R v Strawhorn [2008] VSCA 101

Court of Appeal (Vic)|2008-06-13|Before: VINCENT, NETTLE and KELLAM JJA

Criminal law - Conviction - Trafficking in a commercial quantity of pseudoephedrine - Applicant was a serving member of Victoria Police attached to Drug Squad - Applicant's failure to mention pseudoephedrine transactions to investigating superiors - Statement made by applicant that 'it never happened' - Whether such conduct amounted to a consciousness of guilt - Issue of corroboration - Whether evidence relating to movement and communication between relevant individuals was capable of providing support for conduct alleged - Whether such evidence intractably neutral - Whether trial judge erred in declining to give Faure warning to jury regarding the reliability of evidence given by former police members involved in criminal conduct - Applicant at relevant time in possession of unexplained cash - Whether such evidence of betterment admissible - Whether applicant guilty of trafficking in 'pure pseudoephedrine hydrochloride' - Meaning of 'pure' according to the standards postulated by British Pharmacopeia - Application dismissed.

Criminal law - Sentence - Whether sentence available in proper exercise of sentencing discretion - Parity - Fresh evidence - Subsequent superannuation order made - R v McLeod [2007] VSCA 183; (2007) 16 VR 682 - Application dismissed.

1 The applicant was, on 22 June 2006, presented before the Supreme Court at Melbourne on four counts of trafficking in pseudoephedrine (counts 1 to 4), one count of trafficking in a commercial quantity of pseudoephedrine (count 5) and one count of making a threat to kill (count 6). He was, on 18 October 2006, found guilty by the jury on count 5 only.[1]

2 After hearing a plea in mitigation of penalty, the sentencing judge, on 11 December 2006, imposed a term of imprisonment of seven years in respect of which a non-parole period of four years was fixed.

The application for leave to appeal against conviction

3 The applicant seeks leave to appeal against his conviction[2] and sentence on the grounds that:

2A The learned trial judge erred in leaving evidence of [the applicant's] "failure to mention pseudoephedrine" as consciousness of guilt on all or any counts.

2B The learned trial judge erred in leaving evidence of [the applicant's] alleged "directive" to witness BC that "it never happened" as consciousness of guilt on count 5.

2C A miscarriage of justice was occasioned by the Crown leading evidence which, not ultimately constituting admissions by conduct, was of little probative weight and significant prejudicial effect.

3A The learned trial judge erred in directing the jury that the following pieces of evidence were capable of corroborating the evidence of Stephen Paton.

(i) Regarding counts 1 to 4, all displays of unsourced cash before 19 May 2000.

(ii) Regarding count 5, all displays of unsourced cash including those after 19 May 2000.

(iii) Regarding count 5, the car log for 19 May 2000.

(v) Regarding count 5, the evidence of witnesses DE and BC.

(vii) Regarding all counts and particularly count 5, the evidence of admissions by conduct.

3B The learned trial judge erred in suggesting to (or directing) the jury that a finding that the alleged corroborative evidence was "consistent" with Mr Paton's account was capable of being used to corroborate his evidence.

4A The learned trial judge erred in declining to give a specific direction, in the nature of a Faure warning, to the jury regarding the witness BC.

4B The learned trial judge erred in declining to give a specific direction, in the nature of a Faure warning, to the jury regarding the witness DE.

5A The learned trial judge erred in admitting evidence of eight financial transactions said to involve "unexplained cash transactions" by the applicant. (The Crown initially sought to lead evidence of 11 financial transactions. The evidence in relation to three transactions was ruled inadmissible.)

5B Alternatively, admitting the evidence produced a miscarriage of justice, by exposing the applicant to the danger that the jury might use the material:

(ii) as circumstantial evidence inculpating the applicant, or

(iii) as evidence of corroboration of the account of Mr Stephen Paton.

1 The learned trial judge erred in ruling that the expression "quantity of pure drug" in column 2 of Part 1 of Schedule Eleven of the Drugs, Poisons and Controlled Substances Act 1981 ("the Act"), is an expression that has a special or technical meaning.

2 The learned trial judge further erred in alternatively ruling that the ordinary meaning of the word "pure" is the meaning that is employed in the "standards laid down in the principal reference work on the subject", the British Pharmacopeia.

3 As a result, the verdict on count 5 was unsafe and unsatisfactory in that:

- the verdict was unsupported by evidence of a commercial quantity of pseudo-ephedrine (or pseudo-ephedrine hydrochloride), there being no evidence of a commercial quantity;

- alternatively, the verdict was against the weight of the evidence with respect to the existence of a commercial quantity of these substances.

a. by directing the jury that the quantity of the drug alleged in count 5 was not in issue; and

b. by failing to direct the jury that the meaning of the expression "quantity of pure drug" in column 2 of Part 1 of Schedule Eleven of the Act did not encompass or include a quantity of any other substance in which a drug was contained or with which it was mixed.

2 As a result, the learned trial judge erred in removing from consideration by the jury an element of the offence charged: that the Appellant trafficked in a quantity not less than the commercial quantity.

7A A miscarriage of justice was occasioned by the Crown leading evidence which, in the event, was of little probative weight and significant prejudicial effect on any count, including count 5; such evidence including:

(i) the evidence that [the applicant] secured Paton's resignation;

(ii) the evidence that [the applicant] threatened to kill Paton;

(iii) the evidence that [the applicant] threatened to kill witness 4/199;

(iv) the evidence that [the applicant] commended witness 4/199's character to the Court of Appeal in 2001;

7B The evidence originally mooted as consciousness of guilt evidence, but which the learned trial judge declined to allow to be so used, including:

(i) [The applicant's] instruction to Sayce "don't tell anyone";

(ii) [The applicant's] guilty conduct in recorded conversations of 16 January and 30 May 2001;

(iii) [The applicant's] alleged lies in 15 March 2003 tape.

7C The evidence of police finding allegedly relevant pseudoephedrine in raids on the Bandidos.

7D The evidence of police finding allegedly relevant pseudoephedrine in the raid on Milne's house on 16 June 2000.

8A In the event that one or more aspects of the above grounds are made out, a miscarriage of justice occurred by reason of that aggregation of errors.

4 The applicant was a serving member of the Victoria Police. At the relevant time, he held the rank of Detective Senior Sergeant and was attached to the Drug Squad. His duties included participation in a covert operation, designated 'Vere,' which had as its focus particular groups of individuals believed to be implicated in the illegal trade in amphetamine based drugs. He held a senior position within a section of the operation identified as Unit 2, the activities of which were directed to the location of clandestine laboratories. The drugs produced in such laboratories include amphetamines, methylamphetamines and MDMA (ecstasy). An essential chemical for the manufacturer of these substances is pseudoephedrine hydrochloride ('pseudoephedrine'), a common ingredient in medications for the relief of colds and flu, including the Sigma company product 'Sudafed.' The applicant's primary responsibilities related to the activities of the 'Chemical Diversion Desk,' which as its name implies was concerned with cutting off supplies of the necessary chemicals to alleged operators. As part of his duties, he was involved in the authorisation of what were termed 'controlled deliveries.' Under this process, quantities of chemicals and equipment necessary for the manufacture of illicit drugs would be made available to undercover operatives and/or informers to supply to suspects with the purpose of following the material by way of covert surveillance through to the laboratories and to those engaged in this form of criminal enterprise. Understandably, the procedures under which the unit was to operate required that such deliveries be made only when there were sufficient resources available to monitor the movement of the chemicals on a 24-hour basis.

5 Detective Superintendent David Barry Newton and other police officers stated that controlled deliveries of pure pseudoephedrine (the material encompassed by count 5), in distinction to medications containing this substance, were extremely rare and that the last one occurred around 1997 or 1998. In that case, approval was ultimately given by a Deputy Commissioner.

6 Malcolm Rosenes, a former member of the Police Force, was, at the time of the applicant's trial, undergoing a term of imprisonment.[5] In 2000, he was a Detective Sergeant in Unit 2 of the Drug Squad and his subordinates were Detectives Senior Constables Paton and Firth.

7 Stephen Andrew Paton[6] was attached to the squad between March 1997 and the end of 2000.[7] His duties at the time with which we are concerned here, included the maintenance of liaison with and the making of payments to the drug companies that supplied chemicals for use in controlled deliveries.

8 The Drug Squad predominately secured its supplies from 'Science Supplies' and 'Sigma Pharmaceuticals' ('Sigma'). Sigma was the squad's sole supplier of Sudafed tablets and pseudoephedrine. When advised by a supplier that the chemicals requested were available, Paton would travel by car to the relevant factory and collect them. Pseudoephedrine could only be obtained from Sigma's Croydon factory whereas Sudafed tablets were secured from its premises at Clayton.

9 At Croydon, where he dealt with one of two employees, Ian McKinley-Nicholson or David William Guy, Paton usually had only to telephone ahead and the security guard would admit him upon arrival. The price of pseudoephedrine purchased from Sigma was $170 per kilogram.

10 BC stated that he had been a serving police member between 1972 and 1997. In the period 1990 to 1997, he too was a Detective Sergeant attached to Unit 2. In the course of his duties, from time to time, he received information from a Police Informer, DE. After he resigned in 1998 or 1999, he was told by DE that, if chemicals were provided to certain persons, including a man named Mark Moran, they could lead the police to another person of interest, Antonious Mokbel. BC conveyed this information to the applicant, pointing out what he perceived to be a unique opportunity to target Mokbel.

11 In consequence, Operation Vere was commenced and quantities of chemicals and related paraphenalia were supplied to Moran. BC took possession of chemicals handed to him by the applicant and passed them on to DE to be delivered to Moran. The money handed over by DE for these materials was then passed back to the applicant. Usually the cash was provided beforehand and the chemicals were delivered between two and seven days later. BC stated that the prices for the products were set by the applicant. It was BC's belief, based upon his conversations with the applicant, that he was an unregistered informer and that he had been granted immunity with respect to offences involved in his participation.

12 BC would meet the applicant in the vicinity of BC's office in Holmes Road, Moonee Ponds. He normally met DE in the same general area. It was his understanding that all deliveries of chemicals were carried out under surveillance. The materials supplied consisted, for the most part, of quantities of Sudafed tablets, but included other chemicals, such as red phosphorous, caffeine and a bonding agent (usually lactose gel).

13 DE served as a member of the Victoria Police between 1976 and 1984. In the 1990s, he formed a friendship with BC. DE stated that, in late 1999 or early 2000, BC became aware that he knew Mark Moran and suggested that the Drug Squad might be interested in conducting an operation whereby DE passed materials for the manufacture of amphetamines to Moran by way of controlled deliveries, indicating that the principal target of the operation would be Mokbel. DE stated that BC requested that he ask Moran whether he would be interested in buying such materials.

14 According to DE, he understood that he would only assist the police in obtaining evidence and that he would never be required to enter a witness box. He stated that he agreed to participate on the understanding that the operation was under the direct control of the Drug Squad.

15 When he told Moran that he could secure some Sudafed tablets, Moran initially responded that he would think about it but, shortly afterwards, requested him to proceed. He stated that his early discussions with Moran were face-to-face and that in respect of all further dealings, he waited for Moran to make a short telephone call directing him to meet somewhere. The proposed transactions were never discussed over the telephone.

16 David William Guy was Plant Manager at Sigma Pharmaceuticals. He gave evidence of the internal procedures and documentation required to requisition quantities of chemicals from the company and stated that Sigma did not provide unmixed pseudoephedrine to any person or entity other than the Drug Squad. On some occasions when this material was sought, Guy was directly contacted by Paton. On others, Nicholson was contacted by the applicant and the request was forwarded to Guy.

17 Peter James Thomas, was, in May 2000, National Security Manager for Sigma. He acted as Sigma's liaison person with the Drug Squad which was represented by Paton. An exchange of emails between Thomas and Nicholson on 9 May 2000[8] demonstrated that Thomas was alert to the security issues for these purchases. On that particular day, the squad had purchased a significant quantity of Sudafed and Thomas stated that he experienced no concern from the company's viewpoint because the dealings were confined to the same police officer and it was not necessary to ascertain his identity every time he attended.

18 Graeme Lionel Sayce was a police member from 1981 until March 2000 and between October 2001 and August 2006. In the period between March 2000 and September 2001 he was employed by a company operating as the Strategic Security Alliance Group (SSA), the clients of which included Sigma Pharmaceuticals. SSA provided a security consultation and guarding services for Sigma Pharmaceuticals. Accordingly, Sayce worked with Sigma officers, Thomas and Nicholson. During his employment with SSA, Sayce was aware that Paton was the main contact person between Sigma and the Drug Squad for the purpose of purchasing chemicals or drugs. The contact person at Sigma was Thomas or his assistant Debbie Sierakowski. Sayce recalled seeing Paton at least once and possibly twice at the Clayton plant during 2000.

19 DE stated that, in late April 2000, Moran made a request for pseudoephedrine, which he (DE) then passed onto BC, whose initial response was that pseudoephedrine would not be available. However BC subsequently indicated, in May, that it could be provided in small quantities if Moran wanted it. DE stated that he so informed Moran who said that he was interested.

20 When he was advised by the applicant that a kilogram of this substance could be provided at a price of $12,000, BC conveyed this information to DE, who confirmed that it was wanted. BC said that he informed the applicant of this response, who approved the transaction.

21 Paton stated that he was directed by the applicant to secure two kilograms of pseudoephedrine and that he then followed the normal procedure of contacting either Guy or Nicholson by telephone.

22 On 18 May 2000 at about 11.14pm, Nicholson forwarded an email to Guy requesting the supply of two kilograms of pseudoephedrine to Paton by 2.00pm the next day.[9]

23 Paton had two mobile telephone accounts.[10] One of them was in his own name, while the other was in the false name, 'Craig Grundy'.

24 On 19 May 2000, Paton used police motor vehicle registered PWE-990. The log for that vehicle recorded that it was signed out at 6.10am, on 19 May 2000, was returned at 11.10pm and had travelled about 50 kilometres that day.

25 DE who was living in the country stated that he made arrangements to travel to Melbourne on Friday 19 May 2000 for the purpose of the proposed drug delivery and also to meet his brother for lunch.

26 BC made a telephone call to DE at 8.37am. He stated that that call was to ascertain what time DE would be in Melbourne.

27 DE made a telephone call to BC at 9.42am while in the Essendon area. He stated that, by this time, he had already collected the money from Moran who he had met behind a garage in Curzon Street. BC was recorded to have made a telephone call to the applicant at 9.44am.

28 DE's next call to BC was at 10.14am from the Essendon region. He made another telephone call to BC at 10.33am from the Maribyrnong area. An unrelated call was made by DE at 11.02am also from the Essendon area.

29 Paton made a call from his 'Grundy' telephone at 10.48am to Nicholson at Sigma. A further call was made to Sigma Croydon at 10.52am. Paton stated that this latter call was to indicate that he was on his way.

30 A telephone call by DE to BC was made at 11.41am from the Ascot Vale area which placed him as quite close to BC's office at Moonee Ponds.

31 DE stated that calls recorded at 11.51am and 12.01pm in the Parkville area related to his arrangements to have lunch with his brother. The next two telephone calls made by him at 12.05pm and 12.55pm were also from the Parkville area.

32 BC made a telephone call to the applicant at 12.05pm and two further calls at 12.21pm and 12.22pm.

33 BC made a call to DE at about 12.34pm which BC believed was close to the time that he met DE in the vicinity of his office.

34 According to DE, upon arrival at BC's office, he was advised that the amount of pseudoephedrine would be two kilograms at a price between $12,000 and $14,000. He stated that he then went to obtain the money from Mark Moran.

35 While Paton was in the Knox region, he made a call to Detective Senior Constable Firth at 12.38pm and then one to the applicant at 12.43pm.

36 Telephone records indicated that Paton made a telephone call to 'Sigma Clayton' at 1.29pm.[11]

37 David Guy went to the relevant vault at Sigma's Croydon plant where two kilograms of pseudoephedrine were measured out and the drugs were dispensed into a heavy-gauge plastic bag which bore a label identifying the material with an item number, a batch number, a date and a quantity. He placed that bag into a brown paper bag before taking it out for collection.[12]

38 Usha Gulapalli is a chemist who was employed by Sigma Pharmaceuticals in 1999 and 2000. A test was conducted by her on the batch from the two kilograms extracted on 19 April. It was found to consist of pseudoephedrine hydrochloride with a purity of 99.7 per cent. She stated that, according to British Pharmacopeia standards which have a testing error margin of plus or minus one per cent, the material was pseudoephedrine in the purest state possible.

39 The receipt for the collection of two kilograms of pseudoephedrine on 19 May 2000 was signed by both Paton and Guy[13] and was in the amount of $340.10. That document also records that payment by cheque was not received until 15 August 2000. This transaction is also recorded in Sigma's computer records.[14]

40 Payment for the material was made by way of a Bank of Melbourne bank cheque dated 20 June 2000 and purchased with cash by Mr S Paton. The cheque was received by Sigma under cover of a memorandum addressed to Guy from Paton.[15]

41 After Paton collected the pseudoephedrine which was packaged in a heavy-duty plastic bag inside a heavy duty brown paper bag, he then made a telephone call (at 1.24pm) to the applicant. He said that he was not certain whether it was at this time or in a later call that he told the applicant that he had picked up the material and requested instructions as to where to meet him.

• DE made an unrelated telephone call from the Parkville region at 1.29pm, another to BC at 1.30pm and an unrelated call at 1.47pm, also from the Parkville region.

• Paton made two further telephone calls to the applicant at 1.44pm and 1.45pm.

• A telephone call was made by BC to the applicant at 1.53pm.[16]

• Paton made a telephone call to the Victoria Police Switchboard from the North Melbourne region at 2.01pm and another from the Port Melbourne region at 2.02pm.

43 Paton stated that he received instructions by telephone from the applicant to meet him at the Shell Service Station off the Westgate Freeway, near the eastern approach to the Westgate Bridge. Upon arriving there, he drove into the parking area at the rear of the service station where he recognised a dark green Toyota Vienta that was normally driven by Detective Inspector Reid. The applicant was seated in the car alone. Paton placed the package he had collected in the rear seat of that vehicle. He was not aware of any surveillance being put in place for this transaction and did not arrange for any.

44 A telephone call was made by the applicant to BC at about 2.11pm from the Port Melbourne area.

45 BC then went to an area behind the VicRoads Office beside the Westgate Freeway and waited. In due course, the applicant arrived driving a grey Toyota Camry. The applicant got into the passenger side of BC's car and handed BC the plastic bag containing the pseudoephedrine. The applicant then left.

47 At 2.53pm DE made an unrelated telephone call from the Sunshine North area. He stated that this call was made shortly before his meeting with BC at around 3.00pm.

48 DE stated that, after he collected the money from Moran, he waited for a call from BC advising of the place where they were to meet. When contacted, BC told him to go to a petrol station situated on the Western Ring Road, off the northbound side, heading towards Melbourne Airport. DE stated that he went there and waited. BC arrived and handed over the pseudoephedrine which was contained in a black sports bag in exchange for the purchase money. DE stated that they were together less than five minutes.

49 BC said that he drove to the service station, where DE was waiting, and handed over the plastic bag containing pseudoephedrine. BC saw DE drive away along the Ring Road towards the airport and then contacted the applicant on his mobile telephone advising him of details concerning DE, it being his normal practice to do so for surveillance purposes. He stated that he then returned to his office.

50 At 3.24pm DE made a telephone call to BC from the Beveridge area in the course of his return to Euroa.

51 At 4.34pm BC made a telephone call to the applicant.

52 DE stated that, upon his return to Euroa, he tested the powder to ensure that it was pseudoephedrine, employing a method that Moran had described to him. This involved the placing of a small amount on some silver paper and holding a cigarette lighter flame underneath until the powder melted into liquid. He had been told that, if genuine, when it cooled the powder should return to its original form. DE confirmed that the weight of the material he collected was two kilograms.

53 Paton's diary for 19 May 2000 recorded that he commenced work at 7.30am on Friday, 19 May, and ceased at 5.30pm having been 'ON DUTY AT OFFICE, CORES & ENQ RE OPERATION VERE.'[17]

54 BC identified the Log Book entry for police motor vehicle PKR-150, a Toyota Camry, for 19 May 2000, as having been filled out in the applicant's handwriting[18] and recording a car trip commencing at 1.50pm and ending at 2.50pm with odometer readings indicating that a distance of 18 kilometres was travelled. Save for two other entries on that page recording the vehicle being used by the applicant, all other entries indicated use by 'D REID' - 'DDI'. BC also identified the handwriting in the Police Diary as that belonging to the applicant.[19]

55 DE stated that the two kilogram package he had collected from BC was delivered to Moran in the Essendon area in the first week of June 2000.

56 Jeffrey Robert Milne occupied a bungalow at the rear of premises in Bell Street, Airport West. He stated that in the period prior to the murder of Mark Moran, on 15 June 2000, Moran commenced using his bungalow as a place to keep some of his drug manufacturing equipment and other items.

57 After the death of Moran the police obtained a warrant to search Milne's bungalow. It was executed on 16 June 2000 by Drug Squad members, Paton, Firth, Rosenes, Jones and Arnott. Various items of drugs and drug-trafficking paraphernalia and laboratory glassware were located.[20] In a cupboard on the premises was a bag of white powder which Paton recognised as the one that he had delivered to the applicant on 19 May 2000. However he did not mention this to anyone.

58 DE stated that the bag and the bag of white powder contained therein[21] were similar to the package he had received from BC.

59 Rosenes was involved in the collecting of the items taken from Milne's bungalow. Upon his return to the Drug Squad office, he had them set out on his desk. They included three bags of white powder, one of which weighed two kilograms (and identified as the one in Photograph 33), while the other two weighed about half a kilogram each. He conducted spot tests to ascertain whether they were drugs. The test for amphetamines was negative for all. Most of the other detectives, including the applicant, gathered behind Rosenes as he completed his amphetamine tests. At this point, the applicant came forward, put his finger into the large white bag, put it to his mouth, tasted it and told everyone that it was pseudoephedrine. Rosenes had not conducted any test for pseudoephedrine at that stage. Rosenes stated that, 'I thought it was a pretty brave and gutsy move of him to do that, not knowing what the powder was.' He said that, notwithstanding what one saw in the movies, Drug Squad members were trained to behave much more carefully when handling chemicals that had not been identified.

60 Later in the evening, after Milne was arrested, Paton asked Rosenes to remove some of the pseudoephedrine from the larger bag. He complied and took the three bags of white powder down to the car park of the St Kilda Road police complex, where he placed them in a Nissan four-wheel drive vehicle that was used by the squad. He then drove to Toorak Road and ordered some pizzas for the detectives and Milne to eat that night. While they were being prepared, he went to a supermarket in Clarendon Street, South Melbourne, where he purchased two packets of Glucodin powder and requested several extra white plastic shopping bags. He collected the pizzas and returned to the basement of the St Kilda Road Police Complex. After taking the food to the office, he went back to the vehicle where he removed half the contents of each of the three bags of white powder, and substituted the equivalent quantities of Glucodin. In the process, he spilt some of the powders in the back seat area. He then took the three adulterated bags upstairs to the Drug Squad offices and re-weighed them to ensure that they tallied with the weights he had previously obtained. At this stage, he believed that the smaller bags also contained pseudoephedrine. Subsequent analysis disclosed that this was not the case and that they actually contained ketamine. He had, in consequence, mixed both ketamine and Glucodin with the pseudoephedrine. The powder he had removed from the bags was taken home.

61 On 19 June 2000, the three bags of white powder that had been retained at the Drug Squad were taken by Rosenes to the Victorian Forensic Science Centre and examined by Eleanor Sear, a forensic scientist, in his presence. The large bag weighed 2488.2 grams and the other two bags combined weighed 992 grams. The contents of the smaller bags were 50 per cent Ketamine and the large bag was six per cent Ketamine. The large bag also contained 35 per cent pseudoephedrine. Sears said that there was a margin of variation of 20 per cent in respect of all estimates of purity.[22]

Rosenes' account of the dispersal of the removed powder

62 Rosenes stated that he told Paton that he had removed the powder as requested. He kept it at his home for at least a month before speaking again with Paton. It was his understanding that Paton had intended to sell it to an informer and that the transaction had fallen through. Rosenes stated that, at Paton's suggestion, he then approached one of his own informers and supplied him with a one ounce sample. However the informer contacted him some days later and said that the purchasers were not satisfied with the purity of the material. At another meeting, the informer took a pound of the powder in exchange for $800 on the understanding that a balance of $4,000 would be paid after it had been supplied to the informer's client. Rosenes stated that Paton and he maintained observation over the informer's premises and saw a known drug-trafficker go to the house to collect the powder. They followed that person's vehicle to the vicinity of another known drug trafficker. He stated that they subsequently met with the informer and were told that he had not been paid and that he did not anticipate that he would be because the purchasers were not happy with the quality of the material supplied. Rosenes said that the powder remaining in his possession was subsequently flushed down the toilet.

63 Sayce said that he recalled a discussion with Thomas in late 2000, about the need to arrange a meeting with the Drug Squad to review the policies and procedures relating to the purchase of pharmaceutical products from Sigma. Thomas had raised this issue as a consequence of his impression that there had been an increase in the frequency and volume of such transactions. Sayce stated that he agreed and attempted to arrange a meeting without success.

64 Sayce recalled an occasion in mid-December 2000, on which Thomas and he had travelled interstate and they met at Sigma's Brisbane premises. After his return to Melbourne on Monday 18 December, he attended at the Clayton plant for a meeting with Thomas, who told him that, while he was in Brisbane, Paton had asked Thomas' assistant, Debbie Sierakowski, what Sayce knew about the purchases of Sudafed tablets on behalf of the Drug Squad, indicating that it was important that he not be made aware of the specific details as he was not a member of the Police Force and these were covert operations. Sayce was troubled by this report which in conjunction with the apparent increase in the Drug Squad purchases had the effect of emphasising in his mind the importance of reviewing the policies and procedures for sales to the squad.

65 On the following day, Tuesday 19 December 2000, at about 9.15am, Sayce contacted the Drug Squad and asked to speak to the applicant who was Acting Inspector in charge of Unit 2 at the time. However, as he was not available, Sayce spoke to Detective Inspector John David Shawyer, who was in charge of Unit 3.[23] Although much of their conversation related to social matters (they were friends), Sayce told Shawyer that he had telephoned to speak to the applicant about concerns he had with respect to the security processes in place for the sale of chemicals by Sigma to the squad. Sayce asked Shawyer to request the applicant to telephone him.

66 Shawyer recalled that Sayce told him that he was conducting an audit of the procedures for selling chemicals to the Drug Squad and mentioned that the paperwork was not up to the standard he would have liked. Shawyer passed the message to the applicant between 9.15am and 12.30pm.

67 Later that day, Sayce received a telephone call from the applicant to whom he conveyed his wish to meet concerning policies and procedures. He pointed out that there was an increase in the frequency and volume of sales and that he was troubled by the comment that Paton had reportedly made to Sierakowski. They agreed to meet that afternoon at 1.00pm at a café in Albert Road, a short distance from the St Kilda Road Police Complex. Sayce believed that he either faxed some documents relating to these sales to the applicant or informed him of their contents over the telephone.

68 When they met, they discussed the increase in frequency and volume of purchases and the need to review policies and procedures. Sayce told the applicant that the comment made by Paton was surprising because only a few weeks earlier, Sigma had requested that he be present when the police had purchased a large amount of pseudoephedrine-based tablets. It had been indicated to him that his presence was required so that he could verify to Sigma staff that the persons collecting the drugs were members of the Drug Squad who were personally known to him. Sayce stated that the applicant asked him to obtain documentation pertaining to the sales of drugs, expressing particular interest in purchases made after a date in May 2000. It was agreed that they would meet again in the New Year to review the issues of policies and procedures. He said that the applicant did not give any indication as to whether he regarded the purchases from Sigma as legitimate or otherwise.

69 On Wednesday, 20 December 2000, Sayce collected an envelope from Thomas containing copies of the documents relating to all purchases made by the Drug Squad.

70 At 9.20am Shawyer spoke to his superior, Detective Superintendent Newton, about the call he had received from Sayce on the previous day. He said that great importance was attributed to the relationship they had with Sigma and he believed it was his duty to pass on such information. He did not believe however that anything improper or untoward had actually occurred.

71 At about 9.10am, Newton and the applicant had a discussion in Newton's office. Newton noted in his diary that three different issues were discussed. One of the notations was, 'Pending Query - Sayce Chemicals.' Newton formed the view that Sayce had contacted the applicant about what appeared to be suspicious transactions and, in consequence, the applicant was directed to prepare a briefing paper.

72 Newton spoke to the applicant again at 11.50am and was advised that he had made contact with Sayce and that a list of the chemicals obtained was being cross-referenced to operations.

73 In the afternoon, Sayce was present at a Christmas function with an SSA client, when he was contacted by the applicant who asked whether he had the documents relating to sales of materials to the squad and where they were located. Sayce responded that he intended to arrange for them to be delivered to the applicant sometime that afternoon. Otherwise he would endeavour to have them forwarded on the following day.

74 On Thursday, 21 December, at 2.25pm, Newton contacted Commander Sprague at the Ethical Standards Department (ESD) and advised him of the drug diversion issues in order to alert him to the possibility that they may have had a problem. He reported that a member of the Drug Squad may become the subject of an investigation and, accordingly, that the matter had to be handed over to ESD.

75 At about 3.30pm, Newton received a further update from the applicant who now had advice from Sayce.

76 On Thursday, 21 December, Sayce met with Nicholson at Sigma Pharmaceuticals.[24] They discussed the sales of pseudoephedrine-based tablets to Paton. Nicholson told Sayce that Paton had been involved in the purchase of pure pseudoephedrine on four or five occasions, including a quantity of two-and-a-half kilograms on 19 May 2000. Sayce was told that Paton had advised the Sigma officers that this was required for a covert NCA Operation. Sayce stated that this was the first time that he had heard about pure pseudoephedrine being provided to the Drug Squad.

77 After the meeting, Sayce attended to other appointments before making contact with the applicant. They met at about 11.20am in Bowen Crescent, on the corner of St Kilda Road, near the St Kilda Road Complex. Sayce handed the documents over to the applicant who remonstrated with him for having told Shawyer about what was happening as Shawyer had pre-empted the issue with the applicant's immediate superior. He said that this had caused him embarrassment. Sayce told the applicant, who appeared to be aware of them, that he had learned of the sales of pure pseudoephedrine from Sigma to Paton.

78 In a later conversation, the applicant requested the originals of the copy documents that had been provided to him. Sayce returned to Sigma where they were retrieved. He was present when a facsimile transmission, used as a check sheet for identifying and collecting the original documents for each transaction, and setting out dates of details of the various transactions in 2000 from 9 May 2000 onwards, arrived from the applicant.[25] The transactions listed related to the purchase of Sudafed tablets only.

79 Afterwards, Sayce contacted the applicant and told him that he had the transaction records. The applicant told Sayce to retain them because the matter was now in the hands of the ESD and the documents would be collected by them in due course.

80 Paton stated that on the night of 21 December 2000, he received a visit from Rosenes who told him that there were issues regarding the Sudafed transactions and that it had been decided that it was in the best interests of everyone if Paton resigned.

81 Paton then typed a letter of resignation which he signed and gave to the applicant. According to Paton, the applicant said at that time, or shortly afterwards, that if Paton said anything about him, he would hunt him down and kill him. Paton then went on leave and never returned to the office.[26]

82 At 9.30pm, Newton received the briefing paper that he had requested the applicant to prepare.[27]

83 On Saturday, 23 December, Newton received a telephone call from the applicant who informed him that Paton had resigned and that his resignation was effective immediately. He did not recall the applicant saying anything as to the reasons behind Paton's decision and the applicant gave no indication that he was in any way responsible for or involved in it.

84 At 12.30pm, Newton contacted Commander Lambert. Newton had already decided that he was not going to accept Paton's resignation and would require the giving of the minimum three months notice applicable to his contract of employment.

85 Newton then telephoned Paton and told him that he would not accept his resignation unless he could produce a letter from an employer saying that he would be in a position to take up employment immediately. He said that, if he could not do so, the resignation would be effective from the following March.

86 On 27 December, Commander Fontana briefed a team for an investigation into the transactions involving Paton, which was designated 'Operation Hemi.' He had the briefing paper that the applicant had provided to Newton on 22 December. Detective Inspector De Santo was placed in charge of this investigation. Fontana believed that he had telephone contact with the applicant on that day.

87 At 9.20am, Newton told the applicant that Paton's resignation was not accepted, that three months notice was required and that all outstanding issues were to be addressed.

88 On 28 December at 10.30am, Fontana met the applicant at a café in South Melbourne. The purpose was to inform the applicant of the membership of the investigation team and to ascertain which members of the Drug Squad could assist them with their enquiries. The applicant advised Fontana that Paton had intended to resign 12 months earlier and that his motivations included the considerations that: Paton had been under a deal of pressure and knew that he was going to be relocated; Paton's father, who lived in Queensland, was dying of cancer; Paton's paper work was poor due to pressure from several areas; a number of overdue property files were missing along with telephones that he had used as well as a computer that had been taken from the property store; and Paton's third marriage was in trouble. Fontana stated that the applicant and he discussed the unauthorised deliveries. The applicant agreed to assist by providing any Drug Squad documentation relating to his audit of the chemical diversion programme. At this stage, the concerns of the witness related to the possibility that Paton had been trafficking Sudafed tablets. The only mention of pseudoephedrine in the conversation was made in reference to an unconnected importation of that chemical.

89 At a time which Sayce placed as being between 22 December 2000 and 3 January 2001, he had a conversation with the applicant in which the applicant said that he did not want anyone to be told about the sales of pure pseudoephedrine from Sigma. Sayce assumed that this was because it was part of an ongoing investigative operation.

90 On 3 January 2001, Sayce received a telephone call from Detective Superintendent Fontana of the ESD. Fontana's notes of this conversation were read to the court and the matters related by Sayce included the supply of two kilograms of pseudoephedrine on 19 May 2000 to Paton.

91 Detective Senior Sergeant James Dwyer was brought into Operation Hemi on 5 January 2001. On 13 February, he spoke to Nicholson at Sigma's Croydon Plant who advised him that there had been a number of sales of pure pseudoephedrine as well as Sudafed tablets. He asked Nicholson to gather together as much information as he could in respect of those transactions.

92 On 14 February 2001, the applicant provided a one-page report entitled 'Audit of Chemical Purchases from Science Supply - Discrepancies Found.'[28] This report related to purchases of acetic-anhydride from 'Science Supply.'

93 On 28 February 2001, at 1.30pm, Newton attended a meeting at the ESD at which the applicant and Inspectors De Santo and Taylor were present. The applicant was asked whether his audit had disclosed any pure pseudoephedrine purchases. The applicant said there had been no authorised purchases since 1998. Otherwise no other issues were raised about pseudoephedrine. The applicant did not indicate that he had any knowledge of pseudoephedrine having been supplied to Paton.

94 On 27 March 2001, Taylor had a conversation with the applicant who reported that he had proceeded as far as he could in relation to his enquiries with the chemical companies and that he had not identified any further incidents. Taylor told him that the ESD would require statements from Newton and himself as well as other documents and details about Paton. No reference was made to pure pseudoephedrine hydrochloride in this conversation.

95 On 30 March, Taylor had another meeting with the applicant in a café on St Kilda Road. Again there was no discussion about pseudoephedrine hydrochloride as distinct from Sudafed tablets.

96 Dwyer said that, on 3 April, he attended Sigma's Croydon Plant and spoke to Nicholson and Guy and obtained a number of documents relating to five separate purchases of pure pseudoephedrine. A meeting was conducted at 11.30am at the ESD office between O'Dwyer, Taylor and the applicant in the course of which the applicant was provided with a copy of these documents. The applicant was directed to conduct an audit in relation to their contents and to check Drug Squad records for comparison. The documents related, inter alia, to the supply of pseudoephedrine on 19 May 2000. The applicant did not give any indication that he had knowledge of any of those transactions.

98 On 20 August 2001, Fontana took a statement from the applicant for inclusion in the Brief of Evidence being compiled in respect of Paton.[29] In that statement, he set out the findings made in the 'audit' conducted after 19 December 2000. He asserted that he had no knowledge of the unauthorised collections of Sudafed and other chemicals. He advised that there were no authorised collections of pseudoephedrine during the period 1999 and 2000. He stated that only one controlled delivery of pure pseudoephedrine was ever conducted. That was made in August 1998 and the quantity was 10 kilograms. He said that other operations were conducted where a substitute product was used. The use of pseudoephedrine in quantities greater than 20 grams would, he understood, only be authorised in exceptional circumstances and never without the approval of an Assistant Commissioner.

99 On Friday, 13 September, prior to a lunch to be held by the Major Crime Squad, BC and the applicant met in a coffee shop near BC's office and discussed the ESD investigation of the pseudoephedrine transaction on 19 May 2000. According to BC the applicant said that, 'it never happened' and indicated that this had to be made clear to DE as well. After this meeting, BC contacted DE to pass on what he interpreted as a direction.

100 The police intercepted a series of telephone calls between the applicant and BC that took place on 25 October.[30] The first was quickly terminated because BC had someone in the office. The second sounded out the prospect of a meeting later in the day. During the third call, the applicant said that he would be 'dropping in' shortly and BC said that they would meet at the coffee shop.

101 A telephone call, on 4 November, between BC and the applicant in which there was reference to Inspector De Santo was also intercepted.[31] They discussed the approaching Oaks Day races at Flemington and agreed to meet then.

102 BC recounted that they met in the Bird Cage area at Flemington Racecourse and that, in the course of their conversation, the applicant handed him a list in the applicant's hand writing of the dates of authorised drug transactions.[32] BC noticed that it did not include any which had occurred prior to January 2000 or the transaction of 19 May or make any reference to pseudoephedrine.

103 In January or February 2003, BC and the applicant met at the coffee shop near BC's office. Again, BC said the applicant emphasised the importance of maintaining the stance that, as far as they were concerned, the pseudoephedrine transaction of 19 May had not occurred.

104 On 11 March, the police intercepted a telephone call between the applicant and BC which commenced at about 11.11am.[33] In that call they discussed meeting again in the near future.

105 Police intercepted a telephone call on 15 March, between the applicant and BC commencing at about 12.20pm, followed by further calls at 12.37, 12.51 and 12.53pm.[34] These calls were a lead up to a meeting at the McDonald's store at the intersection of South and Warrigal Roads, Moorabbin. BC attended, fitted with a covert sound recording device.[35]

106 BC indicated to the applicant that they had a problem with DE who he identified as 'our little mate up the bush, up north'. He said that DE had been questioned by investigators on the previous day and was very agitated. BC said DE had tried to contact him about it immediately afterwards and that they had spoken at about 7.00am that morning. DE had told him that he was not asked anything about the tablets and that 'they're zeroing in on that fuckin' pseudo ... and what's really ...' At that point the applicant interposed, 'Cos we don't know anything about it.' The applicant then said that he assumed that Paton had given them a 'story line' and that they must have been 'running with it.' BC said that he (BC) had been asked questions about matters that Paton 'wouldn't or shouldn't even know.'

107 Further discussion ensued about what Paton might have said or might say. The applicant said, '... he'll be standing in the box declaring that he's working for the police. Is he prepared to [sic] that?'

108 BC responded that he would go and 're-align' him (Paton) again.

109 The applicant said that it was up to him (Paton) and pointed that '... he could be interviewed as many times as he wants ... He knows the rules, he doesn't have to make any comment.'

110 The applicant stated that, when he was 'spoken to,' he would not be making any comment -

I'm not going to give them the pleasure of giving them a thousand answers to a thousand questions when they might find something that's just not quite right.

111 He pointed out that BC would also be interviewed and that he had 'to make no comment as well.'

112 The applicant told BC, 'If you make a statement you're in the same boat ... '

114 BC went on to say, 'No, you're the brains of the operation, you can fix it up ...'

No - I am not too happy about it. So that when it is, all criminal matters are thrown aside and they wish to go down the path of the disciplinary ones, well they can't interview me on those and I will not ... and then I can tell you get fucked.

117 The motor vehicle in which Rosenes had mixed Glucodin into the white powders was a green Nissan Patrol registration number QSD-083 that, in early 2001, was sold to Peter and Jenny Nugent. It was usually driven by Mrs Nugent and the interior had not been altered since purchase.[36]

118 On Sunday 2 June, the car was driven to the Victorian Forensic Services Centre at Macleod where it was examined by forensic officer, Peter Ross, who used a commercial vacuum cleaner fitted with an inline filter to remove material from specific areas of the carpet and the seats of the vehicle as well as the underside of the foot mat. The filter was removed and replaced for each separate area. Six such filters were separately bagged by Ross.

119 These filters were examined by Aaron Heagney of the Australian Forensic Science Laboratory in Sydney. The residue collected from the rear passenger bench seat contained pseudoephedrine and ketamine. A similar finding was made in respect of the rear passenger's compartment floor and on the rear passenger floor mat.

120 Gerard Curtin, a forensic accountant, employed by Victoria Police, analysed the applicant's banking records for the period 1 January 1999 to 31 December 2000.[37] He attempted to obtain all vouchers, deposit slips, withdrawal slips and cheques in respect of both of the bank accounts that he had and succeeded in obtaining most of them.

121 Insurance records were also examined to ascertain whether any rebates or refunds had been paid by Medicare and Medibank Private. The records of Ord Minnet, Stockbrokers, of purchases of shares by the applicant were examined. So were VicRoads records relating to the sale of the motor vehicle by the applicant and other records including tax returns.

122 Curtin created a chronological spreadsheet setting out all the transactions that he could detect.[38] This spread sheet excluded cash transactions under $100 unless they occurred within a bank statement. He did not count any transfers between the two bank accounts which in this case consisted of one transfer of $6,000. Wherever a receipt could be obtained for cash payments they were matched up with any relevant cash withdrawals.

123 Curtin also prepared a monthly cash-flow summary which set out the estimated monthly flow of money into the applicant's bank accounts and the outflows.[39]

124 Finally, Curtin produced a short chart of eight cash transactions for which Curtin could not find a source. Three of them were prior to 19 May 2000.[40]

125 Transaction 4 was a cash payment of $4,620 comprising 92 fifty dollar notes and a twenty dollar note for an invoice sum of $4,607 for 2000 Voicenet shares which was made on 7 June 2000 at 2.57pm at the Westend Branch of the Westpac Bank. The order for those shares was placed with Ord Minnet on 2 June 2000.

126 Transactions 5 and 6 were a cash payment amounting to $1,300 to Carpet Call Proprietary Ltd. The applicant admitted, pursuant to s 149A Evidence Act 1958 that, on 8 July 2000, he paid $1,300 to 'Carpet Call' as two cash deposits in the amounts of $1,050 and $250, for purchases of carpet, underlay and vinyl flooring for installation in his home.[41] The outstanding balance of $2,500 for these purchases was paid by cheque on 24 July 2000.

127 Transaction 7 was a cash payment of $597 for motor vehicle insurance made at the Head Office branch of AAMI Ltd on 21 July 2000 at 1.47pm.

128 Transaction 8 was a cash payment of about $1,000. On 19 September 2000, the applicant purchased a bank cheque in the sum of $990 and paid for it in ten one-hundred dollar notes. The cheques were purchased at the Collin Street branch of the Bank of Melbourne.

130 It was submitted on his behalf that much of the evidence against him was given by witnesses who could be seen to be inherently unreliable and with powerful motives of their own to incriminate him. In relation to count 5, counsel directed serious criticisms against the witnesses Paton, DE, BC and Rosenes. He was particularly critical of the role and approach that he claimed were adopted by De Santo in the matter, arguing that he exerted considerable pressure upon these witnesses in what was described as the 'fanatical' pursuit of the applicant. It was not disputed that the applicant met with Paton and BC on 19 May but it was denied that any pseudoephedrine was handed over. The operation in which the applicant was engaged was legitimate and concerned caffeine that was to be the subject of a controlled delivery on 22 May. That operation, it was said, did not proceed due to Mark Moran's request that the deal take place in the evening rather than during the day. This was unacceptable to the squad.[42]

Consciousness of guilt grounds (2A, 2B and 2C)

The next category of evidence relied upon by the Crown is that which involves post-offence conduct, including statements, by the accused which is said to demonstrate a consciousness of guilt on his part of one or more of the pseudoephedrine offences. The use to which the Crown seek to put this evidence is twofold. First, it is said to be relevant as to corroborating Paton's account. But, secondly, it is also said to be relevant in its own right as demonstrating the accused's consciousness of his own guilt of these offences.

Put simply, it means that the conduct of the accused must be conduct deliberately performed because the accused realised his guilt and feared that to have acted or spoken otherwise would implicate him in the offence. If you were satisfied that such conduct has those characteristics or qualities, then you can use it as indicating the accused has accepted his responsibility in this regard.

... [B]efore you would be able to rely upon such conduct by the accused as indicating a consciousness of guilt, as I have defined it, you would need to be satisfied beyond reasonable doubt that no other interpretation is open as a reasonable possibility but that it was conduct performed deliberately because the accused realised his guilt of the offences of drug trafficking and feared the truth coming out.

132 After hearing submissions from counsel, he then directed the jury in relation to the two 'pieces' of evidence that he had determined could be put before them on this basis.

The first piece of evidence that the Crown relied on is the meetings between the accused and [BC] in October 2002 and February 2003 in which, according to [BC], the accused insisted that the pseudoephedrine transaction never happened and told him to tell [DE] the same thing. The Crown argued that this was a direction by the accused to [BC] and [DE] to remain silent about the pseudoephedrine transaction. Thus, it was said that not only was this corroboration of Paton on count 5, it also evinced a consciousness of guilt on count 5.

His Honour then addressed the two limbs of the defence response to the prosecution contention, first, that it was disputed that either of the statements were made and, secondly, that, in any event, they would have been correct insofar as any conduct was attributed to the applicant with respect to it. He then reminded the jury of the items of evidence that the defence asserted could be seen to bear on each of them.

... I repeat that before you will be able to rely upon such a statement as demonstrating a consciousness of guilt, as I have defined it, you would need to be satisfied beyond reasonable doubt that there was no other interpretation open as a reasonable possibility but that it was said deliberately, as a direction to [BC] because the accused realised his guilt in the offence of trafficking and feared the truth coming out.

134 With respect to the other 'piece' or 'category' of evidence that could be considered in this way, the jury was instructed that -

The next category of post-offence conduct which the Crown relies upon as evincing a consciousness of guilt of drug trafficking involves the failure of the accused to raise the question of pseudoephedrine transactions with other police officers on a number of occasions following him being informed by Graeme Sayce on 21 December 2000 of the possibility of transactions involving pseudoephedrine. Thus, the prosecution pointed to the failure of the accused to mention the pseudoephedrine transactions to his superior, Inspector Newton, in December 2000, or subsequently, in his briefing paper of 22 December 2000, to Commander Fontana in their discussion on 28 December 2000, to Inspector De Santo and Senior Sergeant Taylor at their meeting with Inspector Newton and [the applicant] on 28 February 2001, and to any of the Operation Hemi investigators at any time in the period between 28 December 2000 and April 2001 when he was handed the Sigma Croydon documentation obtained by Senior Sergeant Dwyer on the previous day.

It was submitted by the prosecution that all of this was part of an attempted cover up by the accused designed to avoid detection. If this interpretation of the evidence is accepted, this would have the capacity to constitute a consciousness of guilt of all five counts of trafficking as well as to corroborate Paton on each of those counts.

He then repeated the process that he had just undertaken with respect to the first category.

135 In order that there should be no confusion concerning this aspect, the judge specifically excluded any other item of evidence as capable of being used in this fashion, instructing the jury in the precise form discussed beforehand with counsel and accepted by them as appropriate in the circumstances -

The two pieces of post-offence conduct which the Crown can rely on as arguably demonstrating the accused's consciousness of his guilt are therefore the two 'It did not happen' directives by [the applicant] to [BC], and the deliberate failures by the accused to respond to being told by Mr Sayce about the pseudoephedrine transactions. I direct you that as a matter of law no other post-offence conduct by the accused can be used by you as evidence of any consciousness of guilt on his part.

... It is important to note that finding an accused's acts show that he may have implicitly admitted responsibility for an offence is not the same as finding an accused guilty of that offence. At the most, those acts provide no more than that an accused believed that he was guilty of an offence. In other words, just because you find that the accused acted in that way, because he believed that he would otherwise be implicated in the offence does not mean that you must necessarily find him guilty of the offence. The behaviour of the accused is just one piece of evidence that you can use in making your final decision about whether or not the prosecution has proven guilt beyond reasonable doubt.

In summary, in applying the test that I have set out about the inferring of consciousness of guilt from post-offence conduct, there are four requirements that must be fulfilled. If any of these requirements are not met in relation to an account, you must not use it for that purpose.

First, you must be satisfied that the accused actually committed each of the acts alleged by the prosecution. This is particularly important here given that the defence disputes [BC's] evidence of the two conversations to the effect that pseudoephedrine did not happen, and that [the applicant] could only have failed to do something in respect of the pseudoephedrine transactions if he knew about them, and the defence disputes Mr Sayce's evidence that he told [the applicant] about the pseudoephedrine transactions on 21 December 2000.

Secondly, you must be satisfied that the act was done in the manner alleged by the prosecution and was not just an act typically or innocently performed by the accused. Thus, in other circumstances, saying to someone that a transaction did not happen may be quite consistent with innocence if the speaker does not know about the transaction. It may not demonstrate any consciousness of guilt.

Thirdly, you must be satisfied that the accused's acts related to some significant circumstance or event connected with the offence you are considering. If the accused acted in that way due to some completely different matter, his behaviour cannot be used to show that the accused implicitly admitted responsibility for the offence you are considering.

Fourthly, you must be satisfied that the reason why the accused acted in that way was because he believed that he had committed the offence you are considering, or some aspect of it, and he believed that he would be implicated in that crime if he did not act in that way.

It is for the prosecution to eliminate all of these other possibilities beyond reasonable doubt. If you cannot exclude the possibility that the accused acted for one of these other reasons, you cannot use his behaviour as evidence that he implicitly admitted responsibility for the offence. You may only use his acts in this way if you are satisfied that the reasons for those acts was that the accused believed he had committed the crime you are considering, or some aspect of it, and he believed that by not acting in that way, he would be implicated in it.

137 No complaint has been made concerning his Honour's statements of principle which were clearly in accordance with the various authorities.[43] The grounds raise issues with respect to the evidence itself and the use to which it could be properly put.

138 The complaints made under ground 2A (relating to the applicant's failure to mention pseudoephedrine) are that the evidence -

simply could not constitute an admission by conduct to any specific count. Alternatively, it was so equivocal that it could not do so to any standard of proof. Alternatively, it was of so little probative value that it should not have been admitted, given the clear prejudicial effect.[44]

139 There is no force in any of these contentions. The applicant was not only a police member with considerable experience in the area but also had direct responsibilities in relation to the operation of the Chemical Diversion Desk. It can be safely assumed that the possibility that unauthorised purchases had been made for corrupt purposes would have been recognised by him as immensely important given his experience and the nature of his responsibilities. There could be no doubt that he would also have appreciated the need for full disclosure of any knowledge that he had concerning the supply of chemicals to criminal groups, whether authorised or not, and specifically any transaction involving pure pseudoephedrine, a substance that had on only one occasion been approved for a controlled delivery, if only as a matter of self protection against unjustified suspicion Viewed from his perspective, disclosure that he had been overly enthusiastic in his pursuit of those operating clandestine drug laboratories, to the extent that, without securing necessary approval, he participated in what he understood was to be the controlled delivery of pseudoephedrine or not exercising proper supervision of the activities of his subordinates was one thing, albeit almost certainly leaving him subject to criticism for an error of judgment, and it was quite another to be engaged in serious criminal activity. If he indicated that he participated in or even knew of the transaction of 19 May before it took place, those conducting the investigation undoubtedly would have queried why he did not report what was happening or at least ensure that careful surveillance was conducted if it was being undertaken for legitimate purposes. On the other hand, if he asserted that he learned about it later, they would have wanted to know why he did not draw the matter to the attention of his superiors or initiate an investigation himself. The inference was clearly available that the applicant concealed his knowledge of the transaction because he appreciated that the consequence of disclosure would be an investigation into his own conduct with the resultant exposure of his involvement in the unlawful trafficking in pseudoephedrine.

140 Naturally, the jury would have had to consider the various possible motivations for his behaviour. We have set out sufficient parts of the judge's charge to demonstrate the considerable care undertaken by him to ensure that they were fully and correctly instructed on this aspect. As we have indicated, it has not been contended that his Honour fell into error with respect to the directions given to them but rather that the issue of consciousness of guilt on the basis of this evidence should not have been left for their consideration at all. We do not agree.

141 Similar complaints are made under ground 2B. The argument was advanced that the statement 'it never happened' was incapable of demonstrating that the applicant was conscious of any form of wrong doing. Interpreted according to the words used, it was said, the utterance can be seen to be nothing more than a bare denial. The inference for which the prosecution contended, that is, that it constituted a direction as to the stance to be taken if the subject of the 19 May transaction arose in the course of investigation, could not, the argument proceeded, be drawn in the circumstances and certainly not beyond reasonable doubt. Again we disagree.

142 The meaning ascribed to a particular expression is not ascertained simply by reference to the words employed, but may involve consideration of many factors, including the tone in which they are uttered, the background against which they are spoken or written and the identity of the person using them, bearing in mind his or her relationship to the individual addressed. Some years ago, for example, in a popular film, a principal character instructed his underlings to 'make an offer he can't refuse.' Those words were clearly never intended to convey the instruction that an offer of such overwhelming generosity was to be made that the individual would regard rejection as unthinkable, but rather that it was to be made apparent to the unfortunate recipient of the 'offer' that the consequences of non co-operation would be dire.

143 In the present case, there had been a transaction on 19 May and evidence that, by the time of the conversation with BC, the applicant was, at least, aware that there had been dealings in pure pseudoephedrine at around that time. According to Sayce, he had raised that matter with the applicant in about December 2000. There was independent and uncontested evidence concerning the actual receipt by Paton of pseudoephedrine from Sigma. He claimed that it was passed on to the applicant and there was circumstantial support for his version in the evidence of the telephone traffic on 19 May, some of which directly involved the applicant, and of the movements of Paton, DE, BC and the applicant at relevant times. It is also to be taken into account, in this context, that no mention was made by the applicant of the securing of any of that material in his reports or discussions with his superiors. These circumstances inevitably would give rise to the question: what might the statement represent? Whether or not the interpretation ascribed by the prosecution to the applicant's expression was accepted by the jury to be the only reasonable one in the circumstances was properly left to them and they were provided with appropriate instructions and warnings concerning this matter.

144 Although the trial judge decided that only the evidence we have discussed was capable of supporting the inference of consciousness of guilt, the Crown had, in the course of the trial, adduced other evidence upon which they proposed to rely in the same way. This included evidence indicating that the applicant may have secured Paton's resignation, that he threatened to kill Paton, and what were claimed to be other displays of guilty knowledge or behaviour.

145 Following the judge's ruling that none of this evidence could be used as evincing consciousness of guilt, counsel for the applicant expressed concern about its potential prejudicial impact, arguing that it now had no probative value. However after consideration, he announced that no application for discharge of the jury would be made and indicated agreement with the manner in which the judge foreshadowed that he proposed to instruct the jury on this aspect. Notwithstanding that careful thought was obviously given by experienced defence counsel to the question whether the presence of this evidence had created such a risk of a miscarriage of justice in the particular circumstances that the jury should be discharged and the decision was made not to make an application, and further that there was clear acceptance that the situation could be addressed by the provision of agreed instructions, the contention has now been made that the trial can be seen to have miscarried on that basis. The view adopted by counsel at the trial cannot, of course, be determinative of the question whether a miscarriage of justice may have occurred and deprive an applicant of the opportunity to argue that a fair trial has not been had. However the assessment made at the time and in the environment of the trial by those engaged in the proceeding on behalf of the person who might be adversely affected will in the ordinary course of events be attributed considerable weight when considering the possibility that the trial may have miscarried.

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Judgment (413 paragraphs)

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