R v Cox (No 8)
[2005] VSC 368
•16 September 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
CRIMINAL DIVISION
No. 1453 of 2003
| THE QUEEN |
| v |
| STEPHEN COX, GLENN SADLER, IAN FERGUSON AND JOANNE FERGUSON |
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JUDGE: | KAYE J. | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 13 & 14 September 2005 | |
DATE OF RULING: | 16 September 2005 | |
CASE MAY BE CITED AS: | R v Cox and ors (Ruling No. 8) | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 368 | |
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CRIMINAL LAW – Conspiracy to traffick heroin – Application to sever money laundering count – Admissibility of evidence of existence of conspiracy before accused’s participation – Admissibility of accountant’s evidence of financial betterment of co-accused – Relevance - Discretion
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APPEARANCES: | Counsel | Solicitors |
| For the Crown | Mr M. Tovey Q.C. with Mr D. Brown | Office of Public Prosecutions |
| For the Accused Cox | Mr B. Young | Tony Hargreaves & Partners |
| For the Accused Sadler | Mr G.A. Georgiou with Ms H.P. Spowart | Victoria Legal Aid |
| For the Accused Ian Ferguson | Mr D. O’Doherty with Ms A. Marjanovic | C. Marshall & Associates |
| For the Accused Joanne Ferguson | Ms M. Tittensor | Theo Magazis & Associates |
TABLE OF CONTENTS
(a) Severance of Counts 1 and 3....................................................................................................... 1
(b) Admissibility of evidence concerning purchase of Landcruisers...................................... 3
(c) Objection to evidence “bolstering” the evidence of Duy Le............................................... 6
(d) Objection by Ian Ferguson to the evidence of Kenneth Lai................................................ 7
(e) Admissibility against an accused of evidence of financial betterments of co‑accused 13
(i) Admissibility of betterment evidence concerning Sadler on the trial of Ferguson...... 14
(ii) Admissibility of betterment evidence concerning Ferguson on the trial of Cox and Sadler........................................................................................................................................................ 21
(f) The objection by Ian Ferguson to the telephone chart produced by the Crown............ 22
(g) The objection by Ian Ferguson to the admissibility of the evidence of Phillip Carr... 23
Conclusion......................................................................................................................................... 24
HIS HONOUR:
On 21 July 2005 I made a ruling[1] in respect of applications by the accused for separate trials on Count 1, applications for severance of Counts 5, 6 and 7, and objections to the admissibility of some evidence. There are further matters on which I am now required to rule, some of which have arisen as a consequence of that ruling.
[1]R v Cox and ors (Ruling No. 4) [2005] VSC 225.
In particular the following issues have been raised by the parties:
(a)An application by Ian Ferguson and Joanne Ferguson to sever Counts 1 and 3 of the presentment.
(b)The admissibility of evidence concerning the purchase of Landcruisers by Ian Ferguson and Sadler in September 2000 and November 2000.
(c)The objection by Ian Ferguson to “evidence to bolster the credibility of Duy Le”.
(d)The admissibility of the evidence of Kenneth Lai in respect of Count 1.
(e)The admissibility against an accused of the evidence of the financial betterment of the co‑accused.
(f)The admissibility of a telephone chart produced by the Crown.
(g)The admissibility of the evidence of Phillip Carr.
(a) Severance of Counts 1 and 3
The effect of my previous ruling is that Ian Ferguson is to be tried separately to Cox and Sadler on Count 1 (conspiring to traffick heroin). Ian Ferguson and Joanne Ferguson will be tried jointly on Count 3 (being engaged in transactions involving the proceeds of crime). That count will be tried jointly with the charge of conspiracy (in Count 1) against Ian Ferguson. Counts 5, 6 and 7 (each involving theft charges) are to be tried separately from Count 1, and separately from each other.
In written outlines of argument, it was submitted on behalf of Ian Ferguson and Joanne Ferguson that, as a consequence of the severance of Count 6, it is necessary that Count 3 also be severed from Count 1.
Count 1 alleges that Ian Ferguson conspired with Cox, Sadler and others to traffick heroin between 1 April 1999 and 6 December 2002. The Crown case is that, during that period, Ian Ferguson, pursuant to that conspiracy, trafficked large quantities of heroin. Count 3 alleges that during the same period Ian Ferguson and Joanne Ferguson engaged in transactions involving money and other property which were the proceeds of that conspiracy, contrary to s.122 of the Confiscation Act 1997. Count 6 alleges that on 30 August 2000 Ian Ferguson, in the course of a drug raid, stole cash from Giac Nguyen, totalling $370,000.
The submission of Ian Ferguson and Joanne Ferguson, as made in the outlines of argument, focused on the fact that Count 3 alleges that the money laundering occurred between 1 April 1999 and 6 December 2002, and that the theft, charged in Count 6, occurred on 30 August 2000. The argument was that Count 3 must, accordingly, involve an allegation that Ian Ferguson and Joanne Ferguson engaged in transactions which involved (inter alia) the proceeds of the theft charged in Count 6. If Count 3 is jointly charged with Count 1, but not with Count 6, Count 3 can only relate to the proceeds of the conspiracy alleged in Count 1. It was submitted on behalf of Ian Ferguson and Joanne Ferguson that the Crown “ … ought not to be allowed to treat all transactions, particularly those occurring in the months after 30 August 2000, as evidence of the laundering of the proceeds of Ian Ferguson’s drug trafficking activity”.[2]
[2]Joanne Ferguson outline, 19 August 2005, paragraph 10.
At the commencement of oral submissions, Mr Tovey QC, who now appears with Mr Brown for the prosecution, informed me that the Crown does not intend to proceed with the prosecution of Ian Ferguson on Count 6, and that a nolle prosequi will be entered in respect of that count on the presentment. In light of that indication, Ms Tittensor, who appears on behalf of Joanne Ferguson, stated that her client did not persist with the application to sever Counts 1 and 3 on the presentment.
However, and notwithstanding Mr Tovey’s announcement, Mr O’Doherty, who appears with Ms Marjanovic for Ian Ferguson, submitted that Count 1 and Count 3 should be severed in respect of his client. Mr O’Doherty made that submission on the basis that, in a joint trial between Ian Ferguson and Joanne Ferguson on the money laundering count, it would be open to Joanne Ferguson to conduct her defence by seeking to prove that the proceeds of the crime, which were the foundation of Count 3, were derived from the theft alleged against Ian Ferguson by Giac Nguyen, and not from the proceeds of the conspiracy charged in Count 1, as contended by the Crown.
There are a number of short responses which can be made to that submission. First, if Joanne Ferguson intended to adduce evidence as to that theft, that would not provide a logical foundation for severing Counts 1 and 3. Ian Ferguson and Joanne Ferguson are jointly charged on Count 3, and Ian Ferguson would, nonetheless, suffer the apprehended prejudice by being jointly tried on that count. However, and in any event, the more direct response to Mr O’Doherty’s submission is that it is well nigh inconceivable that Joanne Ferguson, whether in a joint trial or if she were tried separately, would seek to prove that the money and property which are the subject of Count 3, had been derived, not from the conspiracy charged in Count 1, but rather from the proceeds of the theft of $370,000 by her husband from a drug dealer. Such a proposition is, to say the least, highly fanciful. I note that in the course of those submissions Ms Tittensor did not, understandably, seek to advance any such proposition on behalf of her client. Accordingly, no basis has been made out for severing Counts 1 and 3 of the presentment.
(b) Admissibility of evidence concerning purchase of Landcruisers
The Crown proposes to call evidence that in September 2000 Ian Ferguson purchased a Landcruiser for himself from Geelong City Toyota for the purchase price of $64,700. The Crown also proposes to call evidence that in November 2000 Ian Ferguson paid the purchase price of a Landcruiser acquired in the name of Caroline Sadler, the wife of the accused man Sadler, for $58,734. Ian Ferguson and Sadler both object to the admissibility of that evidence on the grounds that the prosecution has previously asserted that the two vehicles were purchased indirectly with funds which were the proceeds of the theft alleged in Count 6.
The evidence on which the Crown proposes to rely is contained in a statement of Jason John Flynn, who was then a sales consultant in the employment of Geelong City Toyota. Mr Flynn states that on 1 July 2000, Ian Ferguson attended at the dealership and negotiated the purchase of a new Landcruiser for a price of $64,700. Ferguson signed a contract of purchase in respect of the vehicle dated 1 July 2000. He also paid a cash deposit of $10,000. He produced that amount of cash from his pocket on that day. On 15 September 2000, the vehicle was delivered to Ian Ferguson. Final payment was made by means of a Bank of Melbourne cheque in the sum of $25,700, and cash totalling $29,000.
On 3 November 2000, Ian Ferguson contacted Flynn and enquired about the purchase of another Landcruiser. On the same day Ferguson and Sadler attended at the dealership. They negotiated the purchase of a new Landcruiser for $58,734. Flynn compiled a sale contract in the name of Caroline Sadler. Ferguson left the dealership while Sadler remained. Approximately one hour later Ferguson returned with a cheque for the amount of $58,734. Later that day the vehicle was delivered to Sadler’s home address. Caroline Sadler signed the contract and signed the VicRoads registration form.
As I have stated, Ferguson and Sadler object to that evidence on the grounds that the Crown has previously asserted that the Landcruisers were paid for by the proceeds of the theft alleged in Count 6 of the presentment and not from the proceeds of the conspiracy alleged in Count 1. It was submitted that there had been no change in the evidence concerning the purchase of the two Landcruisers. Thus it was submitted that the Crown assertion that the Landcruisers were purchased from the proceeds of the drug trafficking the subject of the conspiracy in Count 1 is so speculative and tenuous that the Crown ought not to be permitted to lead the evidence of the purchases of the Landcruiser on Count 1.
In a letter dated 15 April 2004 addressed to the solicitors for Sadler, the solicitor for the Office of Public Prosecutions stated that it was alleged by the prosecution that Ferguson used part of the proceeds of the theft alleged in Count 6 to purchase the two Toyota Landcruiser motor vehicles for himself and Sadler. Thus, it is correct that, at one stage in these proceedings, albeit prior to the committal proceedings, the Crown asserted that the motor vehicles were purchased from the proceeds of the theft at Braybrook which was the foundation of Count 6 on the presentment. However that has not always been the consistent stance of the Crown in these proceedings. In July of this year, in the course of argument concerning the severance of Count 6, senior counsel for the Crown submitted that there was a factual relationship between Count 1 and Count 6, because the Crown’s position was that the proceeds of Count 6 were used to fund the conspiracy alleged in Count 1, and were not used for the personal betterment of Mr Ferguson.[3]
[3]T 840-847.
In any event, there is, in my view, a short answer to the submission made on behalf of Sadler and Ian Ferguson. Count 6 is no more than an unproven allegation against Ian Ferguson, in respect of which Ian Ferguson is and was presumed innocent.[4] The fact that at one stage in the proceeding the Crown might have taken the position that the proceeds of the alleged theft were used to purchase the Landcruisers does not mean that the inference on which the Crown now relies, namely, that the vehicles were purchased from the proceeds of the conspiracy charged in Count 1, is speculative or tenuous. The original position taken by the Crown constituted, at that stage, nothing more than an inference which the Crown contended that a jury should ultimately draw at the trial of Count 6. The fact that the Crown, in April 2004, intended to rely on the evidence of the purchase of the Landcruiser for that purpose does not reflect on the validity or otherwise of the inference which the Crown now seeks to be drawn from the purchase of the Landcruisers, namely, that they were funded from the proceeds of the trafficking which was the subject of the conspiracy alleged in Count 1 of the presentment. Accordingly, I reject the objection taken to the admissibility of the evidence of the purchase of the Landcruisers.
[4]cf R v Roberts and Urbanec [2004] VSCA 1 at [77].
Further and in any event, even if there was substance to the objections by Sadler and Ian Ferguson, nonetheless some of the evidence of the purchase of the two Landcruisers would be admissible. The contract for the purchase of the first Landcruiser, in the name of Ian Ferguson, was concluded before the date of the theft alleged in Count 6. On any view the Crown would be entitled to adduce that evidence, together with the evidence of the payment, in cash, of the deposit by Ferguson on that day. Further, the evidence of the purchase by Sadler of the second Landcruiser in November 2000, with the assistance of Ferguson, is relevant to the conspiracy charge for another purpose, namely, to provide that evidence of a commercial relationship existing between Ferguson and Sadler at that time. The existence of that relationship is relevant to the proof by the Crown that Ferguson and Sadler were parties to a conspiracy to traffick heroin.
For those reasons I rule that the evidence concerning the purchase of the two Landcruisers is admissible against Ian Ferguson. I further rule that the evidence of the purchase of the second Landcruiser, in November 2000, is admissible against Sadler.
(c) Objection to evidence “bolstering” the evidence of Duy Le
Ian Ferguson also objects to the evidence of 15 witnesses which, in written submissions made on his behalf, is described as “evidence being called by the Crown to bolster the credibility of Duy Le by virtue of establishing Duy Le has given a consistent account regarding collateral matters”. In the course of discussion before me it became apparent that most, if not all, of the objections made on behalf of Ian Ferguson may be resolved by discussion between the Crown and counsel for Ian Ferguson. Accordingly, it is not necessary for me to rule on those objections at this stage.
(d) Objection by Ian Ferguson to the evidence of Kenneth Lai
The evidence of Lai is summarised in my previous ruling.[5] In essence, Lai was arrested in early 1999. Cox and Sadler recruited him as an informer for the Drug Squad while he was in custody. After his release Lai assisted Cox and Sadler to establish contact with Duy Le, as a result of which Duy Le was arrested. Lai also provided information to Cox and Sadler concerning other drug dealers. In the course of those activities Cox and Sadler tried to persuade Lai to traffick drugs supplied to him by the Drug Squad. They proposed that Lai would be entitled to a share of the profits involved in that drug trafficking. Ultimately Lai refused to accede to that proposal, and declined to participate in the trafficking of drugs on behalf of Cox and Sadler.
[5]R v Cox and ors (Ruling No. 4) at paras 23 – 28.
There is no evidence that Ferguson was involved in the unsuccessful attempt to recruit Lai as a person through whom heroin was to be trafficked on behalf of members of the conspiracy which is alleged in Count 1. Indeed, according to the evidence of Duy Le, Ferguson was not involved in the trafficking of heroin to him until some time after the initial alleged corrupt approach to him by Cox in early August 1999.
The relevance of the evidence of Lai was considered in my previous ruling. It had been argued on behalf of Cox and Sadler that Lai’s evidence was irrelevant to the conspiracy charged in Count 1 of the presentment. In particular it was submitted that, as then framed, the Crown case involved not one but two conspiracies, one involving the attempt by Cox and Sadler to recruit Lai to traffick heroin, and the other being a conspiracy in which Cox initially recruited Duy Le to traffick heroin. I rejected that submission. I held that, on the evidence in the depositions, there was a sufficient nexus between the attempt to recruit Lai to traffick heroin, and the subsequent agreement by Duy Le to traffick heroin on behalf of the accused, so that the two transactions formed part of the one conspiracy. Accordingly I rejected the submission on behalf of Cox and Sadler that the evidence of Lai should be excluded on the grounds that it was incapable of establishing, or being relevant to the proof of, the conspiracy charged by the Crown in Count 1 of the presentment.
Objection has been taken on behalf of Ian Ferguson to the admissibility of the evidence of Lai against him. Mr O’Doherty submitted that the probative value of the evidence is outweighed by its prejudicial effect to Ferguson, and that thus I should exclude the evidence in the exercise of my discretion.
In support of that objection, Mr O’Doherty submitted that Lai’s evidence is only relevant to the existence of the conspiracy before Ferguson is alleged to have become a participant in it. It is thus of limited value to the Crown. He submitted that it is not critical to the Crown case that Lai be called to give evidence. The evidence of Duy Le as to the existence of the conspiracy, and as to the initial approaches to him by Cox and Sadler, does not depend on the evidence of Lai in any relevant sense. The evidence of Duy Le would not be rendered meaningless, or deprived of context if Lai were not called. On the other hand it was submitted that Ferguson would sustain significant prejudice should the evidence of Lai be admitted against him. First, it was submitted that Lai’s evidence would unfairly bolster the credibility of Duy Le, who is a critical witness against Ferguson. Secondly, it was submitted that, because Ferguson had no contact or dealings with Lai, he would be hampered in cross-examining Lai or in countering his evidence.
That objection involves a comparison of the probative value of Lai’s evidence, with the prejudice to Ferguson should the evidence be admitted against him. The evidence of Lai clearly adds to the proofs of the Crown as to the existence – and indeed the origins – of the conspiracy initially constituted between Cox and Sadler. Lai’s evidence, if accepted by the jury, provides important background and context to the evidence of Duy Le. The Crown case is not that the conspiracy originated with the corrupt approach by Cox to Duy Le on 3 August 1999. Rather, the Crown case is that that approach was part of a conspiracy already constituted between Cox and Sadler. In that respect, and to that extent, the evidence of Lai is of probative value to the Crown, particularly in relation to the evidence of Duy Le, as to the initial corrupt approach to him by Cox. It renders that aspect of the evidence of Duy Le less surprising and more probable. It is thus of some probative value in the proof by the Crown of the conspiracy alleged on count one.
The acts and utterances of parties to an alleged conspiracy, other than the accused, may be adduced in evidence to establish the existence and nature of the conspiracy.[6] An accused may join a conspiracy some time after its inception.[7] Thus, evidence is admissible to prove the formation and existence of a conspiracy before the date on which an accused is alleged to have joined the conspiracy.[8] Evidence of what took place between other parties to the alleged conspiracy, before it was joined by an accused, may be relevant to explain the context of the allegations against the accused and to provide an appropriate background to them.[9] It follows that the evidence of Lai is relevant to prove, against Ferguson, the formation and commencement of the conspiracy before Ferguson joined it.
[6]Ahern v R (1988) 165 CLR 87 at 93.
[7]See for example R v Griffiths (1966) 1 QB 589 at 597.
[8]R v Bilick and Stark (1988) 36 SASR 321 at 331 (per King CJ); R v Dinh (2000) 120 A Crim R 42 at [49] to [55].
[9]R v Dinh (above) at [56]; Wilson v R (1970) 123 CLR 334.
An example of such evidence is to be found in R v Masters, Richards and Wunderlich.[10] In that case, the Crown alleged that Morrison and Richards conspired to seize cannabis from a property and sell it. Subsequently, Masters and Wunderlich were recruited to the conspiracy. At trial, the three accused were convicted. On appeal, Masters and Wunderlich contended that the trial judge wrongly directed the jury that it was entitled to take into account conversations between Morrison and Richards, which had taken place before Masters and Wunderlich joined the alleged conspiracy. The New South Wales Court of Criminal Appeal rejected that submission. Their honours stated:[11]
“In conspiracy cases, the Crown must establish both the existence of the conspiracy and the participation of each particular accused in that conspiracy; there is a clear distinction to be made in relation to the admissibility of evidence to establish each of those two issues; Ahern v R (1988) 165 CLR 87 at 93. That distinction becomes of special importance where the conspiracy is alleged to have been between the accused and persons not standing trial with them.
In order to establish the existence of the conspiracy, evidence is admissible of acts done or statements made by persons other than the particular accused even if he were not present – not (so far as the statements are concerned) to prove the truth of what was said but in order to establish, from the fact that the acts were done or the statements were made, the inference that the agreement which constituted the conspiracy charged had been entered into … That evidence is direct evidence, not hearsay …; and it is admissible for that purpose even if the acts were done or the statements were made before the particular accused joined or became a participant in that conspiracy, for it does not depend in any way upon any acknowledgement or acceptance of the truth by that accused of the statements so made.”
[10](1992) 26 NSWLR 450.
[11]p. 460 to 461; see also R v Louden (1995) 37 NSWLR 683 at 697-8; R v Georgiadis, Theodosis and Belbin (2002) 133 A Crim R 152 at 167-8.
Thus, the evidence of Lai as to the approaches made to him by Cox and Sadler, before Ferguson is alleged to have joined the conspiracy, is relevant and admissible to establish the formation and existence of the conspiracy before it is alleged that Ferguson participated in it. It is relevant and of probative value by explaining the background to the evidence to be adduced against Ferguson in respect of his participation in the conspiracy. The question is whether that probative value is outweighed by any unfair prejudice which, it was argued, would flow to Ferguson should Lai’s evidence be admitted in his trial.
It was submitted on behalf of Ian Ferguson that there is a risk that the jury might use the evidence of Lai improperly in support of the evidence of Duy Le. Lai, in the manner in which I have described, adds to the evidence of Duy Le by proving that there was a conspiracy already on foot when Cox induced Duy Le to acquire drugs from the conspiracy. To that extent his evidence confirms that part of the evidence of Duy Le. However, logically, Lai adds nothing to significant parts of the evidence of Duy Le affecting Ian Ferguson. In particular, the evidence of Lai does not add to Duy Le’s evidence, or to the credibility of Duy Le’s evidence, as to the involvement and participation of Ferguson in the conspiracy.
The objection on behalf of Ferguson is based on a concern that the jury might erroneously and unfairly use the evidence of Lai as reinforcing the general credibility of the evidence of Duy Le. In other words, it was submitted that Lai’s evidence might induce the jury to accept that Duy Le’s evidence is not an entire fiction, but at least, in an important respect, is grounded in the truth. It was submitted that a jury might then incorrectly view Duy Le as a witness of truth, rather than as a witness whose credibility ought to be placed under close scrutiny.
In my view any risk that a jury might misuse the evidence of Lai in the manner asserted above would be sufficiently allayed by directions given by me to the jury. At the conclusion of the trial the jury will be given the usual directions as to the assessment of a witness’s credibility and reliability. In addition it is most likely that I will also need to give specific warnings concerning the evidence of Duy Le. Those warnings would derive, first, from the apparent circumstance that Duy Le was an accomplice in the conspiracy. Also I anticipate that I will need to give a direction, of the kind referred to in DPP v Faure[12], arising from Duy Le’s background as a drug trafficker and also from his role as a police informer. In light of those directions a jury would, I anticipate, be especially careful about scrutinising and assessing the credibility of Duy Le, both generally, and in relation to the specific parts of his evidence which are critical to the Crown case against Ferguson. Thus, if the evidence of Lai were accepted and persuaded a jury to accept the evidence of Duy Le concerning the existence of a conspiracy involving Cox and Sadler, the jury would clearly understand that it should not be thereby emboldened, without more, to undergo a sudden leap of faith in respect of the credibility of Duy Le as a witness as a whole.
[12](1993) 2 VR 497 at 504.
The other aspect of the prejudice argued on behalf of Ian Ferguson arises from the circumstance that Ferguson had no contact or dealing with Lai. Accordingly, it was submitted that Ferguson would not be able to take appropriate issue with Lai’s evidence and would not be in a position to properly counter it.
It is of course correct that there is no evidence that Ferguson had any contact or dealings with Lai. However, Lai did give evidence at the committal proceeding. He was cross-examined extensively for more than one day. His cross-examination occupies 165 pages of the depositions. The cross-examination was extensive and comprehensive. It covered a large number of topics including: Lai’s background in the use of drugs; Lai’s previous convictions; Lai’s acting as an informant to the police on previous occasions; Lai’s initial meetings with Cox and Sadler and his recruitment as an informer; information which Lai provided to Cox and Sadler concerning other drug dealers; the aggravated burglary committed by Duy Le, and the allegation by Duy Le that Lai was involved in it; Lai’s role in setting up the arrest of Duy Le; Lai’s allegation that Cox and Sadler proposed to him that he traffick drugs on their behalf; Lai’s evidence that he felt “burnt” from his activities acting as an informer to the Drug Squad and an allegation that Lai had a motive to concoct his account against Cox and Sadler; the circumstances in which the Ceja Task Force approached and ultimately obtained a statement from Lai; Lai’s allegation that Cox and Sadler stole $1,000 from him; and the fact that Lai had breached his bail at the time that he was approached by members of the Ceja Task Force.
In other words, the cross-examination of Lai, recorded in the transcript, covered what would seem to be most if not all issues which might need to be covered by counsel for Ferguson, should, at the forthcoming trial of Ferguson, the accused take issue with Lai’s evidence as to his dealings with Cox and Sadler. Further, there is some force in the submission by Mr Tovey that, in a corruption trial, and indeed in some other trials, evidence is led against accused persons where the accused is not in a position to have first hand knowledge about the evidence, and thus is not necessarily in a position to counter that evidence. In addition, while the evidence is of probative value to the Crown in establishing the pre-existing conspiracy between Cox and Sadler, it is only admissible for that purpose. In other words it is not evidence about matters beyond the ken of Ferguson, but which directly implicates Ferguson in the offence charged. Accordingly, I do not consider that this aspect of prejudice contended for on behalf of Ian Ferguson, in conjunction with the other matters which I have already considered, are sufficient to outweigh the probative value of the evidence in the case. For those reasons I do not uphold the objection to the admissibility of the evidence of Lai.
(e) Admissibility against an accused of evidence of financial betterments of co‑accused
In each of the trials, the Crown proposes to prove against each accused charged with conspiracy on count one of the presentment the “financial betterment” of the co-accused. Cox, Sadler and Ferguson have each objected to the admissibility of the betterment evidence for that purpose.
The financial betterment evidence, which is the subject of this objection, is contained in reports of Mr Gerard Curtin, a forensic accountant. That evidence has already been the subject of two previous rulings by me.[13] In summary, Mr Curtin has examined the financial accounts of Ian Ferguson and his wife Joanne, of Cox and his wife, and of Sadler and his wife. Mr Curtin has matched deposits into those accounts with identified sources of income and other known financial inflows. Where he has been unable to identify a match, Mr Curtin has described the deposit into the accounts of the relevant family unit as a “cash deposit”. Mr Curtin has also sought to match cash payments made by the relevant family unit (i.e. the Fergusons, the Cox’s or the Sadlers) with corresponding cash withdrawals from the accounts of each of the three family units. Where Curtin has been unable to conclude that there was a “match”, he has categorised the relevant cash payment as one for which there was “some other source of funds”. Mr Curtin conducted that analysis for the period 1 January 1999 to 30 June 2002. As a result of that analysis he has concluded that, for that period, there were “unsourced” cash deposits and cash payments as follows:
(a)in respect of Mr and Mrs Ferguson totalling $704,638;
(b)in respect of Mr and Mrs Sadler totalling $169,990;
(c)in respect of Mr and Mrs Cox totalling $31,952.
[13]R v Cox & Ors (Ruling No.1), [2005] VSC 157; R v Cox & Ors (Ruling No. 2), [2005] VSC 224
The Crown proposes, in the forthcoming trial of Ian Ferguson on count 1, to adduce the evidence of Mr Curtin as to the “betterment” of Sadler. Similarly, the Crown proposes, at the forthcoming trial of Cox and Sadler, to adduce the evidence of Curtin as to the betterment of Ferguson. The accused have submitted that that evidence should be excluded on two principal grounds namely:
(a)that the evidence is irrelevant;
(b)alternatively, that the probative value of the evidence is outweighed by the prejudice to the accused should the evidence be admitted.
It was also submitted by Ms Spowart, who appears with Mr Georgiou on behalf of Sadler, that the evidence is hearsay and inadmissible as such. In essence, she submitted was that the evidence of betterment of a co-accused does not constitute an act of the co-accused in furtherance of the alleged conspiracy, and thus is not an act of a co-accused which might be admitted into evidence under the principles stated by the High Court in R v Tripodi[14] and R v Ahearn.[15]
[14](1961) 104 CLR 1
[15](1988) 165 CLR 87.
I do not accept that submission. The evidence of the betterment of the co-accused is not evidence of an act of a co-accused. In any event, it is not evidence which contains an express or implied assertion of fact by a co-accused. There is no hearsay element contained in the betterment evidence. If relevant, the evidence of the financial betterment of a co-accused does no more than support the direct evidence, to be adduced from other witnesses, of drug trafficking by that co-accused. The evidence of the drug trafficking by the co-accused, and the “betterment” evidence which supports it, is not hearsay.
I return to the two principal objections which I have summarised above. Those objections were made on behalf of each of the three accused. For reasons which will become apparent, it is appropriate that I deal with the objections first as they relate to the proposal by the Crown to call the financial betterment evidence of the co‑accused in the trial of Ian Ferguson, which is to commence on 21 September next.
(i) Admissibility of betterment evidence concerning Sadler on the trial of Ferguson
Originally the Crown proposed to call the evidence of Mr Curtin in relation to the financial betterment of both Cox and Sadler on the trial of Ian Ferguson. However in the course of submissions before me, Mr Tovey informed me that the Crown does not propose to call the betterment evidence of Curtin in relation to Cox on the trial of Ian Ferguson. Thus, in the context of the trial of Ian Ferguson, it is only necessary for me to deal with the question of the admissibility of the evidence of the financial betterment of Sadler. The first question is whether that evidence is relevant to the issues in the trial of Ian Ferguson in respect of the conspiracy alleged in count 1 of the presentment.
The Crown submits that the evidence of Curtin as to the betterment of Sadler is relevant, and admissible, against Ian Ferguson, to prove that Sadler trafficked heroin over the period of the conspiracy. The Crown case is that Ferguson conspired with Sadler and Cox to traffick heroin over that period, principally to Duy Le. The Crown proposes to prove that conspiracy, inter alia, by proving that each of the three accused trafficked heroin to Duy Le over that period. The Crown submits that it is therefore relevant, on the trial of Ferguson, to prove that Sadler trafficked heroin to Duy Le over the period of the conspiracy. Thus, it is submitted, the evidence of Curtin as to the financial betterment of Sadler over that period is relevant to the proof by the Crown that Sadler trafficked heroin to Duy Le.
None of the accused contend that it is irrelevant for the Crown to prove, against an accused, the fact of trafficking by one of the co-accused during the period charged in the conspiracy. Thus, in the trial of Ferguson, it has not been contended that the Crown should not be permitted to adduce evidence as to trafficking by Sadler and Cox, as a step to the proof by the Crown of the conspiracy alleged in count 1 of the presentment. However it has been submitted by the three accused that the evidence of Curtin of the betterment of the co-accused is too remote to be admissible on the trial of a particular accused. Thus it is submitted, on behalf of Ferguson, that the evidence of Curtin as to the betterment of Sadler is too remote from the issues between the Crown and Ferguson to be relevant and admissible on the trial of Ferguson.
In assessing that objection, it is important to analyse precisely how the Crown proposes to use the evidence of Curtin as to the financial betterment of the co-accused. First, of course, that evidence does not have any relevance at all as to the issue whether Ferguson was a party to the conspiracy charged in count 1 of the presentment. Further, the evidence of Curtin as to the financial betterment of Sadler does not, of itself, establish the existence of the conspiracy between Ferguson and Sadler. Nor, of itself, does the evidence prove the participation of Sadler in that conspiracy. Rather, the Crown seeks to rely on the evidence of Curtin as to Sadler’s financial betterment in order to support the direct evidence of Duy Le that Sadler trafficked heroin to him during the period of the conspiracy charged in count 1.
It must be borne in mind that, on the trial of Ferguson, the Crown must establish, against Ferguson, the existence of the conspiracy charged in count 1 and the participation of Ferguson in that conspiracy. At the same time, it must be recognized that, in cases involving charges of conspiracy, it is relevant and admissible to adduce evidence as to the acts (and indeed utterances) of alleged co-conspirators in order to prove (at the least) the existence of the conspiracy contended for by the Crown. The critical question is to determine at what point certain evidence, which may support an inference as to the involvement of a co-accused in an alleged conspiracy, becomes too remote from the case against the individual accused to be relevant (at law) and thus admissible against the accused. In the context of this case, thus, the question is when it becomes too remote (and thus irrelevant) to call evidence, on the trial of Ian Ferguson of the conspiracy alleged in count 1, which supports the direct evidence of the participation of Sadler in the conspiracy charged in count 1, or which may be used as a foundation of an inference that Sadler participated in that conspiracy.
As I have stated, it was not contended that it would be irrelevant for the Crown to establish, against Ferguson, that Sadler trafficked heroin to Duy Le during the period of the conspiracy charged in count 1. That concession is, in my view, correct. Further, it was not contended that it would be inadmissible for the Crown to adduce evidence, on the trial of Ferguson, which supports the evidence of Duy Le that Sadler trafficked heroin to him during that period. Indeed, the Crown proposes to call evidence from Loan Tran, who alleges that she was an eye-witness to the trafficking (inter alia) by Sadler to Duy Le during that period. Further, on the trial of Sadler, the evidence of Sadler’s own financial benefit is relevant to the issue whether Sadler was a participant in the conspiracy alleged against him. The question is whether that evidence may be adduced, in the trial of Ferguson, to support the evidence of Duy Le that Sadler trafficked heroin to him during that period.
It is at this point that the question becomes somewhat complex. In my previous rulings concerning Curtin’s evidence, I summarized in some detail the processes undertaken by Curtin in determining the existence and amount of the betterment of each of the three accused (and his wife). The evidence of Curtin is not as simple and straightforward as establishing the receipt by the particular accused of cash deposits, or the identification of large cash purchases made by or on behalf of that accused. The exercise performed by Curtin necessarily involved Curtin seeking to identify which of the cash deposits could be “matched” with (and therefore accounted for by) known sources of income, or other known sources of funds available to the particular accused. Similarly, Mr Curtin’s exercise necessarily involved him seeking to identify which of the cash purchases could be “matched” with (and thus accounted for by) corresponding cash withdrawals from the accounts of the accused or other sources of funds available to the accused. The information available to Mr Curtin to enable him to perform that exercise was limited. In his report Mr Curtin set out each of the limitations. In order to cater for those limitations, Mr Curtin developed a set of assumptions and criteria in order to determine which of the cash deposits or cash payments might be appropriately accounted for by corresponding sources of funds available to the accused. In R. v. Cox & Ors (Ruling No. 2)[16] I summarized those assumptions and criteria. Thus, the identification by Curtin, in respect of an accused, of an “unsourced” cash payment or cash deposit is, by necessity, a conclusion made by Curtin based on the assumptions and criteria developed by him, and made in the context of the limitations concerning the information available to him in respect of the accounts of each of the accused.
[16]Above at paras. 10, 11.
It is in that context that it is necessary to determine, in respect of the charge of conspiracy against Ferguson, whether the evidence of Curtin as to the financial benefit of Sadler is relevant and admissible as such. Again, that evidence is only relevant, in the trial of Ferguson, to the issue whether Sadler trafficked drugs to Duy Le. It does not prove, on its own, the trafficking of those drugs by Sadler. Rather it supports Duy Le’s evidence as to that trafficking. Sadler’s trafficking of drugs to Duy Le does not prove the existence of the conspiracy, nor, of course, the participation by Ferguson (or indeed Sadler) in the conspiracy. However it is evidence which, in combination with other evidence, may give rise to an inference as to the existence of the conspiracy. The evidence of Curtin itself involves a number of assumptions and conclusions made by Curtin. To the extent that those assumptions and conclusions are accepted, and bearing those assumptions and conclusions in mind, that evidence may support the evidence of Duy Le as to the trafficking of heroin by Sadler.
Logically, the evidence may thus be seen to be relevant to the issues between the Crown and Ferguson as to the existence of the conspiracy charge in count 1. However, as has been observed in a number of authorities, there is a distinction between logical relevance and legal relevance. A logical connection between the evidence sought to be adduced, and the issue between the parties, may be so slight that it is regarded as too remote to be relevant at law. In R. v. Stephenson[17], the Full Court of the Supreme Court of Victoria observed:
“Although logic is the test of relevance, not all evidence which is logically relevant is legally admissible. The logical connection between a fact and the issue to be determined may be so slight that the fact is treated as too remote and evidence of it as inadmissible. In some cases, such evidence is described as being irrelevant, an expression which must be taken to indicate that its weight is so minimal that it does not serve to add to or detract from the probability of the principal issue being established. Such evidence may be more correctly described as insufficiently relevant or too remotely relevant.”[18]
[17][1976] V.R. 376 at 380-381.
[18]See also R. v. Priest [2002] VSCA 215 at [19] per Ormiston JA; R. v. Stojkovic [2004] VSCA 84 at [24], per Smith, A.J.A.
The application of those principles to the present case does not produce a clear-cut answer. The solution to the question is difficult because there are a number of steps and inferences in the chain of reasoning relied on by the Crown in using the evidence of Curtin as to Sadler’s financial betterment on the trial of Ian Ferguson. As I have set out above the evidence of Curtin, itself, involves a number of assumptions. The assumptions and conclusions of Curtin, added to the steps and inferences involved in the chain of reasoning by which the Crown seeks to make Curtin’s evidence concerning Sadler admissible on the trial of Ferguson, means that that evidence is a number of steps removed from the issues between the Crown and Ian Ferguson.
Nonetheless, as matters currently stand, I do not consider that that evidence, as set out in Curtin’s report, can be characterized as being so remote from the issues between Ian Ferguson and the Crown on count 1 of the presentment as to be irrelevant to those issues. For, there is a distinct logical connection between the financial betterment of Sadler and the issue whether Sadler was involved in trafficking heroin to others including Duy Le, and between that issue and the charge in count 1 that Ferguson conspired with Sadler and others to traffick heroin to Duy Le and others. However, by the same token, the analysis which I have set out above discloses that that evidence lies near the outer borders of what might be properly considered to be relevant to the issues between Ian Ferguson and the Crown. It is certainly closer to the periphery of those issues than to the heart of them.
I have heard two voir dires concerning the admissibility of the evidence of Curtin. Cross -examination of Curtin on both those occasions revealed further matters which might also impact on the question whether Curtin’s evidence as to Sadler’s financial betterment is relevant to the trial of Ian Ferguson. In particular, it is apparent that Sadler was a frequent gambler. Curtin was able to identify, for some of the period to which count 1 relates, inflows into Sadler’s account totalling approximately $55,000 which were the product of his gambling. However Curtin had limited information available to him concerning Sadler’s gambling activities. It is quite possible that there were other inflows into the accounts of Sadler from his gambling which have not been identified by Curtin and which would, thus, impact on Curtin’s analysis of Sadler’s financial betterment. A proper and full examination of Sadler’s gaming activities might remove the evidence of Sadler’s financial betterment a further step from the issues between the Crown and Ian Ferguson. Matters such as Sadler’s gaming were only examined to a limited extent on the two voir dires, because those inquiries were concerned with the admissibility of Curtin’s evidence. The evidence as to Sadler’s financial betterment will only be fully explored at the trial of Sadler, which is to be held after Ferguson’s trial.
This consideration also raises issues relevant to the question whether I should exclude the evidence in the exercise of my discretion. As I have stated, as matters currently stand, I consider that Curtin’s evidence as to Sadler’s financial betterment is relevant to the trial of Ian Ferguson, but that it lies at the outer limits of relevance to the issues in that trial. However, clearly there are issues which need to be explored in relation to Sadler’s financial betterment. Those issues will not be explored fully on the trial of Ian Ferguson. The matters which were examined on the voir dires do not, I consider, provide an adequate basis for counsel for Ian Ferguson to properly and sufficiently tackle Curtin’s evidence concerning Sadler’s financial betterment. It could not be realistically expected that counsel for Ferguson could appropriately expose issues which need to be examined if Curtin’s evidence concerning Sadler were led in Ferguson’s trial. Sadler would not be available to give evidence at Ferguson’s trial. If the Crown were permitted to call Curtin to give evidence concerning Sadler’s financial betterment on the trial of Ferguson, that would involve significant disadvantage and unfairness to Ferguson, which could not be cured by any direction by me to the jury.
On the other hand, if I were to uphold the objection of Ferguson to the admission of Curtin’s evidence concerning Sadler’s financial betterment, the Crown would have available other evidence which supports the testimony of Duy Le that Sadler was a member of the conspiracy alleged in count 1 of the presentment. Duy Le’s evidence is supported by Loan Tran, who states that she was present with Duy Le when Sadler supplied drugs to him. Duy Le’s evidence as to the involvement of Sadler is further supported by the evidence of Kenneth Lai, which I have discussed above; by the telephone records of Sadler which disclose a number of telephone calls by Sadler to Duy Le, including during the period after the issue of the warrant for the arrest of Duy Le in June 2000; and by evidence of the purchase of the Land Cruiser on behalf of Sadler, which I have discussed above. Thus, the Crown is not solely reliant on the evidence of Sadler’s financial betterment in order to support the evidence of Duy Le as to Sadler’s involvement in the conspiracy charge in count 1. While no doubt the evidence of Sadler’s financial betterment does have probative value for the Crown, its role in Ferguson’s trial must be assessed in the context other evidence also available to the Crown, and in light of the apparent limitations of the evidence of Curtin which I have discussed above. In those circumstances I consider that the unfair prejudice to Ferguson, should the evidence be admitted against him, would substantially outweigh the probative value of the evidence in the trial of the issues between Ferguson and Crown. Accordingly, in the exercise of my discretion, I rule that that evidence is not admissible in the trial of Ian Ferguson.
In summary, then, I accept that the evidence of Curtin as to Sadler’s financial betterment is relevant to the issues in the trial of Ian Ferguson on count 1 of the presentment, but I consider that that evidence lies near the outer limits of what is relevant to those issues. Further, I have concluded that the unfair prejudice which would flow to Ferguson if the evidence were admitted at his trial substantially outweighs the probative value of that evidence to the Crown in his trial. On that basis I exclude the evidence from the trial of Ian Ferguson in the exercise of my discretion.
(ii) Admissibility of betterment evidence concerning Ferguson on the trial of Cox and Sadler
The next question concerns the admissibility of the evidence of Curtin concerning Ferguson’s financial betterment on the trial of Cox and Sadler on count 1 of the presentment.
Bearing in mind the conclusions I have reached as to the admissibility of Curtin’s evidence concerning Sadler’s financial benefit on the trial of Ian Ferguson, I do not consider it appropriate to rule on this issue until the conclusion of the trial of Ian Ferguson. Curtin’s evidence concerning the financial betterment of Ferguson was not the subject of any substantial cross-examination on either of the two voir dires. It will, I expect, be explored to a substantial extent in the forthcoming trial of Ian Ferguson. The transcript of that trial will be available to counsel who appear for Cox and Sadler. Cross-examination of Curtin concerning Ferguson’s financial betterment, at the trial of Ferguson, may have a significant impact on the two questions which have been raised concerning the admissibility of that evidence on the trial of Cox and Sadler. First, it may affect the question whether the evidence of Curtin as to Ferguson’s financial benefit is so remote that it should be excluded from the trial of Cox and Sadler as being irrelevant. It may also reveal the extent to which counsel for Cox and Sadler may be able to adequately cope with that evidence, by way of cross-examination of otherwise, on the trial of Cox and Sadler. In the course of submissions, I raised with both Mr Young, who appears for Cox, and Ms Spowart, on behalf of Sadler, the possibility that I may defer ruling on the admissibility of Curtain’s evidence as to Ferguson’s betterment until the completion of the trial of Ferguson. Neither counsel dissented from taking that course. In the circumstances I consider it preferable that I do so. I shall therefore defer further argument on that issue until the completion of the trial of Ferguson.
(f) The objection by Ian Ferguson to the telephone chart produced by the Crown
The Crown has produced a chart of telephone calls made between telephone numbers of telephones rented by Duy Le and telephones that were used by Sadler, Cox and Ferguson. The chart is conveniently colour-coded. Mr O’Doherty has not objected to the admissibility of the chart as such. He has however objected to some of the nomenclature used on the chart. Counsel informed me that they expected that they would be able to resolve their differences concerning that matter without requiring a decision from me on the question.
(g) The objection by Ian Ferguson to the admissibility of the evidence of Phillip Carr
At the trial of Ian Ferguson the Crown proposes to call a witness Phillip John Carr.[19] Mr Carr’s evidence relates to the value of a television set which was apparently located at Ferguson’s premises at the time of the execution of the warrant from Ferguson in late 2002. Mr Carr is the Manager for Strategy and Regional Distribution of Panasonic Australia. His evidence is that a Panasonic television of the type apparently identified at Ferguson’s premises belongs to a model which was first released in November 1999, and that the recommended retail price of a television of that type was $8,099.
[19]Depositions p.3448.
Mr O’Doherty objected to the admissibility of that evidence on the ground that it is irrelevant. He submitted that there is no evidence as to the date upon which Ferguson purchased the television set, or as to how he purchased it, or the price he paid for it. There is no evidence that the television set was not purchased from Ferguson’s ordinary income or his accounts. Thus there is no basis upon which the value of that television set could be “added” to Ferguson’s financial betterment figure.
In response Mr Tovey acknowledged that the evidence of Mr Carr does not add significantly to the Crown case. Nonetheless he submitted that the evidence is relevant because the television is a significant asset, acquired by Ferguson during the period of the conspiracy, and which the jury would be entitled to take into account when assessing Ferguson’s overall financial position.
I accept that the evidence as to the value of the television set does have some limitations. However those limitations can be simply and fairly argued to the jury. Notwithstanding those limitations, the evidence does have probative value in respect of Ferguson’s financial position during the periods relevant to the conspiracy. It is a matter for the jury to assess the probative value of the evidence. Nonetheless it is relevant. There is no untoward prejudice to the accused if the evidence is admitted. Accordingly there is no basis upon which the evidence should be excluded.
Conclusion
I therefore summarize the conclusions which I have reached in these reasons as follows:
(1)I reject the application by Ian Ferguson to sever counts 1 and 3 of the presentment.
(2)I reject the objection on behalf of Ian Ferguson and Sadler as to the admissibility of evidence concerning the purchase of Land Cruisers by Ian Ferguson and Sadler in September 2000 and November 2000.
(3)I reject the objection by Ian Ferguson to the admissibility of the evidence of Kenneth Lai in respect of count 1.
(4)In the exercise of my discretion, I rule that the evidence of Curtin as to the financial betterment of Sadler is not admissible in the trial of Ian Ferguson on count 1 of the presentment.
(5)I defer further consideration of the objection by Cox and Sadler to the admissibility of Curtin’s evidence concerning the financial betterment of Ian Ferguson on the trial of Cox and Sadler until the completion of the trial of Ian Ferguson on count 1 of the presentment.
(6)I reject the objection by Ian Ferguson to the admissibility of the evidence of Phillip Carr.
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