Director of Public Prosecutions (Cwlth) v Phillip Andrew Bayly (No. 3) No. SCCRM 94/406 Judgment No. 5807 Number of Pages 13 Criminal Law

[1996] SASC 5807

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA OLSSON J

CWDS
Criminal law - evidence - judicial discretion to admit or exclude evidence - evidence unfair to admit or improperly obtained.

Criminal law - evidence - judicial discretion to admit or exclude evidence - prejudicial evidence - the defence asserted, after the conclusion of a "Basha" inquiry, that evidence proposed to be given by a prosecution witness (Sterling) was unreliable and should be excluded, as it would lead to an unfair trial - plea bargaining agreement in the United States of America to lead to the probable imposition of a nominal sentence, conditional upon Sterling giving evidence against the accused - no general discretion to exclude evidence simply because the trial judge considers it to be unreliable. Accused said to have been involved in a prior course of conduct in concert with Sterling related to instances of cocaine importation from June 1986 - the defence sought to exclude evidence relating to the previous importations on the basis that its prejudicial effect outweighed its probative value - evidence not prejudicial to a degree which outweighs its probative value and admissible on basis that, its absence would result in evidence related to the charge being presented out of its natural context and as an unreal and not very intelligible incident.

Rozenes and Anor v Beljajev (1995) 1 VR 533; R v Christie (1914) AC
545, applied. R v Chai (1992) 27 NSWLR 153; Driscoll v The Queen (1977) 137 CLR 517; Stephens v The Queen (1985) 156 CLR 664, not followed. O'Leary v The King (1946) 73 CLR 566; The Queen v Etherington (1982) 32 SASR 230; R v Byrnes and Hopwood
(1996) 186 LSJS
106, discussed. Brusnahan v R (Full Court, 5 November 1993, unreported); R v Falzon (1990) 2 Qd R 436; R v Turner (1975) 61 Cr App R 67; R v McLean and Funk; ex parte Attorney General (1991) 1 Qd R 231; Pfenning v The Queen
(1994) 182; Hoch v The Queen (1988) 165 CLR 292, considered.

HRNG ADELAIDE, 24-27 June, 15-16 August, 2-4 September 1996 #DATE 13:9:1996

Counsel for DPP:         Mr P J Rice

Solicitors for DPP:     DPP (Cwlth)

Counsel for accused:     Mr B Martin QC

Solicitors for accused: J R Lister

ORDER
Application dismissed.

JUDGE1 OLSSON J

1. In reasons for decision published by me on 4 November 1994, I summarised the relevant factual background leading to the conduct of the present proceedings against the accused.

2. The aspect of the proceedings presently falling for decision derives from that context and it is unnecessary to re-iterate what I there said.

3. In the above reasons I foreshadowed the possibility of conducting a so-called "Basha" inquiry in this matter, as a means of meeting certain problems identified by the defence. Such an inquiry was duly requested and has been conducted before me. It was an extensive process, spanning some eight sitting days. In the course of it, inter alia, the Crown witnesses Pierre Lowell Sterling-Burela ("Sterling"), Kenneth Cristopher Wortley ("Wortley") and Dennis Pattle ("Pattle"), in particular, were cross examined on behalf of the defence at some length.

4. At the conclusion of the inquiry Mr Martin QC, of senior counsel for the accused, made an oral application for one of two alternate rulings, namely:- (1) that the whole of the evidence proposed to be led by the prosecution from Sterling (the substance of which appears in his declaration dated 10 November 1993) be excluded at trial, on the basis that the leading of it would be inimical to the conduct of a fair trial and result in a miscarriage of justice; or
(2) that so much of the proposed evidence as relates to previous incidents of illicit importation of cocaine into Australia, allegedly at the instance of the accused, be excluded in exercise of discretion.

5. Before addressing the detailed arguments presented to me, it is first necessary to say something about the proposed evidence and the above three witnesses in particular.

6. Wortley is an agent of the United States Customs Service. He was, at all relevant times, the case officer having the conduct, within the United States, of investigations into the circumstances from which the present prosecution arises. He presented in the witness box as an assured, professional officer who gave his evidence in a confident and apparently credible manner. He was questioned at length concerning the "raid" on SterlingÕs residence on 15 April 1994, on the occasion when the latter was arrested. He was also questioned concerning subsequent dealings had by the witness with Sterling.

7. Pattle was, at the relevant time, a senior member of the Australian Federal Police ("AFP"), attached to the Australian Embassy in Los Angeles. It was his responsibility to effect liaison with appropriate American agencies, in connection with proposed or actual investigations in the United States into criminal activity affecting Australia. He, too, appeared to be an apparently credible and professional witness. His evidence touched both on the exchange of information between the AFP elements in Australia and Los Angeles and also his involvement in the raid on SterlingÕs residence.

8. Sterling is said by the prosecution to have been an accomplice of the accused in relation to both the commission of the offence which is the subject of the present proceedings and also certain prior alleged importations of cocaine into Australia at the instance of the accused. Following his arrest, Sterling agreed to co-operate with the authorities in return for an advantageous plea bargaining agreement come to in the United States and an indemnity against prosecution in Australia. A copy of the written plea bargain agreement was produced in evidence. In his declaration he freely acknowledges that the statement given by him was induced by the expectation of those benefits. By virtue of his agreement to co- operate he has been included in the protected witness programme.

9. It must, at once, be said that Sterling projected in the witness box as an excellent witness. He was self possessed, articulate and readily and spontaneously responded to all questions put to him - with an apparent air of candour. He quite freely conceded the inducements which had been offered to him and also the fact that, at his request, the United States authorities had not prosecuted a woman with whom he appears to have been living in a de facto relationship. There was nothing inherently suspect or unsatisfactory in the manner of his presentation as a witness.

10. At the conclusion of the Basha inquiry it was apparent that there were some inconsistencies between certain aspects of the detailed evidence given by Sterling and that given by Wortley and Pattle. However, it must be said that some of these may well be the product of problems of memory and relative perception, rather than any necessary deception on the part of Sterling. For example, it is patent that the events of the night of 15 April 1994 came as a complete and very frightening surprise to him; and he was both extremely alarmed and apprehensive at the time and immediately thereafter. It is therefore scarcely surprising that his memory or perception of the number of police officers and vehicles involved and the fine, sequential detail of what transpired differs, to some extent, from that of Wortley and Pattle and, indeed, the actual reality of the situation.

11. However that does not, of itself, imply that the substance of his evidence generally is lacking in credit, or that he is to be dismissed as a totally unreliable witness.

12. Equally, the mere fact that the evidence is being given by Sterling against the background of the inducements to become a prosecution witness - which he has quite candidly admitted - does not appear to me, on his presentation in the witness box, adversely to have affected his performance as a witness. Of course, he may be a consummate actor, but if this is so, it is not readily apparent.

13. It should further be mentioned that there is an issue arising on the whole of the evidence as to the nature and extent of any pressure which may have been applied by Wortley to Sterling, both on 15 April 1994 and subsequently, to supply full information concerning the relevant drug transactions and implicate those associated with him in the enterprise - specifically the accused, after Sterling had revealed his name to Wortley. Once again, some of the differences may be the product of individual perceptions, but it seems apparent that, despite the giving of a "Miranda" warning to Sterling at the time of his arrest, considerable pressure was applied to him to "come clean" and co-operate with the authorities. It was certainly made apparent to him that, if he did not, he was liable to serve very long gaol sentences in both the United States and Australia.

14. Sterling readily conceded that such statements "scared" him and it is apparent that the prospect outlined to him was a major factor in his decision to co- operate. It may well be that, as Mr Martin QC asserted, the statements subsequently made by Sterling would not have been allowed to go before a jury, on well known and applied principles, had there been an attempt to use them for the purposes of a prosecution of Sterling himself.

15. Having said that, it must be recognised that, not only has Sterling related a coherent and apparently plausible narrative of his various dealings with the accused, related to importation of cocaine into Australia on several occasions, but also his narrative is corroborated in several ways. Without being exhaustive, the evidence reveals:- (a) the existence of taped telephone conversations of a potentially incriminating nature which took place between Sterling and the accused, following the arrest of the former; (b) the occurrence of various financial dealings on the part of the accused consistent with SterlingÕs narrative; (c) knowledge on the part of Sterling of relevant post office boxes said to have been maintained by the accused under aliases used by him; (d) evidence of the provision of funds to the witness Bagalini in circumstances implicating the accused, by his alias, in the importation in question; (e) evidence of a courier bearing on the earlier importations described by Sterling.

16. It follows that his evidence, although important from the prosecution viewpoint, does not stand alone. The other, mainly circumstantial, material taken at face value, has a potential, strongly, to re-inforce it by confirming its accuracy in significant respects.

17. Against that background I now turn to the specific arguments advanced by counsel.

18. In essence Mr Martin QC sought to contend that, such were the improper importunities advanced by Wortley to Sterling and such were the consequential pressures upon him, these were likely to cause him to fabricate evidence designed to achieve his own desired ends; that his potential testimony was, at the same time, highly prejudicial and could logically be accorded little or no weight. He declaimed that, such were the inducements offered to Sterling and the pressures upon him to salvage his own situation, to permit his unreliable evidence to be given would result in an unfair trial and a miscarriage of justice. He condemned the behaviour of Wortley and Pattle as improper. He asserted that they had bullied Sterling into turning prosecution witness and setting him on what he described as "an irreversible course of co-operation with respect to nailing" the accused - once the latter had volunteered the accusedÕs name. He also condemned what he said were some not so veiled threats, at a later stage, that the benefits of the witness protection programme might be withdrawn if Sterling failed to deliver, as promised.

19. Mr Martin QC sought to rely upon what he said was a principle of law first adverted to in Driscoll v The Queen (1977) 137 CLR 517 ("Driscoll"), reiterated in Stephens v The Queen (1985) 156 CLR 664 ("Stephens") and then recognised as such by the New South Wales Court of Criminal Appeal in R v Chai (1992) 27 NSWLR 153 ("Chai").

20. In Driscoll, in the course of discussing rather more discrete evidentiary issues, Gibbs J had this to say:-
    "Although as a matter of law a document is admissible against an
    accused person who has adopted it, that does not seem to me to be
    the end of the matter. It has long been established that the judge
    presiding at a criminal trial has a discretion to exclude evidence
    if the strict rules of admissibility would operate unfairly against
    the accused. The exercise of this discretion is particularly
    called for if the evidence has little or no weight, but may be
    gravely prejudicial to the accused: see, eg R v Christie; Noor
    Mohamed v The King; Harris v Director of Public Prosecutions; and
    Karuma v The Queen.".

21. This dictum was later referred to in the joint judgment of the High Court in Stephens when, in discussing the proper conceptual approach to unsigned records of interview, these points were made:-
    "When there is evidence that an accused person has read a written
    record of an interview between himself and the police, and has
    acknowledged it to be correct, the record is, as a matter of strict
    law, admissible against the accused, subject of course to objection
    on the ground that it is not relevant or on any other proper ground
    that is available. However the judge presiding at a criminal trial
    always has a discretion to exclude evidence if the strict rules of
    admissibility would operate unfairly against the accused, and
    Driscoll v The Queen establishes that in every case in which an
    unsigned and disputed record of interview is tendered the trial
    judge must give careful consideration to the manner in which that
    discretion should be exercised."

22. In his judgment in Chai, with which the other members of the court concurred, Badgery-Parker J, having reviewed the relevant authorities, dealt with the concept in these terms:-
    "In my view the law may now be regarded as settled. There is no
    separate discretion other than those discussed by this Court in R v
    Merritt and Roso and R v Edelsten to exclude evidence on the ground
    that the source of it is a witness who has received an immunity
    from prosecution. There is a discretion to exclude evidence upon
    the ground that its admission, permitted by the strict rules of
    admissibility, would nevertheless be unduly prejudicial to the
    accused. In a particular case, such unfairness may arise from
    circumstances which include the fact that the witness in question
    has been granted an immunity from prosecution. The mere fact that
    a witness has been granted such immunity does not necessarily and
    will not ordinarily compel a conclusion that reception of the
    evidence would be unfair to the accused so as to require
    discretionary exclusion of it."

23. It is at once apparent that Badgery-Parker J considered that, on the authorities, the proposition stated by him had emerged as a well settled and unequivocal principle of law.

24. A different view seems, however, to have been taken by the Victorian Court of Appeal in Rozenes and Anor v Beljajev (1995) 1 VR 533 ("Beljajev").

25. It must be conceded that, with respect, there are some, seemingly, equivocal passages in the joint judgment in that case. However, as I read it, the following relevant reasoning may be extracted from it:-
    - There is a discretion to reject any evidence on the ground that,
    to receive it would be unfair to the accused in the sense that the
    trial would be unfair.

- The discretions related to probative value/prejudicial effect and
as discussed in Bunning v Cross (1978) 141 CLR 54 (as contended for
    by the Attorney-General in R v McLean and Funk; ex parte Attorney
General (1991) 1 Qd R 231 ("McLean and Funk")) are not exhaustive.
    However, it is not easy to think of circumstances in which grounds
    might exist for the exercise of "any residual discretion, which
    would not bring the case within the more specific principle whereby
    evidence is not to be admitted where its prejudicial effect is out
    of proportion to its probative value".

- The decision of the High Court in The Queen v Doney (1990) 171
    CLR 207 appears to stand as authority against the proposition that
    there is a residual discretion to exclude evidence of significant
    probative value on the ground of its unreliability - that
    expression being employed in the sense of the risk of probability
    that, by reason of the position of an accomplice, his evidence will
    be false or inaccurate (ie the powers of a trial judge are not to
    be enlarged at the expense of the traditional jury function.) (See
    Doney at 214-5.).

- There is no general principle that consideration may be given to
    the exclusion of the evidence of an accomplice, as a matter of
    discretion, in all of the circumstances and especially in view of
    the danger that the accomplice may falsely implicate the accused by
    reason of his own self interest.

The issue needs to be viewed against the background that a judge
    may not withdraw a case from the jury on the ground that a
    conviction would be unsatisfactory or unsafe. By a parity of
    reasoning it is inappropriate to exclude from a jury evidence which
    has probative value, but is said to have come from an unreliable
    source (short of the situation satisfying the classic probative
    value/prejudicial effect test).

There may, however, be a category, identified by Gaudron J in
Dietrich v The Queen (1992) 177 CLR 292 at 363 where evidence may
    be excluded because its reception might place the accused at risk
    of being improperly convicted "either because its weight and
    credibility cannot effectively be tested or because it has more
    prejudicial than probative value É ". The first category is not an
    acceptance of the inadequacy of the usual trial processes. A
    classic example of this type of exclusion is said to be the
    inability to cross examine the deceased maker of an admissible
    statement which may have strong prejudicial potential if it goes
    before the jury.

There is, notwithstanding what is said above, no principle that the
    trial judge has a general discretion "to exclude evidence which is
    based wholly or primarily upon the trial judgeÕs conclusion that
    the evidence is unreliable. But if this view be too extreme, then
    at least it would have to be said that the circumstances calling
    for a favourable exercise of the discretion would have to be most
    exceptional. For it could only be in a most exceptional case that
one could say, as Vincent J put it in R v Pierce (1992) 1 VR 273 at
    277 that the considerations affecting reliability were not
    Ôcomprehensible to a jury and capable of assessment by them as the
    proper tribunal of factÕ."

26. Some apparent circuity of reasoning, if not actual ambivalence, is at once to be perceived.

27. There is no authority in this State directly in point.

28. In Queensland, as appears from McLean and Funk, an approach similar to that espoused in Chai seems to have been adopted, although there was a singular lack of unanimity in the processes of reasoning of the members comprising the Full Court and care needs to be taken in determining the true ratio of the decision.

29. The majority seem, in practical terms, to have proceeded down the path navigated by de Jersey J in R v Falzon (1990) 2 Qd R 436, who held that, where an accomplice had been induced by threats, promises and intimidation of a gross character and there was a very grave risk that his statements were not truthful and reliable (but rather his response to what he felt the inquiring officers wanted him to say, a response made compliantly out of fear and in the hope of securing favoured treatment from persons otherwise apparently bent on making it very hard on him), the evidence of the accomplice could and should be excluded in exercise of a general discretion to do so. Inter alia, he drew some comfort from what was said in R v Turner (1975) 61 Cr App R 67 at 79, in arriving at that decision.

30. The essential thrust of the majority decision in McLean and Funk is probably best encapsulated in the following dictum of Kelly SPJ at 239-240:-
    "After consideration of what has been said in all of the cases to
    which I have referred above on the subject of what has been
    referred to as the general discretion and on the application of
    that discretion in the case of an indemnified witness, I have
    reached the conclusion that because of the undoubted discretion
    which a judge presiding in a criminal trial has to exclude evidence
    if the strict rules of admissibility would operate unfairly against
    the accused, that is, in carrying out his duty to ensure that the
    accused has a fair trial, the discretion does exist to exclude the
    evidence of a competent witness, whether or not that witness be an
    accomplice, who can give evidence of the commission of the offence
    charged in the indictment and has received an indemnity from
    prosecution.It is not possible, however, to categorise the
    circumstances in which that discretion would properly be exercised
    to so exclude such evidence. I would, with respect, agree with the
    view of Carter J in R v Falzon that the mere fact of the granting
    of an indemnity is not by itself sufficient to exclude the evidence
    and, if it should be that no more than that appears, the discretion
    should not be exercised to bring about that result. An appropriate
    warning, which may need to be in quite strong terms, is required
    and it then becomes a matter for the jury as to whether they accept
    the evidence and as to the weight they give it. In my view the
    dicta of Lawton LJ in Turner, at 79, should not be understood as
    justifying the exercise f the discretion in favour of an accused
    merely because the inducement is very powerful and indeed, as the
    learned Lord Justice there went on to say, it is necessary to take
    all factors into consideration.There may, of course, be
    circumstances in which in any event the discretion to exclude the
    evidence might be exercised on the basis indicated by Ireland and
    Bunning v Cross on the one hand and by Driscoll and Stephens on the
    other, but that is not to say that these are the only instances in
    which the discretion to exclude otherwise admissible evidence
    should be exercised. I would not be prepared to go as far as was
    submitted by Mr Mulholland QC for the Attorney-General that if,
    apart from those circumstances, the discretion does exist (which,
    as I have said, in my view it does) the circumstances would need to
    be very exceptional to justify its exercise. There would, however,
    have to be some additional circumstance over and above the mere
    fact of a granting of an indemnity which is sufficiently strong
    that the trial judge may properly take the view that a fair trial
    could not be ensured merely by giving a warning to the jury in
    appropriate terms and in that event the evidence would be excluded
    in the exercise of the discretion. Each case must necessarily
    depend on its own facts."

31. It seems to me that the reasoning adopted by the judges in Queensland essentially derives from certain English authorities to which they make reference. With respect (and like the Court of Appeal in Victoria) I have some reservations concerning that basis of reasoning. As the Court of Appeal demonstrates, the English authorities need to be viewed with some care, because the High Court of Australia has, in its decisions, tended to adopt a somewhat more conservative approach in this area of the law, than have the appellate courts in England.

32. On balance, it seems to me that what I take to be the ultimate conclusion expressed in Beljajev fairly represents the law in this country, as reflecting the reasoning of the High Court over time - that there is no general discretion to exclude evidence simply because the trial judge considers it to be unreliable, because that would, potentially usurp the function of the jury.

33. Like the Victorian Court of Appeal, even if I be considered incorrect in that conclusion, at the very highest, it would only be in the most exceptional case that evidence could properly be excluded on the ground that the circumstances giving rise to the leading of it renders it so unreliable that its admission would be so prejudicial as to render a trial unfair.

34. In the instant case it is true that it was made clear to Sterling that he faced the prospect of a long prison sentence if he did not co-operate and that he was pressed to "come clean" in his own interest. It is also true that he was initially "scared" at the position in which he found himself and desired to protect the woman with whom he had a de facto relationship. On the other hand any threat to potentially withdraw witness protection arrangements if he did not honour his undertaking came after he had given the relevant information concerning the accused and seems to have been related more to his appearing to give evidence than anything else.

35. Further, it must be recalled that Sterling volunteered the accusedÕs name. It was not suggested to him. Having done so he co-operated in participating in intercepted telephone calls with the accused which appear, clearly, to have tended to inculpate the accused by his own statements. Moreover, there are the other external corroborative features, to which I have referred, which strongly point to a continuing illicit importation relationship between Sterling and the accused over time and tend to verify the accuracy of key aspects of what he now says.

36. This is, therefore, not the situation of gross impropriety of the nature condemned in Falzon, which, on the face of it, has produced evidence inherently likely to be false and impermissibly and irretrievably prejudicial. As the Basha inquiry has demonstrated, normal processes of cross examination can quite simply identify relevant inconsistencies and the possible dangers of inaccuracy in what Sterling now says. An appropriate strong judicial warning to the jury concerning the need to scrutinize the accomplice evidence with care and pointing up any obvious inconsistencies or apparent defects in evidence actually given by Sterling, will, in my view, be quite adequate to ensure that the jury goes about its task in a proper manner.

37. In summary, I am in no doubt that the circumstances of this case fall far short of any extreme or gross situation which even the Court of Appeal in New South Wales postulates as a proper basis for the total conclusion of the evidence proposed to be led from Sterling. I therefore reject the application that I so exclude it.

38. There remains for consideration the alternative application that I rule against admitting the proposed evidence of Sterling bearing on earlier incidents of importation of cocaine.

39. Specifically, the core thrust of SterlingÕs declaration in that regard may be summarised thus:-
    - Sterling first met the accused in Adelaide in 1982, when the
    former was a student at Flinders University.

- He returned to the United States in 1984, but maintained some
    contact with the accused.

- In mid 1986 the accused telephoned Sterling, saying that he
    wanted to come to the United States to meet him in order to do some
    lucrative business.

- In about June 1986 Sterling met the accused in San Diego where,
    after some discussion, the latter gave him US$35,000 in cash and
    asked him to purchase cocaine to that value.

- Sterling thereupon purchased about 20 ounces of cocaine from a
    supplier known to him and took it to where the accused was staying.
    Some discussion then took place as to how it could best be taken
    into Australia.

- A few weeks later Sterling received a telephone call from the
    accused from Australia to say that "everything went well". The
    accused permitted Sterling to retain about US$1,500-$2,000 from the
    US$35,000, for his part in the transaction.

- Sterling remained in contact with the accused by telephone. In
    mid 1987 the latter told him that he was using a number of Post
    Office boxes, a Westpac Bank account and Safe Deposit boxes, all in
    the name of "P.J. Williams". Three separate Post Office box
    addresses in that name were supplied to Sterling as a means of
    communicating with the accused by mail.

- Following a telephone call from the accused in Australia in late
    January 1992, the accused again met Sterling in San Diego in about
    February of that year. The accused said that he wished to organise
    a large shipment of cocaine to Australia, as his contacts there
    could handle up to 10 kilograms per month.

- Some discussion ensued as to the manner in which the accused
    would remit money to Sterling to pay for cocaine. However, whilst
    in San Diego on that occasion, Sterling took the accused to a
    Thomas Cook office to exchange a quantity of Australian dollars for
    US currency. A sum of money was left with Sterling, which,
    together with further funds to be sent from Australia, was to be
    used to purchase more cocaine. The accused then returned to
    Australia.

- Following that return the accused in fact sent a series of
    cheques to Sterling, which were cashed. The funds were accumulated
    and placed in a Safe Deposit box with the Wells Fargo Bank in San
    Diego. Sterling is able to produce records of the rental of the
    box and accesses to it on numerous occasions between 2 January 1992
    and 14 April 1993.

- In late March 1992, following a telephone call from the accused,
    a courier called "Patty" came to San Diego and handed over about
    $40,000 in US dollars, after first going to the Thomas Cook office
    to exchange currency. He also handed over about $14,000 in US
    currency which he actually brought with him.

- Towards the end of June 1992 the accused telephoned to say that
    more funds were available for collection in Melbourne. After
    discussion, Sterling arranged for the witness Bagalini (a US
    citizen known to him to be living in Adelaide) to collect the
    money. He arranged with the accused by telephone to have the funds
    handed over to Bagalini at a pre-determined location in
    Melbourne.

- Bagalini duly collected about AUD$45,000 and brought it to San
    Diego. He there exchanged this for US currency and handed it to
    Sterling.

- Some weeks later Sterling, by arrangement with the accused,
    purchased two kilograms of cocaine and organised a courier to take
    it to Australia. Bagalini was to travel on the same aircraft.
    Detailed arrangements were made by telephone between Sterling and
    the accused as to how and where the shipment was to be delivered in
    Melbourne, at an address at South Yarra. The delivery was duly
    made, as arranged.

- In about October 1992 the accused first telephoned and then again
    came to the United States. Sterling met him at the Los Angeles
    airport and drove him to San Diego. Whilst there, the accused
    handed him about US$42,000, which he said he had exchanged at the
    Thomas Cook office. Sterling placed it with a balance of money
    which he still had in the Safe Deposit box. After discussion it
    was decided to export a quantity of cocaine in a false table top to
    be constructed by Sterling.

- By arrangement with the accused, Sterling expended US$57,000 in
    purchasing 3 kilograms of cocaine, which the accused tested prior
    to returning to Australia.

- It was the import of that cocaine in a table top which
    precipitated the present charge.

40. I have summarised the proposed evidence at some length, because this serves to illustrate that the prosecution seeks to lead evidence of a continuous course of conduct - to establish the relationship between Sterling and the accused over time; and the fact that they embarked on a mutually agreed plan to import quantities of cocaine into Australia on an ongoing basis, culminating in the alleged transaction now under consideration. It wishes to do so to establish that such transaction did not stand alone, as a "one-off" incident, and was part of a much broader scheme.

41. Mr Martin QC, argued that the proposed evidence of the earlier transactions and interaction between Sterling and the accused ought to be excluded. He submitted that "this is Mr Sterling pulling himself up by his own bootstraps" and that the proposed material emanated from a patently unreliable source and was highly prejudicial to a degree which far outweighed any possible probative value.

42. I did not take him to contend that the evidence in question was not admissible within the concepts recently discussed by the High Court in Pfennig v The Queen
(1994) 182 CLR 461, which stemmed from earlier authorities such as Hoch v The Queen (1988) 165 CLR 292. Indeed, I would have thought that the proposed evidence was a classic example of the "underlying unity" or "system" criteria adverted to in the latter. Equally, in the context of the present case, it is also important probative material, which goes to establish both the nature of the relationship which existed over time between Sterling and the accused and also the history of dealings between them - without which the events related to the charge now before the court could not be truly understood and, isolated from the relationship evidence, could only be presented, out of their natural context, as unreal and not very intelligible events (OÕLeary v The King (1946) 73 CLR 566 at 577; The Queen v Etherington (1982) 32 SASR 230 at 235; R v Byrnes and Hopwood
(1996) 186 LSJS
106 at 143). The evidence in issue also falls well within the concept articulated by Duggan J in Brusnahan v R (Full Court, 5 November 1993, unreported) where he spoke of relationship evidence in these terms:-"Such relations Ôso far as they may reasonably treated as explanatory of the conduct of the accused É are properly admitted to proof as integral parts of the history of the alleged crime for which the accused is on trialÕ (R v Bond (1906) 2 KB 389 at 401)."

43. In essence, Mr Martin QC sought to rely upon the type of argument advanced in support of his primary proposition in an attempt to demonstrate that, such was the unsatisfactory provenance of the proposed evidence, that its potential prejudicial effect far outweighed its probative value - so that it ought to be excluded on the principle espoused in R v Christie (1914) AC 545. Somewhat colourfully he declaimed:-
    "In a real sense we put to your Honour that this is Mr Sterling
    pulling himself up by his own bootstraps and one cannot imagine in
    a case where thereÕs a charge of importing cocaine more prejudicial
    material than to say you have been previously involved in the
    importation of large quantities of cocaine. That highly
    prejudicial material emanates from a patently unreliable source, Mr
    Sterling, so this is where they are linked, and this was discussed
    I think in HochÕs case but, to some extent, the exercise of the
    discretion to exclude this sort of evidence does come back to the
    reliability of the source of the evidence and here you have the
    compounding effect. ItÕs not just simple interest, itÕs a
    compounding effect that the primary source of this evidence is the
    witness who was shown to be tainted and unreliable."

44. In my opinion the short answer to the alternative argument is that the considerations which I have identified in relation to the primary argument, de facto, sound the death knell in respect of it.

45. On the face of the situation the evidence has strong probative value and the proposed oral evidence of Sterling derives strong support from the corroborative features to which I have earlier made reference. Despite the obvious criticisms which may be advanced by the defence, the plain fact is that Sterling presents as a prima facie impressive witness. The core of what he says, considered in light of the other circumstantial evidence, tends to exhibit the apparent ring of truth. No doubt it is prejudicial in one sense, but that prejudice essentially stems from the significance and impact of the context in which the alleged transaction is said to have occurred - without which the prosecution case would, indeed, emerge in a somewhat unreal and unintelligible fashion.

46. Bearing in mind the careful directions which will obviously have to be given to the jury in due course, I fail to perceive how the impugned evidence can be said to be prejudicial (in the Christie sense) to a degree which outweighs its probative value. I decline to exclude it in exercise of my discretion.

47. In so saying I do not, of course, attempt to foreclose on the right of Mr Martin QC to seek to identify specific passages in the declaration or transcript of evidence of Sterling with a view to arguing that, as an exercise of discretion, they ought to be excluded. My ruling at this point is limited solely to the global issues identified by counsel and developed in argument.