R v Impey [2024] NSWDC 96

District Court New South Wales

Medium Neutral Citation: R v Impey [2024] NSWDC 96 Decision date: 16 February 2024 Jurisdiction: Criminal Before: Judge McHugh SC Decision: See paragraph [42]. Catchwords: CRIME — Drug offences — Supply prohibited drug — Commercial quantity — Objective seriousness —THC — Medicinal use CRIME — Money — Dealing with proceeds of crime — Financial gain Legislation Cited: Drug Misuse and Trafficking Act 1985 Crimes Act 1900 Crime (Sentencing Procedure) Act 1999 Cases Cited: The Queen v Olbrich (1999) 199 CLR 270 Category: Sentence Parties: Rex (Crown) Alexander Impey Representation: Counsel: Mr Smart (the offender)

Solicitors: Mr Enderwick (the Crown) File Number(s): 2022/00280743

SENTENCE

Ex tempore, revised from transcript 1. HIS HONOUR: These are my ex tempore reasons in the matter of Alexander Impey. Mr Impey comes to be sentenced for a supply of prohibited drug, a large commercial quantity which is cannabis, contrary to s 25(2) of the Drug Misuse and Trafficking Act 1985. The maximum penalty for that offence is life imprisonment or 5,000 penalty units and it carries a standard non‑parole period of 15 years. 2. The second matter he is to be sentenced for is that contrary to s 193B(2) of the Crimes Act 1900, he knowingly dealt with the proceeds of crime, some $237,640.29 being the amount. That carries a maximum penalty of 15 years and there is no standard non‑parole period. 3. He is also to be sentenced on a form 1, supply prohibited drug greater to or lesser than a commercial quantity, again contrary to s 25(2) of the Drug Misuse and Trafficking Act 1985 which carries a maximum penalty of 20 years imprisonment or 3,500 penalty units. He is to be sentenced for that on the form 1, for which the offender wishes me to take into account. I note that he has already spent time in custody in respect of these offences of one month and six days and that the offence was committed whilst on bond, specifically a bond for cultivate a prohibited plant which was greater than a small but lesser than an indicatable quantity. 4. There are a number of materials before me in the Crown case, which I marked as exhibit A. The Crown submissions have been marked as MFI 1. In the defence case, the sentence bundle, and the helpful written submissions from Mr Smart are marked as MFI 2. The defence material included an affidavit of the defendant, marked as exhibit 2. There was also a sentence assessment report which I marked as exhibit B. 5. The offender was called upon to give evidence and be cross-examined by Mr Enderwick who appears for the Crown. The subjective materials in the defence sentence bundle included some earlier, much earlier medicine concerning an ADD diagnosis, and other material about the valuation of a Land Rover, various cannabis brochures and medicinal facts and treatment guides including from the Queensland Government medicinal cannabis information guide, and some Family Law orders. There were a total of 18 "references" in the defence sentence bundle. 6. There was also included under that heading of "references" some material from Dr Andrew Katilaris who again, was cross-examined. He wrote a letter addressed to the presiding judge. He was a 68‑year‑old retired medical doctor and medical research scientist, noting he had a Bachelor of Medicine and Surgery from Sydney University and a Doctorate in Medicine at the University of New South Wales for research work in bone marrow transplantation. His evidence included his knowledge of the supply of medicinal cannabis oil and in particular that whilst that has become legally available since, I think, 2017, at the time of this offending which is from 2019 to the middle of 2021, that the regulations there meant that the legally acquired medicinal cannabis oil was not as potent or did not have the same beneficial results as that prepared by persons such as the offender here - a matter I will return to. 7. Dr Katilaris was cross-examined only on his, what I will say, matters to related to his credibility noting that he was deregistered in 2005 and that the Healthcare Complaints Commission had made a series of adverse findings against him. 8. I found Dr Katilaris to be an impressive witness who disputed those Healthcare findings but readily conceded that they were made. The adverse findings and the evidence of those matters has not diminished my view of his evidence concerning cannabinoids and particularly the wide range of medical efficacy between different products and its various uses including for epilepsy, inflammatory bowel disease, Crohn's disease and so on and noting that THCA has no psychotropic effect. 9. The maximum penalties serve as an indication of the relative seriousness of the offence and a standard non‑parole period represents the non-parole period for a hypothetical offence in the middle of the range of objective seriousness without regard to the range of factors both aggravating and mitigating that might bear relevantly on sentencing in an individual case. The standard non‑parole period is not the starting point in sentencing for a mid‑range offence after conviction. 10. The facts of the matter are set out in the statement of agreed facts to which I note the offender pleaded guilty. The police executed a search warrant at the offender's business at Bellingen where he was not present at the time, but they ultimately discovered, and by a process of looking at sales reports and the like were able to determine that in respect of count 1, that is the 9.74 kilograms of cannabis oil were sold in a period between 20 November 2019 and 19 September 2020 although the offending supply is said to have occurred up until July 2021. Also, by a process of looking at sale reports and so on, they know the following: "The sales reported demonstrated that the sales of cannabis oil amounted to a net profit of $237,640.29 after tax and wholesale costs. The 'under the counter' cannabis oils containing THC made up over half the total net profit for the sale of all cannabis (THC and non-THC oils) in the store over 18 months." 1. One can immediately see the difficulty with the deal with the proceeds of crime when one has regard to the evidence that was given before me by the offender that in effect in 2021 alone staff wages accounted for some $330,000. It is not clear to me that there is any financial gain at all in the deal with the proceeds of crime. Nevertheless, the gravamen of the offence of deal with proceeds of crime is the dealing with those monies, although on any view on those facts it cannot have been all proceeds of crime because it includes the non‑THC oils. Nevertheless, that is what he has pleaded guilty to and that is what he will be sentenced for. 2. Usually in terms of objective seriousness for these matters, the role and level within the hierarchy of drug dealing, noting the weight based sentencing regime, is more important in determining the sentence than the quantity of the drug dealing. When I say "drug dealing" I am talking about the supply of drugs. Those matters, that is the typical matter that the Court sentences for regularly, involve people who are substantially motivated either through their own drug addiction or for financial gain, and as the High Court noticed in The Queen v Olbrich (1999), the role and level within any hierarchy is more important than the quantity itself. 3. The quantity here is a large commercial quantity and the legislature in their wisdom has set a most severe maximum sentence of life imprisonment, because the vice that is being addressed is the harm of dangerous drugs including cannabis in certain circumstances. However, that is not the case in these circumstances. I say this because on the evidence before me, which I accept, the THC in the oils for which the offender has pleaded guilty amounts to 3%. That is evidenced in the evidence of the offender who spoke about having his oils analysed at a lab in Victoria to be safe and effective, as well as evidence in his own affidavit setting out the 7 milligrams of cannabis oil and so on, were at 3%. 4. There is no psychoactive effect in these drugs, that is, you cannot get stoned taking this drug. It really is only for medicinal use. 5. There was also Sydney University had also analysed some of the black market oils available between 2017 and 2018 and which apparently included some from this offender when Sydney University was, as part as I understand, from the Lambert materials, was looking at the use of cannabinoid oils in particular for epileptic seizures. 6. Mr Smart who appears for the offender submits that in terms of objective seriousness, this must be at the absolute lowest in terms of objective seriousness because the vice being sought to be addressed by these drug laws is not raised at all in circumstances where this is being used for medicinal purposes. 7. I accept that it is used for medicinal purposes having regard to the evidence before, me much of which is uncontested. 8. Nevertheless, this was known offending over a significant period of time and involved in effect a series of criminal acts. The offending was known to be illegal and the offender went ahead in producing these oils and supplying these oils because, in his view, the regulations which had allowed access to legal cannabis oil, that is cannabis oil which is containing THC, had removed much of the effective remedial effects of the oils including various components such as terpenes and so on. 9. Apparently, and this is referred to both in the evidence of Dr Katilaris and the offender, that came about because the regulations had led to less effective remedies, but that has now been changed after lobbying from, as I understand it, this industry and the medical profession. This change goes towards the risk of any reoffending because the oils now commercially available are of much better remedial effects. 10. Therefore, after having regard to the range of offending that this very serious offence can contemplate, I am of the view that this must be at the absolute bottom of objective seriousness for this type of offending. 11. The Crown also made submissions on the motive of the offender, noting that it did contain some element of financial gain, despite the offender being aware of the illegality of his actions. I accept that submission as there was some financial gain but that was not the ultimate purpose in terms of motive. In my view, there was a humanitarian aspect which Mr Smart spoke to and in all those considerations the moral culpability of the offender in my view is much reduced. 12. I have had regard to the Crime (Sentencing Procedure) Act 1999. In terms of the aggravating features, I am conscious that the only reason this supply got to a large commercial quantity was because it was over a lengthy period of time. When one went back and added up the police having access to the store's sale system to produce the sales report for the past 18 months, that is how they came up with the amount of cannabis oil being sold as being 9.7 kilograms which the Crown notes is some five times the large commercial quantity. 13. I am also aware that he was on conditional liberty, that is he was subject to a s 9 bond. There is some evidence before me about the offender's mental health. It is quite dated and does not rise to the causative mental health aspect and the well known principles in De La Rosa, nevertheless I do take into account that any sentence of fulltime imprisonment would weigh more heavily. I note that he has already spent over a month in full time custody. 14. There was a helpful sentence assessment report which I have had regard to. I note that the offender resides in private rental accommodation near Gosford in New South Wales. He has a shared care arrangement with his children. He has familial support. He has got lots of pro‑social supports. There are people in court today supporting him and there is a limited criminal history. He has two convictions in 2016 and 2017 related to cannabis use. 15. His attitude to the offending was that he was working at the hemp store to be met with requests from customers for medicinal cannabis oil and consistent with the numerous written references he provided, he reported that his customers were often suffering from chronic medical conditions and were desperate for alternative options to relieve their systems which led them to his business. 16. He saw the opportunity to sell cannabis products as a means to enable him to continue paying his staff through the COVID-19 pandemic and the financial uncertainty that that time brought for his business and staff. Although he said in evidence that he could still have survived without selling, even if he had to lay off staff. 17. The sentence assessment report assessed his being at tier one/low risk of reoffending and that he was otherwise suitable to undertake community service work and the like. 18. I will put his prior record to one side and will not take this into account. In my view he is a person otherwise of good character and I take that into account. I note his plea for which he will receive a 25% discount. Remorse and contrition pose a difficulty here because the offender has not been able to provide evidence, or has not acknowledge any injury, loss or harm because it is agreed between both the parties that there has been no harm caused by this offending. 19. In my view, the offender has accepted responsibility for his actions. I find that he is unlikely to reoffend. I also take into account the significance of the form 1 in sentencing for the first offence. 20. There has been no doubt about the importance of general deterrence in drug supply cases since at least the 1970's. An inherent characteristic of that activity is that participants take steps to ensure it is carried out covertly with the result that significant police resources had to be devoted by them and law enforcement authorities for detection and successful prosecution. A consistent message of deterrence from sentencing judges is necessary. Further, having regard to the social impact of drug use particularly its underlying cause of other criminal offending, protection of the community would usually be of significance as well. 21. All of those matters apply in this area, but they do not apply in my view to this case, having regard to the facts which indicate that this is not a typical drug supply case - it was not being carried out covertly and it was being sold in his store, apparently otherwise openly. The police were able to see all of his sales data and the like. 22. I have had regard to specific deterrence. 23. In terms of other comparative cases I have been helpfully taken to a number of them, in particular Sullivan, which was a case sentenced by my brother judge Priestly SC DCJ. That was 9 kilograms where the THC content was said to be .07% and the case of Evans where the THC content was some 5% although that varied. Nevertheless, these were also for the medicinal supply of cannabis which I note is now legal. In those matters, the threshold in s 5, that is the custodial threshold in s 5 of the Crime (Sentencing Procedure) Act was found to have been crossed and ICOs were given. 24. Here the Crown submits that the custodial threshold has been crossed having regard to both offences, one being again a serious matter of deal with the proceeds of crime. I should say that in my view the objective seriousness of that offence is also at the very bottom end having regard to the predicate crime itself being something which was being done for "humanitarian" purposes. 25. I have had regard to the sentencing purposes under s 3A the Crime (Sentencing Procedure) Act, some of which pull in different directions. In my view an aggregate sentence is appropriate. 26. Now I need to address the standard non‑parole period. The reasons for, and which I find is not applicable in this matter, the reasons for imposing a non‑parole period that is longer or shorter than the standard non‑parole period to be found in s 21A and I make the following findings. 27. This was a plea of guilty. He has at least demonstrated common law remorse. His chances of reoffending are quite low and this is well below the mid‑range of objective seriousness in those circumstances. The standard non‑parole period is inapplicable although I keep this in mind as a guide-post, as it is not of particular usefulness here. 28. Taking into account the matter on the form 1 for the supply a large commercial quantity, I am not satisfied that in the particular circumstances of this case that it crosses the custodial threshold. Nevertheless, it was conduct which was known to be illegal and in those circumstances, I must have regard to that, and so there has got to be some element of specific deterrence even though I believe he is very unlikely to reoffend. 29. In those circumstances I would impose a community corrections order in the range of 12 months with the standard conditions to apply. 30. Nevertheless, the knowingly deal with proceeds of crime has caused me some other concerns about whether or not it does cross the custodial threshold but for the reasons I gave earlier in terms of its objective seriousness and having regard to the predicate crime itself being one which is at the lowest objective seriousness and notwithstanding it is a large amount of money, it does seem that at least half of that can only have been referenced to the predicate crime itself, that is, involving the sale of oils containing THC. 31. I am not satisfied that this crosses the custodial threshold either and, in those circumstances, I would also impose a CCO to run concurrently with the CCO for the count 1, supply large commercial quantity. 32. I order that under s 8(1) of the Crime (Sentencing Procedure) Act the appellant comply with a Community Correction Order for a period of 12 months and this commences today. The standard conditions that apply during the term of the order are that the appellant must not commit any offence and must appear before the Court if called upon to do so at any time. I have considered some of the additional orders that are often made in these matters. I do not find any of them relevant in the circumstances here, and I am not going to sentence him to any community service work.