Customs Act 1901 (Cth): ss.243B, 243C, 243D and 243G.

Counsel and Solicitors Dr G A Flick instructed by

1. The defendant pay to the Commonwealth of Australia a

pecuniary penalty pursuant to s.243B of the Customs Act

1901 in the sum of $1,808,743.80.

2. The Official Trustee in Bankruptcy pay to the applicant,

out of the property of the defendant that has come into

his possession or under his control by virtue of orders

made in these proceedings pursuant to s.243E of the Act,

the applicant's costs of these proceedings.

3. Pursuant to s.243G(1) of the Act, the Official Trustee

in Bankruptcy pay to the Commonwealth, out of the

property of the defendant that has come into his

possession or under his control by virtue of orders made

in these proceedings pursuant to s.243E of the Act, an

amount equal to the amount of the liability of the

defendant in respect of the pecuniary penalty specified

in order 1 hereof.

4. Pursuant to s.243G(2) of the Act, the Official Trustee

in Bankruptcy sell or dispose of such of the property of

the defendant that is subject to the charge created by

s.243J of the Act upon the making of the said orders

pursuant to s.243E of the Act.

5. The applicant is to serve a copy of these orders on the

Official Trustee in Bankruptcy within seven days of this

date and to file an affidavit of service of the orders

within ten days of this date.

6. These orders are not to be entered and are not to take

effect before the expiration of 28 days from this date.

7. Liberty is reserved to the defendant and to the Official

Trustee in Bankruptcy to apply within 28 days of this

date for variation of these orders.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The applicant, the Commissioner of the Australian

Federal Police seeks in these proceedings a pecuniary penalty against the first defendant, Mr Butler ("the defendant") pursuant to s.243B of the Customs Act 1901 (Cth) ("the Act") in respect of what that section refers to as "prescribed narcotics dealings" said to have been engaged in by the defendant during the years 1985, 1986 and 1987. The relevant prescribed narcotics dealings are described in the amended application as being:

"(a) The importation by the Defendant, or his

agreeing to import, narcotic goods into

Australia in contravention of the Customs Act

1901 during 1985, 1986 and 1987;

(b) Conspiracy between the Defendant, Donald Edgar

Anderson and others to import narcotic goods

in Australia in contravention of the Customs

Act 1901 during 1985, 1986 and 1987;

(c) The Defendant having aided, abetted,

counselled or procured, or been knowingly

concerned in, the sale of, or other dealing

in, narcotic goods imported into Australia in

contravention of the Customs Act 1901 during

1985, 1986 and 1987."

2. The proceedings against the second defendant have been discontinued.

3. By virtue of s.243B(2) if the court is satisfied that the defendant has, during the relevant period, engaged in prescribed narcotics dealings the court is required to assess "the value of the benefits derived by the person by reason of his having engaged in that dealing, or in prescribed narcotics dealings during that period", that amount becoming then the quantum of the pecuniary penalty. The assessment is to be made under s.243C having regard to the evidence before the court concerning all or any of the matters listed in paragraphs (a)-(e) of that section. For the moment it is sufficient to say that regard can be had to the money that a defendant has come into possession of by reason of his dealing, the market value of the narcotic goods (in the case of a prescribed dealing consisting of selling or otherwise dealing in the narcotics) and the increase in value of the assets of a defendant in the period before and after the end of the relevant period during which the dealings took place.

4. Subsections (3) and (4) of s.243C provide as follows:

"(3) Where evidence is given in a proceeding under

section 243B that the value of the defendant's

property after he engaged in a particular

prescribed narcotics dealing, or after the end

of a particular period during which he engaged

in prescribed narcotics dealings, exceeded the

value of the defendant's property before he

engaged in that dealing, or before the

commencement of that period, then, for the

purposes of sub-section (2) of that section,

the Court shall, subject to sub-section (4),

treat the value of benefits derived by the

defendant by reasons of his having engaged in

that dealing or in prescribed narcotics

dealings during that period as being not less

than the amount of the excess.

(4) Where, after evidence has been given in a

proceeding under section 243B that the value

of the defendant's property after he engaged

in a particular prescribed narcotics dealing,

or after the end of a particular period,

exceeded the value of the defendant's property

before he engaged in that dealing, or before

the commencement of that period, the defendant

satisfies the Court that the whole or a part

of the excess was due to certain causes, being

causes unrelated to his having engaged in that

prescribed narcotics dealing, or in prescribed

narcotics dealings during that period, as the

case may be -

(a) if the defendant so satisfied the Court

in respect of the whole of the excess -

sub-section (3) does not apply to the

excess; or

(b) if the defendant so satisfies the Court

in respect of a part of the excess -

sub-section (3) applies to and in

relation to the excess as if it were

reduced by the amount of that part."

5. Prima facie therefore, but subject to a submission to the contrary made by the applicant which I shall deal with subsequently, evidence of an increase in assets over the period of the dealing provides the minimum pecuniary penalty that can be imposed. Where the pecuniary penalty claimed is in excess of the minimum for which sub-s.(3) makes provision the benefit derived by the defendant is to be calculated disregarding any expenses or outgoings of the defendant in connection with the dealings. In other words, but subject to the minimum penalty for which s.243C(3) makes provision, the pecuniary penalty is the gross benefit of the dealings.

6. The policy of the legislation is quite clear. A person who engages in prescribed narcotics dealings is to be stripped of the gross benefits which he derives from the dealings, the gross benefits being calculated as a minimum of the increase in the person's assets over the period of the dealings unless that increase can be shown by the person to be unrelated to the dealings. It is not necessary that the person has been convicted of an offence, the constituent ingredients of which are identical to the description of the relevant prescribed narcotics dealing or course of dealings; it is sufficient if the court is satisfied that the person has engaged in those dealings or that dealing over the relevant period.

7. It has been established that the proceedings under the Act are civil proceedings so that the applicant is not required to prove its case beyond reasonable doubt. However in deciding whether the applicant's case is made out, the court must bear in mind the gravity of the conduct alleged: see Rejfek v. McElroy [1965] HCA 46; (1965) 112 CLR 517; Commissioner of the Australian Federal Police v. Carlo Razzi & Ors (unreported) 24 August 1989 Wilcox J at p 4; Commissioner of Australian Federal Police v. Cornwall (unreported) Morling J 14 August 1989 at p 25; Commissioner of Australian Federal Police v. Lahood (unreported) 23 May 1988 pp 5-6 per Sweeney J. Where in these reasons hereafter I refer to being satisfied of a fact, I do so in the sense enunciated by Dixon J in Briginshaw v. Briginshaw [1938] HCA 34; (1938) 60 CLR 336, 368-9.

8. It is conceded that as and from July 1986 and in the period until 9 April 1987 the defendant engaged in dealings falling within the definition of prescribed narcotics dealings. However it is disputed that he did so in the period prior to July 1986. That issue in part is dependent upon the effect of certain convictions in respect of charges to which the defendant pleaded (mistakenly he now says) guilty. It is dependent also upon certain matters of fact.

9. The reason why this dispute as to the commencement of the relevant period during which narcotics dealings were engaged in by the defendant is of critical significance in the present case, is that the assets of the defendant increased by approximately $A1,000,000 in the period January 1986 to June 1986 so that the minimum penalty under s.243C(3) could not be quantified until this issue is resolved.

10. Subject to the determination of the period during which the narcotics dealings continued there are two further issues. First the defendant argues that as a matter of law the Court is obliged, where the evidence permits that course, to calculate the penalty by determining the gross profit derived by the defendant and in that event to ignore any increase in assets in the period. It is said that if this submission is correct the evidence establishes that the gross profit of the defendant was in the order of $A700,000. The second issue is whether the defendant satisfies me in accordance with s.243C(4) that certain amounts of money, most importantly two sums of 350,000 pounds STG and 150,000 pound STG came into Australia, the one amount packed with the defendant's household effects and the other being brought into the country by the defendant's daughter, these amounts being said to explain the increase in the defendant's assets of approximately $A1,000,000 in moneys in bank accounts between January and July 1986.

The period of time during which the defendant was engaged in prescribed narcotic dealings

11. On 9 March 1988 the defendant adhered to a plea of guilty in the Sydney District Court in relation to the following offences:

"1. That between 1 October, 1985 and 30 April,

1986 at Sydney he did supply a drug of

addiction to wit cocaine, an offence against

s.21(2A) and s.45A(1)(b) of the Poisons Act,

1966 (NSW).

2. That between July, 1986 and November, 1986 at

Sydney he did supply a prohibited drug to wit

cocaine being not less than the indictable

quantity, an offence against s.25(1) and

s.32(g) of the Drug Misuse & Trafficking Act,

1985 (NSW).

3. That between September, 1986 and December,

1986 at Sydney he did supply a prohibited drug

to wit cocaine being not less than the

indictable quantity applicable to cocaine, an

offence against s.25(1) and s.32(g) of the

Drug Misuse & Trafficking Act, 1985 (NSW).

4. That between 4 February, 1987 and 6 April,

1987 he was knowingly concerned in the

importation into Australia of a quantity of

cocaine being a quantity not less than the

commercial quantity, an offence against

s.233b(1)(d) of the Customs Act, 1901 (Cth).

5. That on or about 10 February, 1987 at Sydney

he did supply a prohibited drug to wit cocaine

being a quantity not less than the indictable

quantity an offence against s.25(1) and

s.32(g) of the Drug Misuse & Trafficking Act,

1985 (NSW).

6. That on 9 April, 1987 at Manly he did without

reasonable excuse have in his possession a

quantity of cocaine which had been imported

into Australia in contravention of the Customs

Act being not less than the commercial

quantity, an offence against s.233B(1)(c) of

the Customs Act, 1901 (Cth)."

12. As a result of the plea of guilty the defendant was sentenced by Judge Moss to a period of 13 years imprisonment with a minimum term of six years imprisonment. An appeal against the leniency of the sentence was upheld by the Court of Criminal Appeal which increased the sentence to a period of 14 years imprisonment with a minimum term of eight and a half years.

13. It will be noted that the offences to which the defendant pleaded guilty are not in terms identical to those described earlier as being the prescribed narcotic dealings relied upon. It is submitted for the defendant that:

* The Court can go behind the convictions of the

defendant to determine whether the defendant did

engage in prescribed narcotic dealings because as a

matter of construction the court must satisfy

itself that the defendant did engage in the

relevant dealings. This is not to say that

evidence of the conviction would not be cogent

evidence for that purpose but such evidence is not,

it was submitted, conclusive.

* As a matter of fact the defendant pleaded guilty in

error to the first charge so that the conviction in

respect of this charge should be ignored.

* The evidence as a whole should not satisfy the

Court to the requisite standard of satisfaction

that the defendant had between 1 October and 30

April 1986 supplied cocaine.

* The onus lay upon the applicant to establish as an

ingredient of the relevant prescribed narcotics

dealings that the defendant knew the cocaine was

imported. The evidence, it was submitted, merely

established that the defendant had that knowledge

in either February or April 1986 but not before.

* Even if the Court could not go behind the

convictions regard should be had to the material

tendered before Judge Moss to determine the dates

on which the offences were committed. In

particular it was submitted the court was not

precluded merely by the fact that one of the

convictions was for an offence occurring between 1

October 1985 and 30 April 1986 from investigating

whether the supply referred to in the charge

occurred some time in 1986 prior to 30 April of

that year rather than in 1985.

14. It is convenient before dealing with the legal issues to refer to the relevant facts.

15. Tendered before Judge Moss were statements of facts relating to the defendant and his co-accused Donald Edgar Anderson and records of interview between the Australian Federal Police and the defendant. From this material it appeared that a quantity of impure cocaine said to be 2,455.3 grams (having a total pure weight of 2,051 grams) with a wholesale value of between $A270,083 and $A282,359 and a retail "street" value of between $A613,825 and $A736,590 was imported into Australia under the name of D E Anderson arriving on 6 April 1987. Mr Anderson picked up the consignment by taxi on 9 April 1987 and met the defendant. The consignment was loaded into the defendant's car and taken to the defendant's home where the police arrested him and seized the consignment.

16. Two interviews with the defendant took place in the early hours of the morning of 10 April 1987. At the first interview the defendant admitted that the powder, hidden in three large wooden planes which had been hollowed out, was cocaine which came from the United States and that he intended to sell it to another man to whom he had sold previous amounts of cocaine. He admitted that the importation of the cocaine was a joint venture between Mr Anderson and himself. In the second interview which commenced seven minutes after the conclusion of the first he admitted that four other planes belonging to himself were located in a storeroom at the home of his stepson. These four planes had apparently been located during the evening by the Federal Police. The defendant admitted that these four planes had been used for importing cocaine and that the fourth plane held $US69,000 to send back to the United States because it was Don Anderson's share of "the last couple of shipments of cocaine". He was then asked:

"Q18. How many shipments of cocaine into Australia

have you been involved in?

A. Five.

Q19. Do you recall when the first shipment of

cocaine was brought into the country?

A. Over a year ago.

Q20. How much cocaine was invovled (sic) in on

the first occasion?

A. About nine ounces.

Q21. How much cocaine have you brought into

Australia from those five shipments?

A. Approximately about five kilos. It may not

even be that, maybe four.

Q22. Who had arranged each of these shipments to

be brought into this country?

A. We both arranged it.

Q23. What do you mean "We both arranged it"?

A. Don and me.

Q24. Where did each of those five shipments of

cocaine come from?

A. Calafornia (sic)."

17. Further in the interview the defendant admitted that he sold the cocaine to his contact "Wilf" for between $A2,000 and $A3,000 per ounce, paid in cash. When asked what he had done with the money he replied:

"Live good, gamble, had holidays at Jupiters."

18. He acknowledged bank accounts and passports in the names of Arthur James Butterworth and Reginald Cummings as relating to himself.

19. The defendant sought, before me, to qualify or correct some of the answers given by him and particularly the answer to question 19. He said in oral evidence (although no mention was made of the fact in an affidavit sworn by him and filed in the present proceedings nor on any prior occasion) that he had been beaten by the police two hours prior to the interviews and that when interviewed he was "all mixed up and dazed". He said he did not know what he was doing. He said when answering question 19 he did not say "over a year ago", but rather "over the year". He described the answer "over a year" as "damn lies". He asserted that there were a few things that were changed in the record of interview or which he answered wrongly.

20. The defendant acknowledged that when he pleaded guilty before Judge Moss he was aware of the errors which he alleged in the record of interview although no questions were put in the proceedings in the District Court to suggest the existence of any error. In his affidavit filed in the present proceedings the defendant sought to explain the significance of the "error" in relation to question 19 as follows:

"The answer I gave was "over the year" which is an

expression I use and which is in common usage in

the part of England from which I come meaning "over

the New Year period." The answer I gave was

intended to mean that the first shipment to my

knowledge was in the December 1986-January 1987

period."

21. Other matters in the interview which the defendant sought to impugn were his involvement in the importation and the number of shipments imported. He denied that he had been involved in the importation and deposed that upon reflection his answer to question 21 was wrong and that the prior consignment was no more than four kilos of which two and one half were still in his possession when arrested. There were as well other matters including an admission that his answer to the question, what he had done with the money, was incorrect. He said that this answer was simply the first thing that had come into his head and was not true.

22. While I have no difficulty in accepting that the defendant did not spend all of his money on "good living, gambling and holidays at Jupiters", I think that this answer given during the interview with the police displays something important about the defendant. The impression I have of him after seeing him in the witness box and listening to his testimony, is that he would be prepared to disregard the truth if to do so would assist in saving his property and that this is the real explanation for the answer which he gave to the question relating to the disposition of his assets. I do not believe that the defendant was confused at the time of the interview or that this was the first answer which came into his head. Nor do I accept that the defendant was beaten and was for that reason confused or dazed.

23. The defendant is an intelligent man and has displayed, both here and in the United Kingdom, an ability to accumulate assets. He himself acknowledged that his embarking upon the cocaine offences came from greed. He failed in preparing a statement of affairs to disclose all his assets or give complete information about them; he wrote a letter to his accountant implying that the accountant should provide certain information that would be helpful to his case perhaps irrespective of the truth of that information and he had in the United Kingdom concerned himself in tax haven activities which he feared would not stand investigation. Further he used passports in false names and opened bank account in false names so as to hide, it must be assumed, any money trail. In my view his evidence must be approached with some caution as it was clear to me that he was very aware of the significance of the commencement date of the period during which the prescribed narcotic dealings were to commence and of the significance of his not having been involved in the importation of the cocaine or indeed of not knowing where it came from.

24. In particular I do not accept the defendant's assertion that he answered question 9 "Over the year." I find that the answer as shown in the record of interview was correctly transcribed.

25. Further, the transcript interview in my view constitutes an admission which I accept, not only that the defendant was involved in the importation of the cocaine but also that he was at all relevant times aware that the cocaine in question was imported into Australia from the United States of America. I do not accept the defendant's denial of these matters in proceedings where it is now clearly in his interest to make the denial in an effort to save his property.

26. The defendant sought to explain the reason for his pleading guilty. He said, that when first charged, the main charge against him was conspiracy to import cocaine as distinct from being knowingly concerned in the importation. He deposed that he had been informed by his solicitor, a Mr O'Brien, that the Crown would not proceed with the conspiracy charge if the defendant pleaded guilty to the six charges to which he did so plead. He asserted that the terms of imprisonment for which he was liable on pleading guilty to the six charges were a great deal less than he would have received on the conspiracy charge and that he had been so advised by his solicitor, Mr O'Brien. Mr O'Brien however was not called to give evidence before me and the failure so to do, in the circumstance where it is clear that the offence of conspiracy to import carries no greater maximum penalty than the offence of supply, permits me to draw an inference that the evidence given by Mr O'Brien, if called, would not have assisted the defendant's case.

27. I am not satisfied that the reason given by the defendant for pleading guilty is true.

28. In his oral evidence the defendant said that his first dealing with Mr Anderson concerning cocaine was in November 1986 when Mr Anderson was looking for someone to sell cocaine for him. He said, contrary to the admission made by him during the police interview, that he did not know where Mr Anderson was getting the cocaine from until Mr Anderson told him in April 1987. He said that between December 1986 and January 1987 he had purchased on three or four occasions about three quarters of a kilo of cocaine. When cross-examined about the wood planes which had been found in his stepson's storage room he said that he did not know whether they had had cocaine in them or not, (this was inconsistent with his answers in the record of interview) nor did he know how Mr Anderson came to have them but that Mr Anderson had asked him to pick up the planes, they being then in a big brown case, from a friend's place. Cross-examined about the $US69,000 hidden in one of the planes, he claimed that he had changed $A105,000 into US dollars changing about $A3,000 at a time in three banks. This he said took a few months as he had been selling cocaine from Christmas to March. This would have required visiting each of the three banks approximately eleven times and sounds somewhat improbable. The statement that he was selling from Christmas to March was in contradiction of his earlier evidence that he had sold all of the cocaine which he had acquired from Mr Anderson in January. He said he knew cocaine came from Colombia or South America and knew that the cocaine must have been smuggled into Australia although he thought that Mr Anderson was buying the cocaine in Melbourne.

29. Although, according to Mr Butler, Mr Anderson had only told him in April 1987 that he, Mr Anderson, was importing the cocaine, he said that he had put two and two together in January-February 1987 when he had noted that the planes were hollowed out after he had opened Mr Anderson's case. He had at the end of January 1987 quizzed Mr Anderson about this, he said, and Mr Anderson had said:

"Well, you do your part of the bargain, Jimmy, and

I'll do mine. You just sell it and leave me to do

my end."

30. Later in the cross-examination the defendant contradicted the substance of his earlier evidence in an important respect. He was asked about the finance for the last shipment. He said that Mr Anderson asked him to put his share of the money in to bring in the second lot of cocaine. He was asked:

"to bring it in from where? --- I know now that he

was bringing it in from California.

He asked you to fund the importation of a lot of

cocaine; is that what you say? --- He asked me for

$15,000 to put to his $15,000.

To bring it in from where? --- From California,

where he was bringing it from.

When did he ask you to put in $15,000 to assist in

the bringing in of cocaine from California, where

he was bringing it from? --- It must have been

about February, after I sold the first lot."

31. It can be seen that after the defendant realised what he had said he sought to correct his evidence, continuing as follows:

He asked you for some funds to help to bring in

some cocaine? --- I know now he was bringing it in

but at the time he just said is was to buy

cocaine."

32. I am satisfied that the defendant knew that Mr Anderson was importing cocaine from the United States of America and that he knew this to be the case well before April 1987 and indeed from the outset of their dealings with each other. This coincides with what the defendant had said in his record of interview with the Australian Federal Police.

Can the Court go behind the convictions in the District Court?

33. It was argued for the defendant that the Court was not bound by the convictions of the defendant in the District Court but rather must satisfy itself on the totality of the evidence that the defendant in the relevant period had engaged in conduct falling within the words "prescribed narcotics dealings". This argument was put on a number of bases.

34. First, it was said, that the convictions in respect to the first two charges at least were not for offences under the Customs Act but for offences under State legislation. The area covered by the State Acts was different in scope from that covered by the Customs Act. In particular it was a necessary ingredient of there being a prescribed narcotics dealing that the defendant knew that the narcotics goods in question were imported into Australia in contravention of the Act. Second, it was submitted that the conviction merely followed a plea of guilty rather than a trial upon which facts were found. Third, it was said as a matter of statutory construction, that s.243B(2) of the Act requires the Court to be satisfied so that the convictions could not be binding upon the Court if other evidence before the Court was such that the Court should not be satisfied. It was stressed that the foundation for a pecuniary penalty under the Act was the satisfaction of the Court not the conviction itself.

35. The last argument is not convincing. It is true that the Court must be satisfied that a defendant has been engaged in a prescribed narcotic dealing or in a course of prescribed narcotics dealings before it can proceed to impose a pecuniary penalty under the Act, but it does not follow from that that a Court must of necessity go behind a conviction which established that fact. Proceedings for pecuniary penalty may be instituted notwithstanding that no prosecution for a criminal offence is in contemplation. In such a case the Court must consider for itself the relevant factual circumstances and reach the required level of satisfaction before imposing a pecuniary penalty. But where however there has been a conviction for an offence the ingredients of which necessarily comprise the same ingredients as are comprised in the definition of prescribed narcotics dealings then it seems to me that unless the Court is permitted generally to go behind the conviction the fact of conviction will itself establish the facts which lead inexorably to the satisfaction of the Court. The conviction will not be merely one fact to be put into the scales and weighed up against other evidence in determining whether the Court has reached the necessary satisfaction. Accordingly it is necessary to consider whether generally the Court can go behind a conviction and set it at naught.

36. In my view the Court is bound by evidence of a conviction and cannot go behind it or permit a collateral attack on some element critical to it. In Hunter v. Chief Constable of the West Midlands Police [1981] UKHL 13; (1982) AC 529 the appellant had been convicted of murder as a result of exploding two bombs in Birmingham. The conviction depended upon a confession which the appellant at the trial claimed had been extracted from him by force. There was a trial on the voire dire and the confession was held to be voluntary and therefore admissible. The appellant subsequently sued the police for assault being the identical assault that had been canvassed in the voire dire proceedings. It was held that there could not in a subsequent civil action be a collateral attack on a final decision reached by a Court of criminal jurisdiction, for so to do would be an abuse of the Court's process.

37. In a somewhat different context the same conclusion was reached in this Court in Minister for Immigration and Ethnic Affairs v. Gungor [1982] FCA 99; (1982) 63 FLR 441 in which Hunter's case was applied in the context of deportation. In that case the Administrative Appeals Tribunal had heard evidence on the circumstances in which the applicant had been found guilty of an offence which formed the basis of a decision made by the Minister to deport him. In considering whether an applicant for review could mount such an attack Fox J referred to Hunter and said at p 448:

"Although the decision (Hunter) is not of direct

application, it does suggest that if a conviction

cannot be attacked collaterally in another court

(in fact one of co-ordinate jurisdiction) it is

unlikely to be open to challenge in an

administrative inquiry such as that here in

question. More, one gets from the decision a

concept of collateral attack, as related not simply

to the ultimate result of the trial, but of facts

determined in the course of it, and of facts the

jury must have accepted."

38. His Honour held in the result that the Tribunal had erred in law in proceeding to a conclusion on the basis of facts inconsistent with the conviction, a view shared also by Sheppard J who in the same case said at p 468-9:

"The taking of such a course by the Tribunal has,

in my respectful opinion, the effect both of going

behind the conviction and setting it at nought. In

my opinion it was not open to the respondent to

lead evidence for the purpose of showing that he

was a principal in the second degree rather than in

the first. Certainly it was not open to the

Tribunal to treat him as convicted on the basis of

that conduct rather than upon the basis of conduct

which made him a principal in the first degree. To

proceed as it did involved it in an error of law."

39. The remaining member of the Court, Fisher J agreed with both the judgments of Fox and Sheppard JJ.

40. While of course Gungor involved the powers of an Administrative Tribunal to go behind a judgment, as had also the decisions in Minister for Immigration and Ethnic Affairs v. Daniele [1981] FCA 212; (1981) 61 FLR 354 and Degerli v. Minister for Immigration and Ethnic Affairs (unreported, Federal Court of Australia, Full Court, 23 December 1981) in my view public policy prevents a court going behind a conviction, that is to say seeking to set it at naught or seeking to challenge a matter upon which the conviction was based. It would indeed be a source of great embarrassment if a court in a civil case could re-hear a matter which had been passed upon by a judge and jury and perhaps reach a conclusion contrary to that reached after the trial. If the decision of the judge and jury in a criminal case is to be challenged then that challenge must be mounted by way of an appeal, the appeal being to the relevant court of criminal appeal and not in a collateral way in civil proceedings in another court.

41. It is not necessary to enter into the debate as to whether the doctrine of issue estoppel has any application to criminal proceedings, a question as to which the members of the High Court expressed divergent views in R v. Storey [1978] HCA 39; (1978) 140 CLR 364. It is sufficient to base my decision upon the doctrine of public policy in accordance with the authorities to which I have referred and the rejection by this Court of Hollington v. F Hewthorn & Co Ltd (1943) KB 587 which had long been accepted as authority for the proposition that a finding of guilt was not evidence in a civil proceeding involving the same factual issue. Of the latter case the House of Lords in Hunter agreed that it was "generally considered to have been wrongly decided".

42. A plea of guilty operates as an admission of the essential legal ingredients of the offence admitted by the plea: R v. O'Neill (1979) 2 NSWLR 582 at 589. Where the plea avoids the necessity of a trial it is not unusual for facts relevant to sentence to be stated from the bar table or contained in an unsworn statement which is read to the trial judge and provided that those facts are common ground between the parties they may be acted upon. Cf. R v. Tait (1978-9) 24 ALR 473 at 483. I do not however think that there is any real distinction in principle to be drawn between a case where the conviction follows a trial and where it follows a plea of guilty so far as the present issue is concerned.

43. It is however obvious that the matters upon which no attack can be brought are limited to those matters of fact upon which the conviction was based. These in the present case have to be determined having regard to the offence with which the defendant was charged (it being to that offence that he pleaded guilty) and include the record of interview and statements of facts handed to the sentencing judge which formed the common ground of facts upon which the ultimate sentence was based. While it is true that the offences under the State Acts are not co-extensive with the conduct falling within the definition of prescribed narcotics dealings, when one examines the ingredients of the offences in question in conjunction with the documents to which I have referred it is easy to see that conviction on the six charges necessarily comprehended conduct falling within the descriptions in paragraphs (a) to (c) of the amended application subject to three matters: the first, whether it is an essential ingredient in the conduct being a prescribed narcotics dealing that it be proved that the defendant knew that narcotic goods were imported into Australia in contravention of the Act; second, whether the conviction is conclusive of the commencement of the period of narcotics dealing and third, whether the convictions necessitate the conclusion that the defendant imported cocaine into Australia.

44. It was submitted by the defendant that it was essential to a finding that he was engaged in prescribed narcotics dealing that the applicant showed to the satisfaction of the Court not only that the narcotic goods were imported into Australia in contravention of the Act but also that the defendant so knew. Section 243D of the Act, it might be observed, makes strict proof of importation in contravention of the Act unnecessary. It is sufficient if the goods in question are goods reasonably suspected of having been imported.

45. The defendant's submission can be tested against paragraph (f) of the definition in s.243A(3) of prescribed narcotics dealings, which paragraph provides:

"(f) he aids, abets, counsels or procures, or is in

any way knowingly concerned in, the sale of,

or other dealing in, narcotic goods imported

into Australia in contravention of this Act,

the importation of narcotic goods into

Australia, or the exportation of narcotic

goods from Australia, in contravention of this

Act, or the keeping in the possession of any

person of narcotic goods imported into

Australia in contravention of this Act."

46. It is obvious that the words "imported into Australia in contravention of this Act" may be merely descriptive, in which case it would be unnecessary to show the defendant had any knowledge of the importation or these words may be a necessary ingredient of the offence such that is is necessary to show the defendant had knowledge of them. On the whole I think that the grammatical construction of the definition and s.243D both suggest the former. But it is unnecessary here to determine the matter for I am satisfied on the evidence before me that the defendant at all times knew that the cocaine was to be imported from the United States of America by Mr Anderson and that he was certainly knowingly concerned not only in the sale of it but also in its importation. This finding follows in my view from the record of interview and the cross-examination to which I have already referred.

47. There is then the question of the period which the dealing in narcotics spanned. As a matter of logic, if a person is convicted of being engaged in supplying drugs between January and June and it is proved that he supplied them in May, the fact that he was convicted of supplying between January and June, no doubt a correct conviction, would not prove a supply in January. Counsel for the applicant submitted that while dates in an indictment were not necessarily conclusive they could be conclusive if they assumed as they did in the present case a special significance. That special significance was said to be that the periods of time differentiated each of the six charges with which the defendant was charged making each of them separate and distinct charges. It may be accepted that the dates did have significance in distinguishing each of the charges, but that of its own does not make a conviction of doing a particular act between certain dates conclusive that the act was done on the first of those dates.

48. Accordingly it seems to me that I must decide on the evidence before me in what period in fact the defendant did engage in the prescribed narcotics dealings set out in the amended application. I shall deal with that matter separately.

49. The third matter relates to the question of importation, conspiracy to import or being knowingly concerned in importation. In my view the evidence to which I have already referred and in particular the record of interview establishes contrary to the assertion of the defendant that subject to the question of the commencement of the relevant period the defendant was involved in importing cocaine and that he conspired with Mr Anderson so to do.

50. Even if one takes the record of interview as the more reliable record than the affidavit or oral evidence of the defendant it is clear that that material on its own does not support the conclusion that the defendant engaged in prescribed narcotic dealings in any period earlier than some time shortly before April 1986 being the year referred to in question 19 in the record of interview. If that were the only material before me it seems clear that the starting point of the period for the computation of assets would be about March of 1986. However that is not the only evidence before me. There is a great deal of uncontradicted evidence before me of movements in the defendant's assets. This evidence of course is relevant also to the ultimate question of computation of the pecuniary penalty. Suffice it to say that if one for the moment ignores three transactions which I shall deal with separately the evidence establishes that between 1 July 1985 and 1 July 1986 the cash at bank of the defendant increased by a figure in excess of $A1,240,000. The credit amounts in the banks as at specified relevant dates were as follows:

1 July 1985 $45,086.63

1 October 1985 $68,093.87

30 April 1986 $1,132,328.70

1 July 1986 $1,286,526.80

31 December 1986 $1,626,151.90

4 February 1987 $1,780,899.40

6 April 1987 $1,727,011.60

Indeed, as will be seen the substantial period of increase commenced on 1 October 1985.

51. In my view it is permissible to take into account this increase in assets which unless it is explained must in circumstances such as the present be assumed to have arisen from drug dealings, particularly in a case where as here the defendant was unemployed in the whole of the relevant time. A somewhat analogous issue arose recently in the Court of Criminal Appeal in R v. Costin (unreported 12 July 1989). In that case the appellants had been accused of armed robbery. Evidence had been given at the trial of a raid on premises occupied by the appellants and of finding a key to a safe-deposit box which contained a large sum of money. The question for decision was whether that evidence was admissible. The accused gave evidence of how he came into possession of the money in the safe-deposit box but was convicted. Gleeson CJ in giving the judgment of the Court referred to United States v. Ravich [1970] USCA2 126; (1970) 421 F 2d 1196 where the United States Court of Appeals, Second Circuit, had held that evidence that persons charged with bank robbery had come suddenly into possession of large amounts of cash was admissible. The Court said at 1204, citing "Wigmore on Evidence":

"Sudden possession of considerable sums of money

has long been recognized as relevant to a charge of

theft. Here there was evidence that before the

robbery the appellants were almost without money;

that afterwards they divided over $300,000 with

Wetzel; that during their journey they, and their

girlfriends gambled, with stakes as high as $22,000

depending on the turn of a single card; and that

the women were instructed to keep large sums on

their persons for purposes of a get-away. The

considerable amounts of currency found in Zeber's

purse and Ravich's wallet and room thus passed any

appropriate test of relevancy by a wide margin."

52. While the finding of money has a special relevance in the case of a robbery of money, it seems to me that where it is suggested that a defendant has sold drugs and derived a profit from them, the unexplained increase of money in his bank account is circumstantial evidence in support of the conclusion that the defendant did make a profit out of drug dealings in the period during which those moneys came into his bank account sufficient to enable the Court to determine in a case such as the present the period of time in which narcotics dealings continued.

53. Subject therefore to the question of whether the defendant has any reasonable explanation for the increase in the moneys in his bank account I would have no hesitation in finding that the period in which the defendant had the relevant prescribed narcotic dealings commenced no later than 1 July 1985 and continued throughout the period to 6 April 1987 being particularly in the period from 1 October 1985 and thereafter.

The construction of s.243C(3) and its relation to s.243C(2)

54. It was submitted for the defendant that the true construction of s.243C(3) when read together with s.243C(2) was that the pecuniary penalty which is required to be calculated is the value of the benefits derived by the defendant by reason of his having engaged in the relevant prescribed narcotics dealings and that accordingly the amount to be assessed should not exceed the gross benefit which a defendant obtained from the course of prescribed narcotics dealings which is proved against him. In the present case it was submitted that the evidence showed only that the defendant together with Mr Anderson on a 50/50 basis had imported and/or sold between four and five kilograms of cocaine. At the worst, it was submitted, that the gross value of the benefits or potential benefits derived by the defendant by reason of his having engaged in prescribed narcotics dealings could not have exceeded the sum of approximately $A750,000 which represented on the evidence the retail market value of approximately two and one half kilograms of cocaine. If the wholesale market value were to be taken the amount of the penalty should be set at $A287,500.

55. The starting point of the submission was a comment made by the full Court of the High Court in R v. Smithers; ex parte McMillan [1982] HCA 76; (1982) 152 CLR 477. In that case an argument had been advanced that the present sections were invalid because they conferred upon the Court an administrative discretion. In rejecting that argument the full Court comprising Gibb CJ, Mason, Murphy, Wilson, Brennan, Deane and Dawson JJ said at pp 486-7:

"The argument is based on the lack of precision in

the expression "benefits derived" in s.243B(2) and

s.243C(2), that expression not being defined by the

Act, and on the absence of any limitation upon the

amount of the pecuniary penalty which the Court is

obliged to award. What the Court is required to do

by the provisions to which we have referred is to

"assess", in accordance with s.243C "the value of

the benefits derived by the person by reason of his

having engaged in" the dealing or dealings.

Section 243C(2) provides some guidance to the Court

in assessing the value of the benefits derived

because it requires the Court to have regard to

evidence before the Court concerning the matters

that are listed in that subsection. And s.243C(6)

requires the Court to disregard "any expenses or

outgoings of the defendant" in connection with the

dealing or dealings. In other words, the Court is

assessing gross, rather than net, benefits. The

statutory provisions, in requiring the Court to

assess the value of the benefits derived, do not

impose upon the Court an administrative discretion.

The concept of gross benefits, like that of net

benefits, is sufficiently certain. ...

The absence of a limitation upon the amount of the

pecuniary penalty for which the sections provide is

of no significance. There is, of course, an

implied limitation - the amount of the penalty is

not to exceed the Court's assessment of the value

of the gross benefits which the person has derived

from engaging in the relevant transaction or

transactions."

56. In my view their Honours were not in the passage cited directing their minds to the question of the interrelationship between s.243C(2) and s.243C(3). The argument that there is an implied limitation upon the amount of pecuniary penalty that can be calculated is unaffected by the issue whether s.243C(3) imposes a minimum limit on the pecuniary penalty and their Honours did not address at all this question. In any event, in a case where there has been an unexplained increase in assets it was no doubt thought appropriate by the legislature to regard such an unexplained increase in assets as being a measure of the value of the gross benefits derived by a defendant by reason of his engaging in prescribed narcotics dealings. The Court is directed in s.243C(2) to consider such evidence as there is before it of the matters referred to in that section, which matters include the increase in value of the defendant's assets. With this evidence in mind the Court determines the value of the benefit. In some cases, and the present is one such, the evidence as to the quantum of narcotics involved in the dealings and the value of those narcotics may be an unsatisfactory guide to determining the value of the benefits which have been derived by the defendant from the prescribed narcotics dealings. In such a case the increase in the value of the defendant's assets will assume a special importance. Where such increase is unexplained it gives the best indication there could be of the amount of the benefits that the defendant has derived from his narcotics dealings absent some cogent evidence of a greater sum.

57. The argument really amounts to no more than saying that the Court must accept the defendant's word for the quantum of narcotics involved in his dealings notwithstanding that there is evidence of an increase in value of assets which in the absence of any satisfactory explanation suggests that the defendant has sold substantially more or benefited in a substantially greater amount than that which would follow from the defendant's own evidence.

58. In my view the words of the section are quite plain and the Court should not read words into the section as submitted by the defendant so as to make in some way s.243C(2) take priority over s.243C(3). The sub-paragraphs are not in conflict but can be read together and when so read together provide that in a case where evidence of the kind referred to in s.243C(2)(e), that is to say of an increase in value of the defendant's assets, is adduced that evidence provides the minimum value of the benefits derived by the defendant although other evidence of the matters referred to in other sub-paragraphs of s.243C(2) may lead in a particular case to a conclusion that the assessment should be a figure greater than is determined by reference to the increase in value of the defendant's assets.

The assessment of the increase of the defendant's assets

59. There was no dispute that as at the time of his arrest the defendant owned assets of $A2,035,854 excluding a Range Rover which was forfeited to the Commonwealth, an interest in a property at Mosman and money that he had given to his wife. The amount of $A2,035,854 was made up of money in bank accounts, $A1,780,899, money invested with Edward Cootes & Co, Brokers, $A250,000; and jewellery of $A4,955. Assets representing this amount but having a higher value as a result of further investment under the control of the official trustee pursuant to s.243G were valued at $A2,243,443 as at 1 September 1989.

60. The applicant submits that on the assumption that the period of narcotics dealings commenced as at 1 October 1985 the known value of the defendant's property as at that date was $A68,093 being cash in bank accounts as at that date plus a house at Seaforth. The house at Seaforth was subsequently sold in January 1986 for $A525,000 and the submissions of the applicant ignored this property on the basis that the whole of the proceeds of sale went to the defendant's wife. This is not so and I will deal with this matter separately.

61. Accordingly the computation of the penalty submitted for by the applicant was to take the difference between the value of the property as at the time of arrest namely, $A2,035,854 and the sum of $A68,093 in the bank accounts as at 1 October 1985 leaving the amount of the pecuniary penalty to be assessed as $A1,967,761.

62. This method of calculating the pecuniary penalty was challenged by the defendant. The defendant posed two alternative bases of calculation which depended upon subtracting from the value of the defendant's assets as at the date of his arrest, an amount said to be the value of the defendant's assets as at 30 October 1985 calculated by bringing to account amounts said to be remitted by the defendant to Australia or said to be brought in by him less his expenses in the period prior to 30 October 1985. In accordance with these calculations the quantum of the pecuniary penalty arrived at was said to be $A451,374.45 or $A1,446,391.60 depending upon whether I accepted that certain amounts should be brought into the calculation.

63. The difficulty I have with the calculations prepared by the defendant apart from the question as to whether or not three amounts, one representing the Australian dollar proceeds of 350,000, pounds the other representing the proceeds of 150,000 pounds and the third representing $A100,000 deposited, is that the figures proceed on the basis of known expenses of $A500,000 when there is virtually no evidence to substantiate such expenses and assumes that as at the commencing date, 30 October 1985 there were large amounts of assets either standing around in cash or in unexplained locations. There is no evidence at all to suggest that as at 30 October 1985 this was the case.

64. Accordingly, in principle it seems to me preferable to proceed along the basis adopted by the applicant subject to considering four separate amounts which are said by the applicant to account for the increase in his assets in the relevant time. I shall deal with each amount separately.

65. The defendant deposed that he had as a result of his business dealings in the United Kingdom accumulated an amount of approximately $A500,000 cash. He said that this cash had arisen as a result of the sale by him of some property in England and three pubs. No documentary or other corroborative evidence was adduced to prove that these properties had been sold or that an amount of this magnitude had been received for them.

66. The defendant said that the Inland Revenue Commissioners were enquiring into his affairs in England and that it was this enquiry which provided one of the reasons for his decision to emigrate to Australia. The defendant said that he had some money in a bank account in the Isle of Man in the name of a company, Recreation Limited, to which I will later return. He said that he had been adamant that the Isle of Man being a tax haven, the money could not be touched by the United Kingdom revenue authorities but that his father had told him to the contrary. Hence he "decided to stop putting it into the Isle of Man and keep it in cash and bring the cash with me to Australia". He said that to send or bring to Australia an amount of cash in a suitcase "through the usual channels" might have resulted in the cash being stolen, so he got the idea when he saw the removalists packing his personal effects into containers to send the money to Australia in one of these containers. In the result, he said in his affidavit that he placed the 350,000 pounds amongst the packing surrounding a dinner service which was then packed in a cargo container carrying furniture and goods which were shipped to Australia. In his evidence in chief he said that he placed the money in two tureens and packed the tureens in a box about 18 inches square. It was said that the 350,000 pounds was comprised in seven packs of 50,000 pounds each in fifty pound notes. Each pack was said to be approximately one and a half inches thick.

67. According to the defendant the container arrived in Sydney in around June/July 1983 and after being cleared from customs was kept in storage by Grace Bros for some months until September 1983 while the defendant completed renovations to a home at Seaforth in which he thereafter lived.

68. According to the defendant he left the money packed in the dinner set for some time until 1984 when he started investing it. He said that he changed about 50,000 pounds in small lots in various banks in the city and invested the money in a number of transactions, four to six, with a Mr Barbouttis, a city accountant. The defendant said that he gave to Mr Barbouttis moneys in sterling and received back from him Australian dollars. Mr Barbouttis was not called to give evidence and I have no hesitation in inferring that such evidence as he might have given had he been called, would not have assisted the defendant's case.

69. The defendant tendered one document which was said to corroborate the involvement of Mr Barbouttis. It was dated 21 September 1984 (although on the same page appeared the numbers 6/87) and apparently was signed by Mr Barbouttis acknowledging the receipt from Mr Butler of $A100,000 repayable on three months notice. There is no suggestion from the document that Mr Barbouttis received an amount in pounds sterling and it may be thought unlikely that the exchange rate would have been precisely $A2 to 1 pound STG to support the defendant's evidence that this was the proceeds of 50,000 pounds. According to the defendant at the expiration of the deposit period, which varied depending upon the transaction from three to six months, he received from Mr Barbouttis the principal sum together with interest.

70. I find this evidence on the whole impossible to believe. That an astute businessman would regard the sending of money packed in a container to Australia as safer than carrying the notes with him or arranging for the money to be remitted by telegraphic transfer to Australia from say the Isle of Man to a bank account opened either in his name, the name of a company or in an alias, defies credibility. That the defendant would allow the carton to remain in storage for months after it had been cleared through customs without checking to see whether the money was still there also defies imagination. That a businessman would leave money lying idle in soup tureens rather than investing it at times of high inflation is also difficult to believe. I am satisfied that the defendant invented this story because he knew that it was necessary to find some explanation for the increase in the moneys in his bank account. Further, I do not believe that he entered into the transactions with Mr Barbouttis that he says he did. It may well be that he did invest in 1984 one amount of $A100,000 for three months but I cannot infer from that transaction that large amounts of pounds sterling were paid to Mr Barbouttis over a period on terms that Mr Barbouttis repaid the amounts in Australian dollars with interest. I am satisfied that the deposits made by the defendant from January to March 1986 were deposits that did not come from moneys invested with Mr Barbouttis. Rather I am satisfied that these deposits were of moneys representing the proceeds of the defendant's drug dealings. It is unnecessary for me to speculate what happened to the $A100,000 that was invested with Mr Barbouttis in 1984.

71. By way of additional comment it might be noted that one would expect an accountant to have records of amounts borrowed and interest paid which records might have been subpoenaed to corroborate the story had it been true. No attempt appears to have been made to take this course. The transaction involving 150,000 pounds

72. According to the defendant when he left the United Kingdom there was money owed to him representing the value of the stock in a leather business which he had sold as well as some money owing to him by a jeweller. He said that the total amount was 150,000 pounds. Again there was no documentary or other corroborative evidence to support this assertion.

73. When in 1985 the defendant's daughter, by a first marriage, who lived in England, came to Australia for a visit he says he arranged for a person unnamed (in England) to deliver to her a brown paper parcel containing the 150,000 pounds. It is said that the daughter "placed the parcel with her luggage and delivered" to the defendant upon her arrival in Australia. In cross-examination it was said that the money was brought by the daughter in her handbag. The defendant in cross-examination said that he believed that it was safe to allow his daughter to bring the money to Australia because for two years he had heard nothing from the tax investigators in England and thought it unlikely that his daughter would be stopped at the airport on leaving England as might have happened when the defendant came initially to Australia.

74. Once the money was in Australia the defendant deposed that he dealt with it in the same way as he had dealt with the 350,000 pounds to which I have earlier referred, that is to say through dealings with Mr Barbouttis. There was no documentation which in any way corroborated any part of the defendant's story.

75. I do not accept the defendant's explanation. I am satisfied that neither the amount of 350,000 pounds nor the amount of 150,000 pounds came to Australia as deposed. Rather I am satisfied that the increases in the defendant's bank accounts to this extent are to be accounted for by the course of his dealings in narcotics.

76. Evidence was tendered before me that a cheque for $A159,017.15 representing so much of the proceeds of the sale of the Seaforth property as was paid to the defendant had been banked in a bank account number 421 46702 with the ANZ Bank on 23 January 1986. This amount was not shown as part of the assets owned by the defendant as at 30 October 1985 in the calculations made by the applicant and, the amount having been withdrawn by various withdrawals through until March 1986 in my view accounts to that extent for the increase in value of the assets of the defendant. Accordingly the assessment of pecuniary penalty made by the applicant must be reduced by the amount of $A159,017.15 to $A1,808,743.80.

77. Evidence was tendered from the ANZ Bank, Circular Quay Branch, that the sum of $A100,000 had been received by the defendant by telegraphic transfer from the United Kingdom and deposited to the credit of account 972 24739. In all probability this amount was part of a total of 200,000 pounds that was remitted to Australia by Fryers Bell & Co, Accountants, who managed the affairs of the Isle of Man company Recreation Limited. From correspondence adduced in evidence before me it appeared that various amounts had been remitted to the defendant in Australia from Recreation Limited as follows:

1983 STG AUD

4 May 200,000 334,000

16 August 33,000 55,110

14 September 50,000 83,612

1984

4 January 10,000 15,688

2 March 15,000 23,180

9 May 30,000 45,502

1985

10 July 65,000 128,483

403,000 685,575

78. The applicant submitted that I should take the amount of $A100,000 into account as an amount deposited in a bank account and therefore being on hand at the commencement of the valuation period on 30 October 1985. It should perhaps be noted that the bank account into which the $A100,000 had been deposited was not among the bank accounts used by the applicant in calculating the value of the defendant's assets because apparently it had not been a bank account disclosed by the defendant.

79. The trouble with taking this amount into account is that there is no way in which I am able to determine whether this amount of $A100,000 has not already been counted in some other way among the assets of the defendant at the opening period. It seems from the evidence before me that prior to October 1985 the defendant had purchased a property at Seaforth with a purchase price plus stamp duty of $A225,000 and had spent $A200,000 on renovations on that property. An indeterminate amount had been spent by the defendant in living expenses and overseas and interstate trips. It is quite likely that this $A100,000 was used by the defendant to pay for the house or the renovations. I find that it is more probable than not that this is what happened and do not regard it appropriate to deduct from the calculation of the pecuniary penalty as proposed by the applicant the further amount of $A100,000.

80. Accordingly I am satisfied that the defendant engaged in a course of prescribed narcotics dealings during the period 1 October 1985 to 6 April 1987 and that the value of the benefits derived by him by reason of his having engaged in that course of prescribed narcotics dealings during that period was not less than the amount of $A1,808,743.80 which accordingly I assess as the pecuniary penalty payable.