R v Cox & Ors

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

CRIMINAL DIVISION

No. 1453 of 2003

THE QUEEN

STEPHEN COX, GLENN SADLER, IAN FERGUSON AND JOANNE FERGUSON

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JUDGE:	KAYE J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	13, 14, 18 July 2005
DATE OF RULING:	21 July 2005
CASE MAY BE CITED AS:	R v Cox & Ors (Ruling No. 4)
MEDIUM NEUTRAL CITATION:	[2005] VSC 255

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CRIMINAL LAW – Conspiracy to traffick heroin – Money laundering – Admissibility of evidence – Whether one or more conspiracies particularised by Crown - Separate trials – Severance of other counts alleging thefts – Whether accused validly charged of being member of joint venture to commit an offence under s.122 of Confiscation Act 1997.

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APPEARANCES:	Counsel	Solicitors
For the Crown	Mr J. Leckie, S.C. with Mr D. Brown	Solicitor for Public Prosecutions
For the Defendant Cox	Mr B. Young	Tony Hargreaves & Partners
For the Defendant Sadler	Mr G.A. Georgiou with Ms H. Spowart	Victoria Legal Aid
For the Defendant Ian Ferguson	Mr D. O'Doherty with Ms A. Marjanovic	C. Marshall & Associates
For the Defendant Joanne Ferguson	Ms M. Tittensor	Theo Magazis & Associates

TABLE OF CONTENTS

BACKGROUND

(1) COUNT 1: ADMISSIBILITY OF EVIDENCE OF LAI

(2) OTHER EVIDENTIARY ISSUES

(a) Ian Ferguson – drink driving charge

(b) Admissibility of letter by National Australia Bank to Cox dated 11 July 2001

(3) APPLICATIONS FOR SEPARATE TRIAL ON COUNT 1

Legal Principles

Application by Cox for separate trial from Ian Ferguson

Application by Sadler for separate trial

Application by Cox to be tried separately from Sadler on Count 1

Conclusion on Separate Trial Applications

(4) APPLICATIONS FOR SEVERANCE OF COUNTS 5, 6 AND 7

Legal Principles

Conclusion

(5) APPLICATION BY JOANNE FERGUSON TO STAY COUNT 3

(6) APPLICATION BY JOANNE FERGUSON FOR SEPARATE TRIAL ON COUNT 3

SUMMARY OF CONCLUSIONS

HIS HONOUR:

The trial of the four accused is due to commence shortly. Each of the accused have made applications for separate trials and for severance of some of the counts on the presentment.

The original presentment in this proceeding was filed before Bongiorno J on 1 February 2005. It contained 16 counts. On 9 May 2005 the Crown filed over a fresh presentment which contains seven counts. Those counts may be paraphrased as follows:

1.Stephen Cox (“Cox”), Glenn Sadler (“Sadler”), and Ian Ferguson (“Ian Ferguson”) between 1 April 1999 and 6 December 2002 together and with others conspired to traffick heroin in a quantity not less than the commercial quantity applicable to that drug of dependence, contrary to s.79 of the Drugs, Poisons and Controlled Substances Act 1981.
2.Cox between 1 April 1999 and 6 December 2002 engaged in transactions involving money and other property which were the proceeds of crime which Cox knew or ought reasonably to have known was derived or realised from some form of illegal activity, contrary to s.122 of the Confiscation Act 1997.
3.Ian Ferguson and Joanne Ferguson (“Joanne Ferguson”) between 1 April 1999 and 6 December 2002 engaged in transactions involving money and other property which were the proceeds of crime and Ian Ferguson and Joanne Ferguson knew or ought to have known that the money and other property was derived or realised from some form of illegal activity contrary to s.122 of the Confiscation Act.
4.Sadler between 1 April 1999 and 6 December 2002 engaged in transactions involving money and other property which were the proceeds of crime and Sadler knew or ought reasonably to have known that the money and other property was derived or realised from some form of illegal activity contrary to s.122 of the Confiscation Act.
5.Cox and Sadler at Prahran on 21 May 1999 stole cash belonging to Kenneth Lai.
6.Ian Ferguson on 30 August 2000 stole cash belonging to Giac Nguyen.
7.Ian Ferguson on 14 May 2002 stole cash belonging to Dung Pham.

The first three accused, Cox, Sadler and Ian Ferguson, were former members of the then Victoria Police Drug Squad. Cox was a member of the Drug Squad from August 1996 until he resigned from the Victoria Police on 27 February 2000. Sadler was a member of the Drug Squad from October 1996 until 9 September 2002. Ian Ferguson was a member of the Drug Squad from 20 January 1997 until 6 November 2000, when he was seconded to the National Crime Authority in Melbourne. On 14 February 2001, Ferguson was then transferred to the Victoria Police Crime Department. The fourth accused, Joanne Ferguson, is the wife of Ian Ferguson. She was also a member of the Victoria Police. Since October 1994 she was attached to the uniform branch of the Corio Police Station where she performed general duties on a part time basis.

The first accused, Cox, has made application:

(a)that the evidence of Kenneth Lai be ruled inadmissible in relation to the trial of him on Count 1.
(b)that he be tried separately on Counts 1 and 2;
(c)that the presentment in respect of him be severed so that Counts 1 and 2 are tried separately to Count 5;
(d)that the presentment also be severed so that he be tried separately on Counts 1 and 2 to the trial of Ian Ferguson on Counts 6 and 7;
(e)that a copy letter from the National Australia Bank Ltd dated 11 July 2001 be ruled inadmissible on the trial of Count 1.

The second accused, Sadler, has made application:

(a)that the evidence of Kenneth Lai be excluded from the trial of him on Count 1 on the presentment;
(b)that he be tried separately on Counts 1 and 2;
(c)that Count 5 be severed;
(d)that the presentment also be severed so that he be tried separately on Counts 1 and 2 to the trial of Ian Ferguson in Counts 6 and 7.

The third accused, Ian Ferguson, has made application:

(a)that evidence be excluded of dealings by him with the witness Duy Le not relating to the trafficking of heroin to Duy Le;
(b)that the copy letter of the National Australia Bank to Cox dated 11 July 2001 be excluded from evidence;
(c)that Counts 6 and 7 be severed and heard separately to Count 1 on the presentment and separately to each other.

The fourth accused, Joanne Ferguson has made application:

(a)that Count 3 as presently formulated be stayed;
(b)that she be tried separately on Count 3.

The several applications made by the four accused can be conveniently considered in the following order:

(1)Evidentiary issues.
(2)Whether any of the three accused on Count 1 are entitled to a separate trial.
(3)Whether Count 5 should be severed from the presentment.
(4)Whether Counts 6 and 7 should be severed from the presentment.
(5)Whether the fourth accused, Joanne Ferguson, should be tried separately on Count 3, and whether Count 3 be stayed.

The issues raised by a number of the applications involve consideration of the ambit of the conspiracy charge in Count 1 of the presentment. The Crown has already provided extensive particulars of overt acts of the conspiracy. However those particulars do not, on their own, define the nature and bounds of the conspiracy which the Crown is alleging. Accordingly I directed the Crown to provide particulars of the conspiracy which is alleged in Count 1, and which the Crown intends to open to the jury. See Gerakiteys v R[1]; R v Mok[2]; R v Partridge & Ors[3].
[1](1983) 153 CLR 317 at 323 (Murphy J), 333 (Deane J).
[2](1987) 27 A Crim R 438 at 441-442.
[3](1930) 30 SR (NSW) 410 at 412 (Ferguson J).

In response to that direction the Crown provided the following particulars of the conspiracy alleged in Count 1:

“Summary of how the Crown puts the case of conspiracy against Stephen Cox, Glenn Sadler and Ian Ferguson.
· The Crown allege that between April 1999 and December 2002, Stephen Cox, Glenn Sadler and Ian Ferguson (who were members of the Victorian Drug Squad and formed into a special unit to investigate heroin trafficking) entered into an agreement to traffick in a commercial quantity of heroin for gain by using their positions in the Victorian Drug Squad.
· This agreement envisaged the following:
Obtaining heroin when opportunities arose during the course of investigations conducted by these police officers, for example:-
(i)keeping some of the heroin seized during arrest situations and;
(ii)obtaining heroin from sources known to the conspirators from information available to them as investigators.

Supplying the heroin to persons they could trust such as informers (persons who had been arrested and charged but had been released back into the community on bail upon the understanding that they would provide police with information about drug trafficking and the police would provide evidence of their cooperation to Courts on their subsequent pleas).
Providing protection to these informers from other police interference while carrying out their illegal activities.
Funding purchases of heroin in part from thefts of money when opportunities arose.

· It is not alleged that Ken Lai, Duy Le or McCabe joined this particular conspiracy.”

BACKGROUND

Before dealing with the applications which are before me, it is necessary first to summarise, in a little detail, some of the evidence which the Crown intends to adduce on Counts 1, 2, 3 and 4.

The two principal Crown witnesses are Duy Le (“Le”) and Kenneth Francis Lai (“Lai”). Le had a background in trafficking heroin. In November 1998 he was charged by Detective Senior Constable Blakely with aggravated burglary. He was released on bail. In January 1999 he was arrested and charged with trafficking one gram of heroin in the Springvale area. He was remanded in custody. Upon pleading guilty, he was sentenced to four months’ imprisonment, which was suspended for two years. Subsequently, on 21 April 1999 Le was arrested by Cox and Sadler in the Melbourne city area as a result of information provided to them by Lai. He was charged with trafficking heroin and was remanded in custody. Some time after his remand he was visited in prison by Sadler and his superior, Mr Bob Hill. They proposed that if Le assisted them by supplying them with information, and with setting up the arrest of other drug dealers, in exchange they would advise the court of Le’s assistance so that he might receive a reduced sentence on his trafficking charge. Le agreed with that proposition. As a consequence he was released on bail. He then proceeded to meet with Cox, Sadler and Ferguson at various locations, including the St Kilda Road Police Complex, in order to discuss with them information which he had about pending drug deals.

On 2 August 1999 members of the Drug Squad, including Cox and Ferguson, arrested Enrique (“Ricky”) Agbayani and Ek (“Eddie”) Cheung at the K-mart car park in Burwood. The arrests were carried out on information provided to them by Le, who had contacted Cheung, and arranged to purchase a quantity of heroin from him. Both Agbayani and Cheung were charged with trafficking heroin. On the next day, 3 August 1999, Cox telephoned Le and asked him to attend his office. There they had a short meeting. At the conclusion of the meeting, Cox shook Le’s hand and placed in it one of the ounces of heroin seized from the arrest the previous night.

Le states that thereafter he commenced to have a corrupt relationship with Ferguson, Cox and Sadler. Initially Cox supplied him with a couple of ounces of heroin every two days for a two week period. This took place between the Burwood arrests (on 2 August 1999) and the arrest of a Vietnamese woman called “Be” a few weeks later in Footscray. Le states that most of his meetings with Cox occurred in a small car park at the rear of the Drug Squad offices in St Kilda Road. Some of the meetings took place in Bromby Street or Arnold Street, South Yarra. Subsequently his dealings with Cox reduced. They ceased when Cox left the police force in January 2000. In the place of Cox, Ferguson took the lead role. Le states that the substantial majority of his contacts were with Ferguson alone. Additionally he also met with Ferguson and Sadler, and on some occasions with Sadler, when Ferguson was unavailable.

Le states that the amounts of heroin supplied to him increased dramatically some time after he began dealing almost exclusively with Ferguson. His arrangements with the Drug Squad were on the basis that heroin was supplied when he needed it. He would meet with them, and if they had heroin, they would supply it to him, even if he had no money. Le estimates that between the date of his release on bail in May 1999 and the end of 2002 he made $1,500,000 from selling heroin, a significant proportion of which resulted from his dealings with the Drug Squad. He received large amounts of heroin from Ferguson, particularly between the end of 1999 and the end of 2000.

According to Le, the majority of his meetings with Ferguson took place behind Melbourne Grammar at the intersection of Arnold Street and Bromby Street, South Yarra, a short distance from the St Kilda Road Police Complex. However there were other locations at which he would meet with Cox, Sadler and Ferguson. He describes meeting with, and being supplied heroin by, Cox near Le’s unit in Footscray. He also met Cox in a park behind the St Kilda Road Police Complex, where he was supplied with two ounce lots of heroin. Le states that he met Sadler only when Ferguson was unavailable to meet him. He met Sadler at their usual spot, and he also met Sadler at the Crown Casino. However, he states that the “ … vast majority of contact I had with the Drug Squad was with Ferguson. Most of the heroin I received from the Drug Squad was purchased from Ferguson and most of the money I paid for these drugs was handed to him.”[4] Le describes a number of places at which he met with Ferguson alone or with Ferguson and Sadler. They include: meeting at a Spencer Street bus terminal car park; meeting outside Pentridge Prison in Coburg; several meetings at the back of the Quix and McDonald’s complex on the city bound side of the Western Ring Road; a meeting at the city bound Westgate Shell Service Centre on the Westgate Freeway; two meetings at a McDonald’s restaurant on Plenty Road near Latrobe University; a number of meetings with Ferguson at the Little River Railway Station and at other locations near that station; some meetings at Broadles Road, Little River; one or two meetings at the McNaughton Reserve, Little River; and a meeting in Sydney.
[4]Depositions p.2754.

In addition to purchasing drugs, Le also describes other transactions which he had with Ferguson. In late 2000 he sold a used BMW, which he had previously purchased through the Trading Post, to Ferguson. In return Ferguson gave Le a quantity of heroin and a quantity of cash. Le was also involved in the sale of wholesale alcohol to shops, restaurants and nightclubs. On a number of occasions Le supplied Ferguson with pallet quantities of alcohol.

In May 2000 Le failed to appear at the Melbourne County Court on his drug charges. In June 2000 he failed to appear in court on the aggravated burglary charges which had been brought against him by Senior Constable Blakely. Le states that Sadler advised him not to answer his bail. Sadler and Ferguson told him that they would advise him when enquiries were being made to locate him. They gave Le information on how to avoid being arrested. Le states that although he had little contact with Cox at this time, he did ring Cox some time after the first warrant had been issued for his arrest and arranged to meet Cox in King Street, Melbourne. At that meeting Cox advised Le what he should or should not be doing to avoid arrest. According to Le, Sadler, Cox and Ferguson advised him to leave Melbourne.

In 2001 Le’s drug dealings with the Drug Squad started to slow down. During that period Ferguson was not able to arrange the supply of heroin. He describes the last transaction with Ferguson as occurring while he was living in Birmingham Street, Springvale. Le lived at that address between 19 February 2001 and 7 June 2002. They met at the usual spot and Le was supplied with a quantity of poor quality heroin.

Although the drug trafficking ceased, Le states that he still maintained contact with Ferguson and to a lesser extent Sadler. In April 2002, when Le was selling his vehicle to a car dealer in Prahran, he was telephoned by either Sadler or Ferguson. They arranged to pick him up. When they met, Ferguson and Sadler told Le that he was being looked for, and that he should get out of Melbourne. They drove around for a short time, and then dropped Le and his girlfriend Loan Tran at South Yarra Railway Station.

In mid 2002 Le became aware that his name was published on the Crime Stoppers programme. He telephoned Sadler who told him to keep his head down and not to worry.

In November 2002 Le became aware that some police had contacted Loan Tran and were making enquiries about the BMW vehicle he had sold to Ferguson. He tried to telephone Ferguson and Sadler but was unable to do so. Eventually he established contact with Sadler. Le was then in Sydney. Sadler told him to stay there. Sadler said that he would ring Le on the following Monday. On that day Le received a call from Cox. Cox asked Le what was going on and what had happened. Le told him what he had told Sadler. Cox said that he would be in touch. According to Le that was the last contact he had with the members of the Drug Squad.

The other principal Crown witness is Kenneth Lai. In the early part of 1999 Lai was arrested several times in relation to drug offences. Eventually he was remanded into custody at the Melbourne Custody Centre. A short time later Cox and Sadler visited him there. They asked him if he was interested in assisting them with their investigations. They said that they could help him with his charges and get him out of the Custody Centre if he agreed to assist by providing information on drug dealers, and in particular on Le. Lai agreed to the proposal. A short time later Lai was granted bail on the grounds that he was assisting Cox and Sadler with an investigation.

Lai then assisted Cox and Sadler to establish contact with Le. Lai acted as intermediary to introduce a Vietnamese undercover police officer to Le. He arranged for a purchase of heroin from Le on behalf of the undercover police officer.

During that period Lai also supplied Cox and Sadler with information concerning a few other dealers. He states that in addition to asking him for information on drug dealers, they also asked him whether he wanted to enter into a business relationship with them. They told him that they could supply him with heroin at a lower price than that at which he was then purchasing heroin. They discussed with him the amount of profit which Lai could make on selling heroin which he purchased at that price. At that time Lai was in financial difficulties. He was told that he would be able to make sufficient money from the sale of heroin to pay his way out of debt.

In addition, Cox and Sadler asked Lai whether he would be prepared to help them arrest drug dealers in return for a portion of the heroin seized. Lai was to provide them with information leading to a “bust”, and they would give him a portion of the drugs seized as payment for the information. Lai asked if he would be able to sell heroin on that scale without being caught. They replied that, if he told them to whom he was selling the drugs, they could make enquiries to ensure that his customers were not being targeted for police raids. In return Lai was required to pay to Cox and Sadler any profits derived from the trafficking.

Although a number of discussions occurred between Lai and Cox and Sadler, Lai ultimately stated that he did not wish to proceed with the proposed transactions. In addition, Cox and Sadler wished Lai to provide them with information on other dealers and if that information produced results, they would arrange for cash payments to be made to him. In the course of those discussions Lai asked if he would be paid for the information he provided relating to Le. As a consequence, Lai was taken to the St Kilda Road Police Complex where he was introduced to the superior of Cox and Sadler. That officer handed Lai $1,000 as a reward for the information he had provided. After he had left, either Cox or Sadler grabbed the money from Lai and pocketed it. Lai states that as a result of that incident he decided to stop supplying Cox and Sadler with information. Nevertheless, Cox and Sadler pressured Lai to provide them with further information and to deal drugs for them. They threatened to place him back in custody and Cox physically assaulted him. As a result of that pressure Lai left the flat in which he was living and moved to a number of different addresses. He stopped reporting on bail and failed to turn up at court as a consequence of which he was arrested on warrant.

The Crown proposes also to call the evidence of Mr Gerard Curtin, a forensic accountant. I have already made a ruling in relation to the admissibility and form of the evidence to be adduced from Mr Curtin.[5] Mr Curtin is a certified practising accountant who has been employed by the Victoria Police in the investigation of fraud related offences for approximately 14 years. He has examined the financial accounts of Ian and Joanne Ferguson, of Cox and his wife Alexia, and of Sadler and his wife Carolyn. He has analysed those accounts on a month by month basis. In particular Mr Curtin has matched deposits into those accounts with identified sources of income and other known financial inflows into the accounts. Where Mr Curtin has been unable to identify a match, he has described the deposit into the account of the subject concerned as a “cash deposit”. Mr Curtin has also sought to match cash payments made by the relevant subject (i.e. the Fergusons, the Coxes or the Sadlers) with corresponding cash withdrawals made from the accounts of each of the subjects. Where Curtin has been unable to conclude that there was a “match”, he has categorised the relevant cash payment made by the subject as a cash payment for which there was “some other source of funds”.
[5][2005] VSC 224R.

Mr Curtin conducted his analysis of each of the three sets of accounts for the period from 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:

(a)in respect of Ian and Joanne Ferguson totalling $704,638;
(b)in respect of Sadler and Carolyn Sadler $169,990;
(c)in respect of Cox and Alexia Cox $31,952.

(1) COUNT 1: ADMISSIBILITY OF EVIDENCE OF LAI

Both Cox and Sadler object to the admission of the evidence of Lai on the conspiracy charged in Count 1. In essence, both Mr Young, on behalf of Cox, and Mr Georgiou, on behalf of Sadler, submitted that, as currently framed, the Crown case involves not one but two conspiracies. The first conspiracy involves the attempt by Cox and Sadler to recruit Lai to traffick heroin. The second conspiracy is that in which Cox initially recruited Le to traffick heroin, and in which Le was subsequently used by Ferguson and Sadler for that purpose.

Thus, Mr Georgiou submitted that at its highest, on the evidence, the prosecution could only establish that Cox and Sadler conspired together, in April 1999, to engage in drug trafficking with Lai. He submitted there was no evidence to support the wider conspiracy alleged in the particulars provided by the Crown. Further there is no evidence of Ferguson being involved in such an agreement. It was submitted that his later alleged involvement with Cox, Sadler and Le does not provide a proper basis for an inference that there was one continuing conspiracy. In his written submissions Mr Georgiou contended:

“The prosecution summary refers to a wider agreement than the evidence properly admits. It is based on speculation that the conspiracy alleged went beyond the simple dealing with Ken Lai in the first instance. That there is a connection with the subsequent allegations involving Duy Le is even more tenuous.”

In support of that proposition both Mr Young and Mr Georgiou submitted that the attempt by Cox and Sadler to traffick heroin through Lai, and the subsequent trafficking of heroin to Le, were quite distinct and separate, so that they did not constitute overt acts of the same conspiracy. A number of differences between, on the one hand, the dealings with Lai, and, on the other hand, the dealings with Le, were relied upon. In particular it was submitted:

(a)The attempt to recruit Lai took place in May 1999. The first corrupt approach to Le did not take place until 3 August 1999.
(b)There is no evidence of any involvement by Ferguson in the attempt to involve Lai in the conspiracy.
(c)On the Crown case a different proposal was made by Cox and Sadler to Lai, than the proposal which Cox is said to have made to Le. Lai alleges that Cox and Sadler proposed that he would receive a share in the profits on the sale of the heroin. By contrast the proposal put to Le, and apparently accepted by Le, was that he would purchase the heroin himself for sale by him.
(d)There were differences in the manner by which it is alleged the police approached Lai and Le. The approach to Lai was gradual. He was taken to nightclubs. The police turned a blind eye to continued drug dealing by him. Only after the police had thus gained his confidence did they seek to recruit him as a conduit by which to traffick drugs. On the other hand it is alleged that the approach made by Cox to Le was sudden and unexpected. After the successful drug raid on 2 August 1999, with no warning, Cox handed Le an ounce of heroin on 3 August 1999.

In response, Mr Leckie submitted on behalf of the Crown there is a clear nexus between the approach made by Cox and Sadler to Lai, and the subsequent dealings by the accused with Le. Cox, Sadler and Ian Ferguson were each members of a special unit within the Drug Squad, tasked with investigating heroin trafficking. In each case, they cloaked their criminal conduct under the guise of legitimate investigation. They did this by first arresting Lai, then Le, for trafficking, and recruiting each of them, in turn, as an informer. In each case, as the relationship developed, the approach was then made to Lai and Le, respectively, offering to trade in heroin by supplying heroin to the informer which the informer was then to on‑sell into the community. In this respect Mr Leckie submitted that the modus operandi in respect of the approaches to Lai and Le was, basically, the same. He accepted that there were some differences in the way in which the approaches were made, and in the detail of the proposals that were put to Lai and Le. However, in each case, the objective was the same, namely the use by the accused of an informer for the purposes of trafficking heroin. Mr Leckie accepted that there was no evidence that Ferguson was involved in the conspiracy at the time at which Cox and Sadler approached Le. However, he submitted that it was pursuant to the same conspiracy that Le was approached. Subsequent to Le being recruited as the person to whom the heroin was to be trafficked, Ferguson became actively involved and took over as the member of the conspiracy responsible for supplying the heroin to Le. Mr Leckie submitted that, even if Ferguson joined the conspiracy subsequent to its inception, that did not mean that there were two conspiracies. Mr Leckie further submitted that this case is different to Gerakiteys v R (above) where, on the evidence, it was held that there was not one conspiracy but, rather, a number of “sub-conspiracies”.

The submission made on behalf of Cox and Sadler is not that Count 1, as presently framed, is bad for duplicity, on the grounds that it charges two or more conspiracies; see R v Greenfield.[6] Rather the submission is that the allegations concerning Lai (“the Lai allegations”), and the allegations concerning Le (“the Le allegations”), if accepted, establish two separate conspiracies, and not the one conspiracy specified in the particulars now provided in respect of the Crown case. Thus it was contended that the Lai allegations do not establish, and are not capable of establishing, the wider conspiracy now particularised by the Crown; rather, at most, they establish a separate conspiracy by Cox and Sadler to traffick heroin to Lai. Accordingly, Mr Georgiou submitted that it would be a matter of speculation, rather than inference, for a jury to rely on the Lai allegations as evidencing the wider conspiracy now charged.
[6][1973] 1 WLR 1151 at 1155 (Lawton LJ).

It is of course trite law that the Crown must prove the conspiracy alleged in the presentment, and not a separate conspiracy or separate conspiracies; R v Ongley,[7] O’Connell v R,[8] Gerakiteys v R.[9]
[7](1940) 50 WN(NSW) 116 at 117 (Jordan CJ).
[8](1844) 11 Cl & F 155 at 236-7; 8 ER 1061 at 1093.
[9](Above) at 327-8 (Brennan J), 333-4 (Deane J).

A relevant example of this principle is found in the judgment of the High Court in Gerakiteys (above). In that case the accused was charged with conspiring, between April 1975 and May 1978, with one Harrison and others to cheat and defraud a number of insurance companies. The accused was a medical practitioner, and Harrison was an insurance agent. Harrison procured a number of persons to apply for sickness and accident insurance policies. Those policies were taken out with a number of insurance companies. Subsequently, Harrison and the insureds consulted the accused. He completed a medical certificate supporting a claim made by the insureds on the policies without performing a medical examination of the insured. Each of the insureds made a claim accompanied by false certificates of disability provided by the accused. As a result of the claims the insurance companies paid benefits to the insureds. The essence of the conspiracy charge against the accused was that he, Harrison and the insureds, in the time alleged, had conspired to cheat and defraud the insurance companies. The accused was convicted on that count. On appeal, his conviction was overturned on the basis that there was no evidence to indicate that all the insureds had been jointly involved with each other, as well as with the accused and Harrison, in the one conspiracy. Rather the evidence pointed to a conspiracy between the accused and Harrison, and a series of four subsidiary conspiracies to which the accused, Harrison and one or more members of the insureds were parties. The New South Wales Court of Appeal accordingly quashed the conviction of the accused but ordered a re‑trial. The High Court (with Brennan J dissenting) upheld the quashing of the conviction, but set aside the order for a new trial, on the basis that a further trial would entitle the Crown to prosecute again on the charge it had particularised but failed to support by evidence. For present purposes the significant aspect of the decision of the High Court was its conclusion that, on the evidence, the Crown had failed to make out the one conspiracy between the accused, Harrison and the various insureds, but, rather, had instead had established a conspiracy between the accused and Harrison, and four subsidiaries conspiracy involving the various insureds.[10]
[10]See 320-321 (Gibbs CJ), 327-8 (Brennan J), 332-3, 336 (Deane J). See also R v Griffiths [1966] 1 QB 589 at 597-599.

On the other hand, it is well established that a single conspiracy may exist and endure over a period of time. As part of that conspiracy the parties to it may undertake and effect a number of transactions pursuant to the common object of the conspiracy, without thereby entering into a number of conspiracies distinct from that conspiracy.

In R v Greenfield[11] the eight accused were tried on an indictment on Count 1 of which charged them with conspiring to cause explosions in the United Kingdom between January 1968 and August 1971. On the Crown case there were 25 explosions or attempted explosions during that period which had various common features. Four of the accused were convicted of conspiracy. On appeal they submitted that the conspiracy count was bad in law because the evidence was consistent with more than one conspiracy. The Court of Appeal rejected that submission. Lawton LJ, delivering judgment of the Court of Appeal, stated:
[11][1973] 1 WLR 1151.

“In our judgment the distinction which exists between form and proof is the clue to the problem provided by this case. The prosecution was alleging that these appellants and the other defendants had had a common purpose to cause explosions. All the defendants in their different ways challenged that basic allegation of a common purpose; and they did so by submitting that the evidence revealed the possibility that those charged may have had in relation to some of the incidents purposes which were not common to all. What they were doing was challenging the existence of the conspiracy as charged which is but a way of saying that they were denying that the prosecution had proved their case. A charge which is not bad for duplicity when the trial starts does not become bad in law because evidence is led which is consistent with one or more of the defendants being a member of a conspiracy other than the one charged. Such evidence may make it impossible for the prosecution to establish the existence of the conspiracy charge. Griffiths’ case was such a case. At the end of the prosecution’s case the evidence may be as consistent with the defendants, or some of them, having been members of a conspiracy which was not the one charged as with the one charged. In such a situation the trial judge should rule that there is no case to answer. But if at the end of the prosecution’s case there is evidence on which, if uncontradicted, a reasonably minded jury could convict the defendants, or two or more of them, of the conspiracy charged despite evidence of the existence of another conspiracy, then the trial judge should let the case go to the jury.
That is what happened in this case. James J allowed the case to go to the jury and directed them in the clearest terms that before convicting anyone they had to be sure that the prosecution had proved the existence of the conspiracy charged. Thus at the outset of his summing up he said:
‘Remember this, the longer a conspiracy is alleged to have lasted the more important it is that one should look with care, to make sure it is one and the same agreement that is being alleged and not a different number of agreements within that one period. The Crown say, here, there was one and the same agreement throughout.’

This direction was repeated over and over again during the long summing up which this lengthy trial made necessary. In our judgment the conspiracy count was not bad in law and the direction to the jury on it was correct.”[12]

[12]pp.1156-7.

The same principle is also demonstrated by the decision of the New South Wales Court of Appeal in Saffron v R (No. 1).[13] In that case the accused, Saffron, was charged between January 1969 and June 1981 of conspiring with one Anderson to defraud the Commonwealth. The accused and Anderson were jointly interested or involved in a number of nightclubs, bars and restaurants in the Kings Cross area of Sydney during the period charged. It was alleged that during that time the accused engaged in a conspiracy with Anderson to defraud the Commonwealth of income tax by keeping two separate sets of financial records, one true and one false, in relation to the operations of the businesses. The Crown case was that the conspiracy was originally entered into in relation to one business (the “Venus Room”), and that it was progressively extended to the others. Indeed some of the businesses were not in existence at the time of the commencement of the conspiracy alleged, in 1969. The accused was convicted. The trial judge reserved questions of law for consideration by the Court of Appeal. One of the questions stated for the Court of Appeal was whether the evidence proved multiple conspiracies, or was consistent with multiple conspiracies as with one conspiracy. Another question concerned whether it was open to the jury to find that the conspiracy charge grew out of an arrangement involving the first business, which was later successively extended to four other businesses in which Saffron and Anderson became either jointly interested or jointly involved. The New South Wales Court of Appeal held that there was sufficient evidence for the jury to conclude that there was one conspiracy successively extending to businesses in which Saffron and Anderson became interested or involved. In reaching that conclusion, Hope JA (who delivered the principal judgment) stated:

“In my opinion the question was properly left to the jury. It is not merely that the object of the conspirators throughout was to defraud the Commonwealth of tax. Thus if there were one charge such as the present formal charge of conspiracy, and the evidence showed the arrangement in the context of the Venus Room, and another arrangement some eight or nine years later to invest money won at the races in a mortgage, using pseudonyms instead of real names, and defrauding the Commonwealth by not returning the true income from the investment in the relevant tax returns, it would not be enough that the parties to the agreements were the same and that the objects were the same. There would clearly be two separate conspiracies. However in the present case there were throughout not only the same object and the same parties; there were the same scheme, the same general class of business and income, the same bookkeeper or bookkeepers implementing the conspiracy at the same office, and a substantial intermixing of the tax evasion activities in all of the businesses … coupled with an absence of further discussions to bring the new businesses within the scheme, all of which justified an inference that Anderson and Saffron assumed, and it was the fact, that the scheme originating in the context of the Venus Room was not limited to that business but was to be applied without further agreement to other businesses as they acquired interests in them.”[14]

[13](1988) 36 A Crim R 262.

[14]At 290.

In the above passage, Hope JA referred to the fact that there were, from the inception, the same parties to the conspiracy. However the authorities make it clear, as indeed was acknowledged in argument, that it is not necessary that each of the alleged parties to the conspiracy be members of it throughout the whole of its duration. See R v Griffiths;[15] R v Simmonds;[16] Saffron v R[17]; R v Ongley[18]. Of course, the fact that there was a change in membership of the alleged conspiracy may militate against the existence of the one conspiracy on the existence of separate conspiracies.
[15]Above at 597.
[16][1969] 1 QB 685 at 696.
[17]Above at 285-6 (Hope JA).
[18]Above at 117.

The question then is whether the evidence relating to the Lai allegations relates to a different conspiracy to that alleged by the Crown in Count 1, and which the Crown seeks to establish by the evidence relating to the Le allegations. The cases to which I have referred show that it is necessary to determine whether there may be discerned from the evidence a common objective in the conspiracy alleged, together with a relevant nexus between the Lai and Le allegations, in order to determine whether the evidence relating to the Lai allegations is relevant to count as conspiracy alleged. To some extent, the task before me is different to that performed, for example, by the Court of Appeal in Saffron. There the question was whether the evidence, as led at trial, could establish the charge in the presentment. In the present case, the trial has not been commenced. It is necessary for me to assess, on the depositions, whether that evidence, if led, might be relevant to Count 1 of the presentment, as now particularised by the Crown.

From the materials contained in the depositions, it is evident that there is a significant nexus between, on the one hand, the Lai allegations, and, on the other hand, the Le allegations. The approach to Lai, and the recruitment of Le by Cox, was directed to the same objective, namely the trafficking of heroin by or through a Drug Squad informer. Each of the three accused charged on Count 1 were members of one of the two units of the Victorian Drug Squad responsible for investigating heroin trafficking. In each instance, the approach was made to a person initially recruited as an informer after the arrest of that person. The corrupt approach was only made after the recruitment of, respectively, Lai and Le as informers, and after they had each performed legitimate roles as informers. Further, I consider that there is a relevant connection in time between the two approaches. Conversely, there is not such a sufficient element of disconnection, that the two transactions should not be seen to be part of the one overall conspiracy. It is alleged that the initial overture to Lai by Cox and Sadler was made in about May 1999. The incident in which Cox and Sadler are alleged to have stolen money from Lai is alleged to have occurred on 21 May 1999. Lai states that before that incident occurred he had decided that he did not want to deal drugs with Cox and Sadler.[19] In the meantime, based on information supplied by Lai, Le was arrested by the Drug Squad in April 1999. After his remand into custody he was recruited as an informer by Sadler and by his superior, Mr Hill. The first corrupt approach by Cox to Le was made on 3 August 1999. Thus, while there is a period of time between the successful attempt to recruit Lai, and the first corrupt approach to Le, the relevant time gap is not substantial. During that period Le had been recruited, and was acting, as an informer for the Drug Squad.
[19]Depositions pp.2612-3.

Each of the above matters are capable of establishing a nexus between the Le allegations and the Lai allegations. There are, of course, some factors which are dissimilar in the two allegations. For example, the type of transaction which was proposed to Lai (profit sharing) was different to the transaction that was proposed to Le (a sale to the informer). The initial recruitment as an informer of Lai was by Cox and Sadler, and of Le was by Hill and Sadler. However, those factors are not, in my view, of such moment that a jury could not properly infer that the two transactions sprang from the one common origin, namely, a corrupt scheme to traffick heroin through persons arrested as drug traffickers and later cultivated as informers to the Drug Squad.

There is no direct evidence which implicates Ian Ferguson in the unsuccessful attempt to recruit Lai as the person through whom to traffick heroin. That circumstance may, ultimately, persuade a jury that there was not on foot the one continuing conspiracy throughout the period charged. However, that factor does not necessarily lead to the conclusion that there was not the one conspiracy in existence. As I have stated, the authorities make it plain that the same conspiracy can subsist, notwithstanding that one or more members of it are not parties to the conspiracy throughout the whole of its duration. A member of the conspiracy can join it after its inception, and another member can leave it while the underlying combination is still on foot.

For those reasons, and based on the matters contained in the depositions, I reject the application made on behalf of Cox and Sadler that the evidence of Lai should be excluded on the grounds it is incapable of establishing, or being irrelevant to the proof of, the conspiracy charged and alleged by the Crown.

(2) OTHER EVIDENTIARY ISSUES

In the course of argument concerning the applications by Cox and Sadler for separate trials on Count 1, it was contended that prejudice would occur to those two accused in a joint trial because of evidence which the Crown proposed to lead against the co-accused, Ian Ferguson. Counsel for Ian Ferguson had foreshadowed objecting to the admissibility of much of that evidence. For those reasons it was appropriate, in the context of the present application, to determine the admissibility of that evidence.

However, a significant part of the dispute between the parties as to the admissibility of that evidence was ultimately resolved by agreement between the Crown and counsel for Ian Ferguson, without the need for decision by me. In particular, and with one exception, the Crown and counsel for Ian Ferguson resolved the dispute as to which evidence might be led as to the dealings between Ferguson and Duy Le which did not involve the trafficking of heroin. It is therefore only necessary for me to decide the admissibility of that one remaining matter. Further, and in the context of the same discussions, it emerged that objection would be taken to the Crown adducing evidence as to the finding in the possession of Ferguson, in November 2002, of a copy of a letter by the National Australia Bank to Cox dated 11 July 2001. It is also convenient for me to determine the admissibility of that evidence at this stage.

(a) Ian Ferguson – drink driving charge

The Crown proposes to call evidence that, in early 2001, in the course of a conversation between them, Ian Ferguson told Duy Le that he had been charged with drink driving and that he had to go to court as a defendant. Ferguson told Le that although he was a police officer he was still required to be alert and could be convicted of drink driving just like anyone else. He also told Le that as a result of the charge he was not allowed to carry a police issue firearm and was in danger of losing his driver licence.[20]
[20]Depositions p.2769.

Although Ferguson told Duy Le that he was charged with drink driving, in fact it appears that Ferguson was charged with refusing to undergo a preliminary breath test contrary to s.49(1)(c) of the Road Safety Act. The Crown does not propose to adduce evidence as to the circumstances relating to that refusal, other than to prove the fact that the charge had been brought by the informant against Ferguson.[21]
[21]Depositions p.3563.

The Crown submits that the evidence is relevant for two reasons. First, the evidence establishes that there was contact between Ferguson and Le subsequent to the issue of warrants for the arrest of Le in May 2000. Secondly, the Crown submits that the evidence demonstrates the existence of a relationship between Ferguson and Le which was not restricted to that of policeman and informer, and, in particular, which was a close personal relationship between the two men.

Mr O’Doherty, who appeared for Ian Ferguson, did not contend that the evidence is not relevant for either purpose stated by the Crown. However, he submitted that it is not necessary for the Crown to call that evidence in order for the Crown to achieve either of the two purposes for which it seeks to call it. There is a significant body of evidence, apart from the evidence to which exception is taken, which establishes both the fact of contact between Ferguson and Duy Le after May 2000, and the existence of a relationship between the two men which was not confined to that of informer and policeman. Thus, it was submitted that the evidence of the drink driving charge would have little probative value for the Crown. On the other hand it was submitted that the evidence, if admitted, would be prejudicial to the accused.

I accept the submissions made by Mr O’Doherty and consider that, in the exercise of my discretion, the evidence to which I have just referred should not be admitted. First, it is not necessary for the Crown to adduce the evidence of the discussion between Duy Le and Ian Ferguson concerning the drink driving charge in order for the Crown to prove a considerable amount of contact between Ferguson and Duy Le after the issue of the warrants for the arrest of Duy Le in May 2000. Further, the Crown is in a position to adduce a significant amount of evidence as to dealings between Duy Le and Ian Ferguson which demonstrated a relationship between Ferguson and Duy Le other than that of police officer and informer, and which is evidence which is not confined to the trafficking of heroin by Ferguson to Duy Le. The Crown intends to lead evidence as to the sale by Duy Le to Ferguson in November 2000 of a second-hand BMW owned by Duy Le. The Crown also intends to adduce evidence as to the sale of cheap alcohol by Duy Le to Ferguson which, it appears, took place from and after about mid-2000. Both of those categories of evidence are supported not just by the assertion of Duy Le, but also by some independent evidence. That evidence demonstrates the existence of a relationship between Duy Le and Ferguson which is quite different to that of a police officer and informer. Indeed, I consider such evidence to be more cogent in proving the existence of such a relationship than the evidence which the Crown wishes to adduce concerning the charge against Ferguson for refusing to undertake a preliminary breath test. The conversation adverted to by Duy Le, and to which I have referred, is no doubt one which ought not to occur between a police officer and an informant. However, the happening of that conversation does not necessarily evince the existence, between the two men, of a relationship other than that of policeman and informer. Accordingly, I do not consider the evidence to be of significant probative value for the Crown.

On the other hand the evidence, if admitted, would in my view be unfairly prejudicial to Ferguson. The evidence is not simply that of offending by Ferguson against the drink driving legislation. More importantly the evidence is of a refusal to undertake a preliminary breath test when requested to do so by a fellow member of the police. Such evidence might well be construed by the jury as demonstrating a view by Ferguson that, at the relevant time, he was entitled to consider himself above the law. Viewed in that light, the evidence would, in my view, be unfairly prejudicial to Ferguson. For those reasons, it is my conclusion that the prejudicial potential of the evidence significantly outweighs any probative value it might have should it be admitted. Accordingly, I rule that the evidence be excluded.

(b) Admissibility of letter by National Australia Bank to Cox dated 11 July 2001

On 14 November 2002 a search warrant was executed at the premises of Ian and Joanne Ferguson, as a result of which a number of items were seized. Among the items seized was a copy of a letter from the business banking manager of the Thomastown branch of the National Australia Bank to Cox dated 11 July 2001, together with a number of documents attached to that letter. The Crown proposes to adduce the letter in evidence against both Cox and Ferguson, but not the documents which were attached to it. Objection has been taken to the admissibility of that evidence on behalf of both Ferguson and Cox.

The letter purports to be an indicative letter for the information of the recipient relating to a lending proposal concerning “new commercial premises purchase $1.1M”. It sets out the loan structure for such financing including the term, interest rates, and application and service fees. The letter notes that the proposed purchase is “for a specialised property”. The letter states that the bank would lend to a value determined by the valuers as the “alternative use”, which assumed the failure of the tenant, and the property to be reconfigured to suit a tenant “in a mainstream industry”.

The attached documents, which the Crown do not propose to tender, make it plain that the premises which Cox intended to purchase, and finance through the National Australia Bank, were then being used as a brothel.

On behalf of Ian Ferguson, Mr O’Doherty contended that the letter was irrelevant. He submitted that the document did not evidence any business relationship between Ferguson and Cox and thus would not establish any relevant on-going relationship between the two men after the date borne by the letter.

Mr Young, on behalf of Cox, also objected to the admissibility of the evidence. First, he contended that the evidence was irrelevant. He submitted that the evidence did nothing more than establish that Cox was, at the relevant time, investigating the possibility of obtaining legitimate loan finance from the National Australia Bank. Otherwise, the letter proved nothing in relation to the financial means and assets of Cox. Further, the finding of the letter in the possession of Ferguson did not establish that Cox and Ferguson were then co-conspirators to traffick heroin.

In addition Mr Young contended that if the letter were admitted in evidence it would occasion Cox unfair prejudice. Cox would be obliged to explain the purpose for which he intended to purchase the property. Otherwise the jury might speculate that the letter indicated that Cox had the financial wherewithal not only to purchase a substantial property, but also to fund the interest payments out of his own pocket. Thus, if the letter were tendered in evidence, Cox would need to show that the proposed business to be conducted at the premises was a brothel which was capable of producing sufficient income to service the loan. Additionally, as the letter was found in the possession of Ferguson, a jury would be led into idle and wrong speculation as to why the letter was in Ferguson’s possession. In order to explain the possession by Ferguson of the letter, Cox might need to show that he consulted Ferguson concerning the acquisition by him of a brothel, at a time at which Ferguson was involved in the squad of the police force responsible for regulating the brothel industry. Thus, Cox might need to show that he was seeking to exploit his previous relationship with Ferguson in order to obtain the advice or assistance of Ferguson in relation to the acquisition by him of the property. Mr Young contended that there was a substantial body of evidence establishing contact between Ferguson and his client after Cox had left the police force. In particular the telephone call records in the hands of the Crown would be available to the Crown to prove that there was on‑going contact between the two men well after Cox had ceased to be a member of the police force in early 2000. Accordingly, Mr Young submitted that the evidence was of little probative value, but of significant prejudicial potential, should it be admitted in evidence.

In response, Mr Leckie submitted that the letter was relevant to establish that there was a relationship of a significant business content between Ferguson and Cox after Cox had left the police force. In particular the letter demonstrates that Cox was consulting Ferguson about a significant loan proposed to be undertaken by Cox, at a time when large amounts of income were being generated by the heroin trafficking by Ferguson to Duy Le. Thus, the evidence is relevant to determining whether Cox was participating in the overall conspiracy at that time.

Mr Leckie further submitted that the potential prejudice to the accused was not as significant as that contended for by Mr Young. He pointed out that the business conducted at the premises which Cox proposed to purchase was legitimate. Any potential prejudice to the accused by their intended association with a brothel could be allayed by an appropriate direction to the jury.

It is first necessary to address the question whether the letter is relevant to any issue between the Crown and the accused. There is no evidence as to how Ferguson came into possession of the letter. However, it is clear that he gained possession of it between the date of the letter (11 July 2001) and the date of the search warrant (14 November 2002) which is a period during which the Crown alleges that the conspiracy was on foot. It would in my view be open to a jury to infer that Ferguson received the letter from Cox. Thus, the actual possession of the letter by Ferguson would be relevant to show that the relationship between Cox and Ferguson, during that period, was such as it entailed Cox providing Ferguson with a copy of a confidential letter concerning a proposal in relation to a significant commercial transaction into which Cox proposed to enter.

The Crown case against Cox and Ferguson is that they were, with Sadler, involved in an illegal conspiracy during that period of time (and before it) to traffick heroin. While the Crown is in a position to establish, through telephone records, that there was some contact between Cox and Ferguson after Cox’s retirement from the police force, the possession by Ferguson of the letter goes further than that, and gives some substance to the nature of at least one contact between the two men.

It is of course a matter of speculation why Cox provided the letter to Ferguson. I have some reservations whether the jury would be entitled to infer, against either Cox or Ferguson, that the letter was given by Cox to Ferguson in order to induce Ferguson to participate in the potential purchase of the property from funds derived by Ferguson from the alleged heroin trafficking conspiracy. On the other hand, as against Cox, the letter would be relevant to establish, not only the fact that Cox was in communication with Ferguson concerning such a proposal, but that he himself was, in July 2001, contemplating entering into a substantial commercial transaction. One strand of the Crown case against Cox is that, during the relevant period, he had available to him funds from sources beyond those identified by Curtain. The fact that Cox was proposing to enter into the transaction of the nature referred to in the letter of the National Australia Bank would, in my view, be relevant to that issue.

Thus, the evidence sought to be adduced by the Crown is potentially relevant. On the other hand, it must be recognised that the evidence does have some potential for occasioning prejudice both to Cox and Ferguson. While the letter itself does not, on its face, reveal that the property, which was the subject of the proposed purchase, was used for a brothel, nonetheless, if it were adduced in evidence, that circumstance might need to be revealed by Cox in order to explain how Cox proposed to fund the interest obligations under the loan. Further, I understand from the submissions of Mr Young that an explanation for the provision of a copy of the letter by Cox to Ferguson might well have been that Cox was then seeking the advice of Ferguson in respect to the proposed purchase. At that time Ferguson was a member of the Vice Squad. Cox was an ex-policeman. If that purpose were revealed in evidence, a jury might draw the inference that Cox was acting improperly in seeking to obtain an unfair advantage by virtue of the fact that Ferguson, a former colleague, was then a member of a squad of the police responsible for regulating the businesses of the type conducted at the premises.

I accept that there may be some prejudice, particularly to Cox, arising out of the revelation to the Court that the proposed business to be conducted in the premises were a brothel. On the other hand the significance of that prejudice must be placed into perspective. The business then being conducted at the property was legal. The proposed lender was Australia’s largest bank, and not some disreputable lender of doubtful integrity. If evidence were to be given at trial as to the use of the premises as a brothel, I consider that an appropriate direction by me as trial judge, as to the use to which a jury might and might not put the evidence, would significantly allay any prejudice which might otherwise flow to Cox. Of course there can be no guarantee that such a judicial direction would allay such prejudice in the breast of every juror. Nonetheless, the experience of trial judges has been that, by and large, juries are conscientious in complying with the type of direction which might be necessary in this case.

I also recognise that there is a potential risk that, if the evidence of the letter were to be admitted, a jury might indulge in untoward speculation concerning the letter. Of course the jury will receive detailed instruction as to the drawing of inferences by it. If the letter is to be admitted in evidence, it might be appropriate, depending upon the state of the evidence, to specifically to remind the jury of the relevant principles relating to inferences when considering the relevance of the letter.

Bearing in mind the above matters, it is evident that the letter is relevant to issues to be established by the Crown against both Ferguson and Cox. While as I have stated I recognise that there may be some prejudice in the admission of the letter into evidence, nonetheless I consider that such prejudice may be suitably nullified by appropriate judicial direction. For those reasons I decline to exclude the admission of that evidence in the exercise of my discretion, and I rule that the letter may be admitted into evidence.

(3) APPLICATIONS FOR SEPARATE TRIAL ON COUNT 1

Cox and Sadler have both applied for separate trials on Count 1.

The central submission made by Mr Young on behalf of Cox is that, in order that he be found guilty on Counts 1 and 2, the jury must be satisfied beyond reasonable doubt as to the truth of the evidence of the witness Duy Le. Duy Le is a witness whose credit will be under wholesale attack. His evidence would be subject to judicial directions both as to his status as an accomplice and also as to his status as an unreliable witness. There is evidence, and in particular evidence of the witness Loan Tran, which potentially corroborates the evidence of Duy Le in respect of Sadler and Ferguson. Moreover, there is independent evidence which supports the evidence of Duy Le that, after the issue of the warrant for his arrest in May 2000, he met with Ferguson, and that during that period he sold a used BMW motor vehicle and cheap alcohol to Ferguson. Thus, in respect of the case against Ferguson, Duy Le’s credibility is, at least in part, bolstered by independent evidence. However, there is no evidence corroborating the allegations made by Duy Le against Cox. There is a risk that in assessing and making conclusions concerning the credibility of Duy Le, the jury will take into account the potential corroboration of Duy Le’s evidence in relation to Sadler and Ferguson. That assessment will inevitably infect any assessment by the jury of the evidence of Duy Le in relation to Cox. In other words the credibility of Duy Le is not severable according to whether his evidence implicates Ian Ferguson, Sadler or Cox.

Further, Mr Young submitted that the allegations relating to Cox are significantly different to those relating to Ferguson and Sadler. Cox resigned from the police force in February 2000. The Crown case is that the initial contact was between Cox and Sadler on the one hand, and Duy Le on the other. However, Duy Le’s evidence is that the “vast majority of contact” which he had with the Drug Squad was with Ian Ferguson. The particulars of overt acts in respect of Cox reveal little by way of contact between Cox and Duy Le after Cox’s resignation from the police force. Accordingly Mr Young submitted that the case against Cox is significantly different to the case made by the Crown against Ferguson and Sadler.

Mr Georgiou, who appears with Ms Spowart on behalf of the secondnamed accused, Sadler, submitted that his client also should be granted a separate trial. Although originally the written submissions filed on behalf of Sadler sought a separate trial from Cox and Ferguson on Count 1, in oral argument Mr Georgiou conceded that, on reflection, he did not have a proper basis to seek a separate trial for his client from Cox. Thus, he only sought a separate trial from Ferguson on Count 1.

It was submitted on behalf of Sadler that the case against Ferguson is significantly different to the case against Sadler. First, the extent of the financial betterment alleged against Ian and Joanne Ferguson ($704,000) is significantly greater than that alleged against Sadler (almost $170,000). Ferguson is alleged to have met Duy Le to conduct drug and other corrupt activities significantly more often than Sadler. There were numerous occasions when Ferguson was present and Sadler was not. The number of telephone calls (321) alleged to have been made by Ferguson to Duy Le after the issue of warrants for the latter’s arrest was significantly greater than the number (48) alleged to have been made by Sadler to Duy Le during that period. Further, there was other questionable or corrupt activity involving Ferguson which did not involve Sadler, including sales of alcohol by Duy Le to Ferguson, and the sale of a BMW car by Duy Le to Ferguson.

In addition it was submitted that there is evidence, apart from that of Duy Le, which is admissible against Ferguson but not admissible against Sadler. That evidence has the potential either to corroborate or, at least, to reinforce the evidence of Duy Le in relation to the allegation that he had a corrupt relationship with Ferguson after warrants had been issued for his arrest. It was submitted that there is no independent and reliable evidence to corroborate Duy Le’s allegations against Sadler. Duy Le’s evidence is critical to the Crown case against Sadler. Accordingly it was submitted that the assessment of the credibility of Duy Le against Ferguson will necessarily need to be different to the assessment of the credibility of Duy Le as against Sadler. Realistically it would not be possible for a jury to reconsider Duy Le’s credibility when assessing his evidence against Sadler.

In response Mr Leckie commenced his submissions by referring to the principle that, ordinarily, persons charged with committing a crime should be tried jointly; R v Demirok[22]. Mr Leckie submitted that there were not significant differences in the Crown case against Cox, Sadler and Ferguson respectively. In accordance with the principles outlined by the High Court in R v Ahearn[23], the Crown would be entitled to lead evidence as to the nature and scope of the conspiracy which was essentially the same against each of the three accused. Thus the Crown would be entitled to call all the evidence of Duy Le and of Loan Tran against each of the three accused. In addition the Crown would be entitled to lead evidence as to the telephone records of each of the three accused for that purpose. Mr Leckie recognised that, on the Crown case, each accused was said to play different roles, with some participating more than others in the actual trafficking of heroin to Duy Le. Nonetheless that circumstance did not render the case against each of the three accused significantly different.
[22][1976] VR 244
[23](1988) 165 CLR 87 at 99

Mr Leckie further contended that the matters of prejudice, relied upon by Cox and Sadler, were not particularly substantial. The primary matters relied upon by each of those accused were the evidence of the sale of the BMW motor vehicle by Duy Le to Ferguson, and the sale of cheap alcohol by Duy Le to Ferguson. Mr Leckie accepted that Duy Le's credibility in respect of those two transactions was supported by independent evidence. To the extent that that evidence, against Ferguson, enhanced the credibility of Duy Le, any disadvantage to the other two accused, Cox and Sadler, could be adequately dealt with by appropriate judicial direction.

Legal Principles

Where two or more accused are jointly presented on one count, the question whether a separate trial should be ordered is a matter for the discretion of the trial judge. The prima facie approach of the Court is that, where the Crown case is that the accused were each engaged on the same common enterprise, they should be jointly presented and jointly tried; R v Grondkowski,[24] R v Demirok,[25] R v Torney,[26] R v Collie, Kranz and Lovegrove,[27] Webb and Hay v R.[28] The acid test is whether it is in the interests of justice that the accused be tried together or separately; see R v Grondkowski;[29] R v Demirok.[30] On the one hand, there are strong public policy reasons why ordinarily those charged with being engaged in a common enterprise ought to be jointly tried. Those reasons were set out in detail in the judgment of the Full Court in R v Demirok[31] and in the judgment of Smith J in the Court of Criminal Appeal in Jones and Waghorn v R.[32] They include the saving of court time and public expense; the avoidance of inconsistent verdicts; the convenience of witnesses; and the desirability of reaching finality as expeditiously as possible and thus of avoiding a repeated retrial of the same issues. Those considerations must, of course, be balanced against the overriding requirement that each accused have a fair trial, according to law, of the charges brought against him or her.
[24][1946] KB 369 at 371.
[25][1976] VR 244 at 252.
[26](1983) 8 A Crim R 437 at 449-50.
[27](1991) 56 SASR 302 at 307.
[28](1994) 181 CLR 41 at 88-89 (per Toohey J, with whom Mason CJ and McHugh J agreed).
[29](above) at 372.
[30](above) at 252.
[31](above) at 254 and following.
[32](1991) 55 A Crim R 159 at 185.

Where, as here, the application for a separate trial is made at or before the commencement of the trial itself, the trial judge must act on limited materials. In Demirok[33] the Full Court pointed out:

“At this point in the trial the knowledge available to the judge of the course which the trial is likely to take is based upon the depositions, and, unless the counsel for the accused volunteer further information, the depositions alone. It will appear from the depositions whether the accused have made statements to the police, and whether those statements involve a denial or an admission of guilt. The judge is aware that it is possible that all the accused or some or none of them may give evidence. In the case of accused persons who are alleged to have made statements, the judge does not know whether the statements will be acknowledged or repudiated, adhered to or departed from. He does not know whether accused persons who appear from their statements to be giving the same account of events will, in the result, be in difference between themselves. The possibilities of the outcome of which the judge is necessarily ignorant can be multiplied indefinitely. Nevertheless, a decision must be made.”

[33](above) at 251.

The fact that evidence might be led against one accused, which is inadmissible against another accused, is not sufficient to warrant ordering separate trials. However, where the effect of such evidence is to occasion substantial prejudice to the co‑accused, and where such prejudice “ … is of a kind not really amenable to nullification by judicial direction, then the claim for a separate trial is very much stronger.” See Jones and Waghorn v R.[34] In that case both accused were charged with the murder of one Turner. In his interviews with the police Jones made admissions in which he implicated his co-accused Waghorn. At their joint trial he also gave an unsworn statement implicating Waghorn. In his out of court statements, and in his unsworn statement in court, Jones stated that he was terrified of Waghorn who had a disposition to violence and murder, and that he was a professional criminal who had been involved in armed robbery. The Crown case against Waghorn hinged substantially on two witnesses, both of whose credibility was open to serious question. The Crown also relied on evidence of conduct of Waghorn after the incident and alleged false denials. In those circumstances, the Court of Criminal Appeal held that there had been a miscarriage of justice in the trial of Waghorn as a result of him being tried jointly with Jones. In reaching that conclusion the Court was particularly concerned with the allegations made by Jones against Waghorn, which were not admissible as evidence against Waghorn. Those allegations were of a highly prejudicial nature, which would not be suitably nullified by appropriate directions given by a trial judge to the jury. Although the evidence of the two Crown witnesses might be discredited, nevertheless the out of court statements by Jones, and his unsworn statement in court, might have impermissibly increased the jury’s confidence in those witnesses in respect of their evidence against Waghorn.[35]
[34]Above at 164 per Crockett J.
[35]See especially at p.162-3 per Crockett J; see also R v Iaria and Panozzo [2004] VSC 110 at [6] (Nettle J).

Similarly, in In R v Demirok[36] the Full Court was concerned with an out of court statement by the co-accused (Demirok’s wife) which confirmed the otherwise questionable evidence of a Crown witness, in circumstances where the out of court statement by the co‑accused was not admissible against the accused. That circumstance, combined with a number of others identified by the Full Court, led to the conclusion that there had been a miscarriage of justice arising from the joint trial of the two accused.[37]
[36]Above, at 250, 254-5.
[37]See also R v Gibb and McKenzie [1983] 2 VR 155, especially at 164-5.

In this case, the applications for separate trials are made on respect of a count in the presentment charging three of the accused with conspiring to traffick a drug of dependence. In R v Darby[38] the High Court was concerned with the question whether a conviction of a conspirator may stand notwithstanding the acquittal of a co‑conspirator. After reviewing the relevant authorities, the Court held that an accused may be convicted of conspiracy, notwithstanding the acquittal of an alleged co‑conspirator, either at the same trial or at a subsequent trial. In that context the Court considered the position of two or more persons accused of conspiracy, where the case against one or more of the parties to the conspiracy is significantly different to the case against the other party or parties to the conspiracy. The Court observed:

“In light of these considerations, in our opinion there is much to be said for the recent decision of the Supreme Court of Canada in Guimond v The Queen[39] requiring separate trials in cases where the evidence admissible against one accused is significantly different from the evidence admissible against the other. We would encourage the adoption of such a practice. In such cases where there is no material distinction in the evidence admissible against both alleged conspirators, the trial judge’s advice to the jury that they will either convict or acquit both accused will continue to be appropriate not because of any technical rule but because of the circumstances of the case.”[40]

[38](1982) 148 CLR 668.

[39](1979) 44 CCC(2d)481.

[40]Above at 678.

In Guimond v The Queen[41] the accused Guimond and one Muzard had been charged with conspiracy to abduct the family of a bank manager and extort money from the bank. At the opening of the trial an application for separate trials was dismissed. Guimond had made a statement which implicated both himself and Muzard in the conspiracy. The two accused were tried together and were convicted. Both appealed. Muzard was granted a new trial on the grounds that he should have been granted a separate trial in light of Guimond’s confession. Guimond’s appeal was dismissed. On his new trial, Muzard was acquitted. Guimond then appealed to the Supreme Court of Canada. He contended that since both he and Muzard had been jointly tried and convicted on a charge of conspiracy, the subsequent acquittal of Muzard must be given the effect of a finding that there was no conspiracy, and that therefore the Guimond should also be acquitted. The Supreme Court of Canada, by a majority of seven justices to two, rejected that submission and rejected Guimond’s appeal.
[41]Above.

In his judgment, Ritchie J (with whom Martland, Spence, Pigeon, Dickson, Beetz and Pratte JJ concurred) expressed the view that the Court of Appeal was correct in ordering a separate trial for Muzard. His Lordship observed that the confession by Guimond was inadmissible against Muzard. The nature of the other evidence tendered against Muzard, coupled with the fact of his acquittal when the statement was not received at Muzard’s re-trial, demonstrated that Muzard was convicted at the first trial on the basis of inadmissible evidence.[42] Having made that observation, Ritchie J then concluded as follows:

“I have already expressed the opinion that when two alleged co‑conspirators are tried separately the acquittal of one does not necessarily invalidate the conviction of the other. I am of the opinion also that, whenever it is apparent that the evidence at the joint trial of two alleged co‑conspirators is substantially stronger against one than the other, the safer course is to direct the separate trial of each and this is particularly the case when the prosecution is tendering in evidence a damaging statement made by one under circumstances which made it inadmissible against the other.”[43]

[42]At 494.

[43]At 497.

The dictum in Darby’s case, based on Guimond’s case, and to which I have referred, was referred to by the Court of Criminal Appeal of Victoria in Torney v R.[44] In that case the accused and his co-accused had been charged jointly as acting in concert to murder the deceased. O’Bryan J referred to the above passage in Darby’s case, and stated:

“It is clear, I believe, that the Court did not intend to change the common law principles governing joint trials in that passage. The Court was there dealing with a case of conspiracy to rob and not with the substantive crime of robbery. The Canadian authority which was cited is also concerned with a count of conspiracy. Among other matters the Court had to consider the correctness of a direction given to the jury at the trial that they would either convict or acquit both accused in circumstances where the evidence against one accused was based on admissions and was overwhelming of guilt whereas against the other accused the evidence was weaker. In light of those considerations I do not believe that Darby’s case prescribes a principle application to joint trials which is different from that prescribed in Demirok or earlier cases.”

[44](1983) 8 A Crim R 437 at 449.

In R v Oliver[45] the appellant, Oliver, was charged and tried with one Fernandini with conspiring to import cocaine under s.233B of the Customs Act (1901) (Cth). At the trial the prosecution produced recorded telephone conversations between Fernandini and one Prouse, a registered informant. In those conversations Fernandini agreed with Prouse upon a plan by which cocaine would, in concert with a citizen of Peru, referred to as “the cook”, be imported into Australia. In related conversations the “cook” was identified as the appellant Oliver. Fernandini and the appellant were both convicted. Oliver appealed, inter alia, on the ground that he should have been granted a separate trial from Fernandini. In particular he contended that there were references to him in the recorded conversations identifying him as the person involved with the cooking and sale of cocaine. Priestley JA, with whose judgment Cantor and Roden JJ agreed, rejected that submission. His Honour referred to directions given by the trial judge to the jury that any out of court statements made by Fernandini were not admissible against the appellant. His Honour considered that that direction was sufficient to allay the prejudice to Oliver caused by the evidence of the tape recorded conversations between Fernandini and Prouse. Priestley JA referred to the passage in Darby, which I have quoted, and stated:

“This passage is clearly encouraging a freer granting of separate trials in conspiracy cases. Equally clearly, it recognises that joint hearings will continue. In every case the question will be whether, after taking into account the matters already mentioned, an accused person has had a fair trial.”[46]

Further and in any event, even if the joinder of the three theft counts on the presentment were justified under Rule 2 of the Presentment Rules, I would exercise my discretion to order a separate trial in relation to each of those three counts. Indeed in the course of submissions, Mr Leckie responsibly accepted that there were powerful discretionary factors in favour of severance of the presentment. The admission of evidence concerning those thefts would quite unfairly prejudice each of the accused in respect of Count 1 on the presentment. Conversely, there is a significant volume of evidence admissible on Count 1, which would not be admissible in respect of Counts 5, 6 and 7. That evidence would clearly prejudice each of the accused in respect of Counts 5, 6 and 7 to an extent which could not be cured by a direction to the jury. For those reasons, if it were necessary to do so, in the exercise of my discretion I would, in any event, have ordered a separate trial on each of Counts 5, 6 and 7.[66]
[66]See Sutton v R (1984) 152 CLR 528 at 541-2 (Brennan J); De Jesus v R (1986) 61 ALR 1 at 13 (Dawson J).

Accordingly, I uphold the applications on behalf of Cox and Sadler that Count 1 be tried separately to Count 5. I uphold the application on behalf of Ferguson that Counts 6 and 7 be tried separately from each other, and from Count 1.

(5) APPLICATION BY JOANNE FERGUSON TO STAY COUNT 3

Ms Tittensor, who appeared on behalf of the fourth accused Joanne Ferguson, submitted that Count 3 of the presentment should be stayed against her client on the grounds that, as currently formulated, Count 3 does not allege an offence known to law.

Count 3 is in the following terms:

“And the Director of Public Prosecution further presents that IAN FERGUSON and JOANNE FERGUSON at Melbourne in the said state between the first day of April 1999 and the sixth day of December 2002 engaged directly or indirectly in transactions that involved money and other property that was the proceeds of crime and IAN FERGUSON and JOANNE FERGUSON knew or ought reasonably to have known that the money and other property was derived or realised directly or indirectly from some form of illegal activity.”

Count 3 purports to charge both Ian and Joanne Ferguson with an offence contrary to s.122 of the Confiscation Act 1997. That section, which has been subsequently repealed, provided:

“(1)A person who engages in money laundering is guilty of an indictable offence and liable to level 3 imprisonment (20 years maximum) or a level 3 fine (2,400 penalty units maximum) or to both.
(2)A person engages in money laundering if, and only if –
(a)the person engages, directly or indirectly, in a transaction that involves money, or other property, that is proceeds of crime; or
(b)the person receives, possesses, conceals, disposes of or brings into Victoria any money, or other property, that is proceeds of crime –

and the person knows, or ought reasonably to know, that the money or other property is derived or realised, directly or indirectly, from some form of unlawful activity.”

The phrase “proceeds of crime” was defined in s.121.

Ms Tittensor noted that the Crown had presented the accused and her husband jointly on the basis that they were acting in concert in the offence of money laundering contrary to s.122 of the Confiscation Act. Thus, the Crown case is based on the principle that where two accused reach an understanding or arrangement that a criminal act or acts will be committed by them or one or some of them, and, while that understanding or act or agreement is still on foot, a crime is committed by one or more of them of a kind which falls within the scope of the understanding or arrangement, they are equally guilty of that crime on the basis that they acted in concert; R v Jensen and Ward;[67] see also R v Lowery and King (No. 2).[68] The understanding or arrangement alleged by the Crown is that the accused and her husband agreed to engage in transactions. The inclusion of the alternative state of mind – that they “ought reasonably to have known” that the money or property the subject of such transactions was the proceeds of crime - permits a finding of guilt in a case where the accused did not know that the moneys or property were in fact the proceeds of crime. In case of such a finding, the jury could not be satisfied that there was an actual understanding or arrangements that criminal acts would be committed by the accused or her husband. To agree to perform an otherwise lawful act – for example purchasing an item or depositing money into a bank account – cannot be said to be an act pursuant of criminal understanding or arrangement which is necessary for the two accused to have been acting in concert. Thus, Ms Tittensor contended, it is not possible to charge an accused with acting in concert to commit an offence under s.122 of the Confiscation Act, where the Crown relies upon an averment that the accused “ought reasonably to have known” that the money and the property was derived or realised from some form of illegal activity.
[67][1980] VR 194 at 201.
[68][1972] VR 560.

In summary, the point made on behalf of Joanne Ferguson is that the Crown must prove that the accused agreed with Ian Ferguson to transact in the proceeds of crime. That necessarily involves proof that she knew it was the proceeds of crime. Such a requirement is inconsistent with the allegation that Joanne Ferguson “ought reasonably to have known” that the money or property which is the subject of the relevant transaction was the proceeds of crime.

Mr Brown, who appears as junior counsel for the Crown, responded by first pointing out that the Crown case against both Ian and Joanne Ferguson on Count 3 is not that the accused were acting in concert, but rather they were acting pursuant to a “joint enterprise” of the type described by the Full Court of the Supreme Court of Victoria in R v Clarke and Johnstone.[69] He correctly accepted that that did not make any difference to the submission made by Ms Tittensor on behalf of Joanne Ferguson. Mr Brown’s substantive response to that submission was that, in order to establish the necessary joint enterprise against either of the co‑accused in Count 3, the Crown need only prove an agreement to carry out the acts which are the basis of the crime alleged, namely the acts of engaging in transactions involving money or property which are proven to be the proceeds of crime. Mr Brown submitted that, in order to establish the requisite agreement, it was not necessary for the Crown also to prove that each party to that agreement had the mens rea necessary for the proof of substantive crime. In support of that submission he referred to the decision of the High Court in Osland v R.[70] Once the requisite concert is thus established, the Crown must, of course, prove against each of the co‑accused the mental element of the crime required by s.122, namely that the accused knew or reasonably ought to have known that the money or other property was derived from some form of unlawful activity.
[69][1986] VR 643 at 653 and following.
[70](1998) 197 CLR 316.

In my view the submissions made by Mr Brown are correct. In Osland’s case, the accused and her son were charged with the murder of her husband. The son struck the fatal blows to the deceased after the accused had rendered him unconscious by putting sedatives in his food. The Crown case was that the accused and her son were acting in concert. At their joint trial the jury convicted the accused, but was unable to reach a verdict in relation to the son. At his subsequent re‑trial the son was acquitted. On appeal, it was submitted on behalf of the accused that the verdicts of the jury were inconsistent. It was submitted that because the Crown case was based on concert, the accused’s liability could only have been derivative, and thus was dependent on the conviction of the son. The majority of the High Court (McHugh, Kirby and Callinan JJ) rejected that submission and held that there was no inconsistency in the jury’s conviction of the accused, and its failure to reach a verdict concerning the son.

In considering the nature of the liability of a party alleged to be acting in concert, McHugh J referred to the decision of the House of Lords in R v Howe[71] and observed[72] that the law stated in that case:

“ … is conclusive in England, at all events, in showing that it is the acts, and not the crime, of the actual perpetrator which are attributed to the person acting in concert. If the latter person has the relevant mens rea, he or she is guilty of the principal offence because the actus reus is attributed to him or her by reason of the agreement and presence at the scene. It is irrelevant that the actual perpetrator cannot be convicted of that crime because he or she has a defence such as lack of mens rea, self-defence, provocation, duress or insanity.”

[71](1987) AC 417.

[72]At p.344.

McHugh J proceeded to consider a number of reported cases in which two or more accused were alleged to have been acting in concert, and in which the accused who actually perpetrated the act constituting the crime was acquitted. His Honour then concluded, giving apparent approval to the statement of law from R v Howe (above), in the following terms:

“Where the parties are acting as the result of an arrangement or understanding, there is nothing contrary to the objects of the criminal law in making the parties liable for each other’s acts and the case for doing so is even stronger where they are at the scene together. If any of those acting in concert but not being the actual perpetrator has the relevant mens rea, it does not seem wrong in principle or as a matter of policy to hold that person liable as a principal in the first degree. Once the parties have agreed to do the acts which constitute the actus reus of the offence and are present acting in concert when the acts are committed, the criminal liability of each should depend upon the existence or non‑existence of mens rea or upon their having a lawful justification for the acts, not upon the criminal liability of the actual perpetrator. So even if the actual perpetrator of the acts is acquitted, there is no reason in principle why others acting in concert cannot be convicted of the principal offence. They are responsible for the acts (because they have agreed to them being done) and they have the mens rea which is necessary to complete the commission of the crime.”[73]

[73]p.350.

Callinan J agreed with the reasoning and conclusion of McHugh J on that aspect of the accused’s appeal.[74] Kirby J also rejected the proposition that there was any inconsistency in the verdicts of the jury.[75]
[74]p.413.
[75]pp.386-7.

Thus in the present case, in order to establish the requisite joint agreement, it is sufficient for the Crown to establish that the two accused, Ian Ferguson and Joanne Ferguson, agreed to deal with money and property which is proven to be the proceeds of crime, that that agreement remained on foot at the time of the actual transaction, and that it was pursuant to that agreement that the relevant transaction took place. Of course in order for either of the accused to be found guilty of the offence under s.122 the Crown must also establish the requisite state of knowledge, namely that the accused knew or ought reasonably to have known that the money or property had been derived from some form of unlawful activity. However, I consider that Osland’s case does contradict the underlying proposition put forward on behalf of Joanne Ferguson, namely, that in order to constitute the requisite concert, there must be actual knowledge by both accused that the money or property were the proceeds of crime.

As I stated, the key submission made on behalf of Joanne Ferguson is that proof of acting in concert to transact in the proceeds of crime necessarily involved proof of knowledge that it was the proceeds of crime which are the subject of the concert. The decision of the High Court in Osland identifies the fallacy in that submission. The Crown must prove that the two accused formed an agreement or understanding to transact in particular money or property which are proven to be the proceeds of crime. However, it is not necessary, in order to establish acting in concert or pursuant to a joint venture, to prove that either party actually knew that the property were the proceeds of crime. Indeed, hypothetically, if Ian Ferguson had no knowledge that the property was the proceeds of crime, and if all the relevant transactions were subsequently conducted by Ian Ferguson, he might be acquitted of an offence under s.122 of the Confiscation Act, yet Joanne Ferguson might nonetheless be found guilty, if it can be shown that she either knew or ought to have known that the money or property the subject of the transaction were the proceeds of crime. Likewise, it is sufficient to establish the requisite joint venture by proving that Joanne and Ian Ferguson entered into an agreement or arrangement to conduct the relevant transaction in respect to the money or property concerned (which is proved to be the proceeds of crime), in circumstances when she ought reasonably to have known that the money or property were the proceeds of crime.

For those reasons I do not accept the submission made by Ms Tittensor on behalf of the accused Joanne Ferguson, and accordingly I reject the application made on her behalf to stay Count 3 on the presentment.

(6) APPLICATION BY JOANNE FERGUSON FOR SEPARATE TRIAL ON COUNT 3

The second application made on behalf of Joanne Ferguson was that she be tried separately on Count 3 from Ian Ferguson. It was also submitted that Count 3, in respect of Joanne Ferguson, be tried separately to each other count on the presentment. In light of the conclusions I have so far reached, it is only necessary for me now to consider whether Joanne Ferguson should be given a separate trial on Count 3 from the co-accused to that count, Ian Ferguson.

The submissions made by Ms Tittensor were, of course, argued in the context of a presentment alleging seven counts, one of which was Count 3. In essence it was submitted that the trial of Joanne Ferguson on Count 3, both jointly with her husband, and also at the same time as each of the other counts on the presentment, would occasion substantial prejudice to Joanne Ferguson. In such a trial, Joanne Ferguson would be but a minor participant. Nonetheless, the jury would be presented with a considerable amount of evidence of wrongdoing by the other co‑accused. When considering the case against Joanne Ferguson the jury might be overborne by the sheer volume of evidence against the three co‑accused. In addition it was submitted that the trial of Joanne Ferguson jointly with the other three co‑accused would be considerably burdensome to her. It was submitted that if she were tried alone, the trial would only take about two weeks. By contrast it was predicted that if all four co-accused were tried together, such a trial would last for three to four months. Finally, it was submitted that, on such a joint trial, she would be the only spouse of either of the three male accused jointly presented. The jury might infer, against her, that the Crown had good reason to only charge her, and not also the wives of both Cox and Sadler.

Each of the matters on which Ms Tittensor relied are, at least to a substantial extent, ameliorated by the decisions which I have already made, namely that Cox and Sadler be tried separately from Ian Ferguson on Count 1, and that the three theft counts be severed. If I were not to grant the application now made by Joanne Ferguson, she would be jointly tried with her husband on Count 3. That count would be tried at the same time as the charge of conspiracy against Ian Ferguson alleged in Count 1.

It was submitted on behalf of Joanne Ferguson that nonetheless a trial of her on Count 3 separately to her husband would be significantly shorter than a joint trial in which she and her husband were the two co-accused. It was acknowledged, correctly, that, on the trial of Joanne Ferguson, it would be necessary for the Crown first to prove beyond reasonable doubt that the money or other property which is the subject of the money laundering count constituted the proceeds of crime. Accordingly, it would be necessary to prove the involvement of Ian Ferguson in the conspiracy charged in Count 1, and that the property and money the subject of Count 3 was derived from that criminal conduct. It was submitted on behalf of Joanne Ferguson that, notwithstanding that those matters would need to be proven against her, nonetheless they could be proven in much shorter compass than is necessary to prove the case against Ian Ferguson on Count 1.

I accept that, to some extent, if Joanne Ferguson were tried separately, the proofs required to be adduced to establish that the property and money, the subject of Count 3, were derived from the conspiracy alleged in Count 1, might be somewhat less than the evidence which will be adduced on the trial of Ian Ferguson on Count 1. Nonetheless, the Crown does bear the onus of proving, against Joanne Ferguson, the “threshold” issue that the money and property involved in Count 3 were the proceeds of the criminal conduct of Ian Ferguson alleged in Count 1. On such a trial it would be necessary to properly prove, by admissible evidence, the criminal conduct of Ian Ferguson, and that that conduct was the source of the money and property which is the subject of Count 3. Thus while the proofs against Joanne Ferguson might be shorter, it is problematic to what extent that that is so. If I were to grant Joanne Ferguson a separate trial on Count 3, that trial might be shorter than a joint trial involving both Ian and Joanne Ferguson, but not substantially so.

The matters to which I have just adverted demonstrate that, whether Joanne Ferguson were to be tried separately or jointly with her husband, the jury would nonetheless have before it significant evidence alleging the criminal conduct of Ian Ferguson. Indeed, the Crown would wish to establish the magnitude and nature of that conduct, in order to be able to establish, on Count 3, that Joanne Ferguson either knew or ought to have known that the money and property which is the subject of that count constituted the proceeds of the criminal conduct of Ian Ferguson. It is thus inevitable that in trial of Count 3 against Joanne Ferguson, there be an extensive revelation of the evidence against Ian Ferguson in respect of Count 1.

The decision which I have made that Cox and Sadler be tried separately on Count 1 to Ian Ferguson does eliminate one item of prejudice adverted to by Ms Tittensor, namely the fact that her client is the only spouse charged with a money laundering offence. It will also have the effect of shortening the trial of Joanne and Ian Ferguson under Counts 1 and 3, since it removes the participation of both Cox and Sadler in such a trial.

Thus there are not, in my view, compelling reasons to grant the application by Joanne Ferguson for a separate trial on Count 3. On the other hand, there are significant factors militating in favour of there being a joint trial of Ian Ferguson and Joanne Ferguson on Count 3. First, the “threshold” issue which must be proven against Joanne Ferguson will involve the same proofs as are to be adduced against Ian Ferguson on Count 1. The joint trial of both accused will save court time and public expense, and also prevent some inconvenience to witnesses. Further, there is some, albeit limited, prospect of there being inconsistent verdicts, should Ian and Joanne Ferguson be tried separately. This would only occur if a jury were to convict Ian Ferguson on Count 1, but to acquit Joanne Ferguson on Count 3, on the basis that it had not been proven that the property and money concerned were the proceeds of crime. I acknowledge that on a separate trial it is unlikely that those representing Joanne Ferguson would seek to challenge the evidence as to the criminal conduct of Ian Ferguson. Nonetheless a significant amount of that evidence – and in particular the evidence of Duy Le and Loan Tran – would be the subject of specific directions by me to the jury. It is feasible – though unlikely – that, given those directions, a jury may decline to act on the evidence of those witnesses, on a separate trial of Joanne Ferguson. Additionally, if Joanne and Ian Ferguson were tried separately on Count 3, there is some risk that, at least in the case of Joanne Ferguson, there would be a blaming by her of her co-accused, which is a factor supporting the joint trial of the two accused on Count 3.

Thus, I do not consider that the interests of justice require me to order a separate trial of Joanne Ferguson on Count 3 from Ian Ferguson. Rather, the policy issues identified in Demirok weigh significantly in favour of there being a joint trial of the two accused on that count.

SUMMARY OF CONCLUSIONS

I summarise the conclusions which I have reached in the course of these reasons as follows:

(1)I reject the application made on behalf of Cox and Sadler that the evidence of Kenneth Lai be excluded in respect of Count 1.
(2) (a)       In the exercise of my discretion I rule that the evidence


relating to Ian Ferguson’s drink-driving offence be


excluded.
(b)I rule that the letter by the National Australia Bank to Cox dated 11 July 2001 is admissible in respect of Counts 1, 2 and 3.

(3)I order the charge of conspiracy in Count 1 be tried jointly against Cox and Sadler, but separately to the charge of conspiracy in Count 1 against Ian Ferguson.
(4)I order Counts 5, 6 and 7 be tried separately to Count 1, and separately from each other.
(5)I reject the application by Joanne Ferguson to stay Count 3.
(6)I reject the application by Joanne Ferguson that she be tried separately from Ian Ferguson on Count 3.

The result of the rulings which I have made in respect to the applications for separate trials, and the applications for severance, is as follows:

(a)Cox and Sadler will be tried jointly on Count 1. On such a trial Counts 2 and 4 will also be tried.
(b)Joanne and Ian Ferguson will be tried jointly on Count 3. On such a trial the charge of conspiracy against Ian Ferguson in Count 1 will be tried.
(c)Counts 5, 6 and 7 will be tried separately from each of the above trials, and from each other.

I shall hear counsel on the question of the order in which the various trials are to take place. See R v Brown and ors.[76]
[76](1990) VR 820 at 827-8.

[2005] VSC 255

21 July 2005