Khoury v R

1. [1]

   JOHNSON J: By Notice of Application for Leave to Appeal filed on 9 April 2020, the Applicant, Anthony Khoury, seeks leave to appeal with respect to sentences imposed at the Sydney District Court on 20 September 2019 for drug supply offences.

The Offences and Sentences

1. [2]

   Following pleas of guilty, the Applicant was sentenced by his Honour Judge Norrish QC for the following offences:

2. [3]

   In addition, the Court was asked to deal with a further offence on a certificate under s.166 Criminal Procedure Act 1986, being an offence of driving whilst licence suspended contrary to s.54(3)(a) Road Transport Act 2013 (“RT Act”), an offence punishable by a maximum penalty of six months’ imprisonment.

3. [4]

   The sentencing Judge imposed the following penalties:

4. [5]

   The total effective sentence involved imprisonment for four years and three months with an effective non-parole period of two years and nine months expiring on 7 May 2021.

Grounds of Appeal

1. [6]

   The Applicant relies upon the following grounds of appeal:

Facts of Offences

1. [7]

   A Statement of Agreed Facts signed by the Applicant was tendered by the Crown at the sentencing hearing.

2. [8]

   The Applicant was sentenced at the same time as a co-offender, Mohammed El Sage: R v El Sage; R v Khoury [2019] NSWDC 826.

3. [9]

   In July 2018, police were conducting an investigation in relation to Mr El Sage and his associates. Between 6 and 8 July 2018, Mr El Sage made arrangements to meet with a person who was an undercover operative (“UCO”). On 9 July 2018, Mr El Sage and the Applicant met the UCO at Leichhardt Oval at Lilyfield and supplied cocaine to him for $6,500.00 cash (the s.25(1) DMT Act offence). The cocaine was later analysed and found to weigh 27.9 grams with a purity of 79.5%.

4. [10]

   After that exchange took place, the Applicant and Mr El Sage agreed to supply the UCO with two kilograms of cocaine at a price of $200,000.00 per kilogram. They agreed to meet at the same place two days later for that purpose.

5. [11]

   On 11 July 2018, the Applicant and Mr El Sage went to a house in Punchbowl. The Applicant was driving the vehicle which transported them to that location (the s.54(3)(a) RT Act offence). The two men were then followed to Leichhardt Oval by a second car, driven by an 18-year old relative of Mr El Sage against whom proceedings were discontinued. Upon meeting with the UCO, Mr El Sage indicated that the cocaine was in the second car. The Applicant retrieved a bag which contained rectangular blocks of powder from the other vehicle and placed it into the passenger seat of the UCO’s vehicle.

6. [12]

   Soon after the Applicant placed the bag in the UCO’s vehicle, the Applicant and Mr El Sage were arrested. The rectangular blocks were later analysed and found to weigh a total of 2,376.2 grams. No prohibited drugs were identified. The Applicant accepted his guilt for the s.25(2) DMT Act offence on the basis that he had represented the blocks to contain cocaine: s.40(1) DMT Act.

7. [13]

   The Applicant’s driver’s licence was suspended from 19 April 2018 to 18 July 2018 by court order made on 19 April 2018, giving rise to the charge of driving whilst suspended for which sentence was passed by way of the s.166 Certificate.

The Applicant’s Subjective Circumstances

1. [14]

   The Applicant was 36 years old at the time of the offences and 37 years of age at the time of sentence.

2. [15]

   The Applicant has a prior criminal history. On 10 October 2006, the Applicant was sentenced at the Burwood Local Court for offences of possessing a loaded firearm in a public place and not keeping a firearm safely, for which he was ordered to perform 200 hours community service and fined $1,000.00.

3. [16]

   On 2 December 2015, the Applicant appeared before the Bankstown Local Court and was fined $100.00 for possession of a prohibited drug.

4. [17]

   On 24 February 2016, the Applicant appeared at the Bankstown Local Court on a charge of possession of a prohibited drug for which he was fined $400.00.

5. [18]

   On 21 February 2017, the Applicant was sentenced at the Bankstown Local Court for offences of supplying a prohibited drug and dealing with property suspected of being the proceeds of crime, for which he was placed on a two-year good behaviour bond under s.9 Sentencing Procedure Act.

6. [19]

   On 15 August 2017, the Applicant was sentenced at the Parramatta District Court for an offence of demanding property in company with menaces, for which he was sentenced to imprisonment for one year and 10 months comprising a non-parole period of 11 months commencing on 9 November 2016 and expiring on 8 October 2017, with a balance of term of 11 months commencing on 9 October 2017 and expiring on 8 September 2018.

7. [20]

   Accordingly, the present offences were committed by the Applicant whilst he was on parole and subject to a good behaviour bond.

8. [21]

   A sentencing assessment report dated 22 July 2019 was before the District Court. A report of Mr Chafic Awit, psychologist, dated 19 July 2019 was tendered in the defence case on sentence. A letter from the Applicant dated 10 July 2019 together with a letter from the Applicant’s partner, Joseline Nakhel, dated 22 July 2019 were also tendered in the defence case on sentence.

9. [22]

   The Applicant did not give evidence at the sentencing hearing.

10. [23]

    The Applicant has been in continuous custody since his arrest on 11 July 2018. His parole was revoked with effect from that day.

Some Findings of the Sentencing Judge

1. [24]

   Having regard to the grounds of appeal, it is appropriate to set out a number of findings made by the sentencing Judge concerning the Applicant. The focus of the grounds of appeal was the offence under s.25(2) DMT Act based upon agreement to supply a substance represented to be a prohibited drug, cocaine.

2. [25]

   The sentencing Judge described the offences in accordance with the Statement of Agreed Facts. When examining the Applicant’s problematic history of substance abuse and subjective material tendered in the defence case, his Honour referred to the s.25(2) DMT Act offence (at ROS[51]) (my emphasis):

3. [26]

   A little later, the sentencing Judge addressed the objective gravity of the DMT Act offences (at ROS[66]) (my emphasis):

4. [27]

   In the context of the s.25(2) DMT Act offence, his Honour referred to a number of sentencing decisions for “drug rip-off” supply offences (at ROS[67]-[69]):

5. [28]

   Soon after, the sentencing Judge made the following finding concerning the objective seriousness of the s.25(2) DMT Act offence (at ROS[72]) (my emphasis):

6. [29]

   In the course of addressing the comparative roles of the Applicant and Mr El Sage, his Honour said (at ROS[109]-[110]) (my emphasis):

7. [30]

   His Honour noted that the Applicant’s offences were committed whilst he was subject to conditional liberty (at ROS[113]):

8. [31]

   In a paragraph which became a focal point for submissions made in this Court, his Honour referred to the issue of financial gain arising from the s.25(2) DMT Act offence (at ROS[115]) (my emphasis):

9. [32]

   The sentencing Judge made findings of special circumstances with respect to both the Applicant and Mr El Sage (at ROS[122]-[124]):

10. [33]

    Shortly after, his Honour passed sentence with respect to the Applicant as referred to earlier in this judgment.

Sentencing “Drug Rip-Off” Supply Offenders

1. [34]

   Before moving to consider the grounds of appeal, it is appropriate to make some general observations concerning sentencing “drug rip-off” supply offenders.

2. [35]

   The term “supply” is defined broadly in s.3(1) DMT Act, including “agreeing to supply”, the s.25(2) DMT Act offence to which the Applicant pleaded guilty. “Supply” is defined as follows:

3. [36]

   The deeming provision in s.40(1) DMT Act operated to render the Applicant liable to conviction for a s.25(2) DMT Act offence even though the substance involved was not a prohibited drug. Section 40(1) DMT Act states:

4. [37]

   Given the grounds of appeal and the submissions made in support of those grounds, it is helpful to refer to decisions where this Court has considered “drug rip-off” supply offences in the context of both conviction and sentence appeals.

5. [38]

   In R v Dendic and Mazzeo (1987) 34 A Crim R 40 (“Dendic and Mazzeo”), this Court (Street CJ, Slattery CJ at CL and Wood J agreeing) determined an appeal against conviction and sentence for a drug supply offence based on the concept of “offer to supply”. The appellants made an offer to supply to an undercover police officer where the substance ultimately delivered was glucodin and not heroin. Street CJ observed at 45:

6. [39]

   The argument advanced for the appellants in Dendic and Mazzeo was that what they did was more in the nature of obtaining property by a false pretence contrary to s.179 Crimes Act 1900. In rejecting this submission, Street CJ observed (at 46):

7. [40]

   With respect to the sentence appeal, Street CJ stated at 47:

8. [41]

   The Chief Justice noted with respect to one of the appellants at 47:

9. [42]

   Street CJ observed (at 47) that there was nothing to indicate that imprisonment for three years with a non-probation period of 12 months was excessive for an offence of that type (then punishable by a maximum penalty of imprisonment for 15 years).

10. [43]

    In R v Addison (1993) 70 A Crim R 213 (“Addison”), the Court referred to Dendic and Mazzeo in the course of dismissing an appeal against conviction based upon agreement to supply in a “drug rip-off” context. Gleeson CJ (Finlay and Grove JJ agreeing) said at 217:

11. [44]

    The applicant in Addison was sentenced to imprisonment for five years with a non-parole period of three years and three months. In dismissing the sentence appeal, Gleeson CJ said at 221:

12. [45]

    In R v Kalpaxis (2001) 122 A Crim R 320; [2001] NSWCCA 119 (“Kalpaxis”), Stein JA (Wood CJ at CL and Studdert J agreeing) said at [18]:

13. [46]

    Stein JA noted that the offender in Kalpaxis was affected by significant mental illness and continued at [20]-[22]:

14. [47]

    The exceptional and extraordinary nature of the offence in Kalpaxis has been emphasised in later decisions of this Court. In R v Smith [2002] NSWCCA 378 (“Smith”), Wood CJ at CL (Howie J agreeing) said at [16]:

15. [48]

    In R v Yaghi (2002) 133 A Crim R 490; [2002] NSWCCA 396 (“Yaghi”), Wood CJ at CL (Smart AJ agreeing) returned to this topic, referring to Kalpaxis at [11]:

16. [49]

    Wood CJ at CL continued at [14]-[21]:

17. [50]

    In Aoun v R [2011] NSWCCA 284 (Aoun”), with the concurrence of Basten JA and Adams J, I said at [44]-[47]:

18. [51]

    In R v Kijurina [2017] NSWCCA 117 (“Kijurina”), Price J (Hoeben CJ at CL and Lonergan J agreeing) said at [99]:

19. [52]

    After referring to Yaghi, Price J continued in Kijurina at [101]-[104]:

20. [53]

    In Diri v R [2019] NSWCCA 319 (“Diri”), Davies J (Macfarlan JA and Hidden AJ agreeing) said at [57]:

21. [54]

    What can be seen from these decisions is a clear line of authority where “drug rip-off” supply offences are regarded as objectively serious. The decision in Kalpaxis, upon which the Applicant seeks to rely in this case, is to be regarded as an extraordinary and exceptional case which provides no assistance to the Applicant. The conduct of the Applicant in the present case is closer to that seen in Dendic and Mazzeo, Addison, Smith, Yaghi, Kijurina and Diri.

22. [55]

    At times, the terminology of fraud or false pretence is used with respect to “drug rip-off” supply offences: Dendic and Mazzeo at 46 (see [39] above), Yaghi at [15], [20] (see [49] above), Kijurina at [101] (see [52] above) and Diri at [57] (see [53] above). Counsel for the Applicant sought to draw such an analogy in this case. Whilst this aspect is to be taken into account in assessing the objective seriousness of the offence, this Court has consistently rejected an approach where the offence is to be characterised as being more one of dishonesty than a drug supply offence which is capable of attracting significant penalties under the DMT Act.

23. [56]

    Clearly, it is relevant to an assessment of objective seriousness that the offer to supply, or agreement to supply in the particular case, as in the present case, did not involve the prospect that an actual prohibited drug would be provided for distribution in the community. However, there are broader policy considerations at play in “drug rip-off” supply offences as noted in the decisions to which reference has been made.

24. [57]

    Having made these general observations, it is appropriate to turn to the grounds of appeal.

Grounds 1-3 - Challenges Directed to the Sentence for the s.25(2) DMT Act Offence

1. [58]

   It is appropriate to consider these grounds together.

2. [59]

   Mr Webb, counsel for the Applicant, submitted that the sentencing Judge had erred in his approach to the offence under s.25(2) DMT Act. It was submitted that there had been a misapplication of legal principle in the way in which his Honour had applied s.21A(2)(o) Sentencing Procedure Act, which provides for an aggravating factor where the offence was committed for financial gain.

3. [60]

   Whilst acknowledging that financial gain is generally speaking a salient factor in a large commercial supply offence, Mr Webb submitted that it was an error to identify it as an aggravating factor in what he described as an ingenuous or fraudulent supply involving speculation by the sentencing Judge upon the basis that there was no payment to an upstream supplier.

4. [61]

   Counsel sought to develop a submission that, as this was a fraudulent transaction, there was a form of double counting which operated adversely to the Applicant in this case. It was submitted that s.21A(2)(o) was misapplied by reference to the financial gain which the Applicant was to make from what was a fraudulent transaction.

5. [62]

   Mr Webb relied upon Kalpaxis and submitted that error had been demonstrated in the approach taken on sentence to the s.25(2) DMT Act offence.

6. [63]

   The Crown submitted that no error had been demonstrated in the sentencing Judge’s approach to financial gain for this offence. It was submitted that the Applicant’s participation in the “drug rip-off” involved in the s.25(2) DMT Act offence was undertaken solely for the purpose of financial gain because the entirety of the anticipated proceeds would have been profit.

7. [64]

   The Crown submitted that the sentence imposed for the s.25(2) DMT Act offence indicated that his Honour had characterised this offence as a lower level one and had imposed what was a lesser (but available) sentence in the circumstances.

8. [65]

   The Crown pointed out that, according to sentencing statistics, the sentence imposed upon the Applicant for a s.25(2) DMT Act offence involving a large commercial quantity of cocaine (including deemed supply) was the lowest recorded sentence, with this confirming that an appropriately restrained approach had been adopted for this offence.

9. [66]

   The Crown submitted that the description of the offence as being “ingenuous” as asserted in Ground 3 was not correct. There was a measure of calculation in the offence and it had not been demonstrated that the sentencing Judge had erred in his approach to this offence.

10. [67]

    When sentencing for a “drug rip-off” supply offence, it is necessary for the Court to take into account that a prohibited drug will not actually be supplied. As Street CJ said in Dendic and Mazzeo, such an offender is “manipulating [the] drug traffic for his own financial advantage” (see [41] above). As Gleeson CJ observed in Addison, the offender in that case was “engaging, for his own purposes, in a charade” (see [44] above).

11. [68]

    It may be accepted that the criminality involved in such a case is “somewhat less than that involved in a case where there was a genuine plan to supply drugs”: Yaghi at [19] (see [49] above).

12. [69]

    Unlike most fraud or false pretences offences, the victim of a “drug rip-off” is unlikely to report the matter to police. As a result, subject to any violent retribution, the offender is likely to escape without punishment. There is a significant community interest in not allowing the drug trade to be used as a vehicle for fraudulent activities of this kind, and also in deterring the kind of violent response which such conduct can provoke: Yaghi at [17]-[18] (see [49] above).

13. [70]

    The importance of general deterrence has been emphasised so that courts should impose sentences of sufficient severity to dissuade others who may be tempted to engage in “drug rip-offs”: Kijurina at [103] (see [52] above).

14. [71]

    It was both open to the sentencing Judge and appropriate to have regard to the financial gain aspect as an aggravating factor under s.21A(2)(o) Sentencing Procedure Act in the circumstances of this case. His Honour characterised appropriately the question of financial gain in his sentencing remarks (ROS[115] at [31] above). As Wood CJ at CL observed in Yaghi at [21] (see [49] above), the offence in that case was “a particularly serious offence which could have secured a substantial sum of money”.

15. [72]

    There has been no double counting of this aspect in this case: Hejazi v R (2009) 217 A Crim R 151; [2009] NSWCCA 282 at [10]. The factors that informed the aggravating factor of financial gain in this case were that there was no other party (no upstream supplier) who would share in the profit and there was no cost or overheads as the substance supplied was not in fact cocaine. If the purchaser had paid for the alleged cocaine, then the Applicant and Mr El Sage stood to gain the full financial sum flowing from the transaction. The nature and extent of financial gain in this case was unusual: Lee v R [2019] NSWCCA 15 at [54]. These were appropriate matters for the sentencing Judge to take into account as an aggravating factor on sentence for this offence (see ROS[51] at [25] above; ROS[115] at [31] above).

16. [73]

    It does not assist the Applicant to describe what occurred as an “ingenuous supply” and not an “actual supply” as asserted in Ground 3. What the Applicant was doing was well known to sentencing courts and was characterised appropriately by the sentencing Judge, who was entitled to take into account the aspect of financial gain as an available aggravating factor under s.21A(2)(o) Sentencing Procedure Act.

17. [74]

    None of the matters complained of in Grounds 1, 2 and 3 are made good and each ground should be rejected.

Ground 4 - Suggested Error in Assessment of Objective Criminality of s.25(2) DMT Act Offence

1. [75]

   Mr Webb made submissions in support of this ground which were, in truth, derived from the general complaint contained in Grounds 1 to 3. He submitted that the assessment of objective gravity for the s.25(2) DMT Act offence was infected by error because of his Honour’s approach to the financial gain issue.

2. [76]

   The Crown submitted that it was open to the sentencing Judge to make the challenged finding concerning the objective seriousness of the s.25(2) DMT Act offence. The Crown noted that the submission made for the Crown at first instance was that the s.25(2) DMT Act offence fell below the middle of the range of objective seriousness for offences of this type and that no contrary submission was made by counsel for the Applicant in the District Court.

3. [77]

   The Crown submitted that the finding made at first instance was open to the Court in the circumstances of this case.

4. [78]

   The assessment of the objective seriousness of an offence is quintessentially for the sentencing Judge and this Court should be very slow to set aside the judgment made at first instance in the exercise of a broadly based discretion: Mulato v R [2006] NSWCCA 282 at [37], [46].

5. [79]

   The sentencing Judge found that the s.25(2) DMT Act offence lay “substantially below the middle range of objective seriousness” but “certainly … not at the lowest end of objective seriousness, notwithstanding the absence of any cocaine” (see ROS[66] at [26] above; ROS[72] at [28] above).

6. [80]

   It was open to the sentencing Judge to make this finding. It is noteworthy that no more favourable finding concerning the objective seriousness of the offence was urged upon his Honour by the Applicant’s counsel in the District Court with respect to the s.25(2) DMT Act offence.

7. [81]

   What was said concerning the objective seriousness of “drug rip-off” offences in cases such as Yaghi, Kijurina and Diri supports the finding made in this case. Earlier decisions such as Dendric and Mazzeo and Addison point as well to the appropriateness of terms of imprisonment for offences of this type (see [40]-[42] and [44] above).

8. [82]

   It was also relevant that the Applicant had actually supplied cocaine (the s.25(1) DMT Act offence) and had obtained and supplied blocks of powder so as to carry through with the s.25(2) DMT Act offence. This case was far removed from the acts of a mentally ill offender in Kalpaxis “who was out of touch with reality” (see Smith and Yaghi at [47]-[49] above).

9. [83]

   I would reject this ground of appeal.

Ground 5 - Claim of Manifest Excess

1. [84]

   Mr Webb submitted that the total effective sentence was manifestly excessive having particular regard once again to features of the s.25(2) DMT Act offence addressed in earlier grounds of appeal.

2. [85]

   The Crown submitted that the sentences passed upon the Applicant were open in the circumstances of the case taking into account, as well, the fact that the Applicant was subject to conditional liberty at the time of the offences.

3. [86]

   The Crown submitted that the sentences passed were not manifestly excessive.

4. [87]

   To succeed on this ground of appeal, it is necessary for the Applicant to demonstrate that the sentences passed were unreasonable or plainly unjust: Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 at [25].

5. [88]

   In addressing earlier grounds of appeal, I have referred to factors which were relevant to sentence for the Applicant’s s.25(2) DMT Act offence.

6. [89]

   It is noteworthy, as the Crown submitted, that the actual sentence imposed for the Applicant’s s.25(2) DMT Act offence is the lowest sentence recorded for this class of offence in sentencing statistics held by the Judicial Commission of New South Wales. This confirms that the sentencing Judge made a finding favourable to the Applicant concerning the objective seriousness of the offence to which his Honour then attached what was, in reality, a moderate sentence which took into account the features of the offence itself. The aspect of financial gain was an aggravating factor for this offence, but his Honour made restrained and appropriate use of it in determining sentence for the s.25(2) DMT Act offence.

7. [90]

   The Applicant was sentenced as well for an offence of supplying a prohibited drug for which a sentence of 18 months’ imprisonment was passed which has already expired.

8. [91]

   The total effective term imposed upon the Applicant for these offences comprised imprisonment for four years and three months with a non-parole period of two years and nine months. By reference to the totality of the Applicant’s criminality, and the fact that these offences were committed in breach of conditional liberty (the Applicant being subject to both parole and a good behaviour bond), the total effective sentence fell well within the exercise of reasonable sentencing discretion in the circumstances of the case.

9. [92]

   This ground of appeal should be rejected.

Conclusion

1. [93]

   The Applicant has not made good any of his grounds of appeal.

2. [94]

   I propose the following orders:

3. [95]

   DAVIES J: I agree with Johnson J.

4. [96]

   IERACE J: I also agree with Johnson J.