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SUPREME COURT OF QUEENSLAND
R v Hill  QSC 309
HILL, Ryan Henry
Indictment No 97 of 2019
Trial (Judge alone)
Supreme Court of Queensland at Cairns
2 October 2020
21, 22 September 2020
Count 1 – Trafficking in dangerous drugs with circumstance of aggravation (serious organised crime): Not Guilty.
Count 1 – Trafficking in dangerous drugs: Guilty, as per plea and admissions.
CRIMINAL LAW – PARTICULAR OFFENCES – DRUG OFFENCES – PROCEDURE – AGGRAVATING CIRCUMSTANCES – where the defendant was charged on indictment with trafficking in dangerous drugs with a serious organised crime circumstance of aggravation – where the defendant pleaded guilty to trafficking simpliciter but not guilty to the offence with the circumstance of aggravation – where the prosecution alleged that the defendant, his supplier and his supplier’s employee comprised a “criminal organisation” within the meaning of that term in s 161O of the Penalties and Sentences Act 1992 (Qld) – where the defendant obtained drugs from a supplier who did not control or direct the defendant’s trafficking business or share in its profit – where the relationship between the supplier and the defendant was essentially one of buyer and seller – whether the prosecution has proven beyond reasonable doubt that the defendant and his supplier (together with each’s respective employee) were a “group” – whether the defendant is guilty of the offence with the serious organised crime circumstance of aggravation
Acts Interpretation Act 1954 (Qld), s 14A, s 14B
Penalties and Sentences Act 1992 (Qld), s 161O, s 161P, s 161Q, s161R
Beckwith v The Queen (1976) 135 CLR 569;  HCA 55, cited
R v A2; R v Magennis; R v Vaziri (2019) 373 ALR 214;  HCA 35, cited
R v Hilton  QSCPR 2, considered
R v Hill  QSCPR 14, cited
R v Pentland  QSC 231, cited
R v Stasiak and Turkyilmaz  2 Qd R 533;  QSC 260, cited
N W Crane for the Crown
A J Glynn QC, with D James, for the defendant
Office of the Director of Public Prosecutions (Queensland) for the Crown
Philip Bovey and Company for the defendant
- Between 1 March 2016 and 3 January 2018, the defendant (“Hill”) carried on the business of unlawfully trafficking in dangerous drugs. He admits this and pleaded guilty to that offence. However, he pleaded not guilty to the circumstance of aggravation alleged in count 1 of the indictment.
- It alleges that:
- (a)he and certain others were participants in a “criminal organisation”; and
- (b)he “knew, or ought reasonably to have known, the offence was being committed in association with 1 or more persons who were, at the time the offence was being committed, or at any time during the commission of the offence, participants in a criminal organisation.”
- The issue for my determination in this judge-only trial is whether the prosecution has proven beyond reasonable doubt the circumstance of aggravation.
- The drugs were sent from Sydney to Cairns. Khalid Kanj was based in Sydney and had access to wholesale quantities of drugs. He enlisted Sandeep Dharan to work for him in Sydney, to weigh and package drugs, and to send them to Cairns, so as to fulfil orders placed by Hill.
- Initially the drugs were forwarded through the Australia Post network, via Express Post, to addresses supplied by Hill. Later, and as a result of interception of some drugs that were sent by this means, Hill recruited a Toll Operations Manager in Cairns, Jamie Payet, to arrange for the drugs to be consigned through the Toll network.
- The Crown case is that the “criminal organisation” was constituted by Kanj, Dharan and Hill and subsequently by Kanj, Dharan, Hill and Payet.
- Hill submits that these individuals were not a “criminal organisation” because they were not a “group” within the meaning of s 161O of the Penalties and Sentences Act 1992 (Qld).
- The critical issue is whether I am satisfied beyond reasonable doubt that Kanj, Dharan and Hill, and subsequently Kanj, Dharan, Hill and Payet, were a “criminal organisation” within the meaning of Part 9D of the Act. That issue turns upon the interpretation of s 161O of the Act, and its application to the evidence.
- Section 161O of the Act defines a “criminal organisation” as follows:
“161O Meaning of criminal organisation
(1) A criminal organisation is a group of 3 or more persons, whether arranged formally or informally –
(a) who engage in, or have as their purpose (or 1 of their purposes) engaging in, serious criminal activity; and
(b) who, by their association, represent an unacceptable risk to the safety, welfare or order of the community.
(2) For subsection (1), it does not matter whether –
(a) the group of persons –
(i) has a name; or
(ii) is capable of being recognised by the public as a group; or
(iii) has ongoing existence as a group beyond the serious criminal activity in which the group engages or has as a purpose; or
(iv) has a legal personality; or
(b) the persons comprising the group –
(i) have different roles in relation to the serous criminal activity; or
Of the persons comprising a methlyamphetamine syndicate, different persons are responsible for supplying the cold and flu tablets, extracting the pseudoephedrine from the tablets, supplying other necessary ingredients, and cooking the ingredients to produce methylamphetamine.
(ii) have different interests in, or obtain different benefits from, the serious criminal activity; or
Of the 3 persons comprising a group that engages in serious criminal activity, 1 person obtains the profit from the activity and pays the other 2 persons an amount for engaging in the activity.
(iii) change from time to time.
a networked online child exploitation forum
(3) In this section –
engage, in serious criminal activity, includes each of the following –
(a) organise, plan, facilitate, support, or otherwise conspire to engage in, serious criminal activity;
(b) obtain a material benefit, directly or indirectly, from serious criminal activity.”
- The meaning of “participant” is defined by s 161P as follows:
“161P Meaning of participant
(1) A person is a participant, in a criminal organisation, if –
(a) the person has been accepted as a member of the organisation and has not ceased to be a member of the organisation; or
(b) the person is an honorary member of the organisation; or
(c) the person is a prospective member of the organisation; or
(d) the person is an office holder of the organisation; or
(e) the person identifies himself or herself in any way as belonging to the organisation; or
- using a theme-based naming convention or icon to establish a screen name or profile for an online child exploitation forum
- wearing or displaying the patches or insignia, or a version of the patches or insignia, of a criminal organisation
(f) the person’s conduct in relation to the organisation would reasonably lead someone else to consider the person to be a participant in the organisation.
Example of conduct for paragraph (f) –
doing any of the following for a criminal organisation involved in the production and sale of cannabis –
- tending the cannabis plants
- packaging the cannabis for sale
- selling the cannabis
- laundering the profits from the sale of the cannabis
- managing the day-to-day business of the organisation
- (2)For subsection (1)(a), a person may be accepted as a member of a criminal organisation –
(a) informally; or
(b) through a process set by the organisation, including, for example, by paying a fee or levy.”
- Section 161Q provides:
“161Q Meaning of serious organised crime circumstance of aggravation
- (1)It is a circumstance of aggravation (a serious organised crime circumstance of aggravation) for a prescribed offence of which an offender is convicted that, at the time the offence was committed, or at any time during the course of the commission of the offence, the offender –
- (a)was a participant in a criminal organisation; and
- (b)knew, or ought reasonably to have known, the offence was being committed –
- (i)at the direction of a criminal organisation or a participant in a criminal organisation; or
- (ii)in association with 1 or more persons who were, at the time the offence was committed, or at any time during the course of the commission of the offence, participants in a criminal organisation; or
- (iii)for the benefit of a criminal organisation.
- (2)For subsection (1)(b), an offence is committed for the benefit of a criminal organisation if the organisation obtains a benefit, directly or indirectly, from the commission of the offence.
- (3)To remove any doubt, it is declared that a criminal organisation mentioned in subsection (1)(b) need not be the criminal organisation in which the offender was a participant.”
- If an offender is convicted of a prescribed offence committed with a “serious organised crime circumstance of aggravation” then the Court must impose on the offender a term of imprisonment consisting of the “base component” and the “mandatory component” provided for in s 161R.
The agreed or uncontested facts
- Many facts were agreed and these admissions became Exhibit 1. Oral evidence was given by:
- (a)Keiren Wilson, to whom Hill supplied drugs in wholesale quantities in Cairns;
- (c)Payet; and
- (d)Detective Sergeant Michael Vincent.
Their evidence was not contentious.
Hill’s trafficking business
- Between 1 March 2016 and 3 January 2018, Hill carried on the business of unlawfully trafficking in the dangerous drugs methylamphetamine, cocaine and
- His customer base included Keiren Wilson, Matthew Hilton and others. Evidence from Wilson gives an insight into Hill’s trafficking business, as do statements made by Hill in an interview with police on 30 August 2019.
- Hill supplied Wilson with methylamphetamine and MDA between October 2016 and October 2017. Sometimes he would supply those drugs monthly, sometimes fortnightly, and there were occasions when he possibly supplied them weekly. Hill would supply to Wilson in quantities that varied from four ounces through to a kilogram. He supplied a kilogram amount only once. Wilson would pay Hill the same amount per ounce, irrespective of the quantity being supplied. Hill fixed the price at $4,500 per ounce, but sometimes, if the quality was bad, the price would drop to $3,500. Hill supplied the drugs to Wilson on credit and would collect cash from him from time to time.
- Originally Hill supplied Wilson by Express Post through the Australia Post network. That method of delivery changed in about May 2017 after police intercepted certain drugs. Hill then arranged for the drugs to be delivered to Wilson through the Toll network.
- Hill and Wilson arranged their drug supplies by the use of a BlackBerry encrypted phone. The phone was set up to provide “peer-to-peer” messages and did not use a network like Telstra or Optus. One needed a password to use the BlackBerry and to access its email application. Hill initially asked Wilson whether he had a BlackBerry and when he was told that he did not, Hill arranged for a BlackBerry to be sent to an address of Wilson’s choosing. It arrived a few days after that conversation.
- With one exception, Wilson dealt only with Hill. When Wilson wanted to order drugs from Hill he would send him a message on the BlackBerry nominating the quantity of drugs and an address that Wilson chose, together with a false name for the recipient. Hill would then send these details to his supplier (Kanj). The drugs would be dispatched and Hill would provide Wilson with the parcel number (in the case of Australia Post) or the consignment note details (in the case of Toll). This would enable them to track the delivery online and to know when it arrived.
- The one exception when Wilson contacted someone other than Hill was an occasion when he was having issues with his BlackBerry. There was only one contact other than Hill’s on the BlackBerry, and Wilson used that contact detail to send a message that he was having issues with his phone. The problem was corrected about 10 minutes later. Wilson did not know the identity of that person who was simply identified on the phone contacts as “Ice Ice Baby”.
- Hill did not identify the name of his supplier to Wilson. He told him that his supplier was a Muslim, mentioned one of his former businesses and said that he had “a fancy Mercedes car”. Wilson also learned of an occasion in either October or November 2016 when Hill travelled to Sydney, but Hill did not say who he was meeting.
Hill’s procurement of drugs
- Having received an order from a customer like Wilson via an encrypted message on a phone like a BlackBerry, Hill would text or email the order and the relevant address to Kanj.
- When an order was received by Kanj, he would screenshot it and forward the image to Sandeep Dharan.
- Dharan would pack the requested drugs inside an Australia Post cardboard box which would then be inserted into an Express Post satchel. To comply with the weight limit for that type of satchel, the drugs were no more than 300 grams per parcel. Dharan would use a false business name such as FLC or FLR with an address such as 16 Smart Street, Smithfield or 16 Smart Street, Fairfield and the sender detail of K Brown.
- Dharan would despatch the packages on behalf of Kanj, using such a false name and address for the sender. During the “era” of the Australia Post parcels, Wilson and other customers of Hill would have the Australia Post parcel number and be able to track its progress. This would enable Hill’s customers, such as Wilson, to know the approximate time at which the parcel would be delivered to the address nominated by Hill’s customer.
- In the Australia Post era, parcels were intercepted by police and seized. One such intercept was in February 2017 of two parcels of drugs which Wilson had ordered from Hill. Wilson had supplied an address that was known to him in Cairns. It was a property occupied by a woman, SG, whose daughter had previously been in a relationship with Wilson. They had previously resided at that property but moved out of it in August 2016. From about January 2017 the house was generally vacant, except for some occasions when SG would return from her partner’s residence. Wilson arranged for this address to be used as a delivery address and Dharan sent two Australia Post parcels to that address. However, there was a miscommunication and the drugs arrived at that address before Wilson was told. He did not receive any tracking number until the Tuesday after the drugs were delivered to that address. Hill eventually sent the tracking number to Wilson, but Wilson could not find any sign of the Express Post parcels at the address. SG was unaware of the arrangements and alerted police to the two parcels which had been forwarded to her address.
- The loss of the drugs became an issue of contention. Hill told Wilson that his supplier thought that Wilson had stolen the drugs. Wilson was able to use a website containing publicly available crime records from police files about addresses. It revealed that there was an unsolved drug matter in relation to the subject address. He supplied this information to Hill who then sent it to his supplier (Kanj) in an attempt to prove that Wilson had not in fact stolen the drugs, but that they had been intercepted by police.
- The loss experienced as a result of the police interception of $54,000 worth of drugs was split three ways with Kanj, Hill and Wilson each bearing $18,000 each.
- There were two other intercepts and seizures by police during the “era” of the Australia Post parcels.
- On 18 May 2017, Matthew Hilton lodged an order with Hill for the supply of methylamphetamine to someone named Rodney Little. The drugs were organised by Hill. Police tracked the delivery of the drug through telephone intercepts on Matthew Hilton’s phone, and seized two ounces of substance containing methylamphetamine from Little.
- On 19 May 2017, an Australia Post parcel survey (X-Ray) revealed five packages containing methylamphetamine. They were addressed to places known to be associated with Hill. They had been sent by Dharan, using his false “sender” name and address.
Hill’s recruitment of Payet
- These interceptions prompted Hill to recruit Jamie Payet to facilitate the transport of drugs through the Toll network.
- Payet was an Operations Manager at the Cairns branch of Toll Transport. This was a management position. He first met Hill in May 2017 when Hill approached him as he was having lunch at a café. Payet was wearing his Toll uniform. Hill made a proposition to Payet “to move some parcels from Sydney to Cairns”, for which Payet was going to be remunerated. Hill did not talk at the first meeting about the amount of money. They met at the same café two days later and continued the conversation. Hill offered Payet $1,100 per parcel and they discussed how Hill would give Payet a mobile phone that only Payet and Hill would be able to talk with. Payet received a mobile phone two or three days later from Hill, who handed it to him at the same place. It was a Samsung Galaxy phone. Hill explained how to use it and how to create a password. Hill also told Payet that one of the special features of the phone was that if it came into the possession of someone else it could be “wiped remotely”. In that event, the phone would revert to being a normal mobile phone.
- The arrangement between Hill and Payet was for Payet to generate a consignment note which identified from whom and to where a package was being transferred. The details of the addresses to be included in the consignment note were sent to Payet on an encrypted phone. Payet would create a barcode that was to be placed on the side of the box. Payet would then email the consignment document and the barcode sticker to an email address used by Dharan.
- Having received a copy of the consignment note and the barcode, Dahran was able to attach them to the package. Hill and others, knowing the details of the consignment, were able to track the packages electronically through a system called Toll Online on the basis of a consignment number. Payet would also be able to track the package in his role as Operations Manager. He would communicate with Hill generally when there was a package coming to Cairns. He would do that via the secure phone. It would be a simple message that the package was on its way and when it was getting delivered.
- When the package came into Cairns via the Toll network it would usually be delivered to the nominated address in the normal way by a Toll delivery driver. On rare occasions Payet would deliver the package because, for example, Hill had requested him to deliver it and to keep an eye on it. There was at least one occasion when Payet received a message on the phone to deliver a package to a different address.
- Payet was also engaged by Hill to arrange for packages to be sent from Cairns to Sydney. These would be packages containing cash from Hill to pay his drug debts to Kanj. There was a similar process of using the Toll network. Hill would come into the Cairns office of Toll and drop off the package to Payet, who would put a consignment note and a barcode on it. Payet would then arrange for the package to be sent to Sydney.
- There were a couple of occasions when Payet received messages from people who he assumed were in Sydney inquiring about the delivery of a package. He would not engage with that message. Instead, he would pass the information onto Hill and say that someone had messaged him. Most of the time Hill would tell him to ignore it. This only occurred once or twice during the course of six months.
- Payet would be paid by Hill in cash either when Hill dropped off a parcel or by an arranged meeting at a certain place. Initially he was paid $1,100 per package, so that if there were a number of packages on a particular occasion he would be paid a multiple of this amount. That arrangement changed when Hill became concerned at the cost.
- In early January 2018 when Payet was on holidays in Thailand, the Samsung Galaxy phone which Hill had given to him looked different. Its black background changed to a normal Samsung background. Payet did not do anything to effect that change.
- Payet returned from Thailand on 9 January 2018 and was arrested at the airport.
Addresses supplied by Hill
- The various addresses identified in paragraphs  –  of the Admissions received parcels, or were the addresses identified on the parcels. Each address had a relationship or association with Hill, whether personal to him or through his drug customer base. For example, they included a property he purchased, a property he had previously resided at and shared with an acquaintance, the address of a family member or an acquaintance. They also included the addresses of customers.
Hill’s record of interview with police
- Hill was charged in early 2018. In August 2019 a request was made through his then-solicitor for him to speak to police. Detective Sergeant Vincent and another officer travelled to Lotus Glen Correctional Centre where they interviewed Hill in the presence of his solicitor. Hill explained in that interview that he obtained methylamphetamine, “MDMA” in different forms, and cocaine from Kanj.
- The methylamphetamine ranged in amounts from as little as an ounce up to a kilogram. The “MDMA” that was supplied as a “ground rock” would be supplied in quantities that varied from an ounce to perhaps 150 grams. “MDMA” pills would be supplied in lots of 1,000. The maximum number of pills supplied was 4,000. Cocaine would be supplied in various amounts from half an ounce to three ounces.
- Hill came to know that Kanj had a wife and children and about the cars he owned. Kanj had a Lebanese restaurant at 535 Crown Street, Sydney and either Kanj or a friend of Kanj also owned a bar. Hill travelled to Sydney on 30 October 2016. Hill did not visit Kanj’s house. The trip to Sydney was the first time that Hill had met Kanj. It was a fairly quick meeting. After the police operation in early 2018, Hill and Kanj communicated through Wickr. Hill wished to engage a new lawyer and Kanj provided some suggestions.
- Hill said that during the period that Australia Post was used until June 2017 he was making a profit of $1,000 to $2,000 on each ounce he was selling. The profit depended on the prices that he could charge. He was acquiring drugs for around $6,500 to $7,000 and selling for $8,500 to $9,000 per ounce. Hill explained how the parcels were delivered. They were cryovaced and placed in a box which was then placed inside an Express Post satchel and the parcels would be tracked according to the number that came to them through the encrypted phone.
The police operation
- Hill and others were identified as participating in drug trafficking. An operation was commenced which identified, amongst others, Hill, Wilson, Hilton, Dharan and Payet. Detective Sergeant Michael Vincent of the Major and Organised Crime Squad was the lead investigator. In addition to being a member of the Queensland Police Service, Detective Sergeant Vincent is a special member of the Australian Federal Police and he was conducting the AFP’s investigation of the operation which branched out into different States and Territories.
- The investigation suggested that Kanj was involved in the importation of drugs but this was never confirmed. The fact that he was close to an importer, if not an importer, was an inference drawn by Detective Sergeant Vincent based on the price that Hill was paying for methamphetamine. As noted, Kanj supplied other drugs to Hill.
- It was not until the close of the operation when a search warrant was executed at Dharan’s residence that the police identified that Kanj was also involved in supplying steroids to a variety of people and to a variety of locations within Australia. However, there is no evidence that he supplied steroids to Hill.
- As for methamphetamine, the only methamphetamine that the police identified during their investigations sourced by Kanj went to Hill. Detective Sergeant Vincent could not say whether Kanj supplied methylamphetamine to persons in addition to Hill.
- The police operation closed on 2 January 2018 when warrants were issued. Investigations continued during 2018. Police executed a warrant at Kanj’s address in Sydney in September 2018. About five days later he left the country and has not returned. It seems that he took up residence in Lebanon at some stage. His family left Australia in October 2018 and have not returned, except for the sale of a house in November 2018.
The Sydney offenders
- Hill’s 30 August 2019 police record of interview and evidence he gave in this Court during an application for leave to set aside a plea explained the process by which he received drugs from Kanj and sent money to Kanj in payment, either through the Australia Post network or via the Toll network. Most of the evidence concerning Kanj’s drug business comes from Dharan.
- In 2016 Dharan was living in Smithfield, Sydney with his parents, and was making a living driving buses. He met Kanj through a friend. Dharan started working for Kanj in Kanj’s drug business in mid-2016. In respect of the supplies to Cairns which are the subject of the present charges (and to which Dharan pleaded guilty on 9 October 2019), Dharan would obtain a message on a BlackBerry phone which Kanj had supplied to him. The message would show the type of drug, the amount and the address to which to send it. Having received the message, Dharan would then go to Kanj’s warehouse to obtain the drugs. He would weigh the drugs and take them back to his house and vacuum-seal them. He would then place the drugs in an Australia Post box which would then be put inside an Express Post satchel. He would put in a maximum of 300 grams per satchel. He would address the parcel and send packages to Cairns three or four times a week. Depending on quantities, he would send more than one Australia Post package on the one day.
- Dharan was, in effect, Kanj’s employee. He was paid between $600 and $1,000 per week, either being paid in cash or in cash and cocaine. Kanj would tell him how much he was going to give him and sometimes Dharan would say something like “Oh, can I get some coke instead”. Kanj also paid for out of pocket expenses. For example, he gave Dharan the money to purchase boxes, satchels and other materials. Dharan initially purchased 100 Express Post satchels. All of them were used.
- During the period when the Australia Post network was used by Kanj to supply drugs to Hill, Dharan would record the sender as FLR (an acronym for Frank’s Lebanese Restaurant) or FLC (an acronym for Frank’s Lebanese Cuisine) and use an address such as Smart Street in Fairfield or Smithfield. He would obtain the parcel tracking number from a sticker on the Express Post bag which would be peeled off. Dharan would send a message to Kanj via the BlackBerry which would communicate the number. This would allow the parcel to be tracked.
- Subsequently, after Hill recruited Payet following packages going missing through Australia Post, Dharan received an instruction from Kanj to use Toll consignments. During this period Dharan did not ever speak to anybody in Cairns. Instead, he received copies of the Toll consignment notes and the barcodes by email. He assumed the emails were from someone in Cairns. These documents would contain an address and he would stick the consignment note and the barcode on the box. By this time he was using larger boxes that were either microwave or blower vacuum boxes. He would pack the drugs into those boxes and tape them up. Having addressed them and stuck the barcode on them, he would then take the packages to the Toll depot in Eastern Creek or another Toll depot.
- Dharan’s recollection is that during “the Toll era” he would send anywhere between 500 grams to a kilogram of methylamphetamine on each consignment. Sometimes cocaine would be included inside the box. When MDMA was sent there would be anywhere between 50 to 150 or even 200 grams in powder form. If pills were sent they were stored in boxes of 500. Sometimes there would be only 100 in a bundle.
- The boxes that were used by Dharan to conceal the drugs and consign them through the Toll network to Cairns sometimes came back to Sydney. He would get those boxes from Kanj’s house.
- It seems that on most occasions the cash payments were sent by Hill via the Toll Network, using Payet, and were received by Kanj at his home. However, there were two occasions when Dharan received cash. On one occasion a courier delivered a package to his house in 2017. The box contained a large amount of money. He counted up to $50,000 and then gave up. He thought that was between a quarter and a half of the contents. There was another occasion when a package containing cash was delivered to him by someone else. On one occasion, Dharan kept the package for some time because Kanj was overseas and then dropped it to him.
- Dharan pleaded guilty on 9 October 2019 in relation to his involvement in the business of unlawfully trafficking in the dangerous drugs methylamphetamine, cocaine and 3,4-methylenedioxyamphetamine in respect of the drugs that he helped send on behalf of Kanj to addresses supplied by Hill and his involvement in the receipt of cash on behalf of Kanj that was sent by Hill.
- Dharan was asked in the hearing before me whether there were times when he would send packages to other areas within Australia, and he chose not to answer that question on the grounds that it may incriminate him. For the same reason he declined to answer a question of whether there was a time when he would send methylamphetamine to other areas within Australia.
- Dharan’s evidence was that the arrangement for sending things to Cairns came to a stop when there was “a bust on one of the packages” and Kanj told him “We better stop now”. From that point on he did not send any further items to Cairns.
Overview of the facts
- The following is a summary of the facts.
- Hill carried on the business of unlawfully trafficking in dangerous drugs in the Cairns region.
- Hill sourced supplies from Kanj.
- Kanj carried on the business of unlawfully trafficking in dangerous drugs, including selling drugs to Hill.
- Kanj employed Dharan to, among other things, fill orders received by Kanj from Hill by weighing, packing and despatching the drugs in parcels.
- The relationship between Hill and Kanj was that of buyer and seller.
- The customers to whom drugs were supplied in the Cairns region were Hill’s customers, not Kanj’s.
- Hill did not act as Kanj’s agent for the purpose of distributing drugs in the Cairns region.
- Hill bought drugs from Kanj at a price fixed by Kanj, and sold drugs in the Cairns region at a price determined by Hill.
- As a major illegal drug supplier, Kanj used encrypted mobile phones, and for the security of his operations, supplied them to customers like Hill and their associates, such as Payet.
- Kanj as a seller and Hill as a buyer agreed on processes by which orders would be placed, goods delivered and payments made for drugs that were delivered to Cairns.
- When certain drugs were not delivered, as planned, due to police intercepts, a new delivery process was proposed by Hill and agreed to by Kanj.
- That process involved the Toll Network and Payet.
- Payet was Hill’s employee or agent for the purpose of transporting drugs and cash between Kanj and Hill. Hill recruited Payet, negotiated his remuneration and paid Payet for his services. The costs of employing Payet were not deducted from the price of drugs purchased by Hill from Kanj, or otherwise accounted for as between Hill and Kanj. Those costs affected Hill’s profits, not Kanj’s profits.
- Hill and Kanj had a mutual interest in the success of Hill’s business, and ensuring that their respective drug trafficking businesses avoided detection.
- Hill and Kanj, along with their respective employees or agents (Payet in respect of Hill, and Dharan in respect of Kanj) had a common interest in the maintenance of the commercial relationship between Hill and Kanj as buyer and seller. This included the efficient and concealed despatch of drugs in accordance with Hill’s orders and the payment of cash by Hill to Kanj.
The threshold issue
- As previewed, the crucial and threshold issue is whether I am satisfied beyond reasonable doubt that Kanj, Dharan and Hill, and subsequently Kanj, Dharan, Hill and Payet, were a “criminal organisation” within the meaning of Part 9D of the Act. If they were, then further issues will arise as to whether Hill:
- (a)was a participant in that “criminal organisation”; and
- (b)knew, or ought reasonably to have known, the offence was being committed in association with 1 or more persons who were, at the time the offence was being committed, or at any time during the commission of the offence, participants in a criminal organisation.
- The threshold issue of whether the particularised individuals were a “criminal organisation” as defined by s 161O depends on:
- (a)the interpretation of s 161O and, in particular, the meaning of “group” in that context; and
- (b)the application of that provision to the facts which I have found or which are not in dispute.
The interpretation of s 161O, including the meaning of “group” in its context
Principles of interpretation
- The principles by which a provision such as s 161O are interpreted are well-established.
- In Beckwith v The Queen, Gibbs J stated:
“In determining the meaning of a penal statute the ordinary rules of construction must be applied, but if the language of the statute remains ambiguous or doubtful the ambiguity or doubt may be resolved in favour of the subject by refusing to extend the category of criminal offences.”
- More recently in R v A2, Kiefel CJ and Keane J stated:
“The method to be applied in construing a statute to ascertain the intended meaning of the words used is well settled. It commences with a consideration of the words of the provision itself, but it does not end there. A literal approach to construction, which requires the courts to obey the ordinary meaning or usage of the words of a provision, even if the result is improbable, has long been eschewed by this Court. It is now accepted that even words having an apparently clear ordinary or grammatical meaning may be ascribed a different legal meaning after the process of construction is complete. This is because consideration of the context for the provision may point to factors that tend against the ordinary usage of the words of the provision.
Consideration of the context for the provision is undertaken at the first stage of the process of construction. Context is to be understood in its widest sense. It includes surrounding statutory provisions, what may be drawn from other aspects of the statute and the statute as a whole. It extends to the mischief which it may be seen that the statute is intended to remedy… The mischief may point most clearly to what it is that the statute seeks to achieve.
This is not to suggest that a very general purpose of a statute will necessarily provide much context for a particular provision or that the words of the provision should be lost sight of in the process of construction.”
- The language which is actually used in the text is an important guide to the statute’s purpose. Leading authorties serve to remind that “the text of a statute is important, for it contains the words being construed, and that a very general purpose may not detract from the meaning of those words.
- Kiefel CJ and Keane J observe:
“As always with statutory construction, much depends upon the terms of the particular statute and what may be drawn from the context for and purpose of the provision.”
- The interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation.
- The meaning of the relevant provision requires consideration of the text of the provision, not resort to paraphrases of the statutory language in extrinsic materials. Consideration may be given to extrinsic material capable of assisting the interpretation:
- (a)if the provision is ambiguous or obscure – to provide an interpretation of it;
- (b)if the ordinary meaning of the provision leads to a result that is manifestly absurd or is unreasonable – to provide an interpretation that avoids such a result; or
- (c)in any other case – to confirm the interpretation conveyed by the ordinary meaning of the provision.
- Consistent with an interpretation of the text of a statute in its context, being an interpretation which will best achieve the provision’s purpose, regard may be had to the consequences of competing interpretations.
Relevant dictionary definitions of the word “group”
- Applying these methods of interpretation, one looks to the text of s 161O(1) and the ordinary meaning of the word “group”.
- Definitions of “group” abound. I select some of the more relevant ones.
- The Oxford English Dictionary defines “group” to include:
- “1.A number of things placed together as the result of deliberate arrangement or composition.
- (a)A number of things (in earlier use esp. natural objects) located or occurring in close proximity, so as to form a collective unity.
- (b)A number of people or animals standing, positioned, or located close together so as to form a collective unity.
- (a)A number of people who associate together for social or professional reasons, or who are linked by a common interest or purpose.
- (b)A number of things having some related properties or attributes in common, regarded as forming a unity or classified together under a general name or description; a set; a type; a division.
- (c)A number of people who are classified together on the basis of certain shared characteristics; each of a number of categories or divisions of people within a larger set, population, etc…”
- The Australian Concise Oxford Dictionary gives similar definitions:
“1. a number of persons or things located close together, or considered or classed together.
2. (attrib.) concerning or done by a group (a group photograph; group sex).
3. a number of people working together or sharing beliefs, e.g. part of a political party.”
- The Macquarie Dictionary includes the following definitions:
“1. any assemblage of persons or things; cluster; aggregation.
2. a number of persons or things ranged, or considered together, as being related in some way.”
Context – s 161O(1)
- As is apparent from the text of s 161O(1), not every three or more persons who are associated with each other in some way and who engage in “serious criminal activity” will be a “criminal organisation”. They must constitute a “group”. The group must be “arranged” formally or informally.
- Further context is provided by s 161O(1)(b). The persons who constitute the group must “by their association” represent an unacceptable risk to the safety, welfare or order of the community. This context suggests that the persons who constitute the group have an “association”, rather than simply something in common which permits them to be classified or categorised together. I respectfully agree with the observations of Henry J in R v Stasiak and Turkyilmaz that the definition necessitates evidence capable of sustaining the inference that there was association as between the three members of the group, and that acts of association can occur without necessarily there being evidence of direct contact between two persons alleged to be associating.
Context – s 161O(2)
- As appears from the terms of s 161O(2) (the full contents of which are extracted at  above), for the purposes of s 161O(1), “it does not matter” whether:
- (a)the group of persons has a name, is capable of being recognised by the public as a group etc.; or
- (b)the persons comprising the group have different roles in relation to the serious criminal activity, have different interests in it etc.
Sub-section 161O(2) bears upon the meaning of “group” by clarifying the kind of group which may comprise a “criminal organisation”. The subsection does not contain a formal definition of “group” for the purpose of s 161O(1), but clearly bears upon the meaning of “group” in that context. It provides, in effect, that a group is not required to have certain features or may have certain other features and still qualify as a “group”. Expressed differently, and not in terms of a definition of “group”, it provides, in effect, that a group may be arranged so informally and in various ways that it nevertheless is a “group” which may constitute a criminal organisation. Section 161O(2) may be intended to narrow the available ordinary meanings of the word “group” or to indicate a preference for an ordinary meaning of “group” which does not require certain features, such as a name or a capacity to be recognised by the public as a group.
- If required to resolve any ambiguity about the purpose of s 161O and s 161O(2) in particular, regard may be had to the Explanatory Notes to the Serious and Organised Crime Legislation Amendment Bill 2016.
“The new definition of ‘criminal organisation’ is intended to be sufficiently broad enough to capture both traditional and hierarchically structured criminal groups; as well as shape-shifting, opportunistically formed and flexible criminal groups. This enhancement acknowledges that while [outlaw motorcycle gangs] have traditionally favoured hierarchical and highly visible models of organisation, other crime groups are now frequently informally arranged and adaptable in their structure … In framing the new definitions, the Bill takes into account the recent decision of the Honourable Justice Peter Lyons in R v Hannan, Hannan, Gills, Murrell & Hannan  QSC 161; to ensure the scenario illustrated by that case is captured by the definition.”
This suggests that the section did not intend to adopt an artificial meaning of the word “group”, but to ensure that an available meaning of “group” is not adopted which prevents the section from applying to criminal groups which are “shape-shifting, opportunistically formed and flexible”. It still must be a group, but it may be “informally arranged and adaptable” in its structure and as a result may not be capable of being recognised by the public as a group.
- In any case, and without reference to the Explanatory Notes, s 161O(2) is not a mandate to give the word “group” some unusual or technical meaning not associated with its ordinary usage. Instead, it guides the choice of relevant ordinary meanings and emphasises that, in the present context, a group may lack things like a name or other features which enable it to be recognised by the public as a group.
Context – s 161O(3)
- The statutory definition of the word “engage” in s 161O(3) does little to illuminate the meaning of the word “group” in s 161O. A person who obtains a material benefit from serious criminal activity may be found to “engage” in that serious criminal activity and to do so as part of a “group”. But not every person who obtains a material benefit from serious criminal activity undertaken by a group will thereby be a part of that group and part of a “criminal organisation”.
Context – s 161P – meaning of “participant”
- My present concern is the meaning of “group” in the context of the definition of “criminal organisation” in s 161O. I am not required to consider at this point the meaning of “participant”. However, s 161P, in defining who is a “participant” in a criminal organisation is part of the context. Briefly stated, s 161P(1) identifies six circumstances in which a person may be a “participant” in a criminal organisation. The first five relate to a person who is a member, prospective member or officer-holder of the organisation or who identifies himself or herself in any way as belonging to the organisation. The sixth, reflected in s 161P(1)(f), is if the person’s conduct in relation to the organisation would “reasonably lead someone else to consider the person to be a participant in the organisation”. It contains an example.
- In R v Hilton, Henry J rejected a submission that s 161P(1)(f) ought be given a meaning confined by the range of participants referred to in subparagraphs (a) to (e) inclusive. Instead, the word “participant” in s 161P(1)(f) ought carry its ordinary meaning. Defence counsel accepts this interpretation. It is appropriate in the circumstances to adopt that interpretation in considering the context which s 161P provides for the proper interpretation of s 161O. As for the statutory example, as Henry J observes, the example concerns persons “participating in the organisation by serving it, that is, by doing work for it”. The examples conform to the ordinary meaning of “participation”.
- To the extent that the statutory example provides further context, it speaks of a person doing certain things “for a criminal organisation” involved in the production and sale of cannabis. The example is apposite for a case in which A employs B and C as part of his group, and B and C do work “for” the group. The example is not concerned with a person who does certain things “in relation to”, but not “for”, a criminal organisation.
Context – s 161Q and s 161R consequences
- In selecting one of a number of available ordinary meanings of a word such as “group”, account may be taken of the provision’s purpose and its context. It is also appropriate to adopt a meaning which avoids apparently unintended consequences.
- Section 161Q creates a circumstance of aggravation. The consequences of that circumstance of aggravation being found are significant. In addition to the sentence of imprisonment (“base component”), there is ordinarily a substantial “mandatory component”. The general purpose of these provisions is to combat serious organised crime and to implement expert recommendations to create a circumstance of aggravation that applies to a prescribed list of serious offences, often associated with organised criminal activity. A statutory purpose is to visit these consequences on a “participant in a criminal organisation” in defined circumstances.
- In accordance with the statutory definition of “criminal organisation”, an essential element is that the person be a participant in a “group” which qualifies as a “criminal organisation”. It is not sufficient to attract these consequences that three or more persons associate together in serious criminal activity. They must constitute a “group” and “by their association” represent an unacceptable risk to the safety, welfare or order of the community.
- The consequences of a “serious organised crime circumstance of aggravation” were not intended to be visited upon persons who do not comprise a “group” according to a meaning of that word which does not find support in the text and context of the section.
Overview on interpretation
- Applying settled principles of statutory interpretation, the word “group” in s 161O should be given an ordinary meaning, the choice of which is influenced by:
- its immediate statutory context (e.g. “arranged” and “by their association”);
- s 161O(2), which signifies that a group may lack or have certain features and be a “criminal organisation”; and
- its broader context, and the fact that the word falls to be applied in respect of a group of three or more persons who engage in, or have as their purpose engaging in, serious criminal activity.
- It is apparent from this context that the word “group” in s 161O is capable of applying to a group of associated criminals, arranged informally, and lacking the features of a legitimate business arrangement. That conclusion is derived from:
- the context of a group of persons which engage in, or have a purpose of engaging in, serious criminal activity;
- the reference to them being “arranged formally or informally”; and
- the contents of s 161O(2).
Accordingly, it is not necessary for a “group” to have a formal organisational structure or the processes and procedures that might often be associated with a legitimate group, such as business reports and accounts.
- Therefore, care is required to test the existence of an alleged “group” for the purposes of s 161O by reference to the features of non-criminal groups. Care is also required to not undertake artificial comparisons with individuals who associate for the purpose of non-criminal activities. Still, if an informal arrangement of persons in a non-criminal activity would not be treated as a “group” despite their relationships and common interests, why should persons in a similar arrangement who engage in criminal activities? The answer must be found in some aspect of their activities or relationships, the terms of s 161O(2) or the nature of serious criminal activity in general.
- The word “group” in s 161O must be read in the context of serious criminal activity and with regard to the terms of s 161O(2). The word is to be applied according to its ordinary meaning in its context, not given an artificial meaning.
- Having regard to available dictionary definitions, the context of and the purpose of s 161O, the word “group” in that section concerns three or more persons who are arranged and who have an “association”. The word “group” in that statutory context does not appear to be concerned simply with persons who may be related in some way or who may be classified together on the basis of certain shared characteristics, such as their preparedness to engage in criminal activity. Instead, the word “group” in its statutory context connotes some association of persons to form “a collective unity” (to quote two of the definitions in the Oxford English Dictionary). This interpretation accords with the meaning adopted by Henry J that there “must be some unifying combination or relation between persons for them to constitute a group.”
Application of the provision to the facts
- I turn from the interpretation of the provision to its application to the facts. The issue is whether the prosecution has proven beyond reasonable doubt that Kanj, Dharan and Hill, and subsequently Kanj, Dharan, Hill and Payet, were a “criminal organisation” within the meaning of Part 9D of the Act.
- The prosecution must prove that those individuals were “a group of 3 or more persons”, whether arranged formally or informally:
- (a)who engaged in, or had as their purpose (or one of their purposes) engaging in, serious criminal activity; and
- (b)who, by their association, represented an unacceptable risk to the safety, welfare or order of the community.
To be clear, the issue is not whether Kanj and Hill, together with their respective employees or agents (Dharan and Payet) had some association or relationship and engaged in serious criminal activity. Clearly they did. The threshold issue is whether they did so as a “group” of three or more persons.
The prosecution’s submissions
- The prosecution pointed to certain features which were submitted to identify a unifying connection between the four people who are particularised as the “criminal organisation”, and a close relationship between Kanj and Hill and their respective employees. The first was the pattern of conduct, including repetition over a long period, giving rise to a level of trust, a close relationship, and a level of risk in financial terms and in being detected. The second was the quantity of drugs, which were submitted to be “unique”. My response to that oral submission was that describing the quantity as “unique” did not make these individuals a group, it just meant that they were operating on a bigger scale, and to say that not many people operated on that scale did not explain why the individuals qualified as a “group”. This led to the submission being reformulated to say that the quantity of the drugs related to the assumption of risk, both financial and of detection and the adoption of procedures to avoid detection and to not lose the drugs.
- The third submission was that the fact that Hill was “a customer” and in a customer/supplier relationship did not matter because the term “engage” includes those who achieve a benefit. “Engage”, as defined in s 161O(3), includes obtaining a material benefit, directly or indirectly, from serious criminal activity.
- A fourth submission was that Hill had a “policy” role, shown in the change made to the transportation arrangements and Kanj’s acceptance of that change. Another aspect of “policy” was submitted to be the distribution of the encrypted phones with certain contacts on them.
- On the issue of association, defence counsel acknowledged that there was evidence of an association between Kanj and Hill and “perhaps tentative evidence of association between Dharan and Payet”. However, there was submitted to be no evidence of an association between Kanj and Payet or between Hill and Dharan. Defence counsel submitted that the three or four nominated individuals were not in an “association” since an association required more than contact. Reliance was placed upon the fact that Hill had no direct contact with Dharan during the period of the trafficking.
- Ultimately it was submitted that Kanj was a wholesale supplier to Hill, but operating his own independent trafficking operation, as did Hill. Accordingly, Kanj and Hill were not members of the same “criminal organisation”. Dharan was Kanj’s agent and was given the task of facilitating the despatch of drugs to locations forwarded to him by Kanj. Payet was submitted to be Hill’s agent, who was engaged by Hill and paid by Hill to arrange the delivery of purchased drugs to Hill or Hill’s customers.
- Defence counsel relied upon the fact that the evidence did not suggest that Kanj controlled the conduct of Hill’s business. There was no evidence that he set the price at which Hill sold drugs or in any other way directed Hill’s trafficking business and operations.
- Defence counsel further submitted that there was only one possible criminal organisation, being a group associated with Kanj, and that the prosecution had been unable to demonstrate that Kanj did not have a wider network of customers beyond Hill. In fact, the evidence in relation to Kanj’s supply of steroids indicated that Kanj was distributing steroids throughout Australia.
- The following example was given in support of the submission that Hill was no more than a customer of Kanj’s business:
“A commercial example that may assist could be that A is a supplier of fertiliser, who negotiates a contract with B to supply B with fertiliser. C is A’s employee, C engages a[n] independent contractor D to deliver the fertiliser to B. B is dissatisfied with D’s service and B then engages E to deliver the fertiliser. It could never be suggested that B was other than a customer of A’s business or that E was involved or a participant in A’s business.”
The issue of association and relationships
- It is implicit from the terms of s 161O that the three or more persons who are alleged to constitute a group must have an “association”. As Henry J observed in R v Stasiak and Turkyilmaz, evidence of association can be indirect, that is to say circumstantial, and acts of association can occur without there necessarily being evidence of direct contact between two persons alleged to be associating. However, as his Honour also observes, there must be evidence capable of sustaining the inference that there was an association as between the three members of the group.
- Here the evidence establishes that during the Australia Post “era” there was:
- an association between Kanj and Hill;
- an association between Kanj and Dharan; and
- an association, albeit indirect, between Hill and Dharan in that Dharan received (via Kanj) Hill’s orders and sent the requested drugs to persons and addresses requested by Hill.
During the Toll “era” the same relationships existed and there also was a clear association between Hill and Payet. There also was a relationship between Payet and Dharan, exhibited by the fact that Payet sent Dharan emails attaching consignment notes and barcodes. That relationship existed notwithstanding that they seemingly did not know each other’s actual name.
- There was no direct communication between Kanj and Payet, yet Payet dealt with Kanj’s employee (Dharan) as just discussed, and was responsible for consigning boxes containing cash to Kanj or his nominee.
The relationship of buyer and seller
- The parties’ submissions raise in different ways the significance or otherwise of the relationship of buyer and seller.
- In my view, the fact that there was such a relationship is relevant to the question of whether the buyer (Hill) and the seller (Kanj) and their respective associates constituted a “group”. However, the fact of a buyer-seller relationship does not preclude the buyer and the seller, along with others, constituting a group.
- The prosecution’s submission that the existence of a buyer-seller relationship does not matter due to the definition of the term “engage” is unpersuasive. Persons who constitute a group may “engage” in serious criminal activity in circumstances in which one of them obtains a material benefit, directly or indirectly, from serious criminal activity. This follows from the definition of “engage” in s 161O(3). However, this proposition does not mean that individuals who benefit from a commercial relationship which involves serious criminal activity thereby constitute a “group” or do so as a member of a “criminal organisation”. That depends on whether they are a group that have the characteristics stated in s 161O(1).
- The defence submissions, including the fertiliser example, emphasise that Hill was simply a buyer or “customer”.
- The fact that Hill and Kanj were in a relationship of buyer-seller, rather than in some other relationship, such as an agent for the other, co-venturers or partners, is relevant. However, I do not wish to be thought to accept an unstated, or possibly implicit, submission that individuals cannot constitute a group because their relationship is one of buyer and seller. Whether or not they are a group depends on the circumstances. To take the fertiliser example, without more, the simple existence of a mutually beneficial commercial relationship between A and B would be unlikely to constitute A and B, together with their respective agents, as a group. In the example given in the defence submissions, there are relationships between A and B, between A and A’s employee (C), between those two individuals and the independent contractor (D) and between B and B’s contractor (E). Their respective business relationships intersect. The individuals have a common interest in fertiliser being transported as part of A and B’s commercial relationship. Their common interest in that regard may support the inference that they are a group constituted by an arrangement, which distinguishes them from another group of individuals who operate in the same industry. However, it is also open to see the three, four or five individuals in the fertiliser example as individuals amongst whom there are various relationships, albeit linked, but who lack the collective unity required to constitute a group.
- To remain with the example, other aspects of their respective and collective relationships may strengthen the conclusion that they are a group. For example, if A, as a term of its relationship with B, controls aspects of B’s business, for instance, the price at which fertiliser is sold or the marketing of the product which A supplies, then A and B (along with their respective employees and agents) may constitute a group. This would be so, not because they would be recognisable as a group by third parties or the general public, but because of A’s control over their operations and because the consequent unity in B following A’s directions would make A and B’s relationship more than simply one of buyer-seller. It would not be necessary for A and B to be in some kind of franchise relationship or exclusive commercial relationship. They and their associates might be regarded as a group because of the nature of their relationships and because the arrangement of persons in the group was largely under the control of A. This conclusion might follow from an assessment of the relationships, their arrangement and the resultant association between persons comprising the group, rather than their association being recognisable by third parties or the general public.
- Section 161O(2)(a)(ii) states that for the purposes of ss 161O(1) it does not matter whether the group of persons “is capable of being recognised by the public as a group”. I apply this provision as meaning that it does not require that kind of element in order to constitute a “group”. I do not regard it as irrelevant for the purpose of s 161O(1) that, along with other things, a group of persons is capable of being recognised by the public as a group. That feature may serve to fortify the conclusion that the individuals constitute a group. Therefore, in the fertiliser example, if B was, and was known to be, A’s exclusive distributor of “Grow Fast” fertiliser in Far North Queensland, with A supplying only to B in that region and B sourcing its supplies of fertiliser only from A, then A and B might be said to be part of the Grow Fast group. This conclusion would be based upon the nature of their business relationships. If B was known to other industry participants (or the general public) to be part of the Grow Fast group, then this might support the conclusion. The conclusion would be more readily drawn if A had an input into the price at which B sold the fertiliser supplied by it and other aspects of its transport and marketing. If the relationship between A and B was such that B took the goods on consignment, with title to the goods not passing and no obligation on B to pay for them until B had sold them, then their collective unity as part of the Grow Fast group might be confirmed along with other aspects of their arrangement.
- In these kinds of examples, it is not the simple fact of a commercial relationship between buyer and seller, but other features of their relationship and the relationships between their associates that may lead to the conclusion that three or more persons in an arrangement constitute a group. Those features may be one party’s control over operations, a sharing of profits or some common commitment to the organisation arising from exclusivity of dealings.
- In the present statutory context the persons comprising a group may have different interests in, or may obtain different benefits from, the serious criminal activity. The statutory example is given of three persons “comprising a group” that engages in serious criminal activity, with one person obtaining the profit from the activity who pays the other two persons an amount for engaging in the activity. This example explains why an employee or agent who is paid a wage or a fixed amount, rather than a share of profit, may comprise, with others, a group. However, in the given example the individuals must still comprise a group. That example is not apposite in this case because one is not concerned with a group in which Kanj pays two other persons out of his profit as a reward for their engaging in criminal activity from which he obtains a profit, or in which Hill pays two other persons an amount from the profit he obtains from the three of them engaging in criminal activity. I remind myself that it is not necessary for three or more persons who comprise a group to derive similar forms of benefit, for example, respective profit shares. It may be sufficient if one member of the group obtains the profit from its activities and pays other members for their work. Nevertheless, a sharing in profits may, along with other features, aid the conclusion that the individuals’ arrangement involved a collective unity.
- As to the relevance or otherwise of commercial relationships between three or more persons who are alleged to comprise a group, it is important to recall that it is not necessarily the case that any three or more persons who are associated or related in some way, for example, in buying and selling illegal drugs to each other, will constitute a “group” in the context of s 161O. This is so, notwithstanding the fact that the relationship of buyer and seller has some level of mutual interest or common purpose in effecting the sale transaction. That conclusion is not altered by the fact that their commercial relationships continue. In practically any continuing commercial relationship of buyer and seller, whether in legitimate goods or otherwise, the seller has an interest in the buyer’s commercial success, and vice versa. This feature of mutual interest would be unlikely to be sufficient to characterise the buyer and the seller as a “group” as that word is ordinarily used.
- The mutual interests of Kanj and Hill in sales transactions being made is relevant to whether they and their respective associates constituted a group. In addition, the fact that they were in a relationship of buyer and seller, rather than one being the other’s agent or in some other relationship, is relevant because any relationship of buyer and seller involves conflicting as well as common interests. The price of the thing sold will affect each party’s profit. For example, Kanj did not have an interest in Hill making as much profit as Hill possibly could from the sale of each ounce of drugs. Hill’s profits would be increased if Kanj lowered his prices, but that would come at Kanj’s expense. Kanj had an interest in Hill making sufficient profit to be able to pay him and to stay in business. Hill’s interest was in buying drugs from Kanj at the lowest possible price.
- In short, their interests as buyer and seller did not align. They had some interests in common, but other interests in conflict.
- Kanj and Hill were linked by a common interest or purpose in effecting sale transactions, and their respective agents (Dharan and Payet) were in relationships which advanced that common interest. According to one dictionary definition of the meaning of “group”, persons who are linked by a common interest or purpose may constitute a group. However, having regard to the statutory context, I have decided that the issue of whether someone is a member of a “group” calls for an assessment of whether they have, in the light of their common interests as well as their diverging or conflicting interests, a “collective unity” (to adopt definitions from the Oxford English Dictionary). The mere presence of a common interest or purpose, together with diverging or conflicting interests, may not be sufficient to constitute three or more persons as a group.
- Were the presence of some common interest or purpose sufficient, then any buyer-seller relationship involving three or more persons might constitute the persons as a “group” for the purpose of s 161O. That seems an unattractive and unintended interpretation. If a commercial relationship in which there is a common interest was sufficient, then a husband and wife (A and B) who routinely purchased amounts of cannabis grown by a local farmer (C) might be a “group” of persons who engaged in “serious criminal activity”. If A and B on-sold part of the cannabis, they might expose themselves to prosecution for a “prescribed offence”, namely supplying dangerous drugs with a commercial purpose. C would be exposed to prosecution for similar offences, possibly drug trafficking. A, B and C would have engaged in “serious criminal activity”. The husband and wife and their grower might be exposed to prosecution for an offence with a circumstance of aggravation which, if established, would attract an additional mandatory component of seven years, as well as an unaffected base component for the offending itself.
- The same might apply to a chain of supply in a different case involving X to Y to Z, each of whom sets his own price and simply on-sells. The same conclusion might follow if there was a course of supply between X and Y in which one of them paid a courier, Z, to transport drugs. In these kinds of examples the nature and scale of the operations and the relationships between A, B and C, or between X, Y and Z, may mean that their “association” may not be of a kind that represents “an unacceptable risk to the safety, welfare or order of the community”. However, “unacceptable risk” is an expression of indeterminate reference. More importantly, that issue is whether the relevant group, by their association, represents such a risk, not the prior question of whether their commercial and other relationships constitute them as a “group”. These illustrations tend to suggest that the mere presence of a commercial relationship of buyer and seller does not make two individuals (along with their respective employees or agents) a “group” according to the ordinary meaning of that word in this context.
- In summary, Hill and Kanj were in a commercial relationship of buyer and seller. Without more, the fact of such a relationship, with its common as well as divergent interests between buyer and seller, would not seem to be sufficient to constitute the buyer and the seller, along with their respective employees or agents, as a group.
The pattern of conduct
- Reliance is placed by the prosecution upon the pattern of conduct between Kanj and Hill, including repetition over a long period, giving rise to a close relationship and a level of trust. Any ongoing commercial relationship, built on trust created over a period and with a mutual interest in its continuation, is likely to be a closer relationship than a one-off transaction between a buyer and a seller. That would not, however, transform the relationship into something other than one of buyer – seller. It would not transform the individuals into something which they were not, namely a group.
- Reliance is also placed upon the scale of the operation and the risks associated with it. The quantity of drugs and the scale of trafficking placed the parties to it at risk of large financial loss if drugs were lost, or lengthy imprisonment if the individuals were detected by police. This may explain why they developed procedures to not lose drugs and to avoid detection. The risks of loss and detection arise in the context of much criminal activity. The risk of loss does not seem to be qualitatively different to any other risky venture in which parties to a commercial transaction or ongoing commercial transactions agree procedures to avoid loss. They seek to avoid loss and allocate risk.
- The desire to avoid detection must be an incident of the dealings of any persons associated in criminal activity, for example, the sale of stolen goods. The mutual interest in avoiding police detection does not constitute criminals with a mutual interest in a transaction as a group if, upon analysis, they have little more in common than making a sale and avoiding detection.
- Agreeing procedures and providing technology or equipment to ensure that transactions are carried out is also a common incident of commercial transactions between parties. For example, parties provide Eftpos facilities and other forms of technology to enable customers or clients to provide information. Parties to legitimate transactions establish websites, forms and processes by which they conduct confidential and private transactions.
- The fact that Kanj provided encrypted phones for his own protection and for the convenient use and protection of customers is simply an aspect of his business operations, which Hill and his functionaries such as Payet were content to accept.
- I am not persuaded that the assumption of risk and steps taken to reduce it lead to the conclusion that the parties to the relevant transaction or transactions constituted a group.
- I do not accept that Hill occupied some “policy” role in a group. His response to the loss of drugs through police interceptions was to devise a more efficient way to have supplies delivered to him. It was a solution to a transportation problem proposed by one of the parties to a buyer-seller relationship, which was accepted by the other party. It does not show that the buyer and seller (along with the seller’s despatch clerk and, subsequently, the buyer’s employee) were a group.
- Hill paid for his employee’s costs. Hill negotiated a change of rate with Payet to $1,100 per consignment, rather than $1,100 per parcel, because of the effect of these costs on Hill’s profit. Hill explained in evidence before Henry J, “I wasn’t making much money” and that the decision was his. Kanj emphatically supported that decision because he thought that Payet was making “heaps of money”. Nevertheless, the decision to change Payet’s pay rate and to fix the rate at $1,100 was Hill’s.
The defence submissions about Kanj being in a different “criminal organisation”
- The defence submission that Hill did not belong to the particularised criminal organisation because there was only one possible criminal organisation, being a group associated with Kanj, is unconvincing. The evidence of Kanj’s supply of steroids and distribution of at least that drug in other parts of Australia may suggest that he was associated with other drug traffickers in other States and part of a “criminal organisation” in that regard. The possibility that he belonged to such a criminal organisation does not defeat the prosecution case. It is possible for an individual to belong to more than one “criminal organisation” at any one time.
- I remind myself that a “group” may be arranged informally, that it need not have a name, that it need not be capable of being recognised by the public as a group and that it can have the features referred to in s 161O(2)(b). Nevertheless, the individuals alleged to constitute it must still qualify as a “group” of three or more persons who are arranged and have the “association” to which s 161O(1)(b) refers.
Did the particularised individuals have the collective unity to constitute a group?
- Kanj and Hill were linked by a common interest or purpose, and their respective agents or employees, Dharan and subsequently Payet, were in relationships which advanced that common interest. Kanj and Hill built a continuing commercial relationship, maintaining the required trust in each other to perform their bargains. They agreed processes and equipment for the secure ordering and delivery of drugs and the payment of cash in return. As with any ongoing commercial relationship, they had a mutual interest in the relationship continuing to yield each of them his profit.
- It is possible to view their commercial arrangement as buyer and seller, along with their respective employees or agents, as having a unity of purpose in ensuring the delivery of drugs and cash, in return.
- The fact that each of the four particularised individuals had a different role to perform does not prevent them from being a group. The scale of the sales transactions and the need for efficiency prompted Kanj to enlist Dharan to help him and for Hill to enlist Payet to provide a different transport service. The fact that the four particularised individuals played their respective parts permits their conduct to be characterised as a group exercise. However, this label tends to overlook the fact that they acted as individuals in different aspects of sale transactions, in pursuing their own interests or that of his employer. To describe their collective activities as a group exercise says little more than there were four individuals involved in serious criminal activities who had a variety of relationships. Those relationships were apt to achieve a mutually agreed outcome of selling drugs to Hill and paying Kanj for them, and for their respective employees to be rewarded out of each business’ separate profits.
- In short, the linked relationships between the individuals suggest a unified endeavour to effect sales transactions.
- This question remains: what about the nature of the operation, the method of its accomplishment or its various relationships made it different to any sale of goods transactions in which the individuals would not be described as a “group”, notwithstanding their common purpose in ensuring that the transactions were completed?
- I am careful not to equate illegal activities with legitimate ones. However, a sound reason must exist in the facts of this case or their characterisation to describe the three or four individuals as a “group”. Absent such a sound reason in the context of criminal activities and the specific statutory context, it is hard to see why the word “group” would be used to describe parties to the subject sale transactions when the word would not be applied to a buyer and a seller in legitimate sales transactions, along with two of their employees.
- The point may be illustrated by repeating an example put by me to counsel during argument. Imagine that there was a Sydney-based wholesale seller of chickpeas who supplied orders to a Cairns-based wholesaler. Something more would be required before one would describe the buyer and the seller, along with a courier or one or two of their respective employees, as a “group”. What makes this case different from the chickpea example?
- The secrecy of Kanj’s and Hill’s operations and the risk that they might lose the goods and suffer loss does not, in my view, make a qualitative difference, or have the effect of turning individuals who would not ordinarily be described as a “group” into a group. Nor, in my view, does the fact that the goods are illegal and that each of them faces imprisonment if detected.
- I have regard to the facts, as earlier summarised by me. Many of them detract from the conclusion that Kanj, Dharan and Hill, and subsequently Kanj, Dharan, Hill and Payet, were a “group” within the meaning of s 161O. Hill was not Kanj’s agent. These were sale transactions. The drugs were not sent to Hill on consignment to see if he could sell them. Kanj did not determine the sale price which Hill sought or obtained. He had no say about the price at which Hill sold the drugs. Hill was not Kanj’s Cairns-based agent, let alone a partner or joint venturer. They did not share in profits. Hill set the price he sold drugs to his customers and the quantities which he sold to each of them. Wilson, Hilton and others were not customers of Kanj or, in any real sense, customers of a group. They were customers of Hill and only Hill.
- I apply the general principles of law which are applicable to all criminal prosecutions, including the drawing of inferences from facts. They were stated by Martin J in R v Pentland. I gratefully adopt that statement.
- I direct myself to apply the interpretation of s 161O and the meaning of “group” at which I have earlier arrived.
- In deciding whether the particularised individuals constituted a “group” within the meaning of that section, I do not inquire whether or not they might be a “group” according to any one of many available dictionary definitions, for example, because it is possible to categorise them as having things in common, namely each being a criminal. I am guided by s 161O(2) and other statutory contexts of the word “group”. The word “group” in s 161O(1) connotes some association of persons to form a collective unity. As Henry J observed, “There must be some unifying combination or relation between persons for them to constitute a group.”
- One reasonable conclusion is that the particularised individuals had a sufficient connection and a sufficient unity to allow them to be described as a “group”. They were involved “in a unified and organised task; a task being conducted by and between them, namely, the trafficking of the drugs from Sydney into Cairns”. However, another reasonable inference from the undisputed facts is that they lacked the unity to constitute a “group”. On this view, the combined tasks which they undertook on their own behalf or on behalf of their respective employer were no more unified than tasks undertaken in a business arrangement between buyer and seller. In any such case there is a common interest in agreeing processes and tasks that will enable goods to be transported safety from point A to point B. One would not necessarily or even ordinarily describe the buyer and the seller and two of their respective employees as a “group” in the relevant sense.
- On this view, more would be required than the proven facts which I have summarised before a buyer and a seller and their respective employees, engaged in continuing, high-value and risky sale transactions, would be described as a group, as distinct from individuals involved in a business relationship of buyer and seller.
- The prosecution has the onus of proving the alleged circumstance of aggravation and must prove it beyond a reasonable doubt.
- It is not sufficient for me to conclude that the particularised individuals probably were a group. The prosecution must exclude the reasonable inference or conclusion that they were not. It must satisfy me beyond a reasonable doubt of the fact of the alleged “group”. I am not satisfied to that high standard. Therefore, I am not satisfied that the circumstance of aggravation has been proven to the required standard.
Verdict and procedural course
- The evidence was received and heard by me on Monday, 21 September 2020. I heard submissions for a substantial part of Tuesday, 22 September 2020. I adjourned to consider my verdict and advised the parties that if I was able to reach my verdict I would deliver it as soon as I reasonably could. The parties supported this course. If I was not satisfied beyond reasonable doubt, then the sentencing hearing for trafficking simpliciter could proceed. If I was satisfied beyond reasonable doubt of the circumstance of aggravation then the sentencing hearing could proceed on that basis. It was convenient to the parties and to the Court to proceed to sentencing, if possible, in the current sittings of the Court at Cairns
- I considered my verdict after the matter was adjourned at 1.30 pm on Tuesday, 22 September 2020. I was able to reach my verdict by the afternoon of Wednesday, 23 September 2020 and I delivered my verdict at 2.22 pm that day.
- By then I had planned my judgment but had yet to complete writing it. The parties proceeded to make sentencing submissions on Thursday, 24 September 2020. Other matters before the Court occupied me on Friday, 25 September 2020. I sentenced the defendant on Monday, 28 September 2020. I have proceeded to complete my judgment during available time in the balance of the sittings. These reasons are to be published on Friday, 2 October 2020.
 MDMA was the term used by Hill, but the substance may have been MDA.
 Many of them are conveniently summarised by Peter Lyons J in R v Hannan and Others (2016) 259 A Crim R 558;  QSC 161 at -.
 (1976) 135 CLR 569 at 576.
 R v A2; R v Magennis; R v Vaziri (“R v A2”) (2019) 373 ALR 214;  HCA 35 at -.
 At .
 Acts Interpretation Act 1954 (Qld), s 14A.
 The Queen v A2 at .
 Acts Interpretation Act 1954 (Qld), s 14B.
 3rd edition, 2014.
 5th edition, 2009.
 7th edition, 2017.
 (2019) 2 QR 533 at 540 -;  QSC 260 at p 7.
 Explanatory Notes to the Serious and Organised Crime Legislation Amendment Bill 2016, p. 19.
  QSCPR 2 at pp 5-7.
 As to the appropriate use of a statutory example, see Acts Interpretation Act 1954 (Qld) s 14D. The example can be used to clarify the meaning of “participant” and, in turn, by way of context, the meaning of “criminal organisation” and the composite phrase “a participant in a criminal organisation”.
 R v Hill  QSCPR 14 at p 11 ll 35-36.
 (2019) 2 QR 533 at 540 -;  QSC 260 at p 7, ll 3-13.
 Section 161O(2)(b)(ii).
 Which is defined in s 161N to mean conduct constituting an indictable offence for which the maximum penalty is at least 7 years’ imprisonment.
 Section 161N, Schedule 1C.
 Section 161O(1)(b).
 Including s 161O(2) which adopts a meaning of “group” which does not require the group to have a name, to be able to be recognised by the public as a group, or to have an ongoing existence as a group beyond the serious criminal activity in which the group engages.
  QSC 231 at -.
 R v Hill  QSCPR 14 at 11 ll 35-36.
 R v Hill  QSCPR 14 at 12 ll 31-32.
- Published Case Name:
R v Hill
- Shortened Case Name:
R v Hill
 QSC 309
02 Oct 2020
- Selected for Reporting: