Questions of Law Reserved On Acquittal (No1/1996) No. SCCRM 96/324 Judgment No. 6074 Number of Pages - 6 Criminal Law (1997) 68 Sasr 117

[1997] SASC 6074

IN THE COURT OF CRIMINAL APPEAL OF SOUTH AUSTRALIA

DOYLE CJ, LANDER AND WILLIAMS JJn

Criminal law - particular offences - drug offences - possession - for sale or supply - taking part in the sale of methylamphetamine - whether s32(1)(d) of the Controlled Substances Act requires specific future sale - whether purchaser or one who takes steps to purchase for purpose of future sale can be guilty of offence under Controlled Substances Acts32(1)(d). Criminal LawConsolidation Act 1935 (SA) s350(1)(a), s351; Controlled Substances Act 1984 (SA) s32(1)-(5), referred to. Director of Public Prosecutions Reference No2 of 1995 (1995) 65 SASR 508, applied.

ADELAIDE, 11 December 1996 (hearing), 21 March 1997 (decision);

#DATE 21:3:1997

Appellant DPP (SA):

Counsel: Mr S Millsteed QC

Solicitors: DPP (SA)

Respondent The Acquitted Person 1-M:

Counsel: Mr D Wardle

Solicitors: Mr D Wardle

Respondent The Acquitted Person 2-T:

Counsel: Mr M Abbott QC

Solicitors: Mr J Lister

Order: Questions of law answered.

WILLIAMS J:

1. This is a case stated by a Judge of the District Court of South Australia on the application of the Director of Public Prosecutions reserving a question of law pursuant to ss350(1)(a) and 351 of the Criminal LawConsolidation Act 1935 (SA). The matter at issue arises out of the interpretation placed by the District Court Judge upon the remarks of this Court in Director of Public Prosecutions Reference No. 2 of 1995 - (1995) 65 SASR 508 (`The 1995 Reference').

2. Michael Anthony Leo, Geoffrey Charles Morgan and Ian Craig Talbot were charged upon information with one count of taking part in the sale of amphetamines contrary to s32(1)(d) of the Controlled Substances Act 1984 (SA); particulars of the charge were that the accused on 15 December 1994 at Barmera and other places knowingly took part in the sale of methylamphetamine, a drug of dependence to another person.

3. Leo entered a guilty plea and the prosecution thereupon entered a nolle prosequi against him with respect to a further count against him namely possessing amphetamine for sale contrary to s32(1)(e) of the Act. The trial of Morgan and Talbot proceeded before a jury; at the conclusion of the prosecution case the learned Trial Judge ruled that upon the evidence adduced by the Crown neither accused had a case to answer. At His Honour's direction, the Jury then returned a verdict of not guilty against each accused.

4. Upon the prosecution case, Leo arranged with Morgan to bring 3lbs of methylamphetamine to Barmera for the purpose of selling it to Morgan. Talbot arranged with Morgan to purchase from him 1lb of the drug from this bulk supply. Thereafter the Police intervened at Barmera and arrested all three men before the transaction proceeded. Leo was in possession of the bulk supply at Barmera upon his arrest.

5. By reason of the sheer size of Talbot's order (in terms of quantity) coupled with his history of selling drugs, the prosecution sought to draw the inference that Talbot intended to on-sell to some person or persons unknown. The prosecution case as regards the proposed arrangements (as well as Talbot's history in the trade) was based upon telephone interceptions.

6. In concluding that this evidence did not raise a case to answer the learned Trial Judge decided that Morgan and Talbot were not shown to have taken part in the sale of a drug to another person. His Honour's view was that whilst the possibility of future sale by Talbot may have been within contemplation, no specific future sale by Talbot could be identified.

7. Upon the above recitation of the facts the Trial Judge considered that there must be proof of an intended transaction (including an identified purchaser from Talbot) in order to establish the prosecution case. In His Honour's view of the evidence there was no more than the thought of a possible future sale by Talbot. As authority, His Honour referred to The 1995 Reference.

8. Upon this material the following questions of law have been reserved to the Full Court: "(1) Can a purchaser of a prohibited substance/drug of dependence for the purpose of future sale be guilty of an offence under section 32(1)(d) Controlled Substances Act, 1984 (SA)?

(2) Can a person who takes steps to purchase a prohibited substance/drug of dependence for the purpose of future sale be guilty of an offence under section 32(1)(d) Controlled Substances Act, 1984 (SA)?

(3) Is it necessary for the prosecution to identify a specific future sale in order to prove an offence under section 32(1)(d) Controlled Substances Act, 1984 (SA)?"

9. The questions have been widely expressed and it will be necessary to give qualified answers thereto in the light of the particular factual situation arising upon the special case.

10. The relevant extract from s32 of the Controlled Substances Act reads as follows: "32(1) A person shall not knowingly- (a) manufacture or produce a drug of dependence or a prohibited substance; (b) take part in the manufacture or production of such a drug or substance; (c) sell, supply or administer such a drug or substance to another person; ( d) take part in the sale, supply or administration of such a drug or substance to another person; or (e) have such a drug or substance in his possession for the purpose of the sale, supply or administration of that drug or substance to another person.

(2) Nothing in this section renders unlawful the manufacture, production, sale, supply, administration or possession of a drug of dependence by- (a) a medical practitioner, dentist, veterinary surgeon, pharmacist or nurse acting in the ordinary course of his profession; (b) a member of any other prescribed profession acting in the course of his profession; or (c) a person licensed to do so by the Health Commission, or renders unlawful- (d) the administration or supply by a person to another person of a drug of dependence that has been lawfully prescribed for, or supplied to, that other person; or (e) the taking part by any other person in the manufacture, production, sale, supply, administration or possession of a drug of dependence in the circumstances referred to in this subsection.

3) For the purpose of this section, a person who knowingly has in his possession more than a prescribed amount of a drug of dependence or a prohibited substance, being an amount that is prescribed for the purposes of this subsection, shall, in the absence of proof to the contrary, be deemed to have that drug or substance in his possession for the purpose of the sale or supply of that drug or substance to another person.

(4) Without limiting the generality of this section, a person takes part in the manufacture, production, sale, supply or administration of a drug of dependence or prohibited substance if- (a) he takes, or participates in, any step, or causes any step to be taken, in the process of that manufacture, production, sale, supply or administration; (b) he provides or arranges finance for any such step in that process; or (c) he provides the premises in which any such step in that process is taken, or suffers or permits any such step in that process to be taken in premises of which he is the owner, or in the management of which he participates.

(5) A person who contravenes this section shall be guilty of an offence and shall subject to subs (6), be liable to a penalty as follows:..."

(The remaining subsections have not been copied.)

11. In my opinion a key element in this case is the large quantity of drugs involved. A jury would be entitled to conclude by way of inference that those interested in this consignment were treating it as stock in trade. In the case of Mr Talbot a jury would also have his history in the drug trade before them to assist them in making such an assessment; the case stated does not specifically disclose whether Morgan was aware of Talbot's trading experience. There can be no doubt that the evidence was sufficient to enable a properly directed jury to draw the inference relied upon by the Crown that a considerable quantity of the drug ordered by Morgan was destined for sale by Talbot in a manner which may have not yet been determined when they were arrested on 15 December 1994.

12. In The 1995 Reference the Full Court dealt with the situation where the parties to an intended sale could be identified but where police intervention at the point of sale frustrated the completion of the transaction. As a point of distinction, it was argued for the accused in the course of the present Reference that Talbot may not have decided upon a particular market for his stock order at the time of his arrest. In my view this does not matter as regards the application of the relevant legal principle arising from s32(1)(d).

13. The circumstances of this case suggests that Leo, Morgan and Talbot were all participants in a trading operation to supply Talbot with stock in trade which was then destined to be disposed of by him for a consideration. A jury was entitled to conclude that such a trading operation was in contemplation irrespective of whether or not Talbot had customers.

14. The proscription of s32 of the Controlled Substances Act (by virtue of subsection(4)) extends to participation by an accused person in any step in the process of sale. Accordingly, any action which may be characterised as being a step in the process of sale will fall within the ambit of s32(1)(d); this legislation is designed to prohibit the trade in controlled substances from point of manufacture (or production) through all stages of commerce until the goods leave the trade and come into the hands of a person for his or her personal use. The prohibition (by virtue of s32(4)(b) and (c)) extends to financiers of drug operations (including brokers) and those having an involvement in providing the premises for the trading activities.

15. The language of s32(1)(d) reveals a legislative intention to exclude from its ambit those purchasers of drugs who are not themselves acquiring an illegal substance for sale - thereby excluding those who are merely purchasing for personal use (as "end users") - see The 1995 Reference at 514. However, a purchaser who is also a trader brings himself or herself within the section by reason of that person's intended further sales. Thus, the person who purchases drugs for personal use is excluded from the section, but the person who purchases drugs by way of stock in trade does so as step in "the process of sale". (A person who supplies or administers a drug to another person in a non-commercial environment, is of course subject to further specific proscriptions in terms of s32(1)(c)(d) and (e) but those situations do not now require examination).

16. The decision of the Trial Judge in the present case concentrated upon the phrase sale "to another person" in s32(1)(d) without recognising the assistance to be gained from s32(4) in identifying the range of activity proscribed by s32(1)(d) itself. The "process of sale" (as s32(4) emphasises) envisages a series of steps; undoubtedly these may include the ordering and procuring of stock by a trader. The process of sale of goods in a commercial environment is a well known concept. By placing and receiving orders for a quantity of goods and arranging for delivery to Morgan in the present case the accused respectively took steps which a jury was entitled to view as being steps in the commercial chain of events whereby Morgan and then Talbot would obtain stock in trade. Morgan's future stock was partially committed in terms of his arrangements to sell 1lb to Talbot in whose hands the stock would be dissipated commercially. Neither Talbot nor Morgan could be viewed (on the Crown case) as "end users" who could claim the protection of the legislative policy to which I have referred.

17. In The 1995 Reference this Court observed that in order to establish an offence against s32(1)(d) it was unnecessary for a sale of the drug to have actually occurred if a sale was in train or in contemplation. These remarks were made in the context of the factual situation then before the court but I consider that they are of general application. In the case of a trader who has ordered and taken steps to procure stock, sales to unknown persons are sufficiently in contemplation to bring the trader within the grasp of the subsection. As I have said previously the quantity of the drug which is involved may point to a person being a trader; alternatively his or her previous drug dealings may provide the evidence. Nevertheless, if for example, a scientist (engaged in relevant research) were to place an order for a drug supply relating to his area of academic interest then the conclusion to be drawn from the quantity of drug in the procurement order might be without significance. Such a person might be regarded as purchasing as an "end user" in the interests of science. The acquisition by such a person would not be for commercial purposes (i.e. for sale "to another person") but that, of course, is a special case.

18. When people allow themselves to be drawn into arrangements concerning large quantities of drugs, it may not be difficult to draw the inference that they must be aware that the arrangements are steps in a commercial undertaking to put product into a market. Courts should not be slow to recognise the realities of society in which we live. As well as the genuine "end user", the law makes allowance for the special classes of persons mentioned in s32(2) so that they may lawfully handle drugs in the restricted terms of the subsection; the agents of these people will likewise attract some limited protection. Therefore, the staff of a veterinary surgeon who (for the purposes of the veterinary practice) places an appropriate drug order with a proper source of supply will be protected; on the other hand a nurse or a medical practitioner (for example) who places an order in the circumstances akin to those which gave rise to the present Reference should not be surprised upon prosecution to be facing a case to answer.

19. Once a person's active status as a trader (or would be trader) is established it follows that such a person will be identified as engaged in a commercial process having the aim of profit through trade. Customers are a necessary concomitant of trade. However, the ship which travels from port to port unsuccessfully looking for cargo is engaged in trade as also is the itinerant knifegrinder who cannot find customers (see "The 1995 Reference" at 513) - it matters not whether the trader is selling services or goods - the same principle must apply - the fact that customers have not or cannot be found does not negate the conclusion which might otherwise be reached that the process of sale (or some step in that process) is in progress.

20. As a matter of general principle the criminal law recognises that there is sometimes scope for preliminary activity which itself does not give rise to an offence or an attempted offence. However, the wide ambit of the statutory concept of "process of sale" as used in s32 may not leave much room in practice for an intending drug dealer to develop his or her plans without infringing the statute. In my opinion such a result reflects the intentions of Parliament in this instance. I note that in terms of s32(4) a person "takes part in the sale...of a drug..." "if he...causes any step to be taken in the process" of sale; it is not necessary for the purposes of the present Reference to examine the implications of this provision in extending even further the wide ambit of s32(1)(d).

21. Despite the wide net which is cast by s32(1)(d), there will be situations in which the prosecution will need to rely upon a charge of possession for sale in terms of s32(1)(e). A "step" in the process of sale will, typically, involve at least some action to acquire or dispose of drugs or involve some associated activity such as the arranging of finance for an identified consignment. There will still be situations in which no action or activity can be proved amounting to a "step" and in which no prospective sale can be identified; there will be the situation in which nothing more can be proved beyond the fact of possession of a drug (perhaps hidden in small quantity but linked with possession of scales and other equipment.) "Being in possession" does not require any activity whereas "taking a step" requires action; to this extent s32(1)(d) and (e) complement each other. Of course these and other subsections of s32 do overlap each other in their potential operation. The legislative scheme would be incomplete without them all. (It should not be overlooked that s32(1)(e) unlike s32(1)(d) is supported by the evidentiary onus of s32(3)).

22. In my view the learned Trial Judge did not attach to the evidence in this case the significance which it deserved. He did not recognise that the placing of an order for such a large quantity of a drug by a drug trader was entitled to be treated as evidence of a step in a commercial enterprise as part of a process of future sale. He did not recognise that such a step is a proscribed activity in terms of s32(1)(d). The Trial Judge should have decided that there was a case for the accused to answer.

23. In my opinion in the light of these reasons the formal questions of law which have been reserved as abovementioned should be answered as follows: 1. Yes.

2. Yes.

3. No.

24. These answers should be read in the light of the circumstances in which the formal questions were posed and having regard to the reasons set out above.

DOYLE CJ:

25. For the reasons given by Williams J, with which reasons I agree, the questions reserved should be answered in the manner proposed by Williams J.

LANDER J:

26. I agree with the answers to the questions reserved proposed by Williams J and I agree with his reasons for those answers.