R v Bennett [2002] VSCA 226

20. In April 1999, the applicant applied to the Division of the Commonwealth Health Department in Canberra known as the Therapeutic Goods Administration (TGA) for a licence to import a controlled substance named Kava. Kava is used as a food in islander ceremonies. A licence was duly granted by TGA to import controlled substances on 1 July 1999. The applicant had to apply for a permit to import any consignment of goods he wished to bring into Australia, but never did so.

23. On 29 September 2000, the applicant telephoned one Singh, the business manager of Fernz Specialty Chemicals in Sydney, a company concerned with the importation of chemicals, including pseudoephedrine (the drug). The applicant represented that he was a pharmacist and his pharmaceutical company was Herbex. These representations were false. The applicant also said that he wanted to use the drug to formulate a cough and cold product and would be contracting out the manufacture of the product to Pan laboratories, which happened to be a large customer of Fernz. He wanted to purchase 150 kilograms of the drug and said he would pay for it upon delivery to him. Singh told him that he would require a permit and approval from certain bodies, and that the drug would have to be delivered to him. The applicant confirmed that he had a therapeutic licence from the TGA.

26. Singh ascertained that Pan Laboratories did not know the applicant and had not had dealings with him. When Singh advised the applicant about Pan never having any dealings with him, the applicant said that he would not use Pan as it was unreliable and that he only wanted to buy 25 kilograms to begin with.

29. McAlpine, the logistics manager of Fernz, made enquiries of the Health Department and the police and verified the applicant's TGA licence. The police in New South Wales advised McAlpine to continue with the transaction as if it were a normal transaction, suspicion having been raised by the quantity of the drug initially sought. The police in New South Wales were justifiably suspicious about the order, not only because 25 kilograms was a large commercial quantity of the drug, a commercial quantity being 2 kilograms, but almost certainly in view of his false claims in relation to Pan and other matters. The drug is a prohibited drug in New South Wales and is used in the manufacture of another prohibited drug known as "speed".

32. On 3 October 2000, the applicant faxed to Singh a handwritten order for delivery of one 25-kilogram drum of pseudoephedrine to his stated address in Emerald, Victoria. The order asked Singh to provide expected delivery date with his invoice, including payment details.

35. The applicant was led to believe by Singh that the company accepted that he was authorized by the TGA to be supplied with the drug and arrangements were then made for Victorian police to make a "controlled delivery" to the applicant in Emerald using a substitute substance. It is relevant in this context to point out that it was never intended that the applicant would actually be supplied with any of the drug. A covert operation was carried out by Victorian police to deliver 25 kilograms of mannitol, (a sugar product), in a drum to the applicant's address in Emerald on 17 October 2000. The price per kilo was $155 which, together with GST, required payment to be made of $4,262.50. Delivery was made and a cheque was provided by the applicant for what he believed was 25 kilograms of the drug. Any illegality involved in these activities was regarded by the trial judge as being of a technical or minor character. Soon after the applicant was arrested.

38. He was interviewed by the police, but essentially he made "no comment" answers to the questions put to him. In addition, the applicant stated that he had never done anything wrong and that he had tried to contact all the right departments.

41. The applicant gave evidence. He said that he had obtained a licence to import kava and had made enquiries of the TGA in relation to the registering of dietary pills. He was referred to Singh and discussed using the drug for manufacturing dietary pills because he believed that the drug was a good product for weight reduction. This explanation, it is to be observed, differed from that given to Singh. He denied saying that he was a pharmacist and denied asking about purchasing 150 kilograms of the drug. He said he was told by Singh that he had passed all the regulatory checks required and was never aware that his licence was inadequate to allow him to purchase the drug. He denied any intention to use the drug to make amphetamine ("speed").

44. At the commencement of the trial, counsel for the applicant applied to have all the evidence relating to counts 1 and 2 excluded because of the unlawful and improper conduct of the police in setting up and carrying out the covert operation. A voir dire was conducted into the police conduct, particularly in New South Wales. On the fifth day of the trial, the judge ruled that the evidence the Crown sought to rely upon to prove the charges was not so tainted by police illegality that public policy required that the evidence be excluded. His Honour admitted the evidence in the exercise of his discretion to do so, notwithstanding any illegality.

47. His Honour's ruling was very thorough in its analysis of the facts and consideration of relevant legal principles. In the course of delivering reasons for the ruling, the judge considered defence counsel's major submission that the alleged crimes of trafficking and possession were procured by illegal and improper conduct of the police continuing up to the date, 17 October 2000, when the applicant took possession of 25 kilograms of the drug in Emerald. Mr Dann contended that as there were further steps which had to be taken after the lodgement of the order before possession could be secured, the offence of attempt to possess had not been committed at that stage. However, this argument was misconceived. The fact that further acts would have to be performed before an offence would be completed would not, of itself, prevent the act said to constitute an attempt to commit that offence being regarded as "more than merely preparatory".[2] Clearly, the lodgement of a written order to obtain the substance could not be appropriately described as a preparatory step, but rather as a necessary and integral part of the process of doing so. This was the view accepted by the judge who said in response to counsel's submission that the attempt "must, as a matter of law, have been effected on 3 October when the order form was signed (by the applicant) and delivered (to Singh) by fax." What happened after 3 October, he said, was by way of proper investigation. He placed reliance upon a passage in Ridgeway v. R.[3] in the joint judgment of Mason, C.J., Deane and Dawson, JJ.:

"The effective investigation by the police of some types of criminal activity may necessarily involve subterfuge, deceit and the intentional creation of opportunities for the commission by a suspect of a criminal offence. When those tactics do not involve illegal conduct, their use will ordinarily be legitimate notwithstanding that they were conducive to the commission of a criminal offence by a person believed to be engaged in criminal activity. It is neither practicable nor desirable to seek with precision the borderline between what is acceptable and what is improper in relation to such conduct."

51. The passage cited by his Honour continued and it is desirable to cite the last two sentences of the paragraph:

"A finding that law enforcement officers have engaged in such clearly improper conduct, [subterfuge, deceit and the intentional creation of opportunities for the commission by a suspect of a criminal offence], will not, of course, suffice of itself to give rise to the discretion to exclude evidence of the alleged offences or of an element of it. As with the case of illegal conduct, the discretion will only arise if the conduct has procured the commission of the offence with which the accused is charged."

55. His Honour proceeded with his ruling as follows:

"I find as a fact, and I do not accept in the circumstances, that the accused in this case could have been led to conclude that his attempting to take possession of the prohibited drug of dependence was lawful. I would conclude, if I had to, and it is not necessary for me to do so, because I certainly at this stage have not heard his evidence, if I will ever hear it, but I would conclude that what happened was that he was surprised that the remarkable bluff that he had put before the authorities had in fact succeeded. I would clearly conclude in all the circumstances that he was not led to believe that what he was doing was lawful. The attempt, in my view, as a matter of law, was completed when he effected the order on 3 October. Thereafter what happened was an investigation, and an appropriate investigation, I might say, which allowed the police to follow the trail of the chemicals, as Mr Harnetty said, to see and to determine if there were any other persons involved, but further, such investigation allowed the accused to further implicate himself by being party to the delivery of a 'sample' of the large amount ordered. I find, therefore, that this crime was not procured by the illegal action or improper conduct of the parties."

Application for leave to appeal against conviction

60. Mr Dann, for the applicant, submitted that the judge's discretion to admit the evidence was vitiated by four errors:

1. By the finding that the attempt was completed on 3 October when the applicant faxed the order to Singh.

2. By his Honour failing to find that the illegality of the police played any role in the obtaining of evidence.

3. By his Honour being reluctant to accept that the applicant could possibly have been misled by any representation that had been made to him (by McAlpine or Singh).

4. By his Honour failing to find that the effective representation to the applicant was that he was lawfully entitled to purchase and take possession of the drug.

67. Having read the ruling, we are unpersuaded that the judge erred in any one of the four ways relied upon by Mr Dann. In our opinion, the placement of an order on 3 October indicated a clear intention by the applicant to purchase and take possession of 25 kilograms of the drug. The applicant's conduct between 29 September and 3 October 2000 was more than merely preparatory to the commission of the offence created by s.73(1) and was immediately connected with the commission of the offence. The other findings complained about were open to the judge to make at the conclusion of the voir dire. The relevance of the alleged errors numbered 2 and 3 to the commission of the offence is very doubtful. The judge had the advantage of hearing the witnesses and making the findings he did.

70. The main thrust of Mr Dann's submission was that the principles enunciated in Ridgeway dictated that the prosecution in the present case was an abuse of process and the evidence should have been excluded. There is a considerable distinction to be made between the facts in Ridgeway and the facts in the present case. In Ridgeway police misconduct was extreme inasmuch as a policeman unlawfully imported heroin into Australia contrary to s.233B of the Customs Act 1901 (Cth) for the purpose of arranging a "controlled delivery" of narcotics in Australia to Ridgeway. The unlawful conduct procured the commission of the offence of possession without reasonable excuse of a prohibited import namely heroin.

73. In the present case, the "controlled delivery" of the drug to the applicant was not procured by serious improper conduct on the part of New South Wales police, if improper conduct occurred at all. The applicant initiated discussions with Singh to buy the drug and took steps to obtain possession by placing an order. If the police conduct was improper in permitting the transaction to proceed as a normal transaction, the judge was entitled to admit the evidence in the exercise of his discretion, applying the principles in Bunning v. Cross.[4] The improper conduct, if any, did not result from a deliberate and reckless disregard of the law and did not affect the cogency of the evidence. Nor, in the circumstances and when regard is had to the conduct in which the police engaged, are there any other considerations of a public policy character which could militate in favour of the exclusion of the evidence. Accordingly ground 1 fails.

76. Ground 2 complains that his Honour erred in ruling that a defence based upon the applicant having an honest belief on reasonable grounds that he was legally entitled to possess the drug after Singh led him to believe that he had been authorized by the TGA to be supplied with the drug was not open to the applicant.

79. In ruling against the defence being available, the judge said that, if the applicant had a belief that it was lawful for him to take possession of the drug, and it was a mistake of fact, it was not an honest belief on reasonable grounds which would make his possession innocent because the mens rea only required the Crown to prove that the applicant knew the existence and nature of the goods.[5] The Crown was not required to prove whether the applicant was authorized under the Act. It was for the applicant to prove on the balance of probabilities that he was authorized under the Act to take possession of the drug.

82. The ruling was plainly right. The leading authority on the defence of "an honest and reasonable belief in a state of facts which, if they existed, would make the defendant's act innocent affords an excuse for doing what would otherwise be an offence" is Proudman v. Dayman. [6] In the present case, an honest belief based upon reasonable grounds, if held by the applicant, that he was authorized to possess the drug could not exculpate him because in fact and in law he was not authorized and it was not an element of the offence of attempting to possess the drug which had to be proved by the Crown. Any belief that the applicant had did not relate to the elements of the offence and could not be exculpatory.

Application for leave to appeal against sentence

89. Although not so expressed, as his application for leave to appeal against sentence contains the single complaint that "the sentence imposed in relation to

count 2 was manifestly excessive", the applicant, in effect, contends that his Honour imposed a sentence which exceeded the applicable maximum penalty available in the circumstances.

"Pursuant to s.73 of the Drugs, Poisons and Controlled Substances Act 1981 an onus is placed upon the offender, having been found guilty, to prove to the court that such attempted possession was for a purpose other than trafficking. Such determination means to the prisoner the difference between a maximum penalty under s.73(1)(b) of one year or under s.73(1)(c) of five years. See R. v. Pantoro [1988] VicRp 28; (1988) V.R. 195 at 200."

97. After an extensive analysis of the evidence that had been adduced in the course of the trial, he concluded that the appropriate applicable maximum penalty to which the applicant was exposed and to which regard was required in the determination of a proper sentence, was that fixed under s.73(1)(c), namely five years' imprisonment and the imposition of a monetary penalty.

100. His Honour reasoned that the failure of the prosecution to establish the guilt of the applicant of the attempted trafficking encompassed by count 1, did not of itself determine the question posed by s.73(1)(b) - had the applicant discharged the onus of establishing that his attempted possession was not for a purpose related to trafficking. [7]

103. Whilst the approach adopted by the judge was clearly correct as a matter of general principle, it was also necessary for his Honour to have regard to the manner in which the case had gone before the jury in order to ensure that full effect was given to the verdicts at which they arrived.

106. In this context, his Honour's charge with respect to the two counts assumes relevance. With regard to count 1, he stated:

"Coming then to the circumstances of this case, how is the trafficking put to you by the Crown? In this instance the prosecution has submitted to you essentially that this is the beginning of an illicit drug trade. This is the start of the chain.

...

The purpose, of course, of this trafficking, you must conclude, to find him guilty in this matter, must be illicit, or another word, illegal. You have heard from Mr Bennett who has said to you, 'My purpose in obtaining this controlled substance was to make dietary pills'. And of course, if you found that that was so, then it could not possibly be an illicit purpose. Further, if you were not satisfied beyond reasonable doubt of the proposition put by the Crown, equally you could not be satisfied that the Crown had proved its case."

It is evident from questions asked by the jury during their retirement that they were, at least, concerned about the possibility that the applicant may have believed that he was acting lawfully in attempting to secure possession of pseudoephedrine. This resulted in the provision of the instruction by the judge:

"Madam Foreman and members of the jury, your question was whether - I think perhaps the word means 'it would' - would his intention to possess the drug legally or illegally have any bearing on our verdict? And can I tell you the short answer to that is no. The elements in this case are as I've explained. Did he intend to exercise control over the drug in this instance, and did he know at the time that he was exercising such control of the existence and nature of the goods? Now, contrast that to the first count where, in the first count, you have to be satisfied that his intent was to be part of an illicit trade, so that if his intent was, in fact, to make dietary pills, then he didn't have the intent in that case to be part of an illicit trade. In this case, however, in the second count, the count is [an] attempt to take possession of a drug which was a drug of dependence pursuant to the Act, and, whether in these circumstances he had an intention to possess that drug legally or illegally, in the circumstances of this case, is not relevant. The provisions in this case look at the issue of possession and that he knew what he was taking possession of and they're the elements that you have to be satisfied, apart from, of course, that it was a drug of dependence and pseudoephedrine, but that's not an issue in this case. So, the answer, the short answer to your question, is no. Thank you."

Apparently, not satisfied with this explanation, a further written question was handed to the judge which his Honour declined to answer:

"Would Mr Bennett try to procure a drug of dependence, namely pseudoephedrine, if firms and the police told him that he did not pass all legal requirements? In this case, he was told that all checks had been approved."

Naturally, care needs to be taken to avoid reading too much into a jury question for a number of obvious reasons. However, there are indications in this and the earlier question that they were troubled by the possibility that the applicant may have been misled by the police and the drug company into committing the offence with which he was charged.

115. On the basis of the instructions given to them, the jury may well have accepted the version of the applicant and still returned a verdict on count 2.

118. The situation with which the sentencing judge was confronted was both difficult and unusual. The responsibility of determining the facts upon which the sentence would be based rested upon him. Clearly, he could not arrive at findings in relation to count 2 which were inconsistent with the jury's verdict on count 1. But that was a verdict with which he strongly disagreed, as the following passages from his remarks make apparent:

"I find without hesitation that when the goods arrived at Mr Bennett's house, albeit that they were substituted goods, that the purpose of their arrival as far as Mr Bennett was concerned was for trafficking. I have no doubt whatsoever that his intention was in the future to enter into a process of manufacture involving that product himself or to have it done on his behalf whereby a third party would produce amphetamine.

...

It seems to me that all of that material (the evidence in the trial) is totally inconsistent with any legal purpose."

However, his Honour recognized that to make that finding of fact would be inconsistent with the jury verdict of acquittal on the count of attempted trafficking and he expressly disavowed doing so.

123. Whilst the judge had no doubt whatever about the motivation of the applicant in attempting to obtain a substantial quantity of pseudoephedrine, in a trial in which, for practical purposes, that was the only matter in dispute, we have indicated, the jury obviously did. Otherwise they would have convicted him on count 1. However, save to the extent that they were not satisfied beyond reasonable doubt that he was intending to traffick in the material, there is no way in which the factual basis upon which their verdicts were reached can be determined with any measure of confidence.

126. The interpretation of jury verdicts for sentencing purposes, without the additional complication of a statutory provision like s.73(1), regularly presents problems for sentencing judges. Problems of consistency of findings do arise from time to time. Sometimes there may be little guidance for the sentencing judge from the verdicts themselves considered against the background of the trial itself. On other occasions, where the issues which were before the jury were few and clearly identifiable, any inconsistency may be readily observable. Ultimately, to the extent that it can be ascertained, full effect must be given to the jury's verdict. His Honour was mindful of these issues and addressed them at some length in carefully constructed sentencing remarks. Nevertheless, his comprehensive rejection of the jury's finding on the central issue of the purpose for which the applicant wanted the material creates a strong impression that he proposed to give effect to that finding to the minimum extent required by law.

129. When regard is had to the strength of his Honour's view as conveyed in his sentencing remarks which, it is to be noted, echoed opinions expressed at the outset of the trial,[8] it is impossible, in our view to avoid the conclusion that he was primarily concerned to avoid what might be described as any logical inconsistency arising between the jury verdict on count 1 and his findings as a sentencing judge in respect of count 2. To approach the matter in this limited fashion, which possesses the potential of undervaluing the jury's determination of the practical issues raised in the trial and may thereby have resulted in a failure to give full effect to it, was in our opinion unsatisfactory.

132. There is, in the special circumstances of the present case, a distinct possibility that full effect has not been given to the jury verdict.

135. Accordingly we consider that the application for leave to appeal against sentence should be allowed, that the sentence imposed on count 2 be set aside and in lieu thereof a sentence of six months' imprisonment be substituted.

138. The application for leave to appeal against conviction will be dismissed.

[1] R. v. Pantorno [1988] VicRp 28; [1988] V.R. 195; R. v. Satalich [2001] VSCA 106; (2001) 3 V.R. 231; Coleman v. DPP and County Court of Victoria [2002] VSCA 116.

[2] See R. v. Jones [1990] 1 W.L.R. 1057.

[3] [1995] HCA 66; (1995) 184 C.L.R. 19 at 37.

[4] [1978] HCA 22; (1978) 141 C.L.R. 54.

[5] He Kaw The v. R. [1985] HCA 43; (1984-1985) 157 C.L.R. 523.

[6] [1941] HCA 28; (1941) 67 C.L.R. 536 at 540.

[7] There is no need in the present context to endeavour to distinguish between the concepts of attempted trafficking and attempted possession for a purpose related to trafficking, which is made in the legislation. Here, the Crown assertion was quite straightforward and could not of itself have produced a difference in outcome between the two counts.