Khalil v R

1. [1]

   PRICE J: I have had the benefit of reading Ierace J’s judgment. I agree that Grounds 1 and 2 should be dismissed and Ground 3 upheld. However, I respectfully do not agree with the orders proposed by Ierace J.

2. [2]

   In determining the sentence to be passed for a federal offence, the Court is obliged to impose a sentence that is of a severity appropriate in all the circumstances of the offence. Without repeating the detail of the applicant’s offending which is comprehensively covered in Ierace J’s judgment, I am not persuaded that a lesser sentence is warranted in law (Criminal Appeal Act 1912 (NSW), s 6(3)).

3. [3]

   It follows that I do not agree with Hamill J’s additional remarks “that an ICO was the appropriate penalty”.

4. [4]

   The orders that I would propose are:

   1. (1)

      Leave to appeal granted.

   2. (2)

      Appeal dismissed.

5. [5]

   HAMILL J: I agree with the orders proposed by Ierace J and with his Honour’s reasons for rejecting ground 1 and for upholding ground 3. Because the Court must exercise the sentencing discretion afresh, I find it unnecessary to express a concluded view as to whether the sentence was manifestly excessive, the argument made by the applicant under ground 2.

6. [6]

   As to ground 3, and in addition to Ierace J’s helpful analysis of relevant case law concerning the imposition of an intensive corrections order (ICO), the requirement to take account of community safety, and the application of s 66 of the Crimes (Sentencing Procedure) Act 1999, I would add reference to the observations of Beech-Jones JA in Stanley v Director of Public Prosecutions (NSW) [2021] NSWCA 337 at [189], [197]-[198].

7. [7]

   I agree with Ierace J as to the appropriate penalty to be imposed on re-sentence. I would only say that, in reaching this conclusion, I am guided by the practical concession made by counsel for the applicant that an ICO is no longer appropriate in circumstances where the applicant has served a substantial period in custody under the sentence imposed by the District Court. The situation that now exists means that a recognizance release order (as proposed by Ierace J) provides similar safeguards in terms of community safety and opportunities for supervision and rehabilitation for the applicant. Were it not for these practical considerations, and if he were otherwise entitled, I would have concluded that an ICO was the appropriate penalty.

8. [8]

   IERACE J: The applicant seeks leave to appeal against a sentence of imprisonment imposed on him by North DCJ (“the sentencing judge”) in the District Court on 9 April 2021, following his pleas of guilty to two offences involving the illegal importation and distribution of tobacco products.

9. [9]

   The first offence was that, on or about 18 July 2018, contrary to s 11.2(1) of the Criminal Code Act 1995 (Cth), the applicant did aid, abet, counsel or procure the commission of an offence by Nadim Kanssan against s 233BABAD(2) of the Customs Act 1901 (Cth), namely, that Mr Kanssan did possess 210kg of tobacco knowing that the goods were imported with intent to defraud the revenue. The maximum penalty was 10 years imprisonment and/or a fine to be calculated in accordance with s 233BABAD(5) which, in this case, was not exceeding $962,556: s 233BABAD(4).

10. [10]

    The second offence was that, on or about 30 April 2019, contrary to s 233BABAD(2) of the Customs Act, the applicant conveyed goods, being 9.5 million cigarettes, knowing that the goods were imported with intent to defraud the revenue. The maximum penalty was also 10 years imprisonment and/or a fine to be calculated in accordance with s 233BABAD(5) which, in this case, was not exceeding $38,843,125: s 233BABAD(4).

11. [11]

    In respect of the first offence, his Honour imposed a sentence of 9 months imprisonment and, in respect of the second, a sentence of 24 months imprisonment, the applicant to be released on a recognisance release order (“an RRO”) pursuant to s 20(1)(b) of the Crimes Act 1914 (Cth) after serving 12 months. The sentences were wholly concurrent, thus resulting in a total effective sentence of 2 years imprisonment, commencing on 9 April 2021 and expiring on 8 April 2023. The applicant is due to be released pursuant to the RRO on 8 April 2022.

Grounds of appeal

1. [12]

   In his notice of appeal filed on 30 July 2021, the applicant advanced the following two grounds:

2. [13]

   At the hearing of the appeal, the applicant sought leave pursuant to r 4.13 of the Supreme Court (Criminal Appeal) Rules 2021 (NSW) to rely on an additional ground, namely:

3. [14]

   The respondent did not oppose the application but submitted that, if leave is granted, the appeal be dismissed or that consideration of the additional ground be deferred until the hearing of an application for leave to appeal by one of the applicant’s co-offenders, Ibrahim Al Am Ali. In that appeal, the sole ground was in similar terms to the applicant’s proposed additional ground. The appeal was heard on 19 November 2021 and judgment was delivered on 1 December 2021: Al Am Ali v R [2021] NSWCCA 281. I will return to that decision later in my judgment.

Factual background

1. [15]

   In November 2017, the New South Wales Joint Counter Terrorism Team commenced an investigation into a suspected Sydney-based organised crime syndicate (“the syndicate”) that was believed to be illegally importing and distributing large quantities of tobacco product. Three undercover police operatives were deployed as part of the investigation.

2. [16]

   The investigation resulted in the arrests of Ahmad Masri (“A Masri”) and Nadim Kanssan who were alleged to be the syndicate’s directors. Others arrested were the applicant, Ibrahim Al Am Ali, Hamad Masri (“H Masri”), Mohamad Masri (“M Masri”), Alaeddine El Masri, Azeem Khan and Aiman Al Khair. The applicant, Nadim Kanssan, Ibrahim Al Am Ali and M Masri entered pleas of guilty and were convicted and sentenced together on 9 April 2021. The remaining members stood trial in the District Court at Sydney on 3 May 2021. I will refer to the applicant and his three co-offenders on sentence as “the offenders”.

3. [17]

   The offenders were sentenced on the basis of a common set of facts. The applicant agreed to specified paragraphs of the facts, which may be summarised as follows.

4. [18]

   Members of the syndicate met with the undercover police operatives 34 times between 2 July 2018 and 30 April 2019. On 13 separate occasions between 18 July 2018 and 30 April 2019, the syndicate purchased and distributed a total of 7,214kg of molasses tobacco. The total duty evaded was $7,506,379.53, including the goods and services tax (“GST”).

5. [19]

   The syndicate also facilitated an illegal importation of tobacco cigarettes into Australia via a shipping container from Dubai. The maximum black market value of the cigarettes was $7,125,000. The duty evaded was $8,545,487.50, including GST.

6. [20]

   The applicant participated in the syndicate on two occasions, being 18 July 2018 and 30 April 2019.

7. [21]

   On 2 July 2018, one of the three undercover police operatives (“UCO 1”) met with Mr Kanssan at Bankstown and discussed the sale of molasses tobacco. On 18 July 2018, Mr Kanssan met with UCO 1 at the Bunnings carpark at Rydalmere pursuant to a pre-arranged agreement for the supply of 210kg of “Al Fakher” brand molasses tobacco. Mr Kanssan arrived in a Volkswagen van driven by Mr Al Am Ali.

8. [22]

   Mr Kanssan carried two boxes of the tobacco from UCO 1’s vehicle to the Volkswagen van, where he examined a packet of tobacco from each box by “lifting it to the light” and “dipping his fingers inside the packet”. He passed the tobacco to Mr Al Am Ali, who also examined and smelt it. Mr Kanssan then assisted UCO 1 to transfer the remaining boxes of tobacco into the Volkswagen van.

9. [23]

   While transferring the boxes, UCO 1 asked Mr Kanssan for payment for the tobacco. Mr Kanssan made a telephone call, requesting that the person he was speaking to “come here near McDonalds”. It seems that there was a McDonald’s fast food restaurant next door to the Bunnings car park.

10. [24]

    Shortly afterwards, a Jeep that was being driven by the applicant and which was registered to his father parked near the two vans. Mr Kanssan approached the applicant as he exited the Jeep and instructed him to give UCO 1 the money. The applicant handed UCO 1 two envelopes stating, “Two envelopes, ten each … hundreds”. Each envelope contained a bundle of $100 notes, which together came to a total of $20,000. A subsequent forensic examination of the envelopes revealed a fingerprint of the applicant.

11. [25]

    A conversation occurred between Mr Kanssan, the applicant, and UCO 1 which included the following conversation, as extracted from the statement of facts:

12. [26]

    Shortly afterwards all parties left the scene, Mr Kanssan driving the Volkswagen van containing the tobacco.

13. [27]

    The total duty evaded in relation to the 210kg of molasses tobacco was $192,511.20.

14. [28]

    In March 2019, Mr A Masri arranged an importation of a quantity of cigarettes from Dubai into Australia in a Maersk shipping container. It was intercepted by police on 17 April 2019 and taken to a Kennards storage facility in Macquarie Park, where its contents, 950 shipping boxes, were placed into two storage units.

15. [29]

    The shipping boxes contained 475,000 packets of “Manchester” brand cigarettes. Each packet contained 20 cigarettes, so that a total of 9.5 million cigarettes were imported.

16. [30]

    On 30 April 2019 at about 10:10am, Messrs Kanssan, H Masri and El Masri met with UCO 1 at the storage facility to take possession of the cigarettes. Messrs H Masri and El Masri arrived in a three-tonne truck which they told UCO 1 they had hired to transport the cigarettes. Mr Kanssan arrived in a Land Rover. They were given the keys to the two storage units.

17. [31]

    Messrs El Masri and H Masri loaded the truck with some of the boxes of the cigarettes. At about 11:21am, the two men drove the truck to a Kennards storage facility at Chullora, which had been rented for a period of one month by Mr El Masri earlier that morning. Between 11:49am and 12:26pm, Messrs Kanssan, El Masri and H Masri unloaded the boxes of cigarettes into the rented storage unit. While they were doing so, the applicant arrived in a vehicle registered to Mr Kanssan and assisted with the unloading.

18. [32]

    At about 12:31pm, Messrs Kanssan, H Masri, and El Masri returned to the storage facility at Macquarie Park with the applicant, arriving at 12:54pm. Between 1:00pm and 1:46pm, they loaded more of the boxes into the truck. At approximately 1:08pm, Mr Kanssan took a photo of himself, Messrs H Masri, El Masri and the applicant in the storage unit with the boxes, stating “Fuck the Police!”.

19. [33]

    At about 1:09pm, the applicant and Mr H Masri had the following conversation:

20. [34]

    At 1:46pm, the applicant said to the others, “That’s 220, 220 boys!”, after which they drove the second truckload to the storage facility at Chullora. Messrs El Masri and H Masri travelled in the truck, while Mr Kanssan and the applicant followed in the Land Rover.

21. [35]

    They then returned to the storage facility at Macquarie Park. At 3:47pm, the applicant and Mr El Masri had the following conversation:

22. [36]

    In all, on 30 April 2019 the group made three trips transferring the 950 boxes of cigarettes from the Kennards storage facilities at Macquarie Park to the storage facility at Chullora. They then delivered some of the cigarettes to a “Rent a Space” storage facility in Lansvale and travelled on to Mr Kanssan’s residence at Liverpool, where at 6:20pm the truck was observed reversing into the driveway of the premises.

23. [37]

    The duty evaded in respect of the 9.5 million “Manchester” brand cigarettes was $7,768,625. The total duty evaded by the two offences was $7,961,136.20 and, additionally, GST of $796,113.62.

Proceedings on sentence

1. [38]

   The sentence hearing took place on 25 February 2021. The applicant was on bail between arrest and sentence.

2. [39]

   Messrs Kanssan, Al Am Ali and M Masri each pleaded guilty to one count, contrary to s 233BABAD(2) of the Customs Act, of possessing goods, being tobacco products, knowing that the goods were imported with intent to defraud the revenue. Mr Kanssan requested that the sentencing judge take into account a “proceeds of crime” offence contrary to s 400.3(1) and an “instrument of crime” offence contrary to s 400.4(1) of the Criminal Code Act.

3. [40]

   The sentence bundle tendered by the Crown at the hearing included the applicant’s criminal history, which was minor in nature.

4. [41]

   The applicant did not give evidence. A letter written by him was tendered, in which he stated that following his arrest in 2019 he had an opportunity to develop his understanding of how the taxation system “shapes the beautiful society we all live in”. He expressed remorse for his role in defrauding that system and for the shame and public humiliation that his offending had brought upon his family. He said that his mental health had deteriorated significantly since being incarcerated and expressed concern that a further period of incarceration would exacerbate his depression and anxiety, causing him to “lose the gains” he had made through periodic consultations he had with a psychologist.

5. [42]

   The applicant expressed a desire to get his life “back on track” by re-commencing a university degree in construction management, which he was due to complete in April 2021; by continuing an internship in the building industry; and by marrying his fiancée and starting a family.

6. [43]

   The applicant tendered letters written by his mother, his fiancée, an employer and a friend. The applicant’s mother stated that the applicant had assisted her in completing everyday activities in the previous few years which she found difficult due to physical ill-health (a “knee and back problem”) and a mental condition (depression and anxiety). She referred to a close bond with the applicant and stated that he had been a “positive energy” in her life, encouraging her to live a healthier lifestyle, pursue further education and find employment.

7. [44]

   The applicant’s fiancée confirmed their plans to marry and to start a family, and her continued support of him. She expressed the view that a full-time custodial sentence would impact adversely on their relationship.

8. [45]

   The employer, with whom the applicant had been undertaking an internship in the construction industry whilst on bail, spoke highly of the applicant’s work ethic and ambition to pursue a career in that industry.

9. [46]

   The applicant tendered a report by forensic psychologist Kris North, dated 12 February 2021. Ms North assessed the applicant in person on 1 February 2021. In her report, she related the applicant’s account of his background, education and employment history as follows.

10. [47]

    The applicant is one of three children who were born in Australia to his parents, who are of Lebanese heritage. His family is close, stable and supportive of him, as is his fiancée with whom he had been in a relationship for two years at the time of the report.

11. [48]

    The applicant attended school until Year 9, after which he pursued an apprenticeship as an electrician. He completed the practical component of his apprenticeship but not the academic component. He commenced working in the construction industry at age 18 while undertaking further studies, including a degree in construction at the University of Western Sydney which he was due to complete in mid-2021. His internship was a requirement of his course of study. He believed there would be ongoing employment available to him through the same employer upon its completion.

12. [49]

    The applicant reported drinking alcohol and smoking cannabis on a few occasions when aged 16. He denied any ongoing substance use.

13. [50]

    The applicant explained to Ms North how he became involved with the offences, which was recounted by her as follows:

14. [51]

    The applicant “expressed regret” for the offending and “indicated he would not be so trusting in the future and would be more wary of who he associated with”.

15. [52]

    The applicant reported being a victim of an assault and robbery whilst on bail in February 2020, during which he was hit from behind. He suffered a concussion and facial injuries, including nasal fractures which required surgery. The applicant described experiencing memory problems since the incident. Hospital records that were tendered in support of his account of the injuries indicated retroactive amnesia at the time of his admission.

16. [53]

    Since being charged with the offences, the applicant had used sleep aids, including Melatonin supplements and Valium. The applicant told Ms North that he was reluctant to discuss his feelings with his family and fiancée as he did not want to “burden” anyone.

17. [54]

    Ms North administered the Depression, Anxiety and Stress Scales (“DASS”), which she described as “a 42-item self-report scale which measures the severity of symptoms relating to depression, anxiety and stress over a one (1) week period”. The applicant’s scores on the DASS indicated diagnoses of depression (mild range), anxiety (very severe range) and stress (mild range).

18. [55]

    Another assessment tool used by Ms North was the Trauma Symptom Inventory, Second Edition (“TSI-2”), which she described as a “widely used measure of trauma symptomatology for use with adults”. Clinically significant elevations were found on the applicant’s TSI-2 profile in relation to anxious arousal, intrusive experiences, defensive avoidance and somatic preoccupations. Factors relating to post-traumatic stress and somatization were significantly elevated.

19. [56]

    Ms North diagnosed the applicant with adjustment disorder, mixed with anxiety and depressed mood, and post-traumatic stress disorder, in accordance with the Diagnostic and Statistical Manual of Mental Disorders, fifth edition (“DSM-5”). Ms North stated:

20. [57]

    Ms North noted the potential impact of a custodial sentence on the applicant’s mental health, as follows:

21. [58]

    In summary, Ms North stated that:

22. [59]

    The applicant tendered a letter from treating psychologist Houda El-Hanssan, dated 23 February 2021. In her letter, Ms El-Hanssan stated that the applicant commenced psychological treatment with her pursuant to a mental health care plan on 18 February 2021 and, by the date of the letter, had undertaken two sessions which involved an assessment of his symptoms and psycho-education and cognitive behaviour therapy.

23. [60]

    Ms El-Hanssan stated that the applicant presented with “severe anxiety and depressive symptoms, particularly relating to his previous traumatic experience of being assaulted as well as his upcoming court matter”, but that he appeared to be “motivated to engage in therapy and stated that he is committed to improving his mental health”. Ms El-Hanssan noted that the applicant had eight further appointments scheduled.

The remarks on sentence

1. [61]

   The sentencing judge identified the relevant offences, related a summary of the agreed facts and set out the general sentencing principles to be applied in respect of the offences.

2. [62]

   His Honour noted the maximum penalty of 10 years imprisonment for each substantive offence, which his Honour indicated would inform his assessment of objective seriousness in accordance with Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25.

3. [63]

   The sentencing judge accepted a submission by the Crown that offences of this nature are against the revenue and therefore, regard may be had to comparative sentences from taxation and like offences.

4. [64]

   The sentencing judge referred to R v Zhang (2017) 265 A Crim R 113; [2017] SASCFC 5, in which the South Australian Court of Criminal Appeal, at [37], identified certain matters to be taken into account when sentencing for an offence against s 233BABAD of the Customs Act:

5. [65]

   His Honour referred to the following considerations identified in s 16A(2) of the Crimes Act in his determination of the objective seriousness of the offences.

6. [66]

   The sentencing judge considered the role of the offender; the quantity of tobacco involved and the amount of duty evaded; the sophistication of the offending; and the extent to which the offender gained financially from the offending. His Honour summarised the parties’ submissions with respect to the above, as follows.

7. [67]

   The Crown submitted that, although the applicant’s involvement in the first offence was limited to one occasion, his role was an important and trusted one which required him to personally deliver $20,000 in cash to Mr Kanssan. In his conversation with UCO 1, extracted at [25] above, the applicant disclosed that he was aware that smuggled tobacco was being purchased, and demonstrated an interest in being able to obtain an ongoing supply of it. With respect to the second offence, the Crown noted that the applicant assisted with the movement of 9.5 million cigarettes in return trips from Macquarie Park to storage facilities at Chullora and later to Lansvale, so that he must have known that a significant amount of duty was being evaded.

8. [68]

   The sentencing judge noted the applicant’s submissions that his role in the commission of both offences was “menial”; he was not a decision-maker, he did not play an executive or managerial role and he was not involved in the importation of the tobacco products. It could not be inferred from the “limited” conversation the applicant had with UCO 1 that he had expertise in the tobacco market. In respect of both offences, there was no evidence that he had gained financially from his involvement.

9. [69]

   The sentencing judge accepted that the applicant had little involvement with UCO 1 on 18 July 2018, and that the involvement of the UCOs “did not contribute to [his] offending”. A relevant consideration was that the molasses, tobacco and cigarettes were not distributed in the community, but “it does not greatly assist the offenders as they believed they were dealing with likeminded people who were attempting to defraud the revenue”. His Honour concluded, in relation to both offences:

10. [70]

    The sentencing judge had regard to the fact that the applicant was charged with two separate offences.

11. [71]

    The sentencing judge accepted the Crown’s submission that there were two forms of injury, loss or damage involved, namely, to the revenue and to public health, and took into account as an important factor the “amount of the fraud” involved.

12. [72]

    His Honour accepted that “[o]ffences against the revenue are not victimless crimes” and observed that recent authorities have reiterated the importance of general deterrence for such offences. As well, specific deterrence is important in an organised fraud “containing such large numbers”.

13. [73]

    The applicant was aged 22 at the time of the offences and 23 at the time of sentence. The sentencing judge described the applicant’s minor criminal record as “irrelevant” so that he “could really be described as a man of prior good character” and that, as such, he was entitled to “some leniency”.

14. [74]

    His Honour stated that he had regard to the report of Ms North, but that, other than the family history which was not in issue, he treated it with “considerable caution … as there was no evidence from [the applicant]”. His Honour summarised the applicant’s background, employment history, alcohol and drug use, mental health history as recounted by Ms North in her report, and her recommendations for further treatment.

15. [75]

    With respect to the applicant’s mental health and experience in custody, his Honour said:

16. [76]

    His Honour referred to the treating psychologist’s report and its recommendations for treatment, noting:

17. [77]

    His Honour accepted, from the applicant’s letter to the Court and the character references tendered on his behalf, that he was “now genuinely remorseful and unlikely to reoffend”.

18. [78]

    His Honour accepted the early guilty pleas of all of the offenders as a mitigating factor, “not only for their subjective value as evidence of contrition, remorse and willingness to facilitate the course of justice, but also for the utilitarian value”, which warranted discounts to each of their sentences of 25 per cent.

19. [79]

    The sentencing judge found Mr Kanssan to be “the most culpable” of the four offenders and Mr M Masri the least, given his involvement was at a “low level” and limited to one occasion. With respect to the applicant and Mr Al Am Ali, his Honour stated:

20. [80]

    The sentencing judge acknowledged the Crown’s submission that, in view of the seriousness of the breaches of s 233 of the Customs Act, having regard to the quantities of tobacco involved, the millions of dollars of duty evaded, the applicant’s level of participation and the need for general deterrence for offences of this type, the only appropriate penalty to be imposed on the applicant was a sentence of imprisonment.

21. [81]

    The sentencing judge noted that, pursuant to s 17A(1) of the Crimes Act, a sentencing court may only pass a sentence of imprisonment for a federal offence if, having considered all available offences, it is satisfied that no other sentence is appropriate in all the circumstances. His Honour stated that he was so satisfied, having regard to the “gravity” of the offences and the matters set out in s 16A of the Crimes Act.

22. [82]

    In respect of the first offence, his Honour imposed a sentence of 9 months imprisonment to commence on 9 April 2021 and to expire on 8 January 2022. His Honour declined to fix a non-parole period or make an RRO.

23. [83]

    In respect of the second offence, which his Honour considered to be more serious than the first, a sentence of 24 months imprisonment to commence on 9 April 2021 and to expire on 8 April 2023 was imposed. This was accompanied by a direction that the applicant be released after 12 months on 8 April 2022, pursuant to an RRO. The recognisance required him to forfeit $1,000 without surety and to be of good behaviour for the remainder of his sentence.

24. [84]

    The sentences imposed on the applicant’s co-offenders were a term of imprisonment for 4 years and 6 months for Mr Kanssan, imprisonment for 2 years, to be released on an RRO after 12 months, for Mr Al Am Ali and an RRO for a period of 12 months for Mr M Masri.

Ground 1: The sentencing judge erred in his assessment of the objective seriousness of both offences

1. [85]

   A sentencing judge’s assessment of the objective seriousness of an offence may be challenged in accordance with the principles set out in Mulato v Regina [2006] NSWCCA 282 by Spigelman CJ, at [37]:

2. [86]

   Further, Simpson J observed, at [46]:

3. [87]

   The applicant submitted that his offending for both offences could only be assessed as being “at the lowest range” of objective seriousness and it was therefore not open to the sentencing judge to find that it fell “midway between the mid-range and low range”.

4. [88]

   In support of that submission, the applicant drew upon the remarks of Beech-Jones J (as his Honour then was) in R v Saleh (2015) 257 A Crim R 212; [2015] NSWCCA 299, in which his Honour stated:

5. [89]

   The applicant submitted that, as an “aider or abetter”, his criminal culpability for the first offence was inherently limited and, in respect of both offences, his involvement was limited in time and scope.

6. [90]

   The applicant submitted that the scale and sophistication of the fraud influenced the sentencing judge’s assessment of the applicant’s involvement, citing the Victorian case of Barakat v Director of Public Prosecutions (Cth) (2020) 284 A Crim R 149; [2020] VSCA 185. In that case, the offender “DB” was charged with one count of conveying tobacco products contrary to s 233BABAD(2) of the Customs Act. Niall JA, with whom Priest and T Forrest JJA agreed, noted:

7. [91]

   The applicant conceded that the revenue lost or imperilled was significant, but submitted that the responsibility for that loss lay exclusively with the principal offenders. The applicant submitted that there was no evidence to suggest that he was aware of the entirety of the scheme or the potential loss of revenue to the Commonwealth, such that these circumstances were “less … of a guiding factor” in assessing the applicant’s culpability.

8. [92]

   The essence of the respondent’s submission was that the sentencing judge assessed the objective seriousness of the offences in an appropriate fashion and, in view of the sentencing judge’s findings, the resulting determination was within bounds. The sentencing judge noted the maximum penalty for both offences, its relevance in determining objective seriousness, and addressed the relevant matters to be taken into account for such offences that were identified in Zhang. It is apparent from his Honour’s remarks that he engaged with the submissions in the process of arriving at those determinations.

9. [93]

   The respondent noted the discretionary nature of the sentencing judge’s determination of objective seriousness, citing Chandab v R [2021] NSWCCA 186. The respondent submitted that there was “a firm basis” for his Honour’s characterisation, given the quantity of tobacco and cigarettes involved with each offence and his Honour’s adoption of the parts of the agreed facts that were conceded by the applicant, which related to the applicant’s role in committing the two offences. The sentencing judge appropriately constrained the level of objective seriousness by finding that the applicant’s role was “limited” by him being involved for only two days and committing two offences in the context of an eight-month long criminal enterprise, although he must have had “some knowledge of the organisation and the very large sums of money involved”. This demonstrates that his Honour did not merely recite the facts constituting the offences, but rather assessed them, as is necessary in the determination of objective seriousness: see R v Cage [2006] NSWCCA 304 at [17], [18].

Consideration

1. [94]

   The applicant places emphasis on his physical acts in committing the offences in order to make the argument that the objective seriousness of each offence could not be greater than “the lowest range”. If that was the full extent of the relevant evidence, the submission would be more persuasive of that outcome. However, to characterise the offending in this way avoids the context provided by statements made by the applicant while committing the offences, which suggest that he had a broader awareness, disposition and role than that of a mere courier of an envelope and a labourer shifting boxes with only basic awareness of the criminality of his acts. In discussion with UCO 1, as is apparent from the conversation extracted at [25] above, the applicant displayed an awareness of the envelope’s contents and went on to propose the frequency, quantities, and preferred flavours of future supplies from UCO 1.

2. [95]

   In relation to the second offence, the captured conversations between the applicant and the co-offenders, extracted at [33] – [35] above, belied an appreciation that he was at least an equal of those who bore the responsibility of transferring the container-load of cigarettes from the supplier’s possession to that of the syndicate, and shared in the decision-making as to the time frame for that exercise.

3. [96]

   In my view, it was open to the sentencing judge to fix the objective seriousness of each offence as being midway between the mid-range and low range for offences of this type. Indeed, taking into account the conversations attributed to the applicant at the time the offences were committed, I would concur in that assessment. In so finding, I put to one side the applicant’s admission to Ms North that he was the source of the $20,000 that he gave to UCO 1, because the sentencing judge did not refer to it in his remarks.

4. [97]

   Accordingly, I would refuse ground 1.

Ground 2: The sentences for each offence and the total sentence were manifestly excessive

1. [98]

   The principles relevant to a ground of manifest excess are well known. Those principles were summarised by R A Hulme J in Obeid v R (2017) 96 NSWLR 155; [2017] NSWCCA 221, at [443]:

2. [99]

   The applicant submitted that the sentences imposed were manifestly excessive, principally in light of the applicant’s relative youth, his prior good character and that his involvement “appeared to arise from a family connection or sense of obligation to a family member, Mr [Kanssan]”.

3. [100]

   Secondary relevant factors are the applicant’s early guilty pleas, the sentencing judge’s favourable findings regarding remorse, his prospects of rehabilitation, his supportive family and his strong work ethic.

4. [101]

   The applicant noted that the sentencing judge expressly acknowledged the relevance of the applicant’s youth and the importance of rehabilitation in the fixing of the sentences, but submitted that the acknowledgement did not find “full expression” in the sentences that were handed down.

5. [102]

   The respondent submitted that each of the factors that were said by the applicant to be relevant to this ground had been acknowledged by the sentencing judge, and therefore may be assumed to have been taken into account. The respondent submitted that manifest excess was not made out, relevant considerations being that the sentence for the second offence was wholly subsumed in the sentence for the first offence and that the RRO was set at 50 per cent of the total sentence.

6. [103]

   The applicant was entitled to favourable consideration in view of his relative youth and the sentencing judge’s findings that he was of prior good character and was “genuinely remorseful and unlikely to reoffend”. The applicant’s submission that his motivation for engaging in the offences may have derived from “a family connection or sense of obligation” depends entirely on the applicant’s admission to Ms North, which is related in her report and extracted at [50] above. However, his claim of minimal involvement, made to Ms North, is at odds with his interest in further supplies of cigarettes, which is apparent from the conversation captured at the time of the first offence and his sense of shared responsibility for the transfer of the shipping container’s contents when engaged in the second offence.

7. [104]

   Applying the principles concerning manifest excess set out above, I am not satisfied that the ground is made out. I would refuse the second ground.

The proposed additional ground of appeal

1. [105]

   At the hearing of this appeal, the submissions of the parties focused on the proposed additional ground, that the sentencing judge failed to have regard to the requirements of s 66 of the Crimes (Sentencing Procedure) Act 1999 (NSW) (“the CSP Act”) in considering non-custodial alternatives to full-time imprisonment.

2. [106]

   In written submissions provided to the sentencing judge as to the appropriate type of sentence, the applicant’s counsel wrote:

3. [107]

   He reiterated this submission orally:

4. [108]

   Similarly, senior counsel for Mr Kanssan and counsel for Mr M Masri and Mr Al Am Ali submitted that an intensive correction order (“an ICO”) was an available sentencing alternative for their clients.

5. [109]

   The Crown submitted that an ICO was an available sentencing option for federal offenders, but only in respect of Mr M Masri did it not oppose a sentence other than full-time imprisonment. In oral submissions, the Crown responded to the applicant’s submission for a sentence other than full-time custody as follows:

6. [110]

   In his remarks on sentence, the sentencing judge did not respond to the parties’ submissions concerning an ICO in relation to any of the offenders; no reference was made at all to an ICO as a sentencing alternative.

7. [111]

   Non-custodial alternatives, which are only available under the law of a state or territory, may be imposed in respect of a person convicted of a federal offence pursuant to s 20AB(1) of the Crimes Act, which relevantly provides:

8. [112]

   In accordance with s 20AB(1)(b), a sentencing court exercising the jurisdiction of the state of New South Wales is empowered to make an ICO, pursuant to s 7 of the CSP Act, which provides:

9. [113]

   Part 5 (ss 64-73B) is titled: “Sentencing procedures for intensive correction orders”. A court must have regard to Pt 5 when it is “considering, or has made, an intensive correction order”: s 64. There are constraints as to the types of offences and the length of a sentence of imprisonment that may qualify for the imposition of an ICO: ss 67 and 68. In determining whether to make an ICO, the sentencing court must have regard to a sentencing assessment report obtained in relation to the offender and evidence from a community corrections officer: s 69(1).

10. [114]

    Section 66 specifies certain factors that a court must take into account when considering whether or not to grant an ICO:

11. [115]

    Section 66 was amended by the Crimes (Sentencing Procedure) Amendment (Sentencing Options) Act 2017 (NSW), which commenced on 24 September 2018. The purpose of the amendment was explained by the Attorney General of New South Wales, the Honourable Mark Speakman SC, in the second reading speech on 11 October 2017:

12. [116]

    Section 7 and Pt 5 of the CSP Act have not been construed as obliging a court to consider making an ICO in every case in which a sentence of imprisonment is appropriate and the case comes within the constraints of ss 67 and 68: R v Fangaloka [2019] NSWCCA 173 at [60] per Basten JA. However, as stated by Campbell J in Blanch v R [2019] NSWCCA 304:

13. [117]

    In Wany v DPP (2020) 103 NSWLR 620; [2020] NSWCA 318 McCallum JA, at [52], stated:

14. [118]

    In Mourtada v R (2021) 361 FLR 96; [2021] NSWCCA 211, the applicant appealed against a sentence of imprisonment for two offences involving the illegal importation of tobacco products. The applicant was one of multiple offenders who were sentenced in the same proceedings for related offences. His counsel at the sentence hearing had submitted that an ICO was appropriate in the circumstances. The sentencing judge did not engage with that submission in his remarks in respect of the applicant. At the conclusion of the sentence proceedings, counsel for the applicant asked:

15. [119]

    The sentencing judge replied that he had, and elaborated:

16. [120]

    The first two grounds of appeal in Mourtada were in the following terms:

17. [121]

    The Court granted leave to appeal and dismissed the appeal. Basten JA at [19], Campbell J at [41] and, inferentially, Adamson J at [38], referred to the exchange following the delivery of sentence as a clear indication that the sentencing judge had considered whether an ICO should be imposed, despite his Honour not having referred to s 66 in his remarks.

18. [122]

    Basten JA, with whom Adamson and Campbell JJ agreed, observed:

19. [123]

    Campbell J, at [41], adhered to the view that he expressed in Blanch, noting that the determinative issue in the instant case was a factual question:

20. [124]

    Abbas Elzein v R; Ahmad Elzein v R; Bilal Doughan v R [2021] NSWCCA 246 concerned appeals arising from the same sentence proceedings as in Mourtada. This Court, differently constituted, considered a ground of appeal concerning similar issues in respect of Bilal Doughan, who received sentences of imprisonment for each of two offences.

21. [125]

    Counsel for Mr Doughan had advanced written submissions on sentence to the effect that an ICO would be a “more than adequate punishment and a significant deterrent to [Doughan] and other persons”. Counsel continued:

22. [126]

    The sentencing judge’s remarks on sentence did not address this submission, although two co-offenders received ICOs. The applicant’s ground of appeal was that, in refusing to direct that his sentence be served by way of an ICO, the sentencing judge erred by:

23. [127]

    Bellew J, with whom Bell P and Walton J agreed, said, at [318]:

24. [128]

    The respondent submitted that the ground failed on the same basis as was reasoned in Mourtada and because the sentencing judge’s consideration of the matters set out in s 66 could be inferred, particularly since two co-offenders had received ICOs. However, Bellew J distinguished the circumstances in this case from those in Mourtada, stating:

25. [129]

    The applicant, relying upon Fangaloka and Blanch, submitted that the sentencing option of an ICO had been squarely raised and that the failure of the sentencing judge to consider Pt 5 of the CSP Act, in particular, the matters set out in s 66, constituted an error that required the re-sentencing of the applicant.

26. [130]

    The respondent submitted that, although counsel for the applicant had proposed an ICO to the sentencing judge as an available option, he had done so with little emphasis and in the context of it being one of three available alternatives to full-time custody, the others being a community correction order (pursuant to s 8 and Pt 7 of the CSP Act) and an RRO. Counsel for the applicant, in the respondent’s submission, had not elaborated on an ICO as an option and did not specifically mention the matters specified in s 66.

27. [131]

    The respondent submitted that the absence of a reference by the counsel for the applicant in his submissions to s 66 or the matters identified therein, in particular, “community safety”, was of significance, in view of the observations by Basten JA in Mourtada at [27] and [28], extracted above at [122].

28. [132]

    At the time of the hearing of this appeal, judgment in Elzein was reserved. The respondent submitted that was of no consequence, since:

Consideration

1. [133]

   As noted, a ground of appeal in identical terms was heard by this Court, differently constituted, on 19 November 2021 in respect of the sentence of imprisonment imposed on a co-offender of the applicant, Mr Al Am Ali. Judgment was handed down on 1 December 2021. By the time of the hearing, judgment in Elzein had been handed down. Consequent upon that decision, the Crown conceded that error had occurred. Davies J, with whom Beech-Jones CJ at CL and Wilson J agreed, granted leave to appeal and upheld the ground of appeal but on re-sentence, concluded that no lesser sentence than that imposed was warranted and dismissed the appeal: Al Am Ali v R [2021] NSWCCA 281.

2. [134]

   Davies J referred to Bellew J’s judgment in Elzein, quoting the passage extracted at [128] above and stating, at [26], that:

3. [135]

   The respondent’s submission in this case that the applicant had not raised the issue of “community safety nor community protection” before the sentencing judge in the context of his submission for an ICO is contradicted by the italicised terms of the applicant’s written submissions to the sentencing judge, being a submission concerning the issue of “community protection” if an ICO was imposed, extracted at [106] above. Clearly the applicant had done so.

4. [136]

   The applicant submitted to the sentencing judge that if his Honour determined, consistently with s 17A of the Crimes Act, that no other sentence than one of imprisonment was appropriate, an ICO would be an available means by which that sentence could be served, having regard to the need for community protection and general deterrence. In my view, the threshold of s 17A having been satisfied, the remarks should have disclosed the sentencing judge’s reasoning for rejecting that submission. His Honour’s remarks on sentence do not do so, either expressly or inferentially, and accordingly the ground is made out.

5. [137]

   I would grant the applicant leave to rely on the additional ground, leave to appeal and uphold the appeal on that ground.

Re-sentence

1. [138]

   Affidavit evidence was read at the hearing without objection, to be taken into account on resentence, should that occur. An affidavit by the applicant, affirmed on 1 September 2021, was to the effect that since he entered prison, which I note was at the time of his sentence, he has been held in maximum security and has not had access to a psychologist to continue his mental health treatment. He had limited family visits prior to New South Wales prisons going back into lockdown as a measure to deal with the Covid-19 pandemic. He understands that a resumption of his internship is still available to him if he is released.

2. [139]

   A brief medical report by the treating doctor of the applicant’s parents, dated 15 September 2021, noted that they have both been infected with the Covid-19 virus.

3. [140]

   An affidavit affirmed by the applicant’s fiancée effectively re-stated her support for the applicant and her desire that he be released to assist in the care of his parents, to resume his employment and so that they may marry. An affidavit affirmed by the applicant’s sister, who is married to the applicant’s co-offender Nadim Kassan, referred to the care that the applicant could provide to their mother, whenever he is released.

4. [141]

   The matters to be taken into account on resentence pursuant to s 16A of the Crimes Act are as follows.

5. [142]

   I note the nature and circumstances of the offending as set out in the parts of the statement of facts that were agreed to by the applicant and which were summarised at [18] – [37] above. I would add to that material the admission made by the applicant to Ms North that he lent his co-offender Mr Kanssan the money which he (the applicant) handed over to UCO 1. However, I accept a submission made by the applicant that the admission does not go so far as to establish that the payment was made with the expectation that it would yield a profit.

6. [143]

   The course of conduct involved two offences of a similar nature, which took place nine months apart. The two offences were committed in the course of a criminal enterprise but in circumstances where the applicant’s involvement was limited to those two occasions.

7. [144]

   The total duty evaded by the two offences was $7,961,136.20. As well, GST of $796,113.62 would have been payable.

8. [145]

   On the basis of Ms North’s report and the applicant’s letter, that was tendered without objection to the sentencing court, I accept that the applicant is genuinely remorseful.

9. [146]

   The applicant is entitled to a discount to his sentence of 25 per cent for its utilitarian value.

10. [147]

    I take into account the applicant’s relative youth at the time of the offences. His criminal history is sufficiently minor in nature for him to be sentenced as a person of prior good character before he committed the first offence in time. I note the applicant’s family support, his beneficial relationship with his fiancée, his work history and work ethic, his commitment to further study and his ambition to work in the construction industry.

11. [148]

    I note that the applicant was the victim of an assault whilst on bail in February 2020. I accept Ms North’s diagnosis in February 2021 that the applicant has an adjustment disorder, mixed with anxiety and a depressed mood, as well as post-traumatic stress disorder. I note that the affidavit evidence is to the effect that the applicant’s experience of prison custody has been stressful, consequent to the suspension of face to face visits in June 2021 and concern about the applicant’s parents’ health. I also take into account the impact of restrictions imposed on prisoners in order to attempt to contain the spread of Covid-19.

12. [149]

    The applicant has stated that, since he has been serving his sentence, he has been unable to continue treatment for his mental health issues. He is ineligible for education or other programs because he has been assessed as having no need for them.

13. [150]

    I concur with the sentencing judge’s findings that the applicant’s process of rehabilitation is under way and that he is unlikely to reoffend.

14. [151]

    The applicant continues to be concerned about his parents’ welfare, although the material tendered that is relevant to that issue is unspecific and does not suggest significant ill health, other than their contracting of Covid-19 in September 2021.

15. [152]

    General deterrence is an important component for such offences: see Saleh at [7]; Zhang at [118]. In view of the applicant’s plea of guilty and my findings as to his character, age, contrition and prospects of rehabilitation, I conclude that there is a limited need for the sentence to reflect specific deterrence.

16. [153]

    Having regard to the maximum penalties for the two offences, the type, nature and circumstances of the offences, the value to the revenue of the duty involved (although I note that the two offences were controlled operations), I conclude, as did the sentencing judge, that the objective seriousness of each offence falls midway between the mid-range and low range for such offences.

17. [154]

    Having considered all alternative available non-custodial sentences, as required by s 17A(1) of the Crimes Act and having regard to the objective seriousness of the offences and the need for general deterrence for such offences, I am satisfied that no punishment other than a sentence of imprisonment is appropriate for each offence.

18. [155]

    I note that the applicant did not submit that an ICO was appropriate on resentence. In respect of the first offence, I would have imposed a sentence of 8 months imprisonment backdated to commence on 9 April 2021 and which expired on 8 December 2021. However, the applicant has already served the sentence that was imposed for that offence. On the second count, I would impose a sentence of 22 months imprisonment, backdated to commence on 9 April 2021 and to expire on 8 February 2023. I would direct that the applicant be released at the expiration of 10 months and 3 weeks, being on 1 March 2022, upon entering a recognisance pursuant to s 20(1)(b) of the Crimes Act.

Orders

1. [156]

   I propose the following orders:

   1. (1)

      Leave to appeal granted;

   2. (2)

      Appeal allowed;

   3. (3)

      Quash the sentence imposed in the District Court on 9 April 2021 in respect of the second offence;

   4. (4)

      In lieu thereof, the applicant is sentenced to imprisonment for a period of 22 months, backdated to commence on 9 April 2021 and to expire on 8 February 2023. The applicant is to be released on 1 March 2022 upon entering into a recognisance pursuant to s 20(1)(b) of the Crimes Act 1914 (Cth) in the sum of $1,000 to be of good behaviour for the balance of the order and to appear on sentence if called upon to do so at any time in respect of any breach within that period.