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Court of Criminal Appeal 10 April 2003

R v Shane Norman Zerafa [2003] NSWCCA 101 revised - 15

[2003] NSWCCA 101

Also reported as 139 A Crim R 439
DrugsFraud & dishonesty
RESPONDENT FOUND IN POSSESSION OF CASH CONVICTED OF SERIOUS DRUG OFFENCES APPEAL ALLOWED.

Citation: R v Shane Norman Zerafa [2003] NSWCCA 101; (2003) 139 A Crim R 439
Court: NSW Court of Criminal Appeal
Date: 10 April 2003
Judge(s): Buddin J, Hidden J, Bell J

Background

The respondent had pleaded guilty in the District Court to two serious drug offences: knowingly taking part in the manufacture of methylamphetamine and supplying it, both contrary to the Drug Misuse and Trafficking Act 1985. The sentencing judge described the operation as ongoing and sophisticated, involving multiple buyers and substantial sums of money.

At the time of arrest, police executing a search warrant found six mobile phones, a Toyota Camry, and $13,500 in cash bundled in three distinct configurations. The District Court ordered forfeiture of the phones and the vehicle but declined to order forfeiture of the cash. The respondent had claimed the cash was the remaining balance of funds he had withdrawn from a bank to purchase a utility vehicle, though the sentencing judge expressly rejected that account.

The Director of Public Prosecutions appealed the refusal to forfeit the cash under s 92(4) of the Confiscation of Proceeds of Crime Act 1989 (the Act). The respondent appeared unrepresented before the Court of Criminal Appeal.

  • Whether the $13,500 in cash constituted "tainted property" within the meaning of s 4 of the Act.
  • Whether the statutory presumption under s 18(4)(a) of the Act applied, or whether the matter fell under s 18(4)(b), requiring the Crown to prove on the balance of probabilities that the property was used in connection with the commission of the offences.
  • Whether the primary judge erred in applying too stringent a test and in finding there was some evidence to rebut the presumption that the cash was connected to the drug offences.

Decision

Buddin J (with whom Hidden J and Bell J agreed) accepted the Crown's submissions that the primary judge had fallen into error. Despite rejecting the respondent's explanation for the cash and finding that the money was illegally or unlawfully obtained, the District Court had nonetheless declined to make the forfeiture order. The Court of Criminal Appeal found there was no proper evidentiary foundation for the primary judge's conclusion that some or all of the money may have been received prior to the offending period.

The Court of Criminal Appeal proceeded on the assumption that s 18(4)(b) was the operative provision, meaning the Crown needed to prove on the balance of probabilities that the property was used in connection with the offences. Even on that higher threshold, the Court found the Crown had met its burden, given the primary judge's own factual findings, including the rejection of the respondent's bank withdrawal explanation, the configuration of the notes, and the finding that the respondent's drug activities predated the period covered by the indictment.

The Court also accepted the Crown's submission that the primary judge had failed to apply the approach in R v Sultana, which bore similar facts. The cash in that case was found to represent "circulating capital" available for use in a drug business, an inference that was equally open on the facts here.

Orders Made

  • The Crown appeal was allowed.
  • The order made in the District Court was set aside.
  • An order was made that the respondent forfeit the sum of $13,500.

Key Takeaways

  • The Court of Criminal Appeal confirmed that where a sentencing court has already rejected an accused's innocent explanation for cash found at the time of arrest and found the money to be illegally obtained, there is ordinarily no proper basis to then decline a forfeiture order under the Act.
  • Under s 18(4) of the Confiscation of Proceeds of Crime Act 1989, possession of property at or immediately after the commission of a serious drug offence triggers either a mandatory presumption (if no contrary evidence exists) or a balance of probabilities test (if some contrary evidence is raised).
  • A finding that drug dealing predated the formal offending period in the indictment is a relevant factual matter in assessing whether cash in a defendant's possession constituted "circulating capital" connected to those offences.
  • Applying an insufficiently demanding test for the connection between cash and drug offences constitutes a legal error capable of correction on Crown appeal under s 92(4) of the Act.
  • The configuration and bundling of banknotes can be a legitimate factual basis for rejecting a claim that cash represented bank withdrawal proceeds, as the primary judge himself found here.

Legislation and Cases Referenced

Legislation:
- Confiscation of Proceeds of Crime Act 1989 (NSW), ss 4, 13, 18, 92(4)
- Drug Misuse and Trafficking Act 1985 (NSW), ss 24(1), 25(1)

Cases:
- DPP v King (2000) 49 NSWLR 729
- R v Steven Robert Devine [2001] TASSC 8
- R v Galek (1993) 70 A Crim R 252
- R v Hadad (1989) 16 NSWLR 476
- R v Sultana (1992) 74 A Crim R 27