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In this significant case, Applegarth J considered whether the defendant was a member of a “criminal organisation” as defined in s 161O of the Penalties and Sentences Act 1992. His Honour’s judgment is notable for its consideration of when an individual is a member of a “group” for the purposes of the definition of “criminal organisation”. In particular, his Honour determined that the mere fact that two individuals within an alleged criminal organisation were in a commercial relationship of buyer and seller, did not, without more, constitute the buyer and seller, together with their respective employees, as a group.
2 October 2020
The defendant, Hill, was charged with one count of trafficking in dangerous drugs with circumstance of aggravation (serious organised crime). . He pleaded guilty to trafficking in dangerous drugs, but not guilty in respect of the circumstance of aggravation. . At issue in this judge-alone trial was whether or not Hill, his suppliers, and a Toll Operations Manager he recruited to arrange for the consignment of the drugs comprised a “criminal organisation” within the meaning of Pt 9D of the Penalties and Sentences Act 1992 (“the Act”). –.
“[C]riminal organisation” is defined in s 161O(1) of the Act as:
“ … 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.”
Effectively, Hill was engaged in the wholesaling of various drugs. Upon receiving an order from his clients, he would send the order and the relevant address to Kanj, his Sydney-based supplier. . Kanj would then either send the parcels of drugs to the clients via registered post or, later, the Toll network. . Kanj employed Dharan to assist with filling Hill’s orders by weighing, packing and dispatching the drugs. . Upon starting to use the Toll network, Hill engaged Payet, the Toll Operations Manager, for the purpose of using the Toll network to transport drugs and cash between himself and Kanj. .
The critical threshold issue for consideration was the meaning of “group” in the context of s 161O of the Act. . Applegarth J found that “group”, as used in s 161O, should be given its ordinary meaning. . The statutory context indicates that the word “group” can apply to an informally-arranged group of associated criminals who lack the features of a formal organisation, structure or processes and procedure which might be associated with a legitimate business arrangement or group. . Further, the word “group” “must be read in the context of serious criminal activity and with regards to the terms of s 161O(2)”. . Ultimately, his Honour found that “the word ‘group’ in its statutory context connotes some association of persons to form a ‘collective unity’”. .
Applegarth J identified that the presence of a relationship of buyer and seller between Hill and Kanj was relevant to determining whether or not they comprised a “group”. . In some circumstances, such as where one party has control over the operations, there is a sharing of profits or there is some other common commitment to the organisation arising from exclusivity of dealings, individuals in a buyer-seller relationship could comprise a “group”. –. Conversely, the conflict of interests between buyer and seller could point towards individuals not being in a group. .
While s 161O2)(a)(ii) provides that the lack of external indicia of being a group does not preclude individuals from comprising a group, the presence of those indicia would be a relevant consideration to making the positive finding that they were a group. . Similarly, individuals may comprise a group even where they derive different forms of benefit from the criminal activity (e.g. they need not receive respective profit shares). .
As applied to the facts of this case, Applegarth J found that the interests of Hill, the buyer, and Kanj, the seller, “did not align”. . Although they had some common interest in effecting the sale transactions, 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”. . In this case, it was not sufficient on its own. .
The long-term pattern of conduct between Hill and Kanj, giving rise to a close relationship and a level of trust, was also relied upon by the prosecution as indicating that they were members of a “group”. .
Applegarth J was not persuaded by this argument, finding that the duration of a relationship was not enough to transform it from a buyer-seller relationship. . Similarly, the scale of the operation, mutual interest in avoiding police protection and agreement of procedures for the carrying out of the transactions were insufficient to prove that Hill and Kanj were a group. –.
Ultimately, Applegarth J found that the four individuals alleged to be a member of the group “acted as individuals in different aspects of sale transactions, in pursuing their own interests or that of his employer”. . Although they were engaged in “the unified endeavour to effect sales transactions”, the best characterisation of their relationship is that between a buyer and seller; they did not constitute a “collective unity” sufficient to constitute a group for the purposes of s 161O. –.
In the event, Applegarth J acquitted Hill in respect of the circumstance of aggravation.