Li, Wing Cheong v R

Judiciary Act (Cth) - s 78B Criminal Code (Cth) - ss 135, 400.3(1), 400.3(4) LEGISLATION CITED: Evidence Act 1995 - ss 59(1), 135, 137 Jury Act 1977 - s 53A, 73A, Part 9 Criminal Appeal Rules - Rule 4

Papakosmas v The Queen [1999] HCA 37; (1999) 1996 CLR 297 Walton v The Queen [1989] HCA 9; (1988-1989) CLR 283 CASES CITED : Pollitt v The Queen [1992] HCA 35; (1992) 35; (1992) 174 CLR 558 Regina v Lee [1998] HCA 60; (1998) 195 CLR 594 Burrell v R [2007] NSWCCA 65 Cesan v The Queen [2008] HCA 52; (2008) 236 CLR 358

TEXTS CITED: Criminal Trial Courts Bench Book

COUNSEL: W Abraham QC - Crown M M Ramage QC - Appellant

SOLICITORS: Commonwealth Director of Public Prosecutions - Crown Jeffreys & Associates - Appellant

IN THE COURT OF CRIMINAL APPEAL 2006/15258

MACFARLAN JA HOWIE J HALL J

MONDAY 8 MARCH 2010 Wing Cheong LI v REGINA Judgment 1 MACFARLAN JA: I agree with Howie and Hall JJ. 2 HOWIE and HALL JJ: This is an appeal against conviction, an application for leave to appeal against sentence and a Crown appeal against what is asserted to be the leniency of the sentence imposed. It was determined that the conviction appeal would only be dealt with at this hearing. This was because this Court, differently constituted, is presently reserved on the question of the application of recent legislation that purports to limit the discretion of the Court in determining a Crown appeal. Shortly before the hearing of the appeal the applicant issued notices under s 78B of the Judiciary Act (Cth) in relation to a constitutional challenge to that legislation. This meant that the hearing date would have to be vacated if the Crown appeal was to be heard. It was, therefore, considered that the most appropriate course was to proceed with the challenge to the conviction. Of course, if the conviction appeal succeeds, the Court will not have to consider the appeal by the Crown or the application for leave to appeal. 3 The appellant was convicted after trial by jury on 29 February 2008 of a charge that between 13 April 2005 and 19 April 2005 he dealt with money which was the proceeds of crime and which he believed to be proceeds of crime and, at the time of the dealing, the value of the money was more than $1,000,000. This is an offence contrary to s 400.3(1) of the Criminal Code (Cth) for which the maximum penalty prescribed is relevantly imprisonment for 25 years. The appellant was sentenced on 27 July 2008 to a term of imprisonment of 12 years with a non-parole period of 8 years. The non-parole period expires on 2 July 2014. 4 There were two other persons charged with similar offences but they were both acquitted. The fact that they were found not guilty has no impact upon the validity of the conviction of the appellant. 5 Section 400.3(1) is as follows:

(1) A person is guilty of an offence if: (a) the person deals with money or other property; and (b) either: (i) the money or property is, and the person believes it to be, proceeds of crime; or (ii) the person intends that the money or property will become an instrument of crime; and (c) at the time of the dealing, the value of the money and other property is $1,000,000 or more. 6 The Crown relied upon (b)(i) above. Hence the Judge indicated to the jury that the elements of the offence were, so far as the appellant was concerned:

Element 2. That the money was the "proceeds of crime".

Element 3. "Which he believed to be proceeds of crime".

Element 4. At the time of the dealing with the money it was more that $1,000,000 in value, in Australian dollars. 7 There was no dispute that the appellant dealt with the money that was the subject of the charge, in that he received or possessed it. Nor was there any issue with element 4, which is an element of absolute liability; see s 400.3(4). The issues in dispute were element 2, as to where the money came from, and element 3, where the appellant believed the money came from. Elements 2 and 3 were related in that the appellant asserted that the money was his as a result of a legitimate commercial transaction carried out in Venezuela. The Crown asserted that the money was the proceeds of the sale of drugs and that the appellant had been recruited to remove the money from Australia to Columbia.

The evidence 8 The facts in the Crown case can briefly be stated. The trial revolved around $2,641,355 in cash that had been stored in a residential unit in Roseville. This was, according to the Crown, part of $5 million owing to a man named Alexander Ayala-Serna (Serna), a Columbian drug trafficker, being his share of the proceeds from the sale of a very large amount of cocaine that had been imported into Australia in 2004. The Crown case was that the appellant came to Australia in April 2005 in order to collect the money to take it back to Columbia. He collected the money and caused $400,000 of it to be remitted overseas so that at the time of his arrest he was in possession of $2.26 million. 9 The background to the charge is as follows. In 2004 Serna agreed with a man named Tono to provide him with 300kgs of cocaine imported into Australia. They agreed that the cost of the drugs, $5 million, was to be collected by Serna in Australia. 10 In November 2004 John Viana came to Australia and met with Serna who had arrived a few days after him. Viana rented the Roseville unit and arranged for a motor vehicle into which the money was to be placed by the purchasers of the drugs. A day later Viana recovered the motor vehicle and met with Serna at the unit. The money was transferred from the vehicle to the unit. At that time the amount of money stored in the unit was $5,050,000. 11 Serna told Viana to contact his father (Viana senior) to find a way to send the money to Columbia. Later Viana informed Serna that Viana senior had arranged for someone in Miami to obtain a contact in Australia to repatriate the money for a commission of 25 per cent. 12 On 6 December 2004 Serna flew out of Australia to Chile leaving Viana to look after the money. Later Viana told Serna that arrangements had been made to have the money sent from Australia in one amount. 13 On 1 January 2005 John Iglesias arrived in Australia from the United States and joined Viana in the Roseville unit. 14 On 6 February 2005 Viana left Australia leaving Iglesias in control of the money. The two men thereafter made frequent telephone contact with Iglesias using a mobile phone he had purchased in Australia. The Australian Federal Police (the AFP) intercepted these calls. 15 Conversations that took place between 10 February 2005 and 16 April revealed that the two men were in regular contact with each other and with Viana senior in relation to the money in the unit. The Crown case was that Viana senior was arranging for someone to meet Iglesias and collect the cash. In a call on 18 February the Crown alleged that Viana gave Iglesias detailed instructions as to how the cash should be handed over in a restaurant car park. 16 On 26 February 2005 during a phone call Viana told Iglesias: "Another amigo has already left to go there". The Crown asserted that this was a reference to the person organised by Viana senior to have the money taken to Columbia. 17 On 8 March 2005 there was a conversation between Viana and Iglesias that included the following exchange:

"Iglesias: …And what happened with the Chinese model? What happened with the Chinese girl?

Viana: No, good, good, good too. All of them are good. All of them good. Everything is well organised with those bloody bitches."

The Crown case was that this was a coded reference to the appellant and his wife who are Chinese although they live in Venezuela. They left Hong Kong for Sydney on 12 April 2005. 18 On 13 April 2005, Iglesias telephoned the appellant. During the conversation the appellant asked when Iglesias was going to bring him the "food". Iglesias replied that they would have to meet before there could be any exchange and they arranged to meet up. Later that day Iglesias told Viana he would be sending the money that day and that he had met "with that bandit of a girl and will be seeing her." The Crown asserted that this was a reference to the appellant. There was a further exchange as follows:

"Iglesias: Give him the whole holiday package, the 27 days.

At this time only $2.7million remained in the unit. 19 On 13 April AFP surveillance observed Iglesias meet the appellant. They travelled to the Roseville unit where Iglesias gave the appellant two backpacks that contained $1.35 million. The appellant took these to the hotel where he was staying. 20 Shortly thereafter Iglesias told Viana that he had handed half "the holiday package" over and would hand the rest the next day. 21 On 14 April Iglesias met the appellant in Haymarket and again travelled to the Roseville unit where the appellant collected a further two bags. Again he returned with these bags to his hotel. 22 Shortly thereafter Iglesias spoke to Viana and said, "Thank god the nightmare is over". 23 Later that day the appellant and Iglesias spoke together. The appellant told him that there was some money missing. Iglesias said, "You are short by 100,000 pesos". The appellant said, "Yes count it well and call me". A short time later Iglesias arranged to meet the appellant at Haymarket. When they met, Iglesias handed a bag to the appellant. It was the Crown case that this contained the missing $100,000. 24 Later the appellant remitted about $400,000 overseas in order to satisfy business debts that he had incurred. The appellant had a number of businesses in Venezuela including a restaurant and a real estate agency. 25 On 18 April 2005 Iglesias departed Australia. 26 On 19 April 2005 the appellant was arrested and had in his possession $2.26 million. 27 It was the appellant's case that the money belonged to him and was the proceeds of real estate that he had sold in Venezuela. The appellant gave evidence to this effect and called witnesses to support his account. Grounds of Appeal 28 The following grounds of appeal were relied upon by the appellant: 1. "The trial judge erred in law in admitting the telephone calls between Iglesias and Viana."

"The trial judge erred in law in that he failed to direct the jury adequately in respect to the use that they could make of the telephone calls between Iglesias and Viana."

"The trial judge erred in law in failing to direct the jury that before they could rely on the telephone calls between Viana and Iglesias they needed to be satisfied beyond reasonable doubt that Iglesias and Viana were in fact speaking about the money which Serna had collected with Viana."

"The trial judge erred in permitting the Crown Prosecutor to raise and rely on in argument that the money came from tax fraud."

"The trial judge erred in allowing the Crown argument concerning tax fraud to be considered by the jury."

"The trial judge erred in law in failing to adequately or at all direct the jury that if they found that the appellant was not a person of good character how that finding was to be used by it."

"It was not open to the jury to be satisfied beyond reasonable doubt of the essential element in the Crown case that the money was the proceeds of crime and that by proving it came from Serna."

"There has been a miscarriage of justice in that the accused did not receive a fair trial as:

(a) There was a departure from the proper conduct of the trial and/or

(b) There was a significant irregularity in the proper conduct of the trial and/or

(c) There was misconduct by the jury in that: some of the members of the jury were playing a game known as Target and the jury was thereby distracted from paying attention to all of the evidence and the judges trial directions." Ground 1 - admission of telephone calls between Iglesias and Viana 29 It was submitted on behalf of the appellant that the trial judge incorrectly admitted evidence of the recorded telephone calls between Iglesias and John Viana. The evidence, it was argued, was inadmissible and/or the trial judge should have rejected the evidence in the exercise of his discretion. 30 In support of these submissions, the following matters were relied upon:-

(1) That it was no part of the Crown case that there was ever a joint enterprise involving Iglesias and Viana with the accused.

(2) The conversations in the telephone calls between Iglesias and Viana were pure hearsay.

(3) That, in respect of the exercise of the discretion, there was a likelihood of misuse by the jury of the telephone calls. 31 In relation to the last-mentioned matter and in relation to the provisions of s 135 and s 137 of the Evidence Act 1995, it was further submitted that the trial judge was required to conduct "a balancing exercise". However, it was contended that there was no evidence that his Honour, in fact, did so. The submission, in this respect was:-

"His Honour failed to give consideration to the fact that [the] jury were very likely to make its decision on an improper basis. As a result of hearing the evidence, they were likely to be satisfied with a lower degree of probability than was otherwise required.There was a real risk that the evidence would be misused/ mis-estimated by the jury." 32 It was, alternatively, submitted that there was a real risk that the jury had been led into adopting an illegitimate form of reasoning. 33 Mr Ramage QC, who appeared for the appellant, submitted (Appellant's Written Submissions, p 6):-

"Insofar as the judge purported to overcome prejudice by limiting the use that the jury made of the evidence by his directions he failed to give proper consideration to the likely impact his directions would have. The situation created was so highly artificial that no jury was likely to have followed them." 34 On behalf of the Crown, it was submitted, inter alia, that the evidence was not hearsay evidence and was properly admitted by the trial judge. The Crown contended that the evidence was relevant to the issue as to whether the money obtained by the appellant constituted "proceeds of crime" (Element 2, "that the money was the 'proceeds of crime'"). 35 In evaluating the competing submissions of the parties on the first issue of the admissibility of the evidence, it is useful to set out the well-established principles concerning the admissibility of statements made outside court. They are:-

(1) The common law does not exclude all evidence of statements made outside court. If relevant, evidence is admissible to prove that a statement was made and, also, to prove its contents. From that evidence, inferences may be drawn. Commonly, inferences may be drawn as, for example, to the speaker's intention, emotion or knowledge of or belief in the facts stated: Papakosmas v The Queen [1999] HCA 37; (1999) 196 CLR 297 at 312 per Gaudron and Kirby JJ.

(2) The challenge to the admissibility of the evidence of the intercepted telephone conversations has to be considered in light of the Crown case including in particular the elements constituting the matters which the Crown was required to establish. It is equally important to take into account the basis upon which the Crown at trial relied upon the evidence.

(3) The hearsay rule applies only to out-of-court statements tendered for the purpose of directly proving that the facts are as asserted in the statement. Generally speaking, evidence of out-of-court statements relied on for another purpose are not excluded by the rule: Walton v The Queen [1989] HCA 9; (1988-1989) CLR 283 at 288 per Mason CJ.

(4) Evidence of an out-of-court statement may constitute original evidence, in that it has independent evidentiary value in proving a relevant matter as, for example, the author's intentions where such intentions are a fact in issue or a fact relevant to a fact in issue. Testimony of such a statement does not infringe the hearsay rule: Walton (supra) at 389.

(5) Whether the evidence takes the form of conduct or statements, the same principles should be applied with respect to the admission in evidence or the rejection of the material as each mode of assertion is apt to be an equally communicative form of expression: Walton (supra) at 292. 36 The asserted error of law that is the subject of Ground 1 is to be considered in the factual context of the case and the elements constituting the Crown case. 37 The relevant chain of events, as indicated above, occurred in the approximately four month period between December 2004 and 15 April 2005. The Crown case at trial was that the actions of a number of persons were by various means interlinked, the association between them allegedly culminating in the collection by the appellant of a large amount of money that the Crown claimed constituted the proceeds of crime. 38 It was the Crown case that Viana left Iglesias to look after the money in the Roseville unit and that, between 10 February 2005 and 16 April 2005, he and Iglesias made regular telephone contact with one another, the conversations being in code. The Crown invited the jury to infer from the conversations that the subject of focus was the money that belonged to Serna. 39 There were 17 reasonably short conversations between 10 February 2005 and 16 April 2005. The transcripts of the calls constituted Exhibit BK. A number of them occurred on the same day. The Crown contends that they were properly admitted and clear directions were given to the jury as to their use. 40 Although it was argued on behalf of the appellant that the conversations were hearsay evidence and should not have been admitted into evidence, the Crown's primary position was that the evidence was not admitted as hearsay evidence. Accordingly, the exceptions to the hearsay rule are not in point. The fundamental proposition relied upon by the Crown was that an out-of-court statement, made in the absence of an accused, is not inadmissible so long as its contents are not relied upon to prove a fact asserted by the statement itself. 41 Accordingly, the Crown's position at trial and on appeal was that the evidence of the telephone calls was not adduced, nor relied upon, to prove the truth of any assertion contained in them. The Crown contended that it was what was said in the conversations that permitted an inference to be drawn that the participants to the calls were talking about one particular subject matter, namely, the money that belonged to Serna. This, in turn, it was argued, permitted an inference to be drawn that the money that was provided to the appellant on 13 and 14 April 2005 by Iglesias was, in fact, Serna's money. 42 In its opening address to the jury, the Crown referred to the recorded telephone conversations in the following terms:- "… There is a peculiarity about the use that could be made of those conversations - the detail of which I won't trouble you with at the moment - but the only effect which the prosecution seeks to get from (these) conversations is not for you accept [sic] the truth of every detail that is in them, but rather that you would be able to conclude from these conversations between those two men, Viana and Iglesias, that what they were talking about in the coded way, they talked to each other about who they're going to contact and phone numbers to ring and things that are happening, is that they were talking about the money. That is one of the most important subject matters which they discussed, we suggest was a continuing one, and can only have been the money, which is likely to be the only thing they have in common to talk about." 43 On 7 February 2008, the trial judge gave a ruling on the admissibility of the recorded telephone conversations. The question of admissibility had, at an earlier time, been heard and determined by Blackmore DCJ who gave judgment in earlier proceedings on 7 June 2007. The trial judge in the trial below accepted, and proceeded upon, the basis that had been adopted by Blackmore DCJ on 7 June 2007. 44 A copy of the latter judgment is included in the appeal papers. Blackmore DCJ recorded the proposition advanced by the Crown that the recorded conversations were said to provide a link between the evidence that was to be given by Serna with respect to his possession of the cash in Australia and the appellant's alleged possession of that same money. The recorded conversations (which were in Spanish) referred to a person, JC, the suggestion being that they are the initials of Juan Carlos, Viana's father. 45 Blackmore DCJ further recorded:-

"The Crown alleges that it is likely that it is Juan Carlos who was being spoken about. The Crown submits that the consistent mention of the topic of JC leads to an inference that the speakers are connected to the cash money.There is other evidence to physically link the man, Iglesias, to the apartment at Roseville during the period of the calls. The Crown submits that the linkage provided by the phone calls leads to the obvious inference that the money left in that apartment by Serna had not yet been disposed of throughout the period of the calls. Subsequently, there are a number of calls which one of the accused, Li, to which no objection is taken by that accused. Those calls are not led against the other accused." 46 On the question as to whether the probative value of the evidence outweighed any possible prejudice to the accused, his Honour noted that the accused was not spoken about at all in the conversations and that, even if the jury accepted the truth of the assertions and the conversations, the meaning of them was so obscure that it would not assist them in reaching a conclusion on the guilt of the accused. Blackmore DCJ then added:-

"… However, the Crown would be greatly assisted in its case if it proved the link between the money possessed by Serna and the money possessed by the accused. Unless that link is established, the prosecution may well fail. It is for that reason that the probative value of the evidence is high." 47 In his summing up, the trial judge directed the jury on the matter in the following terms (summing up, 25 February 2008, p 21):- "There are multiple telephone calls between Iglesias and Viana and these are set out in exhibit BK, a document that you will have. Neither of these mean, Viana and Iglesias, are witnesses here, or have been witnesses here. When you read those transcripts of conversations between those two men, neither of whom has been a witness here, confine yourself to just one question - does a reading of that material persuade you beyond reasonable doubt that it represents a series of related conversations between Viana and Iglesias in which they focus on the one main subject matter of apparently great importance to both of them?Now in those multiple telephone conversations, (set out in exhibit BK, 10 February, 11 February, 12 February, 14 February, 15 February, 16 February and so on up till and well into March) these two talk about lots of things. I direct you that you must not focus on particular parts of the evidence or details of that evidence and go through it to consider whether some words or some phrase may be relevant to some other point you may be considering in this trial. You must not do that because neither Viana, nor Iglesias has been a witness here to be examined and cross-examined by the barristers. In the absence of such cross-examination there is a grave danger that you might jump to wrong conclusions on some point.If you conclude, as to that limited question, that Viana and Iglesias did engage in a series of related conversations, focusing on one main subject matter of apparently great importance to both of them, it would then be open to you to consider what significance that conclusion may have in relation to the other evidence in the case. The Crown asserts that you would infer that the single main subject matter being discussed between Viana and Iglesias was the money left in the Roseville premises by Serna." 48 A little later, the trial judge continued the summing up in the following terms:-

"So although you must not rely on, as it were, the fine detail of those conversations between Viana and Iglesias, I have allowed the evidence to be put before you for the single question - were these two men focusing on a particular subject? And if they were, if you reach that conclusion, if you are satisfied of that, it is a piece of evidence which may assist you (or may not, as you see it) to trace where the money came, why the money left and who it left by, for what purpose [sic]." 49 The following paragraphs appear in the written submissions for the appellant:-

"xiii It is submitted that the above created a wholly artificial situation where the Crown was, in effect, relying on these very conversations to establish, not just that they were consistent with money being spoken about, but the money , and the jury were, in effect, invited to draw that conclusion.It is further submitted that the most astute of jury's [sic] impeccably following the judge's directions were likely to have misunderstood the directions and used the evidence in an impermissible way."

Consideration of Ground 1 50 Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that the person intended to assert by the representation: s 59(1) of the Evidence Act. However, if evidence of a previous representation made by a person is not adduced to prove the existence of a fact asserted by the representation, it is not classified as hearsay. Evidence of that kind is sometimes referred to as "original evidence" to distinguish it from hearsay evidence: Walton (supra) at 289 per Mason CJ; Pollitt v The Queen [1992] HCA 35; (1992) 174 CLR 558 at 571 per Brennan J. 51 In Regina v Lee [1998] HCA 60; (1998) 195 CLR 594 at [22], the operation of the hearsay rule in terms of s 59 was explained by the High Court (Gleeson CJ, Gummow, Kirby, Hayne and Callinan JJ) in the following terms:-

"Section 59 must be understood in this light. The rule's operation requires consideration first of why it is sought to lead evidence of something said or done out of Court (a previous representation). What is it that that 'previous representation' is led to prove? In particular, is it sought to lead it to prove the existence of a fact that the person who made the representation intended to assert by it? The fact that the statement or the conduct concerned might unintendedly convey some assertion is not to the point. The inquiry is about what the person who made the representation intended to assert by it." (per Gleeson CJ, Gummow, Kirby, Hayne and Callinan JJ). 52 Again in Papakosmas (supra), the High Court held that the operation of the exclusion to s 59 depends upon the use that is sought to be made of the evidence in question (at [24] per Gleeson CJ and Hayne J). 53 As discussed above, the Crown relied upon the recorded telephone calls between Viana and Iglesias as evidence that provided a link between Serna's possession of cash money in Australia and the appellant's possession of money said to be proceeds of crime. 54 If evidence of the recorded calls had been relied upon and treated as evidence of the truth of any facts asserted in the calls, then it would have infringed the rule against hearsay. Whether or not evidence of a statement made out of court is hearsay depends upon the use that is sought to be made of the evidence: Papakosmas (supra) per Gleeson CJ and Hayne J at [12]. 55 In the present proceedings, the essential purpose of the reception of the evidence of the recorded phone calls was to establish that the subject of money was the focus of the communications, in particular, the existence of specific money and that that money was held at the Roseville apartment. Those matters, if found, would be available to the jury for the purpose of drawing an inference that the money discussed was the same as Serna's money. An inference could then be drawn concerning the money taken by the accused from the Roseville apartment. The reception of such evidence, of course, had to be accompanied by a direction to the jury by the trial judge that out of court statements must not be regarded by them as evidence of the truth of any facts stated in them. 56 Evidence of the statements in the recorded telephone calls were received on the basis indicated by the Crown and, accordingly, would not be evidence in conflict with, but would be consistent with, the hearsay rule. 57 The Crown case was that, in the context of the facts and events to which reference has been made above, the lease of the Roseville premises was changed over to Iglesias after he arrived in Sydney, the inference being that the money was left with him. Soon after, Viana left Australia there were approximately 70 calls between him and Iglesias until the appellant arrived in Australia. In that period, the Crown alleged that Iglesias had been minding the money. Iglesias telephoned the appellant. They both met soon after and travelled to Roseville and over two days the appellant collected two parcels with a total of $2.6 million in $50 notes from the Roseville apartment. The Crown argued that the chance of there being in the same apartment an amount of $2.6 million in cash but not being part of the money Serna had left in the unit, would be inherently incredible. 58 It is clear that the recorded telephone calls were not admitted as hearsay evidence. The transcripts of the calls were admitted for the purpose only of establishing what the two men were talking about: the existence of money and that that money was Serna's money. The evidence of the recorded telephone calls on that matter was original evidence, in particular, original circumstantial evidence from which inferences could be drawn. 59 The fact of continued communication between Iglesias and Viana was said to be supportive of the inference that there was clearly a matter that they shared an interest in and that, having regard to the timing of events, as a matter of inference, the matter that they were interested in was the money referred to in the preceding paragraph. 60 The evidence of the recorded telephone calls, accordingly, was properly admitted as evidence relevant to a fact in issue. No error has been established in respect of the admission of the evidence. 61 It is, accordingly, now necessary to turn to the submission made on behalf of the appellant that the trial judge was obliged to consider the operation of s 135 and s 137 of the Evidence Act but that there was no evidence that his Honour, in fact, did so. 62 In the course of argument, Mr Ramage QC properly conceded that s 135 had no work to do in the present proceedings beyond that covered by the provisions of s 137 (transcript, 10 December 2009 at p 8). 63 Section 137, Exclusion of prejudicial evidence in criminal proceedings, provides:- "In a criminal proceeding, the Court must refuse to admit evidence adduced by the prosecutor if its probative value is outweighed by the danger of unfair prejudice to the defendant." 64 The written submissions for the appellant did not identify any specific matter that establishes the claimed error with respect to s 137. The submission simply asserted "the trial judge was required himself to conduct a balancing exercise. There is no evidence that he did so" (p 6). The oral submissions did not develop the general submission made in respect of s 137. 65 In his judgment of 7 February 2008, the trial judge referred to the judgment by Blackmore DCJ dated 7 June 2007 in the first trial that dealt with the question of the admissibility of the material in question. The trial judge referred to submissions that had been made in the proceedings before him and to the fact that he was not bound by what Blackmore DCJ had decided in the previous case. However, as previously noted, his Honour went on to state that, nonetheless, considering the evidence in the proceedings before him, he agreed with the approach adopted by Blackmore DCJ and the ruling made by his Honour. 66 The judgment of Blackmore DCJ expressly considered s 135 and s 137, his Honour observing:- "I have also considered ss.135 and 137 of the Evidence Act but, in my view, the probative value of the evidence far outweighs any possible prejudice to the accused. The accused are not spoken about at all in these conversations. Even if the jury accepted the truth of the assertions and the conversations, generally speaking, the meaning of those assertions is so obscure that it would not assist them in reaching a conclusion on the guilt of the accused. However, the Crown would be greatly assisted in its case if it proves the link between the money possessed by Serna and the money possessed by the accused. Unless that link is established, the prosecution may well fail. It is for that reason the probative value of the evidence is high." 67 His Honour went on to discuss the question of directions being given to the jury designed to overcome any risk that might otherwise arise. 68 It is clear that the trial judge, had regard to the overall analysis of Blackmore DCJ (which included the exercise of the discretion involved in s 37) and expressed his agreement with it. In those circumstances, we do not consider that there is any substance to the contention that his Honour failed to have regard to, or to apply, the provisions of s 137 of the Evidence Act. 69 Accordingly, Ground 1 should be rejected. Ground 2: Failure to direct the jury adequately in respect of the telephone calls between Iglesias and Viana 70 The trial judge did give the jury directions concerning the use to which the evidence of the recorded calls could be put. Ground 2 raises the sufficiency or adequacy of them. 71 On the admission of the evidence (Exhibit BK), the trial judge advised the jury that the evidence related mainly to calls between Viana and Iglesias, neither of whom would be at the trial. He, accordingly, made the jury aware of the fact that there would be no opportunity for the truth of anything said by them to be tested by cross-examination. 72 The jury were also instructed that the Crown did not present the material upon the basis that the assertions made were true "… but on the basis that they had a particular subject matter which they appear to be talking about consistently. The Crown will seek to relate this to the money, which is in question in this case" (t 406). 73 The trial judge gave the jury a document entitled "Directions of Law" dated 25 February 2008. At T44 under the heading "Direction as to Telephone Calls between Viana and Iglesias" the jury were directed that they were to confine themselves to just one question, namely:-

"Does a reading of that material persuade you beyond reasonable doubt that it represents a series of related conversations between Viana and Iglesias in which they focus on one main subject matter of apparently great importance to both of them?" 74 The directions also included a limitation that was placed upon the use to which the evidence could be put:-

"I direct you that you must not focus on particular parts of that evidence and consider whether some words or some phrase may be relevant to some other point you may be considering in this trial."

The trial judge again explained that the jury were not to do that because of the fact that neither Viana nor Iglesias had been a witness in the trial and hence not available to be examined and cross-examined. 75 The written directions continued and emphasised the particular matter that the evidence went to:-

"If you conclude as to that limited question that Viana and Iglesias did engage in a series of related conversations focusing on one main subject matter of apparently great importance to them, it would then be open to you to consider what significance that conclusion may have in relation to other evidence in the case.The Crown asserts that you would infer that the single main subject matter being discussed between Viana and Iglesias was the money left in the Roseville premises by Serna.The contrary submission is that you could not conclude beyond reasonable doubt either that the conversations were focused on one single subject matter, or that any money left in the Roseville flat was necessarily money left there in December by Serna." 76 As the Crown observed, no re-directions or further directions were sought and no complaint was made at trial in relation to the matters the subject of Ground 3. The Crown also contended that, as the appellant was represented by experienced counsel, leave would be required pursuant to Rule 4 of the Criminal Appeal Rules and that leave should be refused. 77 In the summing up, the trial judge further dealt with the question of the recorded telephone calls in Exhibit BK. The oral directions were consistent with the written directions and, in substantive respects, repeated what was therein recorded. 78 The trial judge, in his oral summing up, added:-

"So although you must not rely on, as it were, the fine detail of those conversations between Viana and Iglesias, I have allowed the evidence to be put before you for the single question - were these two men focusing on a particular subject? And if they were, if you reach that conclusion, if you are satisfied of that, it is a piece of evidence which may assist you (or may not, as you see it) to trace where the money came, why the money left and who it left by, for what purposes." 79 The question raised by the appellant's submissions is whether or not there is a basis for the assertion that the jury were likely to have misunderstood the directions given and to have used the evidence in an impermissible way. The submission for the appellant was that there was a real risk that the evidence would be misused or mis-estimated by the jury or would have led the jury into adopting "an illegitimate form of reasoning". It was argued:-

"Insofar as the judge purported to overcome prejudice by limiting the use that the jury made of the evidence by his directions, he failed to give proper consideration to the likely impact his directions would have. The situation created was so highly artificial that no jury was likely to have followed them." (Further Amended Submissions by Appellant on Appeal against Conviction at p.6) 80 The Crown submitted that the appellant failed to identify a basis for any alleged inadequacy in the directions. 81 It was additionally argued that the trial judge could not assume that the directions to be given to the jury would be successful in removing the danger of unfair prejudice. It was contended that even an astute jury that impeccably followed the directions "… were likely to have misunderstood the directions and used the evidence in an impermissible way" (p 8). 82 In his oral submissions, Mr Ramage raised what he contended was a dilemma as to how the jury could determine from what was said that money was a matter of particular focus without also bringing into account the content of the conversations for other purposes. In this respect, he stated (transcript, 10 December 2009, p 4):-

"… how could they (the jury) possibly draw the conclusion that it was the money unless they took particular note of what was being said in the course of those conversations. That is the proposition …" 83 Further, in relation to the trial judge's direction that the jury were not to rely on the fine detail of the conversations between Viana and Iglesias but that the evidence had been admitted only upon the single question (whether the two men were focusing on the particular subject), Mr Ramage submitted that if the jury were required to closely examine what was said, "… it suggested that they can use the material way beyond the basis on which his Honour purported to admit it …" (transcript, 10 December 2009, p 5). 84 We do not consider that there is any merit to Ground 2. The written and oral directions given to the jury stated in clear terms the limited basis upon which the evidence was admitted and for which it could be used. The directions did not suggest in any way that the transcript of the recorded telephone calls could be used for a broader purpose or for a purpose other than the limited ones stated in the directions. A reading of the directions in their entirety in fact establish the contrary. 85 The submission that the conversations recorded in Exhibit BK could be used for a number of other purposes and that the jury were placed "in an impossible position" (transcript, 10 December 2009, p 5) is, with respect, an untenable one. The jury were told that they were not to use this evidence for any matter but that particularised and identified. Mr Ramage accepted when it was put to him by the presiding judge (transcript, p 6) that counsel for the appellant at no stage suggested that the trial judge's directions allowed the material in Exhibit BK to be used for a purpose beyond that for which it was admitted. 86 Furthermore, the contention that the jury were unlikely to follow the directions given is one without support. This ground fails. Ground 3 - failing to direct the jury that they needed to be satisfied beyond a reasonable doubt that Iglesias and Viana were, in fact, speaking about the money which Serna had collected from Viana 87 The directions given by the trial judge addressed the issue as to the requisite standard of proof before any finding could be made based upon the recorded telephone calls between Viana and Iglesias. The relevant directions were given both in writing and orally in the course of the summing up. 88 The relevant written direction was in the following terms:-

"When you read those transcripts of conversations between those two men (neither or whom has been a witness here), confine yourself to just one question:- Does a reading of that material persuade you beyond reasonable doubt that it represents a series of related conversations between Viana and Iglesias in which they focus on one main subject matter of apparently great importance to both of them? " 89 Later in the written direction, the trial judge recorded:-

"The contrary submission is that you could not conclude beyond reasonable doubt either that the conversations were focused on one single subject matter, or that any money left in the Roseville flat was necessarily money left there in December by Serna." 90 The trial judge gave a direction in the same terms in the course of his summing up. 91 There was no submission made on behalf of the appellant that the direction as to the standard of proof that applied in making the relevant findings was unclear, obscure or in any way confusing. There was no application made for any further direction. 92 Mr Ramage, in the course of his oral submissions, contended that the jury were very likely to use the written directions incorrectly in that they did not, he argued, make it plain that any finding was one that could only be made if the jury were satisfied beyond reasonable doubt. 93 The fact that no application was made for any further directions confirms, what is apparent, namely that the written and oral submissions were clear and were understood by counsel appearing for the appellant. 94 The directions given by the trial judge were proper directions and there is no basis for concluding that the jury were likely to have been confused or to have misunderstood the directions given. 95 Accordingly, there is no substance to Ground 3.

Grounds 4 and 5 - Reference to "tax fraud" 96 These two grounds can be dealt with together. The complaint is in effect that it was unfair and misleading for the Crown to refer to "tax fraud" in the closing address, particularly in the context that there had been evidence and cross-examination of the appellant concerning the payment or non-payment of tax in Venezuela. We shall refer to that material further in dealing with the ground of appeal concerned with directions on character. It is further complained that the trial judge allowed the jury to consider the issue of "tax fraud". 97 It should be noted at the outset that the only issue where the question of "tax fraud" arose was in relation to what the Judge referred to as "Element 3", that is the belief of the appellant that the money he dealt with was the proceeds of crime within the definition in the section. The Crown always maintained that the money received by the appellant was the proceeds of the drug sales and belonged to Serna. The Crown accepted it had to prove beyond reasonable doubt that this was where the money came from. If the jury were not satisfied beyond reasonable doubt, that this was the provenance of the money in the unit and that which the appellant received, they were to acquit him. This was made perfectly clear in the written and oral directions given to the jury. 98 The complaint arises from what the Crown prosecutor said during his closing address to the jury in the following passage in relation to Element 3, the appellant's belief as to the provenance of the money. It occurred on Wednesday, 20 February 2008, being the sixteenth day of the trial. The passage was in the context of the Crown explaining to the jury that, although it had to prove that the appellant believed that the money was the proceeds of crime, it did not have to prove that he believed that it was the proceeds of a particular crime, for example the importation of cocaine into Australia. We have underlined the sections from the passage at T841 to which objection is now taken:

"I have put this in my opening by saying that in this respect the Crown has to prove that a belief was about a crime, that is a serious crime, but not about the serious crime, being the drug importation, because as you appreciate, there is no evidence in our case that [any of the accused] actually knew either Mr Serna or anything about the cocaine importation.

If that was a necessary component of the charge, well we might as well pulled up stumps and go home, because the Crown hasn't proved that, the Crown doesn't have to prove that in the context of this trial. What the Crown has to prove is that the relevant belief in the case of [the co-accused Lee] recklessness to the facts was in respect of the money that it was the proceeds of a serious crime.

So that, for example, if you are able to conclude that because of the sheer volume of the money, two and a half million dollars in $50 notes, we know that it apparently filled five to seven cartons in the boot of Mr Viana's car, if you accept what Mr Serna says, there is no dispute in any of the cases of what was actually collected was $2.6 million in $50 notes, it would seem, by [the appellant] in April sometime later.

That, on the Crown case, is a massive amount of currency. Whether or not you think that is a massive amount depends on your personal circumstances in relation to simply being $2.6 million, but in $50 notes it's a pile that you can hardly jump over .

The Crown says in relation to that money generally that it brings with it the circumstances of it being in a Roseville home unit by an American man in the circumstances it was, [the appellant] counted it.

But that you could not believe anything other than it was the proceeds of some serious crime. B e it a drug transaction, theoretically, a robbery or a tax fraud punishable by imprisonment, the money must have come from some serious illicit illegal activity ." 99 It should be noted that this was a passage in an address that extended between pages T832 and 886 before any point was raised about the use of the term "tax fraud". The complaint raised was that "tax fraud" did not necessarily amount to a serious crime, at least for the purposes of the offence for which each of the accused had been charged. It should be noted that counsel for the appellant did not raise the point and there was no suggestion that the use of the term was in some way prejudicial to the appellant. The argument before the Judge was very brief and changed course to become a discussion about whether the Crown had an obligation to call a witness who was in custody in the United States and whether the Judge should make any comment about the witness not being called. 100 The Crown did not resume addressing until the next day. He continued over pages T898 to 949 without any further mention of "tax fraud". He was never asked to withdraw what he had said earlier and, of course, there was no application for a discharge of the jury. 101 The matter was again raised at page T988 during the address of counsel for the appellant. This was on 22 February. Counsel indicated that he wanted a ruling "in relation to tax fraud, whether or not it is proceeds of crime". The Judge was reminded that the Crown had said, in the passage set out above, "theoretically robbery or tax fraud". There then followed a lengthy discussion about whether "tax fraud" was an indictable offence. The result was that the Judge said he would think about what he would say in his directions to the jury on the topic. The appellant's counsel indicated he would be saying nothing about it in his address. He then continued to address the jury. 102 On Monday, 25 February, there was a further discussion about whether "tax fraud" could amount to a serious offence and his Honour made reference to s 135 of the Code but indicated that he did not intend to go into the question unless the solicitor appearing for a co-accused, and who had first raised the matter, wanted him to do so. The solicitor indicated that he wanted to think about what the Judge had said but was "not sure" that he would say anything in his address. Addresses then continued without any reference to the issue of "tax fraud". 103 Late on 25 February, before commencing his summing up, the Judge handed to the legal representatives of the parties the written directions he intended to give to the jury. They were very detailed. Relevant to this issue they contained the following:

"Element 2. That the money was the " proceeds of crime ";

In relation to this element, the Crown must also prove that the money was the proceeds of crime, that is, money derived directly or indirectly by any person from the commission of a criminal offence that is a Commonwealth indictable offence. An indictable offence under Commonwealth law is an offence punishable by imprisonment for a period exceeding 12 months. Here (to prove this element) the Crown relies on the crime it says was committed by the witness Serna in conspiring to import cocaine into Australia . Such an offence, if proved, amounts to a "Commonwealth indictable offence".

Element 3. " Which he believed to be proceeds of crime "

You will appreciate that this is different from the question of whether the money was in fact the proceeds of crime. The Crown must prove not only that the money was the proceeds of crime; it must prove that he believed it to be the proceeds of crime.

Belief in this context means that the accused is convinced of the truth or reality of the existence of the thing . It must be more than an awareness of a substantial risk that the thing exists.

Here the Crown must prove that Mr Li believed that the money was the proceeds of an indictable offence .

To prove this element, the Crown need not prove that he believed that the money was derived from any particular offence. It would be sufficient if the Crown has proved that he held a belief that the money was derived from an indictable offence such as importation of a prohibited drug contrary to Australian law, the trafficking of prohibited drugs within Australia, robberies, major thefts or the obtaining of monies by fraud or false pretences.

These categories are not suggested as being specifically relevant to Mr Li's actual belief in this case. They are merely examples of the sorts of serious crimes in respect of which Mr Li must have held the relevant belief. In this case the crime about which he holds the belief must be a crime in Australia, whether it be one under a State law or a Commonwealth law, and not merely a crime in some other country." 104 Counsel then appearing for the appellant, not being counsel who had addressed the jury and asked for the ruling, said this about the passage under the heading "Element 3":

"ORMON-HALES: Your Honour, if I may, I just have one small point and that's on p 4 and its where your Honour gives examples of what Mr Li must believe that these indictable offences were and you've given some examples. The only point, your Honour, is - and, your Honour, there is much discussion in this trial with regard to - -

ORMON-HALES: Yes, p 4, and in its under element 3, it's under the belief and we are in the second lightly coloured font. It's where your Honour gives examples of the types of offences that are indictable offences. My only issue, your Honour, is in regard to false pretences. With respect, your Honour, we've had a lot of discussion on fraud and tax fraud and I see that your Honour has confined it to fraud. Your Honour, I can say on Mr Li's case we're very happy with that. The only issue is in relation to false pretences whether the jury are going to ask for some examples of that. I note, your Honour, to the best of my knowledge I don't believe that we've discussed anything in relation to false pretences. I put it, your Honour, that it may be confusing to the jury, I don't know. So I just point that out, your Honour, that it has - -

HIS HONOUR: if anyone asks about that, I'll tell them. Certainly false pretences is a major category of fraud. Historically it's been overtaken by a multitude of statutory provisions that people pretend to be X and obtain large sums of money."

No other complaint was made about this part of the written directions. 105 As would be expected, the summing up followed very closely the written directions. When dealing with Element 3 the judge quoted almost word for word what was contained in the written directions set out above. He then added the following:

"Now let me give you an example about this. Say, for example, there was a bikie gang which was in the business of using its motor bikes to transfer drugs and money from place to place in Australia (not an unheard of scenario). And let us say that there was a drop-off point at somewhere in Sydney, say a house in Penshurst, to take a random suburb. And one of the team puts a bag full of money in a bedroom in that house and another one of the team is asked to come down from Newcastle and pick that money up. Now the fellow coming from Newcastle might think it was the result of drugs that had been sold into Melbourne, whereas, in fact, the money might be the product of drugs sold in to Bathurst. So it might be an entirely different crime. Or they might have been committing armed robberies and there was a bundle of money from an armed robbery. And the person picking it up thought it was money from drugs. Well, that would not be any defence for him. Provided he believes he is picking up money which is the proceeds of crime, serious crime, then in the way that I have mentioned it, then that will be sufficient proof of this element, element three, 'which he believes to be proceeds of crime'." 106 In our opinion there is no merit in these two grounds of appeal. The only question raised in the trial about the passage in the Crown's address was whether the Crown was technically correct in suggesting that "tax fraud" was a serious crime within the scope of the section. In the end that question did not need to be answered as none of the other addresses raised the issue and the Judge used the concept of fraud generally in the summing up without objection. There was no complaint that the Crown's reference to "tax fraud" could have misled or confused the jury or in some way prejudiced the appellant. In any event the offences referred to in the written directions were given merely as examples of the types of crimes that the appellant had to believe were the source of the funds before he could be guilty of the offence, stressing that they had to be serious crimes. Hence the specific examples given by the Judge to the jury in the last passage quoted above of money being obtained by persons involved in selling drugs or committing armed robberies. 107 Although a complaint was made about the other passage underlined in the Crown's address in the passage first quoted above at the hearing of the appeal, no complaint was made about it at the trial. We do not believe that the Crown prosecutor's somewhat colourful reference to the physical size of the quantity of money in the unit could have in any way misled or distracted the jury. Clearly the amount of money, the fact that it was in $50 notes and that it was being kept at a residential home unit was relevant to the appellant's belief as to the provenance of the money and whether it was the proceeds of crime. It was made perfectly clear to the jury that, if the appellant's account was possibly true, then he had to be acquitted because the Crown had failed to prove this element of the offence. 108 Rule 4 applies to both complaints now made and we are completely unpersuaded that anything in the passage from the Crown prosecutor's address set out above could possibly have caused a miscarriage of justice. The grounds should both be rejected.

Ground 6 - Character directions 109 The complaint is that the trial judge failed to direct the jury as to the relevance of finding that the appellant was not of good character. 110 The only suggestion that the appellant's character was tainted in any way arose from cross-examination of him about his dealings in Venezuela and the asserted practice in that country in commercial transactions of reducing tax liability by cash payments. The cross-examination arose in testing the appellant's assertion that the money he collected was a result of a sale of property that took place in Venezuela and the apparent difference between the asserted purchase price and the price as stated on the contract. It was common ground that the appellant had no criminal convictions and there was positive evidence led of his good character. 111 It should be noted that there was no objection taken to the line of cross-examination or to the Crown's submission to the jury that the appellant's business practices in Venezuela in relation to tax evasion, apparently a common practice in commercial dealings, was relevant to the jury's assessment of the appellant's character. 112 The Judge said this to the jury about the relevance of good character by referring to what he had set out in written directions that had been handed to the jury:

"……………. You see in the middle of page 9 a reference to the heading "Good Character". It is open to you to conclude that each accused is relevantly a person of prior good character. Let me say something about that. You have heard that each of [the co-accused] has no prior convictions, nor does Mr Li. And the Crown did not suggest that either [of the co-accused] were persons of anything other than prior good character.

However, the Crown submits in relation to Mr Li, that he has been engaged in Venezuela in commercial dealings which appear to be intended to avoid obligations under Venezuelan law and therefore you might regard him as a person of untrustworthy character, that you would not regard him as a person of good character. So that whether or not you regard him as a person of good character is entirely a matter for you. You have heard a lot of evidence about him being a businessman, family man. He has no convictions. He has been there for a long time. You have heard Mrs Cheong, who is a relative, talk about his grocery business where her husband's cousin worked.

And you have seen Mr Li in the witness box, it is a matter for you to judge whether you regard he is a person of prior good character. But fundamentally, of course, none of them has any prior convictions or criminal connections.

If you accept that an accused person, he or she, is a person of prior good character, you are bound by law to consider that fact in relation to the question of whether that good character makes it less likely than otherwise that he or she would engage in criminality such as is alleged here… [His Honour referred the jury to a typographical error that occurred in the written directions that is irrelevant to the present ground of appeal] ………………..

Moreover, in the case of Mr Li, if you accept that he is a person of good character you are bound to consider that fact, or whether that fact makes it more likely that he would, in his evidence, be telling the truth. It may do so, it is a matter to you to consider." 113 There was nothing in the written directions that suggested that the appellant should not be found by the jury to be of good character and no reference was made to the Crown's submission on this issue. 114 At a break in the summing up counsel then appearing for the appellant raised the matter of the appellant's character in the following exchange (SU 43):

"ORMAN-HALES: Just in relation to your Honour in finishing off the directions this morning discussed the Crown's position on possible bad character of Mr Li and it is in regard to obligations under Venezuelan law. And your Honour, as I said, I didn't want to pre-empt your Honour in any way but with respect to that Mrs Figuera, his lawyer, gives a lot of evidence as to how things are done in Venezuela about the - and your Honour I only put it in that it's a balance to what the Crown says about Mr Li's possible non obligations of things in Venezuela. Whereas Mrs Figuera gives a lot of evidence that on my reading of it your Honour is that the very different way things are done, for example, that the contract prices are agreed prices between the buyer and the seller. That in regard to paying taxes that it's an administrative issue and that there are fines in regard to US dollars. All those sort of things your Honour and I only put it to your Honour in that it's a balance to the Crown's argument on my client's possible bad character. And as I said your Honour I didn't want to pre-empt your Honour -

HIS HONOUR: Well I will be saying a few things about Wollongong rules applying in Venezuela, I won't mention the word "Wollongong" but yes I know she does speak about that -

HIS HONOUR: -but I don't think the jury had missed that.

ORMAN-HALES: No, no I wouldn't have thought so at all your Honour but I -

HIS HONOUR: But it's a question of whether or not, I mean in moral terms it's a bit like well the big companies that do business all throughout south-east Asia, and there are a lot of Australian people living in splendour on the leafy north shore and attending church every Sunday who operate companies which pay bribes, had paid bribes to Mr Soharto's family and other people throughout south-east Asia for the last fifty years, thirty years anyway. I mean there's no doubt about that, but that's not evidence in the trial, but there is evidence of the way things are done there.

CROWN PROSECUTOR: But it's not those rules that apply of course, it's a dangerous area your Honour.

HIS HONOUR: Well it's a dangerous area but you seek to make the point against Mr Li that he's a rule bender and out of his own mouth that's the case.

CROWN PROSECUTOR: That's right, so he's come here and bent our rules.

His Honour: Well no, hang on, that's what you say, he's a rule bender in Venezuela, whether he's deeply astute to the rules of Australia or just doesn't care about them remains to be seen but I'll be making some observations about it and we can all foam at the mouth after I do that." 115 The Judge returned to the issue of character when reminding the jury of the appellant's evidence and the Crown's cross-examination of him. He said (SU 48) :

"Now you would appreciate, members of the jury, that the thrust of that cross-examination is to suggest that there were two things, one is that there was such a discrepancy between the actual contract price in bolivars and the supposed verbal price in US dollars that she would not believe it was true, you would not believe that this transaction was genuinely related to taking the money out of Australia. And additionally the Crown puts it to you that as a result of the acceptance by the accused of this kind of practice you would be less likely to regard him as a person of good character. It is a matter to you to assess, but you will recall, I should add, that Mrs Figueras gave evidence about the business culture in Venezuela and you may think that if you accept what she says there was indeed widespread practices of the kind that Mr Li agrees with." 116 The Judge referred to further cross-examination of the appellant on the manner of carrying out commercial dealings in Venezuela and reminded them of the appellant expressing the view that in Venezuela:

"……..you've got to do things as people do things and you have to stay with the flow and if majority of people do transactions like that you've got to follow suit and like this sale of the building to Prato Tang, if we do not do in accordance with what was normal practice then the sale may not go through". 117 His Honour went on (SU 49):

"Now members of the jury, you may think it fairly plain that that involves this whole process which he refers to is dishonest if you regard dishonesty as telling a falsehood on a document which you were using in a commercial transaction. And you may well think that is plainly a form of dishonesty. But you may, and I will express an opinion about this which you can either accept or reject, matter for you. But in my view, I think it is highly likely that it was the practice in Venezuelan, if not in other parts of South America, for big commercial transactions to use the dollar, the American dollar as a way of avoiding the fluctuations of South American currency. In this case there is considerable evidence of the fluctuation of the Bolivar between 1997 and 2004. And it would be, you might think, realistic to believe that a lot of commercial people like Mr Li would rather trust a commercial arrangement set in fairly stable US dollars rather than the local currency. Even if that involves some dishonesty, some falsehoods being told to the government authorities.

You do not have to accept my opinion about these things, you are the judges of facts but you may think that flows from the whole pattern of this evidence. And if it leads to tax avoidance you can see how that would be the case. If you put the false statement on the document in bolivars and that is not what you really pay, you can see that inevitably that is going to lead to the likelihood of tax avoidance.

Now what significance you think this has in relation to the character of Mr Li is a matter for you. You may think it casts him in a bad light, it reflects on his conduct in Australia. On the other hand you may think that what he does in Australia is quite separate in terms of commercial pressures (practices?) from what happens in South America."

Although there was some further discussion about this matter, no further request was made by counsel for the appellant for any direction on the issue or any correction of anything his Honour had said. 118 The complaint is now made that his Honour should have given directions found in the Criminal Trial Courts Bench Book at [2-390] being a suggested direction where good character is contested. The relevant part of that suggested direction is as follows:

"If, on the other hand, you do not accept that [ the accused ] is a person of good character, evidence led by the Crown to the contrary to rebut such evidence must not be used to strengthen the Crown case against [ him/her ]. Thus, you are not entitled to say, 'Because of [ the accused's ] … [ specify the evidence to the effect that the accused is not a person of good character ] we think [ he/she ] is a person who is likely to have committed the crime'.

Indeed, if you are not satisfied that [ the accused ] is a person of good character, the law requires you to put all consideration of character out of your minds in determining whether you are satisfied beyond reasonable doubt that [ the accused ] is guilty of the crime charged." 119 We accept that it may have been preferable for his Honour to have warned the jury about the use of a finding that the appellant was not of good character, and we have little doubt that he would have done so had he been asked to give such a warning. But simply because a direction or warning might have been given, it does not follow that there was a miscarriage of justice because the direction or warning was not given, especially where it was not sought. 120 The trial judge's directions on character were very favourable to the appellant, including as they did a strong statement of his opinion that the appellant's practices in Venezuela had to be seen in light of the commercial realities in that country, were common in commercial transactions in that country and were only incidentally dishonest in that tax would have been avoided by misstating the price in bolivars rather than US dollars. Although it was open to the jury to disregard that view, we are of the opinion that in the context of this case and the evidence, that it is highly unlikely that the jury would have used the appellant's practices in Venezuela to his disadvantage having regard to his otherwise good character, especially in light of the factual issues placed before him. The real significance of this evidence, in our opinion was whether his account of how the money came to be in Australia could be accepted as a reasonable explanation. 121 Rule 4 applies. It may well have been the case that counsel then appearing for the appellant thought that, in light of the directions given and the statement of his Honour's opinion on the issue, there was no assistance in directions that raised the possibility that the jury might have treated the appellant as having bad character. In any event we are completely unpersuaded that the possibility of a miscarriage of justice arose because of the failure of the Judge to give the directions which the appellant now asserts should have been given. The ground should be rejected. Ground 7 - Unreasonable verdict 122 The argument in support of this ground was very brief. It was that Serna's evidence went no higher than a belief that the money in the unit was his and that amounts of money could not be reconciled. In effect it was submitted that there were amounts of money that are not accounted for. Serna received over $5 million and when he left Australia there was about $4 million left in the unit. However, the appellant received only $2.6 million from Iglesias so that $1.4 million is left unaccounted for. This fact it was submitted should have given rise to a doubt about whether the money collected by the appellant was the proceeds of Serna's criminal activity. 123 Serna gave evidence as to the circumstances in which he obtained the money. It was open to the jury to accept his account notwithstanding the attack upon his credit. True it is that in evidence at a previous trial it was put to Serna that it was not his money and he answered, "No I think it is my money". But very shortly thereafter he said that he had no doubt it was his money having regard to "the investigations" that had taken place. Later before this jury he explained what investigations had led him to have no doubt that the money was his. The telephone conversations supported the inference that the money was Serna's if the jury accepted, as they must have done, that the conversations related to the money in the Roseville unit. There was on the Crown case a chain of custody in relation to the money between Serna and Iglesias via Viana and then to the appellant. 124 But in any event, once the jury rejected the appellant's account as a reasonable possibility, which they must have done in order to convict him, there was no alternative but that the money belonged to Serna. 125 We are of the opinion that there is no merit in this ground.

Ground 8 - "Jury misconduct" 126 The ground in effect asserts that there was a miscarriage of justice because of the conduct of certain jurors in playing a word game during the course of the trial. It is asserted that the trial was vitiated by misconduct of the jurors, which, had it been known at the time, would have caused the jury to be discharged. It was further argued that the conduct deprived the appellant of a trial by jury and a verdict of twelve jurors. 127 Section 53A of the Jury Act 1977 relevantly provides:

53A Mandatory discharge of individual juror (1) The court or coroner must discharge a juror if, in the course of any trial or coronial inquest: (a) or

(b) or (c) the juror has engaged in misconduct in relation to the trial or coronial inquest.

(2) In this section: " misconduct ", in relation to a trial or coronial inquest, means: (a) conduct that constitutes an offence against this Act, or Note. For example, under section 68C it is an offence for a juror to make certain inquiries except in the proper exercise of his or her functions as a juror. (b) any other conduct that, in the opinion of the court or coroner, gives rise to the risk of a substantial miscarriage of justice in the trial or inquest. 128 Part 9 of the Jury Act sets out the offences under the Act. There is no offence under the Act that would have been committed by any juror who played a game during the course of the trial either in the jury room or in the courtroom. Therefore the Judge would have been required to discharge the jury only if he thought that the conduct gave rise to the risk of a substantial miscarriage of justice. As it was, neither the Judge nor any of the legal representatives were aware of any behaviour of the jury that raised any concerns about the performance of their functions in attending to the evidence, the addresses or the summing up. The trial went for a month, from 29 January to 29 February 2008. 129 After the trial of the appellant had concluded, it became known that one or more jurors had during the trial been playing a game called "Target". On 14 June 2008 an article in a newspaper reported that a juror had complained that the trial was tedious and that bored jurors were doodling or drawing and some played a word game. It was asserted in the article that a juror had reported that "all but two of the jurors had played the game at some time in court". 130 As a result of this article, the trial judge ordered that the sheriff conduct an inquiry in accordance with s 73A of the Jury Act. As a result the sheriff made a report of his investigations on 10 February 2009. The report and the annexures to it were made available to the parties after a hearing before the Chief Judge of the Common Law Division. The appellant tendered the report and annexures at the hearing over some minor objections by the Crown. 131 The sheriff's report indicates that, of the twelve jurors at the trial, the sheriff made contact with nine of them. The sheriff attended upon each of these jurors personally and asked a number of questions about the conduct of the jury in relation to the allegation that a juror or jurors were playing a game during the course of the trial. As a result of the answers given, formal statements were prepared for each of the jurors to sign. Of the nine jurors questioned, one refused to sign the prepared statement. The Crown objected to this Court taking any account of what was said in the unsigned statement or in the newspaper article. 132 It should be noted that no application was made for any of the jurors to be called to give evidence in this Court. At a very late stage, in fact after addresses had concluded and the Court was about to reserve its decision, Senior Counsel for the appellant invited this Court to continue to make inquiries in the hope of contacting the remaining three jurors. 133 The inquiry by the sheriff went further than was necessary in that the jurors were questioned about their conduct in the jury room. Therefore each of the statements made by the jurors refers to the conduct of the jurors in the jury room and the extent to which jurors played the game either before or after the day's proceedings and during adjournments. In our view this material is irrelevant and we do not believe it is appropriate to refer to those parts of the statements that are concerned with the conduct of the jury outside of the courtroom. This Court will only exceptionally receive evidence as to the conduct of jurors in the jury room even where that conduct is concerned with the deliberations and how the verdict was determined; see Burrell v R [2007] NSWCCA 65 at [274] to [284] where the relevant authorities are reviewed. 134 However, we wish to make it perfectly clear that there is nothing in the statements of the jurors that indicates that any misconduct or misbehaviour occurred in the jury room that could possibly bring about a miscarriage of justice. Nor does the evidence support the allegation apparently made by a juror and quoted in the newspaper article. 135 Each of the statements made by the jurors contained the following paragraph:

"This statement made by me accurately sets out the evidence which I would be prepared, if necessary, to give in court as a witness. The statement is true to the best of my knowledge and belief and I make it knowing that, if it is tendered in evidence, I shall be liable to prosecution if I have wilfully stated anything which I know to be false or do not believe to be true." 136 Seven of the eight signed statements contain the following paragraph:

"During the trial, I had no concerns about the conduct of the jury nor any particular jury members. I believe the jury were attentive toward the trial and evidence and took the role seriously, paid attention and were concentrating." 137 One juror stated:

"In the jury room, I did the puzzle on occasions but I did not do the puzzle in the courtroom during the trial. I don't recall seeing any of the other jury members doing the puzzle in the courtroom." 138 A second juror stated:

"I do not recall seeing any of the jury members doing the puzzle whilst in the courtroom during the trial." 139 A third juror stated:

"I recall seeing one man for sure, who played the puzzle while in the courtroom. There may have been one other person, but I'm not sure." 140 A fourth juror stated:

"I do not recall ever seeing any of the other jury members doing the puzzle in the courtroom." 141 A fifth juror stated:

"…….. I don't recall seeing any of the other jury members doing the puzzle in the courtroom." 142 A sixth juror stated:

"I do not recall ever seeing any of the other jury members do the puzzle in the courtroom during the trial." 143 A seventh juror stated:

"I was the foreperson for the jury. During the trial, I had no specific concerns about the conduct of the jury or of any particular jury members, ………

On the whole though, I believe the majority of the jury members gave all due attention to the evidence and took their role seriously. I did note however, that towards the end of the trial, some jury members became annoyed and frustrated with the slow pace of the proceedings, particular the constant frequent coming in and out of court for legal arguments between the defence and prosecution.

…………I did not do the puzzle at all in the courtroom.

I do not recall ever seeing any jury members to the puzzle whilst in the courtroom." 144 An eighth juror stated:

"I do not recall seeing any of the other jury members doing the puzzle in the courtroom." 145 The statement that was unsigned was in a similar form to the other statements. It, however, contained an allegation that four jurors played the game in the courtroom during the latter stages of the trial. This allegation should be given little weight in our opinion: first, because the juror was unwilling to sign the statement and, secondly, because it is inconsistent with the other statements. We believe it unlikely in the extreme that, if four jurors were playing the game in the courtroom, it would go unnoticed by a majority of the jurors. 146 No evidence was led of a formal nature about the game "Target". In fact Senior Counsel for the appellant had never heard of the game and was unaware of what it entailed. However, the parties agreed that the Court could inform itself of the nature of the game as it appears daily in a major Sydney newspaper. 147 The game consists of a square containing a grid that makes up nine smaller squares. In each of those nine squares appears a letter of the alphabet. A letter may appear more than once. The purpose of the game is to find as many words of four or more letters from the nine letters given, the major limitation being that each of the words must include the letter contained in the middle square of the grid. The player must also identify at least one nine-letter word containing each of the letters in the grid. The person who constructed the game has specified different levels of success: targets to be reached according to the number of words found. The targets for any particular game will vary depending upon the difficulty of finding words based upon the letters given. 148 The appellant asserts that the evidence discloses that, because some of the jurors were playing a game in the jury room, and at least one in the courtroom, there was a miscarriage of justice as a result of misconduct on the part of members of the jury. He went so far as to assert that it would be improper for a jury to engage in any sort of conduct that would distract itself from a consideration of the evidence during breaks in the trial. We would reject that submission and it does not accord with the evidence. 149 But in any event we believe that it is quite unrealistic for the criminal justice system to expect a jury to concentrate constantly on the evidence and the issues in the trial while they are in the jury room on a morning-tea break or at lunch. It is a regrettable fact that, in the way many trials are conducted, for long periods of time jurors are confined to the jury room during the course of legal arguments. It is absurd to expect the jury to refrain from seeking to relieve the boredom that would inevitably arise at these times by some form of distraction. 150 Of course, if one or more jurors refused to involve themselves in a proper discussion of the evidence and a consideration of the issues in the trial, particularly during the course of their deliberations, such behaviour may amount to misconduct. Similarly it would be a matter of considerable concern if one or more members of the jury acted in a way that would distract jurors from the task they were sworn to perform. But there is not the slightest suggestion that this is what occurred in this particular trial. In fact the evidence is to the contrary. 151 It is not misconduct nor can it give rise to a miscarriage of justice for members of the jury to play a word game, even competitively, in the jury room during breaks in the proceedings. There is no evidence that the game was being played during jury deliberations or that the playing of the game interfered with the jurors attending to their duties or performing their functions in accordance with their responsibilities. To the contrary the evidence is that the jurors performed their task according to their oaths or affirmations. 152 The allegation that one or more of the jurors were playing the game in the courtroom during the course of the trial raises more concern. It has traditionally been part of the jury's duty to "hearken to the evidence", that is to listen carefully to the evidence and to act upon it in accordance with the directions of law given to them by the judge. But that duty must be seen in a realistic situation, where not all evidence is of the same importance and much of it is routine or of a formal nature. The duty of jurors and their behaviour in the courtroom during the course of a trial must also take into account human frailties. Minor lapses in attention and distractions should not be taken as resulting in a miscarriage of justice or a finding that there has not been a trial according to law. 153 Cesan v The Queen [2008] HCA 52; (2008) 236 CLR 358, was a case concerned with a judge who was a sleep for a significant part of the trial. There was evidence that the conduct of the judge distracted the jury during the course of the trial and, in particular, when one of the accused was giving evidence. It is relevant to the present ground because the members of the High Court considered when a substantial miscarriage of justice might arise by conduct of members of the tribunal in a criminal trial. 154 French CJ held:

[4] As these reasons indicate, the case invited consideration of the duty of the judge in a trial by jury. That duty extends to the supervision and control of the conduct of the trial. Where the judge is noticeably and repeatedly asleep or inattentive during the trial, there can be a miscarriage of justice. Putting to one side minor lapses, a substantial failure of that kind in the judge's duty may have imponderable effects upon the outcome of the trial which cannot be assessed by an appellate court. The trial in such a case is flawed in a fundamental respect. However apparently strong the evidence against the accused person may have been, it cannot generally be said with any confidence that there has been no substantial miscarriage of justice. The trial in this case was so flawed. There was a miscarriage of justice. It could not be said that the miscarriage was not substantial. 155 Later his Honour stated (our emphasis):

[72] The appearance of a court not attending to the evidence and arguments of the parties and control of the conduct of the proceedings is an appearance which would ordinarily suggest to a fair and reasonable observer that the judicial process is not being followed. That is not to say that every minor distraction, inattention, sign of fatigue or even momentary sleepiness constitutes a failure of the judicial function. The courts are human institutions operated by human beings and there must be a margin of appreciation for human limitations. Otherwise the judicial system would be rendered unworkable by the imposition of unachievable standards. Nevertheless, it would be an unnecessarily narrow view of the judicial duty to say that appeal courts are to judge such lapses solely by reference to their effects upon the outcome of the case. In so saying, it must be accepted that the question will ordinarily fall for consideration in the application of statutory language, in this case the common form provision for criminal appeals reflected in s 6(1) of the Criminal Appeal Act. 156 The joint judgment of Hayne, Crennan and Kiefel stated (our emphasis):

[119] What is important, in these cases, is that the jury was distracted from paying attention to all of the evidence. And it was upon the assessment of all of the evidence led at trial that the jury's verdict had to be founded. The repeated distraction of the jury from attending to the evidence at various stages of the trial, including when one of the accused was giving his evidence, constituted a miscarriage of justice.

[120] Ensuring that the jury is not distracted from paying full attention to its task is pre-eminently a matter for the trial judge. If trial counsel is concerned that members of the jury cannot give, or are not giving, proper attention during the trial, it will be for counsel to raise that issue with the trial judge. Ordinarily, if the trial judge does not act of his or her own motion, and if trial counsel says nothing, an appellate court will not later be able to conclude that the jury did not pay attention to the evidence that was led. In particular, proffering the opinion of one or more observers about whether the jury appeared to be paying attention to proceedings would not ordinarily suffice to show that there has been a miscarriage of justice. The absence of intervention by the trial judge will usually far outweigh the value of any opinion offered by some observer after the trial is over. 157 In the present case there is evidence that one juror at some unspecified occasion or occasions to some extent played the game "Target" in the courtroom. The game does not of its nature indicate to us that any juror playing it in any way at all or to any degree is necessarily being distracted from the evidence to such an extent that a miscarriage of justice occurred. It is of no more concern than a juror who doodles or does some other activity that at least keeps the mind active and alert. 158 This was a relatively lengthy trial and not all of the evidence was of a nature that needed complete and undivided attention by each and every member of the jury. For example, there was almost a whole day taken up by the playing of transcripts of conversations in Spanish yet the jury were given transcripts of those conversations translated into English. If this had been an occasion when a juror was playing the game it could not possibly have given rise to any suggestion of a miscarriage of justice. There is no suggestion, unlike in Cesan, that any juror was repeatedly being distracted or not giving full attention at the time that the appellant was giving evidence. 159 It is significant, in our opinion, that no one in the courtroom, including the legal representatives of the Crown and the three co-accused, or any court officer noticed one or more jurors being so distracted while in the jury box to bring that fact to the attention of the judge. 160 We are not persuaded that the evidence shows that any one or more of the jurors were so distracted from due attention to the evidence that a miscarriage of justice occurred. 161 In our opinion none of the grounds of appeal have been made out and the appeal should be dismissed. **********

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