R v Mateiasevici [1999] VSCA 120

39. On 2 June 1999 the Registrar granted the applicant leave to substitute three grounds and add two grounds in relation to his application for leave to appeal against conviction and sentence respectively. The grounds are these.

(1) The trial miscarried as a result of the improper admission into evidence of the finding by the police of the heroin press more than a year after the offences for which he stood trial, together with the applicant's subsequent record of interview.

(2) The trial miscarried as a result of the failure of the trial judge to direct the jury upon the proper use of lies told by the applicant.

(3) The trial judge erred in failing properly to direct the jury as to the meaning of "possession" at common law and in particular, the matters that the applicant was required to negative to overcome the presumption created by s.5 of the Drugs Act.

In the course of the hearing of this appeal, a fourth ground was added which is related to ground 1, namely:

(4) Having admitted evidence tending to establish propensity of the applicant the trial judge failed adequately to direct the jury as to the use that could be made of such evidence.

On appeal, the applicant did not pursue the complaint set out in ground 1 concerning the reception into evidence of the applicant's second record of interview.

(1) The sentence is manifestly excessive.

(2) The sentencing discretion miscarried as a result of the learned sentencing judge erroneously holding that the applicant was a "serious drug offender" pursuant to s.6B of the Sentencing Act 1991 and thereby sentencing him in accordance with s.6D(a) of the Act.

55. I now turn to consider the grounds in support of the applications for leave to appeal in the order in which they were argued.

Grounds 1, 4: (Improper admission of evidence and failure to give propensity warning)

60. It is convenient to mention at this point that at his trial, the applicant did not testify or call any evidence and relied, inter alia, on his first record of interview which was tendered as part of the Crown case.

63. The principal contention of Mr. Shirrefs who appeared for the applicant in the appeal was that the evidence of the heroin press found by the police at the applicant's premises in Noble Park on 25 August 1998 ("the 1998 evidence") was propensity evidence. It was next put that this evidence was inadmissible because its probative value did not or did not sufficiently outweigh its prejudicial effect. It was further contended that in any event, a propensity warning should have been given to the jury and that failure by her Honour to do so, deprived the applicant of a fair trial.

66. It is necessary now to explain briefly the purpose for which the 1998 evidence was led at the trial. In order to establish its case that the applicant trafficked in a drug of dependence, the Crown had to establish that:

(a) the applicant was in possession of the heroin found in the hot water service;

(b) he was in possession of it for sale (and not, say, for his own use).

72. The requirement that the possession of the drug had to be for the purposes of sale was never in issue between the parties. The only issue was whether the applicant was in possession of the heroin on 30 July 1997. Section 5 of the Drugs Act relevantly provides that a person is deemed to be in possession of the drug so long as it is upon premises occupied by him, unless the person satisfies the court to the contrary. It was accepted by Mr. Shirrefs that for the purposes of the appeal the applicant was the occupier of the premises in question at the relevant time within the meaning of s.71. Consequently, the onus was upon him to prove on the balance of probabilities that, at common law, he was not in possession of the drug. Part of his case, which he effectively put through his record of interview, was that he did not know that the heroin was on the premises. The Crown sought to meet this aspect of the applicant's case by seeking to establish, inter alia, that he knew that the heroin press was in his garage on 30 July 1997. It argued that this tended to show that he also knew of the heroin in the hot water service. In order to discredit his denial of knowledge of the heroin press, the Crown relied, inter alia, on the 1998 evidence. In that context, it argued that a heroin press was an extraordinary item of equipment and that it was unrealistic to contemplate that on two occasions, albeit 13 months apart, the applicant could be found in possession of a heroin press at premises occupied by him yet claim on each occasion that he knew nothing about it.

75. The circumstances in which the 1998 evidence was led were as follows. Almost at the very outset of the trial, counsel for the applicant told her Honour that he did not oppose the admission of that evidence. He argued that it was admissible but went only to the credibility of the applicant's denial of his knowledge of the heroin press; the evidence went "to the veracity or otherwise of the [applicant's] denial of knowledge" of the heroin press on 30 July 1997.

78. Initially the prosecutor (Mr. Tinney) argued that the 1998 evidence could be led for a wider purpose than that contended for by counsel for the applicant. He argued that the evidence tended:

(a) to discredit the applicant's denial of his knowledge of the heroin press in July 1997;

(b) to establish that the applicant was in possession of the heroin press in July 1997.

That, together with the evidence of other findings in the kitchen, tended to show that he had knowledge of the heroin found in the hot water service. In the course of making his submissions on that point, Mr. Tinney said that the 1998 evidence was not propensity evidence.

84. As events turned out, counsel for the applicant succeeded in limiting the basis on which it was left with the jury. In the addresses of counsel and in her Honour's charge, the evidence was described as going only to the credit of the applicant's denial of knowledge of the heroin press on 30 July 1997. In her charge, her Honour was quite specific about this matter. She told the jury this:

".. I am about to give you a direction of law. .. [T]he fact that the .. items that make up heroin presses, if you accept that evidence, .. were located a year later in the accused's garage and car, can only be used for a limited purpose. And that is, if you so wish, you can use that evidence to discredit him in relation solely to his explanation to the police of 30 July, as to the items found in the garage which are said to be a heroin press, by the Crown. It is for that limited purpose only that the evidence is being led of the findings of those items at Noble Park."

88. As I have mentioned earlier, Mr. Shirrefs submitted that the 1998 evidence was wrongly admitted. He said it was propensity evidence, the probative value of which did not relevantly outweigh its prejudicial effect so as to make it admissible. He contended further that even if the evidence was admissible, a propensity warning should have been, but was not, given to the jury thereby depriving the applicant of a fair trial.

91. Mr. McArdle who appeared for the respondent did not in terms contend that the 1998 evidence was not propensity evidence. The Crown's case on appeal was that even if the 1998 evidence could be characterised as propensity evidence, it was led as being relevant only to the applicant's credit and the jury was firmly instructed to that effect. Therefore, it could not have been properly used by the jury as evidence of tendency on the part of the applicant to engage in heroin dealing. In support of that submission, the Crown relied on what Ireland, J. (as a member of the New South Wales Court of Appeal and with whom Hunt, C.J. at CL and Levine, J. agreed) said in R. v. AH (1997) 42 N.S.W.L.R. 702, at 708-709, namely, that if evidence is led for a specific purpose other than tendency evidence (in that case it was led to establish a relationship between the accused and the complainant) it cannot be used as propensity evidence. In R. v. FJB [1999] VSCA 90, Charles, J.A. (with whom the President and Buchanan, J.A. agreed) doubted whether evidence which is properly characterised as propensity evidence loses that character merely because the Crown asserts that it was introduced for a different purpose. Although I agree with the views so expressed by Charles, J.A., for reasons which I later give, that issue need not be resolved in this case.

94. Mr. Shirrefs submitted that the 1998 evidence was propensity evidence because it tended to establish that the applicant had or may have committed an offence under s.71A of the Drugs Act. In my view, the reason why the 1998 evidence was propensity evidence was that it tended to show that the applicant was the kind of person who was likely to engage in dealing in heroin or in disreputable conduct associated with such dealing (Pfennig v. R. [1995] HCA 7; (1995) 182 C.L.R. 461, 475). Propensity evidence is not limited to evidence which discloses other crimes; it includes evidence of disreputable conduct or bad character (R. v. Best [1998] 4 V.R. 603, per Callaway J.A. (with whom the Chief Justice and Buchanan, J.A. agreed) at 608).

97. Such evidence, however, is admissible under s.398A(2) of the Crimes Act 1958 if it is relevant to a fact in issue and the court considers that in all the circumstances it is just to admit it despite any prejudicial effect it may have on the applicant. In my view, the 1998 evidence was relevant to the credibility of the applicant's denial of knowledge of the heroin press found in his garage on 30 July 1997. That, in turn, was relevant to the issue of his knowledge and possession of the heroin. Thus, the real question is whether it was just in all the circumstances to admit it despite its prejudicial effect.

100. In R. v. Tektonopoulos [1999] VSCA 93, Winneke, P. agreed with Callaway, J. (in R. v. Best, at 606-611), that the legislative purpose of s.398A was to abrogate the "no other reasonable explanation" test for admissibility of propensity evidence as developed in Hoch v. R. [1988] HCA 50; (1988) 165 C.L.R. 292, 296 and Pfennig in favour of the "just to admit the evidence despite its prejudicial effect" test adopted by the House of Lords in Director of Public Prosecutions v. P. [1991] 2 A.C. 447. His Honour went on to say that the test which s.398A(2) requires is not far removed from that which was usually applied in Australia before Hoch v. R. In that context, the President referred to Sutton v. R. [1984] HCA 5; (1984) 152 C.L.R. 528 where Brennan, J. described, at 547-548, the test of admissibility of the evidence as follows:

"Before the trial judge is at liberty to admit similar fact evidence he must be satisfied that the probative force of the evidence clearly transcends its merely prejudicial effect ..... It is the probative force (or cogency) of the evidence in comparison with the impermissible prejudice that it may produce which determines admissibility."

104. Adopting that formulation of the test for the purposes of this case, the question is whether the 1998 evidence has probative force which clearly transcends its prejudicial effect. Mr. Shirrefs contended that there was no logical link between the 1998 evidence and the discovery of the heroin press in the applicant's garage in 1997. He claimed it was a quantum leap backwards from the 1998 finding to the 1997 discovery; the fact that he had possession of the items in 1998 did not establish that he had them in 1997 or that he lied about the matter on 30 July 1997. He said that this case was not very different from a situation where a balaclava and tools which could be used for burglary were found at the premises of an accused and similar equipment and a (different) balaclava were found at his premises a year or so later. The second finding, so the argument was put, had no logical connection with the first for the purpose of establishing whether the accused had committed a burglary at the time the tools were first found. Whilst there may be merit in that particular argument given the circumstances postulated, the argument would have less merit if the tools had a significant aspect to them which connected them to the crime (as the heroin press has in this case). In Thompson and Wran v. R. [1968] HCA 21; (1968) 117 C.L.R. 313, for example, the accused were charged with breaking, entry and stealing arising out of safe blowing by means of explosives. It was held that evidence that the accused were in possession of tools that could be used to pick the locks of safes was not admissible because they had no connection with the crime charged (and merely showed a criminal propensity to rob safes). But the Court said, at 316, that evidence was admissible that the accused were in possession of a "supply of gelignite, detonators, wires and batteries suitable for the blowing up of safes" (for the purpose of identifying the persons who committed the crime). Mr. Shirrefs' example might also have less force if on each occasion the accused denied that he knew anything about the tools or head gear and the evidence of the second finding was led to the accused's credit in relation to his first denial. In the present case there is, in my opinion, a strong logical link between the two findings bearing in mind the unusual nature of the equipment and its specific use in connection with heroin trafficking, and the applicant's denial of any knowledge of it on each occasion.

107. In my view, the 1998 evidence was probative of the veracity or otherwise of the applicant's denial on 30 July 1997 of knowledge of the heroin press and of the likelihood of it being coincidental that equipment of that type would be found at his premises on two occasions without him being effectively aware of it. The fact that the findings were 12 months or so apart is, in this case, irrelevant. Evidence of a subsequent event is frequently led to negate coincidence and the mere fact that it is evidence of a subsequent event does not deprive it of its probative force. For example, in Thompson v. R. [1989] HCA 30; (1989) 169 C.L.R. 1, where the accused was charged with the murder of two sisters, the Court upheld the admissibility of evidence of subsequent murders by the accused of another sister and her family (on the ground that there was a striking similarity in the manner in which the various deaths had occurred). See also Pfennig. Moreover, in my opinion, the probative value of the 1998 evidence clearly transcends its prejudicial effect. If accepted, it is highly relevant to the credibility of the applicant's denial of 30 July 1997 in respect of the heroin press. Consequently, in my view it was admissible evidence under s.398A(2).

110. But there is another reason why the evidence should have been received. As Hedigan, A.J.A. pointed out during argument on this appeal, not only had the appellant's counsel agreed from the very outset that the evidence was admissible, but he formulated the limited basis on which it was to be put to the jury and succeeded in having it admitted only for the purpose so nominated by him. In these circumstances, it seems to me that one can reasonably infer that counsel made a forensic choice to have the evidence admitted on this limited basis rather than take the risk that it might be admitted on at least the broader basis originally contended for by Mr. Tinney. He did not merely fail to take an objection to this evidence, but deliberately argued for its admission on the limited basis in order to gain a forensic benefit. He succeeded in this and in the circumstances of this case, this Court should not interfere with the jury's verdict even if counsel had arguably erred in his decision to concede its admissibility of the 1998 evidence (see R. v. Wakim [1998] 2 V.R. 46, Winneke, A.C.J. at 43; R. v. Osland [1998] 2 V.R. 636, 651-652; R. v. Birks (1990) 19 N.S.W.L.R. 677, Gleeson, C.J. at 685; R. v. Gay [1976] VicRp 59; [1976] V.R. 577, 584).

113. For completeness, I mention that Mr. Shirrefs sought to argue that the applicant's counsel at trial missed the point that the evidence was propensity evidence and, therefore, inadmissible. The inference was that this led to a miscarriage of justice. For reasons I have already given, the evidence was admissible so that no miscarriage of justice arose. But I should also make it plain that in my view, there is a real doubt as to whether the applicant's former counsel missed the point for which Mr. Shirrefs now contends. He was certainly alive to the risk that he may have been wrong in conceding the admissibility of the 1998 evidence. He frankly acknowledged to her Honour that he might be criticised later for making that concession. No doubt, he had in mind the possibility that if others were to consider the matter afresh they might come to a different conclusion as to whether the evidence was admissible and if so, on what basis. One such basis might be that it was propensity evidence.

117. The authorities establish that where propensity evidence is led for a reason other than reliance on propensity, it is ordinarily necessary for the trial judge to warn the jury not to reason that just because the accused has engaged in conduct which is the subject of the evidence which is of the same general character as the offence with which he or she is charged, that he or she is the type of person who is likely to have committed the offence (BRS v. R. [1997] HCA 47; (1997) 191 C.L.R. 275, 301, 304-309; R. v. Best, at 614, 616; R. v. FJB, at 11; R. v. J (No.2) [1998] 3 V.R. 602, 614). In T (1996) 86 A.Crim.R. 293, Southwell, A.J.A. with whom Callaway, J.A. and Smith, A.J.A. agreed, said, at 299:

"In any trial involving multiple offences, care must be taken to direct the jury as to the admissibility of the evidence in respect to the individual counts. Generally speaking, it will be necessary specifically to warn the jury, not only that proof of guilt upon one count is irrelevant to the question of guilt on any other count, but that the evidence led in support of a count against one offender does not go in proof of any other count involving another offender. The jury will be warned against mistreating such evidence as tending to prove an inclination towards the relevant criminal conduct. That is generally so, although there may be cases where counsel for an accused could persuade the trial judge not to draw the attention of the jury to the aspect of propensity." (Emphasis added.)

121. But it is not in every case where such evidence is led that a conventional propensity warning has to be given. This was recognised by Southwell, A.J.A. in the above passage of his judgment and, in my view, by McHugh, J. in BRS v. R., where his Honour said, at 305:

"If evidence revealing a criminal or reprehensible propensity is admitted, the trial judge must give the jury careful directions concerning the use which they can make of the evidence. If the evidence is admitted for a reason other than reliance on propensity, the judge must direct the jury that they can use the evidence for the relevant purpose and for no other purpose. In some cases, the judge may need to be more specific. He or she may need to direct the jurors that they cannot use the evidence for an identified purpose. If the evidence is admitted because the Crown wishes to rely on the accused's propensity as an element in the chain of proof, it is especially necessary that the judge give the jurors clear directions as to the manner in which they may use the propensity evidence."

125. It is to be noted that his Honour said that it is only in "some cases" where the jury is to be directed that they cannot use evidence for an "identifiable purpose". Given his Honour's "model" charge at 308-309, he was clearly of the view that in the case before him, a propensity warning should have been given, but in the above passage, he nevertheless stopped short of saying that it had to be given in every case where propensity evidence was led for a purpose other than reliance on propensity.

128. The type of case that Southwell, A.J.A. probably had in mind where it might be appropriate for a trial judge not to give a propensity warning at the behest of counsel for the applicant, is one where the warning would prejudice the accused rather than serve his interests and where in all the circumstances, the omission to give the propensity warning would not result in a miscarriage of justice. In my view, for the reasons briefly set out below, the present case is just such a case so that there was no need for her Honour to have given the jury a propensity warning in respect of the 1998 evidence. The omission did not, in my opinion, result in a miscarriage of justice.

131. First, her Honour gave a strong and clear direction as to the limited use to which the jury could put the 1998 evidence. That direction satisfied the first requirement for a proper direction that was stipulated by McHugh, J. (in the second sentence) of the passage of his judgment reproduced earlier. The direction given here was in stark contrast to the situation in BRS v. R. where the jury was at large as to how they could use the propensity evidence. At the very least, her Honour's direction materially reduced, assuming it did not realistically eliminate, the risk of the jury engaging in the forbidden chain of reasoning. In this context, it should be noted that nothing was said by either counsel during their respective addresses to remind the jury of the propensity character of the 1998 evidence. Save for that evidence, nothing occurred in the course of the trial which provides any basis for thinking that the jury might have used the forbidden chain of reasoning in order to convict the applicant.

134. Secondly, not only did counsel for the applicant concede the admissibility of the 1998 evidence, but he virtually invited that evidence to be led and set the terms on which it was to be left with the jury. Consistently with this, he persuaded her Honour not to say anything to the jury about that evidence that would be prejudicial to his client (otherwise than in the context of directing them as to the limited use to which they could use that evidence). In this context, I refer to the terms of the discussion between her Honour and counsel which I reproduce later in this judgment.

137. Next, a propensity warning in this case is likely to have been prejudicial to the applicant rather than served his interests. It would have necessitated a reference to the propensity character of the 1998 evidence which would have been to his disadvantage (see McHugh, J. in BRS v. R., at 308-309). In my view, this was clearly appreciated by her Honour and both counsel as is evident from the transcript of the discussions between them to which I refer later. It is for that reason, no doubt, that the applicant's counsel, an advocate of considerable experience in criminal trials, persuaded her Honour not to deal in her charge with the propensity aspect of the 1998 evidence. This issue was raised before her Honour shortly before she charged the jury in the following way. On the afternoon of 18 February 1999 the following discussion ensued.

"MR TINNEY: Of course, Your Honour. I was not proposing to say to the jury anything about the way in which they may not use the evidence of things seen on 25 August. I don't know whether Your Honour proposed to or not. In other words to tell them that it would be quite wrong of them to use that as an indication that because he still had two heroin presses then he must still be trafficking in heroin. I mean, I wasn't going to touch on that --- HER HONOUR: What I thought, and perhaps it was a matter I should raise with [counsel for the accused] ... I've considered this and I haven't actually written it out in chapter and verse, but I really don't want to say - and I'm sure you [referring to counsel for the accused] don't want me to say - "you can't use it to find that he was a heroin trafficker later". It's me [sic] preferable to say that, "you don't speculate about that, that it's to be used for a limited purpose and it's this." Now, if you want me to be more specific, perhaps think about it. MR TINNEY: Yes, see what I say first perhaps, Your Honour, before. HER HONOUR: I just thought that, really, my direction is that you can use this in this limited way which is going to credit. MR TINNEY: Yes. HER HONOUR: But I was concerned, and if you're sensitive about it I won't do it, to take it that step further and say, "Well, look, you can't use it to find that he was trafficking in heroin," later. COUNSEL FOR THE ACCUSED: I may well do that myself. I don't know what to say about that yet, Your Honour, but I may well do it myself. HER HONOUR: No, I can understand that. That's why I don't want to ask you for submissions now. I think it's preferable after the addresses."

141. On the following day, after both counsel had addressed the jury, this discussion ensued between her Honour and counsel.

"HER HONOUR: Is there any issue either of you wish to raise in relation to the charge, any matters? What about that matter that was left a bit up in the air, .... about the second incident if I could say that, the Noble Park - remember when I asked you just to consider overnight whether you wanted to go so far. COUNSEL FOR THE ACCUSED: No, I don't, Your Honour. Others may criticise me later for it but I say I don't. I thought Mr Tinney did that very, very fairly in the way that he used it. I've now been able to tell them to reduce it and I, myself, don't feel a need for Your Honour to - I think the jury appeared to understand what I was saying. I don't feel a need for it to be repeated. HER HONOUR: No, it was just after your address you said you weren't sure whether you were going to mention it. It was just as I outlined yesterday, to say, for that limited purpose. COUNSEL FOR THE ACCUSED: I think Your Honour would have to tell them, it's for that limited purpose but not go into what they can't do with it if you know what I mean? HER HONOUR: Yes, exactly. COUNSEL FOR THE ACCUSED: I think that could get a bit dangerous but I think you do have to tell them, it's for that limited purpose but I think we've both --- HER HONOUR: It's whether I go further and I thought it was not appropriate unless it was the way you put it to the jury and you didn't so is there any other matter, Mr Tinney, you wish to raise? MR TINNEY: No, Your Honour. COUNSEL FOR THE ACCUSED: It's just a question of inferences. I stayed away from it and my friend stayed away from it but I think it is a circumstantial case and I think inferences would have to be done. HER HONOUR: I always think of the matter of course because when one is looking at intention such as in trafficking although it doesn't seem to be an issue, when you're looking at intention, it's always inferential but do you say I should give the circumstantial direction? COUNSEL FOR THE ACCUSED: No, not take it that far, I think it's clearly obvious to a jury, just simply what inferences are."

145. It is clear from that interchange that her Honour did have in mind the possibility of, in effect, telling the jury that they must not engage in the forbidden chain of reasoning based on the 1998 evidence, or at least she had an open mind on the subject. It is also apparent from this material that counsel for the applicant argued against her Honour raising any such matter with the jury. In those circumstances, it cannot be said that the applicant had been denied his right to a fair trial merely because no such warning had been given. On the contrary, the applicant exercised his right to a fair trial by persuading her Honour to admit the 1998 evidence for a limited basis only and not to mention to the jury any aspect of its propensity character. This was seen by the applicant's counsel as being of forensic advantage to his client. Consequently, no miscarriage of justice occurred in this case by reason of her Honour not giving the jury a propensity warning in relation to the 1998 evidence.

148. A similar conclusion was reached by Callaway, J.A. (with whom Charles, J.A. agreed) in R. v. Arundell [1998] VSCA 102. That case was concerned with the consequences of the trial judge not having given a Longman warning to the jury because he acceded to a submission to that effect made to him by counsel for the accused. The accused was charged with a number of sexual offences said to have been committed by him in relation to the complainant when she was between about 7 and 12 years of age, some 15 to 18 years before the trial. Their Honours held that the trial judge did not err in accepting the submission of counsel for the accused that a Longman warning not be given to the jury because that would be to the advantage of the accused, whereas a warning would be prejudicial to him. As Callaway, J.A. pointed out at 29, the absence of a Longman warning would mean there would be "no elaborate identification by the judge of damaging material that supported the complainant's account". His Honour further said, at 33-35, that cases such as R. v. Storey [1998] 1 V.R. 359, 372 and Re Ratten [1974] VicRp 26; [1974] V.R. 201, 214, emphasise that "the exercise of forensic judgment goes to the heart of our system of criminal law. .. Experienced counsel should be allowed to make such choices which .. are often made with a view to corresponding advantage." In my view, this is what occurred in the present case. The applicant's counsel, in the exercise of his forensic judgment, persuaded her Honour not to mention the propensity character of the 1998 evidence because that would be to his client's advantage and her Honour did not do so. I should add for completeness, that in Arundell, Callaway, J.A. pointed out that merely because the trial judge accedes to a submission of counsel for the accused as to what should be included or omitted from the charge, does not mean that an appellate court will not interfere with the verdict if a miscarriage of justice had occurred by reason of such a charge where counsel had, in making the submission, laboured under a relevant misconception or where he had made a serious error of judgment. For reasons I have given earlier, this has not occurred in this case.

151. Consequently, this appeal ground cannot succeed.

155. The applicant contended that if the 1998 evidence was properly admitted, it was open to the jury to find that "the applicant lied to the police on 30 July 1997"and in the absence of a firm direction to the contrary, there was a real danger that the jury would regard those lies as evidence of consciousness of guilt. It was argued that in order to avoid that risk, her Honour should have given the jury an Edwards warning (Edwards v. R. [1993] HCA 63; (1993) 178 C.L.R. 193) and her failure to do so resulted in the applicant being denied a fair trial. Mr. Shirrefs' complaint was that her Honour said nothing to the jury as to how they could use the fact that the applicant lied to the police concerning the heroin press; all her Honour said about the matter was constituted by her direction as to the use of the 1998 evidence (to which I have referred earlier).

158. In R. v. Renzella [1997] 2 V.R. 88, 90-92, this Court analysed how lies told by the accused should be dealt with by the court in criminal cases. In the course of this analysis, the Court referred to what Deane, Dawson and Gaudron, JJ. said in Edwards, at 208-209, namely, that ordinarily the telling of a lie would do no more than affect the credit of a witness who tells it and this applies to a lie told by the accused. As their Honours pointed out, however, lies told by an accused may go further in that they may amount to conduct which is inconsistent with innocence and thereby constitute an implied admission of guilt. It is only where it is contended that the lies told by the accused amount to such an admission that an Edwards direction is required. It follows that no such direction is needed where the lies go only to credit. As this Court has further pointed out in R. v. Renzella, most lies do not give rise to admissions. This point was highlighted more recently by Charles, J.A. in R. v. Cervelli [1998] 3 V.R. 776, at 783, where his Honour said:

"A lie ordinarily goes only to credit. It is exceptional for it to amount to an admission against interest. See, for example, Edwards v. R. [1993] HCA 63; (1993) 178 C.L.R. 193 per Brennan J. at 198-9 and 202 and per Deane, Dawson and Gaudron JJ. at 208-9; R. v. Toia [1982] 1 N.Z.L.R. 555 per Cooke J. at 559; R. v. Renzella [1997] 2 V.R. 88 at 91 (propositions 2, 5 and 7); R. v. Laz [1998] 1 V.R. 453 at 468-9; R. v. S.T. (1997) 92 A.Crim.R. 390 at 392-3. The telling of the lie must be explicable only on the basis that the truth would have implicated the accused in the offence charged. Compare R. v. Hartwick (unreported, Court of Appeal, 20 December 1995)."

162. In this case, the 1998 evidence was left with the jury only on the basis that it went to the applicant's credit in relation to his denial of knowledge of the heroin press found in his garage on 30 July 1997. The evidence was not admitted for the purpose of establishing an implied admission or consciousness of guilt. That this was so is clear from the discussion between her Honour and counsel before her Honour charged the jury. Mr. Tinney made it plain to her Honour that he would not seek to urge the jury to form a view that if the applicant relevantly lied on 30 July 1997 that that lie could indicate a consciousness of guilt. Her Honour also stated during discussion with counsel that she regarded the 1998 evidence as going only to the credit of the applicant and accordingly, she directed the jury that the 1998 evidence was not to be treated by them as an implied admission of guilt. There was no challenge to this characterisation of the evidence by the applicant's counsel during the discussion with her Honour or when he was taking exceptions to her charge.

165. Thus, in my view, no Edwards direction was called for and her Honour did not err in this regard. It follows, therefore, that this appeal ground must also fail.

169. This ground is concerned with Mr. Shirrefs' contention that her Honour misdirected the jury on the issue of whether the applicant was in possession of the heroin found in the hot water service.

172. It will be recalled that the applicant accepted (for the purposes of the appeal) that since the Crown had established that the heroin in question was at premises occupied by him, he was required to prove on the balance of probabilities that he was not in possession of it at common law (Clarke & Johnstone v. R. [1986] VicRp 64; [1986] V.R. 643, 648-649). Her Honour's ultimate direction to the jury on this issue was that if they were satisfied that the applicant was the occupier of the premises, he was deemed to be in possession of the heroin unless the defence could show on the balance of probabilities that the applicant did not know about it or that he did not have "the capacity to control it alone or jointly".

(a) The jury should have been directed as to what constitutes possession at common law, but her Honour failed to do that.

(b) Her Honour erred in directing the jury that as a second alternative, the applicant had to demonstrate that he did not have "capacity" to control the heroin. It was said that this overlooked the requirement of intention to control which must be present in order to constitute possession where there is no manual custody of the item and that, in effect, her Honour wrongly directed the jury that "the applicant was required to negative a knowing capacity to control the heroin thereby enabling the jury to find guilt by impermissible means".

180. In my view, there was no error in her Honour's ultimate charge on the issue of possession.

183. Possession at common law involves knowingly having physical control or custody of the item in question. It is not necessary to have manual custody of the item in order to have possession of it, but where such custody is not present, there must be an intention to exercise domain or power over it (R. v. Maio [1989] VicRp 23; [1989] V.R. 281, 285-287; He Kaw Teh v. R. [1985] HCA 43; (1985) 157 C.L.R. 523, 585, 600; R. v. Van Swol [1975] VicRp 5; [1975] V.R. 61, 68).

186. The first point raised by Mr. Shirrefs, namely, that her Honour should have defined for the jury the concept of possession at common law, can be dealt with shortly. In my view, there is no such requirement. This was made clear by the Full Court in Clarke & Johnstone v. R., at 649, where it said that the jury need be told only so much of the law in relation to possession as it is necessary for them to know having regard to the issues at the trial. Her Honour's charge satisfied that requirement.

189. Mr. Shirrefs' main attack was on her Honour's charge which dealt with the second alternative way in which the applicant could establish that he did not have possession of the heroin, namely by showing that he did not have "capacity to control the heroin alone or jointly". This alternative assumed that the jury were not satisfied that the applicant was ignorant of the presence of the heroin on his premises. In my view, what her Honour said did not require the applicant to negative a knowing capacity to control the heroin as was contended for by Mr. Shirrefs. There is much to be said for the argument put by Mr. McArdle that the word "capacity" was superfluous and added nothing to the concept of control. In my opinion, what her Honour told the jury in that part of the charge was that if the applicant satisfied them on the balance of probabilities that he did not have effective or actual control of the heroin (even if he knew of its existence on his premises), then he could not be regarded as being in possession of it at common law. In those circumstances, the s.5 presumption would be rebutted. One could be forgiven for thinking that the applicant's counsel understood her Honour as saying just that when she used the term "capacity to control" because he took no exception to that aspect of the charge. As I have already mentioned, he was an advocate of considerable experience. He would have sought a re-direction on this issue if he thought her Honour said something that was different. This is particularly so bearing in mind that he did seek a re-direction in relation to an aspect of her Honour's initial charge on the issue of possession in which she told the jury that the applicant had to satisfy them that he lacked knowledge and that he did not have control of the heroin. Counsel correctly, in my view, submitted to her Honour that she erred in that aspect of her charge and that it would be sufficient for the purposes of rebutting the s.5 presumption if the applicant satisfied the jury on the balance of probabilities that he lacked knowledge of the presence of the heroin or that he did not have control of it. Her Honour then re-directed the jury in accordance with those submissions. As I have said, by way of contrast, no re-direction was sought as to her Honour's use of "capacity".

192. For the above reasons, this ground of appeal must also fail

197. It was contended by Mr. Shirrefs that her Honour wrongly fettered her sentencing discretion by incorrectly treating the applicant as a serious drug offender and by reason of that, when determining the length of the sentence, giving primacy to the protection of the community from the applicant above all other matters which she was required to weigh in the balance.

200. Her Honour's sentencing remarks make it clear that at first she mistakenly took the view that the applicant was a serious drug offender and that therefore, she had to impose on him a sentence the primary purpose of which was to protect the community from the applicant. But it was also clear from the sentencing remarks that in constructing the sentence she had regard to other matters: the importance of maintaining general and specific deterrence, ensuring that the sentence should reflect the seriousness of the offence and that it be proportionate to the criminality involved.

203. It is also apparent that when the error was pointed out to her, her Honour nevertheless regarded the sentence as appropriate even if the protection of the community from the applicant was merely one (but not the primary) consideration in construing the sentence. (It is to be recalled that she was not asked by the applicant's counsel to re-assess the sentence after the discovery of her mistake.)

206. In my view, her Honour's sentencing discretion has not miscarried because of the mistake she made about the applicant's status under the Act. It was an error unproductive of consequences as her Honour's primary focus was bound to have been on general and specific deterrence.

209. Consequently, this ground of appeal must also fail.

213. Mr. Shirrefs submitted that given that the applicant was convicted in respect of only 38 grams of heroin, together with the lack of evidence of actual trafficking by him or of wealth on his part consistent with him being in the business of trafficking, the seven year term of imprisonment was disproportionate to the criminality alleged. Moreover, it was said, the sentence was beyond the range of sentences one would expect for a single incident involving 38 grams. It was also submitted that her Honour gave undue weight to the applicant's prior convictions as is shown by her finding that he was a "serious drug offender".

216. In considering whether the sentence was manifestly excessive, it is important to have regard to the fact that the community, through Parliament, views the offence of trafficking in heroin as a very serious one. This is reflected in the maximum term of imprisonment of 15 years. In my view, there is no basis for saying that her Honour's mistake in characterising the applicant meant that she gave undue weight to the applicant's prior convictions. The fact is that the applicant did have a significant number of prior convictions including one for the same type of offence as that in respect of which he was convicted in this case and in respect of which he received a term of imprisonment. Moreover, there were very few mitigating factors that were or could have been put forward to warrant a reduction in the sentence that would otherwise be appropriate, such as remorse or an early plea of guilty.

219. Having regard to those factors, the sentence imposed by her Honour with respect both to the head sentence and the minimum term was within the range properly open to her and, in all the circumstances, was not manifestly excessive.

222. For these reasons, this appeal ground must also fail.

226. In my view, therefore, the applications should be refused.

230. I have read the reasons of Chernov, J.A. and I agree with them and the order proposed. I have nothing further to add.