(a) Severance of Counts 1 and 3
3 The effect of my previous ruling is that Ian Ferguson is to be tried separately to Cox and Sadler on Count 1 (conspiring to traffick heroin). Ian Ferguson and Joanne Ferguson will be tried jointly on Count 3 (being engaged in transactions involving the proceeds of crime). That count will be tried jointly with the charge of conspiracy (in Count 1) against Ian Ferguson. Counts 5, 6 and 7 (each involving theft charges) are to be tried separately from Count 1, and separately from each other.
4 In written outlines of argument, it was submitted on behalf of Ian Ferguson and Joanne Ferguson that, as a consequence of the severance of Count 6, it is necessary that Count 3 also be severed from Count 1.
5 Count 1 alleges that Ian Ferguson conspired with Cox, Sadler and others to traffick heroin between 1 April 1999 and 6 December 2002. The Crown case is that, during that period, Ian Ferguson, pursuant to that conspiracy, trafficked large quantities of heroin. Count 3 alleges that during the same period Ian Ferguson and Joanne Ferguson engaged in transactions involving money and other property which were the proceeds of that conspiracy, contrary to s.122 of the Confiscation Act 1997. Count 6 alleges that on 30 August 2000 Ian Ferguson, in the course of a drug raid, stole cash from Giac Nguyen, totalling $370,000.
6 The submission of Ian Ferguson and Joanne Ferguson, as made in the outlines of argument, focused on the fact that Count 3 alleges that the money laundering occurred between 1 April 1999 and 6 December 2002, and that the theft, charged in Count 6, occurred on 30 August 2000. The argument was that Count 3 must, accordingly, involve an allegation that Ian Ferguson and Joanne Ferguson engaged in transactions which involved (inter alia) the proceeds of the theft charged in Count 6. If Count 3 is jointly charged with Count 1, but not with Count 6, Count 3 can only relate to the proceeds of the conspiracy alleged in Count 1. It was submitted on behalf of Ian Ferguson and Joanne Ferguson that the Crown " ... ought not to be allowed to treat all transactions, particularly those occurring in the months after 30 August 2000, as evidence of the laundering of the proceeds of Ian Ferguson's drug trafficking activity".[2]
7 At the commencement of oral submissions, Mr Tovey QC, who now appears with Mr Brown for the prosecution, informed me that the Crown does not intend to proceed with the prosecution of Ian Ferguson on Count 6, and that a nolle prosequi will be entered in respect of that count on the presentment. In light of that indication, Ms Tittensor, who appears on behalf of Joanne Ferguson, stated that her client did not persist with the application to sever Counts 1 and 3 on the presentment.
8 However, and notwithstanding Mr Tovey's announcement, Mr O'Doherty, who appears with Ms Marjanovic for Ian Ferguson, submitted that Count 1 and Count 3 should be severed in respect of his client. Mr O'Doherty made that submission on the basis that, in a joint trial between Ian Ferguson and Joanne Ferguson on the money laundering count, it would be open to Joanne Ferguson to conduct her defence by seeking to prove that the proceeds of the crime, which were the foundation of Count 3, were derived from the theft alleged against Ian Ferguson by Giac Nguyen, and not from the proceeds of the conspiracy charged in Count 1, as contended by the Crown.
9 There are a number of short responses which can be made to that submission. First, if Joanne Ferguson intended to adduce evidence as to that theft, that would not provide a logical foundation for severing Counts 1 and 3. Ian Ferguson and Joanne Ferguson are jointly charged on Count 3, and Ian Ferguson would, nonetheless, suffer the apprehended prejudice by being jointly tried on that count. However, and in any event, the more direct response to Mr O'Doherty's submission is that it is well nigh inconceivable that Joanne Ferguson, whether in a joint trial or if she were tried separately, would seek to prove that the money and property which are the subject of Count 3, had been derived, not from the conspiracy charged in Count 1, but rather from the proceeds of the theft of $370,000 by her husband from a drug dealer. Such a proposition is, to say the least, highly fanciful. I note that in the course of those submissions Ms Tittensor did not, understandably, seek to advance any such proposition on behalf of her client. Accordingly, no basis has been made out for severing Counts 1 and 3 of the presentment.
(b) Admissibility of evidence concerning purchase of Landcruisers
10 The Crown proposes to call evidence that in September 2000 Ian Ferguson purchased a Landcruiser for himself from Geelong City Toyota for the purchase price of $64,700. The Crown also proposes to call evidence that in November 2000 Ian Ferguson paid the purchase price of a Landcruiser acquired in the name of Caroline Sadler, the wife of the accused man Sadler, for $58,734. Ian Ferguson and Sadler both object to the admissibility of that evidence on the grounds that the prosecution has previously asserted that the two vehicles were purchased indirectly with funds which were the proceeds of the theft alleged in Count 6.
11 The evidence on which the Crown proposes to rely is contained in a statement of Jason John Flynn, who was then a sales consultant in the employment of Geelong City Toyota. Mr Flynn states that on 1 July 2000, Ian Ferguson attended at the dealership and negotiated the purchase of a new Landcruiser for a price of $64,700. Ferguson signed a contract of purchase in respect of the vehicle dated 1 July 2000. He also paid a cash deposit of $10,000. He produced that amount of cash from his pocket on that day. On 15 September 2000, the vehicle was delivered to Ian Ferguson. Final payment was made by means of a Bank of Melbourne cheque in the sum of $25,700, and cash totalling $29,000.
12 On 3 November 2000, Ian Ferguson contacted Flynn and enquired about the purchase of another Landcruiser. On the same day Ferguson and Sadler attended at the dealership. They negotiated the purchase of a new Landcruiser for $58,734. Flynn compiled a sale contract in the name of Caroline Sadler. Ferguson left the dealership while Sadler remained. Approximately one hour later Ferguson returned with a cheque for the amount of $58,734. Later that day the vehicle was delivered to Sadler's home address. Caroline Sadler signed the contract and signed the VicRoads registration form.
13 As I have stated, Ferguson and Sadler object to that evidence on the grounds that the Crown has previously asserted that the Landcruisers were paid for by the proceeds of the theft alleged in Count 6 of the presentment and not from the proceeds of the conspiracy alleged in Count 1. It was submitted that there had been no change in the evidence concerning the purchase of the two Landcruisers. Thus it was submitted that the Crown assertion that the Landcruisers were purchased from the proceeds of the drug trafficking the subject of the conspiracy in Count 1 is so speculative and tenuous that the Crown ought not to be permitted to lead the evidence of the purchases of the Landcruiser on Count 1.
14 In a letter dated 15 April 2004 addressed to the solicitors for Sadler, the solicitor for the Office of Public Prosecutions stated that it was alleged by the prosecution that Ferguson used part of the proceeds of the theft alleged in Count 6 to purchase the two Toyota Landcruiser motor vehicles for himself and Sadler. Thus, it is correct that, at one stage in these proceedings, albeit prior to the committal proceedings, the Crown asserted that the motor vehicles were purchased from the proceeds of the theft at Braybrook which was the foundation of Count 6 on the presentment. However that has not always been the consistent stance of the Crown in these proceedings. In July of this year, in the course of argument concerning the severance of Count 6, senior counsel for the Crown submitted that there was a factual relationship between Count 1 and Count 6, because the Crown's position was that the proceeds of Count 6 were used to fund the conspiracy alleged in Count 1, and were not used for the personal betterment of Mr Ferguson.[3]
15 In any event, there is, in my view, a short answer to the submission made on behalf of Sadler and Ian Ferguson. Count 6 is no more than an unproven allegation against Ian Ferguson, in respect of which Ian Ferguson is and was presumed innocent.[4] The fact that at one stage in the proceeding the Crown might have taken the position that the proceeds of the alleged theft were used to purchase the Landcruisers does not mean that the inference on which the Crown now relies, namely, that the vehicles were purchased from the proceeds of the conspiracy charged in Count 1, is speculative or tenuous. The original position taken by the Crown constituted, at that stage, nothing more than an inference which the Crown contended that a jury should ultimately draw at the trial of Count 6. The fact that the Crown, in April 2004, intended to rely on the evidence of the purchase of the Landcruiser for that purpose does not reflect on the validity or otherwise of the inference which the Crown now seeks to be drawn from the purchase of the Landcruisers, namely, that they were funded from the proceeds of the trafficking which was the subject of the conspiracy alleged in Count 1 of the presentment. Accordingly, I reject the objection taken to the admissibility of the evidence of the purchase of the Landcruisers.
16 Further and in any event, even if there was substance to the objections by Sadler and Ian Ferguson, nonetheless some of the evidence of the purchase of the two Landcruisers would be admissible. The contract for the purchase of the first Landcruiser, in the name of Ian Ferguson, was concluded before the date of the theft alleged in Count 6. On any view the Crown would be entitled to adduce that evidence, together with the evidence of the payment, in cash, of the deposit by Ferguson on that day. Further, the evidence of the purchase by Sadler of the second Landcruiser in November 2000, with the assistance of Ferguson, is relevant to the conspiracy charge for another purpose, namely, to provide that evidence of a commercial relationship existing between Ferguson and Sadler at that time. The existence of that relationship is relevant to the proof by the Crown that Ferguson and Sadler were parties to a conspiracy to traffick heroin.
17 For those reasons I rule that the evidence concerning the purchase of the two Landcruisers is admissible against Ian Ferguson. I further rule that the evidence of the purchase of the second Landcruiser, in November 2000, is admissible against Sadler.
(c) Objection to evidence "bolstering" the evidence of Duy Le
18 Ian Ferguson also objects to the evidence of 15 witnesses which, in written submissions made on his behalf, is described as "evidence being called by the Crown to bolster the credibility of Duy Le by virtue of establishing Duy Le has given a consistent account regarding collateral matters". In the course of discussion before me it became apparent that most, if not all, of the objections made on behalf of Ian Ferguson may be resolved by discussion between the Crown and counsel for Ian Ferguson. Accordingly, it is not necessary for me to rule on those objections at this stage.
(d) Objection by Ian Ferguson to the evidence of Kenneth Lai
19 The evidence of Lai is summarised in my previous ruling.[5] In essence, Lai was arrested in early 1999. Cox and Sadler recruited him as an informer for the Drug Squad while he was in custody. After his release Lai assisted Cox and Sadler to establish contact with Duy Le, as a result of which Duy Le was arrested. Lai also provided information to Cox and Sadler concerning other drug dealers. In the course of those activities Cox and Sadler tried to persuade Lai to traffick drugs supplied to him by the Drug Squad. They proposed that Lai would be entitled to a share of the profits involved in that drug trafficking. Ultimately Lai refused to accede to that proposal, and declined to participate in the trafficking of drugs on behalf of Cox and Sadler.
20 There is no evidence that Ferguson was involved in the unsuccessful attempt to recruit Lai as a person through whom heroin was to be trafficked on behalf of members of the conspiracy which is alleged in Count 1. Indeed, according to the evidence of Duy Le, Ferguson was not involved in the trafficking of heroin to him until some time after the initial alleged corrupt approach to him by Cox in early August 1999.
21 The relevance of the evidence of Lai was considered in my previous ruling. It had been argued on behalf of Cox and Sadler that Lai's evidence was irrelevant to the conspiracy charged in Count 1 of the presentment. In particular it was submitted that, as then framed, the Crown case involved not one but two conspiracies, one involving the attempt by Cox and Sadler to recruit Lai to traffick heroin, and the other being a conspiracy in which Cox initially recruited Duy Le to traffick heroin. I rejected that submission. I held that, on the evidence in the depositions, there was a sufficient nexus between the attempt to recruit Lai to traffick heroin, and the subsequent agreement by Duy Le to traffick heroin on behalf of the accused, so that the two transactions formed part of the one conspiracy. Accordingly I rejected the submission on behalf of Cox and Sadler that the evidence of Lai should be excluded on the grounds that it was incapable of establishing, or being relevant to the proof of, the conspiracy charged by the Crown in Count 1 of the presentment.
22 Objection has been taken on behalf of Ian Ferguson to the admissibility of the evidence of Lai against him. Mr O'Doherty submitted that the probative value of the evidence is outweighed by its prejudicial effect to Ferguson, and that thus I should exclude the evidence in the exercise of my discretion.
23 In support of that objection, Mr O'Doherty submitted that Lai's evidence is only relevant to the existence of the conspiracy before Ferguson is alleged to have become a participant in it. It is thus of limited value to the Crown. He submitted that it is not critical to the Crown case that Lai be called to give evidence. The evidence of Duy Le as to the existence of the conspiracy, and as to the initial approaches to him by Cox and Sadler, does not depend on the evidence of Lai in any relevant sense. The evidence of Duy Le would not be rendered meaningless, or deprived of context if Lai were not called. On the other hand it was submitted that Ferguson would sustain significant prejudice should the evidence of Lai be admitted against him. First, it was submitted that Lai's evidence would unfairly bolster the credibility of Duy Le, who is a critical witness against Ferguson. Secondly, it was submitted that, because Ferguson had no contact or dealings with Lai, he would be hampered in cross-examining Lai or in countering his evidence.
24 That objection involves a comparison of the probative value of Lai's evidence, with the prejudice to Ferguson should the evidence be admitted against him. The evidence of Lai clearly adds to the proofs of the Crown as to the existence - and indeed the origins - of the conspiracy initially constituted between Cox and Sadler. Lai's evidence, if accepted by the jury, provides important background and context to the evidence of Duy Le. The Crown case is not that the conspiracy originated with the corrupt approach by Cox to Duy Le on 3 August 1999. Rather, the Crown case is that that approach was part of a conspiracy already constituted between Cox and Sadler. In that respect, and to that extent, the evidence of Lai is of probative value to the Crown, particularly in relation to the evidence of Duy Le, as to the initial corrupt approach to him by Cox. It renders that aspect of the evidence of Duy Le less surprising and more probable. It is thus of some probative value in the proof by the Crown of the conspiracy alleged on count one.
25 The acts and utterances of parties to an alleged conspiracy, other than the accused, may be adduced in evidence to establish the existence and nature of the conspiracy.[6] An accused may join a conspiracy some time after its inception.[7] Thus, evidence is admissible to prove the formation and existence of a conspiracy before the date on which an accused is alleged to have joined the conspiracy.[8] Evidence of what took place between other parties to the alleged conspiracy, before it was joined by an accused, may be relevant to explain the context of the allegations against the accused and to provide an appropriate background to them.[9] It follows that the evidence of Lai is relevant to prove, against Ferguson, the formation and commencement of the conspiracy before Ferguson joined it.
26 An example of such evidence is to be found in R v Masters, Richards and Wunderlich.[10] In that case, the Crown alleged that Morrison and Richards conspired to seize cannabis from a property and sell it. Subsequently, Masters and Wunderlich were recruited to the conspiracy. At trial, the three accused were convicted. On appeal, Masters and Wunderlich contended that the trial judge wrongly directed the jury that it was entitled to take into account conversations between Morrison and Richards, which had taken place before Masters and Wunderlich joined the alleged conspiracy. The New South Wales Court of Criminal Appeal rejected that submission. Their honours stated:[11]