Zhuang v Director of Public Prosecutions (NSW)

1. [1]

   HOEBEN CJ at CL: I agree with Johnson J.

2. [2]

   JOHNSON J: The Applicant, Shelley Zhuang, seeks leave to appeal against a drug proceeds order under the Confiscation of Proceeds of Crime Act 1989 (“the Confiscation Act”) made by Acting Judge Williams at the Sydney District Court on 4 April 2014. Following the Applicant’s pleas of guilty and sentencing for drug supply offences, a drug proceeds order was made against her in the sum of $113,390.00.

3. [3]

   The appeal is brought under s.92(1) of the Confiscation Act, which allows a convicted person to appeal against a drug proceeds order as if it were part of the sentence imposed for the offence in relation to which the order was made: s.92(2). On appeal to this Court, a drug proceeds orders may be confirmed, discharged or varied: s.92(3).

4. [4]

   As an appeal by a convicted person against a drug proceeds order is to proceed as if it were an appeal against sentence, the Applicant requires leave to appeal under s.5(1)(c) Criminal Appeal Act 1912.

Offences and Sentences

1. [5]

   On 22 October 2013, the Applicant was committed for sentence from the Central Local Court on serious drug supply charges. The sentencing hearing took place before Acting Judge Williams on 7 February 2014 and his Honour sentenced the Applicant on 4 April 2014.

2. [6]

   The Applicant was sentenced for the following offences:

3. [7]

   In passing sentence on Count 1, the Applicant asked that six matters be taken into account on a Form 1, being knowingly dealing with the proceeds of crime ($4,790.00 in cash in the Applicant’s possession at the time of arrest), possession of a prescribed restricted substance and four counts of goods in custody.

4. [8]

   After applying a 25% discount for the Applicant’s pleas of guilty, the Applicant was sentenced on 4 April 2014 as follows:

5. [9]

   On the same day, the sentencing Judge made the following additional orders:

Facts of Offences

1. [10]

   The facts may be stated briefly. An Agreed Statement of Facts was before the sentencing Judge, with that document having been signed by the solicitor for the Applicant.

2. [11]

   Over a period of three months between July and October 2012, police intercepted approximately 1,400 telephone calls and messages which showed the Applicant was involved in the supply of prohibited drugs. Based on the intercepted calls and messages in which the Applicant discussed the quantity of drugs to be supplied, she supplied 625 grams of methylamphetamine.

3. [12]

   The intercepted calls revealed, as well, that the Applicant was involved in further methylamphetamine supply transactions where no quantity was mentioned. Accordingly, the quantity of 625 grams was the minimum quantity of methylamphetamine supplied by the Applicant.

4. [13]

   The Applicant also supplied 10.5 grams of heroin in late July 2012.

5. [14]

   In the majority of the transactions, the Applicant received a call from a customer and arranged to meet with him or her to supply the nominated drug.

6. [15]

   The Agreed Statement of Facts revealed that the Applicant received money from the customer when she supplied the drugs. Between 26 July and 31 October 2012, based on the telephone intercepts, it was agreed that the Applicant “received at least $118,180.00 from the supply of prohibited drugs”.

7. [16]

   On 31 October 2012, the Applicant was arrested by police whilst she was negotiating with a customer to supply him with drugs. She was driving a vehicle with Queensland registration plates and was the sole occupant of the vehicle. She had parked in the vicinity of where she had agreed to meet him at a street corner.

8. [17]

   Police apprehended her and searched the vehicle. They found a small set of scales, seven mobile telephones (one being the mobile telephone service that had been lawfully intercepted by police) and a purse containing items with her identification and the sum of $4,790.00 in cash, this sum being the subject of the unchallenged forfeiture order. The Agreed Statement of Facts stated that the $4,790.00 was possessed by her “knowing that it was the proceeds of crime, namely the supply of prohibited drugs”.

9. [18]

   There was nothing in the Agreed Statement of Facts that suggested the Applicant was supplying on behalf of any other person, or anything which could identify the source or sources of the drugs which she supplied to customers over that discrete three-month period.

The Applicant’s Subjective Case in the District Court

1. [19]

   The Applicant gave evidence before the sentencing Judge. In evidence-in-chief, she said that she had become “quite a heavy user” of drugs when she was supplying drugs, with her habit being “between $700.00 to $800.00 a day” shortly before her apprehension. The Applicant said that that monetary amount equalled about one-and-a-half grams of Ice per day (T5, 7 February 2014; AB82).

2. [20]

   Under cross-examination, she was asked (T8, 7 February 2014; AB85):

3. [21]

   There was no re-examination by the Applicant’s counsel.

4. [22]

   In a presentence report, the Applicant informed the author that “She had obtained the drug through boyfriends and associates, for whom she would also sell the drug” and that “She felt stupid because she was of the opinion that she was being used by the associates she was selling drugs for”. (AB69).

Application for Drug Proceeds Order and Forfeiture Order

1. [23]

   A Summons was filed by the Director of Public Prosecutions (NSW) (“the Director”) in the District Court on 31 January 2014, seeking orders against the Applicant under the Confiscation Act in the terms which were ultimately made on 4 April 2014.

2. [24]

   In addition, the prosecution trial advocate furnished written submissions dated 6 February 2014 outlining the basis upon which the orders were sought, with submissions of fact and law being made in support of the application.

3. [25]

   At the sentencing hearing on 7 February 2014, counsel for the Applicant submitted (T9, 7 February 2014):

4. [26]

   Towards the end of the sentencing hearing, counsel for the Applicant made short submissions concerning the orders sought under the Confiscation Act. The forfeiture order in the sum of $4,790.00 was not opposed. With respect to the drug proceeds order, counsel for the Applicant did not challenge the law as advanced in the Director’s written submissions. A short submission was made concerning hardship which it was said would flow from the making of the drug proceeds order.

5. [27]

   In the course of the remarks on sentence, his Honour said (ROS2, AB11):

6. [28]

   A little later, his Honour said (ROS4; AB13):

7. [29]

   In the remarks on sentence, the sentencing Judge addressed the orders sought under the Confiscation Act in the following way (ROS6-7; AB15-16):

The Applicant’s Ground of Appeal

1. [30]

   The sole ground of appeal asserts that his Honour erred in failing to take into account relevant considerations when determining that he had no alternative but to make the orders sought by the Director pursuant to s.29(1) of the Confiscation Act, and that his Honour erred in his assessment of the amount that the Applicant ought be ordered to pay.

Submissions of the Parties

1. [31]

   Mr Averre, counsel for the Applicant (who did not appear below), submitted that the sentencing Judge had failed to properly undertake the process of assessment required under ss.29 and 30 of the Confiscation Act where an assessment of a drug proceeds order is required. He submitted that his Honour did not address issues raised at the sentencing hearing which may bear upon that assessment, including the reference to other persons who were involved in the Applicant’s drug supply activities.

2. [32]

   Mr Averre referred to the decisions of this Court in R v Hall [2013] NSWCCA 47; 227 A Crim R 544 and Director of Public Prosecutions (NSW) v Colakoglu [2015] NSWCCA 301 in his submissions.

3. [33]

   Mr Averre acknowledged that the argument he was advancing in this Court had not been made at first instance by counsel for the Applicant. He submitted, however, that the Court should approach the matter upon the basis that error had been demonstrated, and that the matter should be remitted to the District Court under s.12(2) Criminal Appeal Act 1912 so that the application for a drug proceeds order against the Applicant could be reheard.

4. [34]

   The Director submitted that no error had been demonstrated in this case.

5. [35]

   It was submitted that it was not open to the Applicant to seek to contest the application for a drug proceeds order in this Court upon a basis that was not run at first instance: Zreika v R [2012] NSWCCA 44; 223 A Crim R 460 at 477-478 [79]-[82].

6. [36]

   The Director noted, in any event, that the quantum of the drug proceeds order in this case constituted a minimum figure based upon the quantified amounts of drugs referred to in intercepted conversations. It was noted that a complete assessment, which may be undertaken by reference to the further 40% of the Applicant’s offences which were not included in the calculation, may see a gross claim against the Applicant in the order of $200,000.00 if the matter was to be reopened.

Decision

1. [37]

   It is necessary for the Applicant to demonstrate error on the part of the primary Judge.

2. [38]

   In considering whether error is demonstrated, it is appropriate to have regard to the manner in which the proceeding below was conducted on behalf of the Applicant, and to consider what issues were raised at first instance.

3. [39]

   There is a practical expectation that an offender’s legal representative will make submissions to the sentencing Judge at first instance by reference to the particular factors which are sought to be taken into account on sentence: Zreika v R at 478 [80]. Similar considerations arise with respect to an application for a drug proceeds order under the Confiscation Act.

4. [40]

   In this case, the Director had filed a Summons notifying his intention to seek such an order and had made written submissions in support of the application.

5. [41]

   The Agreed Statement of Facts provided a substantial foundation for the making of the order. The Agreed Statement of Facts in this case disclosed material which was pertinent for the purposes of ss.29, 30 and 31 of the Confiscation Act.

6. [42]

   Although there was some reference in passing to the Applicant’s male acquaintances who were, in some way, said to be involved in the drug supply activities, there was no identification of these persons nor any specification of their alleged roles. The observations of the sentencing Judge in the remarks on sentence (referred to at [28] above) appear to have been drawn from the presentence report.

7. [43]

   The oral evidence of the Applicant did not provide a foundation for this aspect to be further explored on the application. Nor was any submission made on behalf of the Applicant that the issue should be explored on the Confiscation Act application.

8. [44]

   It is not necessary to elaborate, on this application, upon the principles applicable under the Confiscation Act, as considered in cases such as R v Hall and Director of Public Prosecutions (NSW) v Colakoglu.

9. [45]

   In my view, this case is far removed from that considered by this Court in Director of Public Prosecutions (NSW) v Colakoglu. In that case, there were several convicted co-offenders who had been involved in drug supply activity, and in relation to whom drug proceeds orders were sought. It was there observed (at [96]) that the Director had sought “drug proceeds orders against multiple co-offenders using a process of double counting”. The process of assessment of the value of benefits in that case involved different considerations (and different evidence) to the present application.

10. [46]

    In this case, a drug proceeds order was sought against a single offender. The Agreed Statement of Facts disclosed that the sum of at least $118,180.00 had been received by the Applicant in the course of her drug supply activities. Deducted from this figure was the sum of $4,790.00 in cash which was found in her possession.

11. [47]

    In circumstances where there were, at best, vague references to the activities of the Applicant’s unidentified male acquaintances in the drug supply activity, it could not be said that there was any real foundation to make an assessment under ss.29-31 of the Confiscation Act in a figure different to that ordered by the primary Judge.

12. [48]

    The Applicant has not established that the primary Judge failed to have regard to relevant considerations in the circumstances of this case.

13. [49]

    It should be observed that, even before this Court, there was no evidence from the Applicant, in the form of an affidavit or otherwise, which purported to set out what it was that she would have wished to say in the event that the Court acceded to the application to remit the matter to the District Court.

14. [50]

    The primary Judge in this case undertook the assessment process in accordance with ss.29-30 of the Confiscation Act by reference to the evidence before the District Court. No error has been demonstrated on the part of the primary Judge in this respect.

15. [51]

    I propose the following orders:

16. [52]

    DAVIES J: I agree with Johnson J.