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District Court 6 May 2016

R v Gaetano VITALE; R v Mark SCALIA

[2016] NSWDC 223

Drugs
ADMIXTURE RULE PARTICIPATING IN A CRIMINAL GROUP

Citation: R v Gaetano VITALE; R v Mark SCALIA [2016] NSWDC 223
Court: District Court of New South Wales
Date: 6 May 2016
Judge(s): Yehia SC DCJ

Background

Following a judge-alone trial, three related offenders were convicted of offences involving the clandestine manufacture of methylamphetamine at a semi-rural property in Bringelly, New South Wales, in June 2013. The primary offender was the manufacturer, while his father and cousin were convicted of knowingly taking part in the manufacture. Police executed a search warrant on 25 June 2013 and discovered an active drug laboratory in a garage, including a separating funnel containing a two-layered liquid, chemical containers, manufacturing equipment, and approximately 273 kilograms of waste product.

The proceedings dealt with the sentencing of two of the three offenders: the manufacturer and his cousin. The manufacturer also faced a separate fraud charge relating to the purchase of a luxury motor vehicle through a deceptive loan application. A third offender, the father, was not sentenced on the same day due to his need for cancer radiotherapy treatment.

At trial, the central factual dispute was not whether the offenders had engaged in manufacture of prohibited drugs but whether the quantity involved reached a commercial quantity (250 grams) or the higher threshold of a large commercial quantity. The admixture rule under section 4 of the Drug Misuse and Trafficking Act 1985 (NSW) was central to resolving the quantity question.

Legal Issues

  • Whether the total weight of the two-layered liquid in the separating funnel (1,075 grams) constituted a prohibited drug under the admixture rule in section 4 of the Drug Misuse and Trafficking Act 1985 (NSW)
  • What quantity of methylamphetamine could be found to have been manufactured to the requisite standard of proof
  • Whether each offender was motivated by financial gain, as an aggravating factor under sentencing law
  • Whether the offenders constituted a "criminal group" under section 93S of the Crimes Act 1900 (NSW), and whether each offender's participation in or direction of that group was established beyond reasonable doubt
  • What sentences were appropriate for the manufacture offences and, in one offender's case, the separate fraud offence, having regard to objective seriousness, subjective circumstances, and the utilitarian value of the partial guilty pleas

Decision

Issue 1: The admixture rule and quantity of prohibited drug

The court found that the two-layered liquid in the separating funnel was not entirely a prohibited drug for the purposes of section 4 of the Drug Misuse and Trafficking Act 1985 (NSW). The bottom layer was clearly waste product, and no evidence established the weight of the top layer, which contained methylamphetamine. Treating the full 1,075 grams as a prohibited drug was therefore not warranted (at [37]-[39]). The court also found that if it were wrong on that point, the offenders did not intend the manufacture of the total liquid as a prohibited drug, because the bottom layer was obviously waste (at [38]).

The court was satisfied, applying the admixture rule and the circumstantial evidence, that a quantity of not less than 250 grams of methylamphetamine was manufactured. The quantity was found to be closer to that commercial threshold than to the middle or upper end of the commercial quantity range, and the offence was placed below the midpoint of objective seriousness (at [42], [47]).

Issue 2: Financial gain as an aggravating factor

The court drew a sharp distinction between a circumstance taken into account as part of a circumstantial case at trial and an aggravating factor for sentencing purposes. A finding during the trial that financial reward was one strand in a chain of circumstantial reasoning did not bind the court to find financial gain proved beyond reasonable doubt as an aggravating factor at sentence (at [57]-[58]).

Applying that standard, the court found that the father's involvement was not motivated by financial gain. He had provided his premises at his son's request and played a limited role (at [66]-[67]). The cousin's primary purpose was found to be accessing free methylamphetamine to relieve chronic pain from a 2012 car accident, and financial gain was not established beyond reasonable doubt in his case (at [82]). By contrast, the manufacturer was found partly motivated by an intention to profit, given his deteriorating finances, reduced business income, substantial debts, and a fraudulent loan to purchase a $170,000 vehicle for his wife (at [91]-[98]). That finding operated as an aggravating factor, though moderated by the concurrent finding that he was also partly motivated by personal drug dependency (at [98]).

Issue 3: Criminal group liability

The court rejected the Crown's submission that membership in a group whose overall purpose is manufacture of methylamphetamine is itself sufficient to establish the element of "obtaining a material benefit" under section 93S of the Crimes Act 1900 (NSW). The material benefit must be something that accrues from the conduct constituting the serious indictable offence, not the conduct itself (at [115]). An intention to save money by manufacturing drugs for personal use, or to relieve pain, could constitute a material benefit (at [118]).

The court found that the manufacturer and his cousin each had a material benefit objective, because both were addicted to methylamphetamine and spending substantial sums on it weekly. Manufacturing the drug eliminated that expense (at [120]). The father, however, had no such objective, as there was no evidence he used methylamphetamine at all (at [119]). On that basis, the manufacturer, his cousin, and a third participant present at the garage constituted the required criminal group of three or more people. The manufacturer was found guilty of directing that group's activities under section 93T(4A), and the cousin was found guilty of participation under section 93T(1). The father was acquitted of participating in a criminal group (at [123]-[124]).

Issue 4: Sentencing outcomes

The court imposed a 20% discount on both offenders' sentences for the manufacture offences, to reflect the utilitarian value of the way the trial was conducted. Each offender had pleaded guilty to manufacturing a prohibited drug from the outset, admitted significant evidence under section 184 of the Evidence Act 1995 (NSW), and confined the trial to a single issue, substantially shortening the proceedings (at [107]). Special circumstances warranting variation of the statutory parole ratio were found in each case, given that each offender was serving their first term of imprisonment and required support to avoid relapse (at [174], [193]).

The manufacturer also received a 25% discount for his early guilty plea in the Local Court to the fraud offence (at [151]). The fraud offence was treated as discrete conduct warranting a measure of accumulation in the aggregate sentence, but the court had regard to the totality principle in determining the extent of that accumulation (at [150]).

Orders Made

Mark Scalia:
- Convicted of knowingly taking part in the manufacture of a prohibited drug (not less than a commercial quantity of methylamphetamine)
- Sentenced to imprisonment with a non-parole period of 21 months commencing 6 May 2016 and expiring 5 February 2018, with a balance of term of 21 months expiring 5 November 2019 (total term: 3 years 6 months)
- Convicted of participating in a criminal group; sentenced to 6 months imprisonment commencing 6 May 2016 and expiring 5 November 2016 (concurrent)
- Eligible for release on parole on 5 February 2018, subject to supervision by Probation and Parole

Gaetano Vitale:
- Convicted of manufacturing not less than a commercial quantity of methylamphetamine, directing the activities of a criminal group, and dishonestly obtaining a benefit by deception
- Sentenced to an aggregate term of 5 years imprisonment (non-parole period of 2 years 9 months commencing 16 October 2015 and expiring 15 July 2018; balance of term of 2 years 3 months expiring 15 October 2020)
- Eligible for release on parole on 15 July 2018, subject to supervision by Community Corrections
- The participating in a criminal group offence (sequence 3 on the section 166 certificate) was dismissed
- Trial exhibits ordered returned; drug destruction order vacated (drugs retained for pending proceedings)
- Non-publication orders made in respect of the sentence judgment and verdict judgment

Key Takeaways

  • The admixture rule in section 4 of the Drug Misuse and Trafficking Act 1985 (NSW) does not automatically make the entire weight of a multi-layered liquid a prohibited drug where one layer is demonstrably waste product and no evidence establishes the weight of the layer that actually contains methylamphetamine (at [37]-[39]).

  • A circumstance relied upon as one strand of a circumstantial case to establish guilt does not, without more, constitute a finding of that circumstance to the criminal standard for the purpose of establishing an aggravating factor at sentence. The court must separately assess whether the aggravating factor is proved beyond reasonable doubt on all the evidence, including evidence called on sentence (at [57]-[59]).

  • Under section 93S of the Crimes Act 1900 (NSW), the "material benefit" required to establish a criminal group must accrue from the conduct constituting the serious indictable offence. The court held that manufacturing drugs for personal use can satisfy that element where an offender saves the cost of purchasing them or uses them to obtain pain relief, but mere participation in a group that manufactures drugs does not of itself establish a material benefit objective (at [115]-[120]).

  • Where an offender's drug use constitutes a form of self-medication for chronic pain that has been resistant to prescribed treatment, that circumstance can reduce moral culpability and moderate the weight given to financial gain as a sentencing consideration, even where the offender knowingly took part in a commercial-quantity manufacture operation (at [202]-[203]).

  • The District Court applied a 20% sentencing discount to reflect the utilitarian value of a trial conducted by way of admissions under section 184 of the Evidence Act 1995 (NSW), with the sole contested issue being quantity. The court found that this approach saved equivalent time to a guilty plea to the commercial quantity charge and warranted a discount in that range, despite the matter proceeding to a contested trial (at [105]-[107]).

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW), s 93S, ss 93T, 192E(1)(b)
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 21A(2)(o)
- Drug Misuse and Trafficking Act 1985 (NSW), ss 4, 24(2)
- Evidence Act 1995 (NSW), s 184

Cases
- Dang v R [2013] NSWCCA 246
- Green v The Queen; Quinn v The Queen (2011) 244 CLR 462
- Hili v The Queen (2010) 242 CLR 520
- Muldrock v The Queen (2011) 244 CLR 120
- R v Todd (1982) 2 NSWLR 517
- R v Bolder; R v Zaphir [2008] NSWCCA 222
- Tsai Yu v R [2016] NSWCCA 73