Juan Manuel Plaza Lopez v The King

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCR 2023 0228

JUAN MANUEL PLAZA LOPEZ	Applicant
v
THE KING	Respondent

---

JUDGES:	PRIEST, TAYLOR and T FORREST JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	21 October 2024
DATE OF JUDGMENT:	12 November 2024
MEDIUM NEUTRAL CITATION:	[2024] VSCA 265
JUDGMENT APPEALED FROM:	CDPP v Plaza Lopez (Unreported, County Court of Victoria, Judge Gucciardo, 14 October 2022 (Conviction); 5 May 2023 (Sentence))

---

CRIMINAL LAW – Appeal – Conviction – Application for leave to appeal against conviction – Extension of time – Drug importation – Circumstantial evidence – Incriminating conduct –Application dismissed.

Criminal Code Act 1995 (Cth) vol 1 sch s 11.2A, vol 2 sch s 307.1(1); Criminal Procedure Act 2009 s 276(1)(a); Jury Directions Act 2015 ss 19, 20, 20(1)(b).

Ansari v The Queen (2010) 241 CLR 299; Attorney-General’s Reference (No 1 of 1983) [1983] 2 VR 410; Director of Public Prosecutions v Lynn [2024] VSCA 62; M v The Queen (1994) 181 CLR 487; Paulson v The King [2024] VSCA 18; R v Baden-Clay (2016) 258 CLR 308; R v Kotzmann [1999] 2 VR 123; Tartaglia v The Queen (2022) 141 SASR 142; R v LK (2010) 241 CLR 177.

---

Counsel
Applicant:		Mr P J Smallwood with Mr C Tom
Respondent:		Ms R Champion
Solicitors
Applicant:	Valos Black & Associates
Respondent:	Office of the Director of Public Prosecutions (Cth)

PRIEST JA
TAYLOR JA
T FORREST JA:

Introduction

The applicant was convicted by a jury in the County Court of importing a commercial quantity of a border controlled drug, namely methamphetamine.[1]
[1]Contrary to the Criminal Code Act 1995 (Cth) (‘Criminal Code’) vol 2 sch s 307.1(1) by virtue of the Criminal Code1995 (Cth) vol 1 sch s 11.2A.
He was sentenced to 22 years’ imprisonment with a minimum non-parole period of 15 years.
He seeks leave, out of time, to appeal against conviction on the following proposed grounds:
(1)A substantial miscarriage of justice resulted from the trial judge’s incriminating conduct ruling.
Particulars:
(a)The trial judge erred by not assessing competing innocent explanations.
(b)The prosecution was permitted to rely on evidence of conduct that was not reasonably capable of being viewed by the jury as evidence of incriminating conduct.
(2)The verdict of the jury was unreasonable or cannot be supported having regard to the evidence.
In discussion, the Court indicated to the applicant that if the Court were of the view that either of the proposed grounds had merit, an extension of time in which to file a notice of application for leave to appeal would be granted.

Overview

We shall provide a reasonably comprehensive overview. It is undisputed that a consignment of over 700 folded frozen cowhides was imported from Mexico, arriving in Sydney on 10 August 2019. Secreted within those cowhides were 167 packages, each containing methamphetamine. In all, 533.8 kilograms of the drug was imported.
The applicant maintained — in police interviews and at trial — that, whilst he performed various acts in connection with the importation, at all times he believed the consignment was made up of cowhides only, and that he had no knowledge or belief that the drugs had been concealed therein.
It is common ground on this application that at trial, the prosecution was required to establish:
(a)the applicant and one Mr Fernando Placencia (hereafter referred to as Fernando) (and others), entered into an agreement to commit an offence, in which each intended that a border controlled drug would be imported into Australia; and
(b)the applicant, and Fernando (and others) had knowledge of, or belief in, the facts that made the proposed conduct they were entering into, an agreement to commit an offence; and
(c)in accordance with that agreement, one or more of the applicant and Fernando (and others) performed the conduct of importing the border controlled drug and the quantity so imported was a commercial quantity.[2]
[2]See Tartaglia v The Queen (2022) 141 SASR 142; Criminal Code1995 (Cth) vol 1 sch s 11.2A(4); R v LK (2010) 241 CLR 177, 210–11 [72] (French CJ), 228 [117] (Gummow, Hayne, Crennan, Kiefel and Bell JJ); Ansari v The Queen (2010) 241 CLR 299, 318 [59] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
It was undisputed at trial that there was in existence an unlawful agreement to import a large commercial quantity of methamphetamine. The dispute concerned whether or not the applicant was a party to that agreement. As we have indicated, the defence was conducted on the basis that the prosecution had failed to establish beyond reasonable doubt that the applicant knew or believed that the consignment contained secreted border controlled drugs. The defence maintained that the applicant was the innocent dupe of Fernando in the same manner as was a man called Mr Omar Fabian Gomez Garcia (hereafter referred to as Mr Garcia) who also provided practical assistance to the importation. It was undisputed at trial that Mr Garcia was in fact an innocent dupe with no knowledge of the secreted drugs.
Naturally if the prosecution failed to prove this knowledge or belief its case failed. The prosecution sought to prove its case circumstantially through an assortment of pre and post importation facts. Some of the post importation facts were the subject of an incriminating conduct notice[3] and were sought to be used by the prosecution at trial as implied admissions by the applicant.
[3]Jury Directions Act 2015 ss 19, 20.
The trial was conducted over two-and-a-half months. The prosecution called 26 witnesses and tendered three witness statements. The applicant gave evidence over nine days, seven of which involved cross-examination. As is common in circumstantial cases, much of the evidence was undisputed, although there was some divergence between certain aspects of the applicant’s evidence and that of Mr Garcia.
As part of this overview, it is necessary to provide a comprehensive summary of the effect of the evidence in the trial. We will not summarise each witnesses’ evidence, but will set out the established, and largely undisputed facts in their chronological order. We have borrowed heavily from the respondent’s schedule of evidence filed on this application, and have confirmed its accuracy by reference to evidence in the trial. Where there is a significant evidentiary dispute, we shall identify it.
For convenience, in our chronological summary of evidence, we have italicised the relevant conduct said to be incriminating. The purpose of this is so that that conduct can be understood in its proper place in the unfolding series of events both before and after the importation was complete.

Chronology

The unlawful agreement was in place prior to 1 May 2019, as evidenced by an email dated 1 May 2019, from GZ (the Mexican freight forwarder) to BTL (the Australian freight forwarder and customs clearance business) regarding the cowhide importation.
The applicant engaged a customs agent who in turn engaged GZ. Thus the applicant, whether knowingly or otherwise, provided some practical assistance to the importation prior to or about 1 May 2019.
GZ was not alleged to be a party to the unlawful agreement but engaged in many communications with BTL throughout the importation process and subsequent to it. GZ was, on the prosecution case unknowingly acting on behalf of those who were parties to the unlawful agreement. It was not alleged that BTL was a party to the unlawful agreement.
In evidence, the applicant claimed expertise in international logistics and that he was used by Fernando to manage and supervise the cowhide consignment from the point it left Fernando’s control in Leon, Mexico, to the point of its arrival at a warehouse in Sydney, Australia. It was undisputed at trial that Fernando was knowingly involved in the unlawful importation.
The applicant was involved in the recruitment of a Mexican, Mr Garcia, living in Melbourne to be consignee of the importation. As we have indicated, it was undisputed at trial that Mr Garcia was not knowingly involved in the importation of the drugs and that he believed the importation consisted solely of cowhides.
On 25 or 26 June 2019 at Leon, Mexico, the applicant supervised the loadings of more than 700 frozen folded cowhides on pallets into a shipping container said to be controlled by Fernando. The prosecution’s case was that at this stage the drugs were secreted within the consignment of cowhides. The applicant denied this in evidence. After the pallets were loaded onto the shipping container, the container was closed and sealed at the Leon warehouse.
On 27 June 2019, the containers arrived at the port of Manzanillo, Mexico, to await departure to Australia. On 1 July 2019, the container was loaded onto a commercial ship. On 2 July 2019, the consignment left Mexico for Sydney. It is likely that the seals on the doors of the containers were broken for unknown reasons in Manzanillo, and then resealed. The prosecution contended at trial that it was fanciful that the drugs were secreted by an unknown party at Manzanillo; the defence contended that this hypothesis could not be excluded to the criminal standard. We shall return to this aspect when considering proposed Ground 2.
At the time of departure (2 July 2019), no import permit had been issued in Australia and no tanner or manufacturer had been engaged to tan the cowhides thus enabling them to be transformed into rugs. This was, according to the prosecution, an ostensibly lawful ‘front’ for the drug importation. On 2 July 2019, the applicant submitted an application for a visa to enter Australia.
The consignment was conveyed directly from Manzanillo to Sydney. This process took about six weeks.
Whilst the consignment was at sea:
•On 10 July 2019, Mr Garcia received a draft import permit from the Australian Government which stated that the cowhides must be tanned at a Government-approved site in Queensland before their release from biosecurity control. The applicant was involved in attempts to remove this condition. It was later removed.
•The applicant flew from Mexico to Sydney and arrived on 29 July 2019. On arrival, he filled out an incoming passenger card and spoke with an Australian Border Force (‘ABF’) officer, Mr Chuen Chung Ma. He described the purpose of his stay as being to visit relatives and friends.
•Between 29 and 30 July 2019, BTL (the Australian freight forwarder and customs clearance agent) advised GZ that there would be an inspection and if the cowhides were contaminated, they may be destroyed.
•On 31 July 2019, the applicant and Mr Garcia met at the Newmarket Hotel in St Kilda and discussed the importation. There was no discussion that bore directly on the issue of the applicant’s knowledge.
On 10 August 2019, the consignment arrived by ship in Sydney.
On 13 August 2019, an import permit was issued to Mr Garcia containing a condition that the consignment would be inspected for contamination. On that day, the consignment was covertly examined by ABF and the drugs were discovered and removed. The drugs were contained within 167 packages, each secreted within the folded, frozen cowhides and in total weighed 666.8 kilograms. The assessed purity of the methamphetamine was 80%. The potential wholesale value was AUD $80 million. At this point the importation came to an end.
On or about 13 August 2019, according to Mr Garcia, the applicant told him that he would rather send the cowhides back to Mexico or China, rather than risk their destruction.[4] At trial, this evidence was not disputed. Mr Garcia also gave undisputed evidence that at about this time, Fernando told him that he did not want to risk the cowhides being destroyed.
[4]This statement was asserted to be incriminating conduct (i) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct.
On 13 and 14 August 2019, GZ made inquiries with BTL about returning the consignment to Mexico.
A controlled AFP operation commenced on 14 August 2019. Police covertly took control of the importation process and endeavoured to convey the appearance that the consignment was moving through the normal customs, quarantine and clearance process. The drugs were not substituted and certain BTL employees assisted in the controlled operation.
On or shortly before 15 August 2019, Mr Garcia told the applicant that he believed that if inspectors found anything on the cowhides, the cowhides would be incinerated without asking for consent or allowing an option to return them.
On Thursday 15 August 2019, GZ told BTL that the customer had decided that the containers be returned to Mexico. On the same day, the applicant spoke to GZ and a customs brokerage officer and discussed whether the consignment could be returned to Mexico or to Hong Kong. He directed GZ to investigate these options. At about this time, he discussed with his wife (who was in Mexico) the prospect of immediately booking a return flight to Mexico, and that ‘we are going to send the containers back’.[5] Also at about this time, BTL advised GZ that there would no longer be an inspection and the container would be released. This was part of the controlled operation. In a later phone call that day, the applicant requested his wife’s assistance to book a flight back to Mexico.[6] Later again, he advised her that ‘…we’re looking into sending it to Hong Kong.’[7] Also on that day, a What’sApp user, ‘Juan Manuel’, alleged to be the applicant, had a conversation with another user in which the other user requested details ‘for the consignee in Hong Kong’.[8] In another What’sApp conversation on or around 15 August 2019, the applicant is alleged to have asked another user ‘…please check the [requirements] very well please, not to have these type of situations [happen]’.[9]
[5]These statements were asserted to be incriminating conduct (ii) and (iii) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct. The prosecution alleged the phone call took place on 15 August 2019 at 11.43 am.
[6]This statement was asserted to be incriminating conduct (iv) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct.
[7]This statement was asserted to be incriminating conduct (v) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct.
[8]This statement was asserted to be incriminating conduct (vi) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct.
[9]This statement was asserted to be incriminating conduct (vii) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct.
In Mr Garcia’s evidence at trial, he recounted that the applicant contacted him and expressed surprise at how quickly the decision to release the consignment had been reached. He said the applicant wanted a guarantee from the quarantine authorities that the cowhides would be released. In evidence, Mr Garcia further said that the applicant advised him that he had spoken to Fernando about the quick release and Fernando told him that he wanted the consignment returned to Mexico because the clearance was approved so quickly. In evidence at trial, the applicant stated that he, too, was surprised at how the approval had been granted.
On the evening of 15 August 2019, the applicant and Mr Garcia had dinner together. The applicant told Mr Garcia that he (the applicant) was going to go to Sydney on the next Monday or Tuesday in connection with the importation.[10] In evidence, the applicant said this was a lie because he never intended to go to Sydney.
[10]This was relied on orally by the prosecution as incriminating conduct after it emerged in evidence during the trial.
On 16 August 2019, GZ advised BTL that the customer (Fernando) wished to proceed with the importation but wanted a documented guarantee that there would be no inspection of the consignment as the customer wanted to avoid the risk of destruction. GZ then reiterated this request to BTL for documentation. Shortly after this the applicant spoke to his wife in a recorded conversation. In substance he stated that the events of 15 and 16 August 2019 were very strange, and that only 40 minutes after he asked for the container to be returned, he was told everything was sorted. The applicant also stated, ‘imagine that what they couldn’t do in two months and they have done it now in 40 minutes’. He appeared to agree with his wife that it was ‘fishy’ that the consignment was so quickly authorised to enter the country. He referred to the possibility of ‘incineration’ and said that it had ‘got to’ him.[11]
[11]These statements were asserted to be incriminating conduct (ix) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct.
In response to GZ’s request for a documented guarantee, as part of the controlled operation, BTL sent GZ a screenshot of what purported to be the release and clearance of the consignment from quarantine. Minutes later, GZ reiterated the request for documentation. Very shortly after this, the applicant spoke to Mr Garcia about the screenshot. The applicant confirmed that he had the screenshot and Mr Garcia stated that he now thought everything was in order. The applicant stated that ‘we should wait for the document’. Mr Garcia recounted to the applicant a conversation he (Mr Garcia) had just had with BTL. He told the applicant, among other things, that BTL had advised him that inspections are discretionary and that it turned out that an inspection was unnecessary. BTL further advised him that there was zero chance of this consignment being incinerated and that BTL were ready to collect the containers and take it to its warehouse. The applicant responded to Mr Garcia: ‘…let’s wait and see — for him to send us the document and we see what’s up…But in any case don’t give your seal of approval mate until a document is received…’[12] In evidence at trial, the applicant confirmed this conversation (which was recorded) and the document he was referring to was an official document guaranteeing that consignment would not be inspected.
[12]These statements were asserted to be incriminating conduct (xi) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct.
The controlled operation manufactured the requested document about two hours later on 16 August 2019. Mr Garcia asked BTL to send the document as soon as possible. About one hour later BTL, acting pursuant to the controlled operation, sent GZ the requested official document headed ‘Released from Biosecurity Control’ which purported to be from the Department of Agriculture.
On either 20 or 21 August 2019, BTL told GZ that the consignment was cleared and ready for delivery to Melbourne.
On 23 August 2019 in a telephone call with Mr Garcia, the applicant falsely told him that he (the applicant) was in Sydney.[13]
[13]This statement was asserted to be incriminating conduct (xiii) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct in regard to a phone call on 23 August 2019.
On 27 August 2019, BTL told Mr Garcia the consignment would be in Melbourne the next day.
On 28 August 2019, an undercover police operative, posing as the truck driver for the consignment, contacted Mr Garcia by telephone and told him that drugs had been found in the consignment. Shortly thereafter Mr Garcia advised the applicant of this. Around one hour later, the applicant booked a plane ticket to Mexico, leaving Australia that night.[14] He was observed by a surveillance team appearing to purchase this ticket using his mobile phone whilst referring to his passport and credit card.[15] He was intercepted by ABF officers at 1.45 pm on 28 August 2019 at the place he was staying in St Kilda.
[14]This activity was asserted to be incriminating conduct (xv) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct.
[15]This activity was asserted to be incriminating conduct (xiv) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct.

In his police interview the applicant told police that his involvement was limited to the shipment from Mexico to Australia and ensuring the consignment was received by Mr Garcia, and that his work was practically already done.[16]
[16]These statements were asserted to be incriminating conduct (xvii) in the prosecution’s Amended Notice of Evidence of Incriminating Conduct.

Proposed Ground 1

The prosecution filed an Amended Notice of Evidence of Incriminating Conduct dated 8 May 2022 (‘ICN’). This notice is appended to these reasons. Initially, 19 pieces of evidence were identified, however reliance on items (viii), (ix), (xii), (xviii) and (xix) was abandoned. Item (xiii) was replaced by identical evidence from another source.
In substance, proposed Ground 1 contends:
(a)that in making a determination under section 20(1)(b) of the Jury Directions Act 1995 (‘the Act’)[17] the judge failed to assess competing innocent explanations for the alleged incriminating conduct; and
(b)the evidence of conduct that was permitted to be used by the jury as incriminating conduct was not reasonably capable of such use.

Proposed Ground 1(a)

[17]Jury Directions Act 2015 s 20(1)(b).

This part of the proposed ground can be dismissed readily. The remaining items in the ICN and the substituted item (xiii) related to four broad categories. The judge correctly described them as follows:
(1)the return of the cargo or sending back of the cargo to Hong Kong or some other destination;
(2)the booking of flights and tickets back to Mexico by the accused;
(3)the injunction to Mr Garcia to wait for (official) documents in relation to the release of the cargo; and
(4)what are said to be lies (by the accused to Mr Garcia) in relation to going to Sydney and being in Sydney.
The judge then ruled pithily:
In my view each of the matters which were outlined by the learned prosecutor, which essentially fall under those broad areas are able, in the light of all the evidence, to be reasonably capable of being viewed by the jury as evidence of incriminating conduct and…may be used as such.
In this passage, the judge was reciting his conclusions under section 20(1)(b) of the Act which prohibits prosecution use of evidence of conduct as incriminating conduct unless (inter alia) the trial judge determines that, on the basis of the evidence as a whole, the evidence of conduct is reasonably capable of being viewed by the jury as evidence of incriminating conduct.[18]
[18]Ibid.
In his Honour’s short ruling he does not advert to considering competing innocent explanations in conducting the evaluative exercise required by section 20(1)(b) of the Act. This does not mean, of course, that the judge did not consider these explanations; a perusal of the transcript of argument, and his Honour’s ultimate jury charge demonstrate with clarity that he did consider these matters.
We divert to make this observation. The brevity of the ruling can be explained by the circumstances in which it was delivered. Unusually the incriminating conduct discussion took place at the conclusion of the evidence along with other significant legal argument. The ruling immediately preceded final addresses and the conclusions were obviously essential to the content of those addresses. We consider it desirable that this type of legal argument occur in the less pressured pre-trial atmosphere. The parties and the judge will then be less distracted, and the judge will have more time to deliver a considered and properly reasoned ruling. In the event that the asserted incriminating conduct evidence changes materially during the trial, then the argument can subsequently be reviewed if necessary.
After the close of all the evidence, argument was undertaken as to the use that could be made of the relevant incriminating conduct evidence. The applicant relied upon detailed written submissions which comprehensively set out each of the competing assertedly innocent explanations, for the relevant conduct. Counsel adopted those written submissions and expanded upon them. There was thorough discussion between defence counsel and the judge as to these explanations.
At an earlier stage of oral argument about section 20(1)(b) of the Act,[19] the judge correctly set out his understanding of the task allotted to him by Parliament:
…it remains basically, for me, to make that decision. Although, I obviously must rely on the way the defence puts that explanation and evaluate it…
[19] Ibid.
It is unnecessary to refer to several other similar passages. The submission that the judge erred by not considering competing innocent explanations is unsustainable, and it is unsurprising that this part of proposed Ground 1 was not advanced orally. On the appeal, the applicant’s counsel accepted that this part of the proposed ground was pressed but faintly.
Further, the judge correctly charged the jury as to how they should go about their task of examining the incriminating conduct evidence including evaluating each competing explanation identified by the defence. Over the course of several pages of transcript, the judge identified each competing explanation to the jury.
There is no substance to proposed Ground 1(a).

Proposed Ground 1(b)

This part of the proposed ground contends that the evidence left to the jury under the section 20(1)(b) determination as incriminating conduct was not reasonably capable of such use.[20] Recently this Court revisited the judicial determination contemplated by the sub-section:
114. It is clear from the statutory provisions that the decision of a trial judge pursuant to s 20(1)(b) does not concern the admissibility of evidence but rather the manner in which evidence may be used. That is, the judge must determine whether the evidence is reasonably capable of being viewed by the jury as evidence of an implied admission by the accused of having committed an offence charged, an element of an offence charged or negating a defence to an offence charged. That determination must be based on the whole of the evidence. It involves no determination of whether the jury would so view the evidence, only whether the jury could do so. In accordance with the mandatory s 21(1)(a) direction, the jury must be directed that the evidence of conduct may only be treated as evidence of incriminating conduct if the jury concludes that the only reasonable explanation of the conduct is that the accused believed that s/he committed an offence or an element of an offence charged or negated a defence to an offence charged.
115. Under s 20(1)(b), the judge has a gate-keeper role. The central issue is the capacity of the evidence to found a process of reasoning. The judicial determination that the evidence has the relevant capacity is a necessary pre-condition to the later determination by the jury whether or not to adopt that reasoning, subject to the mandatory direction in s 21(1)(a). Section 20(1)(b) is a broad filter as to whether the evidence is fit for the jury’s consideration as an implied admission of guilt. Section 21(1)(a) constrains the jury in how that consideration is performed.
116. The combination of these provisions indicates that the JDA contemplates that post-offence conduct evidence may be presented to the jury as evidence of incriminating conduct of the offence charged that ultimately may not be able to be treated as such by the jury because there are other reasonable explanations for that conduct. In other words, evidence of conduct explicable by more than one reasonable argument will, usually, pass through the gateway in s 20(1)(b).[21]
[20]Ibid.
[21]Director of Public Prosecutions v Lynn [2024] VSCA 62 [114]–[116] (Emerton P, Taylor and T Forrest JJA) (citations omitted) (emphasis in original).
A little later in the judgment, the Court said:
Thus the s 20(1)(b) question is not whether the only reasonable explanation for the conduct is that the accused believed he or she had committed the offence charged, but, rather, is another explanation one which the jury could accept or reject as reasonably possible. If so, the evidence must pass through the gateway. It is then for the jury to determine whether, on the evidence as a whole and bringing its collective life experience, wisdom and common sense, it accepts or rejects the reasonable possibility of the non-incriminating or alternative explanation.[22]
[22]Ibid [121] (Emerton P, Taylor and T Forrest JJA) (citations omitted).
Thus, the judicial determinations do not consider the relevant pieces of evidence in a vacuum, or in a piecemeal fashion. As the statute requires, the determinations must be after consideration of the whole of the evidence in the case. In this case, where the respondent relied on 13 pieces of allegedly incriminating conduct, each must be considered against the whole of the evidence, and then if capable of constituting an implied admission of guilt it will pass to the jury to consider whether it does so constitute an admission.
The chronology, including the italicised portions, demonstrates how the prosecution sought to use the asserted post-offence incriminating conduct. Most of the items, considered alone are not particularly potent — it is only when reviewed in their surrounding factual context that their potency becomes apparent.
The various facts were relied upon by the respondent to prove four broad incriminating propositions. With apologies for repetition and for changing the phraseology of those incriminating propositions, they are:
(1)the actions of the applicant in endeavouring to either return the consignment to Mexico or redirect it to Hong Kong;
(2)the caution expressed by the applicant after Mr Garcia was told that the cargo had been released for collection including injuncting Mr Garcia to wait for relevant official documents;
(3)the attempted and actual booking of flights back to Mexico on 15 August and 28 August 2019 respectively; and
(4)the lies told to Mr Garcia about going to and being in Sydney.
We shall consider these propositions in turn.

Redirection of consignment

The drugs were covertly discovered on 13 August 2019. By this stage, BTL had advised GZ that if, upon inspection, the cowhides appeared contaminated, they would be destroyed. Also at this stage the ‘subject to inspection’ condition remained in place of the import permit. In that context, the applicant’s increasingly urgent steps on 15 August 2019 to redirect the consignment (the subject of ICN (i), (ii), (v), (vi) and (vii)) were capable of being viewed by the jury as an implied admission of guilt. Inspection carried with it the risk of detection or destruction. Destruction was decidedly unpalatable for the drug contraband worth $80 million wholesale on the Australian market and of comparatively little moment if cowhides were all that was being imported. The steps taken by the applicant in this regard were capable of being used by the jury as implied admissions that the applicant knew or believed that drugs were secreted within the frozen cowhides. This evidence must also be considered against the applicant’s other activities, particularly those that occurred simultaneously on 15 August 2019.

Caution

On 15 August 2019, at the same time or very shortly after the applicant’s endeavours to redirect the consignment, as part of the controlled police operation, information was released to Mr Garcia that the consignment would not be inspected after all and it was cleared for collection. In our view, the applicant at this stage exercised extreme suspicion and caution at this turn of events. This is the subject of ICN items (viii) (replacement), (ix), (x), (xi) and (xii). He told his wife it was ‘very strange’, seemed to agree with her that it was ‘fishy’, told Mr Garcia that Fernando would want the container sent back because of the speed of the clearance, and required Mr Garcia to wait for official documentation and ‘see how this thing develops’. This also was capable of being used by the jury as an implied admission of knowledge. If the consignment was merely cowhides, why the need for such caution? Why not accept that ‘everything was sorted’ and get on with collecting the consignment?

Flights

Throughout this busy period on 15 August 2019, both whilst the research was being conducted about redirecting the consignment, and into the period where the sudden about-face by ABF precipitated the caution referred to above, the applicant proposed flying home to Mexico forthwith, and requested his wife’s help in booking a ticket. This is the subject of ICN items (iii), (iv), (v) and (x). Further on 28 August 2019, approximately an hour after being advised by Mr Garcia that drugs had been discovered by the truck driver delivering the consignment, the applicant booked a flight to Mexico, scheduled for that evening. This is the subject of ICN items (xiv) and (xv). This evidence of proposed flight from Australia and its timing was capable of being used by the jury as an implied admission of guilt.

Lies

On 15 August 2019 at dinner, the applicant falsely told Mr Garcia that he was going to go to Sydney on the next Monday or Tuesday. On 23 August, he falsely maintained to Mr Garcia that he was in Sydney. The jury could view these lies as implied admissions of knowledge and an attempt to distance himself from the drug importation. The 15 August 2019 conversation emerged orally at trial, and was relied upon as incriminating evidence at trial. The 23 August 2019 conversation was the subject of ICN item (xiii).
When viewed in the overall context of events we consider that each of the pieces of evidence sought to be relied upon as incriminating conduct was capable of being used in that way. There is no merit to proposed Ground 1(b).

Proposed Ground 2

In substance, the applicant contended in proposed Ground 2 that the prosecution’s circumstantial case did not prove the disputed elements, particularly those relating to agreement and knowledge. In the absence of knowledge, the applicant could never be part of the undoubted agreement realised by others to import the drug shipment. Assessing the case as a whole did not resolve doubts about the sufficiency of the evidence adduced by the prosecution on the issue of knowledge.
Further, the applicant contended that there was no material basis for rejecting the applicant’s innocent explanation given both in his police interview and in his evidence, namely that he had no knowledge of drugs and at all times believed he was supervising the logistics of a simple cowhide importation. The applicant pointed to the changing of the seals in Manzanillo and contended that there was a chance, and not a fanciful one, that the drugs were secreted there, without the applicant’s knowledge and there was no evidence connecting him to anything that may have occurred in the port of Manzanillo from 27 June to 1 July 2019.
The applicant contended that his conduct, before and after the importation was completed, was consistent with innocence:
•there were no communications in which the applicant referred to or mentioned drugs;
•Mr Garcia said that he did not observe the applicant do anything that gave him reason to believe the applicant was involved in importing drugs; and
•the applicant did not endeavour to conceal his involvement in the importation of the cowhides and when intercepted by ABF officers in St Kilda on 28 August 2019, he readily provided his mobile phone and laptop, which were easily accessible and devoid of incriminating material.
The applicant compared his position to Mr Garcia’s and argued Mr Garcia was the consignee, had legal authority to receive the consignment and had more practical involvement in the importation. Whilst the prosecution contended that the applicant’s purported role in inspecting and grading the cowhides was merely a ruse to gain first access to the drugs, the applicant argued that there was no evidence that he made any attempt to gain exclusive access to the container. The applicant gave evidence that he sought the assistance of Mr Garcia and others to unload the containers, and he made no attempt to avoid a quarantine inspection which would have disclosed the presence of the drug shipment. In this respect his evidence conflicted with that of Mr Garcia.[23]
[23]See paragraph [70] of these reasons for judgment.
The respondent contended that there were seven critical facts including the incriminating conduct which proved to the criminal standard that the applicant knew or believed that there were drugs in the consignment, and if so, that he was part of the criminal agreement.

Legal principles

This proposed ground is couched in the terms of section 276(1)(a) of the Criminal Procedure Act 2009 and contends that the verdict of the jury is unreasonable and/or cannot be supported having regard to the evidence.[24] The principles that this Court must apply in considering this issue were conveniently restated recently in Paulson v The King[25] citing M v The Queen[26] and R v Baden-Clay:[27]
[49] The relevant principles that this Court must apply when considering whether the verdict of guilt is supported by the evidence were explained by Mason CJ, Deane, Dawson and Toohey JJ in M v R.[28] The applicant must demonstrate that, on the whole of the evidence, it was not open to the jury to be satisfied beyond reasonable doubt of the accused’s guilt of the offence charged.[29] In determining this question, the Court must make its own independent assessment of the evidence, giving full weight to the jury’s advantage in seeing and hearing the evidence.[30]
[50] The case of the prosecution was circumstantial and depended on inferences to be drawn from the proved facts having regard to the criminal standard of proof. In Baden-Clay, under the heading ‘Hypothesis consistent with innocence’, the High Court said:
The prosecution case against the respondent was circumstantial. The principles concerning cases that turn upon circumstantial evidence are well settled. In Barca v R, Gibbs, Stephen and Mason JJ said:
When the case against an accused person rests substantially upon circumstantial evidence the jury cannot return a verdict of guilty unless the circumstances are ‘such as to be inconsistent with any reasonable hypothesis other than the guilt of the accused’: Peacock v R. To enable a jury to be satisfied beyond reasonable doubt of the guilt of the accused it is necessary not only that his guilt should be a rational inference but that it should be ‘the only rational inference that the circumstances would enable them to draw’: Plomp v R ; see also Thomas v R.
For an inference to be reasonable, it ‘must rest upon something more than mere conjecture. The bare possibility of innocence should not prevent a jury from finding the prisoner guilty, if the inference of guilt is the only inference open to reasonable men upon a consideration of all the facts in evidence’ (emphasis added). Further, ‘in considering a circumstantial case, all of the circumstances established by the evidence are to be considered and weighed in deciding whether there is an inference consistent with innocence reasonably open on the evidence’ (emphasis added). The evidence is not to be looked at in a piecemeal fashion, at trial or on appeal.[31]
[51] As that decision makes plain, a hypothesis must be one founded on the evidence. It is not enough that a theoretical hypothesis can be imagined but there are ‘no positive proved facts from which the inference’ can be drawn.[32]
[24]Criminal Procedure Act 2009 s 276(1)(a).
[25][2024] VSCA 188.
[26](1994) 181 CLR 487.
[27](2016) 258 CLR 308.
[28]M v The Queen (1994) 181 CLR 487, 492–3.
[29]Ibid 493 (Mason CJ, Deane, Dawson and Toohey JJ).
[30]Ibid 492–3.
[31]R v Baden-Clay (2016) 258 CLR 308, 323–4 [46]–[47] (French CJ, Kiefel, Bell, Keane and Gordon JJ) [2016] HCA 35 (citations omitted).
[32]Paulson v The King [2024] VSCA 188 [49]–[51] (Priest, Niall and Orr JJA) (emphasis in original) (citations omitted except those cited above).

The applicant gave evidence-in-chief over two days and was cross-examined over five days. Insofar as can be distilled from the transcripts of his record of interview and his evidence, he steadfastly denied any knowledge of the contraband drugs. We consider, however, that the combined force of the circumstantial evidence, together with the inherent improbability of certain aspects of the applicant’s account enabled the jury to reject that account beyond reasonable doubt. It follows that we consider it was open to the jury to be satisfied beyond reasonable doubt that the applicant knew or believed that the consignment contained a significant quantity of illegal drugs, and thus was a party to an agreement with at least Fernando to import those drugs into Australia. We shall explain our reasons. This necessarily requires some repetition of territory already covered by proposed Ground 1(b).

Analysis

Over half a tonne of methamphetamine was secreted in folded frozen cowhides. The principal(s) of the importation had a substantial investment in this enterprise. The applicant was engaged by Fernando, undoubtedly a principal, to oversee the importation of narcotics valued at AUD $80 million wholesale. The applicant was the man on the ground in Australia charged with organising the logistics of the importation. On his account, one of his duties was to inspect, thaw, open and grade each of the cowhides. On Mr Garcia’s account, the applicant wished to do this by himself, notwithstanding the size of the overall shipment. There were over 700 cowhides weighing about 20 tonnes. He told Mr Garcia (on Mr Garcia’s evidence) that the process would take about 10 days. On any view, the inspection and grading process was likely to reveal the contraband. We consider it improbable that Fernando would charge the applicant with a duty involving first access to the imported goods, without informing him about what he might find (i.e. the contraband). If Mr Garcia’s account was accepted, then the applicant’s insistence that he would undertake the process alone is consistent with the applicant knowing that the drugs were secreted in the cowhides and wishing to keep this knowledge to himself. It was clearly open to the jury to accept Mr Garcia’s evidence on this issue, and to reject the applicant’s conflicting account that Mr Garcia also would be involved in this process.
It is similarly improbable that the applicant’s supposed duties of inspection, thawing and grading of the cowhides were the true reason for his having first and exclusive access to the container. By his own admission, he had no experience in inspecting and grading cowhides.
The applicant seemed very concerned about any activities proposed by customs or ABF that would expose the cowhides to close inspection. The applicant attempted to remove a condition on the permit that the cowhides be tanned in Queensland before entry could be granted. Obviously, if the cowhides were shipped to Queensland to be tanned, the secreted drugs would certainly be discovered during the tanning process. Further, the applicant resisted any other form of inspection by customs or ABF; with some urgency he investigated the cowhides’ return to Mexico or redirection to Hong Kong when it appeared that an inspection of the cowhides was an inevitable step in the import approval process.[33] If the cowhides were inspected, the consequence of this would be either the discovery of the drugs or destruction of the cowhides and the drugs. If shipment was simply 700 cowhides as the applicant claimed he believed, he had nothing to fear from a tannery or an ABF inspection, save for the possible destruction of approximately $40,000[34] worth of cowhides that were not his.
[33]The applicant investigated the return or redirection of the cowhides on 15 and 16 August 2019.
[34]On the Australian Customs Entry for Home Consumption document, dated 7 August 2019 and adduced as evidence at the trial, the value of the cowhides imported was US$28,000 which, at the time of the trial, was equivalent to AU$40,342.05.
On Thursday 15 August 2019 after the controlled operation had commenced, the applicant appeared highly suspicious of the sudden about-face by customs. It will be recalled that on 15 August 2019 at 12.31 pm, BTL told Mr Garcia that the consignment had been cleared and there was no need for an inspection. The applicant, according to Mr Garcia, was surprised at the quick release and had spoken to Fernando who wanted the shipment sent back to Mexico. The applicant said to his wife that it was ‘very strange’ that what could not be done in two months (that is having the inspection condition removed from the import approval) was achieved in 40 minutes. He wanted written official confirmation of the release. It would have been open to the jury to conclude that, if the applicant had no knowledge of the contraband, it was likely that he would be content that a stumbling block in his duties had been removed. Instead, the applicant was suspicious about customs’ prompt reversal.
On the same Thursday evening, and in the conversation in which the applicant expressed his surprise to Mr Garcia at the speed of the decision to release the shipment, the applicant lied to Mr Garcia saying that he was going to be in Sydney on the coming Monday or Tuesday in connection with the importation. This lie was substantially repeated on 23 August 2019 when he maintained falsely to Mr Garcia that he was actually in Sydney. The jury could conclude from this and the other evidence in the case that the applicant, suspicious that the importation had been discovered and conscious of his own involvement in it, endeavoured to conceal his true whereabouts from Mr Garcia, the consignee and a person to whom investigators may well wish to speak.
On 28 August 2019, approximately one hour after the undercover police operative told Mr Garcia that drugs had been found in the consignment, the applicant booked a plane ticket to leave Australia forthwith for Mexico. Mr Garcia’s evidence was that he told the applicant that drugs had been detected only minutes after his conversation with the undercover operative. The applicant had earlier indicated in a phone call that he was proposing to remain in Australia for 12 more days. It was open to the jury to conclude that, together with the other relevant evidence, the applicant’s attempted peremptory departure from Australia was because he knew that he was knowingly involved in the drug importation and that police interest in his activities could reveal that.
Similarly, the applicant’s pre-offence lies to ABF in his visa application and on his incoming passenger card representing that his visit to Australia was for tourism was capable of use by the jury in the same way. The jury may reason — why lie? If his purpose for visiting was legitimate business, why not say so? Further, the jury would be entitled to take these lies (if that is what they found them to be) and the Sydney lies (admitted by the applicant) into account when assessing the applicant’s credibility as a witness.

Manzanillo

It will be recalled that the shipping container seals were broken and apparently resealed in Manzanillo, a major Mexican port. The applicant argued at trial that this was evidence that the integrity of the contents of the container, packed originally in Leon, had been compromised. There was no documentary evidence of the breaking of the seals or their resealing in the five days the container was held in Manzanillo. The applicant contended at trial that it was reasonably open on the evidence that in Manzanillo the drugs were secreted in the frozen cowhides by some unknown third party, perhaps a drug cartel.
The respondent contended at trial and in response to the appeal before this Court that this hypothesis, after an examination of all the evidence, was not reasonably open. In her final address, the prosecutor contended that this hypothesis was far-fetched:
•It was implausible that 167 packages weighing over half a tonne would be furtively secreted in frozen cowhides at a busy shipping terminal. This was an activity that needed to be conducted in private, not very publicly. The secretion would require noisy motorised machinery, a large working space, the involvement of several people, the unwrapping and rewrapping of pallets, the repackaging of cowhides in bags and the re-strapping of the pallets.
•The jury were provided with two photographs on this issue. One showed the inside of the container just prior to it being sealed in Leon, the other showed the same view as it appeared immediately after it was opened in Sydney. The prosecutor relied upon the obvious similarity of the position, configuration and appearance of the pallets to argue that the consignment had not been removed from the container, nor disturbed since being loaded at Leon.
•There was no evidence as to what kind of control or influence a drug cartel might try to exercise over the Manzanillo port, or who they would try to influence.
•There was evidence that a container can be opened at that port for legitimate reasons, such as for merchandise inspection. There was also evidence that the shipper of the consignment was made aware of the new seal number and no issue was raised.
We consider that it was open for the jury to reject the applicant’s competing innocent hypothesis of intervention by a third party at Manzanillo. Essentially for the reasons advanced by the prosecution at trial, we consider it implausible that half a tonne of methamphetamine would be secreted publicly at a major Mexican port in 700 frozen cowhides. The asserted involvement of some Mexican drug cartel was highly speculative and unsupported by any evidence other than vague references to drug cartels. There was also no evidence in the case of any follow-up interest by any third party, after the ship left Manzanillo. We have also viewed the photographs of the container taken at the beginning and the end of its journey. We consider the packing arrangements in all practical respects to be identical.
This was a strong circumstantial case, and as we have said, it was comfortably open to the jury to reject the applicant’s innocent account, and the possibility of third party drug cartel intervention at Manzanillo. We agree with their conclusion after our independent examination of the record.

Conclusion

We shall refuse the application to appeal out of time.
---

•

Appendix 1 — The prosecution’s Amended Notice of Evidence of Incriminating Conduct

[2024] VSCA 265

12 November 2024