R v BB (No 4)

[2019] NSWSC 1392

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

R v BB (No 4) [2019] NSWSC 1392

Hearing dates:

26 – 30 August, 03 – 06, 09 – 11, 13, 16 – 17 September 2019

Date of orders:

17 September 2019

Decision date:

17 September 2019

Jurisdiction:

Common Law - Criminal

Before:

Rothman J

Decision:

(1) The application for a directed verdict is rejected and the matter will proceed.

Catchwords:

CRIME – CRIMINAL PROCEDURE – Application for Directed Verdict after close of Crown Case – whether evidence of supply by Accused – meaning of supply in context of offence – means “make available to” – discussion of principles – Crown case taken at highest allows a jury, properly instructed, an inference that accused supplied HICO, knowing the sanctioned goods were going to Iran

Legislation Cited:

Charter of the United Nations Act 1945 (Cth)

Charter of the United Nations (Sanctions – Iran) Regulations 2008 (Cth)

Criminal Appeal Act 1912 (NSW)

Criminal Code (Cth)

United Nations (UN Sanction Enforcement Law) Declaration 2008 (Cth)

Cases Cited:

Doney v R (1990) 171 CLR 207; [1990] HCA 51

JMR (1991) 57 ACrimR 39

R v Kaldor [2004] NSWCCA 425

R v Philip Wan Por Leung (No 3) [2009] NSWSC 450

R v The Queen (1989) 18 NSWLR 74

Category:

Procedural rulings

Parties:

Regina (Crown)
BB (a pseudonym) (Accused)

Representation:

Counsel:
M McHugh SC / A McGrath (Crown)
S Pararajasingham (Accused)

Solicitors:
Director of Public Prosecutions (Cth) (Crown)
Musgrave Legal (Accused)

File Number(s):

2016/321930

Publication restriction:

Suppression orders made under s 7(1) of the Court Suppression and NPO Act 2010 (NSW)

EX TEMPORE Judgment

1. HIS HONOUR: Before the Court is an application by the accused, through his counsel, for a verdict by direction. A written outline of that application, or the grounds and/or arguments in favour thereof, is set out in a document which has been marked for identification (MFI-18) in these proceedings. Essentially, the accused submits that the evidence before the Court is incapable of establishing an element of the offence beyond reasonable doubt.

2. The stage at which the Court has reached is that the evidence in the whole of the trial is complete. There was no oral evidence adduced by the accused and such documentary evidence as the accused tendered was tendered through witnesses called by the Crown. While it is an irrelevant factor, it should not be understood by the foregoing that the Crown called witnesses that were unfavourable to it.

3. The Crown has addressed the jury on how the jury should take the evidence that is before it and come to the conclusion that the elements of the offence have been proved beyond reasonable doubt.

4. The Court previously, in a preliminary ruling, dealt with the issues of direction that were raised by the parties. Those matters were dealt with by the Court in R v BB [2019] NSWSC 1054, (hereinafter “BB (No 1)”). The matters that were then raised with the Court and with which the Court dealt were the fault elements necessary for each of the physical elements required under the provisions of Charter of the United Nations Act 1945 (Cth), (hereinafter “the Act”), by virtue of the operation of the Criminal Code (Cth), (hereinafter “the Criminal Code”). The Court, in those reasons for judgment in BB (No 1) did not deal expressly or at all with the physical elements.

5. Essentially, the issue that is raised now, in the application for a verdict by direction, is an issue that relates to the absence of evidence as to a physical element, as it should be properly understood, in the construction of the Act and the regulations as governed by the Criminal Code.

6. These reasons for judgment should be read in conjunction with BB (No 1). BB (No 1) sets out some of the relevant provisions of the legislation, including the Charter of the United Nations (Sanctions – Iran) Regulations 2008 (Cth) and reg 7 and reg 10, reg 10(2) and reg 10(7) thereof, and including s 27(1) of the Act. It also refers to declarations and the like, none of which are directly relevant to the issues that are now before the Court and do not require discussion in these reasons.

7. The principles associated with a directed verdict and upon which such a direction is to be given are strict and confined. As I have said earlier in judgments and, in particular, in the decision of the Court as presently constituted, in R v Philip Wan Por Leung (No 3) [2009] NSWSC 450, while the principles are strict and confined, the test, once satisfied, is not discretionary. A trial Judge has a duty to direct a verdict of acquittal, if the evidence could not sustain a guilty verdict, or, as more commonly expressed, “if there is no evidence upon which a jury could convict”; a phrase that emanates from Doney v R (1990) 171 CLR 207; [1990] HCA 51 at p 212.

8. When determining that question, that is, the existence or otherwise of evidence that will sustain a guilty verdict, the Court is required to ignore contradictory evidence unfavourable to the Crown and to take the Crown case at its highest, including any inferences that are available and arise from the evidence adduced. It is the function of the jury, not the Judge, to determine whether those inferences will be derived and it is the function of the jury, not the Judge, to resolve conflicting evidence. I refer particularly to the judgment of Gleeson CJ, then Chief Justice of this Court, in R v R (1989) 18 NSWLR 74 at 81.

9. The test is often described as a question of law, but, as was made clear in the reasons for judgment of Gleeson CJ to which I have just referred, it involves an assessment of the facts that are proved by the evidence adduced. Thus, strictly, it is not purely a question of law or only a question of law and, as the Court of Criminal Appeal has made clear, requires leave under the current provisions of the Criminal Appeal Act 1912 (NSW).

10. A number of matters should be noted. First, it is not for the trial Judge to determine the issue on the basis that a jury verdict would be unreasonable or, as it was once described, unsafe or unsound. If there be evidence, even tenuous, inherently weak or vague evidence, which the jury is able to take into account and which, if accepted by the jury, would support a verdict of guilty, the matter must be left to the jury. It is not a matter for the trial Judge to pre-empt a potentially unreasonable verdict by a jury, but a matter for the Court of Criminal Appeal if the verdict ultimately reached be found to be unreasonable.

11. Secondly, it is insufficient, in determining whether to direct a verdict, for a trial Judge to come to the conclusion that a reasonable hypothesis consistent with innocence can be formulated. So much is said by the Court of Criminal Appeal in JMR (1991) 57 A Crim R 39. If an inference is available from the evidence adduced that is consistent with guilt, it is a matter for the jury, properly instructed, not for the trial Judge. So much for the principles on application for a verdict by direction.

12. During the course of the discussion with counsel, issues were raised relating to the operation of the Criminal Code and, in particular, to the operation of s 11.3 of the Criminal Code which is in the following terms:

“A person who:

(a)    has, in relation to each physical element of an offence, a fault element applicable to that physical element; and

(b)    procures conduct of another person that (whether or not together with conduct of the procurer) would have constituted an offence on the part of the procurer if the procurer had engaged in it;

is taken to have committed that offence and is punishable accordingly.”

13. During the course of the discussion, particularly with the Crown, the Court raised the issue of the extended operation of principal offences associated with the provisions of s 11.2. There is authority for the proposition that the provisions of s 11.2 of the Criminal Code do not create a separate and distinct offence, but describe a manner in which an accused, or a person, commits an offence otherwise described or rendered punishable by the law.

14. I was reminded of the reference to the judgment of Howie J, when sitting in the Court of Criminal Appeal and delivering the reasons thereof, to which the other judges agreed, in R v Kaldor [2004] NSWCCA 425. His Honour referred to s 11.2 and the operation of s 11.6 and made the comment that the provisions of s 11.2 of the Criminal Code are not prescribed in s 11.6 of the Criminal Code, because it is not a separate offence, but, rather, a manner in which the principal offence can be proved.

15. Having made that comment, it must be said that the Crown has not put its case on the basis of s 11.2 of the Criminal Code. The Crown does, however, albeit as a subsidiary alternative, rely upon the provisions of s 11.3 of the Criminal Code, which, again, reflect the manner in which a person may commit a principal offence otherwise described in the legislation. By the foregoing, I am not confining the offences to those, if any, prescribed by the Criminal Code.

16. Section 11.3 of the Criminal Code prescribes that, in relation to each physical element, the procuring of conduct by another person would have constituted an offence on the part of the procurer if the offence, if done directly by the procurer, would itself have been an offence.

17. Its effect is that the procuring of conduct is treated as a means by which a person may engage in conduct. Nevertheless, the more fundamental point raised by the Crown, and indeed upon which the accused relies, is that there is no evidence that BB engaged in conduct, being the “supply” of the sanctioned goods.

18. To clarify, I am not now dealing with whether the goods were sanctioned, or whether BB, the accused, knew they were sanctioned, or knew they were going to Iran. In essence, the issue that is raised, is that the Crown has not proved supply by BB as distinct from supply by Metalloy or by Specialised Pipe & Fittings (hereinafter “SPF”), a company more closely connected with the manufacture and supply of the high grade nickel.

19. During the course of the submissions of counsel for the accused, I had occasion to ask the question as to whether he was submitting that supply required the physical handing over of goods by the accused to the recipient of the supply and asked the question, somewhat hypothetically: Is it suggested that BB would be required to pick up the 90 tonnes or one lot of 60 tonnes and one lot of 30 tonnes and hand it over to somebody in Iran?

20. That, of course, is nonsense and, rightly, counsel for the accused did not adopt such a narrow construction. Rather, as I understand it, the argument that is put by counsel is that Metalloy organised for the supply of goods by SPF, which, in turn, organised for the production of goods by Firth Rixson in England.

21. After its manufacture as cast sticks, the goods were loaded onto vessels and shipped directly to Dubai and there it was located in the Dubai Free Zone. Thereafter, it was shipped from the Dubai Free Zone to Iran.

22. As a consequence, SPF, it seems on Mr Pararajasingham’s submission, was not even involved in the supply; only the manufacturer and the shipping companies. It is unnecessary to deal with whether SPF was involved in the supply. Certainly, it is closer, in the chain of events, to the supply than was Metalloy or BB. I do not, by that earlier expression, suggest that the closeness is an essential element of the term “supply”.

23. I have been provided by counsel for BB with a definition of the term “supply”. It is probably necessary for me to deal, albeit in passing, and notwithstanding that I have dealt with it, at least in part, in BB (No 1), with the offences. As earlier stated, that is stated in BB (No 1), the offence that is alleged in the indictment is an offence of conduct in contravention of s 27(1) of the Act. That is an offence that applies to an individual who, pursuant to that provision, commits an offence if the individual engages in conduct and the conduct contravenes a UN Sanction Enforcement Law.

24. There is a subsection of that provision that deals with bodies corporate, which provides that a body corporate commits an offence in the same circumstances. They are separately prescribed, because the body corporate has a defence in relation to reasonable precautions, as otherwise the offence is an offence of strict liability punishable on conviction by a fine only and, plainly, because it is a body corporate, not by imprisonment.

25. The term, “engage in conduct” is defined by s 27(10) to include the doing of an act or the omission to perform an act. Then, somewhat circuitously, one is taken to the provisions of the Act and the definitions section which refers to a UN Sanction Enforcement Law meaning “a provision that is specified in an instrument under subs 2B(1)”. Section 2B(1) refers to the Minister prescribing “by legislative instrument” a provision of a law of the Commonwealth as a UN Sanction Enforcement Law. One is then taken to certain instruments, being the United Nations (UN Sanction Enforcement Law) Declaration 2008 (Cth) and the fact that regs 10, 12, 13, 15 and 16 of the Charter of the United Nations (Sanctions – Iran) Regulations 2008 (Cth) are such a UN Sanction Enforcement Law.

26. The regulation on which much has depended in this case, albeit sub silentio, proscribes, by s 10, “if the person makes a sanctioned supply and the sanctioned supply is not an authorised supply”. I leave aside for present purposes the definition of “authorised supply”, which is found in s 10(6) of the aforesaid regulation and turn, instead, to the provisions of s 7 of the aforesaid regulation which provide that:

“A person makes a sanctioned supply if the person supplies, sells or transfers goods to another person and the goods are export sanctioned goods and, as a direct or indirect result of the supply, sale or transfer, the goods are transferred to Iran or are incorporated into goods that are transferred to Iran.”

27. Unlike the provisions that relate to the supply of drugs in various provisions or various legislative enactments, there is no extended definition of the term “supply” in those provisions that govern the supply of sanctioned goods.

28. The accused submits that, as a consequence, the accused, as distinct from SPF, and even, albeit not necessarily as obviously so, compared to Metalloy, did not supply the goods to Iran and, indeed, did not supply the goods at all.

29. As earlier stated, the Crown has disavowed complicity and joint criminal enterprise. The Crown has also disavowed complicity as it relates to s 11.2 of the Criminal Code. The Crown says it relies on the provisions of s 11.3 being “procuring”.

30. I turn then to the ordinary definition of the word, “supply”. As earlier stated, a definition of supply has been given by the accused, or in submissions, to mean “furnish, provide, afford (something needed, desired or used)”. That definition comes from the Shorter Oxford Dictionary.

31. The Crown has relied upon a definition in the Oxford English Dictionary. The definition of “supply” as a noun runs to some 28 pages; the definition of “supply” as a verb runs to some 12 pages, at least on the printout that I have. At p 7 of 12, in the definition of the word “supply” being definition number 5, used as a transitive verb, the Oxford English Dictionary defines “supply” as to mean: “To make (something needed or wanted) available to someone; to provide, especially for someone’s use or consumption.”

32. It seems to me that the two dictionary definitions do not differ in essence. “To furnish, to provide, to afford” is to make available and it is unnecessary for me to make a preference or describe a preference to either one of them, but I will use the term “make available” as adequately defining that which is necessary for a person to supply goods of the requisite kind in order to fall within the conduct that have been proscribed by the legislature.

33. Mr Pararajasingham, who, as I said earlier, appears for the accused and makes this application, stresses a number of factors. First, the evidence makes clear neither BB nor Metalloy had any title in the goods that were delivered, using a neutral term, to Iran.

34. There is an agency agreement between Metalloy and HICO, the terms of which are before the Court, and the evidence of Mr Boon, which describes the goods as having been supplied through SPF. As Mr Pararajasingham put it on that analysis, it is not clear that even Metalloy supplied the goods.

35. The evidence is lengthy and detailed and is largely documentary, although there is evidence from a number of individuals, who were involved, directly or peripherally, in the arrangements for the supply of the high grade nickel. Some of the evidence is contained in the evidence-in-chief of Mr Habib. At Tcpt, 9 September 2019, p 600(11), Mr Habib said:

“Q.    How did you come to know about that order being placed?

A.    We’d been sending quotes back and forth but, on June - June the 3rd, around 7 or 8 o’clock in the evening, I was out with friends watching a Rugby League game, Origin game, at Canterbury Leagues Club, and I got a phone call from BB saying the order had been placed.

Q.    And what was the order, do you remember?

A.    Yes.

Q.    And what was it?

A.    For the metals as per 738 Inconel and 939 Inconel.

Q.    And what sort of tonnage? Do you remember the tonnage?

A.    Yes.

Q.    And how much was the tonnage?

A.    It was approximately - I can’t recall, but somewhere around the 60 to 80 tonnes of metal.”

36. At Tcpt, 9 September 2019, p 601(4), the evidence is to this effect:

“Q.    So the order was placed to your knowledge, is that right?

A.    Yes.

Q.    At that time you were still running your normal business supplying metal to local manufacturers?

A.    Yes.

Q.    Were you involved in this order at all?

A.    No.

Q.    And what was the arrangement in terms of - you understood there were two shareholders in Metalloy, yourself and [BB], is that right?

A.    To my knowledge, yes.

Q.    Did you have an arrangement as to the sharing of profits?

A.    Yes.”

37. Then there is some reference as to how that was arrived at. In cross-examination, Mr Habib, at Tcpt, 10 September 2019, p 710(13), was asked:

“Q.    Do you accept that the purpose of Metalloy was for you and [BB] to go into business together?

A.    Yes.

Q.    You understand that there were negotiations between Metalloy and HICO regarding a purchase order?

A.    I do understand, yes.

Q.    And that is something that you understood as at 2009 when it was happening, correct?

A.    Yes.”

“Q.    And you understood that [BB] was negotiating with HICO on behalf of Metalloy?

A.    Yes.”

“Q.    And is it the case that you were advising [BB] about that negotiations process?

A.    No.”

38. At Tcpt, 10 September 2019, p 711(45), the following exchange occurs:

“Q.    You understood that, in the context of getting this order, you and [BB] were working together?

A.    No.”

39. I remind myself and the parties that I am required to take the evidence of the Crown at its highest. That evidence could lead to a finding that the negotiation for the supply of the high grade nickel commenced before Metalloy was in fact formed and, indeed, was effected, at least in relation to the first such shipment, before Metalloy was formed; that is, it was completed on or about 3 June 2009, Metalloy having been formed on 4 June 2009.

40. On any analysis it was completed before SPF were involved. In other words, the order was made and accepted before either BB or Metalloy had decided how the supply was to be effected.

41. The question then becomes not the distinction between Metalloy, on the one hand, and BB, on the other, but what is, as a matter of law, encompassed within the meaning of the word “supply”. As already stated, I accept that supply includes “to make available”.

42. A person makes available goods whether or not they physically hand those goods over. A person in ordinary commerce, for example, Woolworths, would make available goods if they ordered particular goods through a supplier to be delivered directly to a consumer and, in that circumstance, Woolworths would be supplying those goods.

39. I cannot see that the provision in s 27, or the regulations that proscribe sanctioned goods, confines the term “supply” to direct supply, as distinct from supply through persons with whom an alleged offender has dealt.

40. I also take the view, particularly in light of the fact that the negotiations and completion of the negotiations occurred, on one view of the evidence, at a time earlier than Metalloy was formed, that the distinction between the supply by BB, on the one hand, and supply by Metalloy, on the other, is not a distinction that enables BB to be unable to be convicted of the offence by a jury properly instructed.

41. I do not, by the foregoing, suggest that there could not be situations in which a person employed by a company or a director of the company would not be liable for all of the acts of the company. However, in this case, where the operating mind of the company and the operating conduct of the company was, on the evidence before the Court, the mind and conduct of BB, the interposing of a company for the purpose of carrying out a transaction does not exculpate the person who has formed the central management and control or the operating mind and operating conduct of the events in question.

42. In other words, as a matter of fact, BB has made available high grade nickel on the evidence of the Crown taken at its highest. It matters not that BB did so through manufacturers, shippers or contractors. Nor does it matter that he did so in his capacity as a director or employee of Metalloy.

43. In those circumstances, the application for a directed verdict is rejected and the matter will proceed.

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Amendments

08 December 2021 - Pseudonym revised.

Decision last updated: 08 December 2021