R v Donnelly[2007] QCA 77

SUPREME COURT OF QUEENSLAND

1. JERRARD JA:   In this matter I have read the reasons for judgment and orders proposed by Muir J, and agree with those reasons and orders.  I add that the applicants’ involvement in that offence of trafficking in ephedrine was discovered in late 2000 and early 2001, when officers of the Crime and Misconduct Commission were conducting an investigation into drug activity on the Gold Coast.  During that time Mr Donnelly was identified as a source of ephedrine, and the investigators were informed that the applicants were importing kilogram quantities of that drug from a Canadian supplier, sent to backpackers on the Gold Coast, and then delivered to Mr Donnelly.

2. One of those deliveries was intercepted on 28 August 2001, and found to contain a calculated weight of ephedrine of 2416.9 grams, or 2.5 kilos. When Mr Donnelly turned up at a house to which the package had been delivered, he was spoken to by police, but denied any knowledge or involvement in that importation. He was, however, implicated by another offender, who informed the police that Mr Donnelly and his partner organised the importation of ephedrine which they sold at $30,000 per kilo.

3. Financial investigations revealed that international telegraphic transfers of money to the Canadian supplier of ephedrine had come from both Mr Donnelly and Mr Corbic’s accounts. The total amount of outgoings for the period November 2000 to October 2001 was $111,174.62. The prosecution informed the learned sentencing judge, without challenge, that that related to the purchase over that period of 40 kg of ephedrine at (Canadian) $2,200 per kg. In a later interview Mr Donnelly admitted buying kilograms of ephedrine in two or three kilogram lots, on some 10 to 15 occasions, and which was sold and distributed in Australia through others, such as offenders named Pfaff and Benson. During the period covered by the trafficking charges cash deposits of $10,300 were made to an account of Mr Donnelly, and he purchased a house for $310,000; of which amount $110,700 could not be accounted for from legitimate sources. In that same period, cash deposits of $125,000 were made to accounts held by Mr Corbic, and he too bought a house, in respect of which $67,980 of the funds applied to its purchase could not be accounted for legitimately. That made an unaccounted income of $120,000 for Donnelly and $193,000 for Mr Corbic.

4. The Crown Prosecutor informed the sentencing judge, without contradiction, that the ephedrine imported was capable of use as a pre-curser drug for the production of methylamphetamine, and that approximately 28 kg of the latter drug could have been manufactured from those 40 kilos of ephedrine. The applicants were therefore responsible, the prosecution submitted, for the distribution of a huge amount of methylamphetamine onto the drug market. They had obviously considerably benefited from that.

5. While the applicants certainly trafficked in the drug ephedrine, they did not actually succeed in doing so with the drug ecstasy. They were charged with trafficking in the latter drug on the basis of intercepted telephone conversations which revealed that the applicants were setting up, or attempting to set up, supply lines of that drug, and to that end were negotiating prices, and attempting to fill orders that they were negotiating with potential customers. They received samples of ecstasy tablets, spoke together in June 2002 of being able to sell 5,000 ecstasy tablets per week, and envisaged increasing that to 20,000 per week.

6. Both applicants had pleaded guilty to trafficking in ephedrine, and had obviously substantially profited from bringing that drug into Australia and distributing it. Its use was for the purpose of methylamphetamine production. They had moved to attempting to participate in trafficking in ecstasy, and also to attempting to involve themselves in the production and distribution of methylamphetamine. Neither was a user of drugs, and their motives were purely commercial.

7. The applicants made considerable but unsuccessful efforts firstly to obtain ecstasy for resale, in large quantities; and secondly, to obtain or help produce methylamphetamine for resale, in large quantities. They did make a significant profit from distributing imported ephedrine. They were inefficient at obtaining and distributing MDMA or methylamphetamine in significant quantities, but they tried.

8. They were on bail for nearly three and a half years, and neither re-offended during that period, and both were employed. The learned judge did refer to those matters, and to the co-operation by each in the administration of justice, and to the other personal matters relevant to each applicant. Although the judge certainly took those matters into account, I respectfully consider that the sentence imposed did not adequately reflect the period without re-offending in the community, during which it was apparently clear that each applicant would ultimately plead guilty. Insufficient weight was given to that factor.

9. I agree with the orders proposed by Muir J.

10. KEANE JA: I agree with the reasons of Jerrard JA and Muir J and with the orders proposed by Muir J.

11. MUIR J: The applicants pleaded guilty to one count of trafficking in the dangerous 3, 4-Methylenedioxymethamphetamine (“MDMA”) between November 2000 and January 2003 (count 1), two counts of unlawful supply of that drug (counts 2 and 4), one count of trafficking in the dangerous drug ephedrine between November 2000 and January 2003 (count 5), one count of unlawful supply of methylamphetamine (count 6) and one count of production of methylamphetamine (count 7).  The applicant Donnelly also pleaded guilty to one count of supply of MDMA (count 3).  

12. The sentences imposed, all to be served concurrently, were:

Count 1 – eight years with a recommendation for eligibility for post-prison community-based release after two years eight months

Count 2 – two and a half years’ imprisonment

Each of counts 3 and 4 – two years’ imprisonment

Count 5 – five years’ imprisonment

Each of counts 6 and 7 – three years’ imprisonment

13. The applicants apply for leave to appeal against sentence on the grounds that the sentences imposed were manifestly excessive. They also rely on a number of other grounds which are dealt with below.

The Sentencing Remarks

14. In her sentencing remarks the learned sentencing judge observed that the evidence, largely the product of extensive telephone intercepts and police surveillance, disclosed that the applicants “were operating at a wholesale level” in respect of MDMA. In that regard, the applicants indicated in telephone calls that they were in a position to sell 5,000 MDMA tablets per week with the possibility of upgrading to 20,000 tablets per week. They had procured the testing of tablets sourced by them in order to determine their quality and had participated in many discussions over the telephone concerning the quality and attributes of various MDMA tablets.

15. Her Honour found that trafficking in MDMA had occurred between 6 November 2000 and 5 January 2003, that the applicants were taking steps to set up large-scale business in trafficking in MDMA and had procured samples for that purpose.

16. Donnelly, who was arrested in January 2003, admitted to importing between two and three kilograms of ephedrine from Canada on ten to fifteen occasions. When Corbic’s house was searched in that month police found documents in respect of overseas telegraphic transfers of sums ranging between $20,000 and $30,000 per kilogram used in the purchase of those quantities of ephedrine.

17. The sentencing judge took into account early pleas of guilty and accepted that both applicants had shown remorse.

     Other relevant facts

18. In his submissions to the learned sentencing judge, the learned Crown prosecutor did not submit that the applicants had managed to establish a business of trafficking in MDMA or that parcels of MDMA had actually been sold by the applicants. Her Honour made no such findings. The prosecutor did submit, however, that the evidence revealed that the applicants had imported the ephedrine referred to earlier and resold it for a “very considerable profit” in the knowledge that it was to be used to produce MDMA. The sentencing judge was informed that: during the trafficking period cash deposits of $10,300 were made into Donnelly’s bank account; he had purchased a house for over $310,000 of which $110,700 could not be traced to a legitimate source; cash deposits totalling $125,000 had been paid into accounts in Corbic’s name and that Corbic had purchased a house for $300,000, of which $67,980 could not be traced to a legitimate source. The matters the subject of counts 2 and 4 constitute further particulars of count 1.

19. Count 2 is based on evidence of conversations between the applicants between 1 and 12 June 2002 which reveal that the applicants were attempting to acquire large quantities of MDMA tablets for the purposes of re-supply. In particular, they discussed obtaining 5,000 MDMA tablets for the purposes of supply and the quality of samples of such tablets. In that period, Donnelly obtained one MDMA tablet which he gave to Corbic who provided it to another person who in turn supplied it to the ultimate user.

20. Count 3 concerns the supply by Donnelly to a person co-operating with police officers of ecstasy tablets containing a total of 4.798 grams of MDMA for a price of $2,000.

21. The facts relied on by the prosecutor in relation to Count 4 included an intercepted conversation on 6 December 2002 which evidenced that the applicants had arranged to purchase 900 MDMA tablets and that another person had obtained $14,500 to facilitate the transaction. The transaction was interrupted by the applicants’ arrest but before that, some samples of tablets had been dealt with by the applicants.

22. Count 5 concerns the large-scale importation of ephedrine to which reference was made earlier. The applicants’ bank accounts evidence the purchase of 40 kilograms of ephedrine for $2,200 Canadian per kg between November 2000 and October 2001.

23. The evidence in respect of count 6 was provided by intercepted telephone calls, in which each applicant participated, relating to the procurement of a pound of methylamphetamine which the applicants hoped to sell for $3,300 per ounce to purchasers who wanted three pounds of high quality drug. The transaction did not proceed to fruition due to difficulties in agreeing a price and, perhaps, because of doubts as to the quality of the drug.

24. Count 7 concerns attempts by the applicants to obtain ephedrine from a location other than Canada for sale for the purpose of manufacturing MDMA. The accused, as well as attempting to locate Ephedrine for supply, did in fact supply samples of material they held out as pseudo-ephedrine or ephedrine for the purpose of producing methylamphetamine. Nine and a half grams of powder was supplied by the applicants on 25 November 2002 and a further quantity of 58.4 grams was supplied on 26 November 2002. There was a further supply of an unknown quantity of powder shortly thereafter

25. None of the powder analysed by police was found to contain ephedrine or any other dangerous drug but a number of conversations in which the applicants participated evidence attempts by them to obtain and supply ephedrine for the purposes of manufacturing MDMA.

26. None of the facts placed before the sentencing judge were disputed by the applicants’ counsel.

Antecedents

27. At the time of sentencing Donnelly was a 44 year old married man with two young children. He had a minor prior criminal history which is of no relevance for present purposes. He had a good employment history. At the time of sentencing he owned his own scaffolding firm which had 13 employees.

28. Corbic was 34 when sentenced. He also had a good work history and no relevant criminal history. For about three years prior to sentencing he had been employed in the area of information technology.

The submissions at first instance

29. The applicants were separately represented. Corbic’s counsel made his submissions first and Donnelly’s counsel implicitly adopted them. The principal argument in relation to count 1 was that the amount of cash located and traced, and the quantity of MDMA located and proved to have been dealt in, did not establish any substantial trafficking.

30. Both counsel stressed the benefits, in a relatively complex factual case, of an early plea of guilty. Corbic’s counsel accepted that a head sentence of 8 years for count 1 was appropriate but urged recommendation of post-prison community-based release after two to two and a half years. Donnelly’s counsel expressly accepted that a head sentence of eight years was appropriate. Both counsel accepted that the sentences imposed should be the same.

The applicants’ submissions

31. The applicants contended that the sentencing judge erred in concluding that the level of the applicants’ dealing in drugs was much greater than that established by the evidence. But the submissions do not attempt to cast doubt on the records of telephone conversations which formed much of the basis for the prosecutor’s submissions and the sentencing judge’s conclusions. Moreover, as the submissions themselves acknowledge, the sentencing judge did not proceed on any erroneous basis as to actual supplies.

32. Reliance was placed on the evidence that despite extensive surveillance and the monitoring of telephone calls, the prosecution was able to establish only very few actual dealings in drugs and the acquisition of relatively small sums of money for which the applicants were unable to account.

33. The conclusion to be drawn from the evidence, it is submitted, is that the applicants were inflating their involvement in drugs and their ability to supply large quantities of drugs out of self-aggrandisement and in order to persuade prospective suppliers to sell to the applicants at a lower price.

34. Referring to a number of comparable sentences, the applicants submit that they have demonstrated the head sentence to be excessive and the parole recommendation to be inadequate. In the latter regard, it is argued that insufficient weight was given to the early plea, lack of prior relevant criminal history, the applicants’ remorse and their good conduct whilst on bail.

The basis on which the sentence for count 1 was imposed

35. The sentence in respect of count 1 was imposed on the basis that the applicants were operating on a wholesale level and that the applicants were “undertaking steps to set up a large scale business” of supplying MDMA. The sentence was probably intended also to reflect the overall criminality of the applicants’ offending behaviour.

The known extent of the applicants’ trafficking in MDMA

36. By their pleas of guilty the applicants admitted trafficking in MDMA between 16 November 2000 and 15 January 2003 but the proven supply transactions, as can be seen from the above narrative in relation to counts 2 and 4, were very modest. The evidence of the applicants’ financial dealings does not provide the respondent’s case with much assistance: any unexplained moneys are more likely to have resulted from the applicants’ extensive trafficking in ephedrine. That was the conclusion reached by the sentencing judge.

Consideration of comparable sentences

37. MDMA is a schedule 2 drug. The maximum penalty for trafficking in it is 20 years.

38. In R v Rizk[1] the Court, referring to the level of sentence imposed on a co-offender of the applicant for trafficking in Schedule 1 and Schedule 2 drugs observed:

“We took the view that the appropriate sentencing range for large scale trafficking in such drugs was 10 to 12 years and that Raciti’s offending was at the upper end of that range.

There are several important points of difference between the course and quality of Raciti’s offending and that of the applicant here. In the case of Raciti, the trafficking involved Schedule 1 drugs, whereas here it was confined to Schedule 2 drugs, for which we would ordinarily assume a range of 8 to 10 years imprisonment.”

39. In Rizk, the applicant was 25 with no previous criminal history. His offending was on a substantial scale and motivated by personal gain but was only about two and a half months in duration. When arrested the applicant had in his possession 5,063 MDMA tablets containing 445.188 grams of pure ecstasy for which he had paid $87,500. His sentence of eight years with a recommendation that he be considered for parole after three years was reduced to six years with a recommendation after two years.

40. Van Ryan, the person who supplied the tablets to Rizk, received the same sentence for trafficking as Rizk.^[2] Van Ryan, like Rizk, was an intermediary. Another co-accused also received the same sentence for supplying MDMA. The application for leave to appeal against his sentence was dismissed.^[3]

Conclusion

41. An analysis of the evidence in respect of count 1 suggests that the applicants did not advance in any material way beyond planning an entree into a large-scale MDMA supply business. Nor does the evidence in that respect reveal a careful, calculated plan of action or the establishment of sources of supply capable of leading to the successful implementation of the applicants’ plans.

42. Each applicant had the benefit of an early plea, had demonstrated remorse and had no relevant criminal history. The sentencing judge’s approach was to give credit for these matters by a recommendation but that, in my view, was not sufficient, particularly when regard is had to the fact that neither applicant re-offended in the three and a half year period during which he was on bail. During that time each of them continued in his employment and supported his family.

43. Having regard to these considerations and the comparable sentences discussed earlier, I am of the view that the sentence for count 1 was manifestly excessive.

44. I would allow the application for leave to appeal and the appeal, set aside the sentence in respect of count 1 and substitute for it a sentence of six years. I would also vary the sentences by fixing the applicants’ parole eligibility date at 11 July 2008.