R v Bucic

Court of Criminal Appeal (NSW)|2016-09-30|Before: Hoeben CJ, Harrison J, Campbell J

Solicitors: Solicitor for Public Prosecutions (Crown) File Number(s): 2014/172409 Decision under appeal Court or tribunal: District Court of NSW Jurisdiction: Criminal Date of Decision: 25 May 2016 Before: Judge Flannery SC

Judgment

HOEBEN CJ at CL:I agree with Campbell J.
HARRISON J: I agree with Campbell J.
CAMPBELL J: By notice of appeal filed on 21 June 2016, the Director of Public Prosecutions appeals against a verdict of acquittal directed by her Honour Judge Flannery SC in the District Court on 25 May 2016. The appeal is brought under s 107(2) Crimes (Appeal and Review) Act 2001 (NSW). The respondent does not dispute that that the appeal "involves a question of law alone". The appeal concerns the meaning of the expression "manufactures … a prohibited drug" within s 24 Drug Misuse and Trafficking Act 1985 (NSW) ("DMTA").

The Crown case

The Crown case on the State offence was that the respondent and his co-accused were in possession of a number of sheets of A4 paper impregnated with cocaine. To adopt neutral language, the case was that the respondent (and the co-accused) took a number of steps to separate the cocaine from the paper. The evidence established that each the respondent and the co-accused had purchased items for this purpose. These items included a 4.6 litre painter's bucket, some smaller buckets, disposable gloves, test tubes, 2.5 litres of iso-Propyl alcohol, a funnel and a quantity of filter paper. The co-accused had obtained written instructions setting out the necessary steps, which included cutting the paper into small pieces, immersing them in the alcohol, stirring occasionally over 3 or 4 hours, mixing that material with boiling water, and allowing evaporation. These steps, or some of them, were to be repeated 3 times.

Expert evidence

Evidence was given at the trial by a member of the Australian Federal Police with a bachelor's degree in applied chemistry with honours in forensic science conferred by the University of Technology, Sydney. His evidence in chief included (reading from his statement): "21. Cocaine hydrochloride (the form in which cocaine is most commonly encountered) is freely soluble in water or alcohol. 22. If the instructions on the handwritten page were followed, utilising [alcohol] as the solvent, cocaine would be extracted from impregnated paper. This would result in cocaine dissolved in a liquid solvent (water and alcohol mixture). Evaporating the liquid solvent (either through simple evaporation or heating) would result in the deposition of a quantity of solid cocaine in a container. No specialised equipment or control chemicals are required to effect the extraction."
In cross-examination the witness agreed that "the cocaine hydrochloride goes into that paper in that form as the cocaine hydrochloride, and comes out again in exactly the same form" (136.10 - .45T). He was asked the following question: "Q. … presupposing the extraction of which you have just given some evidence. So if its impregnated, it goes in and comes out and it is exactly the same going in and coming out? A. It would remain cocaine hydrochloride, yes." He confirmed that no specialised equipment or controlled chemicals are required to effect the extraction (137.35T).

Argument below

On 23 May 2016, just before the close of the Crown case, the jury sent a note to the trial judge in the following terms: "The jury would like a definition on the legal meaning of 'manufacture of prohibited drug'. We would also like to know what is meant by 'knowingly take part in the manufacture'."
It was agreed between her Honour and counsel that she would hear and decide the respondent's legal argument based on Beqiri before answering the jury's note.
The Crown argued that Beqiri did not apply because the legislation was different. The relevant definition in the DMTA was expansive, extending the concept of manufacturing to "the process of extracting or refining the prohibited drug". The definition in the Code was exhaustive and limited by the expression "means any process by which a substance is produced".
The respondent argued that the reasoning in Beqiri should be applied because, despite the differences in legislation, it was strongly persuasive due to the factual similarities in that case and the case at hand. Manufacture had its "ordinary natural meaning" in both Acts. It was submitted that the ordinary meaning of manufacture is "to make or produce" and applying the reasoning in Beqiri the Court should conclude that s 24 DMTA required a new substance to be produced by the extracting process.
Her Honour accepted the respondent's argument and directed the jury to return a not guilty verdict to the State charge on 24 May 2016, giving reasons on 25 May 2016.

Reasons below

In giving her reasons, her Honour referred to the jury's note and recorded that Beqiri involved an offence under the Code, but said the facts were "remarkably similar" (AB 14), involving the extraction of cocaine from towels and clothing by a process of evaporation. The definitional section in the Code was set out so far as material and her Honour emphasised the similarity of the expression "process of extracting or refining a substance". She did not in terms, however, set out the relevant provisions of the DMTA, which she was required to interpret.
Paragraphs [27] to [36] of Beqiri were very amply set out. Her Honour seemed to emphasise that Priest JA at [27] had said "the oridinary meaning of the word manufacture is to make something out of something else", omitting the citations relied upon by his Honour.
Her Honour concluded (AB 16): "Although, as the Crown submitted, Beqiri was a Victorian decision involving different legislation, I consider it highly persuasive. However, as Mr Korn submitted, it is not necessary to have regard to Beqiri. I need only have regard to the ordinary English meaning of 'manufacture', that is, making something out of something different, which clearly informed the context in which the process of extracting the prohibited drug must occur. Here, as in Beqiri, the evidence establishes that the substance was the same substance before it was absorbed into the paper and after it was extracted from the paper. Therefore, nothing different was being made."

Relevant statutory provisions

s 24(1) DMTA is in the following terms: "(1) A person who manufactures or produces, or who knowingly takes part in the manufacture or production of, a prohibited drug, is guilty of an offence. It is unnecessary to set out the balance of the section. "Manufacture" is defined in s 3: "Manufacture, in relation to a prohibited drug, includes the process of extracting or refining the prohibited drug." The offending proscribed by s 24 extends to knowingly taking part in the manufacture of a prohibited drug. Section 6 DMTA makes the following relevant provision: "… a person takes part in … the manufacture … of a prohibited drug … if: 1. the person takes, or participates in, any step, or causes any step to be taken, in the process of that … manufacture …."
It is to be borne in mind that the indictment charged the respondent with 'knowingly taking part in the manufacture of cocaine'.

Summary of arguments on appeal

Ms McNaughton SC, the Commonwealth Director of Public Prosecutions, who appeared on the hearing of the appeal with Ms G Wright, pointed out that the learned trial judge did not refer to the NSW statutory definition in her reasons, indeed, her Honour did not refer to the statute at all. Rather, her Honour purported to apply "the ordinary English meaning" of the word "manufacture" which she took to be "making something out of something different". This was obviously, with respect, derived from Priest JA's judgment in Beqiri at 223 [27]. This was an error because that "ordinary meaning" was derived from revenue statutes concerned with excise duties. In any event, s 305.1(1) of the Code (the subject of the decision in Beqiri), as it stood at that time, was cast in terms very different from s 3 DMTA. In particular, the definition of the word "manufacture" in the Code was prescribed by the word "means", and not "includes", connoting that what followed was an exhaustive definition. The key element of the definition was "any process by which a substance is produced." By contrast, s 24 of the DMTA distinguishes between "manufactures" and "produces" by use of the word "or" between them. In the Code, the expression "any process by which a substance is produced" includes, and limits the meaning of, "any process of extracting a substance".
In contradistinction, the use of the word "includes" after the word "manufacture" in s 3 DMTA is indicative of a legislative intention to enlarge the ordinary meaning of the word: Corporate Affairs Commission (SA) v Australia Central Credit Union (1985) 157 CLR 201; [1985] HCA 64 at 206 - 7. Given the distinction in the operative section between "manufacture" and "produce", the former "is not limited to processes which create a new substance or modify the chemical structure of an existing substance" (Crown written submissions p 9, [35]). The defintions of "manufacture", "make" and "extract" from the Macquarie Dictionary online were relied upon to demonstrate the potential width of meaning in the language used in the DMTA.
Alternatively, even if the learned trial judge was correct about the ordinary English meaning of "manufacture", it was contrary to principle to read down the words which followed "includes" to accord with that ordinary meaning: The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc (1994) 181 CLR 404 at 419.
Mr Thangaraj SC who appeared for the respondent on the hearing of the appeal (and provided written submissions with Ms G Huxley) reminded the Court that attention "must be given first and foremost to the text" of the legislation having regard to its context and purpose: Alcan (NT) v Territory Revenue [2009] HCA 45; 239 CLR 27 at 46 (respondent's written submissions p 2, [9]). It is necessary to read the definition contained in s 3 into the operative part of s 24, interpreting or construing the language having regard to the context and purpose of the operative section.
Learned senior counsel argued that the trial judge was correct in determining that the ordinary meaning of "manufacture" is "making something out of something different". He argued further that "the term 'manufacture' connotes the creation of something (the substance or an object) as a result of the application of some process to something else" (Respondent's written submissions p 3, [10]). The respondent argued that considerable caution was required in the use of dictionaries as an aid to interpretation. He argued that the word "includes" in the definition did not indicate that manufacture had an extended definition in the DMTA; its purpose was to make clear that the term manufacture included the process of extracting and refining, but not so as to extend the ordinary meaning of the word "manufacture". Reference in this regard was made to Beqiri at 225, [35]. Satisfaction of the terms of the statute required proof that the process of extraction served to create a prohibited drug. It was not sufficient that it involved the removal of a prohibited drug from a porous object in which it had been impregnated.

Decision

If one reads the relevant definitions in s 3 and s 6 into the operative part of s 24, the section reads, so far as is relevant to the case at hand: "a person… who knowingly takes any step in the process of extracting… a prohibited drug is guilty of an offence" (See Kelly v The Queen (2004) 218 CLR 216; [2004] HCA 12 at 253 [103] (per McHugh J).) Adapting the words of the substantive provision as amplified in this way, and bearing in mind the summary of the Crown case provided above (at [7]-[9]), in my judgment the evidence was capable of proving beyond reasonable doubt that the respondent was a person who had knowingly taken a step in the process of extracting cocaine from the paper within which it was contained. But the respondent submits that he could not be guilty of this offence because this process of extraction did not amount to making something, ie cocaine, from something different from cocaine. It is necessary to interpet and construe the relevant legislation to determine whether the respondent's argument is correct.

Relevant rules of interpretation and construction

The applicable rules are as follows: 1. In Alcan (NT) v Territory Revenue at [47], Hayne, Heydon, Crennan and Kiefel JJ, said: "[47] This court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy." [Footnotes omitted] 1. In Beckwith v The Queen (1976) 135 CLR 569 at 576, Gibbs J (as his Honour then was) said: "The rule formerly accepted, that statutes creating offences are to be strictly construed, has lost much of its importance in modern times. In determining the meaning of a penal statute the ordinary rules of construction must be applied, but if the language of the statute remains ambiguous or doubtful the ambiguity or doubt may be resolved in favour of the subject by refusing to extend the category of criminal offences … The rule is perhaps one of last resort". [Citations omitted] 1. In R v Thomas (1993) 67 A Crim R 308 at 310, Gleeson CJ (when Chief Justice of New South Wales) explained that it was not appropriate to take a narrow approach to the interpretation of s 24 DMTA. His Honour said: "It is to be noted at the outset that the concept of taking a step in a process of manufacture appears, in s 6 of the Act, in a context which manifests a legislative intention that is inconsistent with any narrow or pedantic approach to the description of activities connected with bringing prohibited drugs into existence. Paragraphs (b) and (c) of s 6 demonstrate that."

The Crown's primary argument - the extended definition

I accept that the process of separating the cocaine from the paper within which it was contained is a process of extraction for the purpose of the DMTA, as the Crown argued. Accordingly, to knowingly take part in that process was to knowingly take part in the manufacture of the prohibited drug cocaine.
Even assuming that the ordinary English meaning of "manufacture" is (and only is) "making something out of something different", it was an error for her Honour to say that that meaning "clearly informs the context in which the process of extracting the prohibited drug must occur". In "Shin Kobe Maru" at 419, a unanimous High Court pointed out: "The use of the word 'proprietary' in the term to be defined does not colour the meaning to be given to the definition which follows it. It would be quite circular to construe the words of a definition by reference to the term defined." As Gibbs J explained in Wacal Developments Pty Ltd v Realty Developments Pty Ltd (1978) 140 CLR 503 at 507: "With all respect it is impermissible to construe a definition by reference to the term defined. The expression is given by the statute a special meaning which must be applied whether or not it accords with the ordinary meaning."
Moreover, and importantly, the use of the word "includes" in the definition "indicates … the subsection is expansive of what would otherwise be included in the notion of" manufacture: Corporate Affairs Commission South Australia v Australian Credit at 206.
As Stephen J said in FCT v St Huberts Island Pty Ltd (1978) 138 CLR 210 at 216: "…a meaning which is expressed in terms of "includes" and which may be seen to be at least partially expansive in its operation should not, I think, be treated as an exclusive definition, but rather as operating cumulatively upon the ordinary meaning of the word or phrase in question and conferring added meaning for the purposes of the Act." This explanation, in my judgment, is apposite in the present case. Even if the ordinary meaning of "manufacture" was as her Honour decided, the construct "the process of extracting … the prohibited drug" adds to that meaning.
The extended definition was not constrained, restricted or informed by the word "manufacture". The word "includes" and those that followed extended the ordinary meaning of "manufacture". This is sufficient to dispose of the appeal. However, in deference to the careful argument advanced by counsel, I think it appropriate to state my views in relation to the principal issues.

Ordinary meaning of manufacture

I accept that "making something out of something different" is an ordinary English meaning of "manufacture"; it is not the ordinary English meaning, as with respect, the learned trial judge decided. The references to the Macquarie Dictionary (online edition) provided by counsel for the appellant identify a range of possible meanings of "manufacture": Comcare v Martinez (No 2) (2013) 212 FCR 272; [2013] FCA 439 at 290 [68]. As Leeming JA said in TAL Life Limited v Sheutrim [2016] NSWCA 68 at [80] "Dictionary definitions may assist in identifying the range of possible meanings a word may bear in various contexts, but it will not assist in ascertaining the precise meaning the word bears in a particular context … Although the distinction between the dictionary definition of the word and its legal meaning is not often well understood, it is clear that dictionaries are no substitute for the interpretive process." [citations omitted]
It is interesting to note that none of the range of meanings attributed to the word "manufacture" in either the Macquarie Dictionary or the Oxford Dictionary online editions includes "to make something from something different". The Oxford Dictionary in one sense speaks of making something from raw materials, and in another of "converting" something, which are, I suppose, broadly similar to the meaning ascribed to "manufacture" by the learned judge. But reference to the dictionaries demonstrates a wide range of possible meanings including, in the Macquarie Dictionary, to work up (material) into a form for use. This would, in my view, include the type of activity the Crown say the respondent engaged in here.
It is apparent from Priest JA's judgment in Beqiri that the meaning favoured by the trial judge may be traced to the judgment of Dixon J (as his Honour then was) in Federal Commissioner of Taxation v Zinader (1949) 78 CLR 336 at 343, a sales tax case. The question was whether fur coats, and the like, formed by a furrier remodelling existing fur garments brought in by customers, were liable to tax as goods manufactured and sold. Dixon J approved the definition of "manufacture" given by Darling J in McNicol v Pinch (1906) 2 KB 352 at 361: "The essence of making or of manufacturing is that what is made shall be a different thing from that out of which it is to be made."
McNicol was also a sales tax case. The question there was whether imported 330 saccharin subjected to a chemical process which converted it to 550 saccharin, a sweeter product, amounted to the "manufacture of saccharin" under the Finance Act 1901 (Imp). By a majority, (Bray and Darling JJ; Ridley J dissenting), the Court held that the appellants were not manufacturers because the product always remained saccharin.
Darling J said at 361: "I do not say that to use the word 'manufacture' as exactly synonymous with the word 'make', or to use the words 'to manufacture' as exactly synonymous with the words 'to make' is strictly grammatical, but I think that is what the statute has done. I think it possible that in a literary sense 'to make' and 'to manufacture' may not have precisely the same meaning. One could put cases where the word 'manufacture' might be used in a somewhat strained way, but perhaps a little more scientifically. Take the case of a carpenter. A carpenter uses wood; he begins with wood; he makes the wood into boxes. What would you say if you wanted to talk of his manufacturing? Ordinary people would not say that he manufactured wood; they would say he manufactured boxes. But I am not quite sure it might not be strictly said that he manufactures the wood. He applies a process to it. I suppose etymologically 'to manufacture' is 'to make by hand'. Everybody knows that you cannot absolutely make a thing by hand in the sense that you can create matter by hand, because in that sense you can make nothing: 'Ex nihilo nihil fit'. You can only make one thing out of another. I think the essence of making or manufacturing is that what is made shall be a different thing from that out of which it is made. Even if it could be strictly said that the carpenter 'manufactures' wood it cannot be said that he 'makes' wood." [emphasis added]
Speaking for myself, I accept that the assembly of boxes from wood is manufacturing. However, it is difficult to think of the box as something made out of something different. The box is wooden and was made from wood.
In dissent, Ridley J said at 363: "Take the manufacture of wool. It is wool when it is on the sheep's back; it is wool when it has passed through the process of sorting and picking, which it has to go through in the mill. Is not that the manufacture of wool? I should have thought it most certainly was, although the name 'wool' is applied to it both before the process begins and after it has ended." I find it difficult not to agree with this.
If one considers Darling J's dictum fully in context, one may understand that the wooden box is "a different thing" from the wooden components "of which it is made". But also in that sense, the cocaine hydrochloride is a different thing from the cocaine impregnated paper from which it was extracted by the process of dissolution and evaporation.
In Thiess v Collector of Customs (2014) 250 CLR 664; [2014] HCA 12 at 672, a unanimous High Court said "objective discernment of statutory purpose is integral to contextual construction." Section 33 Interpretation Act 1937 (NSW) requires a court to adopt "a construction that would promote the purpose or object underlying the Act" in preference "to a construction that would not promote that purpose or object."
The purpose of a revenue statute is different from the purpose of a statute prohibiting the manufacture, distribution and supply of harmful, illicit drugs. Self-evidently so. A revenue statute provides a very different context for the purpose of interpreting "manufacture". Gleeson CJ made this point in Thomas (at 310 - 311). His Honour said: "In the context of constitutional law, a fiscal imposition is held to be a duty of excise if it is a tax upon the manufacture or production of goods. The tax in question may be upon the general process of manufacture or production of goods, or upon a particular step in such manufacture or production. Whether a particular activity is a step in the manufacture or production of goods, and whether a tax relating to such an activity is properly to be regarded as a tax upon goods, are questions of substance, not form, to be determined in the light of the nature and purpose of the activity. Here we are concerned, not with a characterisation of a fiscal imposition, but with the application of a penal statute aimed at preventing (except under certain controlled conditions) the production of particular goods. Activity which may properly be described as the manufacture of a certain product might, in various cases, commence with materials which are themselves in varying stages of production or refinement. The end product of a given industrial activity, assuming it to be a marketable commodity, might be something which is itself capable of being used as a material in a process of manufacture." [Citations omitted]
In the context of the DMTA which, inter alia, prohibits the manufacture, production and supply of drugs, the definition derived from McNichol in my judgment is too narrow. Without attempting to be exhaustive, in my view, the legal meaning of "manufacture" in DMTA includes "to work up material into a form for use". On the Crown case, it was open to the jury as a matter of law to be satisfied beyond reasonable doubt that the respondent and his co-accused were engaged in such an activity.

Taking part in manufacture

I appreciate that in Thomas Gleeson CJ refers to a process of "bringing prohibited drugs into existence" (see also Re Avory (2003) 87 SASR 392 at 105 per Besanko J; and R v Randylle (2006) 95 SASR 574; [2006] SASC 318 at 582 [46] per Doyle CJ). But it is important to consider that idea in the broader context of his Honour's analysis. To be guilty of an offence under s 24, it is not necessary that the person charged is responsible for all necessary steps in the manufacture of the drug from acquisition of raw materials to realisation of the drug as a "marketable commodity". Participation in any one of the various steps along the continuum of a process of manufacture that may be required to realise the drug as a marketable commodity is sufficient.
To like effect is the dictum of Doyle CJ in R v Randylle at 582: " In my opinion… a step in the process of manufacture can be taken by someone who does not have all of the equipment or chemicals required to complete the process. Such a step could be taken before any chemical reaction is produced by the use or treatment of consumables. The process of production can be broken into stages, that might be conducted at different places and by different people and on different days. If the evidence establishes that that is what was intended, an act or event which in isolation might not appear to be a step in the process of production may, properly understood, be found to be such a step. All of these things have to be considered."
In my judgment, even without the definition of manufacture being extended to a process of extraction, and if the learned trial judge's definition had been correct, the dissolution and evaporation to be undertaken by the respondent and his co-accused was a step in the process of manufacture as explained by Doyle CJ.
To put it another way, adapting the language of Gleeson CJ, given the condition in which the drug was brought into this country, a jury may accept that the steps taken by the respondent and his co-accused constituted the final stage of a much larger process of manufacturing cocaine "as a marketable commodity".

Beqiri v R not applicable

As I have said, the trial judge, in directing the acquittal, considered the Victorian decision of Beqiri "highly persuasive". Although her Honour did emphasise that Beqiri involved different legislation, it appears she may have been swayed by the "remarkably similar" facts of that case when compared to the case at hand. But as Windeyer J said in Teubner v Humble (1963) 108 CLR 491; [1963] HCA 11 (at 503): "[D]ecisions on the facts of one case do not really aid the determination of another case. Observations made by judges in the course of deciding issues of fact ought not to be treated as laying down rules of law. Reports should not be ransacked and sentences apt for to the facts of one case extracted from their context and treated as propositions of universal application… That would lead to the substitution of a number of rigid and particular criteria for the essentially flexible and general concept of negligence." (See also Roads and Traffic Authority of NSW v Dederer (2007) 234 CLR 330; [2007] HCA 42 at 350 (Gummow J)) The only proper use of precedent is to identify the relevant rule to apply to the facts as found: Jolley v Sutton London Burrough Council [2000] 3 All ER 409 at 416. A decision on different legislation, accepting a similarity of legislative purpose, provided no "rule" to apply in this case, even if the facts were remarkably similar.
In my judgment, Beqiri has no application to the interpretation of DMTA. The definition of manufacture in the Code is different from the definition in s 3 DMTA and this means the substantive provision, 305.4, has a different operation from s 24 DMTA.
Moreover, Priest JA at [27] recognised that "much of the legislation dealing with illicit drugs to be found in different jurisdictions … provides a statutory definition of manufacture" whatever its ordinary meaning. His Honour also recognised (at [28]) that the code definition was "exhaustive". His Honour referred to R v Thomas and R v Randylle noting that in both cases the relevant legislation was regarded as "having a wide reach" (Beqiri at [30]). Priest JA, however, said: "These cases do no more, however, than illustrate that the legislative intention in any given case must be derived from the words used in the particular statute".
In the context of the Code, Priest JA considered that the concept of "extracting" must be necessarily incidental to "manufacturing" for the statute to apply. He said at [35]: "[T]o beat a Oriental carpet in order to release an illicit drug suspended within it might be "extracting" the drug, but it would not be to produce the drug." This illustrates the centrality of the concept of production to the definition of manufacturing in the Code in the form considered by the Victorian Court of Appeal. This is not true of DMTA. For the reasons I have given above, beating an Oriental carpet to release an illicit drug suspended within it to realise the cocaine as a marketable commodity, would be a "process of extracting … the prohibited drug" for the purposes of DMTA. Just as, here, dissolving the cocaine impregnated paper in the alcohol solution, and evaporating that solution to obtain the cocaine hydrochloride as a marketable commodity, was a process of extraction of the drug, in the statutory sense. Were it necessary to say so I would regard it as a step in its "manufacture", simpliciter.
The orders that I propose are: 1. Crown appeal allowed; 2. Quash the acquittal of the respondent by direction of 24 May 2016; 3. Order a new trial.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 December 2016

Interpretation Act 1937(NSW)

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