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District Court 16 December 2022

R v Lipovac

[2022] NSWDC 649

DrugsFraud & dishonesty
CRIME DRUG OFFENCES COMMONWEALTH OFFENCES MONEY LAUNDERING

Citation: R v Lipovac [2022] NSWDC 649
Court: District Court of New South Wales
Date: 16 December 2022
Judge(s): Scotting DCJ

Background

The offender, a self-employed plumber, pleaded guilty to two Commonwealth offences: attempting to possess a commercial quantity of MDMA (contrary to s 307.5(1) of the Criminal Code Act 1995 (Cth)) and dealing with money suspected of being proceeds of crime (contrary to s 400.4(1)). He also asked the court to take a further offence into account under a s 16BA schedule.

The drug offence arose from a large-scale importation operation. In March 2020, a 42-tonne excavator arrived in Brisbane from the United Kingdom. Australian Border Force and the AFP discovered 226 plastic bags containing approximately 448 kilograms of MDMA (gross weight) concealed within voids in the excavator's boom. The AFP conducted a controlled delivery and mounted a surveillance operation. In May 2020, the offender was observed at a Blacktown construction site assisting another man, Mr Maaz, in attempting to cut open the excavator boom to retrieve the drugs. They were unsuccessful.

The proceeds of crime charge related to $799,400 in cash found at the offender's home during a search warrant executed in December 2020. The cash was heat-sealed in bundles and labelled with the offender's encrypted communications handle, "Froggy." The AFP had identified the offender as a user of the AN0M encrypted communication platform during Operation Ironside.

Legal Issues

  • What role did the offender play in the attempted possession of the MDMA, and what did he know about the quantity and identity of the drugs?
  • Whether disputed recorded conversations established that the offender was financially involved in the importation or held a superior position in the syndicate hierarchy to Mr Maaz.
  • What weight should be given to the offender's claim of non-exculpatory duress arising from threats by an outlaw motorcycle gang (OMCG) to recover his deceased brother's debt?
  • How the offender's mental health conditions, background, prospects of rehabilitation, and early guilty plea affected the appropriate sentence under Part IB of the Crimes Act 1914 (Cth).

Decision

Issue 1: The offender's role and knowledge

Scotting DCJ found that the offender played a relatively minor but essential role as a labourer in the attempt to possess the drugs, with involvement well below that of Mr Maaz (at [87]-[90]). There was no surveillance or documentary evidence of the offender's involvement before 18 May 2020, and his participation consisted primarily of cutting into the excavator boom on direction from others (at [87]). The court was satisfied that the offender knew the quantity was substantial and had significant value, but was not satisfied beyond reasonable doubt that he knew the actual quantity or the identity of the drug (at [89]).

Issue 2: Disputed fact findings

The court resolved four disputed areas in favour of the offender. It was not satisfied beyond reasonable doubt that recorded conversations established that the offender was financially interested in the importation (at [28]), that he knew the gross weight of the drugs was approximately 448 kilograms (at [32]), that he had specific knowledge of the drug's identity or awareness of future shipments (at [33]), or that encrypted communications evidence placed him in a superior position in the hierarchy to Mr Maaz (at [49]). The audio recordings were faint, with significant portions inaudible, making the prosecution's inferences on those points unsustainable to the required standard.

Issue 3: Duress, mental health, and moral culpability

The court accepted, on the balance of probabilities, that the offender became involved partly as a result of non-exculpatory duress: threats from an OMCG to collect his late brother's debt and to harm his family if he did not comply (at [93]). The court also accepted that the offender suffered from prolonged grief disorder, anxiety, and depression arising from his brother's death and his difficult upbringing, and that these conditions had a causal connection to his offending, reducing his moral culpability (at [101]). Because of his mental condition and the duress he faced, the weight given to general deterrence was reduced, as the offender was an inappropriate vehicle for it (at [99]).

Issue 4: Plea, rehabilitation, and sentence

The court applied a 25 percent discount for the offender's early guilty plea, which reflected genuine acceptance of responsibility and had high utilitarian value (at [6]). The need for specific deterrence was significantly reduced given the offender's good insight, drug abstinence since arrest, engagement with psychological treatment, low risk of reoffending, and excellent prospects of rehabilitation (at [97]-[103]). A total effective sentence of 7 years' imprisonment was imposed, with a non-parole period of 4 years backdated to 9 December 2020 (at [109]-[112]).

Orders Made

  • The offender is convicted.
  • For the s 400.4(1) offence (and taking into account the s 16BA schedule matter): 3 years' imprisonment, commencing 9 December 2020, expiring 8 December 2023.
  • For the s 307.5(1) offence: 6 years' imprisonment, commencing 9 December 2021, expiring 8 December 2027.
  • Single non-parole period of 4 years fixed pursuant to s 19AB(1) Crimes Act 1914 (Cth), commencing 9 December 2020, expiring 8 December 2024.
  • Total effective term: 7 years' imprisonment with a 4-year non-parole period.

Key Takeaways

  • The District Court confirmed that, for federal drug offences, a court must impose a sentence of severity appropriate in all the circumstances under s 16A(1) of the Crimes Act 1914 (Cth), taking into account all relevant matters in s 16A(2), with common law principles also applying (at [5]).

  • Where disputed facts are adverse to the offender, the sentencing court must be satisfied of them beyond reasonable doubt; facts favourable to the offender need only be established on the balance of probabilities, following R v Olbrich (1999) 199 CLR 270 (at [3]). Here, the court refused to draw inferences from faint, partly inaudible recordings without sufficient contextual support.

  • Non-exculpatory duress, while not a complete defence, can reduce an offender's moral culpability and the weight given to general deterrence, particularly where the offender was drawn into offending through threats connected to a family member's debt to an organised criminal group (at [93], [99]).

  • A causal connection between diagnosed mental health conditions, including prolonged grief disorder and major depressive disorder, and the commission of the offences was accepted as a mitigating factor reducing moral culpability (at [101]).

  • Characterising an offender's role accurately within a syndicate hierarchy matters significantly to the sentence outcome: the court's finding that the offender was a labourer directed by others, rather than a senior participant, was central to the leniency ultimately afforded despite the very large quantity of drugs involved (at [87]-[90]).

Legislation and Cases Referenced

Legislation
- Crimes Act 1914 (Cth)
- Criminal Code Act 1995 (Cth)

Cases
- Bugmy v The Queen (1990) 169 CLR 525
- Cameron v The Queen (2002) 209 CLR 339
- Deakin v The Queen (1984) 58 ALJR 367
- Hili v The Queen (2010) 242 CLR 520
- Johnson v The Queen (2004) 78 ALJR 616
- Power v The Queen (1974) 131 CLR 623
- R v El Karhani (1990) 21 NSWLR 370
- R v Nassir [2020] NSWCCA 88
- R v Nguyen (2010) 205 A Crim R 106
- R v Olbrich (1999) 199 CLR 270