The Queen v Wannouch; The Queen v Lee [2019] VSCA 97

1 Pursuant to certification of the trial judge given on 30 October 2018 under s 295(3)(a) of the Criminal Procedure Act 2009 ('CPA'), the Commonwealth Director of Public Prosecutions seeks leave to appeal against two evidentiary rulings relating to the pending trial of the respondents, Shi Yuan Lee and Jaafar Wannouch (for convenience, 'Lee' and 'Wannouch'), delivered on 25 October and 30 October 2018 respectively ('the rulings' or 'the interlocutory decisions').[1]

2 For the following reasons, in each case we would refuse leave to appeal.

3 The impugned rulings arose in the following circumstances.

4 An indictment filed in the County Court charges the respondents, Wannouch and Lee, with drug offences in breach of the Criminal Code (Cth) ('the Code'). The charges relate to heroin allegedly contained within two suitcases, described as 'bag 667' and 'bag 670'. A third individual, Jackson Teo ('Teo'), is charged on the same indictment with importing a commercial quantity of a border controlled drug, heroin, relating to bag 670 (charge 6).

• importing a commercial quantity of a border controlled drug, heroin, contrary to subsection 307.1(1) of the Code (charge 1), relating to bag 667;

• attempting to import a commercial quantity of a border controlled drug, heroin, contrary to subsection 11.1(1) and subsection 307.1(1) of the Code (charge 2), relating to bag 667; and

• attempting to import a marketable quantity of a border controlled drug, heroin, contrary to subsection 11.1(1) and subsection 307.2(1)of the Code (charge 3), relating to bag 670.

• importing a commercial quantity of a border controlled drug, heroin, contrary to subsection 307.1(1) of the Code (charge 4), relating to bag 667; and

• attempting to import a marketable quantity of a border controlled drug, heroin, contrary to subsection 11.1(1) and subsection 307.2(1) of the Code (charge 5), relating to bag 667.

7 The two suitcases to which the charges relate, bag 667 and bag 670, were imported into Australia on 19 and 20 March 2017 respectively, on flights from Kuala Lumpur to Melbourne. When bag 670 was seized in Melbourne on 20 March 2017, it was found to contain 15.778 kilograms of pure heroin. Bag 667 was never recovered by law enforcement authorities. Based on what was submitted to be admissible circumstantial evidence, however, the prosecution claims that bag 667 contained the same quantity of heroin as bag 670.

8 Although, as we have said, bag 667 was not recovered, with respect to its asserted contents, Wannouch and Lee have been charged with importing a commercial quantity of heroin[2] (charges 1 and 4); and, in the alternative with attempting to import a marketable quantity of heroin (charges 2 and 5).[3] Wannouch is also charged with attempting to import a marketable quantity of heroin, relating to bag 670, which, as mentioned, contained 15.778 kilograms of the drug (charge 3).

9 The prosecution case is that, on 11 March 2017, Wannouch flew from Melbourne to Kuala Lumpur on flight MH148, arriving at Kuala Lumpur International Airport later that day. He did not have any luggage, save for a black 'Nike' carry bag which he took on board. Wannouch was scheduled to fly back on 14 March 2017, but did not board his flight.

10 On 14 March 2017, a further booking was made for Wannouch to depart Kuala Lumpur for Melbourne at 8.50 am on 19 March 2017, on flight MH129, with an onward flight to Perth on 20 March 2017.

11 At about 6.36 am on 19 March 2017, Wannouch checked in for flight MH129 from Kuala Lumpur to Melbourne. He checked in two suitcases - which he had not taken from Melbourne on 11 March 2017 - weighing a total of 18 kilograms. The suitcases were assigned the serial numbers 0232059659 ('bag 659') and 0232059660 ('bag 660').

12 On 15 March 2017, a booking was made for both Lee and Jackson Teo to depart Kuala Lumpur for Melbourne at 8.50 am on 19 March 2017, on flight MH129, arriving in Melbourne the same day. They were scheduled to return to Kuala Lumpur on 23 March 2017.

13 About 7.57 am on 19 March 2017, both Lee and Teo checked in for the same flight to Melbourne. They each checked in a suitcase weighing 28 kilograms. The bags were assigned serial numbers 0232063667 ('bag 667') and 0232063670 ('bag 670') respectively. CCTV footage shows that a third person - identified by Lee and Teo as 'Uncle' - wheeled the bags into the airport on a trolley and lined up by himself for check-in. A short time later, Lee and Teo attended and Uncle left the check-in queue. Lee and Teo then checked in the bags. As we have said, the prosecution alleges that both bag 667 and bag 670 contained a commercial quantity of a border control drug, heroin, when they were checked in on this day in Malaysia.

14 At 8.50 am, Lee, Teo and Wannouch departed Malaysia on flight MH129. The three sat apart from one another.

15 The flight arrived at Melbourne at 8.11 pm on 19 March 2017, and at 8.20 pm, Lee and Teo disembarked and proceeded along the arrivals concourse to passport control. Lee was in possession of a blue backpack and passport wallet, and Teo had a blue and brown backpack and shoulder slung satchel.

16 Wannouch was processed for arrival at 8.20 pm, and proceeded through to baggage collection. He was carrying a black 'Converse' backpack. At about 8.22 pm, he went to the baggage carousel and waited for luggage.

17 Around 8.26 pm, Lee and Teo were processed for arrival into Australia. Both stated on their Incoming Passenger Cards ('IPC') that they were sales executives. They stated their intended length of stay in Australia was five days and they would be staying at the Ibis Styles Kingsgate in Melbourne. Around 8.31 pm, Lee and Teo presented their IPC to Australian Border Force ('ABF') officers. At no point did they attempt to collect their checked luggage from the baggage carousels.

18 Lee and Teo were selected for baggage examination at about 8.32 pm. They were questioned by ABF officers. Lee's carried baggage contained basic clothing and toiletries, a 'Vivo' mobile phone and $4,000. Teo's carried baggage contained basic clothing and toiletries, a 'Leagoo' brand mobile phone, a 'Samsung Galaxy' mobile phone, travel documents and $4,000. They both told ABF officers that they did not have any checked in luggage. Both left Melbourne Airport on 20 March 2017 after being assessed by members of the Department of Immigration and Border Protection and Australian Federal Police ('AFP').

19 In a recorded conversation with ABF officers, Lee said that his occupation is sales executive; he intended to stay in Australia for five days; his friend, whom he calls 'Uncle', asked him to check in his bag, but he did not know it was in his name; he does not know where the bag he checked in now is; although the bag was checked in his name, he thought it was in Uncle's name; and he never thought about who was going to pick the bag up.

20 Teo told ABF officers that he sells phones; he intended to stay in Australia for five days; he won tickets to Australia in a lottery; 'Uncle' (not a relative) took him to the airport; he does not know Uncle's name; Uncle is a friend of his boss; he checked in one bag at the airport, but it was not his; the bag belonged to Uncle who sent him to the airport; Uncle asked him to use his name to check it in; he did not pick up the suitcase at Melbourne as Uncle called him and told him that he had taken the bag back from the airport; and he first met Uncle a few weeks ago.

21 At 8.41 pm Wannouch collected one black suitcase from baggage carousel one and checked the baggage tag attached. He was seen removing, replacing and checking various suitcases between 8.43 pm and 9.05 pm.

22 At 9.03 pm, ABF officers were told by Melbourne Airport baggage that both Lee and Teo had each checked in one suitcase weighing 28 kilograms whilst in Malaysia. Neither of these two suitcases could be located.

23 At 9.29 pm, Wannouch returned to baggage carousel one and collected a second black suitcase. Between 8.43 pm and 9.28 pm, he inspected a number of black suitcases from that carousel. During this time, he was using a mobile telephone and searching other baggage carousels, ostensibly for another suitcase.

24 At 9.30 pm, Wannouch left the Customs Arrivals Area into Terminal Two carrying the two black suitcases and his black Converse backpack. He walked around the area between Terminal Two and Terminal Three for approximately 15 minutes carrying both suitcases and the backpack.

25 At 9.46 pm, Wannouch met with an Asian male. Between 8.47 pm and 9.47 pm on 19 March 2017, he made and received 16 telephone calls to and from 'T'; and, at 9.48 pm, the Asian male took one black suitcase from Wannouch and walked from Terminal Two towards the Short Term Car Park. Wannouch then walked towards Terminal Four carrying only one black suitcase and his backpack. At about 9.56 pm, the Asian male departed the car park.

26 Wannouch remained at Melbourne Airport until approximately 10.16 pm. He placed one suitcase in the boot of a vehicle before leaving. He did not collect his checked-in suitcase, bag 660.

27 On 20 March 2017, bag 670, the black suitcase checked in by Teo on 19 March 2017 for flight MH129, arrived at Melbourne International Airport aboard flight MH149 as unaccompanied baggage. At 10.30 am, ABF officers conducted an x-ray examination of bag 670 and identified possible anomalies. ABF officers removed a brass padlock from the outside of the suitcase and opened it. They observed a large fabric sack and piece of cardboard. Inside the sack, ABF officers observed many rectangular packages wrapped in brown tape. The rectangular packages contained a compressed white substance, later found to be heroin.

28 On 20 March 2017, AFP members took possession of bag 670, containing the heroin; and on 19 and 20 March 2017, the following bags were seized:

• Wannouch's bag 660 was found unattended at Melbourne Airport on 19 March. It was a black, soft-sided, 'Swiss' brand suitcase, containing two bed quilts. The bag had no other contents and there were no locks on the outside.

• Wannouch's bag 659 bag was seized from the boot of a friend's car. It was a black, soft-sided, Swiss brand suitcase. His Nike bag was found inside, along with tea-towels and photo albums. There were no other contents.

29 Wannouch, Lee and Teo were arrested on 21 March 2017. Each was interviewed by investigating AFP officers.

• he is a hairdresser working for Damage Hair Salon;

• he stopped working for the company in November2016;

• someone he did not know from the company called him one week before the trip and told him that he won a lucky draw to come to Australia;

• planned to spend three to five days in Australia and did not have a return ticket;

• this was the first time boarding an airplane and he did not know the process;

• 'Uncle', a friend he has known for about a year, bought the tickets;

• Uncle asked him to help check in two black suitcases in Malaysia but he did not say what was inside them;

• he checked in the suitcases but was not aware that the suitcases were in his name;

• he saw and spoke with Uncle after checking in and was told by Uncle to board the flight;

• he was only aware that the bags were in his name when he was spoken to by Customs in Australia;

• was suspicious about this trip but did not speak to Teo about it until they were stopped in Australia, Teo saying 'don't think too much';

• he came to Australia with $4,000 given to him by Teo from the company as an advance he would have to repay if he used it; and

• Teo handled the money on the flight to Australia.

• about three weeks before leaving for Malaysia a friend called 'James' told him he could make $40,000 cash if he brought two suitcases back from Malaysia;

• he asked James whether there was going to be any drugs or firearms or anything illegal in the suitcases and James told him there would not be;

• James told him that the suitcases would contain 'a product of ours' - which is not drugs - but that if he gets caught he will get in trouble;

• in the week before leaving for Malaysia he met with a person he knows as 'T' to discuss the trip;

• two days before leaving for Malaysia, T gave him $2,000 spending money (in $50 notes) and a 'Huawei' mobile phone with a pre-subscribed SIM card to contact him on;

• he only took carry-on baggage to Malaysia, including a Converse backpack inside a Nike carry bag, with basic clothes and toiletries;

• when in Malaysia he met with a person he knows as 'Bobby' to organise his return travel to Melbourne;

• Bobby gave him two bags to check in at Malaysia, and told him there would be two identical bags with locks on them when he arrived in Melbourne;

• he opened the two bags he checked in at Malaysia and saw the contents were photo albums and sheets;

• Bobby instructed him to collect the two bags with locks and leave the ones that he checked in on the carousel when he arrived in Melbourne;

• when he arrived in Melbourne he could only find one of the bags with a lock;

• he called T and told him that he could only find one bag with a lock, and T told him to collect the one with the lock and one without;

• T told him to then go the coffee shop and hand over the bag with a lock to a guy who would know him; and

• on 21 March 2017, he contacted T asking for his reward.

32 On 12 April 2017, AFP officers deconstructed Teo's checked-in suitcase, bag 670 bag, which was also a black, soft-sided, Swiss brand suitcase. The heroin located within it was 75.2 per cent pure, the net weight of pure heroin being 15.778 kilograms.

33 Counsel for Lee submitted to the trial judge that the prosecution case is founded upon supposition. Lee is charged solely with bringing in a commercial quantity of heroin in bag 667. Critically, he is not said to be acting in combination with either Wannouch or Teo in connection with the other bag, bag 670. There is, counsel submitted, no evidence of what was inside bag 667. The prosecution case therefore requires the jury to guess as to the contents of bag 667, utilising the contents of bag 670. Such 'reasoning' is impermissible.

34 The prosecutor submitted that although Lee is only charged in relation to bag 667 - the bag which was never recovered - the evidence concerning bag 670 goes to a fact in issue in Lee's case, and is therefore relevant and admissible. Despite there being no direct evidence of what was inside bag 667, bag 670 contained 15.778 kilograms of heroin. Both bags were the same weight, so that the jury could rationally infer that bag 667 contained the same amount of heroin as bag 670. The evidence concerning bag 670 is a piece of circumstantial evidence, from which - together with other pieces of circumstantial evidence - the jury could infer the existence of a fact in issue. This inference is the only reasonable inference which can be drawn from the circumstantial evidence. The jury has to consider all of the evidence.

35 Bag 670, the prosecutor submitted, is relevant to bag 667 as follows. Wannouch, Lee and Teo travelled on the same flight to Melbourne. Wannouch checked in two suitcases, bag 659 and bag 660, the total weight of these two bags being 18 kilograms. Lee and Teo each checked in one suitcase, Lee checking in bag 667, and Teo bag 670. Bag 667 and bag 670 were taken to the check in queue in Kuala Lumpur by 'Uncle' on one trolley. Uncle left, and Lee and Teo waited with the trolley to check in. Lee and Teo both checked in one bag from the trolley, each bag weighing the same, 28 kilograms. They travelled together, although they sat apart. Lee and Teo made no attempt to collect their checked-in luggage upon arrival at Melbourne. Wannouch collected two suitcases. He exited Customs with two suitcases, met an unknown man and then left the airport with only one suitcase. Wannouch's bag 660 was seized from the boot of his friend's car. It contained no drugs. His unclaimed bag 659 was seized from the airport. It contained no drugs. Teo's bag 670 was seized from the airport, it having missed his flight. Bag 670 contained 15.778 kilograms of pure heroin. It was visually identical to Wannouch's bags 659 and 660, being the same colour, brand and model. Lee and Teo stayed together while in Melbourne before their arrest.

36 Taking the evidence as a whole, the prosecutor submitted, an inference could be drawn that a commercial quantity of a border controlled drug, heroin, was imported into Australia (charge 4); or, alternatively, that the quantity imported would have been at least a marketable quantity (charge 5).

37 In his ruling with respect to Lee, the judge said (among other things):[4]

[18] [Defence counsel], who appears on behalf of Mr Lee, objects to the heroin evidence being adduced in the case against Mr Lee. Initially, [defence counsel] made application for a separate trial from Mr Teo and Mr Wannouch. I considered that the issue was more appropriately articulated by [the prosecutor] - in reality, [defence counsel] objects to the admissibility of the heroin evidence against Mr Lee. I have treated [defence counsel's] application as having proceeded on that basis.

[19] [The prosecutor] submitted that notwithstanding the Crown's separation of cases between Lee and Teo, the evidence of the two men's departure from Kuala Lumpur, arrival in Melbourne and the heroin evidence all formed part of the circumstantial case against Mr Lee. In his written outline of submissions, [the prosecutor] set out the 12 circumstances which, the Commonwealth submits, may be used to establish the presence of [heroin in] Mr Lee's missing bag and from which the jury may infer his guilt for either the importation of a commercial quantity of a border controlled drug or his attempt to import a marketable quantity of a border controlled drug.

[20] [The prosecutor] submitted that even if the jury was not satisfied to the requisite standard on the importation charge, the jury may be satisfied that Mr Lee attempted to import the lesser, marketable quantity of [heroin]. This, he submitted, flowed from the inferences that a jury ought to draw from the whole of Mr Lee's conduct in checking in an identical bag to that checked in by Mr Teo, travelling to Australia with Mr Teo and, like Mr Teo, making no attempt to collect the checked in luggage upon arrival in Melbourne.

[21] Before turning to the analysis, it is necessary to say something about the legal principles.

...

[22] Under section 55 [of the] Evidence Act (Cth),[[5]] the evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding.

[23] Section 55 allows the admission of circumstantial evidence. Although it tends to prove the existence of a fact that is not a fact in issue, it is evidence from which an inference regarding the existence of a fact in issue in the proceedings is sought to be drawn. In this way, it is evidence which may indirectly affect the assessment of the probability of the existence of a fact in issue.

[24] Where the Crown relies on circumstantial evidence, then to find an accused guilty, the guilt must not be simply a reasonable inference, but the only reasonable inference which can be drawn from the circumstances established by the evidence.

[25] It is worth remembering that an inference is a process of arriving at a fact or conclusion by reasoning and not by speculation.

[26] For the charges, the salient facts in issue are whether the Crown can prove that bag 667 contained a border controlled drug, and then prove the threshold quantity of that drug.

[27] The Crown asks the jury to infer this (that is to say, to reach this conclusion) as a matter of deduction from, inter alia, the following pieces of circumstantial evidence:

• bag 670 contained 15kg heroin;
• both bag 667 and 670 weighed approximately 28 kg;
• both Lee and Teo checked in together, met at the Melbourne Airport Arrival Terminal and stayed together in Melbourne until they were arrested.

[28] The Crown does not to go so far as to say they were part of a single venture together.

[29] Whilst each of the matters relied on above may be incontrovertible on the evidence, the question remains: do the circumstances alleged enable the conclusion to be drawn that bag 667 contained a border controlled drug?

[30] In my view, the evidence of the contents of bag 670 should not be permitted to be adduced as part of the circumstantial evidence in the case against Mr Lee.

[31] In the first place, I do not consider that this evidence sought to be adduced in proof of the charge of importation against Mr Teo can be properly admitted in the separate case alleged against Mr Lee. It is not alleged that the pair were co-offenders in the sense that they were together complicit in a single venture, each playing a part but otherwise acting with understanding, awareness/appreciation, intention and encouragement towards a single overall object. Rather, it is alleged that Mr Lee carried out his intended actions in respect to bag 667, and Mr Teo carried out his intended actions in respect to bag 670. So, although there is some commonality of factors between the two, especially as to time, place and proximity, the Crown otherwise seeks to separate their liability. Put another way, the aspect in common between the two accused are the overt aspects of their conduct - those observed by other people or CCTV footage.

[32] A critical aspect of this separation of liability is that the Crown does not allege that the accused together had a commonality of understanding, awareness/appreciation, intention and/or encouragement in respect to the contents of each other's bags. Putting this another way, the Crown does not allege a commonality of understanding, awareness/appreciation, intention and/or encouragement with respect to what cannot be seen - the contents of each other's bags.

[33] Once the cases against each accused are separated, and once it is accepted that there is not and cannot be a commonality in respect to the evidence in respect to these critical matters, it must be inevitably concluded that it is impossible to permit the heroin evidence to be adduced in the case against Mr Lee.

[34] In my view there is a second independent reason why the heroin evidence should not be adduced in the case against Mr Lee.

[35] Even if the evidence were admitted as a circumstance in the case against Mr Lee, I do not consider that it, together with the other circumstances, can establish the fact that bag 667 contained heroin, or any border controlled drug.

[36] The process of reasoning the Crown invites the jury to undertake is this: that the men each took a bag from the trolley, they each checked in a bag and both arrived on the same flight from Kuala Lumpur to Melbourne. Neither made an attempt to retrieve the bag they had checked in. Bag 670 contained heroin. From these facts the jury ought to conclude that bag 667 contained heroin (or at least, contained a border controlled drug of a certain quantity).

[37] As I have now stated a couple of times, there is no evidence about the contents of bag 667. It was a bag of a known weight, colour and dimensions. But its contents remain entirely unknown. It may seem also that Mr Lee's conduct appropriately alerted the suspicions of the ABF members and the AFP.

[38] However it comes down to this: the assertion, or even the proved evidence that bag 670 contained heroin does not fill the acknowledged gap in the evidence in relation to the contents of bag 667. In other words, to state that there was heroin in one bag (670) does not establish the presence of heroin, or any border controlled drug in the other bag (667). This does not change, whether the evidence is considered alone, or in conjunction with the other pieces of circumstantial evidence. There is a gap in the direct evidence and all of the circumstantial evidence cannot fill the gap.

[39] The gap may be illustrated by simple examples: Lee's bag was used as a blind (i.e. same weight but filled with innocent items), or it contained other illicit items such as identity documents, but not border controlled drugs. Whilst such examples may be criticised for engaging in speculation, they serve to illustrate that one can only guess what was in the bag, as no one who carries the burden of proof knows what it actually contained. From this, it flows that it is not an inference reached by deductive reasoning to conclude that bag 667 contained heroin; but a guess, or speculation.

[40] For all of these reasons, I conclude that the heroin evidence is inadmissible in the case against Mr Lee.

38 Following delivery of the ruling in Lee's case, counsel for Wannouch submitted to the trial judge that 'for the reasons articulated in that ruling, that the evidence of the contents of bag 670 is similarly inadmissible in the trial of Mr Wannouch in seeking to prove that bag 667 would have contained a border controlled drug'.

39 His Honour's ruling with respect to Wannouch was brief and to the point, and included the following:

[4] Consequent on the Lee Ruling, [counsel] on behalf of Mr Wannouch submits that the evidence of the contents of bag 670 is similarly inadmissible in the trial of Wannouch in seeking to prove that bag 667 would have contained a border controlled drug.

[5] In oral submissions before me, [the prosecutor] ... submitted that there are two differences in the case between Mr Lee and Mr Wannouch:

• first, Mr Wannouch is charged with offending in relation to both bag 670 and bag 667; and
• Mr Wannouch made certain admissions in his record of interview.

[6] However, as [counsel for Wannouch] submitted, there is no evidence in the Crown case, as I understand it, that Mr Wannouch handled or examined the contents of missing bag 667.

[7] In the circumstances, I refer to and repeat my reasons contained in the Lee ruling. I particularly refer to paragraphs 35-40 of that ruling.

[8] In the circumstances, I consider that the heroin evidence is inadmissible in the trial of Mr Wannouch to prove that bag 667 would have contained a border controlled drug.

The grounds of appeal and applicant's submissions

40 In relation to the rulings concerning Lee and Wannouch, the Director seeks to agitate the following grounds, common to both applications:

1. The learned trial judge erred in deciding that the evidence of the contents of bag 670, which had been checked in by Jackson Teo at Kuala Lumpur Airport, and which contained 15.7 kilograms of pure heroin ('the heroin evidence'), was inadmissible in the prosecution case against the Respondent.
2. The learned trial judge erred in deciding that the conclusion could not be drawn that bag 667, which had been checked in by Shi Yuan Lee at Kuala Lumpur Airport, and which has never been recovered, contained a border controlled drug.
3. The learned trial judge erred in deciding that the heroin evidence should not be adduced by the prosecution in evidence in the prosecution case against the Respondent.
4. The learned trial judge erred in deciding that the admission of the heroin evidence against the Respondent could not, together with the evidence of other circumstances, establish or prove the fact that bag 667 contained a border controlled drug.

41 Counsel for the applicant submitted that the relevant fact in issue in the proceedings is whether bag 667 contained heroin. The evidence that bag 670 contained 15.778 kilograms of heroin is relevant to that fact in issue and is therefore admissible. Evidence that bag 670 contained heroin is a piece of circumstantial evidence from which, together with other pieces of circumstantial evidence, the jury could infer the existence of that fact in issue. It was submitted that the evidence that bag 670 contained heroin was reasonably capable of rationally affecting the assessment of the probability that bag 667 also contained heroin, thereby rendering the fact that bag 667 (also) contained heroin more probable than it would be in the absence of the evidence that bag 670 contained heroin.

• Lee, Wannouch and Teo travelled on the same flight, one booking (including return flights) having been made for Lee and Teo;

• Lee and Teo each checked in one suitcase (bag 667 and bag 770 respectively), both weighing 28 kilograms;

• 'Uncle' took both bag 667 and bag 670 to the airport on one trolley;

• Lee and Teo waited with the trolley to check in after Uncle left;

• Lee and Teo made no attempt to collect the luggage on arrival in Melbourne;

• CCTV footage at Melbourne Airport shows Wannouch collecting two suitcases, exiting Customs with two suitcases, meeting an unknown man and then later leaving the airport with only one suitcase;

• Wannouch's bag 659 and bag 660 were both recovered with no drugs inside them;

• Teo's bag 670 - which had missed the flight - when subsequently seized contained 15.778 kilograms of heroin (in 60 blocks of white powder);

• Teo's bag 670 (save for a padlock) was identical to Wannouch's bag 659 and bag 660; and

• Lee and Teo stayed together in Melbourne until their arrest.

43 The applicant further submitted that Wannouch's alleged conduct in searching extensively for two bags other than those he had checked in at Kuala Lumpur was significant to relevance and admissibility as follows:

• it could be concluded that, he having checked them in, Wannouch was aware of the contents of bag 659 and bag 660;

• at Melbourne Airport, Wannouch searched 'extensively' and 'desperately' for two bags, discarding bag 659;

• Wannouch did not wish or intend to collect bag 659 or bag 660, instead searching for two bags which it can be inferred he believed to be of 'much value';

• neither Lee nor Teo sought to collect the bags that they had checked in, bag 667 and bag 670, expecting that someone else would do so;

• it can be inferred that Wannouch was searching for bag 667 and bag 670, intending to collect and remove them, but bag 670 - which contained heroin - could not be collected because it had missed the flight;

• Wannouch collected and removed bags 667 and 660 from the baggage carousel; and

• given that bag 670 contained a large quantity of heroin of substantial value, it can be inferred that bag 667 also contained a large quantity of heroin of substantial value.

44 Lee's counsel submitted that, in assessing the probative value of the evidence concerning bag 670, the judge appreciated that the evidence was not to be looked at in isolation, but as a component of a circumstantial case. The judge had to undertake consideration of the relevance of the bag 670 evidence, however, in circumstances where the prosecution had deliberately eschewed reliance on joint commission, or on coincidence reasoning. Given that the judge came to the view that the impugned evidence could only be used to support the prosecution's cases by resort to speculation, so counsel submitted, he was bound to exclude the evidence. Further, had the judge come to the view that the impugned evidence could only obtain probative value by resort to complicity reasoning, in circumstances where such reasoning had been eschewed by the prosecution, he would have been bound to exclude the evidence.

45 Counsel for Lee further contended that whilst much was (and is) attempted to be made of the common characteristics of bags 659, 660, 667, and 670, the fact remains that only with respect to one bag, bag 670, was there direct evidence that its contents were heroin. That is in circumstances where a deliberate decision had been made by the prosecution to assign separate criminal liability to Lee and Teo as between bags 667 and 670. And whilst much is made of Wannouch's attempt to locate additional bags at Melbourne, the fact remains that he retained possession of bag 660, there being no evidence that bag 660 contained heroin. In all of these circumstances, counsel submitted, to permit a jury to proceed on the basis that the presence of heroin in bag 670 could assist in drawing an inference that bag 667 must also have contained heroin, would be to permit resort to speculation or some other form of illegitimate reasoning.

46 Wannouch's counsel submitted that the prosecution's argument does not get any higher than this: because there was heroin in one bag, then there would have been heroin in the other.

47 Counsel for Wannouch submitted that insofar as the judge formed the view that the evidence was not capable of supporting an inference reached by deductive reasoning, but that to arrive at the conclusion contended for by the prosecution would require guesswork or speculation, the trial judge was correct. There is no rational or logical process of reasoning, counsel argued, by which the inference could be drawn that bag 667 contained heroin, or any other border controlled drug.

48 With respect to the applicant's contentions that Wannouch's conduct in searching for two bags other than the two he had checked in demonstrates that the contents of bag 667 was of much value, so that it can therefore be inferred that bag 667 contained heroin, counsel for Wannouch submitted that the link between these points cannot be sustained on any rational or logical basis. At best, counsel submitted, the evidence may be capable of rationally supporting an inference that bag 667 was connected to bag 670, that it was part of the same criminal plan, and that Wannouch believed that it was important that he collect bag 667 as part of that plan.

49 By virtue of s 55(1) of the Evidence Act 2008 ('the Act'), evidence is relevant in a proceeding if, were it accepted, the evidence 'could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding'. And by virtue of s 56(1), relevant evidence is admissible (except as otherwise provided by the Act).

50 A fact in issue is one that bears on an element (or elements) of a charged offence. As to that, it was observed in Murdoch:[6]

The expression 'fact in issue', found in s 55(1), is not defined in the Act. But it may safely be concluded that, in a criminal case, the ultimate issue will be the existence of one or more of the elements of an offence. Facts in issue in the proceeding will be those bearing on the existence of those elements, and behind those will potentially be many facts relevant to those facts in issue.[7]

51 Reduced to its bare essence, the principal fact in issue that the prosecution in this case seeks to be prove is that bag 667 contained heroin. Thus, to be relevant and admissible, the evidence that bag 670 itself contained heroin must - when considered with the other evidence - have the capacity rationally to affect the probability of the asserted fact that bag 667 contained heroin. Put another way, the impugned evidence must be capable of rationally founding an inference that bag 667 contained heroin.

52 As was recognised in Paulino (and the cases there cited), a decision as to whether evidence has the capacity rationally to affect the assessment of a fact in issue is an exercise in logic:[8]

In Wise, the Court observed that determining whether a piece of evidence has the capacity to 'rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue' involves an exercise in logic.[9] In other words, in order for evidence to be relevant, it must render a fact in issue more probable than it would be without the evidence. As Gleeson CJ, Heydon and Crennan JJ said in Washer:

... Relevance depends upon whether the evidence could rationally affect, directly or indirectly, the assessment of the probability of the existence of a fact in issue in the proceedings.[10] That can be determined only by an analysis of the facts in issue in the proceedings, and the circumstances which bear upon the question of probability. It also requires consideration of the process of reasoning by which information as to the fact of the acquittal could rationally affect the assessment of the probabilities. The word 'rationally' is significant in this context. In order to establish relevance, it is necessary to point to a process of reasoning by which the information in question could affect the jury's assessment of the probability of the existence of a fact in issue at the trial.[11]

In context, s 55(1) of the Evidence Act directs attention to whether the disputed evidence, 'if it were accepted'[12] by the jury, 'could' - not 'would' - 'rationally affect' the assessment of the probability of the existence of a fact in issue. As was pointed out in Washer, the adverb 'rationally' is significant. Thus, there must be a logical connection between the evidence and the fact in issue. If a trial judge is satisfied that a reasonable jury could find such a logical connection, then he or she must determine the evidence to be relevant. Although questions of relevance may raise nice questions of judgment, no discretion falls to be exercised.[13] Therefore, ambiguity or apparent inconsistency is not a sufficient reason to reject evidence in a criminal trial.[14] Moreover, in judging relevance, the contested evidence must not be looked at in isolation.[15] As Heydon J observed in Evans:[16]

... The relevance of evidence does not depend on its capacity by itself to prove the prosecution case on a particular issue, or to raise a reasonable doubt in favour of the defence on that issue. The effect on assessing probability which is to be looked for is the effect of the contested evidence taken with other evidence either admitted by the time the controversial evidence is tendered, or to be called.

53 When determining its relevance, the evidence that bag 670 contained heroin cannot be looked at in isolation. For it to have any relevance, however, there must be a logical connection between the evidence that bag 670 contained heroin and the fact sought to be proven; that is, that bag 667 also contained heroin. The inquiry must be whether that evidence, taken with all the other evidence upon which the prosecution relies, could rationally found an inference that bag 667 contained heroin.

54 In ruling that the impugned evidence was not relevant, the trial judge held that to show that there was heroin in one suitcase, bag 670, does not establish the presence of heroin (or any border controlled drug) in the other suitcase, bag 667. His Honour said that this 'does not change, whether the evidence is considered alone, or in conjunction with the other pieces of circumstantial evidence', since there is 'a gap in the direct evidence and all of the circumstantial evidence cannot fill the gap'. Ultimately, the judge said that from this 'it flows that it is not an inference reached by deductive reasoning to conclude that bag 667 contained heroin', but rather 'a guess' or 'speculation'.[17]

55 In our view, the judge's ultimate conclusion is correct.

56 The difference between permissible inference and conjecture or speculation was discussed by Spigelman CJ in Seltsam Pty Ltd v McGuiness:[18]

It is often difficult to distinguish between permissible inference and conjecture. Characterisation of a reasoning process as one or the other occurs on a continuum in which there is no bright line division. Nevertheless, the distinction exists.

Lord Macmillan in Jones v Great Western Railway Co (1930) 144 LT 194, in the context of stating that a possibility that a negligent act caused injury was not enough, said (at 202):

The dividing line between conjecture and inference is often a very difficult one to draw. A conjecture may be plausible, but is of no legal value, for its essence is that it is a mere guess. An inference in the legal sense, on the other hand, is a deduction from the evidence, and if it is a reasonable deduction it may have the validity of legal proof. The attribution of an occurrence to a cause is, I take it, always a matter of inference.

After referring to this passage, Sir Frederick Jordan in Carr v Baker [1936] NSWStRp 20; (1936) 36 SR (NSW) 301 at 306 said:

The existence of a fact may be inferred from other facts when those facts make it reasonably probable that it exists; if they go no further than to show that it is possible that it may exist, then its existence does not go beyond mere conjecture. Conjecture may range from the barely possible to the quite possible.

As Lord Wright put it in a frequently cited passage in Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 169-170:

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

The test is whether, on the basis of the primary facts, it is reasonable to draw the inference: see, eg, Luxton v Vines [1952] HCA 19; (1952) 85 CLR 352 at 358.

57 At the risk of repetition, in order for it to be relevant, the evidence concerning bag 670 must be capable of rationally affecting the assessment of the probability of the existence of the critical fact in issue. In other words, the evidence that bag 670 contained heroin - taken with other evidence - must be capable of rationally founding the inference that bag 667 contained heroin. Inference is the product of logical deduction rather than the product of speculation. It is a process of reasoning by which, as a matter of logic, a fact in issue may be deduced from other facts established by the evidence. As was said in another context, for an inference to be reasonable, it 'must rest upon something more than mere conjecture'.[19] For the prosecution to establish relevance, therefore, it is necessary that the prosecution be able to point to a process of reasoning by which the evidence in question could affect the jury's assessment of the probability of the existence of the relevant fact in issue.

58 Quite obviously, given the evidence concerning bag 670, a high level of suspicion attaches to bag 667 and its contents. Indeed, the suggestion that bag 667 probably contained heroin is seductively credible, even if only superficially so. Taken alone or in combination with the other evidence, however, we consider that the impugned evidence is incapable of rationally founding an inference that bag 667 contained heroin. The assertion that the contents of bag 667 were heroin is a very plausible conjecture, but we consider that in its essence it amounts to no more than mere guesswork or surmise.[20]

59 As we have endeavoured to convey, drawing an inference involves a process of reasoning by which a factual conclusion is deduced logically from facts established by the evidence. It is to be contrasted with speculation, guesswork or conjecture, which involves reaching a conclusion despite there there being a gap or deficiency in the evidence. Unlike inferential reasoning, speculation involves reaching a conclusion without sufficient evidence. For the evidence surrounding bag 670 to be relevant (and therefore admissible), it must be capable of rationally founding an inference that bag 667 contained heroin. Taking the evidence as a whole, we consider that it is incapable of doing so.

60 Once more risking repetition, we have reached that conclusion after considering all of the circumstantial evidence. Before the evidence of the contents of bag 670 may be considered collectively with other pieces of evidence, it must have some capacity rationally to affect the assessment of a fact in issue. As was observed in Paulino:[21]

As a matter of common experience, often a piece of circumstantial evidence will have little probative value on its own, but, when considered with other pieces of circumstantial evidence (themselves perhaps flimsy if viewed in isolation), will support a compelling inference of fact. It needs to be borne steadily in mind, however, that before a strand of circumstantial evidence may be considered collectively with other strands, it must have some capacity rationally to affect the assessment of a fact in issue. If a strand does not have that capacity, it is irrelevant. And, as a matter of logic, if a strand of evidence is incapable of going in proof of a fact in issue, it does not become clothed in a mantle of relevance simply because it is conjoined to other strands of irrelevant evidence.

61 For the foregoing reasons, we consider that the judge's rulings were correct.

62 The applications for leave to appeal the interlocutory decisions delivered on 25 October and 30 October 2018 must therefore be refused.

[1] His Honour also purported to grant certification under s 295(3)(b). Subsection (3)(b) only applies, however, 'if the interlocutory decision does not concern the admissibility of evidence'. Plainly, the two rulings concern the admissibility of evidence.

[2] A commercial quantity is 1.5 kilograms. See Criminal Code Regulations 2002 (Cth), Schedule 4 (Item 95, Column 2) (now repealed). See now Criminal Code Regulations 2019 (Cth), Schedule 2 (Item 98).

[3] A marketable quantity is two grams. See Criminal Code Regulations 2002 (Cth), Schedule 4 (Item 95, Column 3) (now repealed). See now Criminal Code Regulations 2019 (Cth), Schedule 2 (Item 98).

[5] In fact, s 55 of the Evidence Act 2008 (Vic) applied, rather than s 55 of the Evidence Act 1995 (Cth). Section 4 of the Evidence Act 2008 (Vic) provides that it applies to 'all proceedings in a Victorian court'. Thus, by reason of the definition of Victorian Court in the Dictionary, it applies to proceedings in the Supreme Court of Victoria, and any other court created by the Victorian Parliament (including such a court exercising federal jurisdiction) and 'any person or body that in exercising a function under the law of the State, is required to apply the laws of evidence'. See also s 79 of the Judiciary Act 1903 (Cth).

[6] Murdoch (a Pseudonym) v The Queen [2013] VSCA 272; (2013) 40 VR 451, 461 [76] (Priest JA) (citations as in reported version).

[7] Smith v The Queen [2001] HCA 50; (2001) 206 CLR 650, 654 [7] per Gleeson CJ, Gaudron, Gummow and Hayne JJ.

[8] DPP v Paulino (2017) 54 VR 109, 124-5 [66]-[67] (Priest JA) ('Paulino').

[9] [DPP v Wise (a Pseudonym) [2016] VSCA 173], [68]].

[10] Goldsmith v Sandilands [2002] HCA 31; (2002) 76 ALJR 1024 at 1025 [2]; [2002] HCA 31; 190 ALR 370 at 371. The definition of relevance is taken from the Evidence Act 1995 (Cth), s 55. That legislation does not govern the present case, but the definition reflects the common law.

[11] Washer v Western Australia (2007) 234 CLR 492, 498 [5].

[12] See Adam v The Queen (2001) 207 CLR 96, 105 [22] (Gleeson CJ, McHugh, Kirby and Hayne JJ).

[13] Smith v The Queen [2001] HCA 50; (2001) 206 CLR 650, 653 [6] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).

[14] R v XY [2010] NSWCCA 181; (2010) 79 NSWLR 629, 646 [90] (Whealy J); Louizos v The Queen [2009] NSWCCA 71; (2009) 194 A Crim R 223, 230 [31] (Howie J).

[15] [Bayley v The Queen [2016] VSCA 160], [130]-[131]].

[16] Evans v The Queen [2007] HCA 59; (2007) 235 CLR 521, 568 [177].

[18] (2000) 49 NSWLR 262, 275-6 [84]-[88].

[19] Peacock v The King [1911] HCA 66; (1911) 13 CLR 619, 661; Barca v The Queen ([1975] HCA 42; 1975) 133 CLR 82, 104.

[20] See Jones v Great Western Railway Co (1931) 144 LT 194, 202; [1930] All ER Ext 830, 842 (Lord Macmillan) and [56] above.

[21] Paulino, 131 [97] (Priest JA).