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Court of Criminal Appeal 15 March 2024

Khanat v R (Cth)

[2024] NSWCCA 41

Fraud & dishonesty
CRIME APPEALS APPEAL AGAINST SENTENCE

Citation: Khanat v R (Cth) [2024] NSWCCA 41
Court: NSW Court of Criminal Appeal
Date: 15 March 2024
Judges: Wilson J (dissenting); Ierace J (agreeing with Cavanagh J); Cavanagh J (majority)

Background

The applicant pleaded guilty in the District Court at Parramatta to possessing tobacco products while reckless as to whether they were imported, with intent to defraud the revenue, contrary to s 233BABAD(2B) of the Customs Act 1901 (Cth). Police searched his residence in July 2022 and found over 29,000 illicit cigarettes and approximately 2,187 kilograms of tobacco products. The customs duty avoided totalled more than $3.5 million.

The sentencing judge imposed a term of imprisonment of one year and ten months, with the applicant to be released on a recognizance after twelve months. The judge then considered whether that sentence should be served by way of an Intensive Corrections Order (ICO), a community-based custodial alternative available under s 7 of the Crimes (Sentencing Procedure) Act 1999 (NSW) for sentences of less than two years.

The sentencing judge found that the applicant's risk of reoffending was low and that community safety would be best served by the applicant serving his sentence in the community. However, the judge declined to order an ICO, concluding that general deterrence, given the seriousness and prevalence of the offending, required a period of full-time custody. The applicant sought leave to appeal that decision.

  • Whether a positive finding that community safety is best served by the offender serving his sentence in the community mandates or requires a sentencing court to impose an ICO under s 66 of the Crimes (Sentencing Procedure) Act 1999 (NSW).
  • Whether the sentencing judge erred by subordinating the paramount consideration of community safety to general deterrence when declining to order an ICO.

Decision

On whether a favourable community safety finding mandates an ICO: The Court was unanimous on this point. A positive finding that an offender's risk of reoffending is best addressed in the community does not automatically require the sentencing court to impose an ICO. The assessment under s 66 remains discretionary and must be conducted in accordance with general sentencing principles. The High Court's decision in Stanley v Director of Public Prosecutions (NSW) [2023] HCA 3 does not convert that discretion into an obligation.

On whether the sentencing judge impermissibly subordinated community safety to general deterrence: Here the Court divided. The majority (Cavanagh J, with Ierace J agreeing) found that the sentencing judge had erred. After making a favourable finding on community safety, the judge treated that consideration as effectively displaced by general deterrence. Section 66 requires community safety to be given paramountcy, and the judge's approach was inconsistent with that requirement as explained in Stanley. The majority concluded the sentencing judge plainly viewed an ICO as too lenient, which was not a permissible basis for declining to make one in the circumstances.

Wilson J dissented. Her Honour took the view that the sentencing judge was entitled, in recognising the gravity of the offending and the need for a deterrent sentence as required by s 66(3), to decline to direct that the sentence be served by way of an ICO. In her Honour's view, no error was established.

Resentencing: The majority allowed the appeal, quashed the original sentence, and resentenced the applicant. Cavanagh J noted that the resentencing was not in a vacuum: the applicant had already served nine months in custody, and he should not be worse off as a result of bringing the appeal.

Orders Made

  • Leave to appeal granted.
  • Appeal against sentence upheld.
  • Original sentence imposed 29 June 2023 quashed.
  • Applicant resentenced to imprisonment for one year and nine months, backdated to commence 22 June 2023, expiring 21 March 2025.
  • Pursuant to s 20(1)(b) of the Crimes Act 1914 (Cth), the applicant to be released on 21 March 2024, subject to a recognizance of $500 (without security) for two years from date of release, on the following conditions:
  • Be of good behaviour from the date of release.
  • Be subject to supervision by Community Corrections.
  • Obey all reasonable directions of Community Corrections.
  • Not travel overseas or interstate without the approval of Community Corrections.
  • Net effect: nine months served in custody, with release on 21 March 2024 followed by two years on recognizance.

Key Takeaways

  • A favourable finding on community safety under s 66(2) of the Crimes (Sentencing Procedure) Act 1999 (NSW) does not mandate or automatically require an ICO. The discretion to impose an ICO remains, and is governed by the full statutory framework and general sentencing principles.

  • Under Stanley, community safety is the paramount consideration in the ICO assessment, and the majority held that a sentencing court cannot effectively displace that paramountcy by treating general deterrence as decisive in favour of full-time custody where the community safety finding favours the offender.

  • The majority reasoning makes clear that viewing an ICO as "too lenient" by reference to general deterrence alone is not a sufficient basis for refusing to make one where community safety has been assessed favourably, without proper engagement with the paramountcy of that consideration.

  • Wilson J's dissent signals that the proper application of Stanley in cases involving serious, prevalent offending remains a live and contested question, particularly regarding the role of s 66(3) in preserving weight for deterrence.

  • In resentencing following a successful appeal, the Court of Criminal Appeal confirmed that time already served in custody and the principle that an appellant should not be worse off for appealing are both relevant considerations.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1914 (Cth), s 20
- Crimes Act 1900 (NSW), s 52A(3)
- Criminal Appeal Act 1912 (NSW), s 6
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 7, 66
- Customs Act 1901 (Cth), s 233BABAD(2B)
- Firearms Act 1996 (NSW), s 7(1)

Key Cases:
- Stanley v Director of Public Prosecutions (NSW) (2023) 299 A Crim R 391; [2023] HCA 3 (central authority)
- AM v R [2024] NSWCCA 26
- Mandranis v The Queen (2021) 289 A Crim R 260
- Tonga v R [2023] NSWCCA 120
- DL v The Queen (2018) 265 CLR 215
- Hoare v The Queen (1989) 167 CLR 348
- Veen v The Queen (No 2) (1988) 164 CLR 465
- Quinn v Director of Public Prosecutions (Cth) [2021] NSWCA 294
- R v Whyte (2002) 55 NSWLR 252
- Casella v The Queen [2019] NSWCCA 201