R v Smith; R v Sagar [2025] QCA 130

SUPREME COURT OF QUEENSLAND

CITATION: R v Smith; R v Sagar [2025] QCA 130

PARTIES: In CA No 209 of 2023: / R / v / SMITH, Paul Michael / (aka CLIFFE-HICKLING, Paul Michael) / (appellant) / In CA No 226 of 2023: / R / v / SAGAR, Jeffrey John / (appellant)

FILE NO/S: CA No 209 of 2023 / CA No 226 of 2023 / SC No 1002 of 2022

DIVISION: Court of Appeal

PROCEEDING: Appeal against Conviction

ORIGINATING COURT: Supreme Court at Brisbane – Date of Conviction: 2 November 2023 (Crowley J)

DELIVERED ON: 22 July 2025

DELIVERED AT: Brisbane

HEARING DATE: 15 August 2024

JUDGES: Bond, Flanagan and Brown JJA

ORDERS: The appeal in CA 209 of 2023 is dismissed. The appeal in CA 226 of 2023 is dismissed.

CATCHWORDS: CRIMINAL LAW – APPEAL AND NEW TRIAL – VERDICT UNREASONABLE OR INSUPPORTABLE HAVING REGARD TO EVIDENCE – APPEAL DISMISSED – where after a trial both appellants were convicted of conspiracy to import a commercial quantity of a border controlled drug, namely cocaine – where one appellant was also convicted of dealing with money intended to become an instrument of crime – where no border controlled drug was located during the investigation – where the Crown presented a circumstantial case at trial submitting that the appellants conspired to import cocaine – where the appellants submit that a reasonable jury could not find beyond reasonable doubt that the identity of the product, the object of the conspiracy, was cocaine – whether it was open to the jury to reasonably exclude alternative hypotheses consistent with innocence – whether on the evidence as a whole it was open to the jury to be satisfied beyond reasonable doubt that each of the appellants were guilty / CRIMINAL LAW – APPEAL AND NEW TRIAL – VERDICT UNREASONABLE OR INSUPPORTABLE HAVING REGARD TO EVIDENCE – APPEAL DISMISSED – where after a trial both appellants were convicted of conspiracy to import a commercial quantity of a border controlled drug, namely cocaine – where one appellant was also convicted of dealing with money intended to become an instrument of crime – where no border controlled drug was located during the investigation – where the Crown presented a circumstantial case at trial submitting that the appellants conspired to import cocaine – where a Crown witness, who was named on the indictment and pleaded guilty to their involvement in an agreement to import cocaine, testified that he assumed the object of the conspiracy was cocaine or, if not, heroin – where one appellant argued that the jury could not be satisfied on the evidence as a whole that each alleged co-conspirator held the joint intention to import cocaine – whether on the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty / Blacktown City Council v Hocking [2008] NSWCA 144, cited / M v The Queen (1994) 181 CLR 487; [1994] HCA 63, cited / MFA v The Queen (2002) 213 CLR 606; [2002] HCA 53, cited / R v Baden-Clay (2016) 258 CLR 308; [2016] HCA 35, considered / SKA v The Queen (2011) 243 CLR 400; [2011] HCA 13, cited / The King v ZT (2025) 99 ALJR 676; [2025] HCA 9, applied

COUNSEL: M J McCarthy for the appellant in CA No 209 of 2023 / O P Holdenson KC for the appellant in CA No 226 of 2023 / S J Farnden KC, with C O'Connor, for the respondent

SOLICITORS: Aitken Whyte Lawyers for the appellant in CA No 209 of 2023 / Garde-Wilson Lawyers for the appellant in CA No 226 of 2023 / Director of Public Prosecutions (Commonwealth) for the respondent

CONTENTS

Reasons of Bond JA3

Reasons of Flanagan JA6

Reasons of Brown JA7

The Appeal7

The Offences8

Matters Identified as being the Real Dispute9

Circumstantial Case11

Evidence at Trial13

Evidence of Mr Charles Wagambio14

Evidence of Dr Krishnamurthy23

Other evidence24

The Summing Up34

Summary of Contentions at Trial36

Grounds of Appeal38

Summary of Contentions on Appeal38

Contentions raised by Mr Sagar38

Contentions raised by Mr Smith39

Contentions raised by the Crown40

Legal Principles41

Consideration43

Was cocaine the product planned and intended to be imported?43

Joint intention – Mr Sagar53

Conclusion56

Orders56

1. BOND JA: I have had the advantage of reading in draft the reasons for judgment of Brown JA.

2. I gratefully adopt her Honour’s detailed examination of the relevant evidence. Subject to what follows, I agree that, having regard to that evidence, and for the reasons her Honour expresses, it was open to the jury to find the charges against both Smith and Sagar to be proved beyond reasonable doubt. Accordingly, I agree with the orders proposed by her Honour.

3. I wish only to add that, for the reasons which follow, my evaluation of the evidence concerning the conspiracy to import charges would also take into account the fact that the accused persons, who were the only persons with knowledge of what they intended to import, were relevantly silent.

4. For the reasons which Brown JA advances, the only rational inference which could be drawn from the circumstances proved by the Crown was that the conspirators knew or intended that the substance which they had agreed to import into Australia was some form of illegal but profitable product, which was not gold.

5. The circumstances proved by the Crown did not as a matter of strict logic prove that the illegal product must have been cocaine. It would, for example, have been fallacious to reason:The illegal product which the conspirators intended to import from Peru was a substance which was in the form of bricks and was readily describable as “pure”.Cocaine is an illegal product produced in Peru in the form of bricks, readily describable as “pure”.Therefore the illegal product which the conspirators intended to import from Peru must have been cocaine.

6. Such a conclusion could only be accepted if cocaine was the only illegal product produced in Peru in the form of bricks readily describable as “pure”. That proposition was not proved by the Crown, or even the subject of evidence which attempted to prove it. Dr Krishnamurthy’s evidence did not go anywhere near proving such a proposition.

7. Before the jury and in this Court the Crown placed reliance on the third photograph in exhibit 38. It could legitimately be inferred that the photograph –portrayed a white or off-white or beige powder-like substance which is bagged up in plastic bags on the tables in trays that individuals are working on with masks, headbands and gloves;did not depict any process of making marmalade or jam;was potentially consistent with part of the process to produce cocaine described by Dr Krishnamurthy.

8. However, even adding those propositions into the logic presently under consideration would not, as a matter of logic, prove that the illegal product in question must have been cocaine, as opposed to some other form of border controlled drug.

9. The appellants’ arguments sought to rely on these suggested logical gaps. At trial counsel for Smith put it this way to the jury (emphasis added):

“See, the Crown case isn’t, as I said, that it’s illegal drugs and then we pick cocaine. Their case is they say it’s not tobacco, they say it’s not cannabis, they say it’s not illegal gold, they say it’s not illegal diamonds, they say it’s - to the exclusion of anything else that could be smuggled, they say it’s cocaine and because it’s cocaine, it’s border-controlled drugs. I would suggest that the lack of evidence here cannot support a finding of guilt. …

This case is simply incapable of supporting a finding of guilt. I would suggest there are a litany of innocent explanations for in comparison to an importation of cocaine. It could’ve been illegal anything, because when you look at - the Crown say, ‘It’s covert, it must be cocaine.’ Well, wait a second, if it’s covert then it’s otherwise illegal, that explains why - if it’s something, say, illegal gold, that explains literally every point of the Crown case. The only other points of the Crown case is someone comes along and say, ‘Cocaine comes from South America,’ and an assumption by someone – Mr Wagambio doing some Google searches. I’d suggest that’s not enough to convince you that it was cocaine. It’s based on assumptions and in my submission, ladies and gentlemen, you’d find my client not guilty on both counts.”

10. Similarly, the appellants contended in this Court that the Crown had not excluded hypotheses consistent with innocence, namely –(in Sagar’s submission), the possibility that the substance to be imported was a drug other than cocaine, namely, heroin;(in Smith’s submission), the possibility that the substance to be imported was heroin, or a precursor, or some other drug.

11. The problem with this reasoning is that in a circumstantial case the Crown does not have to exclude beyond reasonable doubt every scenario which might, as a matter of pure logic, have been possible. In carrying out the assessment of whether the evidence in a criminal trial is sufficient to justify a conclusion of guilt in a circumstantial case, neither the jury nor the appellate court are conducting a philosophical thought experiment. Rather, as Brown JA’s summary of legal principle demonstrates, the jury (and the appellate court) are evaluating all of the circumstances established by the evidence, as a whole, and in the context of a trial (and an appeal) conducted in an adversarial system. The only hypotheses consistent with innocence which must be excluded by the Crown are those which are adjudged in that way to have been hypotheses reasonably open on the evidence.

12. In Baden-Clay, to which Brown JA makes extensive reference, the High Court also made these observations (footnotes in original):¹

“The onus of proof of murder, including proof of the respondent’s intention to kill or cause grievous bodily harm, was always upon the prosecution. It is common ground that the jury rejected (and were entitled to reject) beyond reasonable doubt the respondent’s hypotheses that his wife had taken her own life or had died of alcohol or drug toxicity. The Court of Appeal’s reasoning proceeded on the assumption that there could be no reasonable doubt that the respondent killed his wife.

Given the unchallenged conclusion that the respondent was the agent of his wife’s death, the compelling inference is that he was the last person to see his wife alive and was the only person who knew the circumstances of her death. That inference did not, of course, diminish the overall burden on the prosecution of proving beyond reasonable doubt all elements of the offence of murder with which the respondent was charged. In the case of circumstantial evidence, the prosecution’s burden requires it to exclude all reasonable hypotheses consistent with innocence. However, where an accused person with knowledge of the facts is silent, then as was said in Weissensteiner v The Queen:²

‘in a criminal trial, hypotheses consistent with innocence may cease to be rational or reasonable in the absence of evidence to support them when that evidence, if it exists at all, must be within the knowledge of the accused.’

That passage was quoted with approval in RPS v The Queen.³ The significance to be attached to what was said in Weissensteiner must be understood in its context, as explained in Azzopardi v The Queen.⁴ Weissensteiner was not simply a case in which the accused failed to contradict direct evidence of other witnesses. It was a case in which, if there were facts which explained or contradicted the evidence against the accused, they were facts which were within the knowledge only of the accused and thus could not be the subject of evidence from any other person or source.”

13. In the present appeal, the appellants submitted that the application of Weissensteiner reasoning was not appropriate, and the respondent eschewed any reliance on it. But in the independent evaluation of the evidence upon which I am required to embark in the consideration of the present ground of appeal, I am not bound by the respondent’s concession.

14. In my view the approach taken by the High Court in the passage from Baden-Clay to which I have referred above is applicable here and justifies my reasoning as follows:The jury were entitled to conclude in respect of each appellant that the only rational inference from the circumstances proved by the Crown was that the illegal product the subject of their agreement was some form of border controlled drug.Save for Wagambio’s evidence as to his own state of mind (which was not admissible against any other conspirator), there was no evidence which supported the hypotheses that the substance which the conspirators intended to be imported was heroin, or a precursor, or some other drug which was not cocaine. If such evidence existed at all it must have been only within the knowledge of the accused.Where, as here, the accused persons with knowledge of the facts were relevantly silent (Smith advancing only the demonstrably false gold hypothesis in a record of interview and neither having giving evidence at trial), hypotheses consistent with innocence may cease to be rational or reasonable in the absence of evidence to support them when that evidence, if it exists at all, must be within the knowledge of the accused.Accordingly, having regard to all the evidence, including the silence of the appellants on the subject matter, I would conclude that the hypotheses posited by the appellants could not be regarded as reasonable hypotheses consistent with innocence which the Crown had not excluded.

15. FLANAGAN JA: I agree with Brown JA. Having made my own independent assessment of the whole of the evidence, I agree that it was open to the jury to be satisfied beyond reasonable doubt as to the guilt of each appellant.

16. As this was a circumstantial case I have weighed all the circumstances in deciding that it was open to the jury to draw the ultimate inference that the guilt of each appellant had been proved beyond reasonable doubt and that the Crown had excluded any reasonable hypothesis consistent with the innocence of each appellant.

17. BROWN JA: Mr Jeffrey Sagar and Mr Paul Smith were both charged, on indictment with conspiracy to import a commercial quantity of border controlled drugs, namely cocaine (Count 1), under the Commonwealth Criminal Code, in the following terms:⁵

“Between about the first day of April 2016 and the fourteenth day of June 2018 at Brisbane in the State of Queensland and elsewhere PAUL MICHAEL SMITH and JEFFREY JOHN SAGAR conspired with each other, CHARLES WAGAMBIO and others to import a substance, the substance being a border controlled drug, namely cocaine, and the quantity imported being a commercial quantity.”

18. Mr Smith was also charged with dealing in proceeds of crime, being money or property worth $10,000 or more (Count 2) under the Commonwealth Criminal Code, in the following terms:⁶

“Between about the first day of April 2016 and the fourteenth day of June 2018 at Brisbane in the State of Queensland and elsewhere PAUL MICHAEL SMITH dealt with money or property that PAUL MICHAEL SMITH intended would become an instrument of crime and at the time of the dealing the value of the money or property was $10,000 or more.”

19. Both Mr Sagar and Mr Smith were found guilty after a trial that ran for over two weeks. They were each sentenced on 3 November 2023.

20. Mr Charlies Wagambio was a Papua New Guinean national. He pleaded guilty to his involvement in an agreement to import cocaine and gave evidence at the trial.

The Appeal

21. Both appellants appeal against their conviction.

22. Mr Smith appeals the verdicts of guilty for Count 1 and Count 2 on the ground that the verdicts are unreasonable and cannot be supported having regard to the evidence.

23. Mr Sagar appeals the verdict of guilty on Count 1 on the ground that the verdict is unreasonable and cannot be supported having regard to the evidence.

24. The critical issue common to the appellants in each appeal is that they both contend that a reasonable jury could not find beyond reasonable doubt that the identity of the product, the object of the conspiracy, which was to be imported into Australia was cocaine. Mr Smith contends that issue affects both convictions on Counts 1 and 2.

25. This critical issue is also framed by Mr Sagar on the basis that, on the whole of the evidence, it was not open to the jury to exclude beyond reasonable doubt a reasonable hypothesis consistent with innocence, namely that the border controlled drug agreed to be imported into Australia was heroin rather than cocaine. This reasonable hypothesis is said to be based on Mr Wagambio’s evidence that after conducting basic Google searches on known drugs out of Ecuador and Peru, he assumed that the 300 kilograms of blocks to be imported would be cocaine or if not, heroin. Mr Sagar asserts that if Mr Wagambio held the belief that what was to be imported was heroin, it was possible that Mr Sagar also held this belief. It follows, according to Mr Sagar, that the evidence was insufficient to prove beyond reasonable doubt that he held a joint intention with each of his co-conspirators, including Mr Wagambio, to import cocaine. Mr Sagar’s submission went so far as to assert that unless the intention of Mr Wagambio to import cocaine, as the subject of the conspiracy, was proved beyond reasonable doubt, he could not be convicted of Count 1.⁷

26. Mr Smith, similar to Mr Sagar, submitted that the Crown had failed to exclude, beyond reasonable doubt, a reasonable hypothesis consistent with innocence. Mr Smith’s reasonable hypothesis differs from Mr Sagar’s in that Mr Smith asserts that on the whole of the evidence the jury could not be satisfied that the Crown had excluded beyond reasonable doubt that the substance the subject of the conspiracy was heroin, a precursor or some other drug.⁸

27. The Court must make its own independent assessment of the evidence in order to determine whether or not the verdict was unreasonable. That exercise is however “undertaken in a context in which an appeal is as much of an adversarial process as the criminal trial from which the appeal is brought and in which it is for the parties to identify the evidence that the appellate court must review and assess and the features of that evidence that support their respective cases on appeal” (footnotes omitted).

The Offences

28. Count 1, which was conspiracy to import a commercial quantity of a border controlled drug, constituted an offence under s 11.5(1) and s 307.1(1) of the Commonwealth Criminal Code. In order for the Crown to prove the offence the jury needed to be satisfied beyond reasonable doubt, that for each appellant:the appellant conspired with at least one other person to commit an offence of importing a commercial quantity of a border controlled drug (element 1);the appellant intended to conspire (element 2); andthe appellant, or at least one other party to the agreement, committed an overt act pursuant to the agreement (element 3).

29. The Crown had to prove that each appellant entered into an agreement with at least one other person to commit an offence of importing a commercial quantity of a border controlled drug. The indictment specifically nominated the border controlled drug that was the subject of the conspiracy, namely cocaine. That required the Crown to prove that the alleged conspirators agreed to engage in conduct which, if executed, would have resulted in the importation of a commercial quantity of cocaine, whether the alleged conspirators knew or believed the execution of their agreement would result in that weight of cocaine being imported.

30. Conspiracy is a continuing offence which continues to be committed for each day that the agreement remains in existence and the parties continue to pursue it with the intention of achieving the goal of the conspiracy, namely the commission of the intended offence of importing a border controlled drug.

31. In relation to intention as part of the first element, the Crown had to prove that each appellant held a joint intention with at least one other person to the agreement to achieve a particular objective, which in this case is that an offence of importing a border controlled drug, namely cocaine would be committed pursuant to the agreement.

32. In order to prove that intention, the Crown must prove that each alleged conspirator knew of, or believed in, the existence of facts which would make the agreed conduct the subject of the agreement an offence. That offence of importing a commercial quantity of a border controlled drug is established if a person:imports a substance;the substance is a border controlled drug; andthe quantity of the substance is a commercial quantity.

33. In relation to the second element of intention, the Crown had to prove that Mr Smith and Mr Sagar each meant to enter into the agreement with one or more person to commit the offence of importing a commercial quantity of a border controlled drug and in particular, the border controlled drug cocaine. The alleged period of the conspiracy in the indictment was between 2016 and 2018.

34. Count 2 was dealing in proceeds of crime with money or property worth $10,000 or more, which is an offence under sub-ss 400.6(1)(a), (b)(ii) and (c). To prove the offence the Crown had to prove beyond reasonable doubt that:Mr Smith dealt with money;Mr Smith intended to deal with the money;Mr Smith intended that the money would become an instrument of crime;the crime in relation to which it was intended the money would become an instrument, would be a Commonwealth indictable offence; andthe value of the money was $10,000 or more.

Matters Identified as being the Real Dispute

36. While the Crown had to prove all elements of the offences with which Mr Smith and Mr Sagar were charged, the trial judge appropriately identified for the jury the matters which were in real dispute at the trial and those which were not. No issue was taken by any counsel at trial or on appeal with his Honour’s identification of issues.

37. In relation to Mr Smith the trial judge outlined to the jury that there was no real dispute that for the conspiracy charge:¹⁰Mr Smith and Mr Wagambio had an agreement between themselves and others involving a plan to import something into Australia from South America, via Papua New Guinea (PNG);Mr Smith and Mr Wagambio knew and expected that something was to be concealed within the planned consignments that would come from South America; andwhat was to be imported was to be concealed within some other consignment or cargo in a shipping container so that it could be brought into PNG and brought in undetected by authorities; and that it was then to be extracted and transported via boat or some other means through to mainland Australia, via Daru Island in the Torres Strait.

38. In relation to Mr Smith in respect of Count 2, the trial judge outlined that there was no real dispute that:¹¹Mr Smith gave money to Mr Wagambio;the money was to be used to pay for expenses associated with the importation plan and by doing so Mr Smith has dealt with the money; andthe total value of the money was more than $10,000.

39. The trial judge identified that in relation to Mr Smith, the central issue in dispute for both Count 1 and 2 was the nature of the concealed goods that were to be imported and whether the Crown proved beyond reasonable doubt that the concealed goods to be imported were or would be the border controlled drug cocaine.

40. The trial judge noted that the central issue was relevant to all of the offence elements in Count 1 and in relation to Mr Smith the Crown had to establish beyond reasonable doubt that: for the first element of conspiracy, the object of the agreement was not just a border controlled drug but specifically cocaine, and that the parties to the agreement each intended that cocaine would be imported;for the second element of intention, the Crown had to establish that Mr Smith intended to become a party to that particular agreement, namely the agreement to import a commercial quantity of the border controlled drug cocaine; andfor the third element, the overt act had to put into effect a plan to bring in a consignment of cocaine and not something else.

41. The trial judge outlined that the central issue was also relevant in respect of Count 2 in relation to the intended purpose for dealing with the money.

Circumstantial Case

45. The case presented by the Crown was based on circumstantial evidence. By way of overview, the Crown’s case was that the appellants, over a period of just over two years, engaged in an elaborate and sophisticated plan to import 300kg of cocaine from South America into Australia via PNG. Mr Smith and Mr Sagar were located in Australia. Mr Wagambio was located in PNG. An initial attempt at hiding the drug within a shipment of jams from Peru in January of 2018 was a failure as no drugs were found with the jam (first shipment). Arrangements then commenced on or about 20 January 2018 for a second importation to take place (second shipment). The second shipment had not eventuated when the appellants were arrested on 14 June 2018. No substance was ever imported into either PNG or Australia pursuant to the conspiracy. No substance was ever seized or found by the authorities.

46. In terms of the circumstantial evidence, MFI K outlined the inferences the Crown contended the jury should draw from the facts:¹²

“Inferences the crown asks the jury to draw

Smith was the other person exchanging emails with Wagambio on the two proton mail accounts in the drafts.

Smith was the person sending the emails from the daruisland and David Muta proton mail accounts.

In addition to the meetings that are admitted by each defendant that Sagar and Smith also met on 15 January 2018, 05 February 2018 and 02 June 2018 and planned to meet on 14 June 2018.

The solar panel shipment was a test run for the intended importation of the cocaine into PNG and then Australia.

A commodity other than jam was to be in the shipments from South America.

The commodity was cocaine.

The meetings between Smith and Sagar were for the purpose of furthering the importation of the commodity that was supposed to be in the container with the jams.

Sagar was providing Smith with funds for the purpose of furthering the importation of the commodity.

That the money provided to Charles Wagambio on 02 February 2017 was provided to facilitate the shipment of cocaine.

That the money provided to Charles Wagambio on 25 September 2017 was provided to facilitate the shipment of cocaine.

That the money provided to Charles Wagambio on 17 November 2017 was provided to facilitate the shipment of cocaine.

Particulars of the circumstantial case

The circumstances that give rise to the inferences being drawn are:

The clandestine nature of the communications between the parties including:

use of encrypted applications;

use of code words;

use of draft dropping emails;

fake names;

proton mail;

double encryption;

arrangements for meeting;

locations for meeting;

the constant changing of phones;

the use of the blackberry.

The clandestine nature of the meetings between Smith and Sagar.

The changes around what was to be ordered and from what country in South America it was coming from.

The nature of the emails between David Muta and Jorge and the use by Jorge of the George Skynet protonmail account.

The arrangements and secrecy around each occasion that cash was provided to Mr Wagambio.

The lack of any actual intention to make use of the jam by Smith.

The circumstances surrounding the ‘test run’ including the amount of money it cost.

The amount of money spent on this jam.

The amount of time it took to arrange.

The refusal to provide police with the password for the blackberry (in relation to Sagar only).

The lies told by Smith in his interview (in relation to Smith only).

Evidence at Trial

47. A significant amount of the evidence at the trial consisted of emails from Proton Mail accounts, SMS, WhatsApp messages and other information downloaded from mobile phones, particularly of Mr Wagambio and Mr Smith, information downloaded from a BlackBerry of Mr Sagar, information downloaded from computers or tablets of Mr Smith, Mr Wagambio and Mr Sagar, recordings from telephone and listening device intercepts and video recordings and other surveillance evidence. A number of officers were called to prove those various matters. Officer Ashworth, a Leading Senior Constable of the Australian Federal Police (AFP) gave evidence. He was one of the case officers for the investigation into the offences the subject of the trial from June 2017 until May 2019. The investigation was called Operation Harmonica. His role was to collate all information as it came to hand and to ensure that other members of the task force received the information they needed and to allocate various tasks in relation to the investigation. His evidence included that there was a referral from an intelligence probe to his unit. As a result of that, Mr Wagambio’s mobile phone was taken from him at Brisbane International Airport in May 2017 and the information was downloaded. A review of those messages caused a police investigation to be commenced. In addition to identifying conversations with third parties, there was reference to a website that provided secure messaging services, Proton Mail. The AFP obtained authority to access those email accounts.

48. Officer Ashworth gave evidence that in the early stages of the investigation they were investigating if what was intended to be shipped was border controlled precursors, which are chemicals that are used in the manufacturing of border controlled drugs which was based on a proposal in the information obtained from Mr Wagambio’s phone. That, however, changed to being an investigation of a plan in relation to a border controlled drug as a result of the information in the Proton Mail accounts. At that stage the investigators “formed the view that we weren’t looking at a border controlled precursor any longer. We were looking at a border controlled drug”.¹³

49. Officer Ashworth was cross-examined by Mr Smith’s counsel. He agreed that a bullion of gold was quite heavy to lift up.¹⁴

Evidence of Mr Charles Wagambio

50. According to the Crown’s case, Mr Wagambio was one of the people who conspired with the appellants to import a commercial quantity of cocaine from Peru into Australia via PNG. Mr Wagambio was based in PNG. He was engaged by Mr Smith to organise the customs clearance of the containers allegedly containing cocaine and the removal of the cocaine and then facilitate its subsequent transportation to Australia. The Crown led evidence from Mr Wagambio. He gave evidence over a number of days explaining his dealings with Mr Smith, the methods of communications, the communications that were the subject of messages or emails or recordings, some codes used in exchanges and the plans for a shipment from South America. His evidence included the following.

51. He met Mr Smith in or around 2009 or 2010. They most likely met at the work depot which is the Post Office in Port Moresby. Mr Wagambio left that job but returned to work for Post PNG in 2014 or 2015 as an Air Freight Manager. He worked in logistics and air freight management for various organisations in Australia and Port Moresby. In 2016 he joined the FIFA Women’s World Cup as the head of logistics. After that he worked for a company called Agility from approximately the end of 2017 which was a logistics company with whom he acted as operations supervisor.

52. He had some contact with Mr Smith when he contacted him via phone in 2016 needing assistance with logistics advice to move cargo into PNG. Those conversations included Mr Smith asking for advice as to movement of machinery as well as gold.

53. He and Mr Smith had communicated prior to his coming to Australia via telephone conversations, messaging and emails. An email was set up with Proton Mail by Mr Smith, daruisland, and they shared a password and communicated through a draft drop, which involved each logging into the email account using the password and leaving notes in the drafts. When a draft was left they would send a message saying “talk to Mel”.¹⁵ In relation to mobile phones that were used for messaging Mr Wagambio stated that they were changed on a number of occasions which was supported by admissions as to the phone numbers used by Mr Smith during the period.¹⁶ Mr Wagambio also gave evidence he was told by Mr Smith on a number of occasions to delete all messages and that the mobile phone was referred to as “Sally” when they were going to have direct calls.

54. On 4 July 2016, Mr Wagambio sent a message to Mr Smith:¹⁷

“Hey bro, good prospect here for gold. Did some checking and it’s doable. I probably might invest is [sic] this after we make some good money from our operation.”

55. Mr Wagambio explained the message as relating to the fact that he had discussions with Mr Smith about gold investments in PNG.¹⁸ He said that “our operation” referred to whatever Mr Smith needed him to do.

56. Mr Wagambio explained that in 2016 he and Mr Smith were still talking about “gold machinery, things like that”.¹⁹ He said those discussions were about importing and bringing in gold from South America. According to Mr Wagambio, Mr Smith stated that gold was easy to acquire from South America and he just needed a way to get it from there to Australia.²⁰

57. Mr Wagambio sent a message to Mr Smith in August 2016 which he stated was about his assistance in moving cargo, “gold, machinery things like that” for Mr Smith:²¹

“Hey bro, when can we talk. We are in the last quarter of the year and I am wanting to get this over and done with. Please advise.”

58. In October 2016 Mr Wagambio asked “[b]een waiting for u forever. What the hell happen??” To which Mr Smith said, “[l]ong story. When I see you in person”.²²

59. Mr Smith in his messages to Mr Wagambio in November 2016, referred to “seeing team again late today. Talk after that”.²³ Mr Wagambio understood Mr Smith was talking to his people and would send him a message through email.

60. Mr Wagambio’s text messages in late 2016 and early 2017 continued to push for a response as to when “our project” would proceed.²⁴

61. In discussions using the draft drop method in the daruisland email, Mr Wagambio exchanged messages about planning a shipment which originally appeared to contemplate liquids being concealed in machinery. For example:²⁵

“Could not be better

go to Alibaba and search for hydraulic auger post hole.

it is sealed unit.. with 10 in a liquid inside, no detection and safe for transport … very happy … we need machinery guys to receive in your country.”

62. Further messages, which Mr Wagambio identified as not having been written by him and therefore can reasonably be inferred to have been written by Mr Smith, included:

“Hi Mate

All about quality of transport from POM to my base.

It has to be done securely without drama.

This is an international group who do not mess around and will not be messed around.

That is mate ..if we start is [sic] must be done with professionalism

If we do it has to be perfect.

We a logistics transport company and that is what we do best.

ie transport is our business

They will sort into PNG.. we do not need to get involved unless we have to.

They will hand to us in POM amounts of helicopter parts up to 50 at a time.

It is then up to u to get to here in a safe fast method, boat, plane etc …

Further south the better however I will leave that up to you.”

63. Mr Wagambio responded with transport options and advice as to requirements and shipping agents.

64. A further message written by Mr Wagambio on the darusiland email observed that “[w]e can do our original plan using machinery parts as we are now shipping but that will be a decision for you and the team to make. Concentrated fruit juice is also a good option”.²⁶ According to Mr Wagambio the plans changed so that concentrated fruit juice would be included in what they were shipping.

65. In response Mr Smith stated:²⁷

“Hi mate ..

They feel to[o] much risk air so now wish to do container.

I know it presents it’s own difficulties however I am sure with our manpower and abilities we can overcome.

what is [sic] relation to equipment do you suggest is best?

I like the concentrated fruit juice option as well …looks good

Goods will be concealed inside.

It will be coming from Ecuador.. not Peru.

We are close to getting all finali[s]ed so I can give you definite time frames.

I do not control so I wish to be more specific.

Please apply for other positions for I feel we can do all after hrs except the final run that only involves a Friday plus weekend.”

66. The message identified the main exports. Mr Wagambio in response stated that the reference to “[g]oods will be concealed inside” referred to their discussions that gold would be concealed inside.²⁸ Mr Wagambio stated that a reference in a further message not written by him and which it can therefore be inferred was written by Mr Smith asking about whether with fruit concentrates “[c]an we bypass customs? as in cargo”.²⁹ Mr Wagambio stated that was asking whether they could do a clearance without customs. In an undated email in the “daruisland” drafts, which is one of the Proton Mail accounts, Mr Smith provided information about what can be shipped out of Peru. There was a discussion about whether it would be preferrable to ship tin fruit or heavy machinery. Mr Wagambio asked “[h]ow much quantity per export” and commented that “[t]inned [f]ruit would be best option as heavy machinery is not one of the top 10% of Peru’s export”.³⁰ It would reasonably be inferred that the timing of the email was at the time of the FIFA Women’s World Cup as Wagambio had stated he was in the middle of coordinating large quantities of freights for that purpose. The World Cup was held at the end of 2016.

67. The communications between Mr Wagambio and Mr Smith included the form the product would take.

68. Further draft emails were exchanged in 2017 between Mr Smith and Mr Wagambio. They included an email with the subject heading “POM-BNE 28JAN” which contained an exchange between Mr Smith and Mr Wagambio through drafts, Mr Smith raised a number of matters as to the company he wanted to engage and his summary of a plan. Mr Smith comments “[e]xisting company great... however if problem what do we do and you need to have a cover..we can set up as another phone number... fake person” and “[p]lus I will get to u another cell phone... we will start using [WhatsApp] secure end to end encryption”.³¹ Mr Smith also wrote, “[g]oods are under the floor in container ... pure blocks my friend not in fruit tins... Fruit is from Ecuador and you will sell at markets or ??”, “[n]eed to look at how we can package so no one else knows the deal ... ie how to ship to Daru packaged in what”, “what are u happy with transporting at one time ... U will have 300 kg to deal with” and “[t]his is a great opportunity my friend ... they are ready to move on to the next 300 kg as well”.³² Mr Wagambio’s reply in draft responded to each question which included: “Bro I need to know the physical state of what I am moving. I was planning to move liquid and now you are telling me [it’s] in blocks. Blocks is fine bro, it can be done” and “I can transport 300kgs to Daru at one time. [It’s] moving it from Daru to Bamaga on a dingy is the issue. I think it can take 250kgs but I will check and confirm. For now [let’s] plan to move 300kgs right through to Bamaga”.

“…Remember u need protection if there is a problem ... I am not expecting any...

Goods (the good stuff) will be in the floor of the 20 ft container...

Tinned fruit as normal inside the container.

We need to remove the container from the dock to take floor out and get our goods.

Approx 300 kg of blocks.

As I said before we need to be creative in how we pack and move so no person knows what we are doing…”³⁶

70. In response, an email was sent from Mr Wagambio, “see u next wed” and that they need three hours to meet.

71. A further part of the email³⁷ refers to various items, including identifying a logistics company: “[t]his is the company we will use for all importation without attracting much attention”, and as to the Daru trip, Bamaga trip and Plan B which stated, inter alia, “I [would] also like to do the transfer of the shipment onto his vehicle away from my Bamaga team so they are not aware of the actual way and vehicle it’s being moved with. If possible to change the outlook of packaging and containers too …”.

72. The same document in early 2017 in the daruisland email account said that “[g]oods are under the floor in container ... pure blocks my friend not in fruit tins...”. It was also evident that there were plans for further shipments. “This is a great opportunity my friend ... they are ready to move on to the next 300 kg as well”.³⁸

73. Mr Wagambio recalled he met up with Mr Smith in Brisbane when he travelled to Australia after working on the FIFA Women’s World Cup. It was admitted that he travelled to Brisbane at the end of January 2017 and Mr Smith travelled to Brisbane on 1 February 2017.³⁹ Prior to meeting up, Mr Smith told him to “[d]elete all details” which Mr Wagambio stated was asking him to delete all messages.⁴⁰

74. When Mr Wagambio met up with Mr Smith in Australia he stated that he received money to help with “importations payments”⁴¹ to clear a shipment which he thought was from Singapore or China.

75. Mr Wagambio gave evidence that he was given money by Mr Smith to help with the importations payments. Mr Wagambio’s bank records show that $4,100 was deposited into his account via two cash deposits in Mackay.

76. On 17 February 2017, in a further draft email exchange, Mr Wagambio and Mr Smith discussed setting up a false identity of “David Muta” to facilitate the shipment. The email states that the company had requested they “set up a chain of emails with a general standard request for goods ... pricing etc. I think that is smart and, makes it look very normal”.⁴² Mr Smith would set up a VPN and new tablet “for this operation in regards to the mail... if there is a problem there can be no identifiable trail”, and “it will only go to a false identity computer IP number that has been used exclusively for this mail operation”. The name David Muta is described as a “good generic name”. A draft of a letter that was formulated between Mr Smith and Mr Wagambio to the send to the company stated, inter alia, “[m]y name is David Muta … We are the leading 5 star hotel in Papua New Guinea. We are looking at a quality supply of tinned and fresh fruit and vegetables. Can you please forward pricing and any further information that will be suitable for a sample container of goods that we are interested in purchasing” and described the personal email as “[email protected]”.

“All right. Was there any stage that your expectation in relation to what was to be shipped with the jam changed in relation to what it was going to be?---Yes. In all my statements provided, it - the only thing that kept on changing was the physical state of the shipment from solid to liquid back to solid then liquid.

All right. And when you say it was changing from solid to liquid, what was it that was changing?---Whatever the shipment was, which I presumed to be gold, was going to be either put in liquid and - and shipped or was going to remain in a solid state.

Okay. All right. And in relation to the importation of this jam and gold into Port Moresby, how were you going to be, or were you going to be paid or compensated in any way for your role in this?---Yes.

And can you tell us about that? How was that going to be done?---I - not from memory, but I think it would have been a payment done through cash.

Was there any other way that you were going to benefit out of this arrangement with Mr Smith?---I had a business proposal and - - -

Can you tell us about your business proposal?---Yes. That was - it’s well documented as well. It was to do with what I was doing as work for logistics, and I proposed to Mr Smith something that I thought would be beneficial down the line.

Okay. And what was that business proposal?---To set up a warehouse facility and tracking, as I saw it was a, a need from where I was standing at the time.”

87. In June 2017, Mr Wagambio drafted the details of the company set up to receive and market the jam as Green Cube Procurement, which was different from the company nominated earlier.⁵⁵ It was a company that was set up by a relative of his to market the jam.⁵⁶

88. Mr Wagambio said there was some delay in the shipment.⁵⁷ It was then proposed that the shipment would occur in September 2017.⁵⁸ An email was sent indicating that the container was taken to the port and photographs were attached to the email.⁵⁹ There were also photographs of the “container seal lock” and a photo showing the container doors open.⁶⁰

89. On 25 September, Mr Wagambio travelled to Brisbane and Mr Smith flew from Sydney to Brisbane. Arrangements were made for Mr Smith to pick up Mr Wagambio. They were intercepted by the AFP. Surveillance subsequently picked up their meeting in which Mr Wagambio was paid money by Mr Smith. Money was subsequently paid into his account and his sister’s account in the sums of $4,000 and $12,500 respectively.⁶¹

90. Mr Wagambio was subsequently notified that the shipment had left Peru with 2,520 boxes of fruit preserves consigned to Green Cube Procurement on 27 September 2017. He saw the photographs on the David Muta email which were pictures of the container taken to port and the container with open doors.⁶²

91. On 17 November 2017, Mr Wagambio and Mr Smith flew to Brisbane from PNG and Sydney respectively. The meeting was in Brisbane.⁶³ When Mr Wagambio arrived at the airport, he brought copies with him of documents with respect to the jam shipment which he left in the toilet of the airport when he saw there was a search to be conducted.⁶⁴ His trip to Australia was to obtain money to clear the cargo. His meeting with Mr Smith was delayed. They were to meet at McDonalds. They were observed by the AFP meeting there. They subsequently drove to a park where they had a conversation and Mr Wagambio was given cash from the boot of the car.

“… I did basic Google searches on known drugs out of Ecuador and Peru, the places that [Mr Smith] told me from the start we were importing from. I saw that Cocaine was the top known drug from those countries, and I saw the way it’s normally packaged. [Mr Smith] had never mentioned cocaine, but I assumed the 300 kilograms of blocks would be either cocaine or if not, heroin. I saw it as a risk, but I was also promised by [Mr Smith] that I would be compensated for the risk. I was sure the blocks were going to be drugs by the way [Mr Smith] told me it was going to be packed, the way it’s going to be shipped, and all the secrecy.”

97. Mr Wagambio also agreed under cross-examination by the Crown, that in his statement to police he had said that he would use the word “gold” or “Au”⁷² in conversations with Mr Smith when referring to the cocaine or illegal drugs.

98. Mr Wagambio was not asked about the truth of the statement made to police or his earlier evidence in relation to the concealed product being gold.

99. The trial judge gave directions to the jury about previous statements made by Mr Wagambio to police being evidence of any fact that he had previously stated but they had to determine whether they accepted it as fact.

100. The trial judge also gave the following direction:⁷³

“Now, I also must give you a further direction about those particular parts of Mr Wagambio’s evidence where he confirmed what he said in his witness statement about what he expected to find in the bag and also what he understood references to gold or Au meant. So what Mr Wagambio confirmed that he told police in his statement about expecting to find cocaine or heroin in the duffle bag – that is evidence of Mr Wagambio’s state of mind at the time. It is, therefore, relevant to your consideration of his own belief or knowledge and may, therefore, be considered by you in respect of whether he held an intention to commit an offence of importing a commercial quantity of the border-controlled drug cocaine as part of the alleged conspiracy of which he is said to have been a part.

In the cases against each of the defendants, therefore, that aspect of the evidence goes to that element of whether there was a joint intention because you will recall from the elements document that there must be a joint intention between a defendant and at least one other party. So, here, the Crown case is that Mr Wagambio was a party to the conspiracy, so this evidence about what he expected would be in the bag bears upon whether he held the intention to import a commercial quantity of border controlled drug as being one of the alleged participants in that conspiracy. So it goes to that issue whether the defendant and at least one other party to the agreement held the requisite intention to import a commercial quantity of a border-controlled drug. The evidence is relevant to Mr Wagambio, as he is said to be one other party.

However, the evidence does not prove, and it may not be used by you to prove as an objective fact, that what was to be imported was cocaine. You will need to consider the other evidence that has been presented in the case to decide whether you are satisfied that that inference is the only reasonable inference in all the circumstances.

So, in short, members of the jury, just because Mr Wagambio gave evidence that that was his belief – that does not mean that that was, as a fact, objectively, what was to be imported.” (Emphasis added)

101. Mr Wagambio was briefly cross-examined by counsel for Mr Smith. He was asked about a statement made by him to the police that the plan had changed before the container arrived and he was to leave the duffel bag in a hotel. Mr Wagambio stated that the plans changed but he did not think that leaving it in the hotel was the last plan although he didn’t state any further plan in his statement with respect to the duffle bag but then stated that maybe it was the last thing he was told to do with the duffle bag.⁷⁴

Evidence of Dr Krishnamurthy

102. The Crown relied upon the expert evidence of Dr Venkatesh Krishnamurthy, a chemist employed by the AFP who was attached to the Forensic Drug Intelligence Team. His evidence included the following.

103. His team held intelligence in relation to where cocaine is manufactured and shipped from when it comes to Australia, noting it may be transported through other countries along the way. He said that cocaine is extracted from the leaves of the coca plant. He identified three major countries, being Colombia, Peru and Bolivia, where commercial cultivation happens, and that it is likely that most of the coca that is grown in the world is grown in this particular region.

104. The process of cocaine production was described in detail. Dr Krishnamurthy said the initial process required placing the coca leaves in water. Various chemicals are added and a filtering process takes place which produces cocaine base. The second step involves the cocaine base being dissolved and various chemicals added to purify the cocaine. Finally, the cocaine base is separated from the solution, and is then added to a solvent and mixed with other chemicals resulting in the formation of insoluble cocaine hydrochloride, which is separated as a solid. Once it is separated out it is dried or put into a mould. The mould is compressed into a brick form. When the brick does not seem to contain any liquid in it, it is removed from the mould and packaged. Once packaged it is ready for commercial use or commercial trafficking.

105. Dr Krishnamurthy was never invited to consider the photograph which was exhibit 38 or provide an opinion on whether those photographs were referable to a step in the process for producing cocaine. However, the Crown submitted that it was open for the jury to consider the evidence of Dr Krishnamurthy and find that the activities depicted in the photographs were consistent with the production of cocaine.

106. Dr Krishnamurthy was cross-examined by Mr Smith’s counsel who asked whether he had learnt about gold in the course of his studies and its density. He stated he had never worked with gold. He could not answer the questions about the density of gold or its volume. He did not know about the density of cocaine and stated he had never inspected the blocks, but rather that was done by another arm of the AFP and they reported back on the results. He had seen pictures of the bricks which looked similar to a house brick. He was not asked about any other border controlled drugs, including heroin.

Other evidence

107. Much of the evidence led at trial was communications obtained in a police investigation. That evidence was provided by various police officers involved in the undercover operation.

108. The “David Muta” account was used to correspond with a South American known as Jorge at Noroeste. Some of those communications have been outlined above in the context of Mr Wagambio’s evidence.

109. From 15 April 2017, there was then a series of emails exchanged between the David Muta email account and Jorge at Noroeste, in relation to organising the export. On 21 June 2017, an invoice was created referencing 2,856 boxes of “marmalade of diverse flavours”.⁷⁵

110. On 29 June 2017, an email was sent from Jorge to the David Muta account, which said “I will be visiting the production plant next week. so expect some more info and photos of the process then”.⁷⁶ The email was part of exhibit 38.

111. Exhibit 38 contained a number of emails between Jorge and David Muta describing the shipping of product from Peru. It included an email attaching a technical data sheet for goldenberry marmalade in English and Spanish and asked about what documents were required in “your country to import preserves”.⁷⁷ The data sheet referred to the “mixing, baking and packaging of the pulp goldenberry”.⁷⁸ On 29 June 2017, David Muta asked for an update on funds “as we are keen to satisfy our clients here”.⁷⁹

112. In early July, Jorge requested information as to the details of the importer and its location as well as label requirements. Details were provided by David Muta which included that the importer was “Green Cube Procurement” in PNG.

113. On 14 July 2017, an email from Jorge to the David Muta account stated:⁸⁰

“…Please see photos of my visit to the processing plant. Everything is coming along fine. Product should be ready and packed in 2 weeks. One of the photos is what our pallets will look like. The only difference is that our pallets are twice as high as this one...”

114. The photographs attached to the email depicted a pallet loaded with goods, crates, bottles or cans, a bank statement and a picture of workers in uniforms with masks, gloves and head ties working on stainless tables potentially inside a type of processing plant.

115. One of the four photographs (the fourth photograph) in exhibit 38, was relied upon by the Crown as demonstrating that there was no fruit nor gold in the photograph. The Crown further contended that the jury might consider that it was potentially consistent with steps in the production of cocaine. The trial judge directed the jury that they could draw reasonable inferences from what they saw in the photograph. His directions included that:⁸¹

“Those reasonable inferences may arise from what you accept is shown in the photograph alone but also what is shown in the photograph together with other pieces of evidence in the case because you are not necessarily interpreting the photograph just by itself as to what is shown in it, and that would also include the evidence given by Dr Krishnamurthy.

But I need to caution you in respect of this photograph, members of the jury, and the drawing of any inferences from what you can see in it. Firstly, bear in mind what I said. You may only draw reasonable or rational inferences. Secondly, those reasonable/rational inferences must come from other facts that you accept are proven by the evidence, whether by the photograph or other parts of the evidence, that is before you. Thirdly, you must not guess or speculate about what is in the photograph. Do not try and guess at what is there. If you are into that territory, that is not the drawing of a rational or reasonable inference.

The final matter is you must take into account when you are looking at the photograph and considering what you can see in it, either directly, or what inference might be available – have regard to the nature and circumstances of that image that is before you. Just zoom out, please. So it is one photograph on a page. We do not have the actual photograph. What we have is what looks like a screenshot and a multi-split screenshot. So it is one-quarter of a screenshot, and this is a reproduction of whatever the original was.

So it may well be the case, members of the jury, that the original colouring from the original photograph is not truly reproduced in what we can see in this picture...”

116. Further emails were exchanged between David Muta and Jorge after 14 July 2017 as to shipping documents and the departure of the vessel with the container containing the product.

117. On 28 September 2017, an email was sent from Jorge at Noroeste to the David Muta email account advising the vessel had departed with the product. It was in container HLBU1234800 consigned to Green Cube Procurement, Port Moresby. Photographs were sent of the container and the seals of container and the doors of the container open attached to an email from Jorge to David Muta.⁸² Further emails were exchanged between David Muta and Jorge as to the ship’s progress and providing and obtaining necessary documents.

118. The shipment with the container from Peru arrived in Singapore on 15 November 2017. A police search of the container revealed no border controlled drugs. The container was resealed and the vessel continued on to Port Moresby.

119. Jorge advised David Muta on 17 December of the name of the vessel carrying the container was travelling into Port Moresby and that the marmalade had departed from Singapore “[w]e’ll be glad to serve you and the people of PNG with our marmalades and next time soon [sic]”.⁸³

120. On 27 December 2017, Mr Smith using the username MJ on WhatsApp asked Mr Wagambio using the username Wanianga “[p]lease confirm gold arrival again”.⁸⁴

121. On 28 December 2017, Jorge at Noroeste sent an email to David Muta attaching photographs of the original seals on the container and requesting, “[p]lease also take pics as they arrive”.⁸⁵

122. The ship with the container HLBU1234800 arrived in Port Moresby on 31 December 2017. The container on the ship was cleared for Mr Wagambio to open it on 8 January 2018.

123. On 8 January 2018, in WhatsApp messages exchanged between Mr Smith and Mr Wagambio, Mr Wagambio enquired whether he could call Mr Smith on a land line and Mr Smith responded:

“OK just talj [sic]… about gold only though.”⁸⁶

124. In the phone call that followed between them, Mr Smith queried whether the “container with the Au” would be out today and Mr Wagambio confirmed that was correct. Mr Smith said something to the effect of “so the Au is pre-cleared. Everything is pre-cleared on the gold so that’s no issue”.⁸⁷ Mr Smith discussed plans to get that first payment to Mr Wagambio on either Saturday or Sunday, and that Mr Wagambio would come over for that. Mr Smith told Mr Wagambio not to commence unloading the container until he had confirmed the location of the goods.

125. On 9 January 2018, there was a series of messages exchanged between Mr Wagambio and Mr Smith about the opening of the container. In those messages, Mr Smith informed Mr Wagambio that “they want [a] video of the process”.⁸⁸ Mr Wagambio noted the placement of the seals was not usual, and was going to check whether the seals had been moved. Photographs were sent of the seals by Mr Wagambio.⁸⁹ The following messages were also sent from Mr Wagambio to Mr Smith:

“Bro both container seals were not hard to remove and that make me worry [sic].

Looks like it has been tampered with.

Also I’ve climbed into the container and its packed loaded with l0pallets and nothing in between.

Can you confirm if the package is packed inside one of the pallet[s] of jam.”⁹⁰

126. Mr Wagambio later commented on the same day that the seals looked as though they had been professionally cut.

127. The communications on continued 9 January 2018, Mr Wagambio asked Mr Smith “[h]ave you confirmed [the] location of [the] cargo” and Mr Smith responded, “[l]et me find out exact goods are before u unload”.⁹¹

128. Instructions provided by Jorge at Noroeste on the same date were these:

“…You are right, product is shrink wrapped as you can see in the enclosed pics. Also, you can see how they were stored in the container. I took the pic when loading

Let me know when you unwrap them. I recommend the Peach marmalade. It is great, and it is sugar-free.”⁹²

129. David Muta responded saying “[p]each is my favourit[e] as well. I will try that first”.⁹³

130. On 9 January 2018, Mr Smith directed Mr Wagambio via WhatsApp to “check cousin” which was a reference to the David Muta email account.⁹⁴

131. At about 5:52 pm on the same date, Mr Smith sent a WhatsApp message to Mr Wagambio that said:

“This side are saying sports bag in middle.

I think rubbish

Will be in peach jam in box

Let’s see what comes back.

From SA.”⁹⁵

132. A series of messages were then exchanged between Mr Wagambio and Mr Smith on WhatsApp about Mr Wagambio unpacking the pallets Mr Wagambio sent an update of each row of pallets before they were unloaded together with photographs informing him no bag was found. Mr Wagambio stated that unpacking was complete and:

“…Confirm with SA tomorrow and advise coz there is nothing in between any pallets and nothing inside any pallets unless it’s packed in boxes.”⁹⁶

133. On 9 January 2018, Mr Smith attended the Royal Randwick Shopping Centre and was observed by an AFP officer at an internet cafe. Footage showed Mr Smith accessed photographs of the pallets of jams in the container.

134. On 9 January 2018, Mr Smith sent an email from the David Muta email account to Jorge at Noroeste requesting he set up a Proton Mail account. Jorge confirmed he had set up the Proton Mail. Further email communications then followed between the David Muta email and the George Skynet Proton Mail account (operated by Jorge at Noroeste).

135. On 10 January 2018, Mr Smith sent an email to Jorge to the following effect:

“As u can see it has been professionally tampered with

When we received to bolt cut off it fell off the bottom

Can u confirm where the special peach jam is.

This mail is secure and encrypted.”⁹⁷

136. Further instructions from Jorge at Noroeste to David Muta email included:

“I have to tell you, I was not there when the peach jam was brought in. but I will ask. I assure you. it would have to be visible if you check well behind the first couple of pallets.

As you say, it looks professional. I’m dumbfounded. All our work. The investment. The waiting time. Shit. Sorry…

... I’ll try to get back to you as soon as I can.”⁹⁸

137. A further email from George Skynet stated:⁹⁹

“Spoke to local broker. Peach jam was placed in sports bags in the centre of the room.

Right in the middle between rows 3 and 4.

He has asked if there is video or photos of the moment or entry in the room.

Local partners will want to check this if it is possible.

Do you think there is any hope to find?”

138. Mr Wagambio confirmed, in response to a message from Mr Smith that Jorge said the peach jam was placed inside a sports bag in the middle of rows 3 and 4, that there was nothing.

139. On 14 January 2018, Mr Smith informed Mr Wagambio he was meeting with them the following the morning of 15 January and would show them the tampered seals.¹⁰⁰

140. On 15 January 2018, David Muta sent a further email to Jorge:¹⁰¹

“My guys are saying how could they fit 4 suitcase in the container as it was very full of jam?”

…

“I am at a loss why goods were not packaged better in the floor or actually in the jars.

4 extra bags added is too much temptation”

141. On 16 January 2018, an email from George Skynet to David Muta stated that:¹⁰²

“The only people at the placement of the suitcase were the port guys. Nobody else is allowed in……I can confirm there was enough space to squeeze the bags in…

The jam factory knows nothing, so impossible to put in jars …

We should try again. We now can have the special jam put inside the boxes. Not in the jars. It would still be in the original form. But it would be in say 100 boxes. part of the 25000 boxes. Better hidden. Trial quantity can be of not too much, just in case.

Let me know what you think. Can work this out with local broker.”

142. On 22 January 2018, David Muta responded to that email:¹⁰³

“Need to sort our end on this.

Give me a few days to sort what is going on.

Special jam in original form in the cartons makes a lot of sense…”

143. On 2 February 2018, George Skynet sent an email to David Muta stating:¹⁰⁴

“I hope the Jams have been doing well in your side of the world.

Local broker told me that there might be another similar order.

Hopefully we can again be of service.

Let me know.”

144. David Muta responded saying they were very keen to “place another order of similar selection as per last order … We are ready to place order now ...” George Skynet confirmed that the producers “will gladly provide us with more of their product …”.¹⁰⁵

145. On 1 February 2018, Mr Smith sent a message to Mr Wagambio telling him “…[a]ll new talk morning... Delete all previous… [c]ontacts etc… Talk mornings”. On 2 February 2018, Mr Smith sent a WhatsApp message to Mr Wagambio confirming:¹⁰⁶

“Great news ... Fruit order will be done.”

146. Emails were then exchanged in February – April 2018 about a new shipment using a different company and as to payment between David Muta and Jorge of Noroeste with Jorge confirming that in March the jam was already being produced.¹⁰⁷ On 7 February 2018, David Muta in an email to George Skynet confirmed he had requested his side to complete payment as before. David Muta stated in April 2018 he was meeting “the group” or “his team” face to face. Mr Wagambio stated he had no involvement with that email exchange.

147. Evidence of Mr Smith’s contact with Mr Sagar only commenced in January 2018.

148. Mr Sagar admitted that he sent a number of text messages. In particular, prior to it being discovered that no duffle bag had been found in the shipment, he had sent a text message on 4 January 2018 to “Perth Liane” stating “I should know if this deal works out in about a week” where he clearly had an expectation of receiving money. “I should know if I can afford to do it in about a week” and “[i]f this deal works out I will. If it doesn’t I can’t”.¹⁰⁸ On 9 January 2018, he sent a text message to Jiyeon “I think I told you I was waiting on the results of a deal I was doing to see if I had enough money. Still hasn’t come through but I should know soon. …”.¹⁰⁹

149. On 10 January at 12.47 am, Mr Sagar sent a message to “Perth Liane” saying, “[r]eally bad news. That business deal [I] was telling you about and I was going to get you to come to Sydney? It fell through. I am nearly broke”.¹¹⁰ That message was sent some 4 hours after Mr Wagambio had informed Mr Smith through WhatsApp that nothing had been found when the packing was completed.

150. There was evidence which tracked Mr Smith’s vehicle to Anzac Parade Maroubra on 15 January 2018. There was evidence of surveillance that Mr Smith and Mr Sagar had met at that location after that date. The Crown contended that the jury should infer that on 15 January 2018, Mr Smith and Mr Sagar had also met. The evidence from which that was to be inferred was:on 14 January 2018, Mr Smith had sent a message to Mr Wagambio:

“I’m showing them all pictures tomorrow.”¹¹¹

on 15 January 2018 at 9.40 am, Mr Smith sent a message to Mr Wagambio:

“The meeting is in 20 minutes”.¹¹²

tracking data established that Mr Smith’s car drove to and remained at a location in Anzac Parade at about 10 am, which was the same location where future meetings occurred between Mr Smith and Mr Sagar.

there were admissions¹¹³ made that Mr Sagar was sending messages around this time about a business deal in which he was involved going wrong.

the day following the meeting, 16 January 2018, Mr Sagar was observed accessing images of the seals and container, which were taken by Mr Wagambio on 8 and 9 January and sent via WhatsApp to Mr Smith. Mr Sagar used a Hushmail account to access the photographs. Mr Smith had a verification message from Hushmail on his account. The images were downloaded onto Mr Sagar’s laptop computer which was found by the AFP.

151. On 16, 17 and 18 January 2018, Mr Sagar sent text messages which included referring to “this other business unfortunately went bust” and to the “business stuff still dragging on”.¹¹⁴

152. A HP laptop seized at Mr Sagar’s residence was forensically analysed, as was the Huawei phone operated by Mr Wagambio. That forensic analysis demonstrated:on 16 January 2018, Mr Sagar’s computer accessed an email account and downloaded two images of broken seals, being those that were sent by Mr Wagambio to Mr Smith; andon 18 January 2018, Mr Sagar’s computer accessed an email account and downloaded a further seven images of the broken seals, as well as the pallets of jam inside the container.

153. On 4 February 2018, there were messages sent by Mr Smith referring to a meeting with the air team after 1 pm on Monday.¹¹⁵ A meeting took place between Mr Smith and Mr Sagar at 1.30 pm on 5 February, following which he called Mr Wagambio straight afterwards on WhatsApp.

154. On 7 February 2018, Mr Smith emailed Jorge of Noroeste:¹¹⁶

“…Have requested my side to complete initial payment as per before.”

155. On 14 March 2018, through the David Muta email account, a message was sent to George Skynet:¹¹⁷

“My teams blackberry has been shut down world wide.

Will be a few days till they sort new system.

Can u please ask your broker if he still have communication to ask my guy to meet me next Monday at 11.00.. usual place.

Please let me know if u can do otherwise I will sort alternate to get hold of him.”

156. A further email was sent from David Muta to George Skynet after he was asked to re-write his email which included¹¹⁸ “[c]an u ask your broker to tell his contact my side to meet me next Monday at usual place 11.00am”. A message was later sent by George Skynet “[b]roker has confirmed guys your side already have the message. Everything fine…” and later “[b]roker says they agree with Monday 11.00am” on 16 March 2018.

157. The surveillance revealed that on 19 March 2018 Mr Smith travelled to Maroubra and arrived just prior to 11 am. He was then observed walking to Garden Street, Maroubra and then walking around Anzac Parade, and waited in the area until 11.23 am but not that a meeting occurred.¹¹⁹ An email was later sent by David Muta to George Skynet “[w]as their [sic] a misunderstanding as no one was there today at 11.00 today?” to which a response came¹²⁰ “I don’t know. I’ll ask. Remember this is a 3 or 4 link chain. But local broker today told me that day. that he had passed on the 11 am message and that it was confirmed back with a positive reply...”.

158. When the warrant of Mr Sagar’s residence was executed a BlackBerry was seized.

159. Emails between David Muta and George Skynet continued speaking about arrangements for a new shipment of jam using a new logistics company. On 19 April 2018, David Muta advised that¹²¹ “I am seeing my side early next week face to face so will sort as in your details below…”.

160. On 22 April 2018, Mr Smith said to Mr Wagambio on WhatsApp that he was meeting with the group tomorrow. A meeting took place between Mr Smith and Mr Sagar on 23 April 2018. Prior to meeting each were observed walking in a circuitous route. They spoke for fifteen minutes and Mr Smith was observed writing down something on a white piece of paper and giving it to Mr Sagar.

161. On 23 April 2018, Mr Sagar sent a text message to Ferronato Eleonora saying that “[h]ad some good news about work today (not the horse business, the other stuff) but still feel down tonight”.¹²²

162. On 1 May 2018, Mr Smith sent an email to Jorge on the David Muta account saying “[m]y side is fine here”.¹²³ On 2 May 2018, Mr Smith sent a WhatsApp message to Mr Wagambio that said “[t]eam are good”.

‘‘Call if possible next 5 min. Soon as you [can] ... With S A guys now So may need details.”¹²⁷

Mr Smith and Mr Sagar got out of their vehicles walking different routes before meeting up at the corner of Anzac Parade and having a conversation while walking.

167. On 30 May 2018, Mr Smith sent a message saying “Still no word from either trainer, let me know”. Mr Sagar sent a message on 1 June 2018 which stated:

“…Can I meet you at the track tomorrow (Sat)? How about midday?...”¹²⁸

168. On 2 June 2018, Mr Smith travelled to Anzac Parade at Maroubra.¹²⁹

169. Further messages were exchanged on WhatsApp between Mr Smith and Mr Sagar. On 10 June 2018, Mr Sagar asked Mr Smith on WhatsApp whether there was “[a]ny news your end about that filly”.¹³⁰ To which Smith replied on 11 June “[n]o mate, Let me check again” and “60 min” and at about the same time sent a message to Mr Wagambio “[l]et me know when free”.¹³¹ He then sent a message to Mr Sagar “[h]ave now on file ... Sorting through”.

170. On 13 June 2018, at 10.04 am, Mr Smith met up with Mr Sagar after going to Anzac Parade, Maroubra with both walking a circuitous route before meeting.¹³² They had a conversation on the street. Prior to the meeting Mr Smith accessed the David Muta email account at 9.22 am.

171. On 13 June 2018, Mr Sagar sent a message to Mr Smith saying he needed “to catch up with you again asap 10am tomorrow (Thursday) ok ?” which Smith confirmed.¹³³

172. A Filofax notebook seized at Mr Sagar’s house included a reference on 13 June 2018 to “Fruit 10am”, which corresponded to a meeting he had with Mr Smith. On 14 June 2018, there was another reference to “10- fruit”, which was when the further meeting was planned after Mr Sagar said he needed to meet up asap but did not take place due to them being arrested.

173. Mr Sagar refused police access to his BlackBerry device in contravention of a Court order requiring him to do so. When police did obtain access, the communications had been deleted. The Crown relied on that conduct as consciousness of guilt contending that the jury should draw the inference that the only reason he refused to comply was that he was concerned the consequences that he might face if he complied with it would be more serious than the charges he would face for failing to do so.

174. A police interview with Mr Smith was played to the jury.¹³⁴ The Crown relies upon that interview to exclude gold as an explanation, but not to draw an inference the substance in question was cocaine. Mr Smith denied any involvement in a conspiracy to import border controlled drugs, specifically cocaine. He had told police he had contact with Mr Wagambio through WhatsApp and in a meeting about a logistics operation and gold exports. He denied contact through email accounts. He also denied he had given Mr Wagambio money other than $1,000 for a funeral. He denied he had ever tried to import gold into PNG. He denied knowing or meeting Mr Sagar. He then said he had met with the person police said was Mr Sagar who was in the horse racing industry and referred to as “horse” on his WhatsApp.

The Summing Up

182. A very detailed summing up was given by the trial judge as to the issues in the case and the elements of the offence and included the trial judge guiding the jury through the body of evidence through numerous exhibits, evidence from witnesses and admissions that had been the subject of the trial, which was an eTrial.

183. As is usual in a circumstantial case such as this, the trial judge gave specific directions about the Crown’s case as to the alleged conspiracy being circumstantial and explained that the jury were being asked to draw inferences as to each element of the offence and that the inferences contended by the Crown must be the only reasonable inference in the circumstances. He identified the inferences which the Crown was inviting them to draw. In particular the jury were clearly instructed that:¹³⁵

“You are being invited by the Crown to draw inferences, that is, inferences in respect of each of the elements of the offence, and the Crown invites you to conclude that each of those elements are established as the only reasonable or rational conclusion upon the whole of the evidence, and, therefore, they are proven beyond reasonable doubt.

So when it comes to the element with respect to the agreement, you must consider whether you are satisfied that the only reasonable inference to be drawn from all the evidence is that the defendant – and that is – there are two defendants charged with count 1, so it is in each case, you must be satisfied that the only reasonable inference to be drawn is that the defendant entered into the conspiracy agreement as alleged. Now, that particular agreement is to import a commercial quantity of the border-controlled drug cocaine. It must be proven that that was the identity or nature of the concealed goods that were to be imported if you accept that that was the plan. That must be the only reasonable inference in all the circumstances. The Crown must exclude any other reasonable possibility that it may have been something else.

Now, to have conspired as alleged, the defendant in each case must not only have entered into the agreement with at least one other party but must have intended to do so, intended to enter into that agreement, and that the defendant and at least one other party must have had the knowledge and belief – therefore, the intention – that what was to be imported was cocaine. That is the particular inference that the Crown contends is the only reasonable inference in the circumstances that you would draw, having regard to the whole of the evidence. And the final matter – and that is element 3 of the conspiracy charge – is that there was an overt act done to further or achieve the objective of a particular agreement, and, as I have said, members of the jury, there is no dispute that there were many acts done but, ultimately, in respect of what? So, again, you must be satisfied that any such act that was done was done to further the particular agreement as alleged. That must be the only reasonable or rational inference.

Now, the other charge, which is count 2, which is against Mr Smith only – in respect of the issues that remain in dispute there, the real issues come down to the question of the intention held by Mr Smith when dealing with the money, that is, has the prosecution proved, again by inference, as the only reasonable or rational inference in all the circumstances that Mr Smith intended that the money would be used to commit or to facilitate the commission of an indictable offence and that being one which is a Commonwealth indictable offence.

So the Crown case is put that you would be satisfied that Mr Smith dealt with the money because he possessed money at various stages, and then he gave some of that money to Mr Wagambio. But it is the purpose for which the money was given that is the particular issue in dispute. So it is the Crown case that money was given on occasions when Mr Wagambio came to Australia and met with Mr Smith. Mr Wagambio gave evidence about those occasions. Exhibit 31, which are the bank statements – he gave evidence about certain deposits and transactions in there related to money he had been given by Mr Smith, and there is no challenge to the fact that he had been given money and put some of that money into the accounts.

The real issue, then, is in respect of elements 3 and 4 for that charge, and that same critical issue arises with respect to the purpose. Again, you will need to consider as part of that charge what was in the mind of Mr Smith, what was the nature of the concealed goods in the shipping container that ultimately was sent from Peru and arrived in Papua New Guinea in January 2018. And as the Crown case, again, is circumstantial, you must be satisfied that the only reasonable inference is that Mr Smith intended that the money was to be used to commit – facilitate the commission of an indictable offence, and, here, that is said to be the offence of importing a commercial quantity of the border-controlled drug cocaine.”

184. His Honour gave a detailed summary of rival contentions.

Summary of Contentions at Trial

185. The Crown contends that the defence seek to raise matters now upon appeal that were not run below.

186. Relevant to this appeal, the Crown contended that the evidence showed there was no doubt that the arrangement was never about importing jam, which was just something to fill the container with, and that what Mr Smith and Mr Sagar were interested in was what was concealed within it. The Crown contended that the only rational inference was that the agreement between the parties was to import cocaine and that each appellant intended that cocaine was to be illegally imported in the first and second shipment which was established by the following facts:what was to be imported was 300 kilograms in blocks;it was plain that the terms “gold” was only being used as a codeword for the product intended to be imported;one of the photos in exhibit 38 which depicted a factory floor did not show jam or gold and the jury might think it was consistent with the process described by Dr Krishnamurthy about steps in producing cocaine; andconsistent with Dr Krishnamurthy’s evidence, the jury could conclude that the drug being shipped was being processed over the months before it was shipped in one kilogram blocks and from Peru. Those facts together with the secrecy and sophistication of the operation and what was spent on invoices supported the fact that the only rational inference was that it was cocaine that was to be imported into Australia.

187. The Crown contended that the only alternate explanation consistent with innocence was that the product intended to be imported was gold, which could be excluded by the conversation between Mr Smith and Mr Wagambio with Mr Smith referring to use the word “gold” betraying the fact that the actual subject was not gold that was being concealed and it was just a codeword to disguise the true nature of the concealed goods. That was supported by Mr Wagambio’s statement to police.

188. In relation to Mr Sagar the Crown contended that the jury would infer that there was a meeting between Mr Smith and Mr Sagar on 15 January and that, given that the photographs taken by Mr Wagambio of the seals on the container were accessed by Mr Sagar, all three men were linked to the shipment, supported by the messages Mr Sagar sent of the failed business deal. Mr Sagar’s role in regularly meeting with Mr Smith supported his continued role in the planned second shipment and supported him having a role in facilitating payments, given Mr Smith informed Jorge that he had requested his side to make payments not long after he and Mr Sagar met and they continued to meet. Mr Sagar having such a role in the second shipment was supported by Mr Smith’s references in his messages to other people to whom he was meeting about different issues and his messages to Mr Wagambio after he met with Mr Sagar. This inference is also supported by the reference to one of his team having a BlackBerry which was not receiving messages in his messages to Jorge in March, following which he went to meet at his usual meeting point with Mr Sagar.

Grounds of Appeal

191. Both appellants appeal against their conviction on the basis that their respective verdicts are unreasonable and cannot be supported having regard to the evidence. This ground of appeal was expressed in two alternate ways by counsel for Sagar:¹³⁶

“(i) It was not open to the jury to find beyond reasonable doubt that the identity of the commodity (or product) the object of the alleged conspiracy which was to be imported into Australia was cocaine; [or]

It was not open to the jury to reject (or exclude) beyond reasonable doubt a reasonable hypothesis consistent with the innocence of the [a]ppellant[s], namely, the identity of the commodity (or product) the object of the alleged conspiracy which was to be imported into Australia was other than cocaine.”

192. During the course of oral argument Mr Sagar’s counsel also sought to contend that the jury should have had reasonable doubt that Mr Sagar was a party to an agreement.

193. That dual construction of the sole appeal ground proffered by Mr Sagar was adopted by counsel for Mr Smith, who emphasised that the “… principle [sic] submission is that the whole of the evidence could not prove beyond reasonable doubt that the commodity to be imported was cocaine”.¹³⁷

Summary of Contentions on Appeal

Contentions raised by Mr Sagar

194. Counsel for Mr Sagar, in submissions to support his contention that the verdict of guilty on count 1 was an unreasonable verdict, accepts that on the basis of the evidence:it was open to the jury to conclude that Mr Wagambio, Mr Smith and the appellant were parties to a conspiracy to import by ship, from Peru into Australia (via PNG), a product, as distinct from a single item or object, which was to be concealed inside a container and that it was to be concealed in such a manner that the authorities would be unable to find it. The product was not only valuable but was something which took much effort and time for its importation to be organised;the jury could readily conclude, given the time and effort taken to ensure the product avoided customs and border control, that the law prohibited this product from being imported into Australia; andnotwithstanding no substance was ever imported or found, the jury could readily conclude that the product was neither gold nor jam.

195. However, Mr Sagar’s counsel submits that the evidence was insufficient to exclude the reasonable inference that the border controlled drug, the subject of the conspiracy, was a drug other than cocaine because Mr Wagambio had in his evidence stated his belief, based on his google searches of known drugs from Ecuador and Peru, that the 300 kilograms of blocks “would be either cocaine or if not, heroin …”.

196. Further Mr Sagar submits that:consistent with the trial judge’s directions, the evidence of Mr Wagambio’s belief was evidence of Mr Wagambio’s state of mind at the time and could be used by the jury in determining whether Mr Wagambio held an intention to import heroin rather than cocaine as part of the conspiracy;it was open to the jury to conclude that Mr Wagambio believed that the product being imported was heroin and it necessarily follows that it was possible that the appellant had the same belief being such a rational inference; andthe evidence did not support, as the only rational inference, that Mr Sagar intended to join and be a party to an agreement that cocaine would be imported into Australia and exclude as a reasonable hypothesis that some other drug, for example heroin, was to be imported into Australia pursuant to the agreement.

197. In oral submissions, counsel for Mr Sagar contended that given there was a reasonable inference that Mr Wagambio believed that the concealed product was heroin not cocaine, the jury should have had reasonable doubt that Mr Sagar held the relevant intention given the form of the indictment meant that all parties named including Mr Wagambio had to be proven to have entered into an agreement holding the same intention.

198. Mr Sagar’s counsel further contends that there was no evidence that the photograph in exhibit 38 was part of the process of producing cocaine described by Dr Krishnamurthy in the absence of evidence from Dr Krishnamurthy.

Contentions raised by Mr Smith

199. Mr Smith accepts that the Crown presented a strong circumstantial case that the product in question was an illegal product and a border controlled drug, but contends that the Crown did not prove beyond reasonable doubt that the product the subject of the agreement and importation, was cocaine.

200. Mr Smith further submits that, relevant to both count 1 and 2, the evidence was not capable of excluding the reasonable possibility that the product was heroin or a liquid precursor or some other drug. Dr Krishnamurthy’s evidence did not exclude the fact the product could have been some other drug.

201. In relation to the reasonable possibility that the product was a precursor, Mr Smith relies on the evidence of Federal Agent Ashworth. Federal Agent Ashworth gave evidence that police initially thought that “Mr Wagambio, on behalf of Mr Smith, was going to arrange for a significant quantity of drug precursor material, liquids”.¹³⁸ He stated further however that once the product was constituted as blocks they formed the view “we weren’t looking at a border controlled precursor any longer. We were looking at a border controlled drug”.¹³⁹ Mr Smith contends however that the sequence of suspicions of investigators was never closed off in the evidence.

202. In particular Mr Smith contends that the evidence of Dr Krishnamurthy and the photo in exhibit 38 relied upon by the Crown as part of the evidence from which it was to be inferred that the drug in question was cocaine could not satisfy a jury beyond reasonable doubt that the drug that was to be imported and the subject of the agreement for the purpose of establishing a conspiracy was cocaine.

Contentions raised by the Crown

203. The Crown contends that neither defence counsel at trial submitted the heroin hypothesis was reasonably open to the jury and that it was not advanced because it did not reasonably arise on the evidence. The Crown contends that the trial issues were defined by the parties and it was not suggested by defence counsel that there was a reasonable possibility that the concealed substance was heroin, or a precursor liquid or any other border controlled drug. No cross-examination of Dr Krishnamurthy suggested that to be the case. Nor were those possibilities raised by Mr Smith in his interview, which while it could not establish the Crown’s case it did narrow the hypotheses reasonably available on the evidence that may be regarded as inconsistent with the guilt of the accused.

204. The Crown contends that Mr Wagambio’s evidence did not provide an evidentiary basis that the substance intended to be imported by the appellants was heroin consistent with the direction given by the judge. Mr Wagambio’s evidence was not relied on as evidence to directly prove that the substance was cocaine. Rather it was relevant to Mr Wagambio’s intention with respect to the agreement, which the Crown submits was relevant but not essential to establishing the existence and scope of the conspiracy between the co-conspirators. The jury were directed by the trial judge as to the limited purpose for which that evidence of Mr Wagambio could be used.

205. The Crown further contends that even if Mr Wagambio’s evidence was a proper factual foundation for the heroin hypothesis, Mr Wagambio’s position in the enterprise was not at a high level like the appellants. Each of the appellants were so closely involved in the importation of the border controlled drug, thus the jury could infer that they well knew the plain inference that was established from the objective circumstances and their relative positions within the enterprise.

206. In relation to the contention Mr Smith’s counsel now raises, the Crown submits that the precursor liquid hypothesis was not reasonably open on the evidence as it was based only on the investigating officer’s initial suspicion which subsequently changed.

207. The Crown submits that it was unnecessary for the Crown to establish that Mr Wagambio held the requisite intent to import cocaine in order to establish the conspiracy because it was open to the jury to find that Mr Smith and Mr Sagar were each a party to a conspiratorial agreement to import cocaine.

208. According to the Crown the jury were entitled to reject the defence contentions that the importation was, as contended by Mr Sagar at trial, of some unidentified illegal product or in Mr Smith’s case that it was gold or some other drug. Having rejected those possibilities the only rational explanation was that the appellants were involved in a conspiracy to import cocaine because:each of the appellants were engaged in an elaborate and sophisticated venture directed at importing a product into Australia;the period of time and financial resources expended on the venture were consistent with the importation involving something highly lucrative, and the appellants were expecting a significant financial windfall for their efforts;the level of secrecy, including codes, encrypted communications, false identities and other anti-surveillance measures engaged in demonstrated the highly illegal nature of the importation;the origin of the first shipment was Peru, and Dr Krishnamurthy’s evidence was that intelligence held by AFP was that cocaine is shipped to Australia from South America, including Peru;in the email composed by Mr Smith on 23 January 2017, the product was described as 300 kilograms of pure blocks, to be hidden under the floor in the container, which was consistent with the evidence of how cocaine is packaged, usually in one kilogram bricks, as described by Dr Krishnamurthy; andthe product was one which required processing over a number of weeks in a processing plant. It was open to the jury to find the photograph of the processing plant depicted at exhibit 38 was on its face inconsistent with the production of jam, the subject of the emails to which the photograph was attached where it was open for the jury to infer was a front. It could also be considered by the jury that it was consistent with a step in the production of cocaine, noting the various steps involved in that process as described by Dr Krishnamurthy.

Legal Principles

209. The role of the Court in this appeal is not to determine whether, as a matter of law, there was evidence on which the accused could be convicted, but rather the function of an appellate court in reviewing the totality of evidence at trial, is to determine whether a verdict of guilty was unreasonable.¹⁴⁰ In response to a no case application the trial judge had ruled that there was evidence upon which the appellants could be convicted. In particular, the trial judge determined that there was evidence capable of proving that the only reasonable inference was that the subject matter of the importation enterprise and the goods to be imported was cocaine. That ruling is not the subject of this appeal and quite properly neither side seeks to rely on that ruling in the present appeal.

210. The legal principles applicable to this appeal are generally uncontroversial. An appeal of this kind must be determined in the manner described by Mason CJ, Deane, Dawson and Toohey JJ in M v The Queen:¹⁴¹

“Where, notwithstanding that as a matter of law there is evidence to sustain a verdict, a court of criminal appeal is asked to conclude that the verdict is unsafe or unsatisfactory, the question which the court must ask itself is whether it thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty.” (footnotes omitted).

211. The Court must determine whether, notwithstanding the existence of evidence upon which a jury might convict, “none the less it would be dangerous in all the circumstances to allow the verdict of guilty to stand”.¹⁴²

212. The majority of the High Court in The King v ZT¹⁴³ recently confirmed the principles as to whether a verdict is unreasonable or could not be supported having regard to the evidence, which had been authoritatively stated in M v The Queen. In relation to the allowance that must be made in making such an assessment, the majority observed that was “not confined to witness testimony but may extend to all of the evidence adduced at trial. The advantages spoken of are the advantages the jury had, including by the application of the jurors’ collective wisdom and experience of ordinary affairs, from seeing and hearing the evidence as it unfolds when evaluating factual matters, especially witness credibility.”¹⁴⁴ (footnotes omitted). As to the appellate court’s independent assessment of the sufficiency and quality of the “whole of the evidence” the majority observed that:¹⁴⁵

“… that assessment is undertaken in a context in which an appeal is as much of an adversarial process as the criminal trial from which the appeal is brought and in which it is for the parties to identify the evidence that the appellate court must review and assess and the features of that evidence that support their respective cases on appeal. The appellate court does not determine the grounds of appeal by simply reconsidering the parties’ respective cases at the trial.”

213. In R v Miller, this Court held that:¹⁴⁶

“[a]n appellant who contends that the verdict of the jury was unreasonable or that it was unsupported by the evidence must identify the weaknesses in the evidence and must then also demonstrate that these weaknesses reduced the probative value of the evidence in such a way that the appellate court ought to conclude that even making full allowance for the advantages enjoyed by the jury there is a significant possibility that an innocent person has been convicted. The mere identification of weaknesses in the prosecution case is not enough to sustain the ground …

…

The burden upon an appellant who relies upon this ground is heavy and an appellant, by merely asserting the ground, does not force the Crown to prove its case for a second time.”

214. The present case was a circumstantial case. In Coughlan v The Queen, Kiefel CJ, Bell, Gageler, Keane and Edelman JJ held:¹⁴⁷

“An assessment of the sufficiency of the evidence to support the verdict of guilt in a circumstantial case such as this one requires the appellate court to weigh all the circumstances in deciding whether it was open to the jury to draw the ultimate inference that guilt has been proved to the criminal standard. That inference will not be open if the prosecution has failed to exclude an inference consistent with innocence that was reasonably open.” (footnotes omitted)

215. The question of an inference that is reasonably open was considered in R v Baden-Clay, in which French CJ, Kiefel, Bell, Keane and Gordon JJ held:¹⁴⁸

“For an inference to be reasonable, it ‘must rest upon something more than mere conjecture. The bare possibility of innocence should not prevent a jury from finding the prisoner guilty, if the inference of guilt is the only inference open to reasonable men upon a consideration of all the facts in evidence’... Further, ‘in considering a circumstantial case, all of the circumstances established by the evidence are to be considered and weighed in deciding whether there is an inference consistent with innocence reasonably open on the evidence’... The evidence is not to be looked at in a piecemeal fashion, at trial or on appeal.

Further, a criminal trial is accusatorial but also adversarial. Subject to well-defined exceptions, ‘parties are bound by the conduct of their counsel, who exercise a wide discretion in deciding what issues to contest, what witnesses to call, what evidence to lead or to seek to have excluded, and what lines of argument to pursue’.” (footnotes omitted).

216. The plurality in Baden-Clay further emphasised the need for “positive proved facts from which the inference… could be made”, citing Caswell v Powell Duffryn Associated Collieries Ltd.¹⁴⁹ In Caswell, Wright LJ held:¹⁵⁰

“Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. In some cases the other facts can be inferred with as much practical certainty as if they had been actually observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture.”

Consideration

Was cocaine the product planned and intended to be imported?

217. Turning to the common ground of appeal, that the verdict was unreasonable because the jury could not be satisfied on the evidence as a whole beyond reasonable doubt of the appellants’ guilt, particularly because they could not be satisfied that the product that was the subject of the agreement and intended to be the subject of the importation was cocaine.

218. No substance was found by the authorities when they intercepted the shipment, nor did it have to be for the conspiracy charge to be successful. No reference was made to “cocaine” in the evidence of the communications that passed between the parties.

219. The relevant evidence has been summarised above. While the evidence directed to the identity of the alleged border controlled drug was of narrow compass, it is necessary to consider the broader evidence led to establish the planned importation of an illegal product and the parties involved, in order to determine whether there were other possible inferences now raised by the appellants, which having regard to the evidence as a whole, the jury could not exclude.

220. The Crown contends that the appellants now seek to raise hypotheses in relation to the product being imported being heroin or precursor liquid which were not raised at trial. It contends that they cannot now be properly raised upon appeal.

221. The changing nature of the appellants’ contentions from that which was ventured at trial is of some importance, given as recognised by the majority of the High Court in Baden-Clay parties are bound by the conduct of their counsel at trial and that conduct can narrow the range of hypotheses reasonably available upon the evidence.¹⁵¹

222. However, as was recognised by the Court in Baden-Clay:¹⁵²

“It may readily be accepted that ‘it is not incumbent on the defence either to establish that some inference other than that of guilt should reasonably be drawn from the evidence or to prove particular facts that would tend to support such an inference.’ That proposition merely reflects that it remains for the prosecution to prove the accused’s guilt of an offence beyond reasonable doubt. And it does not detract from, and is consistent with, the further proposition that a ‘trial judge must be astute to secure for the accused a fair trial according to law.’ A trial judge must adequately direct the jury ‘both as to the law and the possible use of the relevant facts upon any matter upon which the jury could in the circumstances of the case upon the material before them find or base a verdict in whole or in part’; the trial judge is under a ‘duty to put to the jury with adequate assistance any matters on which the jury, upon the evidence, could find for the accused’” (footnotes omitted)

223. Neither appellant contends that the trial judge’s directions were deficient in this regard.

224. While I do not consider that the conduct of the appellants’ counsel at trial necessarily excludes the hypotheses now being raised upon appeal that were not raised at trial, it is unnecessary for me to reach any final view in that regard given the conclusions I have reached having assessed the evidence as a whole as discussed below.

225. As to whether the subject of the agreement to import an illegal border controlled drug and that the illegal border controlled drug intended to be imported was cocaine, it is only necessary to consider evidence admissible against both Mr Smith and Mr Sagar.

226. The following matters would appear to be uncontentious and were clearly open on the evidence led at trial.

227. The evidence revealed a sophisticated operation which expended significant planning, time and costs in order to bring in a product concealed amongst another product, namely jam. It was plain that the jury could readily have reached the conclusion that the jam was imported to disguise an illegal product which was concealed amongst the jam and that significant efforts had been undertaken to make the import of jam look to be a legitimate business transaction. Considerable steps were taken to ensure that the jam had proper labelling, complied with all importation requirements of PNG and a document trail was created to support the fact that it was being imported for business purposes. Arrangements were made for the jam to be imported by a company in PNG, Green Cube Procurement, which was owned by a relative of Mr Wagambio’s and was apparently going to market the jam. Bills of lading and all documentation required to ship from Peru to PNG were completed after checks were made by the South American arm of the operation through “Jorge” of the requirements which were checked with Mr Wagambio. Mr Wagambio was engaged to ensure the shipment would clear customs by using his connections.

228. Communications were conducted in a covert way to avoid detection. Careful steps were taken to minimise detection of communications and the parties involved by setting up Proton Mail accounts under pseudonyms, daruisland and davidmuta, in which information could be and was exchanged, including through the provision of dropping a draft which could then be seen by another party when they signed into the account. Phone apps such as WhatsApp were used in conversations between Mr Wagambio and Mr Smith and did not refer to them by name. Mr Smith had multiple mobile phones and the mobile phone was changed on a number of occasions. Mr Wagambio was instructed on more than one occasion to delete all messages. Mr Sagar had a cipher BlackBerry. Exchanges that occurred used code words to disguise the nature of the operation. Personal meetings occurred between Mr Smith and Mr Wagambio as part of the planning and between Mr Smith and Mr Sagar. Steps were taken to camouflage those personal meetings, particularly as between Mr Sagar and Mr Smith. The product that was to be concealed was not identified in communications, save that there was a reference to gold.

Joint intention – Mr Sagar

270. Counsel for Mr Sagar also contends that the Crown had to exclude as a reasonable hypothesis that Mr Wagambio held an intention to import heroin rather than cocaine as part of the conspiracy, in order to find that the only rational inference was that Mr Sagar held the requisite joint intention to import cocaine.

271. Counsel for Mr Sagar contends that it was beholden upon the Crown to show that all five co-conspirators held the same intention in terms of the drug to be imported being cocaine, given the form of the indictment. He contends that that was consistent with the directions given by his Honour. Neither submission can be accepted.

272. The submission that the relevant intention to import cocaine had to be held by all persons named on the indictment and particularly that the jury would have to be satisfied that Mr Wagambio and Mr Sagar shared a common intention is inconsistent with the manner in which trial was run and the directions given.

273. It is plain that the directions by his Honour did not direct the jury that they had to be satisfied beyond reasonable doubt that all named co-conspirators held the joint intention in relation to each of the appellants. That was evident from the directions given by his Honour through an aide memoire provided to the jury¹⁷⁵ and also his oral directions:¹⁷⁶

“Now, to have conspired as alleged, the defendant in each case must not only have entered into the agreement with at least one other party but must have intended to do so, intended to enter into that agreement, and that the defendant and at least one other party must have had the knowledge and belief – therefore, the intention – that what was to be imported was cocaine.”

274. No redirection was sought by the appellants at trial. The contention that the direction given by the trial judge was defective was ultimately not pursued by Mr Sagar’s counsel.¹⁷⁷

275. His Honour’s directions were consistent with the law. Notwithstanding an acquittal of one alleged co-conspirator, a conviction of another co-conspirator may stand unless in all of the circumstances the conviction is inconsistent with the acquittal of the other person.¹⁷⁸

276. There was evidence upon which the jury could be satisfied beyond reasonable doubt that Mr Sagar was a party to the agreement to import cocaine from South America, and that he held a joint intention to do so, at least with Mr Smith and those responsible for shipping the cocaine from South America, if not Mr Wagambio. It was also open for the jury to be satisfied beyond reasonable doubt that Mr Wagambio did intend to import cocaine regardless of his reference to heroin or some other illegal drug as part of the conspiracy for the reasons that have been set out above.

277. The jury could infer from Mr Smith’s messages to Mr Wagambio and Jorge referring to “our side” that there were people other than Mr Smith who were involved in the conspiracy in Australia.

278. The evidence of Mr Sagar accessing photographs after Mr Smith went to Anzac Parade, Maroubra on 15 January was compelling evidence that he had met with Mr Sagar in January 2018 for the purpose of discussing the fact that the concealed product in the shipment had not arrived, the broken seals and to provide him with the photographs. This was compelling evidence that Mr Sagar knew what was being concealed in the shipment and intended that cocaine be imported into Australia.

279. The close proximity of the meetings between Mr Smith and Mr Sagar after the product intended to be concealed in the shipment was not found and the surreptitious manner in which each party conducted themselves clearly to avoid detection and being overheard, together with the messages sent by Mr Sagar could not be discarded as mere coincidence or connected with some other venture. Probative of the fact that the inference that those conversations were about anything other than the illegal shipment was the evidence that photographs had been provided by Mr Smith to Mr Sagar who had then accessed them on Hushmail, where a notification on Hushmail was also shown by Mr Smith. Mr Sagar accessing those photographs is inexplicable on any other basis other than that he was a party to the agreement to import the concealed product and intended that product to be imported.

280. Similarly, the jury could exclude the possibility that the conversations between Mr Sagar and Mr Smith were about horses given the fact that proposed meetings set to take place on the track in fact occurred at Anzac Parade, Maroubra. The jury could readily infer the only rational inference to be drawn from the meetings was that Mr Smith was meeting with Mr Sagar to relay what had occurred in relation to the January 2018 shipment and discuss whether a second attempt should be made to import the same product again. That was supported by the messages sent by Mr Smith to Mr Wagambio proximate in time to his meetings with Mr Sagar and the subsequent communications with Jorge of Noroeste.

Conclusion

288. Mr Smith has not succeeded in establishing that the verdict of guilty for count 1 and 2 was unreasonable. Mr Sagar has not succeeded in establishing that the verdict of guilty for count 1 was unreasonable.

Orders

289. The orders of the Court should be:

The appeal in CA 209 of 2023 is dismissed.

The appeal in CA 226 of 2023 is dismissed.

Footnotes

1. R v Baden-Clay (2016) 258 CLR 308 at 324-325 [49]-[51]. ↩

2. (1993) 178 CLR 217 at 227‑228 per Mason CJ, Deane and Dawson JJ. ↩

3. (2000) 199 CLR 620 at 633 [27], 641 [54], see also at 654‑655 [104]. ↩

4. (2001) 205 CLR 50 at 73 [61]. ↩

5. AB Vol 1 8. ↩

6. AB Vol 1 8. ↩

7. Transcript of Proceedings, 15 August 2024, p 1-22 ll 9-13. ↩

8. Appellant’s Outline of Submissions (Smith) at [6]. ↩

9. The King v ZT [2025] HCA 9 at [11]. ↩

10. AB Vol 1 103. ↩

11. AB Vol 1 103-104. ↩

12. AB Vol 3 901-902. ↩

13. AB Vol 2 263/37-40. ↩

14. AB Vol 3 647/24-25. ↩