The Commissioner of the Australian Federal Police v Cornwell, B.R.

Re: THE COMMISSIONER OF THE AUSTRALIAN FEDERAL POLICE
And: BRUCE RICHARD CORNWELL and BARRY RICHARD BULL
No. G489 of 1986
FED No. 453
Criminal Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Morling J.(1)

CATCHWORDS

Criminal Law - conspiracy to import drugs - action for pecuniary penalty - assessment of value of benefits derived from narcotics dealing - benefit - value

Customs Act 1901, ss.243B, 243C

HEARING

SYDNEY

#DATE 14:8:1989

Counsel for applicant: Mr R.J. Burbidge Q.C. with

Mr S. Rushton instructed by: Director of Public Prosecutions

Counsel for respondent: Mr R. McCrudden (withdrew

10.15 a.m. 6 December 1988) instructed by: Mr J. Cullen

ORDER

The first defendant pay to the Commonwealth of Australia a pecuniary penalty pursuant to s.243B of the Customs Act 1901 ("the Act") in the sum of $6,900,000.

The second defendant pay to the Commonwealth of Australia a pecuniary penalty pursuant to s.243B of the Act in the sum of $300,000.

The Official Trustee in Bankruptcy pay to the applicant, out of the property of the defendants that has come into his possession or under his control by virtue of orders made in these proceedings pursuant to s.243E of the Act, the applicant's costs of these proceedings.

Pursuant to s.243G(1) of the Act, the Official Trustee in Bankruptcy pay to the Commonwealth, out of the property of the first defendant that has come into his possession or under his control by virtue of orders made in these proceedings pursuant to s.243E of the Act, an amount equal to the amount of the liability of the first defendant in respect of the pecuniary penalty specified in order 1 hereof.

Pursuant to s.243G(1) of the Act, the Official Trustee in Bankruptcy pay to the Commonwealth, out of the property of the second defendant that has come into his possession or under his control by virtue of orders made in these proceedings pursuant to s.243E of the Act, an amount equal to the amount of the liability of the second defendant in respect of the pecuniary penalty specified in order 2 hereof.

Pursuant to s.243G(2) of the Act, the Official Trustee in Bankruptcy sell or dispose of such of the property of the first defendant that is subject to the charge created by s.243J of the Act upon the making of the said orders pursuant to s.243E of the Act.

Pursuant to s.243G(2) of the Act, the Official Trustee in Bankruptcy sell or dispose of such of the property of the second defendant that is subject to the charge created by s.243J of the Act upon the making of the said orders pursuant to s.243E of the Act.

The provisions of orders 3, 4 and 5 hereof are not to apply to the property of the first defendant described in the Schedule hereto (being property that came into the possession or under the control of the Official Trustee in Bankruptcy by orders made pursuant to s.243E of the Act in these proceedings on 31 October 1986 and 5 February 1987) during the pendency of the Notice of Motion filed in these proceedings on 24 April 1989 on behalf of Brian Ernest Jelley.

SCHEDULE

(a) The proceeds of sale of all that piece or

parcel of land in the State of Queensland, County of March, Parish of Weyba, and Town of Noosa, being Lot 12 in Registered Building Units Plan Number 5386 and being the whole of the land comprised in Certificate of Title Volume 6415 Folio 120, and situate at and known as Unit 12, Little Cove Court, Park Road, Noosa Heads.

(b) All moneys standing to the credit of

Homebeech Limited in the trust account maintained by Primrose Couper Cronin Rudkin, Solicitors, of Southport, Queensland.

8A. The provisions of orders 3, 4 and 5 are not to apply to the vessel known as Tiki pending the hearing of the appeal to the Full Court of this Court in the matter of Rowell v Commissioner of Australian Federal Police.

The applicant is to serve a copy of these orders on the Official Trustee in Bankruptcy within 7 days of this date and to file an affidavit of service of the orders within ten days of this date.

These orders are not to be entered and are not to take effect before the expiration of 28 days from this date.

Liberty is reserved to the defendants and to the Official Trustee in Bankruptcy to apply within 28 days of this date for variation of these orders.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

In May 1985 a large quantity of cannabis was illegally imported into Australia. In September 1987 the defendants Cornwell and Bull pleaded guilty to charges that between 30 June 1984 and 31 May 1985 at Sydney and elsewhere they did conspire with each other and with other persons to import into Australia prohibited imports to which s.233B of the Customs Act 1901 ("the Act") applies, to wit, narcotic goods consisting of cannabis. They also pleaded guilty to having conspired between 1 May and 12 November 1985 to import the cannabis contrary to the provisions of s.233B. Each of the defendants was sentenced to a long period of imprisonment.

Subsection 243B(1) authorizes the applicant to institute proceedings for an order that a person pay a pecuniary penalty to the Commonwealth in respect of, inter alia, a prescribed narcotics dealing engaged in by him. The offences to which the defendants pleaded guilty are prescribed narcotics dealings. Accordingly the applicant has brought this application seeking orders that the defendants pay to the Commonwealth pecuniary penalties in such amounts as may be assessed by the Court. The Court is required, by s.243B(2) to assess, in accordance with s.243C, the value of the benefits derived by the defendants by reason of their having engaged in the abovementioned offences.
The only question which falls to be decided is the amount of the penalties which should be imposed. The applicant claims that Cornwell should be ordered to pay to the Commonwealth a penalty of $14 million. Cornwell submits the penalty should be $350,000. At the conclusion of the evidence there was no real dispute as to the amount of the penalty Bull should be ordered to pay. It was common ground that the penalty in his case should be about $300,000.
Section 243C provides, in part, as follows:

"243C. (1) In this section, a reference to the defendant in relation to a proceeding under section 243B shall be read as a reference to a person against whom an order is sought in that proceeding.

(2) In a proceeding under section 243B, the value of the benefits derived by the defendant by reason of his having engaged in a particular prescribed narcotics dealing, or in prescribed narcotics dealings during a particular period shall be assessed by the Court having regard to the evidence before the Court concerning all or any of the following matters:

(a) the moneys, or the value of the property other than moneys, that came into the possession or under the control of -

(i) the defendant; or

(ii) another person at the request or by the direction of the defendant,

by reason of the defendant's having engaged in that dealing or in prescribed narcotics dealings during that period;

(b) the value of any benefit, other than a benefit of the kind referred to in paragraph (a) that was provided for -

(i) the defendant; or

(ii) another person at the request or by the direction of the defendant,

by reason of the defendant's having engaged in that dealing or in prescribed narcotics dealings during that period;

(c) in the case of a prescribed narcotics dealing that consisted of selling or otherwise dealing in narcotic goods - the market value, at the time of the dealing, of similar or substantially similar narcotic goods;

(d) in the case of a prescribed narcotics dealing that consisted of the doing of any act or thing other than selling or otherwise dealing in narcotic goods - the amount that was, or the range of amounts that were, at the time the dealing occurred, ordinarily paid for the doing of a similar or substantially similar act or thing; and

(e) the value of the defendant's property before and after he engaged in that dealing, or before and after the end of that period, as the case may be. ...

(5) In a proceeding under section 243B, a member of the Australian Federal Police or an officer of Customs who is experienced in the investigation of narcotics offences may testify -

(a) with respect to the amount that, to the best of his information, knowledge and belief, was the market value of narcotic goods at a particular time or during a particular period; or

(b) with respect to the amount, or the range of amounts, that, to the best of his information, knowledge and belief, was the amount, or range of amounts, ordinarily paid at a particular time or during a particular period for the doing of an act or thing (not being the selling or other dealing in narcotic goods) comprising a prescribed narcotics dealing,

notwithstanding any rule of law or practice relating to hearsay evidence, and his testimony is prima facie evidence of the matters testified to.

(6) In calculating, for the purposes of a proceeding under section 243B, the value of benefits derived by the defendant by reason of his having engaged in a particular prescribed narcotics dealing, or in prescribed narcotics dealings during a particular period, any expenses or outgoings of the defendant in connection with that dealing, or those dealings, shall be disregarded."

The applicant asserts that the defendants were the principals who organized the importation of the cannabis referred to in the charges to which they pleaded guilty. It is claimed that Cornwell had the dominant role in the conspiracy and that it should be inferred from the evidence that he received the bulk of the proceeds of the sale of the cannabis. The defendants deny that they were principals and say that they acted merely as the agents for others who, so they allege, were responsible for organizing the importation.
The authorities did not become aware of the conspiracy until some time after it had achieved its purpose. The cannabis was brought from Thailand in a vessel called the Raukawa to a point off the Australian coast near Coffs Harbour. It was transhipped from the Raukawa to a smaller vessel called the Skylab which then transported it to the port of Yamba, north of Coffs Harbour. By the time the defendants and their co-conspirators were arrested the cannabis had long since disappeared.
As might be expected the evidence as to the persons who sold or purchased the cannabis after it was imported is sketchy and incomplete. However, there is evidence as to its quantity and wholesale value. The applicant invites me to infer from the whole of the evidence that the defendants took possession of the cannabis after its importation and disposed of it and that Cornwell received the proceeds of sale. To understand the rival contentions it is necessary to give an account of the events surrounding the entry into the conspiracy, the circumstances in which the cannabis came to be imported, and the financial transactions which occurred subsequent to the importation.
According to the defendants, their role in the conspiracy was limited. They claim that they first became involved on about 11 January 1985 when an American citizen, one Rogers, flew to Australia from Thailand and made contact with them. They say that Rogers told them that he had organized a shipment of cannabis from Thailand, that originally it had been intended for delivery to America, and that because of a security leak he had been asked to bring it to Australia. According to the defendants, Rogers asked Cornwell if he could arrange to have an Australian boat rendezvous with his (Rogers') boat and thereafter deliver the cannabis to a Sydney destination. Cornwell said he agreed to do this and that an arrangement was made that "the payment to be received for the Australian end of the operation was 10% of the value of the cannabis". The defendants claim that Rogers was a principal in the export of drugs from South East Asia.
According to the defendants, a second meeting was held with Rogers between 12 and 14 January. Those present at the meeting were Rogers, the defendants and a person referred to in the proceedings before me as Mr X. X is an expert in radios and electronic equipment. At this meeting charts of the Pacific Ocean and Torres Strait were produced and examined. The defendants claim that Rogers informed them that he, or a good friend of his, would be on the Raukawa.
The defendants say that Rogers returned to Australia on about 7 April 1985 and stayed until 11 April. They say that he then informed Cornwell that the captain of the Raukawa would be a man called "Chuck", that the vessel had already departed with its cargo and that it would be, by that time, in the vicinity of Indonesia. They also say that Rogers gave directions that X should monitor any radio transmissions from the Raukawa.
According to the defendants they were informed some time in April that the Raukawa had experienced a shortage of fuel and other supplies and, in consequence, had been forced to take harbour at Kaukau Bay on the south coast of Papua New Guinea. They say that following their meetings with Rogers between 7 and 11 April, Cornwell arranged for a man named Rowell to travel from Sydney to Kaukau and supervise the delivery of fuel and other supplies to the Raukawa. Thereafter the vessel continued its voyage to the east coast of Australia until it kept a rendezvous with the Skylab on or about 4 May.
According to the defendants, the use of the Skylab in the importation came about as a result of the discussions held with Rogers in January 1985. Following those discussions, Cornwell asked Bull if he could sail a boat to rendezvous with the Raukawa, and Bull agreed to do so. In late April 1985 Bull sailed the Skylab from Sydney and harboured at Iluka on the north coast of New South Wales. Subsequently he sailed the vessel to a point north-east of Coffs Harbour where he met the Raukawa. The cargo of cannabis was transferred by Bull from the Raukawa to the Skylab. He then sailed the Skylab to Yamba where the cargo was unloaded onto a wharf. Cornwell was waiting at the wharf with a van and the cannabis was loaded into the van which was then driven by Cornwell to the Ramada Inn at Crows Nest.
Cornwell said that, as directed by Rogers, he delivered 310 packets, each containing approximately 5 kg of cannabis, to a person in the car park at the Ramada Inn. According to Cornwell, the total consignment landed on the wharf at Yamba consisted of 345 packets. Of these he kept 10%, i.e. 35, and it was the balance of 310 which he transported to Sydney. He said that the 35 packets which he retained were delivered by him to Rowell at a point not far from the wharf at Yamba. He claimed Rowell sold these 35 packets and accounted to him for the proceeds which were approximately $700,000.
In substance, the defendants claim that their part in the conspiracy was limited to transporting the cannabis from the Raukawa to the Ramada Inn and that the value of the benefits they derived from the operation was equivalent to the value of the 35 packets of cannabis which they agreed to take as payment for their efforts.
The applicant claims that the defendants played a much greater part in the conspiracy and that Cornwell was the principal organizer behind the importation. The applicant relies, in part, upon Rogers' version of the conspiracy. According to Rogers, in the latter part of 1984 he was living with a friend, Steve Angelini, in Pattaya, Thailand. He received an approach from two Australian men living near Pattaya - Lionel Grant and a man called Trevor. They proposed that they should use his boat to transport a load of cannabis to Australia, and that they should provide the captain and crew for the boat and pay all expenses. Rogers said, in effect, that although he was willing for his boat to be used in the exercise he himself was not prepared to sail it to Australia, and did not want it to be registered in his name. He said he agreed to find somebody who would sail the boat. He approached a man called Webster and asked him whether he would be interested in being part of the crew. Webster agreed, but said he did not know enough about navigation to be the captain of the vessel. In due course one Tiffany was enlisted as the captain of the Raukawa. Rogers said Grant gave him money to have the vessel repaired and told him his partners in Australia would send him more money if it were needed.
According to Rogers, Grant asked him in January 1985 to go to Australia. He agreed to do so. He checked into the Chevron Hotel at Kings Cross where Cornwell came to see him. Subsequently he was taken to an apartment where Cornwell was living with his wife and another woman. He was shown navigation charts and details of radio frequencies.
Rogers said Cornwell's wife arranged for him to transfer from the Chevron Hotel to the Ramada Inn where Cornwell and Bull went to see him. Bull was carrying navigation charts and spent a whole morning giving him instructions as to what was to be done in the navigation of the Raukawa. Rogers said a third person called Jimmy was present at this discussion. Jimmy appeared to be an expert in radio frequencies. He offered to go to Singapore to install radio equipment on the Raukawa and to talk to Tiffany, but Cornwell decided against this being done. Rogers also said that before he flew back to Singapore he was given charts and radio frequencies for Tiffany's benefit, and was also given two sealed envelopes containing messages for Grant. He said that upon his return to Thailand, he gave Grant the sealed envelopes. There was discussion between Grant and Rogers as to how much he was to be paid for his efforts. Grant said that he would be paid US$600,000 and that this would have to be shared between Tiffany, Webster, Angelini and Rogers. According to Rogers, he was not happy with this arrangement.
In due course the Raukawa was made ready for the voyage in Singapore and was sailed to an island off Phuket in southern Thailand. Rogers said Grant told him to go to Phuket and wait for him in an hotel. This he did, and subsequently Grant came to see him and gave him a chart showing precisely where the Raukawa was to pick up its cargo. He told Rogers that there would be 363 packages of cannabis. It seems the cargo was loaded on 7 March or thereabouts.
Rogers said that he subsequently rang Cornwell in Sydney and told him that he and Angelini would be arriving in Sydney on about 6 April. After his arrival Cornwell told him that, at that stage, the Raukawa had only just passed through the Torres Straits. On two or three occasions, Cornwell spoke by radio to Tiffany who was apparently onboard the Raukawa.

Rogers was in custody in Bombay, India from April 29 to August 29 by reason of events unconnected with the Raukawa conspiracy. He said that when he returned to Thailand after being released from custody he spoke to Grant and asked about payment for his services. According to Rogers, Grant paid him only US$9,000 and told him that he had not been able to pay people their full share of the money because the money had not come from Australia. He said Grant told him that he had been advised by Cornwell that all the cannabis had not arrived, and that: "It was not very good, they had a hard time selling it ...".
Rogers said he visited Grant on a number of occasions late in 1985 and that on one occasion "Grant showed me a telegram from Cornwell or one of his partners and it said, ... 'we want four more tons but we cannot pay the money we owe you now but we will pay it to you later with 10 per cent interest ...'."
Cornwell's account of his dealings and conversations with Rogers differs radically from Rogers' version. In substance, Cornwell claims that Rogers gave virtually all instructions as to how the operation was to be carried out. If Cornwell's account is to be accepted, he and Bull were no more than servants engaged by Rogers and his associates in Thailand for the purpose of transporting the cannabis from the Raukawa to Sydney. According to Cornwell, he knew nothing about the arrangements to import the cannabis until he first spoke to Rogers in January 1985 and the sole financial reward which he and Bull were to derive from the operation was to be an entitlement to 10% of the cannabis.
Bull's evidence is, in broad terms, supportive of Cornwell's account. He said he did not become involved in the conspiracy until early January 1985 when he met Rogers. Cornwell was present at the meeting. He agreed that X installed radio equipment on the Skylab in April 1985. He gave an account of transhipping the cannabis from the Raukawa to the Skylab. He said he tried to keep a count of the packages but lost count after he had picked up about 270. After the transhipment, he sailed to Iluka where he tied up at a wharf. On arrival at the wharf he was met by Cornwell. Cornwell drove a large van onto the wharf. He asked him how many packages there were and he said he had lost count. He said they thereupon counted them and he counted 344 and Cornwell 345. The packages were placed in the van. Bull said he never saw the cannabis again.
According to Bull, when he first met Rogers in January he asked him: "What is in it for us ...?" Rogers said there was about $400,000 whereupon Cornwell inter jected and said that was not enough. Earlier the following morning he saw Cornwell and they had a discussion. His version of the substance of their conversation was as follows:

"He told me he had negotiated 10 per cent of the cargo. It was ours. And which we took to be approximately 4 blocks, around about 200 kilos, so, in actual fact, in a rough estimate, it would be worth about 800,000, but he told me that there would be expenses and he said, 'Are you happy with 300,000, that would be your share?' And I said: 'Mate, that is terrific. I am happy with that. Let us go right ahead with it'."

Bull said he later received from Cornwell in Australia some $70,000. He also appears to have received a further $20,000 which was withdrawn from a bank account in London. He said he believed the balance of his money was placed in a Swiss bank account. He said of this money: "Bruce transferred it overseas with other funds."

In answer to a question whether he considered himself to be Cornwell's partner, Bull said that he imagined he was. However, a consideration of the whole of Bull's evidence leads me to conclude that a more accurate description of his relationship with Cornwell is that he was Cornwell's willing assistant rather than partner. If he was Cornwell's partner, he was far from being an equal partner. It is clear from Bull's evidence that it was Cornwell who had charge of the operation. It was Cornwell who attended to the payments to other people involved in the conspiracy. In reply to a question whether there was any discussion about expenses Bull said:

"Yes Bruce said - he mentioned, he said we have got 10 percent of the cargo and if you are willing to do it there will be expenses to come out and I will have to pay other people. There will be Mr X to pay, but Mr X at the time was not Mr X, we knew him by his real name and there will be other expenses and your share will be 300,000. Is that good enough? And I agreed, I said yes quite acceptable."

Bull also gave the following evidence:

"Q. Well could I just understand, were you doing the job for a payment of 300,000, or was this merely what you were going to get by way of a half share after the expenses had been taken out. Which was it?---Well I considered it a share but if there were some moneys left over after expenses were paid and if the full amount had been paid the $800,000 had have been realized and I received 300,000 and there had been money left over perhaps Bruce might have given me extra. There might have been a bonus. "That would be up to him?---That would probably be up to him."

Bull said that Cornwell gave him $10,000 to pay Drew for his services and that Cornwell also paid the expenses of having Skylab made seaworthy for the voyage to rendezvous with the Raukawa. He said that Cornwell told him that X received $50,000 for his services. I think it is a strong inference that this sum was paid by Cornwell to X. Bull said that he assumed that Cornwell paid the cost of sending Rowell to New Guinea when the Raukawa ran into difficulties.
I am satisfied that, as between Cornwell and Bull, it was Cornwell who took the dominant role. Tiffany said that in a conversation he had with Bull in May 1985 shortly after the importation, Bull referred to Cornwell as his "boss". All the evidence tends to support this description of the relationship between the two men.
Not long after the successful completion of the Raukawa importation Tiffany had another conversation with Cornwell in which there was some discussion about importing a further quantity of cannabis. According to Tiffany, Cornwell suggested that a further four tonnes be imported. According to Tiffany, Cornwell said that "he had worked with the same people that had provided the cannabis for the Raukawa importation in the past". He said Cornwell agreed to advance him US$20,000 so that when he returned to Singapore he could look for a suitable boat to do the next trip. On a later occasion Cornwell went to a bank with Tiffany and another person. The other person was carrying an attache case which contained a large sum of money in Australian dollar notes. Some of this money was used to purchase US$20,000 in traveller's cheques which were handed to Tiffany and his girlfriend.
Later in May 1985 Tiffany had further conversations with Cornwell in which, according to Tiffany, Cornwell suggested that Tiffany fly to Sydney later in the year so that they could hold more discussions about the proposed importation of the further four tonnes. Cornwell told him he would reimburse him for the cost of his flight to Sydney. Tiffany returned to Sydney in September 1985 and had further meetings with Cornwell. He stayed at Cornwell's home and discussed arrangements for the proposed importation. It was agreed that Bull would go to Singapore and sail with Tiffany from there to Thailand to pick up the cargo, and then sail with it to New Guinea en route to Australia. Tiffany said that Cornwell reimbursed his travel expenses of travelling to Sydney in September.
The applicant also relies upon evidence given by X to establish that Cornwell's role extended beyond merely conveying the cannabis from the Raukawa to Sydney. X said that in 1984 Cornwell asked him to check certain premises for the existence of listening devices. He said that Cornwell asked him to go to Bangalow in northern New South Wales in July 1984 for the purpose of installing radio equipment at premises owned by Rowell, one of the conspirators. Cornwell paid for the expenses of the visit to Bangalow. Subsequently X returned with Cornwell to Rowell's property to repair a storm-damaged antenna and to install a telephone interface.
According to X, he went to Hong Kong in August 1984 at the request of Cornwell, who paid his travel expenses. He said Cornwell asked him to open a bank account in his, X's, name with a deposit of US$3,000. He said that in June 1985, on instructions from Cornwell, he wrote to the bank authorizing "Mr J.A. Forker" and "Bill Clarke" to withdraw money from the account. "John Forker" was an alias used by one Reilly, a close associate of Cornwell, and "Bill Clarke" was an alias used by Cornwell himself. Later in 1985, without X's knowledge, moneys totalling US$398,000 were deposited into this bank account and subsequently transmitted to an account held with a Swiss branch of the same bank.
X said that in January 1985 he accompanied Cornwell to a meeting in a room in a motel on the Pacific Highway, Crows Nest (probably the Ramada Inn). Bull and Rogers also attended the meeting. Cornwell, Bull and Rogers examined large marine charts of the Pacific Ocean (including the Torres Strait). Rogers asked X for radio information, including details as to Australian OTC frequencies. X prepared this information and gave it to Rogers and also gave him an OTC handbook dealing with radio frequencies.
In early 1985, at the request of Cornwell, X installed radio equipment and an antenna in premises at Gladesville in which Cornwell and his wife resided. In April that year, again at the request of Cornwell, he installed a radio unit in a four wheel drive Nissan patrol motor vehicle which Cornwell said belonged to him.
All the radio units installed by X on Bull's yacht, Rowell's house at Bangalow, the house at Gladesville and the Nissan motor vehicle were compatible for the purpose of inter-communication. They were all high frequency radios by means of which their respective operators could speak to each other if tuned to the same channel. The range of these units depended upon a number of factors but they were capable, under certain conditions, of establishing contact with a person as far afield as the United States of America.
In March 1985 Cornwell told X that he had some friends on board a yacht coming down the coast to Sydney, that their marine radio was not functioning properly and that they were having problems with the auto-steering. He asked X to make radio contact with them and informed him that Bull would be "going to meet up with them". Cornwell told X that the skipper of the yacht coming down the coast was called "Chuck". In late April or early May 1985, X made radio contact with Chuck who disclosed his whereabouts as being in international waters near New Guinea. Thereafter X established radio contact on a number of occasions with Chuck. X was able to listen to radio conversations that ensued between Chuck, Cornwell and Bull. Cornwell and Bull used code-names in these conversations.
In October 1985, Cornwell, who was apparently then overseas, rang X in Sydney and asked him to do some work on a boat called the Tiki, which Cornwell owned. X had previously, at Cornwell's request, installed radio communications equipment, including a marine transceiver with both international and U.S.A. frequencies on this vessel. The vessel had been substantially modified below deck to increase its freight carrying capacity and to make provision for the installation of long-range fuel and water tanks. In the October 1985 conversation, Cornwell told X that he wanted to get the Tiki ready for "something that's going to happen in early 1986." He asked X to be in London to discuss the matter by 18 December 1985. When X asked Cornwell what was going to happen, Cornwell replied: "It's going to happen like last time. I don't want to talk about it on the phone." X told Cornwell that "I want no part of it", to which Cornwell replied: "Mate, you be there."
I have formed the view that X's evidence was reliable and that he gave me an accurate account of his dealings with Cornwell and Bull.
Most of the witnesses who were called to give evidence before me were involved in the conspiracy and their credibility as witnesses must therefore be suspect. Having said this, I prefer to accept the evidence of the defendants' co-conspirators when it conflicts with the evidence of the defendants themselves. Cornwell, in particular, was an unimpressive witness. When it suited him to do so, he gave unresponsive and sometimes unbelievable evidence. For instance, when asked why he sent a sum of about $1.25 million overseas in 1982, he said it was for a "personal reason" the nature of which he could not remember.
In September 1985 a listening device was installed in premises occupied by Cornwell. On 5 September Cornwell, Tiffany and Bull had a conversation, a transcript of which was tendered in evidence. Tiffany had arrived in Sydney from Singapore the previous day. The conversation apparently related to a future importation of drugs from Thailand. Tiffany referred to an earlier conversation which he had had with Cornwell in which the latter had said that he or somebody else would have to go to Thailand. In response to this observation Cornwell said: "Yeah that's all been done." Later in the same conversation Cornwell said to Tiffany: "Well listen mate. I just want you to understand one thing right. Whatever's decided, it'll be what we want it to be because we're the ones who are gonna do the work back here and we're the ones who are putting up the money and if it doesn't fit in with your (sic) plans, then we won't be doin' it. That's the way it's gonna be."
On 7 September, Cornwell and Tiffany had a conversation with Leslie Scott. Scott was described by Det. Sgt. Milroy, a police officer experienced in investigation of criminal activities associated with the drug trade, as a major distributor of narcotics. The conversation was monitored by means of a listening device. The conversation clearly related to the future importation of a consignment of drugs. During the course of this conversation Cornwell said to Tiffany:

"Ah yeah, look I'll tell you what you're asking for now as far as I am concerned is (sic) the absolute maximum that we can pay you. Right we just can't pay you any more than that because the other crew that we're using will be coming up there during the weekend .... There's just not enough money there."

The conversation between Scott and Cornwell was plainly referable to an arrangement whereby Scott would make a contribution to a proposed dealing in drugs. The conversation also included the following:
"CORNWELL: Listen one of the reasons I wanted to see

ya anyway if you're interested.

SCOTT: Yeah.

CORNWELL: It's entirely up to you.

SCOTT: Yeah what's that.

CORNWELL: If you want to put in thirty-five; you get

a hundred back and plus your thirty five.

SCOTT: You want thirty five, appreciate gettin' in

with you, you want thirty five.

CORNWELL: There's three in ... I'll tell you that now

there's you and Mark

SCOTT: I don't want to know.

CORNWELL: Yeah

SCOTT: I don't wanna know

CORNWELL: Yeah

SCOTT: Thirty five what am I going to get back?

CORNWELL: You get a hundred back

SCOTT: Yeah

CORNWELL: Plus your thirty five

SCOTT: Yeah sweet ... it's there, it's there

CORNWELL: And you'll get um, at seven and three

quarters, you'll get a hundred keys at seven and three quarters

SCOTT: Oh fuckin' terrific. It's about time.

Terrific. I'll do the fuckin' lot at those price. I'll because I'll

CORNWELL: Hang on? There'll be three hundred, I'm

tellin' ya and each person that puts in is gettin' a hundred each, they're all gettin' it at the same price.

SCOTT: Good, good."

In the argot of the drug trade a reference to "a hundred keys at seven and three quarters" is a reference to 100 kg at $7,750 per kg.
Later in the same conversation the following exchange took place:
"SCOTT: I'm a giant wholesaler now, through you

helping me, and givin' me a fuckin' go

CORNWELL: Yeah that's all right ... if you're happy

with that

SCOTT: I'm happy I'm happy when do you want the

money?

CORNWELL: Well anytime"

I am satisfied, and there is no real dispute, that following the Raukawa importation in May 1985 a sum of at least $2,245,324 came into the possession or under the control of Cornwell and that this sum came from the sale of part of the cannabis.
Cornwell claims that he transferred about $800,000 to a bank account held by him in Zurich at the request of or on behalf of Rogers and Angelini. I reject this claim. I think it is highly improbable that Rogers and Angelini, to whom Cornwell was not well known, would have entrusted him with such a large sum of their money and permitted it to remain under Cornwell's control without any security to ensure that he would pay it to them. Cornwell said that he transferred this money overseas because "Australian Steve", whom he claimed to be the Australian principal behind the conspiracy, was incapable himself of arranging the transfer. The $800,000 was not withdrawn from Cornwell's Swiss bank account until 15 November 1985, following his arrest in London on 7 November 1985. The money was withdrawn in cash by an associate of Cornwell, one Butterfield. Cornwell had written to Butterfield from Wormwood Scrubs Prison giving him instructions to withdraw the money but his letter made no mention that the money was to be paid over to Angelini or Rogers.
Cornwell also claims that the abovementioned sum of $2,245,324 comprised, in part, money belonging to his associates Reilly, Harvey and Butterfield. None of these persons were called to give evidence and I do not accept Cornwell's assertion that part of the money he transferred overseas belonged to them.
It is impracticable to analyse in this judgment all the voluminous evidence which is before the Court. Mr Cullen, who appeared for the defendants, submits that it should be inferred from the whole of the evidence that the only role which Cornwell and Bull played in the conspiracy was to arrange for the transportation of the cannabis from the Raukawa to shore and thence to Sydney. He submits that I should conclude from the evidence that there were principals (other than Cornwell and Bull) in Thailand and Australia who arranged for the acquisition of the cannabis in Thailand, its shipment to Australia, and the sale of 90% of it after it arrived in Sydney. In his submission Cornwell and Bull were no more than partners in the venture of transporting the cannabis from the Raukawa to Sydney, that they agreed to accept 10% of the cargo as payment for their efforts, that Bull was to receive $300,000 for his efforts (and possibly a bonus if the cannabis was sold to advantage) and that Cornwell was to retain the balance of the proceeds of the sale of the 10% of the cargo. On the other hand, Mr Burbidge Q.C., senior counsel for the applicant, submits that it should be inferred from the evidence that there were two sets of principals involved in the conspiracy, one in Thailand and the other in Australia. The Australian principals, so he submits, were Cornwell and Bull, Cornwell having the dominant role.

I have no hesitation in rejecting the defendants' version of the facts. Further, I am satisfied that the version of the facts for which the applicant contends is substantially accurate. I say "substantially" because, having regard to the murky atmosphere in which the conspiracy was conceived and executed, it is not possible to ascertain with complete accuracy every detail of what occurred. The applicant carries the onus of proof in the proceedings. The proceedings are civil in nature: (Kirk v Commissioner of Australian Federal Police (1988) 81 ALR 321 at p 338). The degree of satisfaction for which the civil standard of proof calls may vary according to the gravity of the fact to be proved: Rejfek v McElroy (1965) 112 CLR 517 at p 521 citing Briginshaw v Briginshaw (1938) 60 CLR 336 at pp 368-369 and other authorities. I approach the resolution of the factual issues in the case with an appreciation that the allegations against the defendants are of a grave nature.
I shall refer to some of the considerations which have led me to accept the substance of the applicant's case. They are as follows:
(a) It is plain that Cornwell came into possession of

very large sums of money shortly after the cannabis was imported. If, as he said in evidence, he kept only 10% of the cargo for himself and Bull, it is highly improbable that he would have come into possession of the moneys which he admits transferring overseas. It is even more improbable that the persons who, accord ing to the defendants, received the balance of the cargo would have sold it and entrusted a large part of the proceeds to Cornwell, to be kept in an overseas bank account under Cornwell's control. Cornwell does not suggest that he was a close associate or confidant of "Australian Steve" or of any other person who may have become the owner of the balance of the cannabis. It is almost inconceivable that persons who were, on Cornwell's account, complete strangers to him, would have entrusted him with such a large sum of money. I am quite satisfied that the money Cornwell transferred overseas was his own, and that it was the proceeds of the sale of a significant portion of the Raukawa's cargo.

(b) The defendants' account of their first meeting

with Rogers is highly improbable and I reject it. It is highly improbable that Rogers would have approached Cornwell if Cornwell had not had prior experience in the drug trade. I reject the claim that neither defendant had any involvement in the conspiracy prior to January 1985. I am satisfied that Cornwell particularly was heavily involved before January 1985.

(c) It is highly improbable that Cornwell would have

handed over the cargo, less 10% to "Australian Steve", a man he professed never to have met.

(d) It is improbable that the Thai principals would

have permitted the defendants to have unsupervised possession of the Raukawa's cargo if their role was no more than that of carriers. If there were Australian principals other than the defendants, I think they would have been on hand to protect their own interests and to make sure that the extremely valuable cargo did not go astray.

(e) If the defendants had the limited role in the

conspiracy for which they contend, it is inexplicable that Cornwell would have made arrangements at his own expense to extricate the Raukawa from the difficulties it was experiencing in Papua New Guinea. It seems highly probable that these arrangements would have been made by the Australian owners of the cargo.

(f) Cornwell said that he involved himself in the

rescue arrangement "for a bit of adventure". I have no doubt that this and most of Cornwell's other evidence was untruthful.

(g) Cornwell's evidence that he did not know the

identity of "Australian Steve" (the man to whom he claimed to have delivered the balance of the cannabis) is unbelievable. He said that, by a pure accident, he bumped into him while shopping at Edgecliff. I reject this evidence.

(h) The evidence suggests that Cornwell had

substantial means at his disposal to organize, and pay the costs associated with, the Raukawa importation. Both Cornwell and Bull had travelled to Thailand before 1985, on at least one occasion in the company of each other. Cornwell agreed he probably made five or six trips to Thailand and that, on at least one occasion, he paid Bull's expenses when they travelled together.

(i) I am quite satisfied that it was Cornwell who

arranged for X to install the radio equipment on the Skylab in mid-1984. I am also satisfied that it was Cornwell who arranged for X to install compatible radio equipment on Rowell's property on the north coast of New South Wales in July/August 1984.

(j) I am satisfied that Cornwell arranged for X to

open a bank account in Hong Kong in August 1984, paid the cost of X's travel, provided moneys for the initial deposit, and referred X to a particular bank employee who would assist in making the necessary bank arrangements. In late 1985 an amount of at least US$398,000 was deposited to this account by Cornwell.

(k) I am satisfied that Cornwell authorized the

carrying out of substantial repairs to the Skylab towards the end of 1984. The boat was dry-docked by Bull using a false name. Bull was without means at the time. I am satisfied that both defendants intended that Skylab would be used for the purpose of a drug importation. That intention was formed before they met Rogers in January 1985.

(l) I accept Rogers' evidence as being generally

accurate and reliable. If Rogers' accounts of his various conversations with Cornwell is accepted, and I think they should be, it is impossible to accept that the defendants' role in the importation was limited as they claim it to have been. For instance, according to Rogers, when he told Cornwell that he and Angelini were making over $1 million for their role in the conspiracy Cornwell said to him: "I will see you get paid." Further, Rogers said the first he had ever heard of a person known as "Australian Steve" was when the defendants gave evidence before Matthews J., who sentenced them in the Supreme Court.

(m) If Tiffany's evidence is reliable, and I think it

is, the defendants were more involved in the conspiracy than they assert. The reference already made to Tiffany's evidence shows that Bull regarded Cornwell as his "boss", and that Cornwell had had previous experience in the drug trade.

(n) The transcripts of statements made by Cornwell

when some of his conversations were intercepted by listening devices show that Cornwell was familiar with the drug trade and dealing in cannabis, had established contacts in Thailand in relation to the drug trade, played a major role in the distribution of the cannabis imported on the Raukawa, and was a ring-leader in his group of criminal associates. I have already referred to the transcript of the conversation in which Scott said to Cornwell: "I'm a giant wholesaler now, through you helping me ...".

(o) It is reasonable to infer from the transcript of

another conversation that at some stage Rowell received or had possession of the entire shipment and not merely 10% of it. (Counsel for the applicant submits that it can be inferred from the entries in Rowell's diary that he accounted to Cornwell for the proceeds of sale of the entire cargo less one package or "pillow" consisting of five "blocks" of 1 kg each. The entries in the diary are not sufficiently informative to enable me to uphold this submission).

(p) There are many passages in the transcripts of the

intercepted conversations from which it can be inferred that Cornwell was a principal both in the Raukawa conspiracy and in other drug importations.

(q) There is abundant evidence that Cornwell outlayed

large sums of his own money to effectuate the Raukawa conspiracy. He purchased a shark cat boat (at a cost of about $20,000), a truck, fuel and other supplies for the Raukawa, and radio equipment. He also paid the travel expenses and made the payments to some of his co-conspirators to which I have already referred.

(r) According to Cornwell, he has never met and does

not know Grant, who was plainly one of the organizers of the shipment in Thailand. However, Mr Richardson, who was a close associate of the defendants and gave evidence on their behalf, said he had met Grant on at least two occasions in Thailand. I accept Rogers' evidence that it was Richardson who introduced him to Cornwell. Whether or not the respondents have actually met Grant, I think the evidence points irresistibly to them having been in contact with him.

(s) Letters written by Cornwell to Butterfield from

Wormwood Scrubs Prison giving instructions to Butterfield to take control of Cornwell's financial affairs and making cryptic references to bank accounts and deposits raise serious doubts as to whether Cornwell has moneys or assets as yet undiscovered by the authorities. His unwillingness under cross-examination to explain the contents of these letters does nothing to allay these doubts.

(t) There is abundant evidence that Bull's part in the

conspiracy was more that of an assistant to Cornwell rather than that of a full partner in the enterprise. Cornwell negotiated the terms of the arrangements with Rogers, decided how much Bull would be paid, made arrangements for Rowell to dispose of the cannabis, and paid the expenses incurred in effectuating the conspiracy. I have referred to evidence given by Bull that Cornwell paid him $70,000. I have no doubt that because of Bull's long and close friendship with Cornwell, Bull received the balance of his entitlement or arranged for Cornwell to have it sent overseas on his behalf.

I turn now to consider what assessments should be made of the value of the benefits derived by the defendants by reason of their having engaged in the Raukawa conspiracy. In making the assessments, I am required to have regard to the evidence before the Court concerning the matters listed in s. 243C(2) and I am to disregard "any expenses or out-goings" incurred by the defendants: s.243C(6). What I am required to do is to make "a sound discretionary judgment" as to the value of the benefits derived by the defendants: R v Smithers; Ex parte McMillan (1982) 44 ALR 53 at p 60.
I have reached the firm conclusion that all the cannabis imported as a result of the Raukawa conspiracy came into the possession and under the control of Cornwell. I am satisfied that the money he transferred overseas was part of the proceeds of sale of the whole consignment. The applicant has not been able to identify what happened to the balance of the proceeds of sale. However, that does not refute the proposition that the cannabis came into Cornwell's possession and control.
I am also satisfied that it was Cornwell who was the Australian principal in the conspiracy. I have no doubt that he enlisted the aid of many others and that he made substantial payments to them for their assistance. The amounts of some of these payments, e.g. payments to Bull, may be gleaned from the evidence, but it is not possible to quantify many of them. However, since s.243C(6) requires me to disregard expenses or out-goings this is not of importance.
In assessing the penalty in Cornwell's case, an important question is the extent to which regard should be had to the fact that he had the possession and control of the whole of the consignment. In many cases, mere possession of narcotics may not justify the imposition on the possessor of a monetary penalty equivalent to the value of the narcotics. For example, if a person is only temporarily in possession of narcotics and passes them on to his principal it would not, I think, be appropriate to pay much regard to the value of the narcotics of which he had only temporary possession. I do not think that Sweeney J. in Australian Federal Police v Lahood (23 May 1988, unreported) intended to convey that mere possession of narcotics would, of itself, justify the imposition on the possessor of a pecuniary penalty equivalent to the value of the narcotics. Nothing that the Full Court said when Lahood was on appeal (9 June 1989, unreported) supports that proposition.
However I think it is appropriate to assess the benefits derived by Cornwell from the Raukawa conspiracy by reference to the value of the cannabis that came into his possession by reason of him being the principal in the conspiracy. I conclude from the evidence that he became the owner of the cannabis after it was imported. I am satisfied that his possession of it was not temporary in the sense that it merely passed through his hands as a carrier employed by other persons. The cannabis was his to dispose of as he wished. I think he did indeed dispose of it and that he received large sums of money as a result of its disposition. In these circumstances, I think it is appropriate to assess the value of the benefits derived by him as being equivalent to the value of the cannabis itself. Of course, he did not profit from the conspiracy to that extent, since he incurred substantial expenses and out-goings. It is his misfortune that the application of s.243C(6) results in him being penalized in an amount in excess of his profits. But that is a misfortune which a person who engages in a conspiracy to import narcotics is liable to suffer.
I turn now to consider the value of the cannabis. There is evidence from a very experienced police officer that the cannabis was worth anything between $6,000 and $7,000 per kg at the time it was imported. This evidence, which to a certain extent was based on hearsay, is nevertheless prima facie evidence of the market value of the cannabis: s.243C(5). But there is other evidence in the case which inclines me to the view that the value of the cannabis in Cornwell's hands was considerably less than $6,000 per kg. According to Cornwell, he arranged for a relatively small part of the total consignment to be sold by Rowell upon the basis that he (Cornwell) would receive $4,000 per kg and Rowell would keep any sum over and above that price. Entries made by Rowell in his diary disclose that he sold about 150 kg of the consignment for approximately $634,000. The diary entries suggest that the highest price obtained by Rowell was $5,000 for a 1 kg lot. However, the bulk of the 150 kg was sold for $4,400 per kg. The authenticity of the diary entries is not challenged by counsel for the applicant. The diary entries also tend to support Cornwell's claim that he received only $4,000 per kg for the cannabis sold by Rowell, and that Rowell retained anything over and above that price.
In the light of the entries in Rowell's diary I think it is reasonable to assess the market value of the cannabis in the hands of a distributor like him at about $4,500 per kg. But the market available to Cornwell was different from the market available to Rowell. I think it is reasonable to assume that it would have been necessary for Cornwell to sell the total consignment in large lots in order to dispose of it without undue delay. In effect, what he did was to sell 150 kg of it to Rowell for $4,000 per kg rather than take the trouble and incur the risk of selling it himself.
Realistically, the value of the cannabis to Cornwell was $4,000 per kg, not $4,500 per kg. Senior counsel for the applicant argues that the $500 per kg difference in these two figures should properly be regarded as being in the nature of an out-going, being a cost of sale, and hence to be disregarded: s.243C(6). I appreciate the force of this submission but I do not think it should prevail. To give effect to it would be to over-value the benefits derived by Cornwell.
The pecuniary penalty which Cornwell should pay should not, however, be reduced by the amount paid to Bull. I think the amount paid to him is more correctly described as an "out-going" than a share of gross proceeds: cf Commissioner of the Australian Federal Police v Curran (1984) 3 FCR 240 at p 248 per Wilcox J.
The total quantity of cannabis imported was approximately 1,725 kg, i.e. 345 packets each of approximately 5 kg. Upon the basis that the value of the cannabis to Cornwell was $4,000 per kg, I assess the pecuniary penalty payable by him at $6,900,000. It is common ground between the parties that the pecuniary penalty payable by Bull should be $300,000, and I fix the penalty payable by him at that sum.
I order that:
1. The first defendant pay to the Commonwealth of

Australia a pecuniary penalty pursuant to s.243B of the Customs Act 1901 ("the Act") in the sum of $6,900,000.

2. The second defendant pay to the Commonwealth of

Australia a pecuniary penalty pursuant to s.243B of the Act in the sum of $300,000.

3. The Official Trustee in Bankruptcy pay to the

applicant, out of the property of the defendants that has come into his possession or under his control by virtue of orders made in these proceedings pursuant to s.243E of the Act, the applicant's costs of these proceedings.

4. Pursuant to s.243G(1) of the Act, the Official

Trustee in Bankruptcy pay to the Commonwealth, out of the property of the first defendant that has come into his possession or under his control by virtue of orders made in these proceedings pursuant to s.243E of the Act, an amount equal to the amount of the liability of the first defendant in respect of the pecuniary penalty specified in order 1 hereof.

5. Pursuant to s.243G(1) of the Act, the Official

Trustee in Bankruptcy pay to the Commonwealth, out of the property of the second defendant that has come into his possession or under his control by virtue of orders made in these proceedings pursuant to s.243E of the Act, an amount equal to the amount of the liability of the second defendant in respect of the pecuniary penalty specified in order 2 hereof.

6. Pursuant to s.243G(2) of the Act, the Official

Trustee in Bankruptcy sell or dispose of such of the property of the first defendant that is subject to the charge created by s.243J of the Act upon the making of the said orders pursuant to s.243E of the Act.

7. Pursuant to s.243G(2) of the Act, the Official

Trustee in Bankruptcy sell or dispose of such of the property of the second defendant that is subject to the charge created by s.243J of the Act upon the making of the said orders pursuant to s.243E of the Act.

8. The provisions of orders 3, 4 and 5 hereof are not

to apply to the property of the first defendant described in the Schedule hereto (being property that came into the possession or under the control of the Official Trustee in Bankruptcy by orders made pursuant to s.243E of the Act in these proceedings on 31 October 1986 and 5 February 1987) during the pendency of the Notice of Motion filed in these proceedings on 24 April 1989 on behalf of Brian Ernest Jelley. SCHEDULE

(a) The proceeds of sale of all that piece or parcel of land in the State of Queensland, County of March, Parish of Weyba, and Town of Noosa, being Lot 12 in Registered Building Units Plan Number 5386 and being the whole of the land comprised in Certificate of Title Volume 6415 Folio 120, and situate at and known as Unit 12, Little Cove Court, Park Road, Noosa Heads.

(b) All moneys standing to the credit of Homebeech Limited in the trust account maintained by Primrose Couper Cronin Rudkin, Solicitors, of Southport, Queensland.

8A. The provisions of orders 3, 4 and 5 are not to

apply to the vessel known as Tiki pending the hearing of the appeal to the Full Court of this Court in the matter of Rowell v Commissioner of Australian Federal Police.

9. The applicant is to serve a copy of these orders

on the Official Trustee in Bankruptcy within 7 days of this date and to file an affidavit of service of the orders within ten days of this date.

10. These orders are not to be entered and are not to

take effect before the expiration of 28 days from this date.

11. Liberty is reserved to the defendants and to the

Official Trustee in Bankruptcy to apply within 28 days of this date for variation of these orders.

[1989] FCA 453

14 AUGUST 1989