Court of Criminal Appeal Supreme Court New South Wales Medium Neutral Citation: Z v R [2014] NSWCCA 323 Hearing dates: 23 July 2014 Decision date: 18 December 2014 Before: Hoeben CJ at CL at [1] McCallum J at [3] Garling J at [46] Decision: Leave to appeal be granted; appeal allowed; sentences passed at first instance quashed and in substitution therefor that the applicant be sentenced to a term of imprisonment with a non-parole period of 4 years and 6 months commencing on 1 April 2011 and expiring on 30 September 2015 and a balance of term of 2 years and 6 months expiring on 31 March 2018. Catchwords: CRIMINAL LAW - appeal against sentence - three drug offences - whether the sentencing judge erred in failing to adequately discount the applicant's sentence on the basis of his assistance to the authorities - whether the sentencing judge applied the correct maximum penalty - whether the sentencing judge erred in structuring the sentences - whether the degree of accumulation between the individual sentences is manifestly excessive and led to a total effective sentence which is manifestly excessive - principles in Kentwell Legislation Cited: Crimes (Sentencing Procedure) Act 1999, ss 23 and 53A Drug Misuse & Trafficking Act 1985, ss 22, 24(2), 25(1), 33 Cases Cited: Baxter v R [2007] NSWCCA 237; 173 A Crim R 284 C v R [2013] NSWCCA 8; 229 A Crim R 233 Kentwell v R [2014] HCA 37 R v Thompson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383 SZ v R [2007] NSWCCA 19; 168 A Crim R 249 Category: Principal judgment Parties: Z (Applicant) Regina (Respondent) Representation: Counsel: H Dhanji SC (Applicant) Solicitors: William O'Brien & Ross Hudson Solicitors (Applicant) Solicitor for Public Prosecutions (Respondent) File Number(s): 2009/805827 Publication restriction: Non-publication order in relation to the names in evidence Decision under appeal Date of Decision: 2013-05-06 00:00:00 Before: Armitage DCJ File Number(s): 2009/805827 Judgment 1HOEBEN CJ AT CL: I agree with the analysis of McCallum J and the error which she has identified. Regrettably, I cannot agree with the extent of the discount found to be appropriate by her Honour and the sentence which she has proposed. In my opinion, the appropriate discount should be 40 per cent. I would adjust the indicative sentences as follows: Count 3 - 2 years 5 months. Count 2 - 4 years 10 months. Count 1 - 6 years. 2On that basis, I would impose an aggregate sentence of 7 years and 6 months with a non-parole period of 5 years. 3McCALLUM J: The applicant, to whom I will refer as 'Z', seeks leave to appeal against the sentences imposed upon him in the District Court in respect of three drug offences. Two of the offences were defended and the applicant was found guilty by a jury after a trial. The first (count 1) was an offence of manufacturing a large commercial quantity of 3,4 methylenedioxymethylamphetamine (MDMA) contrary to s 24(2) of the Drug Misuse & Trafficking Act 1985. Pursuant to s 33 of the Act, the maximum penalty for that offence is imprisonment for life. The offence carries a standard non-parole period of 15 years. 4The second matter defended by the applicant (count 2) was an offence of manufacturing a commercial quantity of methylamphetamine contrary to s 24(2) of the Drug Misuse & Trafficking Act. The maximum penalty for that offence is imprisonment for 20 years. The offence carries a standard non-parole period of 10 years. 5The offence to which the applicant pleaded guilty (count 3) was an offence of supplying a prohibited drug, namely 9.869 kg of cannabis, contrary to s 25(1) of the Drug Misuse & Trafficking Act. The maximum penalty for that offence is imprisonment for 10 years. 6In sentencing the applicant on count 2, the judge took into account an offence on a form 1, being an offence of possessing a precursor (1.588 kg of 1-phenyl-2-propanone) intended for use in the manufacture of methylamphetamine contrary to s 24A(1) of the Drug Misuse & Trafficking Act. The maximum penalty for that offence is imprisonment for 10 years. 7A statement of the relevant facts was agreed for the purpose of the proceedings on sentence. The charge relating to a large commercial quantity of MDMA (count 1) arose out of the execution of a search warrant by police at premises in a Sydney suburb. Police found a number of items which, upon analysis, contained MDMA or traces of MDMA, including equipment used in the manufacture of that drug. Chemical notes and literature located at different premises in rural New South Wales (where the methylamphetamine the subject of count 2 was manufactured) corresponded with the process of manufacture and pilling of the MDMA there. Pill presses located at the Sydney premises were of a type that could perform the "pilling" stage of the manufacturing process at a rate consistent with there having been not less than 500 grams produced (approximately 1500 tablets). Evidence of a fingerprint of the applicant on a measuring jug at the Sydney address established direct participation on his part in the manufacturing process. 8The charge relating to the manufacture of methylamphetamine (count 2) also arose from the execution of a search warrant by police, at the premises in rural New South Wales. Police found methylamphetamine or traces of methylamphetamine on items associated with the manufacture of that drug. 9The judge sentenced the applicant on the basis that the jury must have accepted that he had arranged for another person to be the cook and had contact with that person during the manufacturing process in telephone conversations which were intercepted by police. The Crown case, evidently accepted by the jury, was that the equipment found supported the inference that a quantity of no less than 250 grams of methylamphetamine had been manufactured at those premises. 10The Crown submitted at the proceedings on sentence that, based on the content of the intercepted telephone conversations, it should be found that the applicant was at the top of the hierarchy and was the sole principal in the enterprise. The judge was not satisfied beyond reasonable doubt of that fact, finding that both the applicant and another co-offender were principals in the enterprise at either of the locations. 11The agreed facts in respect of count 3 were that on 4 July 2008, another co-offender went interstate to purchase cannabis on behalf of the applicant and himself. The quality was not satisfactory, so that co-offender returned to Sydney. Shortly thereafter, the applicant also went interstate and purchased a quantity of cannabis later found by police at the home of the other principal. The quantity of cannabis found by police was 9.869 kg. 12The applicant had prior convictions for drug offences but, as noted by the sentencing judge, the prior offences were not remotely as serious as the present charges. In New South Wales, he has a conviction for possession of a prohibited drug for which he was fined in 2001. He also has a conviction in Victoria in 2004 for trafficking a drug of dependence for which he received a sentence of imprisonment for 6 months partially suspended. The sentencing judge found that the need for individual deterrence, while present, was not as great as it would have been had the prior offences been of a level of seriousness similar to the present matters. 13The judge gave careful consideration to issues of parity with a number of co-offenders, being the cook, the man who first travelled interstate to buy the cannabis and, most relevantly, the other principal. No ground of appeal is raised in the present appeal as to the manner in which his Honour addressed those issues. 14There was evidence before the sentencing judge that the applicant had given assistance to authorities of the highest quality and usefulness. The judge accepted that the applicant was entitled to a substantial deduction from his sentences for that assistance. After considering relevant authorities, his Honour concluded that a discount of 25 per cent should be allowed. His Honour's conclusion on that issue is the principal ground of appeal. 15In respect of the charge of supplying cannabis (count 3), the judge indicated a starting point of 4 years. His Honour allowed a combined discount of 37.5 per cent (25 per cent for assistance and 12.5 per cent for the plea entered on the first day of the trial). His Honour stated that the application of those discounts produced a net sentence of 2 years and 4 months imprisonment. In fact, the correct calculation is 2 years and 6 months. In any event, his Honour imposed a fixed term of imprisonment of 2 years and 4 months commencing on the agreed starting date of 1 April 2011 and expiring on 31 July 2013. 16For the offence of manufacturing methylamphetamine (count 2), his Honour indicated a starting point of 8 years and 8 months, reduced to 6 years and 6 months after applying the discount of 25 per cent for assistance. His Honour made a finding of special circumstances on the basis that it would be the applicant's first period of lengthy imprisonment and that he would need a lengthy period of supervision on parole to address his problems with substance abuse and gambling. His Honour fixed a non-parole period of 4 years for that offence. The sentence was fixed to commence on 1 October 2012, which meant that it was accumulated by 18 months upon the sentence imposed for count 3. The sentence passed was a term of imprisonment with a non-parole period of 4 years commencing on 1 October 2012 and expiring on 31 September 2016 (as said) and a balance of term of 2 years and 6 months expiring on 1 April 2019 (as said). 17For the offence of manufacturing MDMA in a large commercial quantity (count 1), the sentencing judge also indicated a starting point of 8 years and 8 months, reduced to 6 years and 6 months after applying the discount of 25 per cent for assistance. For that offence, the applicant was sentenced to a term of imprisonment with a non-parole period of 3 years commencing on 1 April 2014 and expiring on 31 March 2017 and a balance of term of 3 years and 6 months expiring on 30 September 2020. 18At the time of passing sentence, the judge accidentally identified the commencement date in respect of count 1 as being 1 April 2015. His Honour had intended to identify 1 April 2014 as the starting date for that sentence. The error was later corrected. 19The effect of the sentences was accordingly an overall sentence of imprisonment for 9 years and 6 months commencing on 1 April 2011 and expiring on 30 September 2020 with a non-parole period of 6 years commencing on 1 April 2011 and expiring on 31 March 2017. 20The first ground of appeal is: "The learned sentencing judge erred in failing to adequately discount the applicant's sentence on the basis of his assistance to the authorities." 21The applicant's assistance to authorities was evidenced by exhibits C, D and E. For obvious reasons, the sentencing judge did not expose the contents of those documents except to record that police regarded the assistance to be "of the highest quality and usefulness". The judge considered that the Crown had correctly conceded that to be the case. His Honour recorded the real prospect of considerable danger to the applicant's life and those of his loved ones which "will never disappear". He noted that, in all probability, the applicant would have to be relocated overseas and that members of his family had already been relocated. His Honour also noted that, as a result of his assistance, the applicant will spend his time in custody in isolation and that, as a result of the relocation of his family, he receives few visits and is extremely lonely. 22On the strength of those findings, which the Crown does not dispute, it appears to have been incontestable that, subject to the requirement of proportionality recognised in s 23(3) of the Act, the applicant had established a basis for consideration to be given to allowing a discount at or close to the highest end of the appropriate range. The question raised by ground 1 is whether the judge erred in his determination as to what the appropriate range is. 23In his careful and lengthy remarks on sentence, the judge frankly noted his "anxiety" as to whether the reduction he had allowed for assistance to authorities was sufficient. His Honour considered some of the authorities dealing with the case of an offender who is entitled to a combined discount for both assistance and a plea of guilty. His Honour's anxiety appears to have stemmed from uncertainty (in the absence of any clear guidance on the issue in the authorities) as to the proper application of those statements of principle to the case of a person who has not pleaded guilty and who is entitled only to a discount for assistance. That is the critical issue raised by the present appeal. 24In determining that issue, it is appropriate to begin with the words of the statute. Section 23 evinces a clear intention to encourage and reward the provision of assistance to law enforcement authorities. It achieves that object by conferring power on a sentencing judge to impose a lesser penalty than would otherwise be imposed. The determination as to whether to impose a lesser penalty and the nature and extent of the penalty to be imposed is guided by the mandatory considerations listed in s 23(2). Consideration of those matters in the present case pointed unequivocally to the imposition of a substantially lesser penalty than would otherwise be imposed. 25The power to reduce a penalty on that basis is subject to the important constraint stated in s 23(3) that a lesser penalty imposed under the section must not be unreasonably disproportionate to the nature and circumstances of the offence. That provision implicitly acknowledges that a reduction for assistance may produce a penalty that does not wholly reflect the seriousness of the offending. The sentence, if disproportionate, must not be "unreasonably" so. 26Separately, the Act requires the sentencing court to take into account, where appropriate, the fact that an offender has pleaded guilty. That is also an occasion for imposing a lesser penalty than would otherwise have been imposed: see s 22 of the Act. A guideline judgment of this Court has stated that the utilitarian value of a plea to the criminal justice system should generally be assessed in the range of 10-25 per cent discount on sentence: R v Thompson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383. Consideration of the enduring requirement of reasonable proportionality (recognised in s 23(3)) is complicated by the fact that some offenders attract the operation of both provisions. In such a case, the risk of an unreasonably disproportionate sentence is more acute. 27The view has been expressed and endorsed in this Court that, in general, a single, combined discount should be given for both a plea of guilty and assistance and that such a discount should not normally exceed 50 per cent: SZ v R [2007] NSWCCA 19; 168 A Crim R 249 at [3] per Howie J; Simpson J agreeing at [1]; at [53] per Buddin J. Buddin J ventured the view that a combined discount exceeding 50 per cent should be reserved for an exceptional case (at [53]). 28The decision in SZ was considered by this Court in C v R [2013] NSWCCA 81. In that case, the sentencing judge had allowed a combined discount of 35 per cent. Having regard to the timing of the plea, it was submitted on appeal that the discount for assistance must have been as low as 10 per cent (on the premise that the discount for the plea must have been 25 per cent). A discount for assistance at that level was said to be inadequate in circumstances where the offender had assisted police to arrest two of the intended recipients of a quantity of imported cocaine, resulting in his being fearful both for himself and for his family. The Court of Criminal Appeal did not accept that the discount for assistance must necessarily have been as low as 10 per cent but was nonetheless persuaded that the combined discount of 35 per cent was inadequate (at [44]). In resentencing the applicant, the Court allowed a discount "approaching 45 per cent" (at [47]). 29The sentencing judge in the present case appears to have understood the decisions in SZ and C to be inconsistent with the allowance of a discount of up to 50 per cent for assistance alone. While his Honour did not say so in terms, his reasoning appears to have been that, if a combined discount for pleas of guilty and assistance should not normally exceed 50 per cent, it follows that a discount for assistance alone should not normally exceed 25 per cent. 30That is implicit in his Honour's remarks concerning the authorities relied upon by the applicant. His Honour noted that the decision in SZ holds that a combined discount should not ordinarily exceed 50 per cent. His Honour then recorded the fact that, in C, it had been submitted that there should be a discount of 20-50 per cent for assistance alone and that the Court had allowed a discount of 45 per cent as a combined discount. 31Finally, his Honour referred to an unreported decision of Zahra DCJ where there was a discount for assistance of 40 per cent. His Honour said: "While I have the greatest of respect for the decision of my very experienced colleague, I do not see in [counsel for the applicant's] submissions any decision of a court binding upon me to the effect that a discount of 40-50 per cent, as I understood [counsel for the applicant] to be suggesting for assistance alone, is within an appropriate range." 32Those remarks suggest that his Honour understood from the authorities cited by counsel that a discount for assistance alone in the order of 40-50 per cent would be impermissible or outside an appropriate range. My conclusion that his Honour approached the issue on that basis is reinforced by his repeated references to the very high order of assistance offered by the applicant and the "very great dangers incurred as a result". 33The applicant's submissions have persuaded me that the sentencing judge acted upon a wrong principle in that respect. His Honour was not constrained by the fact that the applicant had not pleaded guilty to stop at 25 per cent discount for assistance to authorities. The only constraint was that imposed by s 23(3) which, as has been observed by this Court, will not generally be met by allowing a combined discount of more than 50 per cent. 34In reaching this conclusion I intend no criticism of the sentencing judge, whose careful and anxious attention to this issue is manifest from the remarks on sentence. His Honour may have been concerned, as I have been, by the prospect of unequal justice. On the authority of SZ, it may appear at first glance that an offender who pleads not guilty but provides assistance of the highest order is eligible to have his penalty reduced by the same amount as an offender who provides assistance of the same high order but also pleads guilty at the earliest opportunity. That of course is an entirely hypothetical comparison. To the extent that there is at least a theoretical possibility of unequal justice being occasioned on that account, it is resolved by s 23(3). As explained by Howie J in SZ, that provision reflects the common law principle that there is "a bottom line beneath which a sentence cannot legitimately be set". It is recognised that the bottom line ordinarily sits at 50 per cent of the sentence that would have been imposed but for the discounts allowed by the statute. But it does not follow that the Act must be construed with an implied algorithm (flowing from the premise established by Thompson and Houlton) that a discount for assistance cannot exceed 25 per cent. To construe the Act with that level of mathematical rigidity would come close to punishing some offenders who offer assistance for not pleading guilty. 35Ground 2 is: The learned sentencing judge erred in sentencing the applicant in respect of the offence of supplying cannabis by sentencing the applicant against a maximum penalty of 15 years whereas the correct maximum penalty for the offence is 10 years. 36The Crown acknowledged the apparent error in his Honour's statement of the applicable maximum but submitted that it is not one which would attract the intervention of this Court, citing the judgment of Kirby J in Baxter v R [2007] NSWCCA 237; 173 A Crim R 284. Those submissions were written before the recent decision of the High Court in Kentwell v R [2014] HCA 37. In Kentwell, the Court noted that the three members of the the Court in Baxter took different views as to the proper construction of s 6(3) of the Criminal Appeal Act 1912 (which governs the determination of appeals against sentence). The plurality said (at [42]): Spigelman CJ's analysis in Baxter should be accepted. When a judge acts upon wrong principle, allows extraneous or irrelevant matters to guide or affect the determination, mistakes the facts or does not take into account some material consideration, the Court of Criminal Appeal does not assess whether and to what degree the error influenced the outcome. The discretion in such a case has miscarried and it is the duty of the Court of Criminal Appeal to exercise the discretion afresh taking into account the purposes of sentencing and the factors that the Sentencing Act and any other Act or rule of law, require or permit. As sentencing is a discretionary judgment that does not yield a single correct result, it follows that a range of sentences in a given case may be said to be "warranted in law". A sentence that happens to be within the range but that has been imposed as the result of a legally flawed determination is not "warranted in law" unless, in the exercise of its independent discretion, the Court of Criminal Appeal determines that it is the appropriate sentence for the offender and the offence. This is not to say that all errors in the sentencing of offenders vitiate the exercise of the sentencer's discretion. By way of example, s 44(1) of the Sentencing Act requires the court when sentencing an offender to imprisonment to first set the non-parole period and then set the balance of the term. Prior to 1 February 2003, a court was required to first set the term of the sentence and then specify the non-parole period. A court which sentences an offender to imprisonment after 1 February 2003 by first setting the term of the sentence commits legal error. Without more, the error does not affect the exercise of the sentencer's discretion. 37Notwithstanding the error identified in this ground, I regard the starting point of 4 years, in all the circumstances, to be the appropriate sentence for the offence. As already noted, there was an error of calculation in the application of the discount (in favour of the applicant). Having regard to my conclusion as to ground 1, it is necessary to revisit the discount in any event. 38Ground 3 is: The learned sentencing judge erred in structuring the sentences such that the degree of accumulation between the individual sentences is manifestly excessive leading to a total effective sentence which is manifestly excessive. 39Since I consider that the appeal should be allowed on the strength of ground 1, it is not strictly necessary to determine ground 3. The appropriate degree of accumulation is inextricably linked with the discount for assistance. It is enough to indicate that, in my view, it would be difficult both to increase the discount and to reduce the degree of accumulation without arriving at a sentence that is unreasonably disproportionate to the seriousness of the applicant's offending. 40In light of the success of ground 1, it is necessary to exercise the sentencing discretion afresh. For reasons I will explain, I consider it appropriate to impose an aggregate sentence, as allowed under s 53A of the Crimes (Sentencing Procedure) Act. 41In Kentwell at [43], the High Court said: After having identified specific error of the kind described in House, the Court of Criminal Appeal may conclude, taking into account all relevant matters, including evidence of events that have occurred since the sentence hearing, that a lesser sentence is the appropriate sentence for the offender and the offence. This is a conclusion that that lesser sentence is warranted in law. The result of the Court of Criminal Appeal's independent exercise of discretion may be the conclusion that the same sentence or a greater sentence is the appropriate sentence. In neither case is the Court required to re-sentence. Nor is the Court required to re-sentence in a case in which it concludes that a lesser sentence is appropriate for one or more offences, but that a greater sentence is appropriate for another or other offences, with the result that the aggregate sentence that it considers warranted in law exceeds the aggregate sentence that is the subject of appeal. The occasions calling for the Court of Criminal Appeal to grant leave, allow an offender's appeal and substitute a more severe sentence are likely to be rare. Were the Court to grant leave in such a case, convention would require that it inform the appellant of its intended course so that he or she might abandon the appeal 42I have concluded that a lesser overall sentence is warranted. In my view, in all the circumstances, the starting point nominated by the sentencing judge for count 3 was the appropriate sentence for that offence before the application of any discount. For each of counts 1 and 2 the judge indicated a starting point of 8 years and 8 months. However, count 1 was more serious than count 2, since it involved a large commercial quantity and carried a maximum penalty of imprisonment for life. Further, I would not, in the independent exercise of my discretion, start at a point of the mathematical precision of the terms identified. I consider the appropriate starting point for count 1 was in fact higher than that stated by the judge, namely, 10 years while the appropriate starting point for count 2 was 8 years. 43For the reasons already explained, I consider that the applicant is entitled to have those penalties reduced by 50 per cent for assistance unless the application of a discount of that order would produce a sentence that is unreasonably disproportionate to the seriousness of the applicant's offending. I propose to address that issue in the degree of accumulation reflected in the aggregate sentence. On that basis, I indicate that the sentences that I would have proposed had separate sentences been proposed instead of an aggregate sentence are 2 years for count 3, 4 years for count 2 and 5 years for count 1. 44On that basis, I would impose an aggregate sentence of 7 years with a non-parole period of 4 years and 6 months. 45The orders I propose are: (1)that leave to appeal be granted; (2)that the appeal be allowed; (3)that the sentences passed at first instance be quashed and in substitution therefor that the applicant be sentenced to a term of imprisonment with a non-parole period of 4 years and 6 months commencing on 1 April 2011 and expiring on 30 September 2015 and a balance of term of 2 years and 6 months expiring on 31 March 2018. 46GARLING J: I agree with McCallum J's proposed orders, and with her reasons for them. It is important at all times, as her Honour's judgment shows, to keep firmly in mind two features. First, that there is no algorithmic approach to the application of a discount for assistance. Secondly, whatever sentence results is one which must not be unreasonably disproportionate to the nature and circumstances of the offence. 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 December 2014