Citation: R v Wu [2020] NSWDC 342
Court: District Court of New South Wales
Date: 2 July 2020
Judge: Mahony SC DCJ
Background
The offender, a 30-year-old Chinese national residing in Australia, was found inside a Kennards Storage unit in Ultimo on 2 May 2019 by Australian Border Force officers. The unit contained 368,480 sticks of imported cigarettes across 36 brands and 1.18 kilograms of loose tobacco, none of which complied with Australian packaging standards. The total revenue evaded on those goods was approximately $302,611.
The offender was the sole director of a tobacco retail business in Parramatta, and message threads on his mobile phone contained numerous references to tobacco sales and purchases. His wife had attended the storage facility that same morning to pay overdue fees in cash. A subsequent search of the business premises uncovered additional non-compliant tobacco products consistent with those found in the storage unit.
The offender pleaded guilty in the Local Court to possessing goods knowing they were imported with intent to defraud the revenue, contrary to section 233BABAD(2) of the Customs Act 1901 (Cth). He described his role as delivering illegal tobacco for an employer, for which he was paid $10 per carton, at a time when his wife was pregnant and he felt significant financial pressure.
Legal Issues
- What sentence was appropriate for a Commonwealth offence of possessing tobacco products knowing they were imported to defraud the revenue, carrying a maximum of 10 years imprisonment?
- Whether the sentence should be served by way of an Intensive Correction Order (ICO) rather than full-time custody, having regard to the offender's prospects of rehabilitation and the community safety considerations under the Crimes (Sentencing Procedure) Act 1999 (CSPA).
- What weight should be given to the guilty plea, the offender's personal circumstances, and his comparative role in the offending?
Decision
The court accepted that while the offending was serious, involving a substantial quantity of tobacco and a significant revenue shortfall, the offender occupied a lower-level role within a larger operation. He was paid a modest sum per delivery and described himself as acting under the direction of an employer. The court treated this characterisation as relevant to the assessment of his moral culpability.
The court took into account significant mitigating factors. These included the early guilty plea, genuine remorse as evidenced by letters from the offender and supporting character references, the offender's good prospects for rehabilitation, and the collateral consequences of the conviction on his ability to maintain or obtain membership as a chartered accountant with CPA Australia.
On the question of the mode of serving the sentence, the court applied section 66 of the CSPA, which requires community safety to be treated as a paramount consideration when determining whether an ICO is appropriate. The court found that the offender presented a low risk of reoffending and that an ICO, combined with supervision and community service work, was the disposition most likely to promote rehabilitation.
A two-year term of imprisonment was imposed, to be served by way of an ICO rather than full-time custody, with 300 hours of community service work as an additional condition.
Orders Made
- The offender was convicted of possessing tobacco products (368,480 sticks and 1.18 kg of loose tobacco) knowing they were imported with intent to defraud the revenue, contrary to section 233BABAD(2) of the Customs Act 1901 (Cth).
- A term of imprisonment of 2 years was imposed, commencing 2 July 2020.
- Pursuant to section 7(1) of the CSPA, the sentence is to be served by way of an Intensive Correction Order (ICO).
- The offender must report to the Community Corrections Office at Parramatta within 7 days.
- Standard conditions apply: no further offending and submission to supervision by Community Corrections.
- Additional condition: 300 hours of community service work.
- The court was satisfied that no Supervised Amendment Report (SAR) was required under section 17D(1A) of the CSPA.
- Non-compliance may result in warnings, more stringent conditions, or revocation of the ICO, with potential return to full-time custody.
Key Takeaways
- A conviction under section 233BABAD(2) of the Customs Act 1901 (Cth) requires proof that the offender possessed imported goods knowing they were imported with intent to defraud the revenue; the maximum penalty is 10 years imprisonment and/or a substantial fine.
- The District Court treated the offender's comparatively minor role (delivery work at $10 per carton) and financial vulnerability as relevant to moral culpability, even where the quantity of goods and revenue evaded were significant.
- Under section 66 of the CSPA, community safety operates as a paramount consideration in the ICO analysis, but the court found that this consideration is closely linked to rehabilitation and is often best served by supervised community-based orders rather than full-time custody.
- Collateral consequences of a criminal conviction, including the potential loss of professional membership and associated career impacts, formed part of the sentencing calculus as factors bearing on the overall burden of the sentence.
- Where an offender demonstrates a low risk of reoffending, genuine remorse, and strong rehabilitation prospects, an ICO with community service conditions may be available even for Commonwealth revenue fraud offences carrying substantial maximum penalties.
Legislation and Cases Referenced
Legislation:
- Customs Act 1901 (Cth), s 233BABAD(2) and (5)
- Crimes Act 1914 (Cth)
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 7(1), 17D(1A), 66
- Evidence Act 1995
Cases:
- Hussein v R [2016] VSCA 212
- R v Pham (2015) 256 CLR 550; [2015] HCA 39
- R v Pullen [2018] NSWCCA 264
- R v Saleh [2015] NSWCCA 399
- R v Tieu [2019] NSWDC 485
- R v Zerafa (2013) 235 A Crim R 265; [2013] NSWCCA 222
- R v Zhang [2017] SASCFC 5
- Weininger v R (2003) 212 CLR 629; [2003] HCA 14