New South Wales Court of Criminal Appeal CITATION : R v. Depalo [2003] NSWCCA 80 HEARING DATE(S) : 27 March 2003 JUDGMENT DATE : 1 April 2003 JUDGMENT OF : Studdert J at 1; Smart AJ at 2 DECISION : Leave to appeal against sentence granted; appeal allowed; sentence quashed; in lieu of the sentence imposed the applicant is fined $3300 and allowed 3 months from today in which to pay the fine. CATCHWORDS : Correct approach where single incident of supply of relatively small quantity of cocaine and not to vulnerable person - no necessity for exceptional circumstances to avoid custodial penalty - correct approach to imposition of periodic detention R v. P. M. Clarke NSWCCA unrep 15 March 1990 CASES CITED : R v. J. R. Bardo NSWCCA unrep 14 July 1992 R v. Ozer NSWCCA unrep 9 Nov 1993 R v. Adam Eli Meyer [2002] NSWCCA 451 PARTIES : Regina v. Frank Depalo FILE NUMBER(S) : CCA 60042/2003 COUNSEL : Appellant P. Byrne S.C Respondent M. C. Grogan SOLICITORS : Appellant Nyman Gibson Stewart Respondent S. E. O'Connor LOWER COURT District Court JURISDICTION : LOWER COURT 02/11/0708 FILE NUMBER(S) : LOWER COURT Taylor DCJ JUDICIAL OFFICER : - 13 - IN THE COURT OF CRIMINAL APPEAL 60042/03 Studdert J Smart AJ Tuesday, 1 April 2003 R v. Frank DEPALO Judgment 1. STUDDERT J: I agree with Smart AJ 2. SMART AJ: Frank Depalo seeks leave to appeal against a sentence of imprisonment for 2 years 6 months with a non-parole period of 1 year 10 months 12 days, the non-parole period to be served by way of periodic detention for the offence of between 30 November–2 December 1999 supplying a prohibited drug, to wit cocaine, approximately 6.25 grams. The cocaine content was, on analysis, found to be 20%. The maximum penalty is 15 years imprisonment and/or a fine of 2000 penalty units. 3. The applicant pleaded guilty before the magistrate. 4. In late November- early December a large scale police investigation into the supply of prohibited drugs between a number of persons was in progress. Part of this investigation included the monitoring of lawfully intercepted telephone conversations. A number of those indicated the applicant was arranging the supply of prohibited drugs from George Markovich via himself to Jason Stella. Part of these conversations referred to the quantity and type of packaging (9 discs) of the drugs. Surveillance was conducted on the applicant and others. 5. Early on 30 November 1999 in a telephone conversation between Markovich and the applicant he explained that he had someone who wanted to obtain 9 discs for Thursday. Markovich appeared to change the subject but a little later said, "So you're gonna get um…..I'll talk to you later on". Markovich assured the applicant that there would be "no problem". 6. That afternoon Markovich had a further discussion with the applicant about the supply of drugs to Stella. Markovich said that he did not want to meet Stella or become involved. The applicant described Stella as "a friend of Cathy's" and said that this was a one off transaction. He also said that he did not want to become involved and did not want to do these things. On Markovich replying that neither did he the applicant laughed. 7. On 1 December 1999, in a telephone conversation between the applicant and Stella, he asked if they were organised and the applicant replied that it should be organised for tomorrow. A time was to be arranged later. Stella said that he was cashed up and the applicant replied, "Oh good 'cause there's no tick!" Stella promised to telephone the applicant "late in the arvo" on the following day. Stella expected to be back in his hotel room by 6pm. The applicant told Stella, "It's a once off favour, I can do for you". 8. In a telephone conversation on 2 December 1999 the applicant arranged to meet Markovich at a restaurant about 6:30pm that day. It was agreed that Markovich would supply the applicant with "nine". Later, the applicant confirmed to a female in a telephone conversation that "they" were going to be separate items and not just one. 9. In a telephone conversation about 5.27pm on 2 December 1999 the applicant and Stella arranged to meet at the Centra Hotel, Missenden Road Camperdown between 8pm and 9pm, the applicant explaining that he had to go and pick the stuff up and confirming that there would be "nine". Stella agreed that he would be in his room (713) from 8pm. The applicant and Stella agreed to sort out prices when they met at the Centra. A little later Stella telephoned the applicant wanting to reduce the quantity from nine to eight but the applicant explained that he had already put in an order for nine. 10. The applicant was followed in vehicle UIC 550, owned by him, to a restaurant in Elizabeth Bay Road. He arrived there shortly after 6:50pm. Upon leaving the restaurant about 7:14pm he drove to premises in Newtown where he entered the premises of and in company with Markovich who had driven to Newtown in a separate vehicle. Further intercepted telephone conversations indicated that the applicant was arranging to meet Stella. Shortly after 7.50pm the applicant entered the Centra Hotel, Camperdown. About 9.07pm he walked out of that hotel, entered his vehicle, UIC 550 and left the area. 11. Following this, a search warrant was obtained and executed on room 713 of the Centra Hotel, Camperdown. Subsequently, Stella was arrested and nine small resealable plastic bags containing a white powder substance were located and seized. Analysis established that there were 6.25 grams and that the white powder was cocaine. The judge noted that the indictable quantity was 5 grams. 12. In early January 2000 the applicant contacted Markovich concerned over something and wanting to meet with him. Sometime later, Markovich contacted Stella threatening him and inquiring as to the names of the police that arrested him. Markovich threatened Stella with harm if the applicant received any threats or harm. 13. On 21 March 2002 the applicant attended and was arrested at the Sydney police centre. As was his right he declined to be interviewed following legal advice. The reasons for the delay between the commission of the offence and the arrest were not explored but may have had something to do with the ongoing operation. The delay is a matter to be taken into account in the applicant's favour. 14. In his evidence the applicant traced his career. That indicated that he was a resourceful and intelligent man who was running his own company with some 30 people dependent upon him. He admitted that he supplied the drugs to Stella and asserted that he had only met him once before 2 December 1999 and that was through a contact in Melbourne. The applicant said that he was reluctant to disclose the details of the people in Melbourne with whom he was dealing because of fear of retribution from them. 15. The applicant denied that he had supplied drugs before and said that this was the only time that he had supplied drugs of any kind to anybody. The applicant said that he had used small amounts of cocaine himself from time to time and had obtained that cocaine from various sources. 16. The applicant was referred to telephone tapes where he had told Stella that he was engaging in the particular supply as a "once off favour" and where he had told Markovich that it was a "one off". He insisted that that was the position. 17. The applicant said that he did not make any profit out of the transaction. He claimed that he had lost money because Stella did not have enough money to pay for the drugs supplied and that he gave Stella his bank account details so Stella could deposit the balance of the purchase moneys into the applicant's bank account. Stella was to give the applicant precisely the amount of money that he had paid his supplier for the drugs. The applicant claimed that he did not recall the amount. When pressed for the approximate amount the applicant replied, "I honestly don't know, it was almost three years ago. It was, I don't know, somewhere around $1500 or something like that, I'm not sure". 18. He said that it was possibly about $1500. He told Stella that there would be no credit and that he had had to pay for the drugs out of his own pocket. The applicant said that he had nothing to do with the threats addressed to Stella. He was not aware that Markovich was making threats to Stella. 19. The applicant claimed that he was blinded by his desire to help a friend, a girl in Melbourne. He said that he was no longer using cocaine although he was using it at the time of the offence. He declined to nominate his source because of fear of retribution. 20. The applicant explained that 9 discs referred to the 9 bags of drugs sold to Stella. 21. The judge said that the applicant was not a good witness. The judge further said: "The nature of the favour for his friend in Melbourne is unexplained. He told the court that he was not able to say anything further about that relationship because of the risk of retribution. No credible reason was advanced by the offender as to quite what the nature of the favour was and why he felt so compelled to enter into this serious criminal conduct". The judge continued: "The explanation that he gave simply does not ring true. It is inherently unlikely that he would so readily supply his bank details to Jason Stella. I have read the transcripts of the telephone intercepts. They very much give the impression of people dealing in almost a disinterested way about giving effect to a drug transaction. At one point the offender says that, in effect, he is not experienced in carrying out this conduct. Mr Markovich more or less says the same thing. They both laugh. Subsequently Mr Markovich makes it quite clear to Jason Stella when threatening him that he knows quite a deal about the ways of the drug milleu. The offender, one would have expected, would have been able to remember how much he paid for the drugs and how much he was to receive. All he can tell the court is the simple assertion that he did not gain financially from it. It is inherently unlikely that he could not remember this detail of this very significant event that occurred in his life. It raises a difficult question on sentencing because I cannot rely on what the offender has to say for himself in the witness box. His explanation that he used cocaine to try and, in effect, help himself to relieve a sleeping difficulty that he had was scarcely credible. He also said he used the drug for what was described as "recreational purposes". It is difficult to attribute a motive to the offender absent any reliable information from him or supporting evidence. Whilst there might be aggravating circumstances in some cases here the prosecution can only rely upon the short facts that I have set out. In sentencing the offender that is the objective material that I can be satisfied about. After reading the transcripts it would not be fair to describe him as a naïve man. I am to sentence him for one offence of supply. His role was to obtain the drugs from another person to supply to someone who was apparently a user. The quantity of drugs is about 1.25 grams in excess of the indictable amount. So it is by no means as large as many of the cases that come before the court. In my opinion the objective circumstances of the offence are such that it calls for a custodial sentence". 22. The primary submission of the applicant was that a sentence of 21/2 years imprisonment with a non-parole period of 18 months to be served by way of periodic detention was manifestly excessive bearing in mind: (a) there was a single act of supply and no evidence of other acts of supply, and (b) the quantity of 6.25 grams was relatively small, and (c) the supply was not to a vulnerable person, and (d) there were no aggravating features. 23. Propositions (a) – (d) were established on the evidence. The applicant submitted that they alone established that the sentence was manifestly excessive. In further support of his submission that the sentence was manifestly excessive but not essential to that submission the applicant relied on having no previous convictions and testimonials as to otherwise good character. There was the difficulty that the judge, for good reasons, did not accept the applicant as a witness of truth. 24. In support of his primary submission, the applicant contended that the judge's reasons contained two errors. First, the judge overstated the applicable principle when he said in relation to drug supply cases "Custodial sentences should be generally imposed except in exceptional circumstances". In some circumstances the applicant conceded that this statement would be unexceptional. However in the present circumstances it was inapplicable. The statement mentioned only applied when the conduct of an accused constituted "trafficking to a substantial degree". 25. In R v. P M Clarke CCA, unrep, 15 March 1990 Hunt J, with whom Sharpe J agreed, said: "This Court has….emphasised that sentences involving a substantial general deterrence are to be imposed on drug traffickers and….only in exceptional circumstances will a non custodial order be appropriate. That statement is not….restricted to the cases in which ….a profit has been obtained…. What the statement is principally directed to is the trafficking, the dissemination of drugs to others… trafficking alone in any substantial degree should normally lead to a custodial sentence". 26. In R v.J. R. Bardo, CCA, unrep, 14 July 1992 Hunt CJ at CL, after referring to his earlier judgment in Clarke said that the word "trafficking" clearly carries with it the connotation of supply on more than one occasion. The other members of the Court agreed. 27. In R v. Ozer CCA unrep, 9 November 1993, the offence there of knowingly taking part in the supply of a commercial quantity of cocaine had been held by the sentencing judge to be a limited and isolated event. This Court (Hunt CJ at CL, Allen and Mathews JJ) in rejecting a Crown appeal against the inadequacy of a sentence of imprisonment for a fixed term of 18 months to be served by way of periodic detention pointed out (per Hunt CJ at CL): "…he [Ozer] was not trafficking in the sense in which the word is used in the cases, of supply on more than one occasion: Regina v. Juliano Romy Bardo …The sentencing principle stated in Regina v. Peter Michael Clarke and the other cases does not apply in this case. There are nevertheless obviously cases where, such is the detailed involvement in the preparation and execution of only the one commercial transaction, a full time custodial sentence is not only appropriate but necessary. That, however, is not the present case". 28. Ozer involved the supply of one pound of cocaine for $54,000. The amount of pure cocaine was 402.6 grams. The sentence was regarded as unduly lenient but not so low as to warrant appellate intervention. It was stated that it should never be used as a precedent. 29. The applicant's contention was that this was not a case in which the general principle should have been stated without the qualifications contained in the cases because they rendered the general principle inapplicable to the circumstances of the case. That submission is correct. 30. The Crown accepted that in the circumstances of the present case the observation that custodial sentences be imposed other than in exceptional circumstances was too narrow a view. 31. The Crown pointed out that the judge correctly emphasised the importance of deterrence in drug supply cases and that after the observation complained of the judge added that the specific circumstances of an individual offender were determinative. The judge then referred to the objective material about which he was satisfied and upon which he proceeded to sentence the applicant. 32. The Crown submitted that it was not accurate to describe the approach taken by the judge as having been dictated by an erroneous application of Clarke. Rather it was his findings regarding the objective circumstances of the case that led him to conclude that a custodial sentence was appropriate. 33. The Crown submission does not provide a sufficient answer to the applicant's contentions. The imposition of a custodial sentence and one as long as 21/2 years for an isolated instance of the supply of a relatively small quantity of cocaine was excessive and that sentence appears to have been influenced by the judge's incorrect statement and application of principle. 34. The applicant further contended that the judge erred when he said "the best guide to the seriousness of a drug offence is to be found in the maximum penalties prescribed by the legislation". Counsel submitted that while the penalties were one guide it was putting the matter too high to say they were the best guide. The quantity involved, the circumstances of the offence and whether it was an isolated instance were also important. Everything must depend on the facts of the particular case and weighing and balancing them correctly. 35. The applicant submitted that the judge had erred in his approach to periodic detention, that he had not followed the approach set out in R v. Adam Eli Meyer [2002] NSWCCA 451 and this, of itself, required the Court to intervene and re-sentence the applicant. 36. In Meyer it was pointed out that the judge first had to determine that no penalty other than imprisonment was appropriate. That was the judge's view in the present case. Next the judge was required to consider the term of the sentence and to set a non-parole period unless he decided to decline to set a non-parole period. Bell J, with whose reasons Wood CJ at CL and Dowd J agreed, said at par [13]: Having determined to sentence the applicant to a term of imprisonment for three years or less it was necessary for his Honour to consider whether pursuant to s6(1) of the Sentencing Procedure Act that the sentence should be served by way of periodic detention. In Regina v Foster [2001] NSWCCA 215 Badgery-Parker J (in a judgment with which Giles JA and Greg James J agreed) noted that the failure of a sentencing judge to advert in the course of his or her reasons to this two stage procedure (fixing the term of the sentence and then considering alternatives to full-time custody) does not require a conclusion of error. However, his Honour observed at [33]: "Failure to adopt the two stage procedure may be productive of error, and because it entails that risk, sentencing judges should be at pains, to proceed in the manner which the statute requires…". 37. After hearing the evidence and the submissions of the legal representatives of the parties the judge adjourned the hearing for some hours to consider what penalty he should impose. I have little doubt that prior to giving his reasons he had determined the sentence which should be imposed. The Crown submission to that effect was correct. 38. The judge determined that the objective seriousness of the offence called for a custodial sentence. After reviewing the subjective features of the applicant and noting the testimonials the judge said that he did not accept the claim of the applicant that he was foolishly trying to help a friend. The judge held that because (a) the applicant has a responsibility to support young children, and (b) he had not been involved in any other criminal activities (before or since the offence), and (c) he is running a business that employs a number of people whose livelihood would be affected if he underwent a sentence of full time custody the sentence of imprisonment should be served by periodic detention. 39. The judge considered that the plea had considerable utilitarian value and evidenced contrition. He also referred to the applicant's good conduct, the support of his family and his good works. The judge said, "Because of those factors…I have reduced the sentence that I would otherwise impose by twenty percent". The judge then sentenced the applicant to two years and six months imprisonment. He did not elaborate on why he selected this term of imprisonment with a non-parole period of one year ten months and twelve days to be served by way of periodic detention. 40. The applicant contended that if the judge had first determined to impose a custodial sentence it should and would have been much shorter. His starting point, taking into account the discount of twenty percent was 37 ½ months. That and the subsequent sentence were manifestly excessive. It was submitted that the court could safely infer that the judge had fixed a sentence as long as 21/2 years because it was being served by periodic detention. That is reading too much into what the judge said. It would, however, have been better if the judge had followed the order set out in the statutory provisions (and explained in Meyer). 41. The applicant has, however, made good his contention that the sentence was manifestly excessive. The Court is required to re-sentence the applicant. Despite the unsatisfactory evidence of the applicant and the suspicions it arouses the Court must confine itself to the evidence against the applicant. 42. This Court is dealing with a position which differs from that before the judge in that as at 27 March 2003 this Court was advised that the applicant had served 27 periods of periodic detention, that is just over 6 months. 43. In view of the following: (a) one instance of supply of a relatively small amount of cocaine and not to a vulnerable person (b) the delay in the prosecution of the charge of 2 years 31/2 months when the facts were known and the evidence was available (c) the plea of guilty at committal and the considerable utilitarian value of the plea and it also evidencing contrition (d) the absence of prior convictions (e) the good conduct of the applicant recorded in the testimonials (f) the applicant's business and family responsibilities and his family support (g) the periods already spent in custody the correct penalty is a fine of $3300 – thirty penalty units. 44. I propose the following orders: (a) Leave to appeal against sentence granted (b) Appeal allowed; sentence quashed. (c) In lieu of the sentence imposed the applicant is fined $3300 and allowed 3 months from today in which to pay the fine. ********** Last Modified: 04/04/2003 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.