Solicitors:
Korn Tlais Defence Lawyers (for the applicant)
Solicitor for Public Prosecutions (NSW) (Crown)
File Number(s): 2021/00230244
[2]
JUDGMENT
Luka Zoric seeks a certificate under s 2 of the Costs in Criminal Cases Act 1967 (NSW). The application comes after he was acquitted of the first, second, third, fourth, fifth, sixth, seventh and the ninth count, of the indictment upon which he was presented for trial. The applicant Zoric pleaded guilty to the eighth count before trial.
On 8 November 2023, the applicant Zoric and another man (who will be referred to simply as the co-accused), were arraigned on a single indictment containing ten counts that mainly alleged that they: supplied and knowingly took part in the manufacture of large, commercial quantities of the prohibited drugs cocaine and methylamphetamine; engaged in money laundering; and, thereby participated in a criminal group.
Counts 1 through 7 jointly charged both men. The eighth and ninth counts charged the applicant Zoric alone. The tenth count charged the co-accused alone. Those counts and the respective pleas upon arraignment were as follows:
Both men pleaded not guilty to the first count. That charge alleged that between 21 February 2021 and 13 August 2021 at Prospect, they participated in a criminal group.
On the second count, that alleged that at the same place and time they supplied not less than a large commercial quantity of a prohibited drug. The co-accused pleaded guilty whilst the applicant Zoric pleaded not guilty.
On the third count that alleged that at the same place and time, they supplied not less than a large commercial quantity of a prohibited drug, both men pleaded not guilty.
On the fourth count that alleged that at the same place and between 21 February 2021 and 7 August 2021, they dealt with the proceeds of crime, namely 990,100 Australian dollars, knowing it was the proceeds of crime, both men pleaded not guilty.
On the fifth count that alleged that between 21 February 2021 and 13 August 2021 at Pemulway, they supplied not less than a large commercial quantity of prohibited drug, both men pleaded not guilty.
On the sixth count that alleged that between 21 February 2021 and 13 August 2021 at Pyramul, they knowingly took part in the manufacture of not less than a large commercial quantity of a prohibited drug, both men pleaded not guilty.
On the seventh count that alleged that between 21 February 2021 and 13 August 2021 at Pyramul, they each conspired with another person to knowingly take part in the manufacture of not less than a large commercial quantity of a prohibited drug, both men pleaded not guilty.
The applicant Zoric pleaded guilty to the eighth count; an allegation that on 12 August 2021 at Austral, he possessed a firearm that turned out to be a damaged air rifle without authorisation by licence or permit to do so.
The applicant Zoric pleaded not guilty to the ninth count; an allegation that on 12 August 2021 at Austral, he dealt with the proceeds of crime knowing it was the proceeds of crime.
The co-accused pleaded guilty to the tenth count; an allegation of dealing with the proceeds of crime, namely, 3,186,030 Australian dollars knowing it was the proceeds of crime.
In accordance with the ruling I made on 7 November 2023, the trial of the accused proceeded as a Judge-alone trial. Both the accused and the Crown agreed to the trial proceeding without a jury.
The Costs in Criminal Cases Act 1967 (NSW) ('Costs Act') provides for the award of costs to an acquitted accused on a limited basis. Section 2 of the Costs Act provides the power for the Court to make such an order, section 3 sets out the statutory test to be established before a cost certificate can be granted, and section 4 sets out the effect of a certificate being granted. Those and other associated legislative provisions have been considered in numerous decisions of the Supreme Court at first instance and appeal - several of which have been referred to by both parties in their submissions.
In the leading case of Queen v Pavy (1997) 98 A Crim R 396, the Court, consisting of Justice Hunt, the Chief Judge at Common Law, and Justices Smart and Badgery-Parker, said at page 399:
"The primary test to be applied when deciding whether a certificate should be granted is to be found in the wording of s 3(1)(a): if the prosecution had been in possession of all the relevant evidence as it is now known before the proceedings had begun, would it have been reasonable to institute proceedings? The section calls for: '… a hypothetical exercise in the sense that the question is whether it would have been reasonable to prosecute at the time of (the) institution (of the proceedings) if the hypothetical prosecutor had possession of evidence of all the relevant facts including those established even after the trial and on (the) application …."
In the case of Chahal v Director of Public Prosecutions [2008] NSWCA 152, Ipp JA (with whom Giles JA agreed), said at [29]:
""All the relevant facts", as that phrase is used in s 3(1)(a), are facts relevant to the reasonableness of the institution of the criminal proceedings."
In Mordaunt v Director of Public Prosecutions & Another [2007] NSWCA 121; (2007) 171 A Crim R 510, McColl JA (Beazley and Hodgson JJA agreeing) noted the following on the question of "relevant facts" at [36(f)]:
"The hypothetical question is addressed to evidence of all of the relevant facts, whether discovered before arrest or before committal (if any); after committal and before trial; during the trial; or afterwards admitted under s 3A of the CCC Act; all of the relevant facts proved, whenever they became known to the prosecution and whether or not in evidence at the trial, must then be considered by the decision-maker … ; the relevant facts include those relevant to the offences charged and the threshold question posed by s 3(1)(a); other facts will also be relevant and admissible going, amongst other things, to the question posed by s 3(1)(b) and to the ultimate question whether, assuming that the court is of the opinion required to be specified, it should exercise its discretion under s 2 … "
Mr Korn, counsel for the applicant Zoric, submits that the jurisdiction to award a cost certificate has properly arisen in respect of all counts on the indictment. I take that to mean all of the counts upon which Mr Zoric was acquitted. Specifically, it was not reasonable to institute proceedings based on the evidence in support of the charges, argues Mr Korn, adding, there was no act or omission of the applicant that contributed or might have contributed to the institution or continuation of the proceedings. Mr Korn contends that the applicant made significant attempts, whether by way of applications to the Director of Public Prosecutions, and/or the provision of statutory declarations to have the proceedings withdrawn.
In relation to the counts on the indictment for which Mr Zoric was acquitted, there was always an inherent weakness in the Crown case, argues Mr Korn, insofar as its success was tied to audio which was inaudible and circumstantial evidence which could never have arisen to the level of beyond reasonable doubt.
At paragraphs 17 and 18 of his written submissions, counsel for the applicant Zoric summarised the relevant facts as including, controversially as far as the Crown is concerned, the following things:
The surveillance and audio devices stored at Kennards were "mainly inaudible".
There was no explanation, evidence or argument as to the facts which point to the involvement of persons other than the two accused and Messrs Drenovac, Birkic, Bojcevski, Flores and Ramirez. Including, Mackenzie, Peters, Shamas, Cahill, or unknown persons referred to as 'A', 'B', 'E', and 'G'.
The tribunal of fact was unable to conclude from viewing and watching the footage that Zoric said the following words "I told you not to put that shit in that unit. We're fucked because of you".
The tribunal of fact found that it was a rational inference that Drenovac alone, or with others, possessed the drugs, the subject of the second, third and fifth counts to the exclusion of Zoric. This was an obvious difficulty in the Crown case, contends Mr Korn, that was highlighted in the Nolle Prosequi submission.
The tribunal of fact found that the evidence with regards to a manufacture could only rise to steps merely preparatory to the process of manufacture and not a step in the process of manufacture.
The tribunal of fact found that the Crown also failed to exclude as a rational inference that Drenovac planned or conspired with another person to manufacture cocaine.
With respect to Count 4, the tribunal of fact was not satisfied that the evidence excluded the reasonable inference that Drenovac, either alone or with others, such as Birkic, possessed or concealed that money to the exclusion of the applicant Zoric and the co-accused Peitos.
The Crown argument with respect of Count 9 was described as "unpersuasive as an argument" during the course of the judgment that I gave.
The evidence led throughout the trial also established the following matters:
the Officer-in-Charge failed to investigate the origins of the money, the subject of the fourth and ninth counts,
the applicant Zoric had only attended Kennards storage facility once before the covert's search warrant and that was about a month before the execution of that covert search warrant.
the applicant Zoric did not retrieve a 'white and blue' package from Kennards on 6 July 2021 as described by the Crown, rather he retrieved painting equipment consistent with his trade as a painter,
there was no forensic evidence linking the applicant Zoric to the drugs, money, or manufacture,
there was no evidence led which was even remotely capable of establishing the applicant Zoric's knowledge of the activities of others before the covert search warrant was executed.
The respondent Crown opposes the application for a costs certificate by Mr Zoric. The Crown submits that the applicant has failed to demonstrate that it would have been unreasonable to commence the prosecution, had any relevant facts now known, been known at the commencement of the proceedings.
Rather than accepting that the circumstances in which a certificate may be granted under s 3 of the Act, involves an evaluation of all of the evidence as it emerged at the trial - the ultimate written and curious submission advanced by the Crown Prosecutor was that, "There are no facts established on the evidence". Treatment of the evidence led at the trial was no substitute for evidence establishing a fact, argued the Crown who added:
"In circumstances where no new facts are to be transposed into the mind of the prosecutor at the date of charging, where no facts are established save for the Tribunal of Fact's verdict and its treatment of the underlying evidence and where the issues to be decided turn on what inferences are able to be drawn, properly the realm of the trier of fact, the decision to commence or continue proceedings cannot be regarded as not reasonable and therefore argues the Crown, the application should be refused".
That contention by the Crown in my view amounts to saying that if there is a prima facie case, that is enough to justify instituting the proceedings.
In his written submissions, the Crown Prosecutor further argued, unsurprisingly without reference to any authority, that:
"An assertion that a fact is established (and a submission that the Court would find as such) is a positive assertion. Logic dictates that before such an assertion is worthy of acceptance, positive evidence must be presented which is capable of proving the asserted fact. ….. The absence of evidence is not evidence and is therefore incapable, by itself, of proving an asserted fact."
That is an argument that does not demonstrate any understanding that proof beyond reasonable doubt requires the Crown to disprove any reasonable possibility of innocence. The argument advanced by the Crown is at odds with the circumstances in which a certificate may be granted as stated in s 3 of the Act as elucidated in the line of authority that extends back to the R v Pavy (1997) 98 A Crim R 396. At page 401 in the judgment of the Court in Pavy's Case, their Honours said:
"The legitimate interest which the community has in serious crimes being prosecuted by the Director of Public Prosecutions is not disputed. That cannot in our judgment, make it reasonable as between the Crown and the accused/applicant to prosecute in face of significant weaknesses in the Crown case of which the Crown acting reasonably, ought to have been aware."
Similarly, as explained by Simpson J in Regina v Johnston [2000] NSWCCA 197 at [16]:
"The circumstances in which a certificate may be granted are those stated in s 3 of the Act and may conveniently be re-stated as involving:
"(i) An evaluation of all of the evidence as it emerged at trial;
(ii) An assumption that all that evidence was available to the prosecution before the proceedings were instituted:
(iii) A determination whether, if the prosecution had been in possession of all that evidence, it would not have been reasonable to institute the proceedings;
Where it is concluded that, in those circumstances, it would not have been reasonable to institute the proceedings;
(iv) A determination whether any act or omission of the accused contributed to the commencement of or continuation of the proceedings
and, where such an act or omission is found to exist;
(v) A determination whether that act or omission was, in the circumstances, reasonable."
Accordingly, as mandated by Justice Simpson in that passage of Johnston, I turn to my evaluation of the evidence as it emerged at trial.
Admitted into evidence as part of exhibit A were the following items:
maps depicting the locations of the places mentioned earlier;
three reports by the forensic chemist Peter Ballard, to the effect that-
a large commercial quantity of cocaine, in the amount of 60.9kg, was contained within buckets of grey slurry located by police at the Pemulwuy home of Nikola Drenovac on 12 August 2021,
a large commercial quantity of cocaine hydrochloride, in the amount of 15.458kg, was manufactured by conversion from cocaine freebase at 327 Old Coach Road, Pyramul,
a further large commercial quantity of cocaine hydrochloride, in the amount of 21.760kg, could have been manufactured by conversion from the available cocaine freebase at 327 Old Coach Road, Pyramul,
a large commercial quantity of cocaine, in the amount of 2.531kg, was contained with a silver Mitsubishi Triton motor vehicle, located at 327 Old Coach Road, Pyramul and items located with that vehicle, could be used to extract a large commercial quantity from the clay-like solid.
a summary of surveillance evidence spanning the period from 4 May 2021 to 21 July 2021 that shows that on various dates, the accused men, Drenovac, Birkic and others interacted with each other including by attending the Pemulwuy home of Drenovac.
Closed Circuit Television still images and invoices to the effect that on 6 July 2021, Drenovac and Peitsos purchased 14 x 20 litre white buckets, also referred to as round, handy pails, for $203 from a Bunnings hardware retail outlet at Blacktown. Drenovac and Bojcevski, either singly or together, also purchased items from other Bunnings outlets on 12, 15 and 31 July 2021, 8 August 2021 and most notably 10 August 2021 when Drenovac and Bojcevski attended four different Bunnings stores.
photographs relating to the execution of a covert police search warrant at the Kennards facility at Prospect
audio-visual footage, obtained by police investigators, from the surveillance devices they installed, after they had covertly searched and seized items from those units on 6 August 2021, that depicted the attendance of Drenovac and others, including the two accused men at the Kennards storage units on 6 or 7 August 2021.
As I stated during the trial and in the judgment on verdict, I was unable to discern in any meaningful way, anything that was said by Drenovac or any of the others, including the applicant Zoric, when the audio-visual footage was tendered and played. I remain of the same view that I formed when that footage was played in open court. Some uttered words can be heard but it is mainly inaudible. It was unclear as to who was speaking because at various times people had their backs to the camera, were in view of the camera, wearing a surgical mask, or people were speaking at the same time. I repeated my frustration as to being unable to discern who said what. Remarkably, no attempt was made by the Crown to deploy hardware that might have enhanced what could have been heard in that footage. That included the readily available hearing loops that are in the court room, nor was any attempt made to adduce an aide-memoire in the form of a transcript of what was said, authored by a police officer or some other person who would repeatedly listen to the recording with advanced equipment, and who was therefore acknowledged an ad hoc expert as the content of the footage.
The hypothetical prosecutor is expected to know that course was available, as it has been the subject of judicial consideration, as summarised and described by N Adams J in R v Hawat (No 5) [2019] NSWSC 1727.
Other tendered exhibits in the trial included a summary of DNA and fingerprint analysis and in the case against the co-accused, a Statement of Agreed Facts concerning the possible contamination and/or transfer of material from which DNA profiles may be obtained.
What was in dispute in the trial, were the inferences and conclusions to be drawn from the direct facts revealed in the tendered exhibits and evidence. Those inferences and conclusions are indirect facts and are fairly and squarely part of the relevant facts to be considered in determining this application.
The movements and actions of Nikola Drenovac in July 2021 were relied upon by the Crown in support of its case against the applicant Zoric. Drenovac drove a white Isuzu motor vehicle to and from the direction of Bathurst on 10 July 2021. The white Isuzu motor vehicle was registered with Transport for New South Wales in the name of AL Project Group Pty Limited, that company had two directors Ante Birkic and the applicant Zoric. According to the Officer‑in‑Charge, Detective Senior Constable Van der Hout, police surveillance established that the majority of the driving of that vehicle was conducted by Drenovac and Pacevski, otherwise Birkic drove it as well.
On 13 July 2021 Police covertly observed Birkic at Drenovac's Pemulway home, unloading and relocating 20 litre chemical drums into Drenovac's garage before he (Birkic) took a box from that garage and drove it to the Kennards facility in Prospect, where he accessed storage Unit B051 a little after noon that day.
Drenovac also drove the white Isuzu motor vehicle to and from the direction of Bathurst on 14, 21 and 20 July 2021. The product of the surveillance device installed by police in that white Isuzu motor vehicle indicated the car went to the Kennards facility in Prospect on 3 August 2021. Drenovac also drove the white Isuzu motor vehicle to and from 327 Old Coach Road Pyramul on 4 August 2021.
On 6 August 2021 police located items within Unit 51 of the Kennards storage facility at on Rowood Road, at Prospect, that included: the 14 kilograms of cocaine relied upon in proof of the second count; the 20 kilograms of methylamphetamine relied upon in proof of the third count; the $990,100 in cash relied upon and proof of the fourth count. Also located within Unit 51, were a large number of chemicals, painting equipment and tools, as well as multiple white buckets referred to in evidence as "handy pails". On that same date, police located within Unit 55 of the Kennards storage facility at Prospect, quantities of other chemicals.
Later that day Drenovac arrived at the Kennards facility and discovered that things were not as he expected. Items were missing. Those missing items were the cocaine, methylamphetamine and cash located and seized by police earlier that day. An apparently agitated Drenovac apparently used his mobile telephone to contact someone that the Crown contended at trial was a man named Birkic. About three hours later Drenovac, Birkic, Pacevski and the co-accused attended the Kennards facility.
On 12 August 2021 police also executed search warrants at various locations and various items were seized. At the Driftway Drive, Pemulway home of Nikola Drenovac, police seized 20 white handy pails, containing a total of 450.265 kilograms of grey sludge containing the 60.951 kilograms of pure cocaine, that was relied upon in proof of the fifth count. From a rural property in Pyramul village, about 220 kilometres northwest of Prospect, the police seized 15.458 kilograms of cocaine relied upon in proof of the sixth count; and 21.760 kilograms of cocaine relied upon in proof of the seventh count.
On that same date the police stopped and searched the Volkswagen car being driven by the applicant Zoric and seized a damaged air rifle, the subject of the eighth count, to which he pleaded guilty; and $40,050 in cash, the subject of the ninth count. Within the Millers Point home of the co-accused, a total of $3,186,030 in cash was located, that money was the subject of the tenth count.
Unexplained in both evidence and argument, are those facts that pointed to the involvement of persons other than the two accused men, and Messrs Drenovac, Birkic, Pacevski, Floris and Ramirez. The fingerprints or DNA profiles of persons named Mckenzie, Peters, Chamos, Kale or unknown persons referred to as A, B, E and G were located on various relevant items. Those items included a glove, the handle of a wooden rod, a bag containing money alleged to be the proceeds of crime and a sealed bag or bags containing prohibited drugs located at the Kennards storage facility. Those items also included a roll of black electrical tape, the mouth of a water bottle, a glove, a respirator and two face masks located at the property at Pyramul.
In advancing its case against the applicant Zoric, the Crown relied upon the doctrine of joint criminal enterprise. Obviously enough, a verdict of guilty could not be returned unless it was the only rational inference available on the proven facts.
As far as the second, third and fifth counts, were concerned, the Crown needed to prove beyond reasonable doubt that the applicant Zoric possessed the prohibited drug. The plea of guilty by the co-accused to the second count was always incapable of establishing the guilt of the applicant Zoric on that same count.
The Crown needed to prove beyond reasonable doubt that the applicant Zoric intentionally had the cocaine the subject of the second count, the methylamphetamine the subject of the third count, and the cocaine the subject of the fifth count, in his physical custody or control to the exclusion of any other person, except some person acting jointly with him in possessing the substances.
Given that the allegation was never that the applicant Zoric had actual physical custody or control of the drugs, the Crown sought to prove that he intentionally had the drugs in some place to which he had access and might go to obtain physical custody or control of it to the exclusion of any other person, either alone or together with some other person acting jointly with him in possessing the drugs.
Possession in that regard may be inferred or concluded from the consideration of the surrounding circumstances, provided any such inference or conclusion is a rational one and is not based on speculation or suspicion. Because of the requirement that the Crown proves this beyond reasonable doubt, the hypothetical prosecutor is expected to know that any inference or conclusion that is to be drawn about the applicant Zoric's possession must be the only rational inference or conclusion open on the evidence.
Whilst the Crown's contention at trial that possession of the drugs is a rational inference, it could never have been the only rational inference that inevitably follows from the apparently leading role played by Drenovac, in the narrative of events relied upon by the Crown. It was always the case that it was a rational inference that Drenovac alone or with others possessed the drugs the subject of the second, third and fifth counts to the exclusion of the applicant Zoric.
As far as the sixth count is concerned, the relevant facts are incapable of establishing any more than that the applicant Zoric handled and/or transported ingredients and implements capable of being used in the manufacture of a prohibited drug. As a matter of law, such steps are merely preparatory to the process of manufacture. The relevant facts could never have established that the applicant Zoric took a step in the process of manufacture.
Similarly, as far as the seventh count was concerned the relevant facts could never have established any more than that the applicant Zoric agreed to handle and/or transport ingredients and implements capable of being used in the manufacture of a prohibited drug. Nor could the relevant facts exclude as a rational inference, that Drenovac planned or conspired with someone other than the applicant Zoric to manufacture cocaine.
As far as the fourth count was concerned, familiarity with and attendance at the Kennards storage unit might establish a rational inference that the applicant Zoric knew that the $990,100 was at the storage unit. The relevant facts could never have established beyond reasonable doubt that the applicant Zoric possessed or concealed that money because of the competing reasonable inference that Drenovac, either alone or with others such as Birkic, possessed or concealed that money to the exclusion of the applicant Zoric.
As far as the ninth count was concerned, the Crown's argument that the $40,050 of bundled cash, located and seized by police from Zoric's vehicle on 12 August 2021, is consistent with the manner in which the $990,100 of cash found and seized on 6 August 2021 was bundled, was never capable of establishing beyond reasonable doubt the guilt of the applicant Zoric on either the fourth or ninth counts.
The hypothetical prosecutor is expected to understand, as the High Court said in the case of Douglass v The Queen [2012] HCA 34; 86 ALJR 1086 at [48], ""the criminal standard of proof is a designedly exacting standard". There was nothing particularly unique about how the money was in fact bundled given that the bundling consisted of no more than the use of rubber bands in similar amounts. Those relevant facts could not establish beyond reasonable doubt that the applicant Zoric bundled the the $40,050 or the $990,100. Nor could the relevant facts ever establish beyond reasonable doubt that Zoric knew the $40,050 was substantially derived or realised from the commission of a serious offence.
If follows from what I have said to this point, that as far as the first count on the indictment was concerned, the relevant facts were incapable of proving beyond reasonable doubt that the applicant Zoric was a participant in a criminal group of three or more persons.
In his written submissions, the Crown Prosecutor took issue with paragraphs 17 and 18 of the written submissions on behalf of the applicant Zoric by Mr Korn, referred to earlier. The Crown contended, once more without reference to any authority:
"That the tribunal of fact did not find a fact established is not the same as the converse of that fact being found. In a similar vein, to say that the tribunal of fact found an inference to be rational, where that the availability of that inference meant that the Crown case failed, is not equivalent to a finding that the inferences advanced by the Crown are, as matters of fact, were unavailable."
That submission fortifies my conclusion that this prosecution of the applicant Zoric was instituted, and maintained, either without any proper professional advertence to whether there existed reasonable prospects of securing a conviction or, in spite of such advertence, such that it is appropriate that a certificate issue. There is nothing about this case that warrants the exercise of a residual discretion against the grant of a certificate where the statutory test is otherwise satisfied.
Accordingly, I grant the applicant a certificate in accordance with s 2 of the Costs in Criminal Cases Act 1967.
I direct that the applicant prepare a certificate, show it to the prosecutor and send it to my chambers so that in due course it may issue.
[3]
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Decision last updated: 10 May 2024