Chow v R

[2007] NSWCCA 225

Reported Decision: 172 A Crim R 582

New South Wales

Court of Criminal Appeal

CITATION:	Chow v R [2007] NSWCCA 225
HEARING DATE(S):	9 July 2007
JUDGMENT DATE:	2 August 2007
JUDGMENT OF:	Tobias JA; Latham J; Mathews AJ
DECISION:	(a) Appeal against conviction dismissed; (b) Grant leave to appeal against sentence.; (c) Appeal against sentence dismissed
CATCHWORDS:	CRIMINAL LAW – APPEAL AGAINST CONVICTION – Whether jury verdict unreasonable, or cannot be supported– Criminal Appeal Act 1912 s 6(1) – Use of opinion evidence regarding meaning of allegedly coded language in conversations between co-accused – APPEAL AGAINST SENTENCE – Nature of role of appellant in drug transaction relative to that of co-offender – Whether sentencing manifestly excessive
LEGISLATION CITED:	Crimes (Sentencing Procedure) Act 1999 Criminal Appeal Act 1912 Evidence Act 1995
CASES CITED:	Jones v The Queen (1997) 191 CLR 439 Keller v Regina [2006] NSWCCA 204 MFA v The Queen (2002) 213 CLR 606; [2002] HCA 53 M v The Queen (1994) 181 CLR 487 R v David & Gugea (unreported, NSW CCA, 10 October 1995
PARTIES:	Mervyn Man Wah Chow Regina
FILE NUMBER(S):	CCA 2007/485
COUNSEL:	A: L McSpedden R: T Thorpe
SOLICITORS:	A: P M Murphy R: S Kavanagh
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 2005/11/0906
LOWER COURT JUDICIAL OFFICER:	Keleman DCJ
LOWER COURT DATE OF DECISION:	20 February 2006

CCA 2007/485
DC 2005/11/0906

TOBIAS JA
LATHAM J
MATHEWS AJ

2 August 2007

MERVYN MAN WAH CHOW v REGINA

Judgment

1 THE COURT: On 20 February 2006 the appellant was indicted on one count before his Honour Judge Keleman and a jury of 12 in the District Court. He pleaded not guilty to the charge that:

“between 1 May 2000 and 25 June 2000 at Sydney, in the State of New South Wales, and elsewhere, [he] did knowingly take part in the supply of a prohibited drug, namely, heroin, in an amount of 3.5 kilograms, which is not less than a large commercial quantity of that drug.”

2 The trial proceeded from 20 February 2006 to 1 March 2006 on which date the jury returned a verdict of guilty. On 13 April 2006 the appellant was sentenced to imprisonment for a term of 11 years commencing 7 June 2005 with a non-parole period of eight years and three months expiring on 6 September 2013.

3 The appellant appeals against his conviction and seeks the leave of this Court to appeal against the alleged severity of his sentence. The sole ground of appeal with respect to his conviction was that the verdict of the jury was unsafe and unsatisfactory. The two grounds of appeal with respect to the sentence were first, that the trial judge erred in finding that the appellant’s role in the drug transaction was below that of a principal but higher than that of his co-offender and second, that the sentence was manifestly excessive.

Summary of the Crown case

4 The Crown case against the appellant was primarily based upon a number of intercepted and recorded mobile telephone conversations over the period 16 May 2000 to 24 June 2000 between the appellant who was in Hong Kong and one Tony Micalizzi (Micalizzi) who was in Sydney.

5 It was alleged that during the course of these telephone conversations, the appellant on behalf of an unknown principal or principals negotiated with Micalizzi the quantity and price of the heroin and caused arrangements to be set up for its supply and for the transfer of at least part payment for the drug to certain bank accounts. The heroin was supplied by one Vincent Fung (Fung) to Micalizzi in the City on 24 June 2000.

6 On that day at approximately 3pm, officers of the Australian Federal Police were conducting surveillance in the vicinity of Pitt and Liverpool Streets, Sydney. They saw a vehicle pull up at Liverpool Street and park. Micalizzi and one Gary Lammas (Lammas) were observed in the vehicle, the former on his mobile phone. Micalizzi and Lammas then left their vehicle and walked down Liverpool Street towards George Street. They then separated and shortly after Micalizzi met Fung whereupon they proceeded to Fung’s vehicle, entered it and drove to Pitt Street, Haymarket. Micalizzi then got out of Fung’s vehicle carrying a black and brown backpack over his right shoulder and proceeded back to Liverpool Street. He then re-entered the vehicle in which Lammas had remained and drove away. Within a short distance they were stopped by the police, the vehicle was searched and the backpack was found to contain five packages of heroin. Both Micalizzi and Lammas were then arrested.

7 As noted, the Crown case against the appellant was based essentially upon a number of recorded telephone conversations between him and Micalizzi. These conversations were allegedly in code and the Crown relied on the expert evidence of an Australian Federal Police officer, Gail McClure (Agent McClure) as to the possible meaning of those conversations. Accordingly, the Crown relied heavily on Agent McClure’s evidence as to the interpretation to be placed upon the conversations insofar as they were consistent with coded discussions as to the proposed drug supply. Although there was other circumstantial evidence, of itself it would not have been sufficient to result in the appellant’s conviction.

8 The circumstantial evidence included the following exhibits. First, a facsimile dated 10 June 2001 found in the pocket of the co-accused Micalizzi referring to three bank accounts with numbers placed in squares next to each account. One of the accounts was a Hong Kong account which the appellant had previously used for transferring money to Australia. The second was an Australian account in the name of a horse trainer, Albert Stapleford (Stapleford) and his wife and the third was in the name of a Mrs Wong who, when interviewed, said she did not know the appellant.

9 The Crown alleged that the facsimile set up a mechanism that would enable Micalizzi to arrange for the transfer of money to the three nominated accounts in the sums specified in the square boxes.

10 Other documentation was found on a search of Micalizzi’s residence including a TAB receipt and some business cards with the name “Merv” or “Mervyn” written on the back of them together with an overseas number with the prefix “0011”.

The intercepted telephone calls

11 Twenty-two intercepted telephone calls were relied upon by the Crown of which all but four were between the appellant and Micalizzi. A transcript of each of the calls was admitted into evidence and became Exhibits D1-D22 inclusive. The Crown relied in particular upon the calls represented by Exhibits D2, D3, D7, D8, D12 and D21 being those involving the appellant in conversations with Micalizzi using code for drug terms. The Crown therefore sought to tender expert evidence from Agent McClure contained in two statements made by her on 23 May 2002 and 12 November 2002. In the former she expressed the opinion as to the interpretation of the various intercepted telephone conversations between the appellant and Micalizzi to establish the use of code language with respect to negotiations for the supply of heroin and the terms and conditions for payment of same.

12 It was common ground that it was crucial for the Crown to prove that the relevant conversations between the appellant and Micalizzi were in fact coded arrangements for the supply of heroin.

13 Objection was initially taken on behalf of the appellant to the admissibility of Agent McClure’s statements on the basis of her lack of expertise. Accordingly, a voir dire examination was embarked upon which resulted in a number of amendments to her statement of 23 May 2002 in which she had opined that a certain word or expression used in a particular conversation “was” a coded reference to various aspects of a drug transaction such as quantity, type of drug and price. The amendment deleted the word “was” and substituted the words “could be”.

14 Upon the basis that Agent McClure’s statement was so amended, at the conclusion of the voir dire the appellant’s trial counsel abandoned his objection to Agent McClure’s alleged lack of expertise and to her giving evidence in terms of her amended statement. Thereafter she gave that evidence during the course of the trial without further objection.

15 As will appear, Agent McClure was nevertheless cross-examined at trial in an effort to undermine the extent of her experience in interpreting the relevant telephone conversations. She was also cross-examined to suggest that the words and expressions which in her opinion could be code for a drug transaction were also consistent with another rational inference or possible explanation. It was thus put to Agent McClure in cross-examination and to the jury in address that in the recorded conversations the appellant and Micalizzi were not using coded references to drugs but were using words in their ordinary normal meaning with respect to perfectly innocent topics such as women, furniture and the known mutual interest of the participants in the conversation in horseracing and betting.

16 Thus towards the end of Agent McClure’s examination-in-chief the trial judge put to the then counsel for the appellant that his position essentially was that what the Crown asserted to be coded references in the telephone calls were not references to drugs but normal words used in their ordinary meaning relating to racing and betting, a proposition with which counsel agreed. Ultimately, and relevantly to his appeal, the submission was made to the jury on behalf of the appellant that it should discount Agent McClure’s evidence and give it scant, if any, weight. It was put to the jury that if they acceded to that submission they could not be satisfied beyond reasonable doubt of the appellant’s guilt.

17 By its guilty verdict it is apparent that the jury did not accede to this submission. The essential basis of the appellant’s appeal, therefore, was that the jury should have accepted the submission and that its failure to do so rendered its verdict unsafe or unsatisfactory.

The critical conversations

18 Exhibit D2 was a transcript of a conversation on 19 May 2000 at 6.15pm. The following part of that conversation was relied upon, M1 being the appellant, M2 being Micalizzi:

“M1: Yeah. And the other thing, before you come to see me I want to just my – a few word, right.
M2: Yeah.
M1: You – you – you know the girl you take out, the uh six [sic] dollars per hour one?
M2: Yeah, yeah.
M1: Can you - can you u h uh – can you uh – can you take – take the girl out for two weeks and fix ten girls out and fix it in about two or three weeks? Can you do that? You can’t do that?
M2: Yeah, I can.
M1: Sixty dollars?
M2: Yeah.
M1: You know the girl you take out last time for dinner sixty..?
M2: Yes, yes, yes, yes.
M1: Sixty dollar one?
M2: Yeah.
M1: And uh and uh can you let the people sign some – half the contract for ten girl. You know, they sign – sign – oh oh five big contracts beforehand, you know. Can you do that or can’t you do that?
M2: No, no. Not with that one, no.
M1: Not with that one?
M2: No. The other one, the forty dollar one, yeah. I can do that but not that one. It’s not very – I’ll talk to you when I get there. We’ll sort out everything. Okay.”

19 In Agent McClure’s opinion the references in the conversation to “girls” and “big contracts” could be to half-units of heroin. The appellant’s offer to Micalizzi of “sixty dollar girls” and his reply that he could only do the “forty dollar one” could be, in her opinion, coded references to the proposed wholesale price of half-units of heroin. In this respect she considered that the reference to “sixty dollar girls” was a reference to $60,000 and the reference to “forty dollar one” was a reference to $40,000.

20 In cross-examination it was put to Agent McClure that the reference in conversation D2 to “girls” could equally be a reference to escorts. She agreed that that could be a possibility but it was not her opinion.

21 Exhibit D7 is the transcript of the conversation between the appellant and Micalizzi on 10 June 2000 at 9.33pm. In the transcript M1 is the appellant and M2 is Micalizzi. The relevant part of the conversation is as follows:

“…

M1: And also, you know, I call the three company line in the fax. All right.

M2: Then what?

M1: You know in the fax I got three company there?

M2: Yes.

M1: So, you know, you just calling you to the company and then the square – the square number in it ---

M2: Yeah.

M1: --- you just put the document in it, you know. The – say one – first one is seven pages ---

M2: Yeah.

M1: …The second one is six pages plus six pages – so you put it separate. You know what I mean?

M2: Yeah, yeah.

M1: And then the …(indistinct)… one, five plus five, you put it separate, you know. How – how – when you think you start the other fifty five to one outsider? When you start the horse, you think?

M2: Well, I think on that one we have to wait a little bit because it’s a flood.

M1: Oh.

M2: Yeah. And it’s very cheap right now.

M1: Is it?

M2: We can’t even get fifty if we wanted to now [sic].

M1: Is it?

M2: Ah. It’s too much on the – all right. But anyway, see if you can send that fax and I’ll speak to you if you tomorrow on Monday because my friend ---
…“

22 Agent McClure gave evidence that the reference in the transcript to “fifty” could be a coded reference to $50,000 being the proposed wholesale price for a half-unit of heroin, whereas the reference to it being “cheap” could be to the ready availability of heroin within the Sydney illicit drug market at that time.

23 The only cross-examination on this conversation was directed to whether the reference to “cheap” applied only to the ready availability of heroin in Sydney – a proposition with which Agent McClure agreed indicating that she could only comment upon its availability in Sydney at the time. There was no challenge to the evidence that at the time heroin was readily available on the Sydney illicit drug market and was cheap. This was, apparently, a well-known fact.

24 At 9.45pm a further conversation took place between the appellant and Micalizzi, the transcript of which is Exhibit D8. Again, M1 in the transcript is the appellant and M2 is Micalizzi. The relevant portion of the conversation is as follows:

“…

M1: And the other thing is if the horse – I can tell them back it in to fortyeight do you think you can do that or not?

M2: yeah. But I still – still rather to wait. You know what I mean?

M1: Yeah, yeah, yeah, yeah, yeah, yeah, yeah.

M2: Because it’s – it’s still – it’s a flood. I’m telling you. It’s everywhere.

M1: Oh I see. Oh I see, yeah. But anyway, just keep in mind that they want – they want to start the horse – they had to start in three horses race, you know. You know, like …(indistinct)… you can’t do that just do the other thing. You know what I mean?

M2: yea, yeah. All right. Anyway ---
…”

25 Agent McClure’s evidence was that the appellant’s reference to “fortyeight” could be a coded reference to $48,000, being the proposed wholesale price of a half-unit of heroin. Again, the reference to a “flood” and it being “everywhere” could be a coded reference to the ready availability of heroin within the Sydney illicit drug market at that time. The reference to “start in three horse race” could also be coded language in that when discussing the horse and starting the horse, the appellant could be referring to a heroin supply sometime in the near future.

26 In cross-examination it was suggested to Agent McClure that the expression “back it into fortyeight” was a betting reference to backing a horse. She agreed that the words “back in” could be used in racing but that was not what she thought the words meant in the conversation. However, if it was a legitimate conversation about horseracing then the reference to starting a horse in a race to be run in the future was possible.

27 Exhibit D10 is the transcript of a conversation between the appellant and Micalizzi at 4.10pm on 12 June 2000. In this transcript M1 is Micalizzi and M2 is the appellant. Relevantly it is in the following terms:

“…

M2: You get my fax?

M1: Yeah. I got your fax.

M2: Yeah.

M1: What happened to the material?

…

M1: But didn’t that bloke get back to you with the material, prices and everything?

M2: Beg yours?

M1: you know, the materials we wanted? Has that bloke got a price on it?

M2: Oh, which one is that? The one your friend wanted?

M1: The company. Yeah, yeah.

M2: The company?

M1: The company. Yeah.

M2: Yea, I think the – we can do him a favour for start at eight on three, you know.

M1: Yeah, yeah.

M2: yeah, yeah, yeah.

M1: All right. Anyway, I got them and I should be able to do something in the next couple of days for you.

M2: Yeah. Okay. You know the fax you have, you see the number beside it?

M1: Yeah.

M2: That – that’s the document you put in every time, you know.

M1: Yeah, now worries.

M2: So – so you got …

M1: I understood that, yes.

M2: …three company. Okay. Yeah.

M1: Okay.

M2: So, when do you think you do this?

M1: Well, you know, tomorrow or the next day. Whenever my friend should be back because he has the long weekend.

…”

28 Agent McClure gave evidence that the reference to “material prices and everything and the materials we wanted, has the bloke got a price?” could be coded language for Micalizzi asking the appellant about the price of half-units or full-units of heroin. Further, the reference to “we can do him a favour for start at eight on three” she believed could be a reference to $83,000 being the wholesale price of a unit of heroin. She was not cross-examined on that evidence.

29 Exhibit D12 is a transcript of the telephone conversation between the appellant and Micalizzi at 3.26pm on 15 June 2000. In the transcript M1 is Micalizzi and M2 is the appellant. It is relevantly in the following terms:

“…

M2: Hello, mate. How are ya?

M1: Good, good. How are you?

M2: Good. So, you – you organise the paperwork already?

M1: Eh?

M2: You organise the paperwork already?

M1: I can’t understand.

M2: Now, did you – did you see your friend to organise the papers …(indistinct)…

M1: No, no, no. Not yes, no. Hopefully I’ll see him tonight.

…

M1: It can be done. It’s – if they can, you know, the prices are right for the furniture. That’s no problem.

M2; Mm.

M1: Yeah. The other one is ---

M2: …(indistinct)…

M1: The other one is impossible, mate.

M2: Impossible, the other one?

M1: yeah, yeah. Just some – uh the plastic uh here is very cheap. So, there’s no point – no point trying to do anything with it now.

M2: Oh I see, yeah.

M1: Yeah.

M2: What ---

M1: It’s just impossible.

M2: What – what the horse can start at? What price can you start at?

M1; Well you know, thirtyeight, forty.

…”

30 Agent McClure gave evidence that in her opinion the reference to “furniture” and “plastic” could be coded references to narcotic commodities and the reference to “horses” could be a reference to the price of half-units of heroin. When the appellant asked Micalizzi what price he could start at for the horses and the latter replied “thirty eight, forty”, in her opinion this could be a coded reference to $38,000 and $40,000 being the proposed wholesale price of a half-unit of heroin. Further, the words “what price can you start at?” could be coded language for the appellant asking Micalizzi what would be the cheapest price or the best wholesale price for a half unit of heroin.

31 In cross-examination it was suggested to her that the reference to “furniture” related to Lammas’ furniture which had been embargoed on the dock in Perth. She agreed that she was aware of discussions between Lammas and Micalizzi with respect to that furniture and that it had been so embargoed by customs. She was not asked anything to suggest that there was some connection between Lammas and/or his furniture and the appellant or why Micalizzi might be referring to the prices for Lammas’ furniture in Perth being “right”.

32 Exhibit D13 is the transcript of a telephone conversation between the appellant and Micalizzi at 2.28pm on 16 June 2000. M1 is Micalizzi and M2 is the appellant. It is relevantly in the following terms:

“…

M2: Yeah. I talk to Albert and your horse is looking all right.

M1: Yeah, yeah. You talked to him?

M2: yeah, yeah, yeah. I going to call him later today too, you know, because he got a horse starts at one (sic) [tomorrow] got a good chance, you.

M1: Oh yeah.

M2: How you fix the company thing?

M1: The company is not good, mate, because I don’t know what’s wrong but my friend is not back and I don’t know. I only can speak to his wife. He promised everything was all right but he hasn’t been back.
…

M2: Oh I see. Because my friend – my friend – the horse can – can be started next Wednesday. Can you see other SP bookie?

M1: Yeah. All right. I’ll – I’ll do that too. I’ll see somebody else. Yeah.

M2: yeah. Because the horse can be started at eight – eight point five, you know.

M1: Yeah.

M2; They’re good horse so if you line up other SP bookie, you know.

M1: Yeah, no worries. Okay.

M2: Can you give me the answer tomorrow?

M1: The horse.

M2: Tomorrow or ---

M1; Yeah. Okay. I ---

…”

33 Again, Agent McClure gave evidence that in her opinion the reference to horses could be a reference to half-units of heroin and that the appellant could be telling Micalizzi that he could arrange a heroin supply for the following Wednesday. Further, she believed the word “horse” at the end of the conversation could be a reference to a full-unit of heroin because the words “eight point five” could be a reference to $85,000 which would be the wholesale price of a full-unit of heroin at that time.

34 However, there could be no doubt that the commencement of this conversation was genuine and did not relate to any drug transaction. The reference to Albert is a reference to Stapleford who, in June 2000, was training a horse owned by Micalizzi known as Maestro Boy. However, the horse suffered from a sore tendon and had to be spelled in a paddock. Stapleford was also training a horse known as Myalla Red. As at the time of the telephone call on 16 June Myalla Red was to start in a race at Warwick Farm the following day, 17 June. The horse in fact raced that day and was placed third, thus confirming the appellant’s assertion in the first part of the conversation that Stapleford had a horse starting the following day with a “good chance”. It was therefore accepted that this part of the conversation was entirely genuine and that the language used was straight-forward, made sense and was not in code. However, Agent McClure’s opinion was that the same could not be said of the balance of the conversation.

35 That there were also genuine conversations with respect to the horse Maestro Boy is illustrated by a conversation at 4.37pm on 21 June 2000, Exhibit D15. In that transcript M1 is Micalizzi and M2 the appellant. It is relevantly in the following terms:

“…

M2: Hello, mate.

M1; Ah g’day, buddy. How are you?

M2: Not bad. You ring Albert about your horse yet?

M1: No.

M2: I think you better ring him. I think your horse is going all right, you known.

M1: Yeah.

…”

There was no doubt that this was a genuine enquiry as to the health of Maestro Boy. Again, the language is plain and makes sense.

36 Exhibit D16 is a transcript of a conversation at 5.28pm on 22 June 2000. In the transcript M1 is Micalizzi and M2 the appellant. It is relevantly in the following terms:

“M2: And also you’ve found the SP, no problem, huh?

M1: No, no problem. No, no.

M2: Okay.

M1: No problem with that.

M2; Okay so – so, I tell my friend to start the horse probably at the weekend or something. All right. …(indistinct)…

M1: Okay. Not a problem. Not a problem.

M2: Just make sure that the three company ---

M1: Yeah, they are. Yeah. I tell you – you know the one we got in - the ones we got in Gosford, the horse we got in Gosford?

M2: Yeah, yeah, yeah, yeah.

M2: Why? Something wrong, huh?

M1: No, it’s not quite healed yet. Do you remember I told you he got injured?

M2: Oh yeah, yeah, yeah, yeah, yeah, yeah.

M1: And – what’s his name – Albert rang me today ---

M2: Yeah.

M1: ---and he said that he done x-rays and it’s not quite healed.

M: Oh yeah, yeah.

M1: So, he suggested we put him another two months out before we race him. You understand?

M2: Oh I see. It’s all right. Let – let – let Albert handle it because he got a good …(indistinct)…

M1: No, that’s what he told me today, that we have put him out for another two months ---

M2: yeah. Okay. Yeah, yeah.

M1; --- to make sure it heals up properly otherwise he’s gunna break down.

M2: yeah, yeah. I think it’ a good idea, you know. So ---

M1: Because he did – he did x-rays on him, you know.

M2: Yeah, yeah. I think so too you know.

M1: Yeah. No, no. Well, I have to believe him and he’s good.

M2: Yeah, yeah, yeah.

M1; So, that’s what’s he suggesting, put him out for another two months, maybe three.

M2: Oh I see.

M1: Because ---

M2: He like the horse, yeah?

M1: He likes him, yeah.

M2: That’s good, yeah.

M1: He’s a good horse. I told you he can gallop.

M2: Yeah, yeah. I think Albert do the good job for you, no worries.

M1: Yeah, yeah, yeah.

M2: Just – just – just get the company fixed up early. Okay.

M1: Okay, mate.

…"

37 Apart from the reference to finding the SP at the commencement of the above extract and to getting “the company fixed up early” at the end of it, the balance of the conversation is in plain terms and relates without the necessity for interpretation to enquiries as to the health of Maestro Boy who was being cared for by Stapleford.

38 By way of contrast Exhibit D19 is the transcript of a telephone conversation between the appellant and Micalizzi at 11.48pm on 23 June 2000. M1 is Micalizzi and M2 the appellant. It is relevantly in the following terms:

“…

M2: hello. How are ya?

M1: Good, mate. How are you?

M2: Where are you now?

M1: I’m in Liverpool.

M2: Oh I see. Listen, I got horses tomorrow. I got ten horses start tomorrow. You organise an SP already?

M1: Yeah, mate. It’s not a problem. I told you.

M2: yeah.

M1: Ah, somebody rang me just now. His names’ Tony.

M2: Yeah, yeah. Tony, yeah. That’s right. Yeah, yeah, yeah.

M1: Okay, then. Not a problem.

M2: (…indistinct…)

M1: He’s gunna meet me tomorrow afternoon.

M2: Yeah. Okay. And ---

M1: And if he tells me the horses and everything, the names and I’ll organise the bets. Okay.

M2: Okay. …(indistinct)… Okay. So, ah, you be home in the morning?

…”

39 Agent McClure gave evidence that in her opinion the expression “I got ten horses start tomorrow” could be a coded reference to the fact that the appellant was able to arrange the supply of ten half-units of heroin to Micalizzi the following day. The appellant then asked Micalizzi whether he had organised “an SP already”, to which Micalizzi responded in the affirmative. He then immediately refers to having been telephoned by someone called Tony who he was going to meet “tomorrow afternoon”, being 24 June. Micalizzi then says that if he – presumably Tony – “tells me the horses and everything, the names, I’ll organise the bets”. She was not cross-examined on her interpretation of this conversation.

40 Exhibit D20 is the transcript of a conversation at 12.15pm on 24 June 2000 between Micalizzi and Fung. In that conversation they arranged to meet at 3pm that afternoon outside a convenience store on the corner of Pitt and Liverpool Streets in the City. Less than an hour later, at 1.02pm, the appellant telephoned Micalizzi and the transcript - Exhibit D21 - relevantly records the following conversation, M1 being Micalizzi and M2 being the appellant:

“…
M2: Good morning. How are ya?
M1: Good, mate. How are you?
M2: Good, you you finish the races already?
M1: No, no. Three o’clock is the ---
M2: Oh I see, yeah.
M1: …the meeting is three o’clock.
M2: All right.
M1: Okay.
M2: Okay, then. All right.
M1: So, ring me later and I’ll tell you if he won or not. Okay.
M2: Okay. Right, then.
…”

41 Agent McClure was cross-examined to establish that Myalla Red, the racehorse trained by Stapleton, was running at Warwick Farm at 3pm on 24 June. However the evidence also established that the horse was scratched on the morning of that day. The appellant submitted to the jury that the reference by him in Exhibit D19 to his having “ten horses start tomorrow” and the reference by Micalizzi to “the meeting at 3 o’clock” was a reference to Myalla Red racing at 3pm at Warwick Farm that afternoon. However, there was no direct cross-examination of Agent McClure to this effect and it was clearly open to the jury to reject the submission. The appellant’s reference in Exhibit D19 to having “ten horses start tomorrow” does not sit well with the fact that only one horse trained by Stapleford was running the following day. Further, as at 1.02pm on 24 June, the horse had been scratched. It was clearly open to the jury to find that Micalizzi’s reference to the meeting being at 3 o’clock was one the arrangement of which he had made with Fung in the conversation in D20 whereby Fung was to meet him on the corner of Pitt and Liverpool Streets at that time.

Was the jury’s verdict unreasonable or unsupportable?

42 Although the appellant originally submitted that the jury’s verdict was unsafe and unsatisfactory, he accepted that the correct question for determination was whether the verdict was “unreasonable, or cannot be supported” within the meaning of s 6(1) of the Criminal Appeal Act 1912. The appropriate test was authoritatively stated by the High Court in MFA v The Queen (2002) 213 CLR 606; [2002] HCA 53 at 614 [25] and 634 [97]. In so doing the justices accepted that that test was as formulated by the majority of the High Court in M v The Queen (1994) 181 CLR 487 at 493 (and applied by that Court in Jones v The Queen (1997) 191 CLR 439 at 432) in the following terms:

"8 The appropriate test for determining whether a verdict is unreasonable or unsupportable within the meaning of s 6(1) of the Criminal Appeal Act 1912, was authoritatively stated by the High Court in MFA v The Queen (2002) 213 CLR 606; [2002] HCA 53 at 614 [25] and 634 [97]. In so doing the justices accepted that that test was as formulated in the following terms by the majority of the High Court in M v The Queen (1994) 181 CLR 487 at 493 (and applied by that Court in Jones v The Queen (1997) 191 CLR 439 at 452):
‘Where, notwithstanding that as a matter of law there is evidence to sustain a verdict, the court of criminal appeal is asked to conclude that the verdict is unsafe or unsatisfactory, the question which the court must ask itself is whether it thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty. But in answering that question the court must not disregard or discount either the consideration that the jury is the body entrusted with the primary responsibility of determining guilt or innocence or the consideration that the jury has had the benefit of having seen and heard the witnesses. On the contrary, the court must pay full regard to those considerations.’ "

43 Relevant to the present case is the following further passage from the joint judgment in M (at 494):

“13 Relevant also to the test of whether a jury verdict is ‘ unreasonable, or cannot be supported ’ within the meaning of s 6(1) of the Criminal Appeal Act is the following passage from the joint judgment of the High Court in M (at 494):
‘In most cases a doubt experienced by an appellate court will be a doubt which a jury ought also to have experienced. It is only where a jury's advantage in seeing and hearing the evidence is capable of resolving a doubt experienced by a court of criminal appeal that the court may conclude that no miscarriage of justice occurred. That is to say, where the evidence lacks credibility for reasons which are not explained by the manner in which it was given, a reasonable doubt experienced by the court is a doubt which a reasonable jury ought to have experienced. If the evidence, upon the record itself, contains discrepancies, displays inadequacies, is tainted or otherwise lacks probative force in such a way as to lead the court of criminal appeal to conclude that, even making full allowance for the advantages enjoyed by the jury, there is a significant possibility that an innocent person has been convicted, then the court is bound to act and to set aside a verdict based upon that evidence. In doing so, the court is not substituting trial by a court of appeal for trial by jury, for the ultimate question must always be whether the court thinks that upon the whole of the evidence it was open to the jury to be satisfied beyond reasonable doubt that the accused was guilty.’ “

44 Two attacks were made upon the evidence of Agent McClure. The first was directed to her experience and training with respect to drug-related investigations, drug-related terminology and the methods of operation of drug suppliers. She acknowledged that as at June 2000 she had been a member of the Australian Federal Police for approximately 1½ years attached to the National Avion Strike Teams which were task forces involved in the investigation of high level illicit drug importation and distribution syndicates in Australia and overseas. By the time she made her statement in May 2002 as to her interpretation of the interpreted telephone conversations between the appellant and Micalizzi, she had been engaged in the Task Force for some four years. As part of her responsibilities as an investigator she was involved in complex, protracted investigations relating to many types of illicit narcotics. As part of those investigations she had been extensively involved in the monitoring and analysis of intercepted telephone conversations and listening device material. By November 2002 she estimated that she had listened to many thousands of conversations.

45 Agent McClure also gave evidence that her duties had exposed her to the fact that those involved in drug trafficking often used coded language to discuss the distribution or importation of narcotics. Such persons were aware that law enforcement agents had the ability to intercept telephone conversations and therefore they used coded language to differentiate between their legitimate and illegitimate activities. She gave evidence that she was aware that such persons often used coded language in an attempt to avoid detection by law enforcement authorities. Finally, her evidence was that in her experience in the investigation of illicit narcotics she was aware that 350 gram blocks of heroin were commonly referred to as “half-units” and that 700 gram blocks were commonly referred to as “units”. She was also aware that heroin in block form was commonly regarded as being of high quality.

46 Although she agreed under cross-examination that she had never undergone any specialised training in drug-related investigations or terminology, she nevertheless gave evidence that those involved in drug trafficking referred to half-units and units and that the range of price of half-units of heroin around May/June 2000 was between $40,000 and $60,000 and for a whole unit between $80,000 and $100,000. She also gave evidence that around June 2000 heroin was readily available in Sydney and that there was an oversupply which affected price.

47 Although Agent McClure agreed that she had not undertaken any formal course in relation to decoding telephone calls or voice recognition, in re-examination she indicated that she was unaware of any university or other course that offered study in breaking down coded conversations. She said that officers acquired that knowledge by on-the-job training. It should be noted that there was no challenge to the accuracy of the transcript of the telephone conversations in terms of the attribution of those conversations to the appellant.

48 The other basis of challenge to the reliability of Agent McClure’s evidence related to the time when she first became aware that the appellant and Micalizzi were referring to heroin in their telephone conversations. In this respect the following exchange took place:

“Q. And until the arrest of Mr Micalizzi and Mr Lammas on 24 June 2000, you didn’t know until the backpack was opened that what was involved in that transaction involved heroin, did you?
A. Not heroin specifically, no.
…
Q. It’s by a process of reasoning backwards that you come to the opinion about certain words having meanings as being references, potential references to heroin, do you accept that?
A. Yes.
His Honour: Q. Just so that I understand your evidence. Are you saying despite being aware of what is being said in these recorded telephone conversations shortly after they were taking place you didn’t know until the backpack was opened that the supply was to involve heroin?
A. Yes. I thought that the conversations could be about a potential supply of a narcotic commodity, but I didn’t know until we searched the backpack that it was heroin specifically.”

49 Reliance was placed by the appellant on the decision of this Court in Keller v Regina [2006] NSWCCA 204. Judgment in that case was delivered on 26 July 2006 some five months after the trial in the present case. In that case the indictment contained two counts against Keller, the first being that he did supply a prohibited drug namely, cocaine, being in a quantity which was not less than a commercial quantity; the second count, as an alternative, was that he did knowingly take part in the supply of that drug. He was found guilty on the first count so that the alternative count became irrelevant.

50 As in the present matter, the Crown case relied mainly on telephone intercept evidence. Opinion evidence was given by an officer of the Australian Federal Police. He gave evidence as to the various meanings conveyed in the intercepted conversations. In so doing he expressed opinions that a particular word or phrase “was” a reference to a particular aspect of drug trafficking such as the amount of drugs or money.

51 Before the officer’s evidence was heard by the jury, it was taken on the voir dire and the trial judge ruled it admissible. As was pointed out by Studdert J, with whom Hall and Latham JJ agreed, at [20], the witness’ evidence in chief on the voir dire was received substantially in statement form and in it the witness referred to words used in the intercepted conversations expressing the opinion that the language “was consistent” with being a reference to drugs and money. Although in the voir dire proceedings the issue presented on admissibility was whether the witness could give evidence that the language employed in the conversations “was consistent” with language referrable to a drugs transaction, inexplicably that was not the way in which the evidence was ultimately given before the jury.

52 It was acknowledged by the appellant’s counsel in that case that had the witness limited himself to expressions of opinion as to the consistency of the language used as being referrable to drug dealing, there could be no complaint. That concession was regarded by his Honour as correct. As the evidence had not been given in that form, it was held by this Court to have been inadmissible. His Honour (at [33]) also noted that in cross-examination the witness did not draw a clear distinction between an expression of opinion that something spoken was consistent with being a reference to drugs, and asserting that it was a reference to drugs.

53 In Keller, the witness also gave evidence similar to that extracted in [48] above. He acknowledged in cross-examination that he had reasoned backwards in that as the accused had drugs on him at the time of his arrest, he must have been talking about drugs in the relevant conversations. In so doing, the witness had not identified the contextual matters which led him to the opinion expressed and to the extent that he relied upon the co-accused’s arrest on the day after the conversation, he was not relying upon his expertise as such but on the fact that the accused was found in possession of half a kilo of cocaine the day after he had spoken to his co-accused.

54 Studdert J (at [37]) concluded that it did not appear that the witness had identified in the course of his evidence those matters which led him to conclude that the subject matter of the intercepted conversations was about drugs. His Honour then referred to this Court’s decision in R v David & Gugea (unreported, NSW CCA, 10 October 1995) where in the judgment of the Court it was considered that it was appropriate for the expert to give evidence that the relevant conversations could be referring to the supply of heroin, not that they did in fact relate to the supply of that drug.

55 His Honour then concluded as follows:

“42. The different outcomes in David & Gugea and in Huynh highlight the necessity for a close consideration of the circumstances of the particular case. Returning to the present case, I do not consider as being shown that the opinions expressed by the witness were wholly or substantially based upon his specialised knowledge. Further, I do not consider that the reasoning process of the witness has been sufficiently exposed to establish how his conclusion was based upon his specialised knowledge, if such be the case. Hence I consider that the evidence of Federal Agent Ian Robert Smith that the conversations were about drugs should ultimately have been excluded from the consideration of the jury.
43. I add that if strictly the evidence was admissible … I consider it should have been excluded under s 137 of the Evidence Act … It is clear from the evidence that the witness gave that in part the opinion of the witness was arrived at having regard to the discovery of the cocaine in the possession of the co-accused who had conversed with the appellant. To that extent, of course, the opinion of the expert was not based upon his particular expertise, and it seems to me that there was a very real risk that the jury would be distracted from making its own evaluation of the evidence by reason of the assertion of the police officer as an expert that the conversations were about drugs. Moreover, absent the exposure of the reasoning process of the police officer, this opinion was not open to close scrutiny by the jury.” (Emphasis added)

56 It is to be observed that the evidence of the witness in Keller that his opinion was arrived at having regard to the discovery of the cocaine in the possession of the co-accused, was not considered by Studdert J as being a ground of inadmissibility but, rather, as a basis to exclude the evidence under s 137 of the Evidence Act 1995 because its probative value would be outweighed by the danger of unfair prejudice to the accused.

57 In the present case, not only was there no objection to the admissibility of the evidence but there was no application that the evidence should be excluded under s 137 because of the cross-examination of Agent McClure which I have recorded in [48] above. In these circumstances, and as the appellant’s counsel readily conceded, very little can be made of that cross-examination.

58 Nevertheless, the appellant submitted that notwithstanding that Agent McClure’s evidence was admitted, her conclusions could be seen to be patently flawed so that combined with the other circumstantial evidence in the Crown case, the competing hypotheses advanced by the defence that the dealings between the parties were in the context of horseracing and betting were not negatived beyond reasonable doubt.

59 Furthermore, it was submitted that none of the telephone conversations relied upon by the Crown referred to drugs in any explicit way and the meanings attributable to the words and expressions used in them by Agent McClure were capable of a different construction from that placed by her upon them. The appellant’s case at trial was that the telephone intercepts related to horseracing, betting and gambling and had nothing to do with the supply of heroin and, it was submitted, “evidence at the trial supported this competing hypothesis”. Accordingly, in the light of Agent McClure’s “very limited experience in the area”, her evidence ought to have been accorded scant weight by the jury in deciding the ultimate issue as to the meaning of the words used in the intercepted telephone conversations.

60 It was also submitted that the conversations did not on their face justify the inference that the speakers were engaged in illicit drug dealing activities. Agent McClure’s evidence at its highest was that the conversations “could” relate to a proposed drug transaction but there were competing inferences which were a real possibility. In these circumstances, the jury ought to have accorded slight or no weight to the evidence of Agent McClure in circumstances where “cogent evidence” was available to rebut her opinion. Accordingly, the jury’s verdict was unreasonable or unsupportable.

61 We reject the appellant’s submissions for the following reasons. First, no complaint was made with respect to the trial judge’s summing up. His Honour on numerous occasions made it clear to the jury that if there was any other rational inference or reasonably possible explanation open on all of the evidence which was inconsistent with the appellant’s guilt and which the Crown had not excluded or disproved beyond reasonable doubt, they could not draw an inference that established guilt and they must find him not guilty. His Honour also made it clear to the jury that if they were not satisfied that the Crown had proven beyond reasonable doubt that the recorded conversations between the appellant and Micalizzi involved discussions concerning supplying heroin, then they also would be obliged to find the appellant not guilty.

62 Second, the trial judge put the appellant’s case squarely to the jury, namely, that there was another rational inference or possible explanation available with respect to the content of the recorded conversations between the appellant and Micalizzi that was inconsistent with guilt and which the Crown had not disproved beyond reasonable doubt, namely, that the appellant and Micalizzi were not using coded references referring to drugs but were using words in their ordinary normal meaning taking into account that English was not the appellant’s first language and that he was talking to Micalizzi about things such as women, furniture and their mutual interest in horseracing.

63 In this last respect the Crown accepted that there was no question that the appellant and Micalizzi were interested in horses and betting on horses and that there were a number of occasions in their conversations when they were actually and genuinely talking about those subject matters. His Honour repeated to the jury the Crown’s submission that there were other occasions in the conversations between Micalizzi and the appellant to which reference has been made when although they were referring to horses and using gambling terms, they were not actually talking about those subjects. The Crown submitted to the jury that if two people are familiar with each other and have a common interest and want to disguise the subject matter of their conversation, it is natural for them to do so by using language they were familiar with and in which they have a common interest.

64 Importantly, the Crown submitted to the jury, and the trial judge in his summing up reminded them, that there were a number of examples in the recorded conversations that simply did not on their face make any sense at all unless they related to the supplying of the heroin that was ultimately supplied to Micalizzi on 24 June 2000. Particular reference was made to the conversation transcribed as Exhibits D7 and D8 which referred, amongst other things, to a discussion about starting at fifty-five to one and there being a “flood” and it being “very cheap right now” which, so the Crown submitted, simply did not make sense in terms of placing a bet but did make sense in the context of a discussion as to the oversupply of heroin in the Sydney market at the time, a fact that was not in dispute.

65 Third, in our opinion the most telling aspects of the recorded conversations which pointed to the appellant’s guilt was the contrast between the conversations referred to in [21] and [24] relating to the “flood”, it being “very cheap right now” and “it’s everywhere” which the jury may well have considered to have had no relationship to the placing of a bet or some other form of gambling on horses and those referred to in [35] and [36] which, on their face not only made sense but were clearly referrable to the health of Micalizzi’s horse Maestro Boy and [32] which also in clear language referred to the chances of Myalla Red who was racing the following day, 17 June, and who in fact did so and ran third.

66 All the other critical conversations couched in what might be referred to as “racing terms” simply did not make sense and, if they were intended to relate to genuine racing transactions, involved the use of the most elliptical language in circumstances where, as we have indicated, quite plain language had been used by the appellant and Micalizzi when they were undoubtedly speaking about Maestro Boy on the one hand and placing bets on Myalla Red on the other.

67 Fourth, as we have observed in [41] above, there was a clear inconsistency between the statement by the appellant in Exhibit D19 referred to in [38] above that “I got ten horses start tomorrow. You organise an SP already?” and the conversation in Exhibit D21 involving the reference to the meeting at 3 o’clock in the context of the arrangements made between Micalizzi and Fung referred to in Exhibit D20 to meet at 3 o’clock that day at the corner of Pitt and Liverpool Streets.

68 Although it is true that there was a race at Warwick Farm at 3pm on 24 June in which Myalla Red, a horse trained by Stapleford, was listed to run, the horse was scratched early in the morning and before these conversations took place. It would be odd in the extreme if Micalizzi at 1.02pm on 24 June when speaking to the appellant (Exhibit D21) could have been referring to the race meeting at Warwick Farm scheduled for 3pm in circumstances where Myalla Red had already been scratched. No doubt it was possible that Micalizzi was unaware of that fact but it was clearly open to the jury to have found beyond reasonable doubt that the conversation between the appellant and Micalizzi relating to the meeting at 3 o’clock had nothing to do with that race.

69 To adopt the language of the joint judgment of the High Court in M to which reference has been made in [43] above, in our opinion there is nothing in the evidence upon which the Crown relied which contained discrepancies or inadequacies or otherwise lacked probative force. On the contrary, it was clearly open to the jury to take the view that those shortcomings were applicable to the appellant’s case based upon the submission that the conversations were innocent and were capable of an alternative rational explanation which the Crown had not excluded, namely, conversations with respect to the mutual interest of the appellant and Micalizzi in horseracing and betting.

70 At the end of the day, the weight to be given to Agent McClure’s evidence was entirely a matter for the jury. Contrary to the appellant’s submission, we are unable to find that there was “cogent evidence” available to rebut the opinions she expressed. There may have been evidence but it certainly was not cogent and none was so identified in argument. Furthermore, we would reject the appellant’s submission that Agent McClure’s evidence that words and expressions used in the relevant conversations were, in effect, consistent with an illicit drug transaction “could be seen to be patently flawed”. Whether or not those opinions combined with the other circumstantial evidence in the Crown case were capable of negativing the competing hypotheses advanced at trial on behalf of the appellant that the dealings between he and Micalizzi were in the context of horseracing, was entirely a matter for the jury.

71 In our view the jury was entitled to reject the submission put to them by the appellant that they should only accord Agent McClure’s evidence “scant weight” in deciding the ultimate issue as to the meaning of the words used in the intercepted telephone conversations. What can undoubtedly be said about that issue is that it was open to the jury to accept Agent McClure’s evidence which, if they did, would inevitably lead to a finding of guilt beyond reasonable doubt. There was nothing in that or any other evidence which should necessarily have persuaded the jury to accord it scant, if any, weight.

72 It follows in our opinion that we do not experience any doubt as to the reasonableness of the jury’s verdict. Nor do we accept that there is any possibility, let alone significant possibility, that an innocent person has been convicted. Accordingly, the appellant’s challenge to his conviction should be rejected and his appeal against his conviction dismissed.

The appeal against sentence

73 Turning to the sentence appeal, it is important to note at the outset that the offence upon which the appellant was convicted after trial carries a maximum penalty of life imprisonment. The quantity supplied was in excess of three times the large commercial quantity. The offence having been committed in 2000, the provisions of Division 1A of Part 4 of the Crimes (Sentencing Procedure) Act 1999 did not apply.

74 The asserted error in the sentencing judge’s finding of the role undertaken by the appellant in the supply focuses upon the respective positions in the hierarchy of the appellant and the co-offender Micalizzi. It is the appellant’s contention that his Honour should have assessed the appellant’s criminality at about the same level as that of Micalizzi. It is acknowledged that the ground alleging manifest excess falls away in the absence of any error by the sentencing judge in this respect.

75 His Honour began his remarks on sentence by noting that the Crown case at trial, as evidenced by the telephone intercepts between the appellant and Micalizzi, was that the appellant “negotiated with Micalizzi the quantity and price and caused arrangements to be set up for the delivery and for at least part payment of 3.5197 kgs of heroin that was supplied by a Vincent Fung to Micalizzi in the city area of Sydney on 24 June 2000”. No issue is taken with this description of the part the appellant played in the supply of heroin, which was between 59% and 68% pure, at an estimated wholesale value of between $460,000 and $600,000.

76 His Honour referred to the subjective and objective circumstances of each of the appellant’s co-offenders, Micalizzi, Fung and Lammas, and to the sentences imposed upon each of them. Lammas pleaded guilty to aiding and abetting the supply of a commercial quantity of heroin (carrying a maximum penalty of 20 years imprisonment), on the basis that he was Micalizzi’s driver and played the most subordinate role in the enterprise. The appellant, Micalizzi and Fung were all convicted after trial in respect of a large commercial quantity of heroin.

77 After reviewing the telephone intercepts and the surveillance evidence at trial, his Honour concluded that the appellant was acting on behalf of a principal or principals when he negotiated with Micalizzi (who was in turn acting on behalf of a wholesale purchaser) the quantity and price of the heroin. Further, that the appellant, whilst in Hong Kong, “directly or indirectly caused arrangements to be set up for the delivery of the heroin to Micalizzi, which resulted in the involvement of the lower level operators, namely ‘Tony’ and Vincent Fung in supplying the heroin to Micalizzi, and also the [appellant] provided Micalizzi with a mechanism to enable him to arrange the transfer of at least part payment of the heroin.”

78 On this basis, the appellant was found by his Honour to have operated at a level between the principal supplier and Micalizzi, the latter being characterised as a wholesaler, whilst Fung was characterised as a courier. Accordingly, the appellant’s criminality was assessed as greater than that of Micalizzi’s. His Honour also found that the appellant was to receive a very substantial financial benefit for his role, given that he was not a user of prohibited drugs but had a long-standing addiction to gambling. That addiction had been a significant factor in the commission of a previous supply heroin offence in 1987, for which the appellant received a sentence of 8 years imprisonment with a non parole period of 3 years and six months, increased to 4 years and six months following a successful Crown appeal. Thus, the appellant had a conviction for a relevantly similar offence in which he had played a similar role.

79 Micalizzi also had a prior conviction in 1984 for Cultivating Indian Hemp. His subjective circumstances and criminal history were described by his Honour as “broadly comparable” to those of the appellant. The sentence of 8 years imprisonment with a non-parole period of 6 years imposed upon Micalizzi in May 2003 was considered by his Honour to be an “extremely lenient” one, notwithstanding the absence of a Crown appeal. We would agree with that opinion. However, his Honour nonetheless had regard to it when determining the appropriate sentence to be imposed upon the appellant “in order to avoid a justifiable sense of grievance” on his part.

80 In our view, it was entirely correct to assess the appellant’s criminality above that of Micalizzi. The appellant’s residency in Hong Kong and China (since 1997, until his return in 2005, when he was arrested for this offence) was integral to the supply of heroin in Australia. He was the interface between those who sourced the heroin and the wholesaler’s representative (Micalizzi), both in terms of the supply itself and payment for the supply. His previous conviction for the same type of offence demonstrated his experience with such transactions and called for some emphasis upon the principle of specific deterrence. All of this was appropriately reflected in the sentence imposed upon him. Although we are prepared to grant leave to appeal against sentence, the appeal should nevertheless be dismissed.

Conclusion

81 For the foregoing reason the Court makes the following orders:

(a) Appeal against conviction dismissed.

(b) Grant leave to appeal against sentence.

(c) Appeal against sentence dismissed.

**********