences that financial rewards will be neutralised by the risk of severe punishment. There is also a need for specific deterrence. The offender has a criminal history, including a serious drug supply offence and a proceeds of crime offence, for both of which he received custodial sentences. 2. The offender is 50 years of age and was 49 at the time of the offending. He has two significant prior convictions. The offender was under significant financial strain at the time of the offences, brought on by the impact of COVID‑19 in his otherwise successful business. This was compounded by his wife gambling away about $180,000. Having said that, I note the offender appeared to have access to large sums of cash to purchase a not insignificant amount of drugs and had large sums of cash available after doing so. 3. The offender has prospects of rehabilitation. He has conducted himself responsibly in custody and seems to recognise the need for drug rehabilitation. He has responsibilities to his family that are likely to encourage him to remain crime free. The offender has expressed remorse to the psychologist and his family. I am satisfied that he understands the impact that his offending has had on the community and that he accepts responsibility for his actions. I am satisfied that he is genuinely contrite. His plea of guilty also indicates remorse. 4. The offender has experienced harsh conditions in custody as a result of the COVID-19 pandemic. I have taken into account that he has spent large periods of his incarceration in lockdown conditions. The offender's incarceration has caused, and will continue to cause, difficulty for his mother, his father, his wife, his son and his younger brother for the reasons I have already alluded to. 5. I have had regard to the comparable cases referred to me by the parties and I have taken into account the limitations of that exercise. I have taken into account the psychologist's opinion in relation to the offender's mental condition. He has had longstanding, significant symptoms of depression over the years, and I am satisfied that there was a causal connection between his mental condition and the offences before the Court. This is an appropriate case to reduce the offender's moral culpability for the offences to some extent. Penalty 1. I have had regard to s 17A Crimes Act 1914. I am satisfied, having considered all other available sentences, that no sentence other than imprisonment is appropriate in all the circumstances of the case for the reasons I have given in this judgment. 2. The offender is convicted. 3. Taking into account the matters on the s 16BA schedule, I impose a term of imprisonment of 5 years to date from 8 June 2021 and expire on 27 June 2026. I fix a non-parole period of 3 years that will expire on 7 June 2024. The offender will be eligible to be released on parole on 7 June 2024. 4. I am obliged to explain to the offender the effect of the orders I have made. Brett Anthony Smith, the sentences I have imposed mean that you will be obliged to spend a minimum period in custody of 3 years. This means that, having regard to the time you have already spent in custody, you will be eligible for release on parole on 7 June 2024. It will be a matter for the Federal Attorney General as to whether you will be released on that day. It may depend on your behaviour in prison. It will also be a matter for the Attorney General to determine whether any conditions should apply to you while you are at conditional liberty on parole after 7 June 2024. If you are released on that day, you will remain on parole for a further period of 2 years. If you were to breach your parole, you may be required to return to prison to serve the balance of the term of your sentence. ********** 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: 12 October 2022