Salgado v R

1. [1]

   BRERETON JA: I have had the benefit of reading in draft the judgment to be delivered by Hamill J, with which I agree. Insofar as Mac v R [2014] NSWCCA 24 dictates that evidence that the applicant was involved in the business of supplying drugs over the period covered by the six counts in the indictment was admissible other than on tendency reasoning – in this case, essentially to exclude as reasonably plausible hypotheses that the accused’s association with Garner-Thornton was innocent (Count 1), and that the drugs found in a cooler bag in his backyard were there unbeknownst to him (Counts 4 and 5) – then its use so closely approached an invitation to tendency reasoning that, at the least, a stringent anti-tendency direction was required. The direction that “you must not reason that because the accused pleaded guilty to Counts 2, 3 and 6, then he must automatically be guilty of the counts that you have to decide” not only does not meet that requirement, but practically invites tendency reasoning, so long as it is not “automatic”. The appeal must be allowed and there must be a new trial on the contested counts. I agree with the orders proposed by Hamill J.

2. [2]

   CAMPBELL J: I have had the great advantage of considering Hamill J’s reasons in draft. I agree with them and with the orders his Honour proposes. I only wish to add a short comment of my own about Ground 2, the misdirection point. I do not understand my comment to be in any way inconsistent with what Hamill J has written and it is not so intended.

3. [3]

   As Hamill J has explained, the evidence of Mr Salgado’s pleas of guilty to Counts 2, 3 and 6 in the presence of the jury were admissible in respect of Counts 1, 4 and 5 as circumstantial evidence that Mr Salgado at a time material to each disputed count was carrying on a drug supply business for financial gain. This was an integral part of the Crown case against him. And in a way was part of Mr Salgado’s defence. The difference between him and the Crown as the cross-examination of Detective Stuart Cadden demonstrated (see [45] below,) was that he was a small-fry retailer dealing in small amounts for personal use as evidenced by his plea of guilty to Counts 2 and 3, in particular, and as such he was unlikely to be the type of dealer who would be involved in the supply of large commercial quantities of prohibited drugs.

4. [4]

   Given her Honour’s rulings on cross-admissibility and the rejection of the separate trials application, it is tolerably clear that learned defence counsel made a deliberate, legitimate forensic choice to have Mr Salgado plead guilty to counts 2, 3 and 6 when arraigned in the presence of the panel from whom the jury was selected to lay the ground work for the defence she intended to run that Mr Salgado was no big-time dealer. However, the risk of impermissible tendency reasoning as a pathway to verdicts of guilty on the disputed counts remained, as the learned trial judge recognised in the exchange with defence counsel quoted by Hamill J (at [66]): cf Hamilton (a pseudonym) v The Queen [2021] HCA 33; (2021) 95 ALJR 894 at [52] – [53]; Hamill J at [82] – [85] below.

5. [5]

   That her Honour was leaning to a somewhat different view at the conclusion of the evidence (at [67] below) is not to the point as after hearing from defence counsel again her Honour, who is very experienced, obviously decided that an anti-tendency direction was called for even if in somewhat limited terms.

6. [6]

   Although the direction given by the learned trial judge broadly followed what might be regarded as a standard anti-tendency direction adapted for the particular circumstances of the case at hand, her use of the adverb “automatically” in effect undercut the meaning that the direction was intended to convey to the jury: cf Criminal Trial Courts Bench Book [4-220] – [4-222]. It did this because it suggested to the ordinary listener that it was impermissible to jump to the conclusion that “[Mr Salgado] must be a person who commits … drug related offences and must therefore … be guilty of” the disputed counts. It implied, however, the same conclusion could be reached as a result of the jury’s mature consideration if they were so persuaded. In truth either pathway equally involved impermissible tendency reasoning and both were contrary to law.

7. [7]

   HAMILL J: Benjamin Salgado (the appellant) appeals against his convictions in relation to three counts of supplying prohibited drugs. The convictions followed his trial before Judge Hock and a jury in the District Court which was conducted between 14 August 2019 and 11 September 2019 when the jury returned guilty verdicts after deliberations that commenced two days earlier.

8. [8]

   Over an objection taken as part of a pre-trial application to sever the indictment and for separate trials of some of the counts, the indictment included three further counts to which the appellant indicated he would plead guilty. These comprised two allegations of supplying drugs and one allegation of dealing with the proceeds of crime. On arraignment the appellant pleaded guilty to these counts, first before the pre-trial argument and later in the presence of the jury panel.

9. [9]

   Mr Salgado was sentenced to an aggregate term of 12 years imprisonment with a non-parole period of 8 years commencing on 12 January 2017. There is no application for leave to appeal against the aggregate sentence. However, if the conviction appeal succeeds, it will be necessary to quash the aggregate sentence and remit the whole of the proceedings to the District Court.

10. [10]

    The notice of appeal, filed on 22 March 2021, identified two related grounds. The first concerns the cross-admissibility of evidence relating to particular counts to prove the allegations in the other counts. The submissions on appeal reflected generally the arguments made at the trial in support of the severance application. The second ground of appeal concerns the failure of the trial Judge in the summing up to identify the permissible and impermissible uses of the evidence. No objection was taken to the summing up at trial and no re-direction was sought, although an application was made at the commencement of the summing up for clear directions relating to the evidence and, as has been seen, there was an objection to the evidence in advance of the trial. Senior Counsel for the appellant conceded that leave under rule 4.15 of the Supreme Court (Criminal Appeal) Rules 2021 (NSW) was required to argue ground 2. In the circumstances, leave should be granted to the extent necessary. The appellant submits that the trial miscarried as a result of the matters alleged under each ground.

11. [11]

    The appellant’s submissions focussed on the danger that the cross-admissibility of the evidence between the various counts may have, or inevitably, resulted in the jury adopting impermissible tendency reasoning. The appellant contended that such reasoning was invited or encouraged by the Prosecutor who commenced his opening statement to the jury by asserting:

12. [12]

    Similarly, in his closing address, the Prosecutor said of the appellant:

13. [13]

    In written submissions to this Court, the respondent accepted that the Prosecutor at trial “did not give a full explanation of the relevance of the evidence being cross-admissible”. [1] However, the respondent submitted that the trial Judge clearly understood the evidence to be, and correctly admitted the material as, “circumstantial evidence to prove that the drugs were in the possession of the appellant by virtue of the indicia of a drug supplying enterprise”. [2] As to the second ground of appeal, the respondent submitted that the appellant “has not demonstrated that there was a real chance that the jury reasoned impermissibly” [3] and that “the direction read as a whole conveys an anti-tendency direction.” [4]

14. [14]

    The appeal raises frequently litigated questions concerning the admissibility of other criminal acts (whether charged or uncharged) to prove an individual allegation and the directions that are required to ensure that the jury adopts a principled and legally permissible approach to the evidence.

15. [15]

    Putting to one side the question of admissibility, the evidence was not admitted as tendency evidence in the appellant’s case. The jury received insufficient directions as to the permissible use of the evidence and no warning that the evidence could not be used to establish that the appellant had a tendency to act in a particular way (that is, to be a drug dealer) which could in turn be used to establish that he supplied the drugs on the particular occasions the subject of counts 1, 4 and 5 (or that he possessed those drugs for the purpose of supply).

16. [16]

    The appeal must be upheld, the convictions and aggregate sentence quashed, and a re-trial ordered. What follows are my more detailed reasons for those conclusions.

The allegations, counts, pleas and verdicts

1. [17]

   The particulars of the counts, pleas or verdicts and the indicative individual sentences are summarised in the following table:

2. [18]

   Count 1 related to the discovery of a commercial quantity of methylamphetamine (887.8 grams) on 2 October 2016. This was secreted in a compartment of a vehicle in which a tracking device had covertly been installed by investigators. The car was parked at the appellant’s residence and he moved it while under surveillance at around 10am that morning. At about 11am, David Garner-Thornton attended the appellant’s residence with two other people and conveyed the vehicle an hour away. He was stopped by police on the Hume Highway. The appellant was the first person that Mr Garner-Thornton contacted to say he was being pulled over and that the car was unregistered. The appellant’s fingerprints and DNA were identified on the exterior of a “Qantas bag” in which two plastic containers, filled with an off-white coloured crystal substance that analysis later established contained methylamphetamine, were located. At the time of the arrest, Mr Garner-Thornton claimed ownership of the drugs and a gun located in the compartment. He told the arresting police officers: “It’s all mine, everything is mine, put the cuffs on me.” [5]

3. [19]

   Before the arrests, search and seizure of the drugs, investigating police had intercepted a series of text messages between the appellant and Mr Garner-Thornton and Mr Garner-Thornton and another individual, Grant Hodges. These communications became Exhibit 4 at the trial. According to the evidence of one of the investigating police officers, these messages and other “blank” or “empty SMS” messages suggested that the appellant and Mr Garner-Thornton were in the business of supplying drugs together. [6]

4. [20]

   The messages which the prosecution relied on to suggest that the appellant notified Mr Garner-Thornton that methylamphetamine was to be delivered on 2 October 2016 and that Mr Garner-Thornton then made those arrangements, included:

5. [21]

   At the request of counsel for the appellant, Mr Garner-Thornton was called by the Prosecutor at trial. He gave evidence denying that the appellant was aware of the drugs found in the car. [7] He claimed ownership of the drugs and the vehicle, and said he was responsible for the installation of the secret compartment. [8] This compartment was only accessible when both the demister and engine were running and by means of a switch concealed under the centre console of the vehicle. Mr Garner-Thornton’s evidence was disputed by the Prosecutor who was granted leave to cross-examine him and did so at length. The witness maintained his account.

6. [22]

   Mr Garner-Thornton remained in custody during the period leading up to the appellant’s arrest.

7. [23]

   Count 4 related to the discovery of 185 grams of methylamphetamine located in an ALDI cooler-bag in the backyard of the appellant’s residence on 12 November 2016. The search was conducted following the appellant’s arrest earlier in the morning for the conduct subject of counts 2 and 3, to which he pleaded guilty. A DNA profile consistent with the appellant was located on the handles of the bag.

8. [24]

   Count 5 related to 128.9 grams of cocaine located in the same cooler-bag seized by police during the search on 12 November 2016.

9. [25]

   Count 2 concerned the supply of 6.44 grams of methylamphetamine on 11 November 2016. The appellant was under surveillance and police intercepted calls between the appellant and another individual making arrangements to meet. The investigators observed the appellant approach the other person’s car on foot and have a brief interaction before departing. The driver was stopped, his vehicle searched, and he was found to be in possession of the methylamphetamine. By his plea the appellant admitted that he supplied the other person with 6.44 grams of the drug.

10. [26]

    Count 3 related to 14.8 grams of methylamphetamine recovered by police in the appellant’s possession when he was pulled over in a vehicle headed toward the central coast on 12 November 2016. Once again, the appellant was under surveillance. Police intercepted text messages earlier in the morning between the appellant and his brother who organised to travel to Newcastle together. To avoid the drugs, or their full quantity, being discovered, the appellant threw the contents of a plastic bag into the air shortly after the offenders were pulled over by police. The appellant was arrested and the police recovered the contents of the bag and were able to test the substance.

11. [27]

    Count 6 related to the appellant’s possession of $209,000 suspected to be the proceeds of crime. The money was recovered by police from the appellant’s residence on 12 November 2016 when a search warrant was executed and the drugs the subject of counts 4 and 5 were discovered along with an amount of lignocaine (a substance commonly used to cut down the purity of other drugs), scales, sealing equipment and plastic bags.

12. [28]

    The preceding narrative is a truncated and incomplete summary of the prosecution case in relation to each of the counts. It was a strong prosecution case. While it is incomplete, the summary is sufficient to understand the issues that arise on the appeal and to put the grounds and competing arguments in context. Put simply, the prosecution case was that the appellant was involved in various drug transactions in October and November of 2016, in the area of and around Menangle and at Ourimbah. The appellant and various associates were under surveillance at this time and there was a good deal of surveillance evidence, including electronic communications that were recorded by police and tendered at the trial. These supported the inference that the appellant was involved in the drug deals forming the basis of the counts on the indictment. The offending encompassed by the three contested counts spanned from 2 October 2016 to 12 November 2016, with a period of almost six weeks separating count 1 from counts 4 and 5. While the first count involved another individual, Mr Garner-Thornton, who had physical control of the drug (and was alleged to be in joint possession with the appellant), the prosecution case was that the appellant was the true owner and was in control of the vehicle in which the drugs were discovered.

13. [29]

    The appellant disputed that he was in possession of the drugs relating to the contested counts and denied that he was involved in their supply. The defence case was that, while the appellant was a drug user and was involved in low-level drug supply around this time, he was not involved in supplying large or commercial quantities. The defence case was that the commercial quantity of methylamphetamine was not his and that he had no knowledge of the substance. For the quantities located in the backyard of his residence, the appellant’s case was that the house had been ransacked by unknown persons who left the cooler-bag containing the drugs in a hasty exit to avoid police detection. The appellant relied on evidence adduced at trial which indicated that secondary transfer was a possible explanation for the DNA located on the handles of the ALDI bag which contained the substances referrable to counts 4 and 5. It was established that the police officers conducting the search were not wearing gloves.

Ground 1: The trial Judge erred in law and the trial miscarried through admission of:

1. [30]

   The trial Judge refused an application to sever count 1 from the indictment and ruled, over objection, that the evidence concerned with the supply counts to which the appellant pleaded guilty was admissible to prove the other counts (including count 1). Her Honour also ruled that “the evidence of the later counts is admissible in relation to Count 1 in my view and vice versa”. [9] Having delivered an ex tempore judgment relating to the severance of count 1, her Honour clarified that she also rejected an application “to sever counts two and three and I glean counts six as well.” [10]

2. [31]

   In her Honour’s judgment rejecting the application for severance of count 1, Judge Hock said:

3. [32]

   The appellant made an application to sever count 1 from counts 4 and 5 on the basis that the evidence on the different counts was not cross-admissible and that there was a real risk of unfair prejudice if the trial on the disputed counts was conducted following an arraignment in which the appellant pleaded guilty to other drug charges. [12] Part of the submission was that because Mr Garner-Thornton was not involved in the facts giving rise to counts 2-5, and those offences occurred some weeks later and involved drugs of a different kind or not comparable in purity or volume, the evidence of count 1 was not relevant and accordingly not admissible in respect of the other later counts. The further and related submission was that the admission of evidence relating to all of the counts gave rise to unfair prejudice because of the possible misuse of the evidence. In particular there was a risk of tendency reasoning when the prosecution did not submit that the evidence was admissible to establish any relevant tendency. The appellant’s position in relation to count 6 was somewhat enigmatic because of the following exchange:

4. [33]

   Despite a subsequent observation by the trial Judge (set out above and again below), in which her Honour said she “gleaned” the objection extended to the proceeds of crime offence, it appears from the passage just set out that the appellant did not press the objection in relation to the evidence underlying count 6. The admission of the evidence of count 6 as relevant to guilt on counts 4 and 5 was not subject to the grounds and arguments raised on appeal.

5. [34]

   In the course of submissions, the appellant’s trial counsel submitted that the “only way it can be led would be on a tendency argument, and there is no tendency argument, to my understanding that the Crown relies on.” [13]

6. [35]

   In opposing the severance application, and in pressing for a trial in which all of the evidence was admissible in proof of all of the charges, the Prosecutor had the following discussion with the trial Judge:

7. [36]

   The following day, counsel for the appellant sought to distinguish the case of Mac v R [2014] NSWCCA 24 and the authorities on which it was based. She also contended that no direction would be sufficiently “strong” to overcome the prejudicial effect of the evidence.

8. [37]

   The trial Judge found against the appellant on the severance application and, after summarising the basic factual background against which the decision was made, gave the following reasons:

9. [38]

   After delivering the judgment on the application for the severance of count 1, her Honour briefly addressed the cross-admissibility of the admitted criminal conduct (Counts 2, 3 and 6) and the associated severance application on those counts:

10. [39]

    Following these rulings, counsel for the appellant indicated she would consider whether “the jury should know that he’s pleaded guilty”. [17] Apparently following discussions between counsel and with the consent of the appellant, [18] the appellant was arraigned in front of a jury panel on an indictment including all six counts. [19] In accordance with his earlier plea, he pleaded guilty to counts 2, 3 and 6.

11. [40]

    It should be emphasised that the evidence was not put forward by the Prosecutor as tendency evidence. Further, as conceded on the appeal, the Prosecutor at trial did not articulate with clarity, the way the evidence was otherwise relevant. It seems apparent from Her Honour’s reasons that the evidence of Counts 2, 3, 4, 5 and 6 was admitted as “relationship” or “context” evidence, to adopt some popular labels, and to disprove an innocent association between the appellant and the co-accused, in relation to count 1. The trial Judge took the view that “the probative value of the evidence is high and was not outweighed by the danger of unfair prejudice”. [20] The reasons for admitting the evidence relating to Count 1 in respect of Counts 4 and 5 were more opaque and was not separately articulated other than that by her Honour’s assertion that it was admissible “vice versa”.

12. [41]

    The appellant submitted that the Prosecutor at trial failed to identify how the evidence was admissible, or was to be used by the jury, if it was not to ground a case based on tendency reasoning. The appellant relied on the majority judgment in R v Ngatikaura (2006) 161 A Crim R 329; [2006] NSWCCA 161 in answer to the suggestion that the evidence of counts 4 and 5 was admitted in proof of count 1 to disprove an innocent association between the appellant and Mr Garner-Thornton, but not as tendency evidence. Simpson J (as her Honour then was), at [67] – [68], confirmed the two purposes were not mutually exclusive:

13. [42]

    In the same case, Rothman J said at [86] – [87]:

14. [43]

    The appellant argued that the Prosecutor’s opening and closing addresses demonstrated that the evidence was being used as tendency evidence. In opening the case, the Prosecutor told the jury:

15. [44]

    In his closing address, the Prosecutor said:

16. [45]

    The appellant also questioned whether the evidence of the admitted criminal conduct was probative of the remaining counts on the indictment at all. Reliance was placed on the evidence of Detective Stuart Cadden who gave evidence regarding drug syndicate hierarchies The officer provided an opinion that it was rare for someone in the business of supplying smaller quantities such as those admitted by the appellant under counts 2 and 3 to also be involved in the sale of much larger quantities in the order of kilos. [23] He was cross-examined as follows:

17. [46]

    On appeal, the respondent “accepted that the prosecutor did not give a full explanation of the relevance of the evidence being cross admissible”. [25] However, counsel for the respondent offered an alternate basis for the admission of the evidence as circumstantial evidence, namely that it was evidence of a drug supplier’s “tools of the trade” or “the indicia of the drug supplying enterprise”. [26] The respondent submitted that the evidence was cross-admissible to “provide context to the conduct giving rise to the offence charged, so as to demonstrate its criminality” and referred to Mac v R at [28]. [27]

18. [47]

    The trial Judge directed the jury that the evidence was part of the prosecution’s circumstantial case concerning evidence of the “indicia of supply”:

19. [48]

    Senior Counsel for the appellant complained that the evidence was not admitted on the basis that it was part of the “indicia of supply” case presented by the Prosecutor at trial. Further, she submitted that the final dot-point in the passage set out above was not supported by cases such as R v Falzon (2018) 264 CLR 361; [2018] HCA 29 which explain the basis upon which evidence of the “indicia of supply” is admitted. [29] Ms Bashir SC submitted that to categorise the evidence as the “indicia of supply” was apt to invoke tendency reasoning and, adopting the expression used by trial counsel, allowed tendency evidence to be admitted “by the back door”.

20. [49]

    The Court is not called upon to determine whether Judge Hock erred in rejecting the application for severance or for separate trials. While the question of the cross-admissibility of the evidence was central to that application, it was not necessarily determinative of it. [30]

21. [50]

    The early cases at common law established a relatively rigid rejection of evidence establishing other criminal conduct on the part of an accused person. For example, in Makin v The Attorney General for NSW [1894] AC 57 Lord Herschell made the following observation at 65:

22. [51]

    Lord Herschell’s statement of principle was followed in Australia for around a century and there are many cases in which it was applied. [31] However, by the time of McHugh J’s dissenting judgment in Pfennig v The Queen the rigidity of the statement came to be questioned. McHugh J said at 527:

23. [52]

    McHugh J went on to analyse the degree of probative force required before such evidence would be admissible in light of the risk of an unfair trial inherent in the admission of such evidence before a jury.

24. [53]

    The cases decided at common law remain important, particularly in relation to evidence that is relevant otherwise than as what the common law described as “propensity evidence” and the directions required to cure the potential for prejudice when such evidence is admitted. However, the test of admissibility of “propensity” evidence has been substantially altered, if not swept away, by the “tendency rule” in ss 97-101 of the Evidence Act 1995 (NSW). [32] That change to the law of evidence is not relevant to the present appeal because the evidence in question was not tendered to prove any relevant tendency in the appellant.

25. [54]

    In Harriman v The Queen (1989) 167 CLR 590; [1989] HCA 50, the High Court held to be admissible evidence that the accused was involved in an earlier importation of heroin from Thailand with a particular co-offender (“X”). The evidence was relevant to establish his guilty association with X in respect of the charged drug offence and to rebut his defence which asserted an innocent association with X. Similar reasoning was adopted in R v Quach [2002] NSWCCA 519; (2002) 137 A Crim R 345.

26. [55]

    The principles enunciated in Harriman v The Queen and R v Quach were applied in different factual circumstances in Mac v R. Hidden J held that the trial of four counts was properly conducted as a joint trial and that the evidence admissible in relation to the individual counts was admissible in proof of the others. The first count was an offence of attempting to import a marketable quantity of heroin. The second was an offence of dealing with the proceeds of crime (around $554,000 in cash). The third and fourth were offences of supplying large commercial quantities of heroin and methylamphetamine. The importation offence was based on the applicant’s trip to Vietnam in October 2010 and on the contents of a package that arrived in Australia on 7 November 2010, which was collected by the applicant on 11 November 2010. The remaining charges were based on items found on a search of the applicant’s premises on 12 November 2010. The applicant’s case at trial was that his trip to Vietnam was an innocent one and that he picked up the parcel for his daughter unaware that it contained drugs. His case on the supply offences was that he was aware that the drugs were present at his home but that he was not in possession of them but was merely minding them for a man he nominated as “Dung”.

27. [56]

    Hidden J held at [34] that the applicant had “no legitimate complaint” that the joint trial resulted in the jury treating his defence to each charge “with a great deal of scepticism”. On the contrary, his Honour said (with Basten JA and RS Hulme J agreeing):

28. [57]

    Unguided by this Court’s decision in Mac v R, I would have concluded that the evidence in the present case (and the evidence in Mac v R itself) could only realistically be admitted as tendency evidence as defined in s 97 of Evidence Act. That is, it appears to be evidence of “the conduct of a person” led to establish that the person “had a tendency … to act in a particular way.” I am unable to find that Mac v R was “plainly wrong” and it is a decision that must be followed unless or until it is overruled. It might be considered to be a decision decided on its own facts and the unlikely defences raised by the applicant in that case to the charges levelled against him. There is some tension between the reasoning in Mac v R and that adopted by Simpson and Rothman JJ in R v Ngatikaura referred to above. [33] Ms Bashir SC submitted that Mac v R could be distinguished and relied on the fact that the evidence was not adduced to prove the nature of any ongoing relationship or prior criminal involvement with co-offenders, the length of time between count 1 and the later counts, and the absence of any connexion in the origin or purity of the drugs the subject of the counts. [34] However, the fundamental basis of the decision in Mac v R was correctly recognised by Judge Hock to have relevance in the appellant’s case. Even so, the issue of admissibility was to be determined by reference to the individual facts and evidentiary circumstances of this case and not based entirely on a decision of this Court made in different circumstances.

29. [58]

    Based on the authorities to which I have referred, and in particular the High Court’s analysis in Harriman v The Queen, I am satisfied that the evidence supporting counts 2, 3, 4, 5 was relevant and probative in support of the prosecution case on count 1. The appellant’s case on count 1 involved an assertion that his association with Mr Garner-Thornton was an innocent one and that the text exchanges and surveillance evidence did not establish that he was a co-owner of the drugs found in the car driven by Mr Garner-Thornton. Those assertions could not be “realistically assessed” (to adopt Hidden J’s language in Mac v R) in the absence of evidence that the appellant was found to be in possession of drugs some weeks later. Whether the “danger of unfair prejudice” outweighed the probative value of the evidence (Evidence Act, s 137) turned on the directions that could be given the jury to ensure the jury did not misuse the evidence, and in particular that it did not engage in tendency reasoning. The trial Judge was alive to this issue and noted that “careful directions” would be required. I am satisfied it was possible to fashion directions capable of overcoming the danger of unfair prejudice. If those conclusions are correct, grounds 1(b) and 1(c) must be rejected. Whether the directions provided to the jury were adequate is the subject of ground 2 and is not determinative of the question of admissibility.

30. [59]

    On the other hand, I am not satisfied that the evidence establishing count 1 was admissible in proof of counts 4 and 5. By the time the drugs were located at the appellant’s premises, Mr Garner-Thornton had been custody for more than a month. The appellant’s involvement with him in the commission of count 1 on 2 October 2016 (if established) could not rationally effect a proper assessment of the prosecution or defence case relating to the possession for supply of drugs found at the appellant’s premises on 12 November 2016. Even if the evidence possessed some probative value on those issues, other than as tendency evidence, the probative value was outweighed by the danger of unfair prejudice. That prejudice arose from the potential misuse of the evidence as tendency evidence and the concern that if the jury rejected (beyond reasonable doubt) the evidence given by Mr Garner-Thornton, it might improperly and too readily jump to the conclusion that the whole of the defence case on all counts should be rejected. As was submitted by defence counsel at the trial, there was no direction that could cure this potential for unfair prejudice.

31. [60]

    I would uphold ground 1(a). However, even if that conclusion is incorrect, there can be no doubt that ground 2 must be upheld given the way that the trial unfolded and the absence of directions warning the jury against adopting tendency reasoning.

Ground 2: There was a miscarriage of justice occasioned in the trial Judge’s failure to direct the jury properly as to the permissible and impermissible uses of each count (counts 1, 4 and 5), and/or the appellant’s admitted criminal conduct (counts 2, 3 and 6), in its consideration of the circumstantial case in respect of counts 1 and/or counts 4 and 5.

1. [61]

   Ground 2 must be considered in the light of the following matters relevant to the conduct of the trial:

   1. (1)

      The prosecution specifically eschewed the use of the evidence as tendency evidence.

   2. (2)

      The trial Judge, in deciding the evidence of each count was “cross-admissible” in proof of the other counts, said “clearly there will have to be careful directions about the way the evidence of the other counts can be used and more importantly must not be used”. [35]

   3. (3)

      The Prosecutor’s opening and closing addresses may have invited tendency reasoning.

   4. (4)

      In arguing the evidence should be excluded, defence counsel submitted that no direction could cure the danger of unfair prejudice.

   5. (5)

      Before the summing up, counsel submitted that the circumstances required “the strongest possible direction” to guard against tendency reasoning. [36]

2. [62]

   The trial essentially commenced with the Prosecutor telling the jury that the Prosecution case was that “the accused was a significant drug dealer.” In his closing address he said “[s]upply of prohibited drugs was something that he did continuously. In fact, from the period of 2 October to the day upon which he was arrested.”

3. [63]

   On one view, these comments merely invited the jury to accept the prosecution case in respect of the three disputed counts. However, the comments may also have invited the jury to reason that the evidence of all six counts, especially those in relation to which he pleaded guilty established that he was “a significant drug dealer” and that this made it more likely that he was guilty of counts 1, 4 and 5. That is tendency reasoning.

4. [64]

   The appellant is correct in submitting that this gave rise to the need for particularly clear directions as to the possible misuse of the evidence.

5. [65]

   Reference has already been made to trial counsel submitting that no direction could cure the danger of unfair prejudice arising from the cross-admissibility of the evidence and to her Honour’s comment in her judgment allowing the evidence that careful directions were required.

6. [66]

   The transcript also records the following exchange during the submissions on admissibility:

7. [67]

   Prior to the summing up, there was some limited and general discussions of the directions to be provided to the jury. Those discussions included:

8. [68]

   The direction ultimately given to the jury was in the following terms:

9. [69]

   The danger of misuse of evidence that suggests or establishes that an accused has committed other criminal offences, particularly of the same or similar kind, has been emphasised in many cases.

10. [70]

    For example, in Sutton v The Queen at 541-542, Brennan J said:

11. [71]

    BRS v The Queen (1997) 191 CLR 275; [1997] HCA 47 was a case decided under the common law. The evidence was not relied on as propensity evidence, the common law equivalent of tendency evidence. [40] The impugned evidence in BRS v The Queen concerned an allegation that the appellant (a teacher) encouraged a school-boy (W) to masturbate in his bedroom using a towel and lubricant. The evidence was admitted in support of the account given by another boy (H) that a towel and lubricant were present in the appellant’s bedroom at the time of the charged offences. It was also admitted as evidence capable of rebutting the appellant’s case that he was a person of good character. Toohey J (at 294-295), Gaudron J (at 301-303), McHugh J (at 304-305 and 310) and Kirby J (at 330 and 332) all concluded that the trial miscarried because there was no direction prohibiting the jury from using W’s evidence as propensity evidence. McHugh J, at 305, said:

12. [72]

    Earlier, at 304, his Honour said:

13. [73]

    Howie J in Vaoalii Toalepai v R [2009] NSWCCA 270 at [48] said:

14. [74]

    The majority judgment of the High Court in Hughes v The Queen acknowledged at [17]:

15. [75]

    The danger of the kind of prejudice referred to in Hughes v The Queen arises from the nature of the evidence itself, rather than from its intended use. Where the evidence might lead a jury to adopt tendency reasoning, but is not admitted for that purpose, it is critical that the jury is instructed not to follow such a process of reasoning.

16. [76]

    The appellant also relied on the remarks of McClellan CJ at CL in Qualtieri v R [2006] NSWCCA 95; (2006) 171 A Crim R 463, where it was held at [80] that where there is any evidence which suggests “prior illegal acts” by an accused:

17. [77]

    The directions given at the appellant’s trial did not constitute an adequate “anti-tendency direction” in the complex circumstances of the case. It must be remembered that the jury were confronted not only with evidence of the applicant’s admitted offending, but also evidence relating to two separate and disputed incidents of criminality that occurred almost 6 weeks apart. The directions failed to identify the use that could properly be made of the evidence concerning the offences to which the appellant pleaded guilty. While the trial Judge said she proposed giving directions “such as those that were given in the case of [Mac v R]”, no such directions were provided with respect to the three disputed counts, in relation to which there was a ruling allowing for the cross-admissibility of the evidence. The directions given in Mac v R, which was a case where all relevant offences were denied, were referred to by Hidden J at [36] and were as follows:

18. [78]

    A direction does not guard adequately against impermissible tendency reasoning merely by instructing a jury not to conclude “automatically” that the accused person is guilty by virtue of the fact that they have admitted committed a similar type of offence on another occasion. I accept the appellant’s submission that the use of the word “automatically” in the summing up had the capacity to undermine the purpose of the direction. It allowed the jury to use the evidence in an impermissible way provided it did not “automatically” conclude the appellant was guilty. Insofar as the passage set out above at [67] may be seen as acquiescence by trial counsel, that passage must be considered in the light of the fact that counsel argued with some perseverance that the prejudice could not be cured by any direction at all.

19. [79]

    Further, the directions only addressed the use of the evidence relating to those offences admitted by the applicant (counts 2,3 and 6). The directions did not address in any way the use (if any) that could be made of the evidence relating to count 1 in terms of the allegations in counts 4 and 5. No anti-tendency direction was provided in the event that the jury was satisfied of the appellant’s guilt on count 1.

20. [80]

    Similarly, no direction was given as to the use that could be made of the evidence, or an adverse finding, in relation to counts 4 and/or 5 in the jury’s analysis of whether the prosecution had proved the allegation in count 1 and how those matters might impact on the jury’s assessment of the exculpatory evidence given by Mr Garner-Thornton in relation to the drugs subject of count 1. I am not satisfied that the standard “separate consideration” direction was sufficient in circumstances where the jury heard evidence of:

    1. (1)

       the appellant’s admitted offending;

    2. (2)

       the circumstances surrounding Mr Garner-Thornton’s arrest and possession of 887.8 grams of methylamphetamine on 2 October 2016; and

    3. (3)

       the allegation that the appellant was in possession of the drugs located on 12 November 2016 and subject of counts 4 and 5,

21. [81]

    Counsel for the respondent submitted, correctly, that there is no universal requirement for an anti-tendency direction in cases where there are multiple counts on an indictment. [41] The absence of such a direction does not necessarily establish that the trial miscarried. The respondent also relied upon R v Matthews; R v Williams [2004] NSWCCA 259 to contend that the “separate consideration direction” provided was both routine and sufficient in the circumstances. In that case, Simpson J said at [43] – [45]:

22. [82]

    The respondent also relied on the decision of a majority of this Court in Hamilton (a pseudonym) v R [2020] NSWCCA 80. In that case, Beech-Jones J (as his Honour then was) said at [113]:

23. [83]

    Adamson J agreed with Beech-Jones J while Macfarlan JA wrote a powerful dissenting judgment. This Court’s decision was upheld by a 3:2 majority of the High Court (Kiefel CJ, Keane and Seward JJ; Edelman and Gleeson JJ dissenting): Hamilton (a pseudonym) v The Queen [2021] HCA 33; (2021) 95 ALJR 894. The majority in the High Court relied on a variety of factors including the way the case was conducted, the issues in dispute between the parties, the cumulative impact of other directions given to the jury and whether trial counsel sought the further direction at first instance. The majority commented at [43]:

24. [84]

    In both this Court and in the High Court, the majority concluded that trial counsel made a forensic or tactical choice not to seek an “anti-tendency direction”. It was held that counsel was content to rely on the combination of “a separate consideration direction” and a “Murray direction” (to the effect that the jury had to be satisfied beyond reasonable doubt of the evidence of each individual complainant). Accordingly, there was no miscarriage of justice.

25. [85]

    Similar considerations do not arise in the present case. For one thing, this was not a case where a “Murray direction” had any application. The questions and finer distinctions discussed by Beech-Jones J as to whether, and the extent to which, a “theoretical” risk was “material” or “practical” do not arise in this case. The risk of impermissible tendency reasoning was a real and significant one, and it needed to be guarded against by a firm and unambiguous warning. [42]

26. [86]

    The failure of trial counsel to seek a re-direction at the conclusion of the summing up is relevant to this Court’s assessment of whether the risk of impermissible reasoning arose. [43] However, trial counsel made a number of submissions seeking appropriate directions, having commenced from the position (on the severance application) that no direction was capable of preventing the jury from engaging in tendency reasoning. As Kiefel CJ, Bell, Gageler and Gordon JJ said in De Silva v The Queen (2019) 268 CLR 57; [2019] HCA 48 at [35]:

27. [87]

    In the present case, an application for strong directions was made. It cannot be held that defence counsel made a tactical decision not to seek a direction, let alone that she was persuaded by the perhaps self-deprecating submission of the Prosecutor who, when asked to assist in framing the directions, said that he may be “more of a hindrance than a help.” [44] The trial Judge said in the course of these discussions:

28. [88]

    That did not accord with the position taken by defence counsel who assessed the risk of improper tendency reasoning on the part of the jury to be high. She was correct in that assessment.

29. [89]

    The directions provided to the jury were insufficient to eliminate the risk that the jury would engage in impermissible tendency reasoning.

30. [90]

    For the foregoing reasons, ground 2 must be upheld.

Orders

1. [91]

   I would make the following orders:

   1. (1)

      To the extent necessary, grant leave to appeal against the convictions on counts 1, 4 and 5.

   2. (2)

      Allow the appeal.

   3. (3)

      Quash the convictions in relation to counts 1, 4 and 5.

   4. (4)

      Confirm the convictions on counts 2, 3 and 6.

   5. (5)

      Order a re-trial on counts 1, 4 and 5.

   6. (6)

      Quash the aggregate sentence imposed on 21 February 2020.

   7. (7)

      Remit the matter to the District Court for retrial in relation to counts 1, 4 and 5 and resentence of Counts 2, 3 and 6 upon finalisation of those proceedings. I direct that the matter be placed in the Arraignments List at Sydney District Court on 25 March 2022 at 9:30am.